UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
DC  20549





FORM
10-K


(Mark
one)


x
            ANNUAL REPORT PURSUANT TO SECTION
      13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
  1934


For
the fiscal year ended December 31, 2008





 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
transition period from ______ to ______





Commission
File Number 000-52392





GOLD CREST MINES,
INC.


(Exact
name of registrant as specified in its charter)





Nevada
                
                82-0290112(State
      or other jurisdiction of incorporation or organization)
                
                (IRS
      Employer Identification
Number)





724
E. Metler Lane, Spokane, WA 99218


(Address
of principal executive offices)





Registrant's
telephone number, including area code: (509) 893-0171





SECURITIES
RESGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: None





SECURITIES
REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:  Common Stock,
$0.001 par value





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  ̈  Nox





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.


Yes  ̈  Nox





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  x





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-K or any amendment to this
Form 10-K.  YESx  NO   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer
               ̈
              
              Accelerated
      filer
               ̈Non-accelerated
      filer
               ̈
              (Do
      not check if a smaller reporting company)
              Smaller
      reporting company
              x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  ̈  Nox





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant on June 30, 2008, the last business day of the
registrant’s most recently completed second fiscal quarter, based on the last
reported trading price of the registrant’s common stock on the Over the Counter
Bulletin Board was $1,531,137.





At March
4, 2009, 84,776,995 shares of the registrant’s common stock were
outstanding.








GOLD
CREST MINES, INC.


ANNUAL
REORT ON FORM 10-K


For
the Fiscal Year Ended December 31, 2008





TABLE
OF CONTENTS




PART
      IItem 1.
                      Business
                      3Item 1A.
                      Risk
      Factors
                      7Item 1B.
                      Unresolved
      Staff Comments
                      7Item 2.
                      Properties
                      7Item 3.
                      Legal
      Proceedings
                      14Item 4.
                      Submission
      of Matters to a Vote of Security Holders
                      14PART IIItem 5.
                      Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
                      15Item 6.
                      Selected
      Financial Data
                      16Item 7.
                      Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      16Item 7A.
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      21Item 8.
                      Financial
      Statements and Supplementary Data
                      21Item 9.
                      Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
                      40Item 9A(T).
                      Controls
      and Procedures
                      40Item 9B.
                      Other
      Information
                      41PART IIIItem 10.
                      Directors,
      Executive Officers and Corporate Governance
                      42Item 11.
                      Executive
      Compensation
                      44Item 12.
                      Security
      Ownership of Certain Beneficial Owners and Management
      and  Related Stockholder Matters
                      46Item 13.
                      Certain
      Relationships and Related Transactions, and Director
      Independence
                      48Item 14.
                      Principal
      Accounting Fees and Services
                      49PART
      IVItem 15.
                      Exhibits,
      Financial Statement Schedules
                      51Signatures
                      53




2





PART
I


ITEM
1.                BUSINESS





This
annual report on Form 10-K, includes forward-looking statements. Our
forward-looking statements include our current expectations and projections
about future results, performance, results of litigation, prospects and
opportunities. We have tried to identify these forward-looking statements by
using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,”
“feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These
forward-looking statements are based on information currently available to us
and are expressed in good faith and believed to have a reasonable basis.
However, our forward-looking statements are subject to a number of risks,
uncertainties and other factors that could cause our actual results,
performance, prospects or opportunities to differ materially from those
expressed in, or implied by, these forward-looking statements.




Given
these risks and uncertainties, readers are cautioned not to place undue reliance
on our forward-looking statements. All subsequent written and oral
forward-looking statements attributable to Gold Crest Mines, Inc. or to persons
acting on our behalf are expressly qualified in their entirety by these
cautionary statements.  Except as required by federal securities laws,
we do not intend to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.




The safe
harbors of forward-looking statements provided by Section 21E of the Exchange
Act are unavailable to issuers of penny stock.  As we issued
securities at a price below $5.00 per share, our shares are considered penny
stock and such safe harbors set forth under Section 21E are unavailable to
us.




Business
Development


Silver
Crest Mines, Inc., the Company’s predecessor, was incorporated under the laws of
the State of Idaho in 1968.  The Company was organized to develop
mineral properties located in the State of Idaho.  The Company’s
initial and subsequent efforts in the acquisition, exploration and development
of potentially viable and commercial properties were
unsuccessful.  The Company has a history of losses and no revenues
from operations.  The Company’s capital needs have historically been
met by the issuance of securities either through private placements, the
issuance of shares for debt or the joint venture or lease of mineral
properties.  In June 2003, the Company merged into its wholly-owned
subsidiary, Silver Crest Resources, Inc., for the purpose of changing the
Company’s state of domicile to Nevada.




The
Company was thereafter dormant until the completion of the share exchange
effective August 1, 2006 with Niagara Mining & Development Company, Inc.
(“Niagara”), an Idaho corporation formed on January 11, 2005, and its
wholly-owned subsidiary, Kisa Gold Mining, Inc. (“Kisa”), an Alaskan corporation
formed on July 28, 2006.  Under the terms of the share exchange, the
Company acquired all of the issued and outstanding shares of Niagara in exchange
for 37,500,000 shares of the Company’s common stock.  At the time of
the share exchange, Niagara was in the process of completing the acquisition and
staking of mining claims in Alaska and Idaho. On June 20, 2008, 100% of the
issued and outstanding shares of Kisa were transferred from Niagara to the
Company.





Alaska
Properties





In August
2006, the Company acquired exploration properties in southwest Alaska
approximately 90 miles east of the village of Bethel covering approximately
22,500 acres of State of Alaska-owned lands in 6 claim groups known as the Kisa,
Gold Lake, Ako, Little Swift, Gold Creek and Gossan Valley claim groups within
the Kuskokwim Mineral Belt.  Based on field work completed in late
2006 and summer of 2007, airborne geophysical surveys completed in the fall of
2006 and spring of 2007 and results of data compilations conducted over the
winter months, the Company identified additional ground for acquisition.
Approximately 8,000 acres in the Kisa area known as the Luna claim group and
approximately 51,000 acres, known as the Buckstock claim groups located
approximately 30-80 miles south of the Donlin Creek deposit and north of the
Company’s other claim groups were acquired based on the results.  On
September 1, 2008, the Company elected to abandon approximately 43,500 of the
Buckstock acres leaving only the Chilly claim group for lack of interest in
joint ventures and due to the financial situation of the Company.





Golden Lynx,
LLC





On April
18, 2008, the Company, through its wholly-owned subsidiary, Kisa, entered into
an agreement with Cougar Gold LLC, (“Cougar”), a greater than 5% shareholder,
under which the two companies formed Golden Lynx, LLC, (“Golden
Lynx”).  Pursuant to this agreement, the Company transferred 15,320
acres under State of Alaska jurisdiction into Golden Lynx.  The
Company accounts for this investment under the cost method of
accounting.


3




Cougar
has an initial 55% interest and Kisa has an initial 45% interest in Golden
Lynx.  The members appointed Cougar as the manager with overall
management responsibility for operations.  Cougar is entitled to
retain its 55% interest by making the following contributions to Golden Lynx,
used to fund exploration expenditures, on the following timetable:


(a)
            $750,000
      on or before the first anniversary of the effective date of the
      agreement;


(b)
            An
      additional $1,250,000 on or before the second anniversary of the effective
      date of the agreement; and


(c)
            An
      additional $1,500,000 on or before the third anniversary of the effective
      date of the agreement.





Within 30
days after completing the foregoing expenditures, Cougar may elect to purchase
an additional ownership interest in Golden Lynx by making capital contributions
in the aggregate amount of $2,500,000 which shall also be used to fund
exploration expenditures during the two years that follow the third anniversary
of the effective date of the agreement. Upon making such capital contributions,
Cougar’s ownership interest would increase to 80%, and Kisa’s ownership interest
would decrease to 20%.





Cougar
has notified Gold Crest that as of December 31, 2008 their intent was to
continue forward with the agreement and as of the date of this document, they
have not informed us of anything that would lead us to believe that they had
changed their decision.





Newmont Joint
Venture





On May 8,
2008, the Company signed three separate joint venture agreements (“the Newmont
Agreements”) with Newmont North America Exploration Limited, a subsidiary of
Newmont Mining Corporation (”Newmont”).   The subject claims
consist of the Company’s AKO and Luna claim groups located in the Kuskokwim
region of southwestern Alaska approximately 120 miles south of the Donlin Creek
deposit and our Chilly claim group located approximately 50 miles southwest of
the Donlin Creek deposit.





After a
season of exploration by Newmont, on December 12, 2008, the Company received
from Newmont a letter that notified the Company of its intent to terminate the
three venture agreements effective immediately.  The claims are in
good standing with the state of Alaska through September 1, 2009.





Kelly
Creek





On
January 30, 2007, the Company acquired rights to 8,640 acres under a
lease/option to purchase agreement with Greatland Exploration on the Seward
Peninsula in northwest Alaska called the Kelly Creek project and acquired
approximately 26,400 additional acres of lands adjacent to the Kelly Creek
project.  On July 22, 2008 the Company elected to terminate the
lease/option to purchase agreement with Greatland Exploration and along with it,
pursuant to the terms of the agreement, turned over the rights to the additional
26,400 acres to Greatland Exploration.





Idaho
Properties





In
central Idaho, the Company controls approximately 46 unpatented federal mill
site claims and 185 unpatented federal lode claims in the Stibnite District
covering approximately 3,930 acres.  The Stibnite gold district is
located east of McCall in Valley County, Idaho, approximately 45 miles northeast
of Cascade, Idaho.  On March 13, we signed a purchase agreement (the
"Agreement") between Gold Crest Mines, Inc. and Frank Duval for the sale of our
Idaho unpatented claims.  Under the terms of the agreement we sold all
of the Company’s rights, title and interest in and to our 46 unpatented federal
mill site claims and 185 unpatented federal lode claims in the Stibnite District
of Idaho known as our Golden Meadows Project.  We received $25,000 on
March 17, 2009 and the remaining $25,000 is due no later than October 1,
2009.  As part of the agreement, the purchaser shall timely pay the
BLM fees required to maintain the claims in good standing for the 2009
assessment year unless Purchaser shall notify the Company in writing, no later
than August 1, 2009, of their intent not to proceed with the purchase of the
Claims. If Purchaser gives notice of intent not to proceed with the purchase of
the Claims, then the $25,000 initial payment shall be forfeited to the
Company.  See “Note 14. Subsequent Events -Purchase Agreement on Idaho
Unpatented Claims”to our consolidated financial statements for further
details.





Royalty Interest in Mineral
Property





On
January 24, 2008, the Company entered into an Option and Royalty Sales Agreement
with the heirs of the Estate of J.J. Oberbillig (the “Oberbillig
Agreement”).  Pursuant to the terms of the original Agreement, the
Company has been granted an exclusive option through August 15, 2008 to purchase
a 5% (five percent) net smelter royalty interest (“NSR”) in real property
located in Valley County, Idaho.  This royalty applies to any metal
produced from lands sold by the estate of J.J. Oberbillig to Bradley Mining Co.
in 1941.  The Yellow Pine gold property, now controlled by Vista Gold
Corporation and the subject of a December 2006 Canadian National Instrument
43-101 report, is subject to the 5% NSR.  The NSR has a total Purchase
Price of $1,642,480.  As consideration for entering into the Option
Agreement, the Company paid $400,000 which was presented as “Royalty interest in
mineral properties” on the balance sheet.


4


The
original closing date was to be on or before August 15, 2008, but at the closing
the Company did not exercise the option due to the unsuccessful attempt to
obtain a joint venture partner on the property.  The Company then
began negotiations with the Estate of J.J. Oberbillig to extend the option
purchase date and on November 4, 2008 the Company received a letter of
understanding from the attorneys for both JJO and the heirs of the Estate of
J.J. Oberbillig stating that they were willing to accept Gold Crest’s new
proposed terms provided they could get the royalty right holders
approval.  The new terms called for a 32% reduction in the pricing
terms.





Under the
new terms for the option and royalty sales agreement, if the Company decides to
exercise this option on or before the newly proposed closing date of May 1, 2009
(the “Closing Date”), there will be a payment due upon closing in the amount of
$160,000.  The remaining balance of the Purchase Price, $558,238 shall
be in the form of a promissory note which will accrue interest at the rate of
six percent (6%) per annum commencing on the closing
date.   Commencing one (1) year from the closing date, seven (7)
annual payments of principal plus accrued interest in the amount of $100,000
will be due on the same day and month as the closing date.





During
the year ended December 31, 2008, the Company determined that the $400,000
carrying value of the royalty had been impaired based on the fact that the
Company had been unsuccessful in finding any potential joint venture partners
and there was a very high probability that the Company would not exercise the
option to purchase, and therefore impaired the carrying value to
zero.  See “Note “Note 6. Royalty Interest in Mineral Property”and “Note 14. Subsequent
Events – assignment of Royalty
Interest in Mineral Property” to our consolidated financial statements
for further details.





Option and Real Property
Sales Agreement with JJO, LLC.





On
January 24, 2008, the Company entered into an Option and Real Property Sales
Agreement with JJO, LLC, (“JJO”) an Idaho limited liability company and personal
representative of the Estate of J.J. Oberbillig.  This option gives
the Company the right to acquire approximately 255 acres of patented mining and
mill site claims in the Stibnite area from the Oberbillig
Estate.  These lands have been the subject of several exploration
programs over the years, but contain no resources calculated to modern
standards.  The Company has also acquired access to all the historical
data for the district owned by the Oberbilligs.  The property has a
total purchase price of $435,620.  As consideration for entering into
the Option Agreement, the Company paid $125,000 which was originally presented
in the caption “Mineral Properties” on the balance sheet.





The
original closing date was to be on or before August 15, 2008, but at the closing
the Company did not exercise the option due to the unsuccessful attempt to
obtain a joint venture partner on the property.  The Company then
began negotiations with the Estate of J.J. Oberbillig to extend the option
purchase date and on November 4, 2008 the Company received a letter of
understanding from the attorneys for both JJO and the heirs of the Estate of
J.J. Oberbillig stating that they were willing to accept Gold Crest’s new
proposed terms provided they could get the royalty right holders approval. The
new terms called for a 32% reduction in the pricing terms.





Under the
new terms for the option and real property sales agreement, if the Company
decides to exercise this option on or before the newly proposed closing date of
May 1, 2009 (the “Closing Date”), there will be a payment due upon closing in
the amount of $40,000.  The remaining balance of the Purchase Price,
$139,560 shall be in the form of a promissory note which will accrue interest at
the rate of six percent (6%) per annum commencing on the closing
date.   Commencing one (1) year from the closing date, seven (7)
annual payments of principal plus accrued interest in the amount of $25,000 will
be due on the same day and month as the closing date.





During
the year ended December 31, 2008, the Company determined that the $125,000
carrying value of the property had been impaired based on the fact that the
Company had been unsuccessful in finding any potential joint venture partners
and there was a very high probability that the Company would not exercise the
option to purchase, and therefore impaired the carrying value to
zero.  See “Note 5. Mineral Properties - Option and Real Property Sales
Agreement with JJO, LLC” and“Note 14. Subsequent Events – Assignment of Option and Real
Property Sales Agreement with JJO, LLC.” to our consolidated financial
statements for further details.





Mining Lease and Option to
Purchase Agreement with Bradley Mining Company





On March
31, 2008, the Company entered into a Mining Lease and Option to Purchase
Agreement with the Bradley Mining Company (the “Bradley Option
Agreement”).  Pursuant to the terms of the Agreement, the Company has
been granted an exclusive option through March 30, 2009 to purchase for $300,000
real property located in the Stibnite mining district, Valley County, Idaho
(“the Bradley Property”).  The Bradley Property consists of nine
patented mining claims comprising approximately 175 acres.  As
consideration for entering into the Bradley Option Agreement, the Company paid
$75,000 which is included in the caption “Mineral Properties” on the balance
sheet.  If the Company elects to exercise this option on or before
March 30, 2009, then there will be another payment due upon closing in the
amount of $225,000.


5


For the
quarter ended September 30, 2008, the Company determined that the $75,000
carrying value of the property was impaired and recorded a write-down of $24,000
which was recognized as an impairment of mineral properties and royalty interest
in the third quarter of 2008. This was a 32% impairment based on the newly
proposed terms of the Option and Real Property Sales Agreement received by the
estate of J.J. Oberbillig on November 4, 2008.  Management of the
Company believed that the proposed terms reflected a reasonable basis to
estimate the decline in the value of the Bradley property due to its proximity
to the Oberbillig property.





For the
year ended December 31, 2008, the Company determined that the $75,000 carrying
value of the property had been impaired based on the fact that the Company had
been unsuccessful in finding any potential joint venture partners and there was
a very high probability that the Company would not exercise the option to
purchase, and therefore impaired the carrying value to zero.  On March
4, the Company notified the Bradley Mining Company that it intended not to
exercise the option on the option agreement. See “Note 5. Mineral Properties -
Mining Lease and Option to
Purchase Agreement with Bradley Mining Company” and“Note 14. Subsequent
Events – Assignment of Mining
Lease and Option to Purchase Agreement with Bradley Mining Company” to
our consolidated financial statements for further details.





In
October 2007, our common stock began trading on the NASDAQ Electronic Bulletin
Board (OTCBB) under the symbol “GCMN”.  Prior to October 2007 our
common stock was traded on the over the counter market in the pink sheets under
the symbol “GCMN.”





There has
been no bankruptcy, receivership or similar proceedings.





Business of the
Company


We are in
the business of exploration, development, and if warranted the mining of
properties containing valuable mineral deposits. The focus of our exploration
programs is directed at precious metals, primarily gold. We currently control
approximately ,37,560 acres of land under State of Alaska jurisdiction. In
Alaska, the lands are held under and are subject to the State’s mining laws and
regulations.  Of the 37,560 acres in Alaska, approximately 15,320 are
placed with Golden Lynx, LLC as part of our joint venture with Cougar Gold
LLC.  See “Note 5. Mineral Properties - Golden Lynx, LLC” to our
consolidated financial statements for further details. We continue to identify,
investigate and acquire potential properties for future exploration and
development when warranted.





In Idaho
we currently control 46 unpatented federal mill site claims and 185 unpatented
federal lode claims in the Stibnite District covering approximately 3,930
acres.   The Idaho properties are held under and are subject to
the Federal mining laws and regulations.  In Idaho, we initiated
collection and compilation of historic exploration data and due diligence
activities related to our land holdings in the Stibnite-Yellow Pine Mining
District.  See “Note 14. Subsequent Events - Purchase Agreement on Idaho
Unpatented Claims” to our consolidated financial statements for further
details.




Amount Spent on Exploration
for the Last Two Years


During
the years ending December 31, 2008 and 2007, we have spent $159,201 and
$3,373,798, respectively, on exploration activities.




Employees


On
January 31, 2009 the Company decided not to renew its office lease that
consisted of 3,354 square feet and move the Company’s operations into the home
of the CFO who at the time is the only paid employee working part
time.  We intend to utilize the services of consultants and
contractors to provide additional services to the Company as
needed.




Competition


There is
aggressive competition within the minerals industry to discover and acquire
properties considered to have commercial potential.  The Company
competes for the opportunity to participate in promising exploration projects
with other entities, many of which have greater resources than the
Company.  In addition, the Company competes with others in efforts to
obtain financing to explore and develop mineral properties.




Regulation


The
Company’s activities in the United States are subject to various federal, state,
and local laws and regulations governing prospecting, development, production,
labor standards, occupational health and mine safety, control of toxic
substances, and other matters involving environmental protection and
taxation.  It is possible that future changes in these laws or
regulations could have a significant impact on the Company’s business, causing
those activities to be economically reevaluated at that time.


6




Reports to Security
Holders




We are
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the Exchange Act), and therefore file periodic reports and other
information with the Securities and Exchange Commission (SEC). These reports may
be obtained by visiting the Public Reference Room of the SEC at 100 F
Street, NE, Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330. In
addition, the SEC maintains an Internet web site at www.sec.gov that contains
reports, proxy information statements and other information regarding issuers
that file electronically.




Our
filings under the Exchange Act (including annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and all
amendments to these reports) are also available free of charge on our web site
at www.goldcrestminesinc.com.
These reports are available as soon as reasonably practicable after such
material is electronically filed with or furnished to the SEC. The reference to
our web site address does not constitute incorporation by reference of the
information contained on the web site, and the information contained on the web
site is not part of this document.





ITEM
1A.             RISK
FACTORS




As a
smaller reporting company, we have elected not to provide the disclosure
required by this item.





ITEM
1B.             UNRESOLVED
STAFF COMMENTS





None.




ITEM
2.                PROPERTIES




ALASKA
PROPERTIES





SOUTHWEST KUSKOKWIM
PROJECT





Summary


In the
Kisaralik Lake area of southwest Alaska, the Company’s wholly owned subsidiary
Kisa Gold Mining, Inc. (KGMI) controls or has interests in seven claim blocks
consisting of 199 State of Alaska mining claims covering approximately 30,520
acres.  Of the 30,520 acres, approximately 15,320 are placed with
Golden Lynx, LLC as part of our joint venture with Cougar Gold LLC, a greater
than 5% shareholder, who is the operator of the Golden Lynx, LLC and an
affiliate of Electrum USA Ltd.  See “Note 5. Mineral Properties -
Golden Lynx, LLC” to
our consolidated financial statements for further details. The Company calls the
seven claim blocks the Southwest Kuskokwim Project and the individual names of
each claim block are Kisa, Gold Lake, Luna, AKO, Gold Creek, Gossan Valley and
Little Swift.  Previous workers located and prospected several
significant precious metal showings in this remote, highly prospective portion
of the Kuskokwim Mineral Belt nearly 20 years ago.  The showings show
many similarities in mineralization style, alteration and general geologic
characteristics to Nova Gold Resources and Barrick’s Donlin Creek project and
other major Kuskokwim Mineral Belt gold deposits.


Location
and Access


The
Southwest Kuskokwim Project area is situated in a mountainous, high relief area
located approximately 100 miles east of Bethel, Alaska and approximately 120
miles southwest of Donlin Creek and 40 miles west of the Shotgun
Deposit.  The project area lies along the boundary between the Bristol
Bay, Kuskokwim and Bethel Recording Districts in southwest Alaska on State of
Alaska lands.  Bethel is the nearest community with full, year-round
services.  Commercial barge service from Anchorage is available from
late May through early October at Bethel.




The
effective work season in the project area is from July through
September.  The lakes in the immediate area typically remain frozen
and snow covers ridges and upper slopes until late June or early
July.  Currently, personnel and equipment access to the area is
limited to float planes capable of landing on lakes, via helicopter or via small
fixed wing aircraft equipped with tundra tires.




The
nearest areas to the prospects that are closed to mineral entry include Wood –
Tikchik State Park located to the east of the Gold Lake and Kisa claim
groups.  Areas to the west and south are property of the Federal
government and include the Yukon Flats National Wildlife and Togiak National
Wildlife Refuges respectively.  There currently are no unusual social,
political or environmental encumbrances to exploration, development or
production on the prospects.  There are currently no roads or power
available to the properties.  Should attempts to develop one or more
of the prospects occur, there is no guarantee that controversy will not arise as
a result of any proposed development.


