| Nevada                                                                                             | 88-0336988                                                  |
|----------------------------------------------------------------------------------------------------|-------------------------------------------------------------|
| (State                  or other jurisdiction of incorporation                    or organization) | (I.R.S.                  Employer Identification No.)  |

| Class                                           |   | Outstanding                  on August 14, 2008 |
|-------------------------------------------------|--------|-------------------------------------------------|
| Common                  Stock, Par Value $.001. |   | 24,587,753                                      |

----

|                      |   |                                                                                                |   | PAGE                  NO. |
|---------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|---------------------------|
| PART                  I.  |   | FINANCIAL                  INFORMATION                                                              |   | 3                         |
|                      |   |                                                                                                |   |                      |
| ITEM                  1.  |   | FINANCIAL                  STATEMENTS                                                               |   | 3                         |
|                      |   | Balance                  Sheets                                                                     |   | 3                         |
|                      |   | Statements                  of Operations                                                           |   | 4                         |
|                      |   | Statements                  of Cash Flows                                                           |   | 5                         |
|                      |   | Notes                  to Financial Statements                                                      |   | 10                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  2.  |   | Management's                  Discussion and Analysis of  Financial                  Condition |   | 14                        |
|                      |   |                                                                                                     |   |                      |
| ITEM                  3.  |   | Quantitative                  and Qualitative Disclosures about Market Risk                         | 20     |
|                      |   |                                                                                                |   |                      |
| ITEM                  4.  |   | Controls                  and Procedures                                                            |   | 20                        |
|                      |   |                                                                                                |   |                      |
| PART                  II. |   | OTHER                  INFORMATION                                                                  |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  1.  |   | Legal                  Proceedings                                                                  |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  2.  |   | Changes                  in Securities                                                              |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  3.  |   | Defaults                  upon Senior Securities                                                    |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  4.  |   | Submission                  of Matters to a Vote of Security Holders                                |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  5.  |   | Other                  information                                                                  |   | 21                        |
|                      |   |                                                                                                |   |                      |
| ITEM                  6.  |   | Exhibits                  and Reports on Form 8-K                                                   |   | 22                        |
|                      |   |                                                                                                |   |                      |
| Signatures                |   |                                                                                                |
|                      |   |                                                                                                |
| Certifications            |   |                                                                                                |

----

----

| **Can-Cal                  Resources Ltd.**         |
|-----------------------------------------------------|
| **(An                  Exploration Stage Company)** |
| **Condensed                  Balance Sheets**       |

|                                                                                                          |   | June                  30, |       | December                  31, |   |
|---------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|-------------------------------|--------|
|                                                                                                          |   | 2008                      |       | 2007                          |   |
|                                                                                                          |   | (Unaudited)               |       | (Audited)                     |   |
| ASSETS                                                                                                        |   |                      |       |                          |   |
| Current                  assets                                                                               |   |                      |       |                     |   |
| Cash                                                                                                          |   | $                         | 72,827     |                          | $      | 105,987 |   |
| Other                  current assets                                                                         |   |                      | 5,100      |                          |   | - |   |
| Total                  current assets                                                                    |   |                      | 77,927     |                          |   | 105,987 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Property,                  equipment and mineral interests (net of accumulated                                |   |                      |       |                          |   |   |   |
| depreciation                  of $131,890 and $125,894)                                                       |   |                      | 505,725    |                          |   | 511,720 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Other                  assets, net                                                                            |   |                      | 1,895      |                          |   | 1,895 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Total                  assets                                                                                 |   | $                         | 585,547    |                          | $      | 619,602 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' DEFICIT                                                        |   |                      |       |                          |   |   |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Current                  liabilities                                                                          |   |                      |       |                          |   |   |   |
| Accounts                  payable                                                                             |   | $                         | 23,868     |                          | $      | 28,399 |   |
| Accrued                  interest                                                                             |   |                      | 339,391    |                          |   | 311,320 |   |
| Accrued                  officer salary                                                                       |   |                      | 160,149    |                          |   | 110,652 |   |
| Accrued                  payroll taxes                                                                        |   |                      | 458        |                          |   | 21,853 |   |
| Notes                  payable, related parties                                                               |   |                      | 395,630    |                          |   | 360,550 |   |
| Notes                  payable                                                                                |   |                      | 83,500     |                          |   | - |   |
| Unearned                  revenues                                                                            |   |                      | 47,061     |                          |   | 9,375 |   |
| Total                  current liabilities                                                               |   |                      | 1,050,057  |                          |   | 842,149 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Total                  liabilities                                                                       |   |                      | 1,050,057  |                          |   | 842,149 |   |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Stockholders