7




Geologic
Setting and Deposit Types


The
properties are situated in the Kuskokwim Mineral Belt in the southern portion of
the Aniak-Tuluksak and southeastern portion of the Bethel Mining
Districts.  Historically the Kuskokwim Mineral Belt has been a major
placer and lode gold producer as well as the major source of mercury in Alaska
since the turn of the twentieth century.  Recent regional- to
deposit-scale investigations by industry, academic institutions and government
workers have helped better define the mineral deposit types and geologic
controls in the Mineral Belt.  This work has been spurred on by the
discovery of major gold deposits throughout the northern and central portion of
the belt, including the largest known deposit in the belt, the Donlin Creek
deposit located approximately 120 miles to the northeast.





Rock
sequences exposed in the Kuskokwim region consist of fault-bounded blocks
consisting of Jurassic- to Tertiary-age assemblages of sedimentary, volcanic and
intrusive rocks. These rocks were subsequently deformed, weakly metamorphosed
and intruded by middle Cretaceous to Tertiary plutons, and associated dikes and
sills, often in swarms along structural corridors. Glacial and modern flood
plain deposits typically fill the broad glacially-carved valleys.




Previous
Work by the Company


The
Company’s past exploration efforts on the project include:




·
            Completion
      of 2,100 square miles of high resolution airborne geophysical surveys over
      the project area and south of the Donlin Creek gold deposit in 2006 and
      2007;


·
            Completion
      of 17-line miles of induced polarization/resistivity surveys, 120-line
      miles of ground magnetics, collection of over 300 stream sediments and 250
      rock samples and three soil grids on anomalies in the seven claim block
      area in 2006 and 2007;


·
            Completion
      of over 3,100 feet of drilling at the Kisa Breccia target in the Kisa
      claim group with encouraging results in
2007;


·
            Acquisition
      of two historic district-scale industry reconnaissance data sets and
      development of a proprietary steam sediment database that includes over
      3,000 conventional silt and pan concentrate stream sediment samples. These
      samples define district-scale anomalies along distinct trends identified
      by the airborne geophysics and cover an area beginning at Kisa and
      extending 100 miles to northeast to the southern reaches of the Donlin
      Creek deposit;


·
            Discovery
      and staking of a major new mineral occurrence at the Luna Prospect 6 miles
      west of the Company’s Kisa claim
group;


·
            Entry
      into a Joint Venture with Cougar Gold LLC, operator of the Golden Lynx LLC
      on the Kisa, Gold Lake, Little Swift, Gossan Valley and Gold Creek
      prospects and into a Joint Venture with Newmont Mining Corporation on the
      AKO and Luna prospects.  See “Note 5. Mineral Properties - Golden Lynx, LLC” and
      “Note 5. Mineral Properties - Newmont Venture Agreements”to our consolidated financial statements for further
      details.




Current
Program


Significant
accomplishments of the 2008 exploration program include:




·
            Completion
      of over 3,200 feet of drilling on the Gossan Ridge prospect, Gold Lake
      claim group with encouraging
results;


·
            Completion
      of a soil grid on the Gold Lake and Kisa prospects extending areas of
      anomalous gold mineralization;


·
            Staking
      of additional mining claims over the Kisa, Gold Lake, Gold Creek, Gossan
      Valley and Little Swift prospect
areas;


·
            Completion
      of systematic rock and soil sampling on the Luna and AKO claim groups by
      Newmont Mining Corporation while they were the Company’s Joint Venture
      partner.





Southwest Kuskokwim Project
Descriptions




Kisa
Prospect


The Kisa
claim group is made up of 32 state mining claims covering approximately 4,520
acres. The property is held under a joint venture agreement with Cougar Gold
LLC, operator of the Golden Lynx LLC, a private Denver-based exploration and
development company. The property is held and managed by the joint venture
company, Golden Lynx LLC. See “Note 5. Mineral Properties - Golden Lynx, LLC”to our consolidated
financial statements for further details.





The
mining claims encompass a narrow, linear, northeast trending ridge held up with
hornfelsed Jurassic- to Cretaceous-age sedimentary rocks intruded by rhyolite to
gabbroic dikes and sills.  Several northwest-trending spurs off the
main ridge appear to be related to crosscutting dikes of a different age and
composition.  Geochemical analyses suggest associations similar to
those known from other gold deposits within the Kuskokwim Mineral Belt including
the producing Fort Knox Mine and advanced exploration projects at Donlin Creek
to the north and Shotgun Hills to the east.


8




During
2007, the Company completed over 3,100 feet of core drilling with encouraging
results on one of the main targets of the Kisa claim group, known as the Kisa Breccia Target.  A poorly
exposed, extensively silica-carbonate-sulfide altered breccia body is located
along a ridge crest and steep, north-facing valley walls. The breccia is
composed of a mixture of altered sedimentary and igneous clasts, many of which
exhibit multiple generations of veining and brecciation.  The breccia
body is exposed over an area approximately 1000 feet wide x 1600 feet long and
roughly 800 feet high.  Systematic rock chip samples from outcropping
exposures of this breccia average over 1.25 parts per million (0.036 troy ounces
per short ton) gold with select rock chip samples up to 7 parts per million
(0.20 troy ounces per short ton). The Company completed six core holes into the
target during the 2007 drilling campaign. All six holes cut broad zones of
intensely altered igneous breccia containing low grade gold mineralization
including narrower higher grade intervals. Highlights include hole K07-04 which
cut 678 feet averaging 0.3 parts per million gold; hole K07-05 which cut 378
feet averaging 0.7 parts per million (0.02 ounces per ton) gold, including an
intercept of 144 feet averaging 1.3 parts per million (0.038 ounces per ton) and
hole K07-06 which cut 485 feet averaging 0.4 parts per million (0.012 ounces per
ton) gold.




The Golden Dike Target includes the rocks
exposed on and under a prominent northeast trending ridgeline running through
the center of the Kisa claim group.  The ridge contains numerous
silica-carbonate-sulfide altered felsic rhyolite dikes and sills exposed over an
area 900 feet wide x 9800 feet long with at least 650 feet of exposed vertical
extent.  Float mapping, aerial photographic linears, airborne
geophysical data and soil sampling suggest the dike swarm may extend in both
directions under talus covered slopes and into the adjacent
valleys.  Sedimentary rocks are heavily iron oxide stained and
fractured in the hornfelsed zones adjacent to and along the dike and sill
margins and contain various oxidation products after sulfides.  The
dikes are often bleached, silicified and typically contain disseminated to
stockwork sulfide veining.  The large spatial extent and intense
alteration associated with gold in amounts > 0.1 parts per million in nearly
all the samples collected from this dike swarm and the heavily iron-stained host
rocks suggest the presence of a major mineralized system at the surface and
underlying the ridge.  Similar dikes swarms and alteration zones are
associated with the mineralized zones in the Donlin Creek deposit.




Work in
2007 included detailed rock chip and soil sampling, ground and airborne
geophysics and geologic mapping. This work has now expanded the target area to a
zone approximately 850 feet to 1,500 feet wide x 15,000 feet long with at least
525 feet and locally up to 1,150 feet of exposed vertical extent. Additional
soil and rock chip sampling and geologic mapping were completed during the 2008
field season and expanded the areas of known gold mineralization
considerably.




The Pirate’s Pick Target is located in the
northern portion of the Kisa claim group and consists of a large
northwest-trending quartz-carbonate-sulfide veined fault zone.  The
intensely stockwork-veined fault is intermittently exposed over the crest and
flanks of a small ridge in an area roughly 650 feet wide by 1150 feet long with
several hundreds of feet of exposed vertical extent.  The fault occurs
along the northern end of the ridge hosting the dike-sill complex and field
evidence suggests the fault may offset and displace the dike
swarm.  The average of 18 rock chip samples collected from this zone
is 1.95 parts per million (0.057 ounces per ton) gold.




Additional
targets occur along the projections of the dike swarm and fault systems into the
adjacent talus covered slopes and glacial drift filled valleys, but will require
additional work prior to definition of drill targets.  Several small
rubble crop and/or outcrop showings along the valley edge to the northwest of
the main ridge contain anomalous pathfinder element suites and gold
values.  These showings correspond with a marked airborne magnetic
geophysical anomaly identical to that over the main ridge to the southeast and
make an intriguing target.




Gold
Lake Prospect


The Gold
Lake claim group is made up of 44 state mining claims covering approximately
6,320 acres approximately 8 miles west of the Kisa Prospect. The property is
held under a joint venture agreement with Cougar Gold LLC, operator of the
Golden Lynx LLC, a private Denver-based exploration and development company. The
property is held and managed by the joint venture company, Golden Lynx
LLC.  See “Note 5. Mineral Properties - Golden Lynx, LLC”to our consolidated
financial statements for further details.  The claims cover a broad,
bright red, iron oxide stained, northwest trending ridge several miles long and
nearly a mile wide adjacent to Gold Lake.  The claim group contains at
least two generations of crosscutting igneous dikes and sills similar to the
Kisa showing and drill targets have been defined at several prospects within the
claim package.


9




The Gossan Ridge Target consists of a series of
banded quartz-sulfide veins associated with a dike-sill swarm that runs along
the crest and flanks of rust-colored ridgeline exhibiting heavily iron
oxide-staining reflecting weathering and oxidation of widespread disseminated
sulfides in the rocks exposed along the ridge.  The vein system has an
exposed strike length of over 1600 feet and exposed widths up to 150 feet and
the alteration zone and lower grade old mineralization is up to 350 feet wide
and 4900 feet long with up to 650 feet of exposed vertical
extent.  Samples from the vein system consistently carry highly
anomalous gold and pathfinder elements with select samples running up to 10
parts per million  (0.29 ounces per ton) gold and 200 parts per
million (5.8 ounces per ton) silver.  The vein system appears to be
associated with a series of porphyritic dikes that have produced pervasive and
intense hydrothermal alteration of the host sedimentary rocks.  The
dikes and sills typically contain lower grade gold mineralization, but their
widespread presence and intense alteration associated with the igneous rocks
throughout the complex suggest the presence of a larger, potentially mineralized
igneous body at depth.




During
2007, additional rock and soil sampling was completed and the previously
outlined soil anomaly was extended to more than 1 kilometer along
strike.  Over 51 line-miles of ground magnetics were completed and
located a distinctive circular magnetic anomaly adjacent to, and overlapping
with the main soil and rock chip anomaly.  The magnetic feature
extends beneath a glacial drift-filled valley and underlies another prominent
alteration zone on the adjacent ridge slopes.  Prospecting this
feature in 2007 confirmed the presence of quartz-arsenopyrite-stibnite veins and
fracture-controlled sulfides potentially indicative of cupola-related
mineralization above a buried intrusion.  A single 3-mile long,
induced polarization and resistivity survey line was run adjacent to the main
showing and generated a good IP response over the circular ground magnetics
feature.  A large area of anomalous gold and intense alteration and
the numerous dikes suggests the Gold Lake prospect may overlie a larger
potentially mineralized intrusive hosted system at depth.




During
2008, four drill holes were completed totaling 3,227.5 feet and cut thick
intervals of moderately to strongly altered and weakly gold mineralized
sediments and intrusives. All the holes bottomed in hornfels indicating
proximity to a larger intrusive body at depth which is still untested by
drilling. Geologic mapping and soil and rock sampling were completed along
favorable trends. Detailed sampling and structural analysis indicates the main
mineralized zone, exposed on steep nearly inaccessible cliffs, was not
completely tested by the 2008 drilling, in part due to difficulties in
establishing a stable drill platform on the steep slopes. Detailed continuous
rock chip sampling across the mineralized zone exposed on the cliffs outlined a
zone approximately 30 meters true thickness averaging over 1 gram per metric
tonne.




The Golden Alder Target consists of a linear
fault zone exposed along the bottom and valley walls of a small drainage over a
strike length of approximately 600 meters.  Soils collected over
covered areas on the valley walls and adjacent uplands suggests the zone may be
as wide as 200 meters.  A pronounced circular airborne geophysical
anomaly underlies a portion of the fault system and its projection into an
alluvium covered area and may represent a leakage halo emanating from a
potentially mineralized intrusion at depth beneath the fault
zone.  The average of 18 rock chip samples collected from this
structural zone average over 1.5 grams per tonne gold. During 2008, additional
soil and rock sampling surveys were completed with encouraging
results.




AKO
Prospect


The AKO
claim group is located in the southwestern Kuskokwim mountains approximately 9
miles southwest of the Kisa Prospect.  The Company controls over 7,200
acres on 45 state mining claims. The AKO prospects were first discovered 20
years ago during a regional reconnaissance program.  Follow-up
included limited rock-chip sampling and field examination of several linear to
ovoid iron-oxide stained ridgeline and valley-wall color anomalies within and
along the faulted, western margin of the Crooked Mountain
Pluton.  These color anomalies are found at the headwaters of streams
with strong gold and multi-element anomalies in stream sediments and pan
concentrates and they are aligned along a pronounced, linear topographic feature
that stretches for several miles.  These prospects have never been
drilled.





The
Company’s exploration in the area includes compilation of historic data,
completion of fixed-wing aeromagnetic and electromagnetic surveys, aerial
reconnaissance mapping, stream sediment sampling and preliminary prospecting on
several of the color anomalies identified to date. Stream-sediment samples from
below the area of the known color anomalies and gold showings contain highly
anomalous gold, arsenic, antimony, molybdenum and bismuth.  Pan
concentrates from streams draining these areas also contain visible gold.
Follow-up work in 2007 has identified a number of targets on the property for
further follow-up and possibly drill testing.





On May 8,
2008, the Company signed three separate joint venture agreements with Newmont
North America Exploration Limited, a subsidiary of Newmont Mining Corporation
(”Newmont”). During the joint venture Newmont completed a systematic
reconnaissance type soil and rock chip sampling program over the AKO claim group
which resulted in the delineation of two contiguous large gold anomalies on the
claim group, The largest anomaly is centered over a distinctive aeromagnetic
anomaly thought to represent a separate intrusive phase of the Crooked Mountain
Pluton, consists of soils and rocks containing gold values greater than 20 ppb
and up to 4 ppm. This anomaly is over 13,500 feet long and 2,400 feet wide and
is associated with multiple sets of sheeted quartz-sulfide vein systems. A
similar and contiguous anomaly is situated adjacent to the main anomaly and has
a slightly different trend and consists of soils and rock samples defining an
anomalous area over 20,000 feet long and 2,700 feet wide. Neither of these
anomalies has been drill tested. However on December 12, 2008, the Company
received from Newmont a letter that notified of its intent to terminate the
three venture agreements effective immediately. See “Note 5. Mineral
Properties - Newmont Venture
Agreements”to our consolidated financial statements for further
details.




10


Luna
Prospect


The Luna
claim group is located in the southern Kuskokwim mountains of southwestern
Alaska approximately 100 miles to the southeast of Bethel and 6 miles west of
the Kisa prospect.  The project area is accessed by helicopter or by
small aircraft capable of landing on a tundra dirt strip. The Company staked the
property in mid-2007, which consists of 50 state mining claims covering
approximately 8,000 acres.





The Luna
prospect was discovered during follow-up of an airborne geophysical anomaly
identified from proprietary surveys completed in the fall of 2006 and spring of
2007.  A regional-scale structural zone was interpreted from the
airborne geophysical data.  Follow-up exploration involving IP,
resistivity and ground magnetic surveys, systematic stream-sediment and
rock-chip sampling and geologic mapping led to the discovery.





Follow-up
exploration involving IP, resistivity and ground magnetic surveys, systematic
stream-sediment and rock-chip sampling and geologic mapping led to the
discovery.  Over 16 line-miles of IP-resistivity and 40 line-miles of
ground magnetics were completed in 2007.  The geophysical surveys
define a 4.8 miles long by 1.4 miles wide IP and resistivity anomaly coinciding
with a ground and aerial magnetic anomaly.  Several conductors
identified from the airborne electromagnetic surveys correspond with zones of
semi-massive sulfide replacement mineralization located on the
ground.





A total
of 41 stream-sediment samples collected from streams draining the prospect area
outline a distinct 10 square mile gold, arsenic, and antimony
anomaly.  Samples returned values up to 1,052 ppb gold.  A
total of 40 of 72 rock chip samples collected from the prospect area contain
anomalous gold, with values as high as 0.75 oz Au/t over 5 feet widths
reported.  Gold is associated with anomalous arsenic (up to 8,400
ppm), antimony (up to 158 ppm), bismuth (up to 36 ppm), molybdenum (up to 64
ppm), silver (up to 23 ppm), copper (up to 0.44%), lead (up to 0.12%) and zinc
(up to 0.6%).





Mineralization
is hosted in calcareous siltstones, cherts and tuffaceous sedimentary rocks as
well as in porphyritic intrusive rocks.  Gold has been found in a
broad area that exhibits pervasive fracturing and clay
alteration.  The prospective area contains ubiquitous disseminated,
vein and stockwork sulfide accumulations.  Intrusive rocks occur as
dikes, sills and small stocks and compositionally include diorites and
granodiorites as well as rhyolites.  Several zones of stratiform
sulfide replacement mineralization with cherty silica alteration containing up
to 70% sulfides, primarily fine-grained pyrite, arsenopyrite and stibnite and to
a lesser extent chalcopyrite and sphalerite have been located within the claim
group.





The
presence of widespread base and precious metals anomalies in stream sediments
and rocks along this newly located structural zone and the association of these
anomalies with intrusive rocks and reactive sedimentary rocks opens up a wide
range of opportunities for future discoveries.





On May 8,
2008, the Company signed three separate joint venture agreements with Newmont
North America Exploration Limited, a subsidiary of Newmont Mining Corporation
(”Newmont”). During the joint venture Newmont conducted rock sampling and
mapping on the project in 2008 and confirmed previous sampling results produced
by the Company including reproduction of higher grade rock chip sample results
from a poorly exposed altered intrusive returning gold values as high as 12 ppm
(0.35 opt).  However on December 12, 2008, the Company received from
Newmont a letter that notified of its intent to terminate the three venture
agreements effective immediately. See “Note 5. Mineral Properties - Newmont Venture Agreements”to our consolidated financial statements for further
details.





Little
Swift


Little
Swift consists of 14 state mining claims covering approximately 2,240 acres and
were staked to prospect a distinctively linear, contact zone between the Crooked
Mountain quartz monzonite pluton and the cupola of hornfelsed sedimentary rocks.
The property is held under a joint venture agreement with Cougar Gold LLC,
operator of the Golden Lynx LLC, a private Denver-based exploration and
development company. The property is held and managed by the joint venture
company, Golden Lynx LLC. See “Note 5. Mineral Properties - Golden Lynx, LLC” to our consolidated
financial statements for further details. The prospect sites are staked over six
large linear to ovoid iron-oxide stained ridgeline and valley wall color
anomalies along the contact zone.  Previous workers collected highly
anomalous stream silt samples from below the area of the color anomalies
containing up to 230 ppb Au, 151 ppm As and 25 ppb Hg.


11


Gold
Creek


Gold
Creek consists of 12 state mining claims covering approximately 1,920 acres and
were staked to prospect several iron-oxide stained color anomalies developed
within the cupola of hornfelsed sedimentary rocks associated with the eastern
margin of Crooked Mountain quartz monzonite pluton. The property is held under a
joint venture agreement with Cougar Gold LLC, operator of the Golden Lynx LLC, a
private Denver-based exploration and development company. The property is held
and managed by the joint venture company, Golden Lynx LLC. See “Note 5. Mineral
Properties - Golden Lynx,
LLC” to our consolidated financial statements for further details. The
prospect sites are staked over four large ovoid-valley wall color anomalies that
appear to be stratiform in character.  Previous workers collected
highly anomalous stream-sediment samples from below the area of the color
anomalies containing up to 163 ppm As and 57 ppb Hg. In 2008, Cougar Gold LLC,
an affiliate of Electrum USA Ltd., operator of the Golden Lynx LLC, completed
sampling and mapping of the Gold Creek prospects.  Mapping located a
series of large quartz monzonite to diorite dikes in the headwaters of the
streams reporting anomalous gold and pathfinder elements. Large color anomalies
noted previously were examined and found to be associated with extensive
fracture controlled sulfide development. The most intense sulfide development
and fracturing were found to be stratigraphically controlled and associated with
distinctive chert and black siltite sections. Weak gold and pathfinder anomalies
are associated with these fracture zones. Much of the prospect area is covered
with glacial alluvium and talus potentially masking potential mineralized areas
within the claim group.





Gossan
Valley


Gossan
Valley consists of 2 state mining claims covering approximately 320 acres
located approximately 6 miles south of the AKO prospect. The property is held
under a joint venture agreement with Cougar Gold LLC, operator of the Golden
Lynx LLC, a private Denver-based exploration and development company. The
property is held and managed by the joint venture company, Golden Lynx
LLC.  See “Note 5. Mineral Properties - Golden Lynx, LLC”to our consolidated
financial statements for further details. The prospect was first discovered 20
years ago during a regional reconnaissance program.  Follow-up
included limited rock-chip sampling and field examination of several ridgeline
and valley-wall color anomalies within and along the faulted, eastern margin of
the Crooked Mountain Pluton.  The color anomalies are found at the
headwaters of streams with gold (up to 30 ppb) and multi-element anomalies in
stream sediments and pan concentrates and they are aligned along a pronounced,
linear topographic feature that stretches for approximately one
mile.  Previous rock sampling in the area, was limited to the
collection of ten float, talus and outcrop samples below and within one of
several color anomalies present in the area.  Two of the ten samples
returned detectable gold with a maximum value of 40 ppb and weakly anomalous
copper in several samples with a maximum value of 357 ppm.  The
prospect was never drilled.





The
Company’s exploration in the area includes compilation of historic data,
completion of fixed-wing aeromagnetic and electromagnetic surveys, aerial
reconnaissance mapping, stream sediment sampling and preliminary prospecting on
several of the color anomalies. Stream-sediment samples from below the area of
the known color anomalies contain highly anomalous gold, arsenic, antimony,
molybdenum and bismuth.  Pan concentrates from streams draining these
areas also contain visible gold.  A brief examination of the showing
in 2007 included collection of a single representative rock chip sample over a 3
meter thick exposure of gossanous hornfels.  The rock chip sample
reported 199 ppb gold and 462 ppm copper consistent with previous sample results
from the area.





In 2008,
Cougar Gold LLC, an affiliate of Electrum USA Ltd., operator of the Golden Lynx
LLC, completed sampling and mapping of the prospect and identified a broad area
of stockwork veining, potassium feldspar and biotite flooding similar to that
found in many porphyry-style gold and copper systems. See “Note 5. Mineral
Properties - Golden Lynx,
LLC” to
our consolidated financial statements for further details.





BUCKSTOCK
PROJECT





Summary


The
Company’s wholly owned subsidiary Kisa Gold Mining, Inc., (KGMI) had staked 316
State of Alaska mining claims covering approximately 51,560 acres in seven claim
groups.  The Company abandoned 6 of the claim groups leaving only the
Chilly group with 44 State of Alaska mining claims covering approximately 7,000
acres.  The claims are situated approximately 50 miles southwest of
Donlin Creek and 45 miles northeast of KGMI’s Kisa Project area. KGMI initiated
an active and aggressive exploration program in the region as part of a regional
program approach expanding on the Company’s results in the Kisa Project
area.  These prospects have been identified through multiple sources
including a review and compilation of data from published federal, state and
academic manuscripts, published and unpublished geochemical data and corporate
proprietary data sets.





Over
1,600 stream sediment, heavy mineral concentrate and rock samples cover the area
and the claim groups are staked in areas determined to be prospective as
potential source areas for the placer occurrences identified from the company’s
proprietary geochemical database.  Each of these prospects falls
within much larger, poorly defined regional-scale geochemical anomalies that
represent district-scale exploration plays.





The
project area is underlain by sedimentary and volcanic rocks of the Triassic and
Cretaceous Gemuk Group; sedimentary rocks of the Cretaceous Kuskokwim Group; and
Late Cretaceous and early Tertiary mafic to felsic volcanic rocks, small
granitic intrusions, and granite porphyry dikes and sills.  Locally
there are small accumulations of Quaternary age olivine basalt.  The
project area lies within a structurally complex flexure zone within a series of
crustal-scale wrench faults.


12





Deformation
associated with these faults and splays appears to be at least locally important
in the location of both igneous rocks and mineralized showings.  Both
high level epithermal and deeper-level shallow intrusive and subvolcanic
alteration and mineralization systems are present in the
project.  Initial field follow-up in late 2007 was encouraging with
gold showings identified in bedrock on several claim groups.





Chilly


This
prospect consists of a semicircular, 25-square mile multi-element stream
geochemical anomaly draining a large Late Cretaceous to Early Tertiary, zoned,
quartz monzonitic intrusive complex.  Highly anomalous arsenic in
stream silts outlines this intrusive complex at the regional
scale.  Placer gold has been found around the flanks of the complex
coincident with highly anomalous stream silts containing pathfinder
elements.  Seven rock chip samples collected from outcrops in the
headwaters of the anomalous streams contain values ranging from 0.2 to 0.4 gpt
gold.





On May 8,
2008, the Company signed three separate joint venture agreements with Newmont
North America Exploration Limited, a subsidiary of Newmont Mining Corporation
(”Newmont”). During the joint venture Newmont completed a systematic rock
and soil sampling program on the claims in the summer of 2008 and delineated a
large gold in soils anomaly on the claim group.  However on December
12, 2008, the Company received from Newmont a letter that notified of its intent
to terminate the three venture agreements effective immediately. See “Note
5. Mineral Properties - NewmontVenture Agreements”to our
consolidated financial statements for further details.




IDAHO
PROPERTIES





Niagara
Mining and Development Co., Inc., (Niagara) a wholly owned subsidiary of Gold
Crest Mines, Inc has established a dominant land position in the historic Yellow
Pine-Stibnite Mining District. The District is located approximately 45 miles
northeast of Cascade, in Valley County in south-central Idaho.  The
area is situated in a high relief terrane with surrounding mountains rising up
to 8,000 feet in elevation. Networks of paved and unpaved public roads access
the property and an airstrip is present on the site. The Company now controls
over 230 unpatented federal mining claims and a substantial acreage of patented
lode and mill site claims through preliminary option agreements totaling
approximately 4,500 acres in the district. According to a 2000 report by the
Idaho Geological Survey, the Stibnite district has produced over 500,000 ounces
of gold as well as substantial quantities of silver, antimony and
tungsten.





The
Company has entered into an agreement with the J.J. Oberbillig Estate and heirs
for an option to purchase a 5% Net Smelter Royalty (NSR) and real property in
the Stibnite Mining District in central Idaho. See “Note 5. Mineral Properties -
Option and Real Property Sales
Agreement with JJO, LLC”,“Note 6. Royalty Interest in Mineral
Property”and “Note 14.
Subsequent Events – Assignment
of Option and Real Property Sales Agreement with JJO, LLC”to our
consolidated financial statements for further details. This royalty applies to
any metal produced from lands sold by the Oberbilligs to Bradley Mining Co. in
1941. This option also gives the Company the right to acquire approximately 255
acres of patented mining and mill site claims in the Stibnite area from the
Oberbillig Estate.  These lands have been the subject of several
exploration programs over the years, but contain no reserves calculated to
modern standards.





In
addition, the Company has entered into a Mining Lease and Option to Purchase
Agreement with the Bradley Mining Company. The patented claims lie in a
North-South direction and cover approximately 1.5 miles of the surface
expression of the Meadow Creek fault, the primary mineralized zone in the
district.  Underlying the claims are the past producing Meadow Creek
underground mine, the DMEA and North exploration workings and a portion of the
Monday Tunnel, an exploration drift.  See “Note 5. Mineral Properties
- Mining Lease and Option to
Purchase Agreement with Bradley Mining Company”and “Note 14. Subsequent
Events – Assignment of Mining
Lease and Option to Purchase Agreement with Bradley Mining Company”to
our consolidated financial statements for further details.





The 2000
Idaho Geological Survey report credits the Meadow Creek mine with producing some
49,500 ounces of gold from underground operations during the period 1932 through
1937, as well as silver, antimony and tungsten.  Additional work was
carried out on these claims from the 1930’s through the 1950’s by the U.S.
Bureau of Mines (DMEA workings) and the Bradley Mining Company (Monday Tunnel
and North Drift).  Work during this period included extensive drifting
along and adjacent to the Meadow Creek fault system as well as both surface and
underground diamond drilling.





Considerable
data (maps, mine plans, drill logs and assay results) on these claims was
acquired through the land and royalty purchase option
agreement.  Based on a review of this data and information available
in State and Federal agencies’ archives, the underground drifts encountered
numerous zones of mineralization, many of which were further explored by diamond
drilling.  Nevertheless, no proven or probable ore reserves have been
established on the Bradley lease.




13


Bedrock
in the district consists of granitic rocks of the Cretaceous-age Idaho Batholith
and a roof pendant of metasedimentary rocks dominated by carbonates and
quartzites. Much of the District’s valley area is covered with unconsolidated
alluvial and glacial deposits. Gold and antimony mineralization are epithermal
in character and related to north- and northeast-trending structures, which are
believed to be related to the nearby Tertiary-age Thunder Mountain caldera
complex. Production in the district started in the early 1900s and considerable
quantities of gold, antimony, and tungsten have been mined there since World War
II. In the late 1980’s and early 1990’s about 3 million tons of oxide ore was
heap leached. Total recorded past production from the District is well over
500,000 oz of gold.





Numerous
areas of sulfide mineralization are found throughout the District and on lands
under the Company’s control. Much of this mineralization has been extensively
drilled by previous operators during early stage exploration and development as
well as part of past mining operations focused on the previously exploited
leachable oxide ores. The largest currently known single sulfide occurrence in
the district is the Yellow Pine prospect currently under option by Vista Gold.
Any future production from the main Yellow Pine deposit and any additional
production from the Vista-controlled patented claim block are subject to the 5%
Net Smelter Returns royalty interest mentioned above.  As part of the
royalty and land acquisition, the Company has acquired a large amount of
historical data from the district dating back as early as the 1920’s when the
district’s first major development occurred.  Review and compilation
of these historical records indicates a surprisingly large number of undeveloped
mineralized areas containing the potential to host considerable tonnages of
mineralized oxide and sulfide material within the Company’s land package. Large
areas underlain by oxidized gold-bearing mineralized rock were identified and
drilled during the early 1990’s, but were never mined by previous operators and
are now under the Company’s control. The company is establishing a
district-scale drill and geologic database to place the mineralization into a
consistent framework for exploration.





On March
13, we signed a purchase agreement (the "Agreement") between Gold Crest Mines,
Inc. and Frank Duval for the sale of our Idaho unpatented
claims.  Under the terms of the agreement we sold all of the Company’s
rights, title and interest in and to our 46 unpatented federal mill site claims
and 185 unpatented federal lode claims in the Stibnite District of Idaho known
as our Golden Meadows Project.  We received $25,000 on March 17, 2009
and the remaining $25,000 is due no later than October 1, 2009.  As
part of the agreement, the purchaser shall timely pay the BLM fees required to
maintain the claims in good standing for the 2009 assessment year unless
Purchaser shall notify the Company in writing, no later than August 1, 2009, of
their intent not to proceed with the purchase of the Claims. If Purchaser gives
notice of intent not to proceed with the purchase of the Claims, then the
$25,000 initial payment shall be forfeited to the Company. See “Note 14.
Subsequent Events - Purchase
Agreement on Idaho Unpatented Claims” to our consolidated financial
statements for further details.





ITEM
3.                LEGAL
PROCEEDINGS





We are
not a party to any legal proceedings and are not aware of any such proceedings
known to be contemplated.





ITEM
4.                SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS





No
matters were submitted to a vote of the security holders through the
solicitation of proxies, or otherwise, during the quarter ended December 31,
2008.


14




PART
II





ITEM
      5.
            MARKET
      FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
      EQUITY SECURITIES




In
October 2007, our common stock began quotation on the OTC Electronic Bulletin
Board (OTCBB) under the symbol “GCMN”.  Prior to October 2007 our
common stock was quoted on the over the counter market in the Pink
Sheets.





The
following table sets forth for our common stock, the high and low closing bid
quotations per share, taken from the internet, for our common stock for each
quarter for the periods indicated.  The quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.





Year
                                
                                Quarter
                                
                                High
      Closing
                                
                                
                                Low
      Closing2007
                                
                                First
      Quarter
                                
                                $
                                0.64
                                
                                
                                $
                                0.40Second
      Quarter
                                
                                $
                                0.63
                                
                                
                                $
                                0.50Third
      Quarter
                                
                                $
                                0.55
                                
                                
                                $
                                0.22Fourth
      Quarter
                                
                                $
                                0.30
                                
                                
                                $
                                0.202008
                                
                                First
      Quarter
                                
                                $
                                0.29
                                
                                
                                $
                                0.14Second
      Quarter
                                
                                $
                                0.15
                                
                                
                                $
                                0.08Third
      Quarter
                                
                                $
                                0.09
                                
                                
                                $
                                0.02Fourth
      Quarter
                                
                                $
                                0.04
                                
                                
                                $
                                0.01




Holders




As of
March 4, 2009, there were approximately 393 shareholders of record of the
Company’s common stock as furnished to the Company by its transfer agent and
does not account for shares owned through clearing houses.





Unregistered Sales of Equity
Securities





In
November 2007, we completed a private placement of units for gross proceeds of
$939,500, of which $132,500 remained in the form of promissory notes dated
November 20, 2007, with due dates extending through September 1,
2008.  In the aggregate, we sold 4,697,500 units at a price of $0.20
per unit which included 662,500 units related to the promissory notes and which
were issuable only upon payment of the promissory notes.  Each unit
consisted of one share of common stock and one full common stock purchase
warrant.  Each warrant is exercisable for a period of two (2) years
from the closing to purchase one share of common stock at a price of $0.30 per
share.





On
December 12, 2008, we issued 4,000 shares of common stock and warrants for 4,000
shares to Gregory B. Lipsker for partial payment of $800 by him on his
outstanding promissory note issued as part of his subscription agreement dated
November 20, 2007, to purchase a total of 37,500 units as part of the November
2007 private placement mentioned above.





The
shares and warrants above were issued without registration under the Securities
Act by reason of the exemption from registration afforded by the provisions of
Section 4(2) thereof, as a transaction by an issuer not involving any public
offering.  Mr. Lipsker was an accredited investor at the time of the
issuance.  He delivered appropriate investment representations with
respect to the issuance of the shares and warrants and consented to the
imposition of a restrictive legend upon the certificates representing the shares
and warrants.  He represented that he had not entered into the
transaction with us as a result of or subsequent to any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar
media or broadcast on television or radio, or presented at any seminar or
meeting.  He represented that he had been afforded the opportunity to
ask questions of our management and to receive answers concerning the terms and
conditions of the unit purchase.  No underwriting discounts or
commissions were paid in connection with this transaction.




Dividends





The
Company has never paid any dividends and does not anticipate the payment of
dividends in the foreseeable future.





See Item
12 herein for information relating to our equity compensation
plan.


15




ITEM
6.                SELECTED
FINANCIAL DATA




As a
smaller reporting company, we have elected not to provide the disclosure
required by this item.




ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS


The
following discussion contains various statements regarding our current
strategies, financial position, results of operations, cash flows, operating and
financial trends and uncertainties, as well as certain forward-looking
statements regarding our future expectations. When used in this discussion,
words such as "anticipate," "believe," "estimate," "expect," "could," "may,"
"will," "should," "plan," "predict," "potential," and similar expressions are
intended to identify such forward-looking statements. Our forward- looking
statements are based on our current expectations and are subject to numerous
risks and uncertainties. As such, our actual future results, performance or
achievements may differ materially from the results expressed in, or implied by,
our forward-looking statements. Please refer to our "Risk Factors" elsewhere in
this Annual Report on Form 10-K for the fiscal year ended December 31,
2008. We assume no future obligation to update our forward-looking statements or
to provide periodic updates or guidance.





Overview and Plan of
Operation





As
discussed in “Note 3. Going Concern” to our consolidated financial statements,
the Company has had no revenues and incurred an accumulated deficit of
$9,345,904 through December 31, 2008.  Another factor is that the
Company has a negative current ratio of 0.43: 1 at December 31,
2008.  The current ratio is a measurement of the degree to which
current assets cover current liabilities (current assets/ current
liabilities).  A high ratio indicates a good probability the
enterprise can retire current debts.  These factors raise substantial
doubt about the Company’s ability to continue as a going
concern.  Management intends to seek additional capital from new
equity securities offerings and joint venture agreements that will provide funds
needed to increase liquidity, fund internal growth and fully implement its
business plan.





We are in
the business of exploration, development, and if warranted the mining of
properties containing valuable mineral deposits. We are traded on the over the
counter market in the United States and, as is typical with such companies,
losses are incurred in the stages of exploration and development, which
typically need to be funded through equity or debt financing.





We
currently control approximately 22,240 acres of land under State of Alaska
jurisdiction after having transferred 15,320 acres into Golden Lynx, LLC as part
of our joint venture with Cougar Gold LLC as well as 4,840 additional acres
staked by Golden Lynx.  See “Note 5. Mineral Properties - Golden Lynx, LLC”to our
consolidated financial statements for further details.





Additionally,
we currently control approximately 46 unpatented federal mill site claims and
185 unpatented federal lode claims in the Stibnite District in Central Idaho
covering approximately 3,930 acres. On March 13, we signed a purchase agreement
(the "Agreement") between Gold Crest Mines, Inc. and Frank Duval for the sale of
our Idaho unpatented claims.  Under the terms of the agreement we sold all
of the Company’s rights, title and interest in and to our 46 unpatented federal
mill site claims and 185 unpatented federal lode claims in the Stibnite District
of Idaho known as our Golden Meadows Project.  We received $25,000 on
March 17, 2009 and the remaining $25,000 is due no later than October 1,
2009.  As part of the agreement, the purchaser shall timely pay the
BLM fees required to maintain the claims in good standing for the 2009
assessment year unless Purchaser shall notify the Company in writing, no later
than August 1, 2009, of their intent not to proceed with the purchase of the
Claims. If Purchaser gives notice of intent not to proceed with the purchase of
the Claims, then the $25,000 initial payment shall be forfeited to the
Company. See “Note 14. Subsequent Events - Purchase Agreement on Idaho
Unpatented Claims” to our consolidated financial statements for further
details.





We have
been successful in entering into several  agreements under which, we
believe, we have the opportunity to implement our business plan.  This
agreement and the references to further details contained in our consolidated
financial statements follow:





1.
            On
      January 24, 2008, we entered into an Option and Royalty Sales Agreement
      with the heirs of the Estate of J.J. Oberbillig.  See “Note
      6.  Royalty Interest in Mineral Property” and “Note 14.
      Subsequent Events – Assignment of Royalty Interest
      in Mineral Properties”to our consolidated financial statements for
      further details.


2.
            On
      January 24, 2008, we entered into an Option and Real Property Sales
      Agreement with JJO, LLC, an Idaho limited liability company and personal
      representative of the Estate of J.J. Oberbillig.  See “Note
      5.  Mineral Properties - Option and Real Property Sales
      Agreement with JJO, LLC” and “Note 14. Subsequent Events – Assignment of Option and Real
      Property Sales Agreement with JJO, LLC” to our consolidated
      financial statements for further
details.


16


3.
            On
      March 31, 2008, we entered into a Mining Lease and Option to Purchase
      Agreement with the Bradley Mining Company.  See “Note
      5.  Mineral Properties - Mining Lease and Option to
      Purchase Agreement with Bradley Mining Company” and “Note 14.
      Subsequent Events – Assignment ofMining Lease and Option to
      Purchase Agreement with Bradley Mining Company” to our consolidated
      financial statements for further
details.


4.
            On
      April 18, 2008, we, through our wholly-owned subsidiary, Kisa, entered
      into an agreement with Cougar Gold LLC under which the two companies
      formed the Golden Lynx, LLC.  See “Note 5. Mineral Properties -
      Golden Lynx,
      LLC”to
      our consolidated financial statements for further
  details.


5.
            On
      May 8, 2008, we entered into three separate joint venture agreements with
      Newmont North America Exploration Limited.  On December 12,
      2008, the Company received from Newmont a letter that notified of its
      intent to terminate the three venture agreements effective
      immediately.  See “Note 5. Mineral Properties - Newmont Venture Agreements”to our consolidated financial statements for further
      details.





Officers and Board of
Directors





On April
22, 2008, Gold Crest received a letter of resignation from Gerald Booth as
director effective immediately.





On April
24, 2008 Gold Crest received a letter of resignation from Thomas Loucks as
director effective immediately. Mr. Loucks also served on the Audit
Committee.





On April
28, 2008, the Board of Directors appointed Dan McKinney as a director by
unanimous consent to replace Mr. Booth.




On May
30, 2008 Gold Crest received a letter of resignation from Howard Crosby as
director and chairman of the board effective immediately.





On June
5, 2008, the Board of Directors reappointed Howard Crosby as a director and
chairman of the board by unanimous consent. On January 21, 2009 Gold Crest
received a letter of resignation from Howard Crosby as director and chairman of
the board effective immediately.  Also on June 5, 2008, the Board of
Directors appointed John Ryan as a director by unanimous consent.





On
November 13, 2008, the Board of Directors accepted the resignation of Thomas H.
Parker as the President and Chief Executive Officer of the
Company.  Mr. Parker is continuing in his duties as a director of the
Company.





On
November 13, 2008, the Board of Directors appointed John P. Ryan as the new
President and Chief Executive Officer of the Company.  Mr. Ryan also
remained a Director of the Company.





Comparison of the Years
Ended December 31, 2008 and December 31, 2007:





Results of
Operations




The
following tables set forth certain information regarding the components of our
Consolidated Statements of Operations for the year ended December 31, 2008
compared with the year ended December 31, 2007. These tables are provided to
assist in assessing differences in our overall performance:




The
      Year EndedDecember
      31,
                    
                    
                    December
      31,2008
                    
                    
                    2007
                    
                    
                    $
      Change
                    
                    
                    %
      ChangeREVENUES
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -OPERATING
      EXPENSES:Exploration
      expenditures
                    
                    
                    159,201
                    
                    
                    
                    3,373,798
                    
                    
                    
                    (3,214,597
                    )
                    
                    
                    -95.3
                    %Settlement
      of drilling contract
                    
                    
                    161,813
                    
                    
                    
                    -
                    
                    
                    
                    161,813
                    
                    
                    
                    100.0
                    %Abandonment
      of mineral lease
                    
                    
                    83,600
                    
                    
                    
                    -
                    
                    
                    
                    83,600
                    
                    
                    
                    100.0
                    %Impairment
      of mineral propertiesand royalty interest
                    
                    
                    616,875
                    
                    
                    
                    -
                    
                    
                    
                    616,875
                    
                    
                    
                    100.0
                    %Loss
      on disposal of equipment
                    
                    
                    11,204
                    
                    
                    
                    -
                    
                    
                    
                    11,204
                    
                    
                    
                    100.0
                    %Legal
      and accounting expenses
                    
                    
                    150,828
                    
                    
                    
                    241,586
                    
                    
                    
                    (90,758
                    )
                    
                    
                    -37.6
                    %Directors'
      fees
                    
                    
                    40,000
                    
                    
                    
                    214,000
                    
                    
                    
                    (174,000
                    )
                    
                    
                    -81.3
                    %General
      and administrative
                    
                    
                    672,987
                    
                    
                    
                    1,835,449
                    
                    
                    
                    (1,162,462
                    )
                    
                    
                    -63.3
                    %TOTAL
      OPERATING EXPENSES
                    
                    
                    1,896,508
                    
                    
                    
                    5,664,833
                    
                    
                    
                    (3,768,325
                    )
                    
                    
                    -66.5
                    %LOSS
      FROM OPERATIONS
                    
                    
                    (1,896,508
                    )
                    
                    
                    (5,664,833
                    )
                    
                    
                    3,768,325
                    
                    
                    
                    -66.5
                    %Interest
      income
                    
                    
                    5,571
                    
                    
                    
                    62,756
                    
                    
                    
                    (57,185
                    )
                    
                    
                    -91.1
                    %Interest
      expense
                    
                    
                    (7,787
                    )
                    
                    
                    -
                    
                    
                    
                    (7,787
                    )
                    
                    
                    100.0
                    %TOTAL
      OTHER INCOME (EXPENSE)
                    
                    
                    (2,216
                    )
                    
                    
                    62,756
                    
                    
                    
                    (64,972
                    )
                    
                    
                    -103.5
                    %LOSS
      BEFORE TAXES
                    
                    $
                    (1,898,724
                    )
                    
                    $
                    (5,602,077
                    )
                    
                    $
                    3,703,353
                    
                    
                    $
                    -66.1
                    %




17




Overview of Operating
Results




Operating
Expenses





The
decrease of $3,768,325 in operating expenses during the year ended December 31,
2008 compared to the year ended December 31, 2007 was primarily the result of
our entrance into two separate joint venture agreements one of which is still
ongoing as of December 31, 2008.  Our partners in these joint venture
agreements are conducting exploration activities on our behalf as part of the
agreements’ “earn-in” provisions.  These decreases in exploration
expenses were partially offset by $161,814 due to the settlement of a drilling
contract which occurred in the second quarter of 2008.  See “Note 4.
Note Receivable”to our
consolidated financial statements for further details.  The decreases
were further offset by $83,600 and $616,875 which corresponded to the
abandonment of a mineral lease and the impairment of mineral properties and
royalty interest in the third and fourth quarters of 2008.  See “Note
5. Mineral Properties – Option
and Real Property Sales Agreement with JJO, LLC”,“Note 5. Mineral
Properties – Mining Lease and
Option to Purchase Agreement with Bradley Mining company” and“Note 6.
Royalty Interest in Mineral Property” to our consolidated financial statements
for further details.





Another
major factor in the decrease in operating expenses for the year ended December
31, 2008 was attributed to stock compensation expense for options issued in
2007.  In 2007 there were 6,380,000 stock options granted mainly for
professional consulting and to a lesser extent, employee incentive
stock.  Of the 6,380,000 options granted, 5,720,000 vested immediately
causing $1,032,772 in stock compensation expense earned for the year ended
December 31, 2007 versus only $121,089 in stock compensation expense earned for
the year ended December 31, 2008.





Also
contributing to the decrease in operating expenses during 2008, although to a
significantly lesser extent, was a decrease in directors’
fees.  During the 2008 second quarter we issued 400,000 shares of
common stock to two new directors at a price of $0.10 per
share.  During the 2007 second quarter we issued 200,000 shares of
common stock to one new director at a price of $0.53 per
share.  During the 2007 first quarter we issued an additional 200,000
to a new director at a price of $0.54 per share.





Overview of Financial
Position





At
December 31, 2008, Gold Crest had cash of $924 and total liabilities of
$69,809.  During the year ended December 31, 2008, we received
proceeds of $111,300 from the pay off of promissory notes associated with the
November 2007 private placement and net proceeds of $90,000 from the exercise of
300,000 warrants by three investors. The proceeds from the payoff of the
promissory notes were primarily utilized to fund daily
operations.  The proceeds from the exercise of the warrants were used
to complete the mining lease and option to purchase agreement with the Bradley
Mining Company for $75,000 and the remainder was utilized to fund daily
operations.





Also
during the year ended December 31, 2008, the Company issued 1,666,667, 3,000,000
and 1,000,000 shares of restricted common stock for gross proceeds of $250,000,
$300,000 and $50,000, respectively. See “Note 5. Mineral Properties - Golden Lynx, LLC” and “Note
5. Mineral Properties - Letter
of Intent with Cougar” to our consolidated financial statements for
further details.





Royalty Interest in Mineral
Property





During
the year ended December 31, 2008, the Company purchased an option and royalty
sales agreement for $400,000. In the third quarter the Company decided to impair
the $400,000 carrying value of the property by $128,000, recorded as impairment
of mineral properties and royalty interest on the statement of
operations.  Then during the fourth quarter of 2008, the Company
determined that the remaining $272,000 carrying value of the royalty had been
impaired based on the fact that the Company had been unsuccessful in finding any
potential joint venture partners and there was a very high probability that the
Company would not exercise the option to purchase and recorded an additional
write-down of $272,000 which was recognized as an impairment of mineral
properties and royalty interest in the fourth quarter of 2008 leaving a carrying
value of zero.  See “Note 6. Royalty Interest in Mineral Property” and
“Note 14. Subsequent Events – Assignment of Royalty in Mineral
Property” to our consolidated financial statements for further
details.


18





Mineral Properties and
Investment in Golden Lynx LLC, at Cost





The
decrease in mineral properties of $155,050 during the year ended December 31,
2008 was due to an $83,600 reduction in the third quarter of 2008 when we
relinquished 26,400 acres of our Alaskan properties by notifying Greatland
Exploration, LTD that we had exercised our right to cancel the lease agreement
with option to purchase entered into on January 30, 2007.  Mineral
properties decreased further when management decided to impair the carrying
value of our AKO claim group in Alaska by $16,875 that had been placed in a
joint venture with Newmont Mining Corporation but then later dropped by
them.  The final $54,575 decrease was due to the joint venture
agreement entered into with Cougar Gold on five of our Alaska claim
groups.  The $54,575 was reclassed from “mineral properties” to
“investment in Golden Lynx LLC, at cost” on the balance sheet.  See
“Note 5. Mineral Properties - Golden Lynx, LLC”to our
consolidated financial statements for further details.





Accounts Payable and Accrued
Liabilities





The
decrease in accounts payable and accrued liabilities of $272,121 during the year
ended December 31, 2008 was almost entirely due to our paying off $267,783 worth
of invoices and accrued liabilities that related to the 2007 drilling season
which we were unable to pay by the year ending 2007.  As well as the
fact that we did not accrue any significant additional accounts payable during
2008 since the majority of our properties were in joint ventures during 2008 and
all exploration expenditures were being paid by the joint venture partners as
part of their earn-in requirements.





Equipment





The
decrease in equipment, net of accumulated depreciation, was $76,004 for the year
ended December 31, 2008.  The decrease was due to the following
transactions:





1.
            Settled
      an outstanding payable of $29,828 to a vendor by trading equipment with a
      cost of $35,820 with accumulated depreciation of $9,413 and hitting
      exploration expense with the difference of
  $3,421;


2.
            Received
      $3,000 for the sale of a piece of equipment with a cost of $7,741 with
      accumulated depreciation of $3,587 and recording a loss on sale of
      equipment for $1,154.


3.
            Wrote
      off miscellaneous equipment with a cost of $18,300 with accumulated
      depreciation of $8,250 and recording a loss on disposal of equipment for
      $10,050.


4.
            Per
      the settlement of the Diamond Drilling Contract we gave up equipment with
      a cost of $17,822 with accumulated depreciation of $5,168.  See
      “Note 4. Note Receivable” to our consolidated financial statements for
      further details.





Note
Receivable





For the
decrease of $120,000 in Note Receivable see “Note 4. Note Receivable” to our
consolidated financial statements for further details.





Prepaid
Expenses





During
the year ended December 31, 2008, the balances in the different “Prepaid
Expenses” captions on the Company’s financial statements decreased by $71,970.
The decreases for the different prepaid accounts were composed of the
following:





1.
            “Prepaid
      Insurance” – decreased by $12,536 during 2008. This decrease is due to the
      fact that the Company’s insurance premiums were drastically
      reduced.  The prior year’s general liability premium was $10,850
      versus the 2008 premium of only $3,080.  The Directors and
      Officers annual premium was also reduced from $38,860 in 2007 to only
      $13,842 in 2008.


2.
            “Prepaid
      Claim Fees” – decreased by $4,434 during 2008.  This decrease is
      due to the fact that we only had to pay rent on our Idaho properties since
      our Alaska properties were being paid for by our joint venture partners
      per their earn-in agreements on the
properties.


3.
            “Prepaid
      Expenses” – decreased by $55,000 during 2008. Of this decrease, $40,000
      related to amortization of the “Prepaid Exploration Costs” associated with
      the note receivable from Diamond Drilling. The $40,000 consisted of
      $18,000 of amortization recorded in the normal course of business during
      2008.  The remaining $22,000 was written off in connection with
      Diamond Drilling “Settlement Agreement”. See “Note 4. Note Receivable” to
      our consolidated financial statements for further details. The other
      $15,000 decrease related to a refund of $10,813 and amortization of $4,187
      in connection with prepaid transportation
costs.


19





Common Stock
Subscribed





The
change in common stock subscribed during the year ended December 31, 2008 was
due to the receipt of installment payments of $111,300 owed on the promissory
notes by investors who participated in the November 2007 private placement. In
December, 2008 the Company decided to forgive the final $21,200 worth of
outstanding promissory notes. See “Note 9. Common Stock Subscribed” to our
consolidated financial statements for further details.





Additional Paid-In
Capital





The
increase in additional paid-in capital during the year ended December 31, 2008,
was primarily due to the following:





1.
            stock
      based compensation of $121,089 related to the vesting of stock
      options;


2.
            the
      issuance of 300,000 shares of restricted common stock upon the exercise of
      300,000 warrants and received gross proceeds in the amount of
      $90,000;


3.
            the
      issuance of 100,000 shares of restricted common stock for $10,000 worth of
      services performed;


4.
            In
      December, 2008 the Company decided to forgive the final $21,200 worth of
      outstanding promissory notes owed by investors who participated in the
      November 2007 private placement. See “Note 9. Common Stock Subscribed” to
      our consolidated financial statements for further
  details.


5.
            the
      issuance of 400,000 shares of common stock to two newly appointed
      directors valued at $40,000; and


6.
            the
      issuance of 1,666,667, 3,000,000 and 1,000,000 shares of restricted common
      stock for gross proceeds of $250,000, $300,000 and $50,000, respectively.
      See “Note 5. Mineral Properties - Golden Lynx, LLC” and
      “Note 5. Mineral Properties - Letter of Intent with Cougar”to our consolidated financial statements for further
      details.




Liquidity and Capital
Resources




We have
limited capital resources and thus have had to rely upon the sale of equity
securities for the cash required for exploration and development purposes, for
acquisitions and to fund our administration.  Since we do not expect
to generate any revenues in the near future, we must continue to rely upon the
sale of our equity securities to raise capital.  There can be no
assurance that financing, whether debt or equity, will always be available to us
in the amount required at any particular time or for any period or, if
available, that it can be obtained on terms satisfactory to us.





On
February 2, 2009 the Company began a private placement offering up to a maximum
of 5,000,000 shares at $0.01 per share for a maximum of $50,000 in
proceeds.  On March 13, 2009, the Company’s board of directors
unanimously decided to close the offering effective immediately.  As
of March 13, 2009, the Company had issued 1,000,000 shares raising a total of
$10,000.  The shares were being offered and sold by officers and
directors of the Company who received no remuneration for the sale of the
shares.  The Company also received the first of two $25,000 payments
on a purchase agreement signed on March 13, 2009. See “Note 14. Subsequent
Events – Private
Placement” and “Note 14. Subsequent Events – Purchase Agreement on Idaho
Unpatented Claims”to our consolidated financial statements for further
details.





Future
Outlook


Based on
the current market environment and our low share price it is not likely we will
be able to raise enough money through a private placement of our common
stock.  We are currently seeking a new joint venture opportunity
concerning our Alaska claim groups that were in joint venture with Newmont
Mining Corporation but were dropped in December of 2008.  A
stipulation of any joint venture we enter would be an upfront cash infusion to
cover our operating costs.  We are also looking into possible joint
ventures on our unpatented mining claims in Idaho with the same stipulation as
noted above.  We have cut our operating costs down to the bare minimum
by reducing our employee base down to only one employee with reduced time and
pay and we currently intend to rely on the use of outside consultants to provide
certain services to the Company.  As of January 31, 2009 we did not
re-new our office lease and moved operations to the home of the Chief Financial
Officer which reduced the rent to zero and other overhead costs will be greatly
reduced.





On March
13, we signed a purchase agreement (the "Agreement") between Gold Crest Mines,
Inc. and Frank Duval for the sale of our Idaho unpatented
claims.  Under the terms of the agreement we sold all of the Company’s
rights, title and interest in and to our 46 unpatented federal mill site claims
and 185 unpatented federal lode claims in the Stibnite District of Idaho known
as our Golden Meadows Project.  We received $25,000 on March 17, 2009
and the remaining $25,000 is due no later than October 1, 2009.  As
part of the agreement, the purchaser shall timely pay the BLM fees required to
maintain the claims in good standing for the 2009 assessment year unless
Purchaser shall notify the Company in writing, no later than August 1, 2009, of
their intent not to proceed with the purchase of the Claims. If Purchaser gives
notice of intent not to proceed with the purchase of the Claims, then the
$25,000 initial payment shall be forfeited to the Company. See “Note 14.
Subsequent Events – Purchase
Agreement on Idaho Unpatented Claims” to our consolidated financial
statements for further details.


20




Changes
in Accounting Policies




We did
not change our accounting policies during fiscal 2007 or 2008.




Off-Balance
Sheet Arrangements




During
the year ended December 31, 2008, the Company did not have any off-balance sheet
arrangements.





ITEM
7A.             QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




As a
smaller reporting company, we have elected not to provide the disclosure
required by this item.




ITEM
8.                CONSOLIDATED
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




INDEX
TO THE CONSOLIDATED FINANCIAL STATEMENTS




Report
      of Independent Registered Public Accounting Firm
                
                
                22Financial
      Statements:Consolidated
      Balance Sheets as of December 31, 2008 and December 31,
      2007
                
                
                23Consolidated
      Statements of Operations for the years ended December 31, 2008,
      December 31, 2007 and for the period from inception until
      December 31, 2008
                
                
                24Consolidated
      Statement of Stockholders’ Equity for the years ended December 31, 2008
      and 2007, and from inception to December 31, 2006
                
                
                25Consolidated
      Statements of Cash Flows for the years ended December 31, 2008,
      December 31, 2007 and for the period from inception until
      December 31, 2008
                
                
                27Notes
      to the Consolidated Financial Statements
                
                
                28


21


Report
of Independent Registered Public Accounting Firm
 
 Board of
Directors
 Gold
Crest Mines, Inc.
 
 We have
audited the accompanying consolidated balance sheets of Gold Crest Mines, Inc.
(An Exploration Stage
Company) (“the Company”) as of December 31, 2008 and 2007, and therelated consolidated
statements of operations, changes in stockholders’ equity, and cash flows
forthe years then
ended. These financial statements are the responsibility of the Company’smanagement. Our
responsibility is to express an opinion on these financial statements based
onour
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
 
 In our
opinion, based on our audits, the financial statements referred to above present
fairly, in all material respects, the financial position of Gold Crest Mines,
Inc. as of December 31, 2008 and 2007, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has no revenue, an accumulated deficit, and a negative
current ratio that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 /DeCoria,
Maichel & Teague, P.S./
 
 Spokane,
Washington
 March 18,
2009


22





GOLD
CREST MINES, INC.


(AN
EXPLORATION STAGE COMPANY)


Consolidated
Balance Sheets





December
      31,
                  
                  
                  December
      31,2008
                  
                  
                  2007ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                  
                  $
                  924
                  
                  
                  $
                  778,696Miscellaneous
      receivable
                  
                  
                  3,000
                  
                  
                  
                  -Interest
      receivable, current
                  
                  
                  -
                  
                  
                  
                  893Prepaid
      insurance
                  
                  
                  2,865
                  
                  
                  
                  15,401Prepaid
      claim fees
                  
                  
                  19,250
                  
                  
                  
                  23,684Prepaid
      expenses
                  
                  
                  -
                  
                  
                  
                  55,000Deposits,
      current
                  
                  
                  3,682
                  
                  
                  
                  4,104Total
      Current Assets
                  
                  
                  29,721
                  
                  
                  
                  877,778Note
      receivable, non-current
                  
                  
                  -
                  
                  
                  
                  120,000Interest
      receivable, non-current
                  
                  
                  -
                  
                  
                  
                  3,920Deposits,
      non-current
                  
                  
                  -
                  
                  
                  
                  50,000Equipment,
      net of accumulated depreciation of $20,315 and $23,994,
      respectively
                  
                  
                  34,973
                  
                  
                  
                  110,977Mineral
      properties
                  
                  
                  33,125
                  
                  
                  
                  188,175Investment
      in Golden Lynx LLC, at cost
                  
                  
                  54,575
                  
                  
                  
                  -TOTAL
      ASSETS
                  
                  $
                  152,394
                  
                  
                  $
                  1,350,850LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable
                  
                  $
                  65,924
                  
                  
                  $
                  240,800Accrued
      liabilities
                  
                  
                  3,885
                  
                  
                  
                  101,130Total
      Current Liabilities
                  
                  
                  69,809
                  
                  
                  
                  341,930Total
      Liabilities
                  
                  $
                  69,809
                  
                  
                  $
                  341,930Commitments
      and contingenciesSTOCKHOLDERS'
      EQUITYPreferred
      stock; no par value; 10,000,000 shares authorized, none issued or
      outstanding
                  
                  
                  -
                  
                  
                  
                  -Common
      stock; $0.001 par value; 500,000,000 shares authorized; 83,776,995 and
      77,416,328 shares issued and outstanding, respectively
                  
                  
                  83,777
                  
                  
                  
                  77,417Common
      stock subscribed
                  
                  
                  -
                  
                  
                  
                  (132,500
                  )Additional
      paid-in capital
                  
                  
                  9,344,712
                  
                  
                  
                  8,511,183Accumulated
      deficit during exploration stage
                  
                  
                  (9,345,904
                  )
                  
                  
                  (7,447,180
                  )Total
      Stockholders' Equity
                  
                  
                  82,585
                  
                  
                  
                  1,008,920TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  
                  $
                  152,394
                  
                  
                  $
                  1,350,850





The
accompanying notes are an integral part of these consolidated financial
statements.


23


GOLD
CREST MINES, INC.


(AN
EXPLORATION STAGE COMPANY)


Consolidated
Statements of Operations





From
      InceptionJanuary
      11, 2005Years Ended
                
                
                toDecember
      31,
                
                
                December
      31,
                
                
                December
      31,2008
                
                
                2007
                
                
                2008REVENUES
                
                $
                -
                
                
                $
                -
                
                
                $
                -OPERATING
      EXPENSES:Exploration
      expenditures
                
                
                159,201
                
                
                
                3,373,798
                
                
                
                4,304,291Settlement
      of drilling contract
                
                
                161,813
                
                
                
                -
                
                
                
                161,813Abandonment
      of mineral lease
                
                
                83,600
                
                
                
                -
                
                
                
                83,600Impairment
      of mineral properties and royalty interest
                
                
                616,875
                
                
                
                -
                
                
                
                616,875Loss
      on disposal of equipment
                
                
                11,204
                
                
                
                -
                
                
                
                11,204Legal
      and accounting expenses
                
                
                150,828
                
                
                
                241,586
                
                
                
                468,699Directors'
      fees
                
                
                40,000
                
                
                
                214,000
                
                
                
                844,000General
      and administrative
                
                
                672,987
                
                
                
                1,835,449
                
                
                
                2,912,044TOTAL
      OPERATING EXPENSES
                
                
                1,896,508
                
                
                
                5,664,833
                
                
                
                9,402,526LOSS
      FROM OPERATIONS
                
                
                (1,896,508
                )
                
                
                (5,664,833
                )
                
                
                (9,402,526
                )OTHER
      INCOME (EXPENSE):Interest
      income
                
                
                5,571
                
                
                
                62,756
                
                
                
                79,182Interest
      expense
                
                
                (7,787
                )
                
                
                -
                
                
                
                (22,560
                )TOTAL
      OTHER INCOME (EXPENSE)
                
                
                (2,216
                )
                
                
                62,756
                
                
                
                56,622LOSS
      BEFORE TAXES
                
                
                (1,898,724
                )
                
                
                (5,602,077
                )
                
                
                (9,345,904
                )INCOME
      TAXES
                
                
                -
                
                
                
                -
                
                
                
                -NET
      LOSS
                
                $
                (1,898,724
                )
                
                $
                (5,602,077
                )
                
                $
                (9,345,904
                )NET
      LOSS PER COMMON SHARE - BASIC AND DILUTED
                
                $
                (0.02
                )
                
                $
                (0.08
                )WEIGHTED
      AVERAGE NUMBER OF SHARES OUTSTANDING BASIC  AND
      DILUTED
                
                
                80,739,603
                
                
                
                72,370,920




The
accompanying notes are an integral part of these consolidated financial
statements.


24


Gold
Crest Mines, Inc.


(An
Exploration Stage Company)


Consolidated
Statements of Changes in Stockholders' Equity





DeficitAccumulatedCommon Stock
                                              
                                              
                                              Additional
                                              
                                              
                                              Common
                                              
                                              
                                              DuringPaid-in
                                              
                                              
                                              Stock
                                              
                                              
                                              ExplorationShares
                                              
                                              
                                              Amount
                                              
                                              
                                              Capital
                                              
                                              
                                              Subscribed
                                              
                                              
                                              Stage
                                              
                                              
                                              TotalBalances,
      January 11, 2005 and December 31, 2005
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -Issuance
      of Common Stock:for
      cash, pre-merger at $0.004 per share
                                              
                                              
                                              37,500,000
                                              
                                              
                                              
                                              37,500
                                              
                                              
                                              
                                              112,500
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              150,000In
      connection with reverse merger (Note 1)
                                              
                                              
                                              14,600,100
                                              
                                              
                                              
                                              14,600
                                              
                                              
                                              
                                              (7,144
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              7,456for
      cash, post-merger at $0.30 per share
                                              
                                              
                                              10,797,062
                                              
                                              
                                              
                                              10,797
                                              
                                              
                                              
                                              2,887,910
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              2,898,707for
      interest at $0.30 per share
                                              
                                              
                                              41,667
                                              
                                              
                                              
                                              42
                                              
                                              
                                              
                                              12,458
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              12,500for
      share-based compensation at $0.59 and $0.63 per share
                                              
                                              
                                              1,800,000
                                              
                                              
                                              
                                              1,800
                                              
                                              
                                              
                                              1,064,200
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,066,000Stock
      options granted at $0.30 per share
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              72,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              72,000Net
      loss for year ended December 31, 2006
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (1,845,103
                                              )
                                              
                                              
                                              (1,845,103
                                              )Balances,
      December 31, 2006
                                              
                                              
                                              64,738,829
                                              
                                              
                                              $
                                              64,739
                                              
                                              
                                              $
                                              4,141,924
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              (1,845,103
                                              )
                                              
                                              $
                                              2,361,560Issuance
      of Common Stock:for
      directors fees between $0.53 and $0.54 per share
                                              
                                              
                                              400,000
                                              
                                              
                                              
                                              400
                                              
                                              
                                              
                                              213,600
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              214,000for
      share-based compensation at $0.28 per share
                                              
                                              
                                              50,000
                                              
                                              
                                              
                                              50
                                              
                                              
                                              
                                              13,950
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              14,000for
      cash at $0.30 per share
                                              
                                              
                                              7,529,999
                                              
                                              
                                              
                                              7,530
                                              
                                              
                                              
                                              2,251,470
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              2,259,000for
      brokerage fees
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (77,335
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (77,335
                                              )for
      cash at $0.20 per share with warrants attached
                                              
                                              
                                              4,035,000
                                              
                                              
                                              
                                              4,035
                                              
                                              
                                              
                                              802,965
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              807,000for
      common stock issuable at $0.20 per share with warrants
      attached
                                              
                                              
                                              662,500
                                              
                                              
                                              
                                              663
                                              
                                              
                                              
                                              131,837
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              132,500for
      common stock subscribed
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (132,500
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (132,500
                                              )Stock
      options granted at $0.28 and $0.53 per share
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,032,772
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,032,772Net
      Loss for the year ended December 31, 2007
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (5,602,077
                                              )
                                              
                                              
                                              (5,602,077
                                              )Balances,
      December 31, 2007
                                              
                                              
                                              77,416,328
                                              
                                              
                                              $
                                              77,417
                                              
                                              
                                              $
                                              8,511,183
                                              
                                              
                                              $
                                              (132,500
                                              )
                                              
                                              $
                                              (7,447,180
                                              )
                                              
                                              $
                                              1,008,920




25


Gold
Crest Mines, Inc.


(An
Exploration Stage Company)


Consolidated
Statements of Changes in Stockholders' Equity


(Continued)





DeficitAccumulatedCommon Stock
                                
                                
                                Additional
                                
                                
                                Common
                                
                                
                                DuringPaid-in
                                
                                
                                Stock
                                
                                
                                ExplorationShares
                                
                                
                                Amount
                                
                                
                                Capital
                                
                                
                                Subscribed
                                
                                
                                Stage
                                
                                
                                TotalBalances,
      December 31, 2007
                                
                                
                                77,416,328
                                
                                
                                $
                                77,417
                                
                                
                                $
                                8,511,183
                                
                                
                                $
                                (132,500
                                )
                                
                                $
                                (7,447,180
                                )
                                
                                $
                                1,008,920Stock
      warrants:Exercised
      at $0.30 per share
                                
                                
                                300,000
                                
                                
                                
                                300
                                
                                
                                
                                89,700
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                90,000Stock
      options:for
      share-based compensationat
      $0.28 per share
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                121,089
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                121,089Issuance
      of Common Stock:for
      directors fees at$0.10
      per share
                                
                                
                                400,000
                                
                                
                                
                                400
                                
                                
                                
                                39,600
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                40,000for
      services at $0.10 per share
                                
                                
                                100,000
                                
                                
                                
                                100
                                
                                
                                
                                9,900
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                10,000for
      cash ranging from $0.05to
      $0.15 per share
                                
                                
                                5,666,667
                                
                                
                                
                                5,666
                                
                                
                                
                                594,334
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                600,000for
      common stock subscribed
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                111,300
                                
                                
                                
                                -
                                
                                
                                
                                111,300Forgiveness
      of remainingcommon
      stock subscribed
                                
                                
                                (106,000
                                )
                                
                                
                                (106
                                )
                                
                                
                                (21,094
                                )
                                
                                
                                21,200
                                
                                
                                
                                -
                                
                                
                                
                                -Net
      loss for year endedDecember
      31, 2008
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                -
                                
                                
                                
                                (1,898,724
                                )
                                
                                
                                (1,898,724
                                )Balances,
      December 31, 2008
                                
                                
                                83,776,995
                                
                                
                                $
                                83,778
                                
                                
                                $
                                9,344,712
                                
                                
                                $
                                -
                                
                                
                                $
                                (9,345,904
                                )
                                
                                $
                                82,585





The
accompanying notes are an integral part of these consolidated financial
statements.


26





GOLD
CREST MINES, INC.


(AN
EXPLORATION STAGE COMPANY)


Consolidated
Statements of Cash Flows


Year Ended
                                  
                                  
                                  Year Ended
                                  
                                  
                                  From InceptionDecember 31,
                                  
                                  
                                  December 31,
                                  
                                  
                                  January 11, 2005 to2008
                                  
                                  
                                  2007
                                  
                                  
                                  December 31, 2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                  
                                  $
                                  (1,898,724
                                  )
                                  
                                  $
                                  (5,602,077
                                  )
                                  
                                  $
                                  (9,345,904
                                  )Adjustments
      to reconcile net loss to net cash usedby
      operating activities:Depreciation
                                  
                                  
                                  22,739
                                  
                                  
                                  
                                  23,562
                                  
                                  
                                  
                                  46,733Common
      stock and options issued for services
                                  
                                  
                                  10,000
                                  
                                  
                                  
                                  945,975
                                  
                                  
                                  
                                  1,368,976Equity
      compensation for management and directors
                                  
                                  
                                  161,089
                                  
                                  
                                  
                                  314,798
                                  
                                  
                                  
                                  1,200,886Interest
      paid with common shares
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  12,500Settlement
      of drilling contract (see Note 4)
                                  
                                  
                                  161,813
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  161,813Gain
      recognized on equipment exchanged in settlementof
      accounts payable
                                  
                                  
                                  (3,421
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (3,421
                                  )Loss
      on disposal of equipment
                                  
                                  
                                  11,204
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  11,204Abandonment
      of mineral lease (see Note 5)
                                  
                                  
                                  83,600
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  83,600Impairment
      of mineral properties and royaltyinterest
      (see Note 4 and Note 5)
                                  
                                  
                                  616,875
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  616,875Changes
      in operating assets and liabilities:Change
      in interest receivable
                                  
                                  
                                  (2,346
                                  )
                                  
                                  
                                  (3,920
                                  )
                                  
                                  
                                  (6,266
                                  )Change
      in prepaid expenses and deposits
                                  
                                  
                                  50,392
                                  
                                  
                                  
                                  25,792
                                  
                                  
                                  
                                  32,202Change
      in accounts payable and accrued liabilities
                                  
                                  
                                  (242,293
                                  )
                                  
                                  
                                  304,497
                                  
                                  
                                  
                                  99,638Net
      cash used by operating activities
                                  
                                  
                                  (1,029,072
                                  )
                                  
                                  
                                  (3,991,373
                                  )
                                  
                                  
                                  (5,721,164
                                  )CASH
      FLOWS FROM INVESTING ACTIVITIES:Cash
      received in reverse merger
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  7,456Note
      receivable issued
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (200,000
                                  )
                                  
                                  
                                  (200,000
                                  )Purchase
      of royalty interest in mineral property
                                  
                                  
                                  (400,000
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (400,000
                                  )Purchase
      of mineral properties
                                  
                                  
                                  (150,000
                                  )
                                  
                                  
                                  (105,000
                                  )
                                  
                                  
                                  (388,175
                                  )Purchase
      of equipment
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (95,729
                                  )
                                  
                                  
                                  ( 134,971
                                  )Net
      cash used by investing activities
                                  
                                  
                                  (550,000
                                  )
                                  
                                  
                                  (400,729
                                  )
                                  
                                  
                                  (1,115,690
                                  )CASH
      FLOWS FROM FINANCING ACTIVITIES:Borrowings
      under line of credit
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  250,000Payments
      on line of credit
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (250,000
                                  )Payments
      received on stock subscriptions
                                  
                                  
                                  111,300
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  111,300Proceeds
      from the issuance of stock on the exercise of warrants
                                  
                                  
                                  90,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  90,000Sale
      of common stock, net of issuance costs
                                  
                                  
                                  600,000
                                  
                                  
                                  
                                  2,987,771
                                  
                                  
                                  
                                  6,636,478Net
      cash provided by financing activities
                                  
                                  
                                  801,300
                                  
                                  
                                  
                                  2,987,771
                                  
                                  
                                  
                                  6,837,778Net
      change in cash and cash equivalents
                                  
                                  
                                  (777,772
                                  )
                                  
                                  
                                  (1,404,331
                                  )
                                  
                                  
                                  924Cash
      and cash equivalents, beginning of period
                                  
                                  
                                  778,696
                                  
                                  
                                  
                                  2,183,027
                                  
                                  
                                  
                                  -Cash
      and cash equivalents, end of period
                                  
                                  $
                                  924
                                  
                                  
                                  $
                                  778,696
                                  
                                  
                                  $
                                  924SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATION:Interest
      paid
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  2,273Taxes
      paid
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -NON-CASH
      INVESTING AND FINANCING ACTIVITIESLand
      contributed in exchange for investment in Golden Lynx LLC
                                  
                                  $
                                  54,575
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  54,575Note
      receivable forgiven in connectionwith
      settlement agreement (see Note 4)
                                  
                                  $
                                  120,000
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  120,000Equipment
      relinquished in connectionwith
      settlement agreement (see Note 4)
                                  
                                  $
                                  12,654
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  12,654Equipment
      exchanged for settlement of accounts payable
                                  
                                  $
                                  29,828
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  29,828





The
accompanying notes are an integral part of these consolidated financial
statements.


27


Gold
Crest Mines, Inc.





(An
Exploration Stage Company)


Notes
to Unaudited Consolidated Financial Statements





NOTE
1.  Organization and Description of Business





Gold
Crest Mines, Inc. and its subsidiaries (“Gold Crest” and “the Company”) is a
Nevada corporation originally incorporated on August 20, 1968, as Silver Crest
Mines, Inc., an Idaho corporation.





On August
1, 2006, Gold Crest acquired 100% of the issued and outstanding shares of
Niagara Mining and Development Co., (“Niagara”), an Idaho corporation formed on
January 11, 2005, and its wholly-owned subsidiary, Kisa Gold Mining, Inc.
(“Kisa”), an Alaskan corporation formed on July 28, 2006.  Gold
Crest’s sole asset on the merger date was cash of $7,456, which was accounted
for as being acquired by Niagara in exchange for 14,600,100 common shares of
Niagara.    Niagara’s sole asset on the merger date was cash
of $150,000.   Neither company had liabilities on the date of the
merger.  This transaction has been treated as a reverse merger,
effectively as if Niagara had issued shares for consideration equal to the net
monetary assets of Gold Crest. Under reverse acquisition accounting, the
consolidated financial statements of the entity are considered a continuation of
the financial statements of Niagara, the accounting acquirer.  On June
20, 2008, 100% of the issued and outstanding shares of Kisa were transferred
from Niagara to the Company.





The
Company is in the business of exploration, development, and if warranted the
mining of properties containing valuable mineral deposits. The focus of the
Company’s exploration programs is directed at precious metals, primarily
gold.





Certain
amounts in prior period financial statements have been reclassified to conform
to the 2008 presentation.




NOTE
2.  Summary of Significant Accounting Policies





This
summary of significant accounting policies is presented to assist in
understanding the financial statements. The financial statements and notes are
representations of the Company’s management, which is responsible for their
integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the United States of America and have been
consistently applied in the preparation of the financial
statements.





Accounting
Method





The
Company’s financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.





Consolidation of
Subsidiaries





The
consolidated financial statements include the Company’s accounts and the
accounts of wholly-owned subsidiaries.  All significant intercompany
balances and transactions have been eliminated in consolidation.





Accounting for
Investments





The
Company uses the cost method to account for its investments in companies that it
does not control and for which the Company does not have the ability to exercise
significant influence over operating and financial
policies.  Management of the Company periodically reviews the carrying
value of its investments. These reviews consider the net realizable value of
each investment to determine whether a permanent impairment in value has
occurred and the need for any write-down.





Marketable
equity securities are categorized as available for sale and carried at fair
market value. Realized gains and losses on the sale of securities are recognized
on a specific identification basis. Unrealized gains and losses are included as
a component of accumulated other comprehensive income (loss), unless another
than temporary impairment in value has occurred, which would then be charged to
current period net income (loss).





Cash and Cash
Equivalents





Highly
liquid short-term investments with a remaining maturity when purchased of three
months or less are classified as cash equivalents.  The Company
deposits its cash and cash equivalents in high quality financial
institutions.




28





Use of
Estimates





In
preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect
the amounts reported in those statements and accompanying notes. Examples of
areas requiring the use of estimates include the recoverability of mineral
property, assumptions used in determining the fair value of stock-based
compensation and the expected economic lives and rates for
depreciation.  Actual results could differ from those
estimates.





Exploration Stage
Enterprise





The
Company's financial statements are prepared pursuant to the provisions of SFAS
No. 7, “Accounting for Development Stage Enterprises,” as it devotes
substantially all of its efforts to acquiring and exploring mining interests
that will eventually provide sufficient net profits to sustain the Company’s
existence. Until such interests are engaged in major commercial production, the
Company will continue to prepare its financial statements and related
disclosures in accordance with entities in the development
stage.  Mining companies subject to SFAS No. 7 are required to label
their financial statements as an “Exploration Stage Company,” pursuant to
guidance provided by SEC Guide 7 for Mining Companies.





Mine Exploration and
Development Costs





All
exploration costs are expensed as incurred. Mine development costs are
capitalized after proven and probable reserves have been
identified.  Amortization is calculated using the units-of-production
method over the expected life of the operation based on the estimated
recoverable mineral ounces.





Mineral
Properties





Significant
payments related to the acquisition of mineral properties, mineral rights, and
mineral leases are capitalized.  If a commercially mineable ore body
is discovered, such costs are amortized when production begins using the
units-of-production method based on proven and probable reserves. If no
commercially mineable ore body is discovered, or such rights are otherwise
determined to have no value, such costs are expensed in the period in which it
is determined the property has no future economic value.





Property
Evaluations





Management
of the Company periodically reviews the net carrying value of its properties on
a property-by-property basis. These reviews consider the net realizable value of
each property to determine whether a permanent impairment in value has occurred
and the need for any asset write-down. An impairment loss will be recognized
when the estimated future cash flows (undiscounted and without interest)
expected to result from the use of an asset are less than the carrying amount of
the asset.  Measurement of an impairment loss will be based on the
estimated fair value of the asset if the asset is expected to be held and
used.





Although
management will make its best estimate of the factors that affect net realizable
value based on current conditions, it is reasonably possible that changes could
occur in the near term which could adversely affect management's estimate of net
cash flows expected to be generated from its assets, and necessitate asset
impairment write-downs.





Fair Values of Financial
Instruments





The
carrying amounts of financial instruments including cash and cash equivalents,
miscellaneous receivable and accounts payable approximated their fair values as
of December 31, 2007 and 2008.





Share-Based
Compensation





The
Company applies SFAS No. 123 “Share-Based Payments” (“SFAS No. 123(R)”) to
share-based compensation, which requires the measurement of the cost of services
received in exchange for an award of an equity instrument based on the
grant-date fair value of the award.  Compensation cost is recognized
when the event occurs.  The Black-Scholes option-pricing model is used
to estimate the fair value of options granted.  For stock awards that
do not vest immediately, the Company recognizes the compensation expense ratably
over the requisite service period of the individual grants, which generally
equals the vesting period.




29





Basic and Diluted Net Loss
Per Share





Net loss
per share was computed by dividing the net loss by the weighted average number
of common shares outstanding during the period.  The weighted average
number of shares was calculated by taking the number of shares outstanding and
weighting them by the amount of time that they were
outstanding.  Diluted net loss per share for the Company is the same
as basic net loss per share, as the inclusion of common stock equivalents would
be anti-dilutive.  At December 31, 2008, the common stock equivalents
consisted of 6,150,000 options exercisable at prices ranging from $0.28 to $0.53
per share and 4,291,500 common stock warrants exercisable at $0.30 per
share.





Income
Taxes





The
Company accounts for income taxes using the liability method.  Under
this method, deferred income tax liabilities or assets at the end of each period
are determined using the tax rate expected to be in effect when the taxes will
be actually paid or recovered.  A valuation allowance is recorded to
reduce the deferred tax assets, if there is uncertainty regarding their
realization.





Property, Plant and
Equipment





Property,
plant and equipment is carried at cost and depreciated using the straight line
method over five to seven years.  Maintenance and repairs are charged
to operations as incurred. Betterments of a major nature are
capitalized.  When assets are retired or sold, the costs and related
accumulated depreciation are eliminated from the accounts and any resulting gain
or loss is reflected in operations.





Reclamation and Remediation
Costs (Asset Retirement Obligations)





The
Company had no operating properties at December 31, 2007 and 2008, but the
Company’s mineral properties will be subject to standards for mine reclamation
that are established by various governmental agencies. For these non-operating
properties, the Company accrues costs associated with environmental remediation
obligations when it is probable that such costs will be incurred and they are
reasonably estimable. Costs of future expenditures for environmental remediation
are not discounted to their present value. Such costs are based on management's
current estimate of amounts that are expected to be incurred when the
remediation work is performed within current laws and regulations.





It is
reasonably possible that due to uncertainties associated with defining the
nature and extent of environmental contamination, application of laws and
regulations by regulatory authorities, and changes in remediation technology,
the ultimate cost of remediation and reclamation could change in the future. The
Company continually reviews its accrued liabilities for such remediation and
reclamation costs as evidence becomes available indicating that its remediation
and reclamation liability has changed.





The
Company recognizes the fair value of a liability for an asset retirement
obligation in the period in which it is incurred, if a reasonable estimate of
fair value can be made.  The associated asset retirement costs are
capitalized as part of the carrying amount of the associated long-lived assets
and depreciated over the lives of the assets on a units-of-production
basis.  Reclamation costs are accreted over the life of the related
assets and are adjusted for changes resulting from the passage of time and
changes to either the timing or amount of the original present value estimate on
the underlying obligation.





Adoption of New Accounting
Principles







Effective
January 1, 2008, we adopted the provisions of SFAS No. 157, “Fair Value
Measurements”, for our financial assets and financial liabilities without a
material effect on our results of operations and financial
position.  The effective date of SFAS No. 157 for non-financial assets
and non-financial liabilities has been deferred by FSP 157-2 to fiscal years
beginning after November 15, 2008, and we do not anticipate the impact of
adopting SFAS 157 for non-financial and non-financial liabilities to have a
material impact on our results of operations and financial
position.






SFAS No.
157 expands disclosure requirements to include the following information for
each major category of assets and liabilities that are measured at fair value on
a recurring basis:


a.
            The
      fair value measurement;


b.
            The
      level within the fair value hierarchy in which the fair value measurements
      in their entirety fall, segregating fair value measurements using quoted
      prices in active markets for identical assets or liabilities (Level 1),
      significant other observable inputs (Level 2), and significant
      unobservable inputs (Level 3);


30





c.
            For
      fair value measurements using significant unobservable inputs (Level 3), a
      reconciliation of the beginning and ending balances, separately presenting
      changes during the period attributable to the
  following:


1)
            Total
      gains or losses for the period (realized and unrealized), segregating
      those gains or losses included in earnings (or changes in net assets), and
      a description of where those gains or losses included in earnings (or
      changes in net assets) are reported in the statement of income (or
      activities);


2)
            The
      amount of these gains or losses attributable to the change in unrealized
      gains or losses relating to those assets or liabilities still held at the
      reporting period date and a description of where those unrealized gains or
      losses are reported;


3)
            Purchases,
      sales, issuances, and settlements (net);
and


4)
            Transfers
      in and/or out of Level 3.





The
Company’s cash and cash equivalents are classified within Level 1 of the fair
value hierarchy because they are valued using quoted market prices.




We also
adopted the provisions of SFAS No. 159, “The Fair Value Option for Financial
Liabilities”, effective January 1, 2008.  SFAS No. 159 permits
entities to choose to measure many financial assets and financial liabilities at
fair value.  The adoption of SFAS No. 159 has not had a material
effect on our financial position or results of operations as of and for the year
ended December 31, 2008.





In May
2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The
Hierarchy of Generally Accepted Accounting Principles” ("SFAS 162"). SFAS 162
identifies a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with U.S. generally accepted accounting principles for
non-governmental entities. SFAS 162 became effective on November 13, 2008 and
was adopted by the Company.  The adoption of SFAS No. 162 has not had
a material effect on our financial position or results of operations as of and
for the year ended December 31, 2008.





New Accounting
Pronouncements





In
March 2008, the FASB issued Statement of Financial Accounting Standards
No. 161, “Disclosures about Derivative Instruments and Hedging Activities -
an amendment of FASB Statement No. 133” (“SFAS 161”).  SFAS 161
requires enhanced disclosures about an entity’s derivative and hedging
activities.  This Statement is effective for financial statements issued
for fiscal years and interim periods beginning after November 15,
2008.  The Company does not expect the adoption of SFAS 161 to have a
material effect on our financial position or results of operations.





In
December 2007, FASB issued Statement of Financial Accounting Standards No. 160
“Non Controlling Interests in Consolidated Financial Statements - an amendment
of ARB 51” (“SFAS 160”) which is effective for fiscal years and interim periods
within those years beginning on or after December 15, 2008. SFAS No. 160 amends
ARB 51 to establish accounting and reporting standards for the non controlling
ownership interest in a subsidiary and for the deconsolidation of a subsidiary.
The Company does not expect the adoption of SFAS 160 to have a material effect
on our financial position or results of operations.




In
December 2007, FASB issued SFAS No. 141 (R) “Business Combinations”. This
standard is effective for transactions where the acquisition date is on or after
the beginning of the first annual reporting period beginning on or after
December 15, 2008. SFAS No. 141 (R) will change the accounting for assets
acquired and liabilities assumed in a business combination. These changes
include:


·
            Acquisition
      costs will generally be expensed as
incurred;


·
            Non
      controlling interests will be valued at fair value at the acquisition
      date;


·
            Acquired
      contingent liabilities will be recorded at fair value at the acquisition
      date and subsequently measured at either the higher of such amount or the
      amount determined under existing guidance for non acquired
      contingencies;


·
            In-process
      research and development will be recorded at fair value as an
      indefinite-lived intangible asset at the acquisition
  date;


·
            Restructuring
      costs associated with a business combination will generally be expensed
      subsequent to the acquisition date;
and


·
            Changes
      in deferred tax asset valuation allowances and income tax uncertainties
      after the acquisition date generally will affect income tax
      expense.





The
adoption of SFAS No. 141 (R) is not expected to have a material effect on the
Company’s financial statements.  Any future business combination
occurring during the first annual reporting period beginning on or after
December 15, 2008 will be accounted for in accordance with this
guidance.


31




NOTE
3. Going Concern





As shown
in the accompanying financial statements, the Company has had no revenues and
incurred an accumulated deficit of $9,345,904 through December 31,
2008.  Another factor is that the Company has a negative current ratio
of 0.43: 1 at December 31, 2008.  The current ratio is a measurement
of the degree to which current assets cover current liabilities (current assets/
current liabilities).  A high ratio indicates a good probability the
enterprise can retire current debts.  These factors raise substantial
doubt about the Company’s ability to continue as a going
concern.  Management intends to seek additional capital from new
equity securities offerings and joint venture agreements that will provide funds
needed to increase liquidity, fund internal growth and fully implement its
business plan.





The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.





Should
the Company be unable to raise capital through future private placements and/or
joint venture agreements, its business, and, as a result, its financial
position, results of operations and cash flow will likely be materially
adversely impacted.  As such, substantial doubt as to the Company’s
ability to continue as a going concern remains as of the date of these financial
statements.





The
Company has drastically reduced its overhead expenses going into 2009 such as
reducing staff on payroll to one part time employee and eliminating its office
space.  With these reductions in overhead, the Company believes it
will only need an estimated $50,000 to $100,000 to continue operations through
the next twelve months unless we decide it is necessary to exercise any of our
land or royalty options, which at this time appears remote. The timing and
amount of capital requirements will depend on a number of factors, including the
Company’s ability to successfully enter into a joint venture on our Golden
Meadows project in Idaho and the Company’s future personnel
requirements.  See “Note 5. Mineral Properties - Golden Lynx, LLC’ and“Note
7. Common Stock and Common Stock Warrants” and “Note 14. Subsequent
Events”.





NOTE
4.  Note Receivable





On
January 11, 2007, the Company advanced Diamond Drilling Consultants Con Ag.,
Inc. (“Diamond Drilling”) $150,000 of a $200,000 secured promissory note to
finance the construction of a drilling rig for use by the Company. The final
$50,000 was advanced during May 2007, when the drilling rig construction was
completed. Interest accrued at six percent (6%) per annum, from June 15, 2007,
through June 12, 2008. This note, including principal and interest, was payable
in full on or before January 15, 2009, or at the termination of the drilling
contract between the parties, whichever occurred first. In consideration for the
Company providing this note, the Company was to have exclusive use of the
drilling rig for two calendar years, which also served as collateral for the
note.





Upon
successful completion of the contractual obligations of the note, the Company
agreed to grant Diamond Drilling a forty percent (40%) reduction in the amount
of principal and accrued interest payable.  During the third quarter
of 2007, the Company determined that the 40% reduction was probable and likely
to occur.  Therefore 40% of the note receivable, or $80,000, had been
recorded as “Prepaid Exploration Costs” and was being amortized over the life of
the note receivable.  The amortized expense was being charged to
exploration expenditures.





As part
of the contract with Diamond Drilling for the 2008 drilling season, the Company
had a 10,000 foot minimum drilling requirement at a cost of $23.00 per foot for
a total potential liability of $230,000 for undrilled footage (the “Diamond
Drilling Contract”).





During
2008, it became apparent that the Company would not satisfy its minimum drilling
requirement under the Diamond Drilling Contract.  On June 12, 2008,
the Company entered into a settlement agreement with Diamond Drilling (the
“Settlement Agreement”).  The terms of the Settlement Agreement
require Diamond Drilling to release Gold Crest from its obligation to pay the
$230,000 drilling commitment in exchange for the following:





1.
            The
      forgiveness by the Company of a $120,000 note receivable from Diamond
      Drilling;


2.
            The
      forgiveness by the Company of $7,160 of accrued interest receivable
      related to the note receivable from Diamond
  Drilling;


3.
            The
      sale to Diamond Drilling for $1 of a water line with a carrying value of
      $12,654 and miscellaneous tools with zero carrying value;
    and


4.
            The
      write off by the Company of the $22,000 remaining balance in the Prepaid
      Exploration Costs.


32





As a
result of this settlement transaction, the Company recognized a loss of $161,814
in 2008.





NOTE
5.  Mineral Properties





The
Company’s mineral properties consist of various mining claims in Alaska and
Idaho.  The Company currently controls approximately 22,240 acres of
land under State of Alaska jurisdiction, after having transferred 15,320 acres
into Golden Lynx, LLC as part of our joint venture with Cougar Gold
LLC.  See “Golden
Lynx, LLC”.  In Idaho, the Company controls over 3,930 acres of
unpatented mill site and load claims under Federal jurisdiction that are held
under and are subject to the Federal mining laws and regulations.





On
September 1, 2008, the Company relinquished 43,520 acres of Alaskan property by
not making the required annual rental and annual work assessment
payments.  Additionally, on July 22, 2008, the Company relinquished
26,400 acres by notifying Greatland Exploration, LTD that it had exercised its
right to cancel the lease agreement with option to purchase entered into on
January 30, 2007.  The Kelly Creek mineral lease carrying value of
$83,600 was recognized as a loss on abandonment of mineral lease in the third
quarter of 2008.





Golden Lynx,
LLC





On April
18, 2008, the Company, through its wholly-owned subsidiary, Kisa, entered into
an agreement with Cougar Gold LLC, a Delaware limited liability company,
(“Cougar”) (a related party, see “Note 12 – Related Party Transactions”) under
which the two companies formed Golden Lynx, LLC, a Delaware limited liability
company (“Golden Lynx”).  Pursuant to this agreement, the Company
transferred 15,320 acres under State of Alaska jurisdiction into Golden
Lynx.  The Company accounts for this investment under the cost method
of accounting.  Accordingly, the carrying value of the contributed
property of $54,575 was reclassed from mineral properties to “Investment in
Golden Lynx LLC”.





Cougar
has an initial 55% interest and Kisa has an initial 45% interest in Golden Lynx.
Per the agreement the management committee shall consist of one member appointed
by Kisa and two members appointed by Cougar.  The member with a
percentage interest over 50% shall determine the decisions of the management
committee.  The members appointed Cougar as the manager with overall
management responsibility for operations.  Cougar is entitled to
retain its 55% interest by making the following contributions to Golden Lynx,
used to fund exploration expenditures, on the following timetable:





a)
            $750,000
      on or before the first anniversary of the effective date of the
      agreement;


b)
            An
      additional $1,250,000 on or before the second anniversary of the effective
      date of the agreement; and


c)
            An
      additional $1,500,000 on or before the third anniversary of the effective
      date of the agreement.





Within 30
days after completing the foregoing expenditures, Cougar may elect to purchase
an additional ownership interest in Golden Lynx by making capital contributions
in the aggregate amount of $2,500,000 which shall also be used to fund
exploration expenditures during the two years that follow the third anniversary
of the effective date of the agreement. Upon making such capital contributions,
Cougar’s ownership interest would increase to 80%, and Kisa’s ownership interest
would decrease to 20%.





Option and Real Property
Sales Agreement with JJO, LLC.





On
January 24, 2008, the Company entered into an Option and Real Property Sales
Agreement with JJO, LLC, (“JJO”) an Idaho limited liability company and personal
representative of the Estate of J.J. Oberbillig.  This option gives
the Company the right to acquire approximately 255 acres of patented mining and
mill site claims in the Stibnite area from the Oberbillig Estate.  The
property has a total purchase price of $435,620.  As consideration for
entering into the Option Agreement, the Company paid $125,000.





The
original closing date was to be on or before August 15, 2008, but at the closing
the Company did not exercise the option due to the unsuccessful attempt to
obtain a joint venture partner on the property.  The Company then
began negotiations with the Estate of J.J. Oberbillig to extend the option
purchase date and on November 4, 2008 the Company received a letter of
understanding from the attorneys for both JJO and the heirs of the Estate of
J.J. Oberbillig stating that they were willing to accept Gold Crest’s new
proposed terms provided they could get the royalty right holders
approval.





During
the second half of 2008, the Company determined that the carrying value of the
property had been impaired based on the fact that the Company had been
unsuccessful in finding any potential joint venture partners and there was a
very high probability that the Company would not exercise the option to purchase
which had been extended to May 1, 2009.   The Company wrote-down
the property’s carrying value of $125,000 and  recognized the write
down as an impairment of mineral properties and royalty interest in the fourth
quarter of 2008 leaving a carrying value of zero.  See “Note 14.
Subsequent Events - Assignment
of Option and Real
Property Sales Agreement with JJO, LLC”.


33




Mining Lease and Option to
Purchase Agreement with Bradley Mining Company





On March
31, 2008, the Company entered into a Mining Lease and Option to Purchase
Agreement with the Bradley Mining Company (the “Bradley Option
Agreement”).  Pursuant to the terms of the Agreement, the Company has
been granted an exclusive option through March 30, 2009 to purchase for $300,000
real property located in the Stibnite mining district, Valley County, Idaho
(“the Bradley Property”).  The Bradley Property consists of nine
patented mining claims comprising approximately 175 acres.  As
consideration for entering into the Bradley Option Agreement, the Company paid
$75,000.  If the Company elects to exercise this option on or before
March 30, 2009, then there will be another payment due upon closing in the
amount of $225,000.





During
the second half of 2008, the Company determined that the carrying value of the
property had been impaired based on the fact that the Company had been
unsuccessful in finding any potential joint venture partners and there was a
very high probability that the Company would not exercise the option to
purchase.  The Company recorded a write-down of $75,000 which was
recognized as an impairment of mineral properties and royalty interest in the
fourth quarter of 2008 leaving a carrying value of zero.  See “Note
14. Subsequent Events – Assignment of Mining Lease and Option to Purchase
Agreement with Bradley Mining Company”.





Newmont Venture
Agreements





On May 8,
2008, the Company signed three separate joint venture agreements (“the Newmont
Agreements”) with Newmont North America Exploration Limited, a subsidiary of
Newmont Mining Corporation (”Newmont”).   The subject claims
consist of the Company’s AKO and Luna claim groups located in the Kuskokwim
region of southwestern Alaska approximately 120 miles south of the Donlin Creek
deposit and our Chilly claim group located approximately 50 miles southwest of
the Donlin Creek deposit.





On
December 12, 2008, the Company received from Newmont a letter that notified of
its intent to terminate the three venture agreements effective
immediately.





For the
quarter ended December 31, 2008, the Company determined that the $16,875
carrying value of the AKO property had been impaired based on the fact that
Newmont had terminated the venture agreement and there was a very high
probability that the Company would not make the annual rental payments due in
September of 2009 to continue to hold the property and recorded a write-down of
$16,875 which was recognized as an impairment of mineral properties and royalty
interest in the fourth quarter of 2008 leaving a carrying value of
zero.





The
following is a summary of our mineral properties at December 31, 2008 and
December 31, 2007.





At
                    December 31,
                    2008
                  
                  
                  At
                    December 31,
                    2007Alaska
      PropertiesSouthwest
      Kuskokwim Project
                  
                  $
                  -
                  
                  
                  $
                  71,450Kelly
      Creek – Mineral Lease
                  
                  
                  -
                  
                  
                  
                  83,600Idaho
      PropertiesGolden
      Meadows Project
                  
                  
                  33,125
                  
                  
                  
                  33,125Total
                  
                  $
                  33,125
                  
                  
                  $
                  188,175





The
Company or its joint venture partner is required to perform certain work
commitments and pay annual assessments to the States of Alaska and Idaho to hold
these claims in good standing.  See “Note 13. Commitments and
Contingencies”.





NOTE
6.  Royalty Interest in Mineral Property





On
January 24, 2008, the Company entered into an Option and Royalty Sales Agreement
with the heirs of the Estate of J.J. Oberbillig (the “Oberbillig
Agreement”).  Pursuant to the terms of the original Agreement, the
Company was granted an exclusive option through August 15, 2008 to purchase a 5%
(five percent) net smelter royalty interest (“NSR”) in real property located in
Valley County, Idaho.  This royalty applied to any metal produced from
lands sold by the estate of J.J. Oberbillig to Bradley Mining Co. in
1941.  The Yellow Pine gold property, now controlled by Vista Gold
Corporation and the subject of a December 2006 Canadian National Instrument
43-101 report, is subject to the 5% NSR.  The NSR has a total Purchase
Price of $1,642,480.  As consideration for entering into the Option
Agreement, the Company paid $400,000.


34





The
original closing date was to be on or before August 15, 2008, but at the closing
the Company did not exercise the option due to the unsuccessful attempt to
obtain a joint venture partner on the property.  The Company then
began negotiations with the Estate of J.J. Oberbillig to extend the option
purchase date and on November 4, 2008 the Company received a letter of
understanding from the attorneys for both JJO and the heirs of the Estate of
J.J. Oberbillig stating that they were willing to accept Gold Crest’s new
proposed terms provided they could get the royalty right holders
approval.





During
the second half of 2008, the Company determined that the $400,000 carrying value
of the royalty interest had been impaired based on the fact that the Company had
been unsuccessful in finding any potential joint venture partners and there was
a very high probability that the Company would not exercise the option to
purchase, which had been extended to May 1, 2009, and recorded a write-down of
$400,000 which was recognized as an impairment of mineral properties and royalty
interest in the fourth quarter of 2008 leaving a carrying value of
zero.  See “Note 14. Subsequent Events – Assignment of Royalty Interest in
Mineral Property”.





NOTE
7.  Common Stock and Common Stock Warrants





The
Company is authorized to issue 500,000,000 shares of its common
stock.  All shares of common stock are equal to each other with
respect to voting, liquidation, dividend, and other rights.  Owners of
shares are entitled to one vote for each share owned at any Shareholders’
meeting.  The common stock of the Company does not have cumulative
voting rights, which means that the holders of more than fifty percent (50%) of
the shares voting in an election of directors may elect all of the directors if
they choose to do so.





During
the year ended December 31, 2008, the Company had the following issuances of
common stock:





1.
            The
      Company issued 556,500 shares of restricted common stock upon the payment
      of promissory notes in the amount of $111,300 issued as part of the
      November 2007 private placement.  See “Note 9. Common Stock
      Subscribed”;


2.
            The
      Company issued 300,000 shares of restricted common stock upon the exercise
      of 300,000 warrants and received gross proceeds in the amount of
      $90,000;


3.
            The
      Company issued 100,000 shares of restricted common stock for $10,000 worth
      of services performed;


4.
            The
      Company issued 400,000 shares of common stock to two newly appointed
      directors valued at $40,000;


5.
            The
      Company issued 1,666,667, 3,000,000 and 1,000,000 shares of restricted
      common stock for cash proceeds of $250,000, $300,000 and $50,000,
      respectively.





In
November 2007 the Company completed a private placement of units for gross
proceeds of $939,500, of which $132,500 was in the form of promissory notes at
December 31, 2007.  See “Note 9. Common Stock
Subscribed”.  In the aggregate, the Company issued 4,591,500 units at
a price of $0.20 per unit.  Each unit consisted of one share of common
stock and one full common stock purchase warrant.  Each warrant is
exercisable for a period of two (2) years from the closing to purchase one share
of common stock at a price of $0.30 per share.  At December 31, 2008
there were 4,291,500 warrants outstanding exercisable at $0.30 per share with
expiration dates ranging from October 21, 2009 to November 19,
2009.





The
following is a summary of warrant activity in 2007 and 2008:





Number of Warrants
                  
                  
                  Weighted Average
                    Exercise PriceOutstanding
      January 1, 2007
                  
                  
                  —
                  
                  
                  $
                  —Issued
                  
                  
                  4,697,500
                  
                  
                  
                  0.30Outstanding
      at December 31, 2007
                  
                  
                  4,697,500
                  
                  
                  $
                  0.30Issued
                  
                  
                  —
                  
                  
                  
                  0.30Exercised
                  
                  
                  300,000
                  
                  
                  
                  0.30Forfeited
                  
                  
                  106,000
                  
                  
                  
                  0.30Outstanding
      at December 31, 2008
                  
                  
                  4,291,500
                  
                  
                  $
                  0.30Warrants
      exercisable at December 31, 2008
                  
                  
                  4,291,500
                  
                  
                  $
                  0.30





See Note
10 for stock issued under stock compensation plans.




35




NOTE
8.  Preferred Stock


The
Company is authorized to issue 10,000,000 shares of Preferred Stock. The
Preferred Stock is entitled to preference over the common stock with respect to
the distribution of assets of the Company in the event of liquidation,
dissolution, or winding-up of the Company, whether voluntarily or involuntarily,
or in the event of any other distribution of assets of the Company among its
shareholders for the purpose of winding-up its affairs.  The
authorized but un-issued shares of Preferred Stock may be divided into and
issued in designated series from time to time by one or more resolutions adopted
by the Board of Directors.  The Directors in their sole discretion
have the power to determine the preferences, limitations, and relative rights of
each series of Preferred Stock within the limits set forth in the Nevada
Business Corporation Act.  At December 31, 2008, no preferred stock
has been issued.





NOTE
9.  Common Stock Subscribed





As
described in Note 7, in November 2007, the Company completed a private placement
of 4,697,500 units. Of the total units, 662,500 units were subscribed in
exchange for promissory notes with a value of $132,500 and due dates extending
through September 1, 2008.





During
the year ended December 31, 2008 the Company received payments on the promissory
notes in the amount of $111,300 which constituted partial payments on the
promissory notes and issued a total of 556,500 units.





In
December, 2008 the Company decided to forgive the final $21,200 worth of
outstanding promissory notes which constituted 106,000 units that will not be
issued bringing down the total units issued as part of the November 2007 private
placement to only 4,591,500 units.





NOTE
10.  Stock Based Compensation




Stock Based Compensation
Plans


In June
2007, the Board of Directors adopted the 2007 Gold Crest Stock Plan (the “Plan”)
which was approved by shareholders in December 2007.  The purposes of
the Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to employees,
directors and consultants and to promote the success of the Company’s
business.





The
maximum number of shares available for issuance pursuant to the Plan adopted by
the Company is currently set at 12,000,000 shares of which 4,000,000 may be
granted as Incentive Stock Options to employees.  As of December 31,
2008, the maximum number of shares available for issuance under the 2007 Stock
Plan was 5,270,000.





Stock
Options


During
the year ended December 31, 2008 the Company did not issue any new options under
the 2007 Stock Plan.  During that same period, 430,000 stock options
with a weighted average exercise price of $0.47 were forfeited due to an officer
and a board member resigning. Compensation expense was recorded of $121,089 was
recognized in 2008 for the options issued in 2007, which vested during the year
ended December 31, 2008.





During
the year ended December 31, 2007, the Company issued 6,380,000 options under the
2007 Stock Plan with exercise prices ranging from $0.28 to $0.53 with vesting at
various dates through 2009.  These options were granted to members of
the board of directors, officers, employees and consultants of the
Company.  The fair value of each option is estimated on the date of
grant using the Black-Scholes Option Price Calculation.  The following
assumptions were made in estimating the fair value:  risk free
interest of 3.53%; volatility of 99.9%; dividend rate of 0%; and expected life
of 4.51 to 6.51 years.  The total value of options awarded during the
year ended December 31, 2007 was calculated at $1,167,217.  Expense
was recorded of $1,032,772 for the options which were earned in the year ended
December 31, 2007.  The expense was recorded $945,975 as professional
consulting fees and $86,798 as compensation expense.





The
following is a summary of stock option activity in 2007 and 2008:





Number of Shares
                    Under Options
                  
                  
                  Weighted Average
                    Exercise PriceOutstanding
      January 1, 2007
                  
                  
                  200,000
                  
                  
                  $
                  0.30Granted
                  
                  
                  6,380,000
                  
                  
                  
                  0.52Exercised
                  
                  
                  —
                  
                  
                  
                  —Forfeited
                  
                  
                  —
                  
                  
                  
                  —Expired
                  
                  
                  —
                  
                  
                  
                  —Outstanding
      at December 31, 2007
                  
                  
                  6,580,000
                  
                  
                  $
                  0.51Options
      exercisable at December 31, 2007
                  
                  
                  5,920,000
                  
                  
                  $
                  0.51Weighted
      average fair value of options granted during 2007
                  
                  $
                  0.18Outstanding
      January 1, 2008
                  
                  
                  6,580,000
                  
                  
                  $
                  0.51Granted
                  
                  
                  —
                  
                  
                  
                  —Exercised
                  
                  
                  —
                  
                  
                  
                  —Forfeited
                  
                  
                  430,000
                  
                  
                  
                  0.47Expired
                  
                  
                  —
                  
                  
                  
                  —Outstanding
      at December 31, 2008
                  
                  
                  6,150,000
                  
                  
                  $
                  0.51Options
      exercisable at December 31, 2008
                  
                  
                  6,150,000
                  
                  
                  $
                  0.51Weighted
      average fair value of options granted during 2008
                  
                  
                  —




36




The
6,150,000 shares under options at December 31, 2008 have expiration dates
ranging as follows:  200,000 expire on August 20, 2009, 5,340,000
expire on June 18, 2012, 280,000 expire on September 11, 2012 and the final
330,000 expire on June 18, 2013.   At December 31, 2008 the fully
vested stock options have no intrinsic value due to the fact that the option
exercise prices are greater than the market price on that date.





Stock Awards Under the 2007
Stock Plan





During
the year ended December 31, 2008, the Company issued 400,000 shares of
fully-vested common stock to two newly appointed board members of the Company
that was earned based on board compensation.  The total value of the
stock awards granted and expensed during the year ended December 31, 2008 was
calculated at $40,000.





During
the year ended December 31, 2007, the Company issued 50,000 shares of
fully-vested common stock to an officer of the Company that was earned based on
field performance.  The total value of the stock award granted and
expensed during the year ended December 31, 2007 was calculated at
$14,000.





NOTE
11.  Income Taxes





At
December 31, 2008 and 2007 the Company had deferred tax assets principally
arising from the net operating loss carry forwards for income tax purposes
multiplied by an expected rate of 34%.  As management of the Company
cannot determine that it is more likely than not that the Company will realize
the benefit of the deferred tax assets, a valuation allowance equal to the
deferred tax asset has be established at December 31, 2008 and
December 31, 2007. The significant component of the deferred tax asset at
December 31, 2008 and 2007 was as follows:




December 31,
                    2008
                  
                  
                  December 31,
                    2007Net
      operating loss carry forward
                  
                  $
                  4,400,000
                  
                  
                  $
                  2,900,000Deferred
      tax assetNet
      operating loss carry forward
                  
                  $
                  1,644,000
                  
                  
                  $
                  990,000Exploration
      costs
                  
                  
                  938,000
                  
                  
                  
                  1,022,000Stock
      based compensation
                  
                  
                  392,000
                  
                  
                  
                  351,0002,974,000
                  
                  
                  
                  2,363,000Deferred
      tax asset valuation allowance
                  
                  
                  (2,974,000
                  )
                  
                  
                  (2,363,000
                  )Net
      deferred tax asset
                  
                  $
                  —
                  
                  
                  $
                  —




At
December 31, 2008 and 2007 the Company had net operating loss carry
forwards of approximately $4,400,000 and $2,900,000 respectively, which expire
in the years 2027 through 2028. The change in the allowance account from
December 31, 2007 to December 31, 2008 was $611,000.




On
January 1, 2007, the Company adopted Financial Accounting Standards Board
Interpretation No. 48 (“FIN No. 48”) “Accounting for Uncertainty in Income
Taxes.” FIN No. 48 clarifies the accounting for uncertainty in income taxes
recognized in accordance with Statement of Financial Accounting Standard
(“SFAS”) No. 109 “Accounting for Income Taxes,” prescribing a recognition
threshold and measurement attribute for the recognition and measurement of a tax
position taken or expected to be taken in a tax return. The Company did not find
any tax positions and therefore did not accrue a tax liability as of December
31, 2008.  We have determined that we are subject to examination of
our income tax filings in the United States and state jurisdictions for the 2005
through 2007 tax years. In the event that the Company is assessed penalties and
or interest, penalties will be charged to other operating expense and interest
will be charged to interest expense.


37





NOTE
12.  Related Party Transactions





During
the years ended December 31, 2008 and 2007, the following related transactions
occurred:




During
the year ended December 31, 2007, the Company awarded 2,000,000 stock options to
Frank D. Duval, a greater than 5% (five percent) shareholder.  This
stock option award was recorded as professional consulting fees of
$357,099.




During
the year ended December 31, 2007, the Company awarded 1,500,000 stock options to
Terrence J. Dunne while serving as Chief Financial Officer and Director of the
Company.  The award was not related to his services as CFO or
Director, but for consulting services and guaranteeing a line of credit. This
stock option award was recorded as professional consulting fees of $267,825.
During the year ended December 31, 2007, the Company awarded 1,500,000 stock
options to Howard M. Crosby while serving as a Director of the
Company.  The award was not related to his services as Director, but
for consulting services and guaranteeing a line of credit. This stock option
award was recorded as professional consulting fees of $267,825.





On April
23, 2008, the Company issued 1,666,667 shares at $0.15 per share for total cash
received of $250,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the Golden Lynx LLC we entered
into on April 18, 2008.  See “Note 5. Mineral Properties - Golden Lynx, LLC”to our
consolidated financial statements for further details.





On June
1, 2007, the Company entered into a twenty-one month consulting agreement with
Janice Duval, the wife of Frank Duval, a greater than 5% (five percent)
shareholder, as payment for professional services rendered to the
Company.  The agreement is for $3,000 per month for twenty-one months
ending February 2009.  During the year ended December 31, 2008 the
Company paid Mrs. Duval $6,000 and accrued in accounts payable another
$30,000.





On June
16, 2008, the Company issued 3,000,000 shares at $0.10 per share for total cash
received of $300,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the letter of intent with Cougar
Gold for a joint venture on our Idaho properties.  See “Note 5.
Mineral Properties - Letter of
Intent with Cougar” to our consolidated financial statements for further
details.





On August
26, 2008, the Company issued 500,000 shares at $0.10 per share for total cash
received of $50,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the sixty day extension to the
letter of intent with Cougar Gold for them to perform additional due diligence
on the property.  As part of the extension deal, if Cougar Gold
decided not to go forward with the Idaho joint venture then the Company would
issue another 500,000 shares at no cost to Cougar Gold bringing the average
share price down to $0.05 per share.  On September 9, 2008, after
being informed by Cougar Gold that they did not intend to go forward with the
joint venture on our Idaho properties we issued the other 500,000 shares at no
cost.  See “Note 5. Mineral Properties - Letter of Intent with Cougar”
to our consolidated financial statements for further details.





NOTE
13.  Commitments and Contingencies





Alaska Mineral Property Rent
and Assessment Work Commitments





In
Alaska, land holdings consist of state mining claims and prospecting sites
totaling 37,560 acres of land of which 15,320 acres have been transferred into
Golden Lynx, LLC as part of our joint venture with Cougar Gold LLC. Future annual
assessment work and annual rental payments will be paid by the Company or Cougar
Gold, LLC per their agreement unless the joint venture partner terminates their
relationship with the Company and gives Gold Crest at least six months notice
before the payments or assessment work is due.





By
September 1, 2009 the Company or the Company’s joint venture partner will need
to have completed $46,800 of assessment work on the claims to the State of
Alaska and as of December 31, 2008 this entire amount has been covered by the
earn-in requirements per our joint venture agreements with both Newmont Mining
Corporation and Cougar Gold.  The Company or the Company’s joint
venture partner will also be required to pay annual rent amounting to $23,475 to
the State of Alaska.     See “Note 5. Mineral
Properties -Golden Lynx,
LLC”.





Idaho Mineral Property Rent
and Assessment Work Commitments





In
central Idaho, the Company controls approximately 46 unpatented federal mill
site claims and 185 unpatented federal lode claims in the Stibnite District
covering approximately 3,930 acres on federally-owned public lands administered
by the Payette and Boise National Forests. Mill site claims do not require
annual assessment work, but do require annual maintenance payments to DOI Bureau
of Land Management which will total $5,750 due by September 1,
2009.  The 185 unpatented federal lode claims will require a total of
$18,500 worth of assessment work to be performed by September 1, 2009 or in lieu
of the work, a one-time payment of $23,125 would satisfy the annual maintenance
fee in order to hold the Idaho properties for an additional
year.


38




Environmental
Matters





A
predecessor entity to the Company owned mineral property interests on certain
public and private lands in Idaho and Montana.  Holdings included
lands in mining districts designated as “Superfund” sites pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"). The properties were, and are, subject to a variety of federal and
state regulations governing land use and environmental matters. A consultant
reviewed the potential environmental impact of the prior mineral exploration and
development activities, and believes there was substantial compliance with all
such regulations, and is unaware of any pending action or proceedings relating
to regulatory matters that would affect the financial position of the Company.
Management acknowledges, however, that the possibility exists that the Company
may be subject to environmental liabilities associated with its prior activities
in the unforeseeable future, although the likelihood of such is deemed remote
and the amount and nature of the liabilities is impossible to
estimate.





NOTE 14.  Subsequent
Events





Private
Placement





On
February 2, 2009 the Company began a private placement offering up to a maximum
of 5,000,000 shares at $0.01 per share for a maximum of $50,000 in
proceeds.  On March 13, 2009, the Company’s board of directors
unanimously decided to close the offering effective immediately.  As
of March 13, 2009, the Company had issued 1,000,000 shares raising a total of
$10,000.  The shares were being offered and sold by officers and
directors of the Company who received no remuneration for the sale of the
shares.





Purchase Agreement on Idaho
Unpatented Claims





On March
13, 2009 the Company signed a Purchase Agreement (the "Agreement") between Gold
Crest Mines, Inc. and Frank Duval, a related party who owns greater than 5% of
the outstanding shares of the Company, as an individual or agent for and on
behalf of a company to be formed for the purpose of acquiring the mining claims
the subject of the Agreement.





Under the
terms of the agreement we sold all of the Company’s rights, title and interest
in and to our 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District of Idaho known as our Golden Meadows
Project.  The selling price is $50,000 for all of its rights, title
and interest in and to the Claims as follows:





(a)  $25,000 within 10 days
of the execution of the Agreement, and





(b)  $25,000 October 1,
2009.





As part
of the agreement, the purchaser shall timely pay the BLM fees required to
maintain the claims in good standing for the 2009 assessment year unless
Purchaser shall notify the Company in writing, no later than August 1, 2009, of
their intent not to proceed with the purchase of the Claims. If Purchaser gives
notice of intent not to proceed with the purchase of the Claims, then the
$25,000 initial payment shall be forfeited to the Company.





Assignment of Mining Lease
and Option to Purchase Agreement with Bradley Mining Company





On March
13, 2009 the Company assigned the Mining Lease and Option to Purchase Agreement
with the Bradley Mining Company (the “Bradley Option Agreement”) to Frank Duval,
a related party who owns greater than 5% of the outstanding shares of the
Company.  The assignment is part of the “Purchase Agreement”
above.  See “Note 5. Mineral Properties -Mining Lease and Option to Purchase
Agreement with Bradley Mining Company”.





Assignment of Royalty
Interest in Mineral Property





On March
13, 2009 the Company assigned the Option and Royalty Sales Agreement with the
heirs of the Estate of J.J. Oberbillig (the “Oberbillig Agreement”) to Frank
Duval, a related party who owns greater than 5% of the outstanding shares of the
Company.  The assignment is part of the “Purchase Agreement”
above.  See “Note 6. Royalty Interest in Mineral
Property”.




39





Assignment of Option and
Real Property Sales Agreement with JJO, LLC.





On March
13, 2009 the Company assigned the Option and Real Property Sales Agreement with
JJO, LLC, (“JJO”) to Frank Duval, a related party who owns greater than 5% of
the outstanding shares of the Company.  The assignment is part of the
“Purchase Agreement” above.  See “Note 5. Mineral Properties -Option and Real Property Sales
Agreement with JJO, LLC.”




ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




None.




ITEM
      9A(T).
            CONTROLS
      AND PROCEDURES





Evaluation of Disclosure
Controls and Procedures





At the
end of the period covered by this report, an evaluation was carried out under
the supervision of, and with the participation of, the Company’s management,
including the Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures (as defined in Exchange Act Rules 13a – 15(e) and Rule 15d –
15(e)) and internal control over financial reporting (as defined in Exchange Act
rules 13a-15(f) and 15d-15(f)).





Based on
that evaluation, the Company’s management concluded that as of the end of the
period covered by this report, the Company’s disclosure controls and procedures
were adequately designed and effective in ensuring that information required to
be disclosed by the Company in its reports that it files or submits to the SEC
under the Exchange Act, is recorded, processed, summarized and reported within
the time period specified in applicable rules and forms and to provide
reasonable assurance that such information is accumulated and communicated to
our management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding required
disclosures.





Management's
Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting to   provide reasonable
assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.  Internal control over
financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of our company; (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of our management and
directors; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial
statements.





The
Company’s management, including the Chief Executive Officer and Chief Financial
Officer, do not expect that our disclosure controls or our internal control over
financial reporting will prevent or detect all errors and all fraud that could
occur.  A control system, no matter how well designed and operated,
can provide only reasonable, not absolute, assurance that the control system’s
objectives will be met.  The design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must
be considered relative to their costs.  Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues within the Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty and that breakdowns can occur because
of simple error or mistake.  Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of the controls.  The design of any system of
controls is based in part on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions.  Projections
of any evaluation of controls effectiveness to future periods are subject to
risks.  Over time, controls may become inadequate because of changes
in conditions or deterioration in the degree of compliance with policies or
procedures.





Management
assessed our internal control over financial reporting as of December 31, 2008,
the end of our fiscal year.  Management based its assessment on
criteria established in Internal Control Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway
Commission.


40





Based on
our assessment, management has concluded that our internal control over
financial reporting was effective, as of the end of the fiscal year, for a
company of our size, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
reporting purposes in accordance with generally accepted accounting
principles.





This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the company to provide only management’s report
in this annual report.





Changes
in internal controls over financial reporting





During
the period covered by this report, there have been no changes in the Company’s
internal control over financial reporting during the quarter ended December 31,
2008 that have materially affected, or are reasonably likely to materially
affect, the Company’s internal control over financial reporting.





ITEM
      9B.
            OTHER
      INFORMATION





None




41


PART
III




ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




The
following table provides the names, positions and ages of our directors and
officers:


Name
              
              Age
              
              PositionJohn
      P. Ryan
              
              46
              
              President,
      Chief Executive Officer and DirectorThomas
      H. Parker
              
              66
              
              DirectorBobby
      E. Cooper(2)(3)
              
              63
              
              DirectorRobert
      O’Brien(3)
              
              75
              
              DirectorTerrence
      J. Dunne(1)(2)
              
              60
              
              Secretary/Treasurer
      and DirectorDaniel
      R. McKinney Sr.
              
              60
              
              DirectorMatthew
      J. Colbert
              
              40
              
              Chief
      Financial Officer





(1)
            Member
      of the Audit Committee


(2)
            Member
      of the Nominating and Corporate Governance
  Committee


(3)
            Member
      of the Compensation Committee.




We have
no knowledge of any arrangements, including any pledge by any person of our
securities, the operation of which may at a subsequent date result in a change
in our control.  We are not, to the best of our knowledge, directly or
indirectly owned or controlled by another corporation or foreign
government.




John P.
Ryan.  Mr. Ryan was appointed as President and CEO of the
Company on November 13, 2008. Mr. Ryan has extensive experience with
development-stage resource companies. Mr. Ryan has been a Director of the
Company since June, 2008. Mr. Ryan was Founder and Chairman of U.S. Silver
Corporation (a producing silver company) from June, 2006 until September, 2008.
Mr. Ryan was Secretary and Chief Financial Officer of High Plains Uranium, Inc.
(a uranium exploration and production company) ("High Plains") from
incorporation in February 2005 until September 2006 (High Plains became a
reporting issuer in all jurisdictions in Canada in November 2005). He also
served from April 2004 to February 2005 as a director (in addition to Secretary
and Chief Financial Officer) of High Plains Uranium, Inc. (Idaho), the
predecessor to High Plains. During the period of 1996 until 2006, he held
various positions with Cadence Resources Corporation, a U.S. public natural
resources company, including Vice President of Corporate Development
(1996-2005), Secretary (1998-2006) and a director (1997-2005). Mr. Ryan has also
been Chief Financial Officer and a director of Trend Mining Company since August
2000. He served as President and a director of Grand Central Silver Mines Inc.
from 1998 until 2000 and was a director of Metalline Mining Company from 1996
until 1999. Mr. Ryan attended the University of Idaho where he received a B.S.
degree in Mining Engineering, and he also received a Juris Doctor from Boston
College. Mr. Ryan is a former U.S. Naval Officer.




Thomas H.
Parker.  Mr. Parkerhas
been a Director of the Company since March of 2007.  Mr. Parker served
as the President, Chief Executive Officer and Director of the Company from March
2007 to November 2008.  Mr. Parker has worked extensively in senior
management positions in the mining industry for the past 40
years.  From March 2006, until February 2007, Mr. Parker was the Chief
Executive Officer and a Director of High Plains Uranium.  From 1995 to
March 2006, he was the Executive Vice President of Anderson and Schwab, a New
York-based consulting firm where his clients included UBS Warburg and Norilsk
Nickel.  Prior to joining Anderson and Schwab, he was President and
Chief Executive Officer of Costain Coal Inc., a large coal company with over
2,000 employees that produced steam and metallurgical coal from January 1992, to
September 1994.  Earlier in his career, Mr. Parker managed coal mining
operations for Arco Coal, Anaconda Minerals, and Kerr McGee, among
others.  From 1978 to 1981, he was director and project manager for
Conoco’s uranium joint venture with Cogema and the French government in
Niger.  Currently Mr. Parker serves as the President and CEO of U.S.
Silver Corporation.  Mr. Parker is a mining engineering graduate from
the South Dakota School of Mines with a Master’s Degree in mineral engineering
management from Pennsylvania State University.





Bobby E.
Cooper.  Mr. Cooper became a director of the Company in August
2006.  Mr. Cooper has over 40 years of diversified mining industry
experience from maintenance supervisor and mine manager to President & CEO
of Kennecott Corporation a wholly owned subsidiary of RTZ. As Group Mining
Executive, worldwide, for RTZ, while posted in London, Mr. Cooper represented
Rio Tinto on the Board of Escondida, the world's largest copper mine located in
Chile. Prior to being named CEO of Kennecott, Mr. Cooper held the positions of
Chief Operating Officer, V.P. Environmental Affairs and V.P. U.S.
Mines.  Prior to joining Kennecott, Mr. Cooper served as President of
Thunder Basin Coal Company. Mr. Cooper also worked at Shell Mining Company, Arch
Minerals Corporation and Kerr McGee Coal Corporation, Atlantic Richfield, and
Inspiration Consolidated Copper.  Mr. Cooper currently serves as a director
of U.S. Silver and Western Prospector, both TSX listed Companies.  Mr.
Cooper graduated from Arizona State University with a BA in Business
Administration in 1972 and subsequently carried out graduate work in industrial
technology and mineral economics. Mr. Cooper has been a Director of Gold Crest
Mines, Inc. since 2006.


42




Terrence J.
Dunne.  Mr. Dunne has served as a director and the Company’s
Secretary/Treasurer since 2006.  For more than the past six years Mr.
Dunne has operated Terrence J. Dunne & Associates, a sole proprietorship
which provides bookkeeping, income tax return preparation and business
consulting services for small businesses.  Mr. Dunne is a business
consultant, primarily focused on business acquisitions and corporate
reorganizations. Mr. Dunne currently serves as a director of Rock Energy
Resources, Inc., which trades on the OTCBB.  Mr. Dunne is currently
serving as a director for Superior Silver Mines, Inc., which trades on the
OTCBB.  Mr. Dunne received a degree in Business Administration from
Gonzaga University in 1970.  He received his Masters Degree in
Business Administration in 1975 from Gonzaga University. In addition, he
received a Masters Degree in Taxation from Gonzaga University in 1984. Mr. Dunne
is a former adjunct professor in the School of Business Administration of
Gonzaga University, teaching courses in corporate mergers, acquisitions and
reorganizations.





Robert
O’Brien.  Mr. O’Brien has served as a director of the Company
since 2004.  Since July 1996, Mr. O’Brien has been the sole owner and
manager of Spokane Quotation Bureau, LLC, a company, which publishes stock
quotations for companies traded over-the-counter.  Mr. O’Brien has
over 45 years experience with private and publicly held companies. He has served
as an Owner, CEO, Officer, Director, and Accredited Investor in various
categories including: Direct Management, Public and Investor Relations,
Corporate Relations and Reverse Mergers and Acquisitions.  Since July
1996, Mr. O'Brien has owned and operated Spokane Quotation Bureau, LLC, a
company that tracks and publishes stock quotations for selected over-the-counter
stock trades.  Mr. O’Brien graduated from Gonzaga University with a BA
degree in Economics.





Daniel R. McKinney,
Sr.  Mr. McKinney joined Gold Crest Mines, Inc. as a Director
in April of 2008.  Mr. McKinney has been a real estate broker for
approximately 30 years.  He is a principal and developer of commercial and
residential real estate projects in Washington, Idaho and Arizona.  Since
1989 he has owned and operated a disability management consulting firm and has
worked as a senior consultant specializing in negotiated settlements and
forensic testimony on disability related court cases.  He received a
Bachelor of Arts degree in Psychology from Eastern Washington University in 1973
and a Master of Education Degree from Whitworth University in 1977.  Mr.
McKinney is a past director and officer of Silver Crest Resources, Inc. and a
past director and officer of Hanover Gold/Rock Energy Resources.





Matthew J.
Colbert.  Mr. Colbert has served as the Chief Financial Officer
of the Company since December 2007.  Mr. Colbert has over ten years of
experience in public accounting.  He has a Bachelor of Science degree
in Accounting from the University of Idaho and is licensed as a Certified Public
Accountant in the State of Washington.  Before being appointed CFO,
Mr. Colbert had been the Controller of the Company since August
2007.  Most recently, Mr. Colbert Served as Chief Financial Officer
and President of Lifestream Technologies, Inc., a publicly traded
company.  Lifestream Technologies, Inc. was a leading supplier of
cholesterol monitors.  Mr. Colbert also served on Lifestream’s Board
of Directors.  Earlier in his career, Mr. Colbert served as a Business
Assurance Associate in the audit department of PricewaterhouseCoopers, LLP, an
international accounting and consulting firm.





Audit
Committee


On April
22, 2008 and April 24, 2008, the Company received a letter of resignation from
Gerald Booth and Thomas Loucks, respectively, as directors effective
immediately, and as such Mr. Booth and Mr. Loucks no longer serve on the Audit
Committee.  As of December 31, 2008 Terrence Dunne now comprises the
Company’s Audit Committee.  The Audit Committee approves the selection
of the Company’s independent certified public accountants to audit the annual
financial statements and review the quarterly financial statements, discusses
with the auditors and approves in advance the scope of the audit and reviews,
reviews management’s administration of the system of internal controls, and
reviews the Company’s procedures relating to business ethics.  The
Board of Directors has determined that Terrence Dunne meets the SEC definition
of an “audit committee financial expert”.




Nominating and Corporate
Governance Committee


On April
22, 2008, the Company received a letter of resignation from Gerald Booth as a
director effective immediately, and as such Mr. Booth no longer serves on the
Nominating and Corporate Governance Committee.  Bobby Cooper and
Terrence Dunne comprise the Company’s Nominating and Corporate Governance
Committee.  Mr. Cooper is an independent member of that Committee. The
Corporate Governance and Nominating Committee is responsible for developing the
Company’s approach to corporate governance issues and compliance with governance
rules. The Corporate Governance and Nominating Committee is also mandated to
plan for the succession of the Company, including recommending director
candidates, review of board procedures, size and organization, and monitoring of
senior management with respect to governance issues. The committee is
responsible for the development and implementation of corporate communications
to ensure the integrity of the Company’s internal control and management
information systems. The purview of the Corporate Governance and Nominating
Committee also includes the administration of the board’s relationship with the
management of the Company, monitoring the quality and effectiveness of the
Company’s corporate governance system and ensuring the effectiveness and
integrity of the Company’s communication and reporting to shareholders and the
public generally.


43




Compensation
Committee


On
January 20, 2009, the Company received a letter of resignation from Howard
Crosby as a director effective immediately, and as such Mr. Crosby no longer
serves on the Compensation Committee.  Bobby Cooper and Robert O’Brien
comprise the Company’s Compensation Committee.  Mr. Cooper is an
independent member of that Committee. The Compensation Committee is responsible
for setting the compensation for the officers and the other agents and employees
of the corporation. The Committee may delegate the authority to set the
compensation of the officers, agents, and employees to the
President.  No officer may be prevented from receiving compensation as
an officer solely because the officer is also a director of the
corporation.  The Committee shall fix the amount or salary to be paid
to each director for service as a director or for attendance at each meeting of
the Board.  Salary or payment for service as a director shall not
preclude a director from serving the corporation in any other capacity or from
receiving compensation for service in that other capacity.




Legal
Proceedings




No
Director, or person nominated to become a Director or Executive Officer, has
been involved in any legal action involving the Company during the past five
years.




Family
Relationships




There are
no family relationships between any director, executive officer, or person
nominated or chosen by the Company to become a director or executive
officer.




Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Securities Exchange Act of 1934 requires our officers, directors,
and any person who beneficially owns more than 10% of our common stock to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission.  Executive officers, directors, and more than 10%
shareholders are required by regulation to furnish us with copies of all Section
16(a) forms which they file.





During
2008, certain of our directors and executive officers who own our stock filed
Forms 3, 4 or 5 with the Securities and Exchange Commission.  The
information on these filings reflects the current ownership position of all such
individuals.  To the best of our knowledge, during 2008 all such
filings by our officers and directors were made timely.





Code
of Ethics





We have
adopted a Code of Conduct and Ethics for our Directors, Officers and
employees.  A copy of our Code of Conduct and Ethics can be obtained
at no cost, by telephone at (509) 893-0171, by mail at: Gold Crest
Mines, Inc., 724 East Metler Lane, Spokane, Washington 99218, attention:
Investor Relations, or at our website: www.goldcrestminesinc.com.  We
believe our Code of Conduct and Ethics is reasonably designed to deter
wrongdoing and promote honest and ethical conduct; provide full, fair, accurate,
timely and understandable disclosure in public reports; comply with applicable
laws; ensure prompt internal reporting of code violations; and provide
accountability for adherence to the code.




ITEM
      11.
            EXECUTIVE
      COMPENSATION





Summary
Compensation Table


The
following table sets forth, for the years ended December 31, 2008 and 2007,
compensation paid to our Chief Executive Officer, Chief Financial Officer and
Vice President of Exploration (collectively, the “Named Executive
Officers”).




44




SUMMARY
COMPENSATION TABLE


FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008 and 2007




Name and Principal Position
                                        
                                        Year
                                        
                                        Salary ($)
                                        
                                        
                                        Stock
                                          Awards ($)
                                        
                                        
                                        Option
                                          Awards ($)
                                        
                                        
                                        Total ($)John
      P. Ryan (1)(4)
                                        
                                        2008
                                        
                                        
                                        —
                                        
                                        
                                        $
                                        20,000
                                        
                                        
                                        
                                        —
                                        
                                        
                                        $
                                        20,000President
      and Chief ExecutiveOfficerThomas
      H. Parker (2)(4)
                                        
                                        2008
                                        
                                        $
                                        143,304
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        $
                                        143,304President
      and Chief Executive
                                        
                                        2007
                                        
                                        $
                                        125,000
                                        
                                        
                                        $
                                        106,000
                                        
                                        
                                        $
                                        195,151
                                        
                                        
                                        $
                                        426,151OfficerChristopher
      M. Dail (3)
                                        
                                        2008
                                        
                                        $
                                        103,286
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —
                                        
                                        
                                        $
                                        103,328V.P.
      of Exploration
                                        
                                        2007
                                        
                                        $
                                        115,417
                                        
                                        
                                        $
                                        14,000
                                        
                                        
                                        
                                        —
                                        
                                        
                                        $
                                        129,417





(1)
            Mr. Ryan was
      appointed President and Chief Executive Officer on November 13, 2008 and
      Director on June 5, 2008.  The $20,000 Stock Award was for
      services as a Director.  Mr. Ryan receives no compensation for
      his role as President and CEO.


(2)
            Mr.
      Parker was appointed President and Chief Executive Officer and Director on
      March 13, 2007.  Mr. Parker later resigned as President and
      Chief Executive Officer effective November 13, 2008.  The
      $106,000 Stock Award was for services as a
  Director.


(3)
            Mr. Dail
      resigned as V.P. of exploration on October 15,
  2008.


(4)
            The
      named individuals also served as Directors of the Company and the
      compensation related to their services as Director is reflected in this
      table and not in the Director Compensation
  Table.





Outstanding
Equity Awards at Fiscal Year-End




The
following table sets forth information concerning year-end number and value of
unexercised options, stock that has not vested and equity incentive plan awards
for each of the Named Executive Officers.




OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END




Option Awards
                                                    
                                                    Stock AwardsNumber of
                                                      Securities
                                                      Underlying
                                                      Unexercised
                                                      Options
                                                      (#)
                                                    
                                                    
                                                    Number of
                                                      Securities
                                                      Underlying
                                                      Unexercised
                                                      Options
                                                      (#)
                                                    
                                                    
                                                    Option
                                                      Exercise
                                                      Price
                                                    
                                                    Option
                                                      Expiration
                                                    
                                                    Number of
                                                      Shares or
                                                      Units of
                                                      Stock That
                                                      Have Not
                                                      Vested
                                                    
                                                    Market
                                                      Value of
                                                      Shares or
                                                      Units of
                                                      Stock That
                                                      Have Not
                                                      VestedName
                                                    
                                                    Exercisable
                                                    
                                                    
                                                    Unexercisable
                                                    
                                                    
                                                    ($)
                                                    
                                                    Date
                                                    
                                                    (#)
                                                    
                                                    ($)Thomas
      H. Parker(1)
                                                    
                                                    
                                                    670,000
                                                    
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    $
                                                    0.53
                                                    
                                                    06/19/2012President
      and Chief ExecutiveOfficerChristopher
      M. Dail
                                                    
                                                    
                                                    200,000
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    $
                                                    0.30
                                                    
                                                    09/20/2009V.P.
      of ExplorationJohn
      Ryan
                                                    
                                                    
                                                    —
                                                    
                                                    
                                                    
                                                    —President
      and Chief ExecutiveOfficer







(1)
            Mr.
      Parker served as President and Chief Executive Officer from March 13, 2007
      until November 13, 2008.




Employment
Agreements




The
following is a summary of the employment agreements that were in effect between
us and each of the Named Executive Officers during the last fiscal year. In
March 2007, we entered into an employment agreement with Thomas H. Parker
who was elected as our President and Chief Executive Officer. His agreement is
summarized below.




Thomas
H. Parker




Thomas H.
Parker’s executive compensation agreement was for a 2-year term commencing on
March 1, 2007, and was terminated on November 13, 2009 by mutual
consent.  Mr. Parker’s compensation is $150,000 for the initial year
and $200,000 for the second year subject to adjustments for merit at the
discretion of the Board.  In addition, Mr. Parker was granted one
million incentive stock options at an option price exercisable at $0.53 per
share.  Options to acquire 340,000 shares to vest immediately, options
to acquire 330,000 shares to vest on March 31, 2008, and options to acquire
330,000 shares to vest on March 31, 2009.  All of the options have a
term of 5 years from the date of vesting.  Upon termination by the
Company without cause, Parker is entitled to 18 months of his then current
salary.  There is a termination for cause provision.  A
change in control of the Company, to be defined in the agreement, triggers a
lump sum payment to Mr. Parker equal to eighteen months of his then current
salary.


45




On
November 13, 2008 Mr. Parker resigned from the Company.  Due to the
financial condition of the Company Mr. Parker elected not to pursue his
severance package.  Mr. Parker was fully vested in 670,000 of the
1,000,000 shares that were granted to him per the paragraph
above.  The remaining 330,000 were forfeited and returned to the
plan.  Mr. Parker remains a director of the Company.





Director
Compensation




The
following table sets forth information concerning compensation paid for the year
ended December 31, 2008 to directors who were not employees. Mr. Ryan,
who is an employee and Thomas Parker who was an employee during the year, have
their compensation as a Director fully reflected in the Summary Compensation
Table.




DIRECTOR
COMPENSATION




Name
                  
                  Fees Earned or
                    Paid in Cash ($)
                  
                  
                  Option Awards ($)
                  
                  
                  All Other
                    Compensation ($)
                  
                  
                  Total ($)Daniel
      R. McKinney, Sr.
                  
                  
                  —
                  
                  
                  $
                  20,000
                  
                  
                  
                  —
                  
                  
                  $
                  20,000Howard
      M. Crosby
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Terrence
      J. Dunne
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Bobby
      E. Cooper
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Robert
      O’Brien
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —




ITEM 12.
            SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS





Security
Ownership of Certain Beneficial Owners and Management




The
following table sets forth information as of March 4, 2009 regarding the
ownership of our Common Stock by:




·each person who is known by us to own more than 5% of our shares of
      common stock;




·each of our named executive officers and directors;
    and




·all of our executive officers and directors as a
    group.




The
number of shares beneficially owned and the percentage of shares beneficially
owned are based on 84,776,995 shares of common stock outstanding as of
March 4, 2008.




For the
purposes of the information provided below, beneficial ownership is determined
in accordance with the rules of the SEC, and for each person includes
shares that person has the right to acquire within 60 days following
March 4, 2008 subject to options, warrants or similar
instruments.




Name and Address of  Beneficial Owner
                                  
                                  Amount and Nature of
                                    Beneficial Owner
                                  
                                  
                                  Percent of ClassJohn  P.
      Ryan
                                    301
      Central Ave., Apt. 384,
                                    Hilton
      Head, SC 29926
                                  
                                  
                                  3,535,000
                                  
                                  
                                  
                                  4.17
                                  %Thomas
      H. Parker(1)
                                    191
      Somerset Dr., Kalispell, MT 59901
                                  
                                  
                                  2,400,000
                                  
                                  
                                  
                                  2.80
                                  %Bobby
      E. Cooper (2)
                                    P.O.
      Box 69430, Tucson, AZ 85737
                                  
                                  
                                  1,700,000
                                  
                                  
                                  
                                  2.00
                                  %Robert
      W. O’Brien(3)
                                    1511
      S. Riegel Ct., Spokane, WA 99212
                                  
                                  
                                  3,272,963
                                  
                                  
                                  
                                  3.85
                                  %Terrence
      J. Dunne(4)
                                    1224
      W. Riverside Ave., Apt 1006
                                    Spokane,
      WA 99201
                                  
                                  
                                  10,259,464
                                  
                                  
                                  
                                  11.87
                                  %




46


Daniel
      R. McKinney Sr.(5)
                                  607
      S. Government Way, Spokane, WA 99224
                                
                                
                                1,512,000
                                
                                
                                
                                1.78
                                %Matt
      J. Colbert(6)
                                  724
      E. Metler Lane, Spokane, WA 99218
                                
                                
                                125,000
                                
                                
                                
                                0.15
                                %Total
      of all executive officers and directors
                                  (7
      individuals)(7)
                                
                                
                                22,804,427
                                
                                
                                
                                25.86
                                %Howard
      M. Crosby (8)
                                  P.O.
      Box 2056, Walla Walla, WA 99362
                                
                                
                                5,250,000
                                
                                
                                
                                6.07
                                %Tony
      Alford(9)
                                  7040
      Interlaken Dr., Kernersville, NC 27284
                                
                                
                                6,782,960
                                
                                
                                
                                7.91
                                %Frank
      D. Duval(10)
                                  P.O.
      Box 687, Veradale, WA 99037
                                
                                
                                7,185,000
                                
                                
                                
                                8.26
                                %Cougar
      Gold LLC(11)
                                  1700
      Lincoln St., Ste 2600,
                                  Denver,
      CO 80203
                                
                                
                                5,666,667
                                
                                
                                
                                6.68
                                %










(1)
            Includes
      670,000 shares issuable upon the exercise of vested options and 250,000
      shares issuable upon the exercise of a
warrant.


(2)
            Includes
      250,000 shares issuable upon the exercise of a
  warrant.


(3)
            Includes
      219,028 shares issuable upon the exercise of a
  warrant.


(4)
            Includes
      3,000,000 shares owned by Cork Investments, Inc. all of which are
      controlled by Mr. Crosby.  Also includes 1,500,000 shares
      issuable upon the exercise of vested options and 159,660 shares issuable
      upon the exercise of a warrant.


(5)
            Includes 200,000 shares issuable
      upon the exercise of a warrant.  Also includes 18,500 shares
      held in spouses IRA.


(6)
            Includes
      125,000 shares issuable upon the exercise of vested
    options.


(7)
            Includes
      3,995,000 shares issuable upon the exercise of vested options and
      1,258,567 shares issuable upon the exercise of
  warrants.


(8)
            Includes
      1,500,000 shares issuable upon the exercise of vested options and 179,879
      shares issuable upon the exercise of a
warrant.


(9)
            Mr.
      Alford is not an Officer or Director of the Company but is a 5% or greater
      shareholder.  Includes 1,000,000 shares issuable upon the
      exercise of a warrant.  The shares were verified by the Columbia
      Stock Transfer Company and by a NOBO listing obtained by Broadridge with a
      record date of March 4, 2009.


(10)
            Mr.
      Duval is not an Officer or Director of the Company but a 5% or greater
      shareholder.  Includes 2,000,000 shares issuable upon the
      exercise of vested options and 166,433 shares issuable upon the exercise
      of a warrant.  Includes 416,667 shares owned by St. Louis
      Drumlummon, all of which are controlled by Mr. Duval.  The
      shares were verified by the Columbia Stock Transfer Company and by a NOBO
      listing obtained by Broadridge with a record date of March 4,
      2009.


(11)
            Cougar
      Gold LLC is a 5% or greater shareholder. The shares were verified by the
      schedule 13G filed with the Securities and Exchange Commission on June 16,
      2008.





There are
no arrangements known to the Company, the operation of which may at a subsequent
time result in the change of control of the Company.





Securities
Authorized for Issuance under Equity Compensation Plans




The table
below sets forth certain information with respect to our equity compensation
plans as of December 31, 2008:




Number of securities
                          to be issued upon
                          exercise of
                          outstanding options
                        
                        
                        Weighted average
                          excise price of
                          outstanding options
                        
                        
                        Number of securities
                          remaining available
                          for future issuance
                          under equity
                          compensation plansEquity
      compensation plans not approved by security holders
                        
                        
                        200,000
                        
                        
                        $
                        0.30
                        
                        
                        
                        n/aEquity
      compensation plans approved by security holders:2007
      Stock Plan
                        
                        
                        5,950,000
                        
                        
                        $
                        0.52
                        
                        
                        
                        5,600,000
                        (1)Total
                        
                        
                        6,150,000
                        
                        
                        $
                        0.51
                        
                        
                        
                        5,600,000





(1)
              The
      aggregate number of shares of common stock that may be issued pursuant to
      awards granted under the 2007 Stock Plan will not exceed
      12,000,000.




47




ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE





During
the years ended December 31, 2008 and 2007, and to date in 2009, the following
related transactions occurred:




During
the year ended December 31, 2007, the Company awarded 2,000,000 stock options to
Frank D. Duval, a greater than 5% (five percent) shareholder.  This
stock option award was recorded as professional consulting fees of
$357,099.




During
the year ended December 31, 2007, the Company awarded 1,500,000 stock options to
Terrence J. Dunne while serving as Chief Financial Officer and Director of the
Company.  The award was not related to his services as CFO or
Director, but for consulting services and guaranteeing a line of credit. This
stock option award was recorded as professional consulting fees of
$267,825.




During
the year ended December 31, 2007, the Company awarded 1,500,000 stock options to
Howard M. Crosby while serving as a Director of the Company.  The
award was not related to his services as Director, but for consulting services
and guaranteeing a line of credit. This stock option award was recorded as
professional consulting fees of $267,825.





On March
26, 2008, Terry Dunne, the Secretary/Treasurer and a director of the Company
exercised 71,788 warrants to purchase shares at $0.30 per share and paid the
Company $21,536.  Also on April 28, 2008 he exercised another 23,333
warrants to purchase shares at $0.30 per share and paid the Company
$7,000.  The warrants were part of the November 2007 private
placement.





On March
26, 2008, Howard Crosby, a director of the Company exercised 90,340 warrants to
purchase shares at $0.30 per share and paid the Company $27,102.  The
warrants were part of the November 2007 private placement.





On March
26, 2008, Frank Duval, a greater than 5% shareholder of the Company exercised
66,900 warrants to purchase shares at $0.30 per share and paid the Company
$20,070.  Also on April 28, 2008 he exercised another 16,667 warrants
to purchase shares at $0.30 per share and paid the Company
$5,000.  The warrants were part of the November 2007 private
placement.





On April
23, 2008, the Company issued 1,666,667 shares at $0.15 per share for total cash
received of $250,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the Golden Lynx LLC we entered
into on April 18, 2008.  See “Note 5. Mineral Properties - Golden Lynx, LLC”to our
consolidated financial statements for further details.





On June
1, 2007, the Company entered into a twenty-one month consulting agreement with
Janice Duval, the wife of Frank Duval, a greater than 5% (five percent)
shareholder, as payment for professional services rendered to the
Company.  The agreement is for $3,000 per month for twenty-one months
ending February 2009.  During the year ended December 31, 2008 the
Company paid Mrs. Duval $6,000 and accrued in accounts payable another
$30,000.





On June
16, 2008, the Company issued 3,000,000 shares at $0.10 per share for total cash
received of $300,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the letter of intent with Cougar
Gold for a joint venture on our Idaho properties.  See “Note 5.
Mineral Properties - Letter of
Intent with Cougar” to our consolidated financial statements for further
details.





On August
26, 2008, the Company issued 500,000 shares at $0.10 per share for total cash
received of $50,000 to Cougar Gold LLC, a greater than 5%
shareholder.  The shares were part of the sixty day extension to the
letter of intent with Cougar Gold for them to perform additional due diligence
on the property.  As part of the extension deal, if Cougar Gold
decided not to go forward with the Idaho joint venture then the Company would
issue another 500,000 shares at no cost to Cougar Gold bringing the average
share price down to $0.05 per share.  On September 9, 2008, after
being informed by Cougar Gold that they did not intend to go forward with the
joint venture on our Idaho properties we issued the other 500,000 shares at no
cost.  See “Note 5. Mineral Properties - Letter of Intent with Cougar”
to our consolidated financial statements for further details.





On March
13, 2009 the Company signed a Purchase Agreement (the "Agreement") with Frank
Duval, a related party who owns greater than 5% of the outstanding shares of the
Company, as an individual or agent for and on behalf of a company to be formed
for the purpose of acquiring the mining claims the subject of the Agreement (the
“Purchaser”).


48





Under the
terms of the Agreement we sold all of the Company’s rights, title and interest
in and to our 46 unpatented federal mill site claims and 185 unpatented federal
lode claims in the Stibnite District of Idaho known as our Golden Meadows
Project.  In addition, the Company also agreed to assign its rights
under the Mining Lease and Option to Purchase Agreement with the Bradley Mining
Company, the Option and Royalty Sales Agreement with the heirs of the Estate of
J.J. Oberbillig, and Option and Real Property Sales Agreement with JJO, LLC to
the Purchaser.  The selling price for the claims and the assignment of
the agreements is $50,000 payable as follows:





(a)  $25,000 within 10 days
of the execution of the Agreement, and





(b)  $25,000 October 1,
2009.





As part
of the Agreement, the Purchaser is required to timely pay the BLM fees required
to maintain the claims in good standing for the 2009 assessment year unless
Purchaser shall notify the Company in writing, no later than August 1, 2009, of
its intent not to proceed with the purchase of the Claims. If Purchaser gives
notice of intent not to proceed with the purchase of the Claims, then the
$25,000 initial payment shall be forfeited to the Company.





Director
Independence





Director
Bobby E. Cooper is an independent member of the board of directors as defined by
NASDAQ Marketplace Rules 4200(a)(15) and 4350(d)(2) respectively.





In
determining the matter of independence, Mr. Cooper had no transactions,
relationships or arrangements with the Company prior to or after becoming a
director of the Company except for becoming a shareholder of the Company
pursuant to the shares granted to him as directors’ fees, his investment
participation in the Company’s private placements on the same terms as all other
investors in that offering.  In determining the matter of director
independence, the following independence criteria were utilized:





(1)           a
director who is, or at any time during the past three years was, employed by the
company or by any parent or subsidiary of the company;




(2)           a
director who accepted or who has a Family Member who accepted any compensation
from the company in excess of $120,000 during any period of twelve consecutive
months within the three years preceding the determination of independence, other
than the following:


(i)           compensation
for board or board committee service;


(ii)           compensation
paid to a Family Member who is an employee (other than an executive officer) of
the company ; or


(iii)           benefits
under a tax-qualified retirement plan, or non-discretionary
compensation




(3)           Other
relationships include:




(i)           a
director who is a Family Member of an individual who is, or at any time during
the past three years was, employed by the Company or by any parent or subsidiary
of the Company made, or from which the Company received, payments for property
or services in the current or any of the past three fiscal years that exceed 5%
of the recipient's consolidated gross revenues for that year, or $200,000,
whichever is more, other than (i) payments arising solely from investments in
the company's securities; or(ii) payments under non-discretionary charitable
contribution matching programs.




(ii)           a
director of the Company who is, or has a Family Member who is, employed as an
executive officer of another entity where at any time during the past three
years any of the executive officers of the Company serve on the compensation
committee of such other entity; or




(iii)           a
director who is, or has a Family Member who is, a current partner of the
Company's outside auditor, or was a partner or employee of the Company's outside
auditor who worked on the company's audit at any time during any of the past
three years.




ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





Audit
Fees





The
aggregate fees billed for professional services rendered by the Company’s
independent registered public accounting firm for the audit of the Company’s
annual consolidated financial statements for the fiscal years ended
December 31, 2008 and 2007  and reviews of the consolidated
financial statements included in the Company’s Forms 10-QSB and 10-Q were
$22,800 and $37,900, respectively.


49




Audit-Related
Fees





There
were no fees billed in the last two fiscal years for assurance and related
services by the principal accountant that are reasonably related to the
performance of the audit or review of the Company’s financial statements except
as set forth in the preceding paragraph.





Tax
Fees





The
Company’s auditors billed $800 and $0 for professional services for tax
compliance, tax advice and tax planning for fiscal 2007 and 2006,
respectively.





All
Other Fees





The
Company incurred no fees from the principal accountant during the last two
fiscal years for products and services other than as set forth
above.





Policy
on Audit Committee Pre-Approval of Audit and Non-Audit Services of Independent
Auditors





The Audit
Committee meets prior to the filing of any Form 10-Q or 10-K to approve those
filings.  In addition, the Company’s audit committee pre-approves all
services provided to the Company by DeCoria, Maichel & Teague P.S. or any
other professional services firm that are related to the preparation of the
Company’s financial statements.




50


PART
IV




ITEM 15.
            EXHIBITS, FINANCIAL STATEMENT
      SCHEDULES





Exhibit
                  Number
                
                Description of Document3.1
                
                Articles
      of Incorporation for Silver Crest Mines, Inc. 9/11/1968.  Filed
      as Exhibit 3.1 with the Company’s 10-SB12G on January 8,
    2007.3.2
                
                Articles
      of Merger of Domestic Corporations into Silver Crest Mines, Inc.
      12/20/1982.  Filed as Exhibit 3.2 with the Company’s 10-SB12G on
      January 8, 2007.3.3
                
                Articles
      of Incorporation of Silver Crest Resources, Inc. 1/28/2003. Filed as
      Exhibit 3.3 with the Company’s 10-SB12G on January 8,
  2007.3.4
                
                Articles
      of Merger between Silver Crest Mines, Inc. into Silver Crest Resources,
      Inc. as filed in Nevada on 6/11/2003. Filed as Exhibit 3.4 with the
      Company’s 10-SB12G on January 8, 2007.3.5
                
                Articles
      of Merger between Silver Crest Mines, Inc. into Silver Crest Resources,
      Inc. as filed in Idaho on 6/11/2003. Filed as Exhibit 3.5 with the
      Company’s 10-SB12G on January 8, 2007.3.6
                
                Articles
      of Exchange of Niagara Mining and Development Company, Inc., and Silver
      Crest Resources, Inc. as filed in Nevada on 8/4/2006. Filed as Exhibit 3.6
      with the Company’s 10-SB12G on January 8, 2007.3.7
                
                Articles
      of Exchange of Niagara Mining and Development Company, Inc., and Silver
      Crest Resources, Inc. as filed in Idaho on 8/4/2006. Filed as Exhibit 3.7
      with the Company’s 10-SB12G on January 8, 2007.3.8
                
                Certificate
      of Amendment to Articles of Incorporation for a Nevada Corporation
      8/14/2006. Filed as Exhibit 3.8 with the Company’s 10-SB12G on January 8,
      2007.3.9
                
                Articles
      of Incorporation for Kisa Gold Mining, Inc. 7/28/2006. Filed as Exhibit
      3.9 with the Company’s 10-SB12G on January 8, 2007.3.10
                
                Articles
      of Incorporation for Niagara Mining and Development Company, Inc.
      1/11/2005. Filed as Exhibit 3.10 with the Company’s 10-SB12G on January 8,
      2007.3.11
                
                Amended
      Bylaws adopted September 12, 2007. Filed as Exhibit 3.11 with the
      Company’s 10-KSB on March 26, 2008.10.1
                
                Employment
      Contract of Thomas H. Parker. Filed as Exhibit 10a with the Company’s
      10-SB12G/A on August 6, 2007. Filed as Exhibit 3.11 with the Company’s
      10-KSB on March 26, 2008.10.2
                
                Option
      and Royalty Sales Agreement between Gold Crest Mines, Inc. and the heirs
      of the Estate of J.J. Oberbillig. Filed as Exhibit 10.3 with the Company’s
      10-KSB on March 26, 2008.10.3
                
                Option
      and Real Property Sales Agreement between Gold Crest Mines, Inc. and JJO,
      LLC, an Idaho limited liability company and personal representative of the
      Estate of J.J. Oberbillig. Filed as Exhibit 10.4 with the Company’s 10-KSB
      on March 26, 2008.10.4
                
                Mining
      Lease and Option to Purchase Agreement dated March 31, 2008, between Gold
      Crest Mines, Inc. and Bradley Mining Company, a California Corporation.
      Filed as Exhibit 10.5 with the Company’s 10-Q on August 11,
      2008.10.5
                
                Golden
      Lynx, LLC, Limited Liability Company Agreement dated April 18, 2008,
      between Kisa Gold Mining, Inc. and Cougar Gold LLC. Filed as Exhibit 10.6
      with the Company’s 10-Q on August 11, 2008.10.6
                
                AKO
      Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and
      Newmont North America Exploration Limited, a Delaware Corporation. Filed
      as Exhibit 10.7 with the Company’s 10-Q on August 11,
  2008.10.7
                
                Luna
      Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and
      Newmont North America Exploration Limited, a Delaware Corporation. Filed
      as Exhibit 10.8 with the Company’s 10-Q on August 11,
  2008.10.8
                
                Chilly
      Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and
      Newmont North America Exploration Limited, a Delaware Corporation. Filed
      as Exhibit 10.9 with the Company’s 10-Q on August 11,
  2008.10.9
                
                Purchase
      Agreement dated March 13, 2009, between Gold Crest Mines, Inc. and Frank
      Duval.  Filed herewith.14
                
                Code
      of Conduct and Ethics of Gold Crest Mines, Inc. adopted March 3, 2008.
      Filed as Exhibit 14.1 with the Company’s 8-K on March 3,
    2008.21
                
                Subsidiaries
      of the Issuer. Filed as Exhibit 21 with the Company’s 10-SB12G on January
      8, 2007.23.1
                
                Consent
      of DeCoria, Maichel & Teague P.S., independent registered public
      accounting firm.  Filed
herewith.
  51
  99
              
              Gold
      Crest Mines, Inc., 2007 Stock Plan. Filed as Exhibit 99 with the Company’s
      10-SB12G/A on August 6, 2007.31.1
              
              Certification
      of CEO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
      Exchange Act. Filed herewith.31.2
              
              Certification
      of CFO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
      Exchange Act. Filed herewith32.1
              
              Certification
      of CEO pursuant to 18 U.S.C. Section 1350.  Filed
      herewith32.2
              
              Certification
      of CFO pursuant to 18 U.S.C. Section 1350.  Filed
      herewith




52





SIGNATURES





In
accordance with the requirements of the Section 13 or 15(d) of the
Exchange Act, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in Spokane, Washington on
March 25,
2009.




GOLD
      CREST MINES, INC.By:
            /s/ John P. RyanJohn
      P. RyanPresident
      and CEO(Principal
      Executive Officer)





In
accordance with the requirements of the Section 13 or 15(d) of the
Exchange Act, as amended, this report has been signed below by the following
persons on behalf of the registrant and in the capacities on March 25,2009.




/s/  JOHN
      P. RYAN
                              
                              
                              
                              President,
      Chief Executive Officer and DirectorJohn
      P. Ryan(Principal
      Executive Officer)/s/  MATT
      J. COLBERT
                              
                              
                              
                              Chief
      Financial OfficerMatt
      J. Colbert(Principal
      Financial and Accounting Officer)/s/  TERRENCE
      J. DUNNE
                              
                              
                              
                              Director
      and Secretary / TreasurerTerrence
      J. Dunne/s/  THOMAS
      H. PARKER
                              
                              
                              
                              DirectorThomas
      H. Parker/s/  BOBBY
      E. COOPER
                              
                              
                              
                              DirectorBobby
      E. Cooper/s/  ROBERT
      W. O’BRIEN
                              
                              
                              
                              DirectorRobert
      W. O’Brien/s/  DANIEL
      R. MCKINNEY, SR.
                              
                              
                              
                              DirectorDaniel
      R. McKinney, Sr.




53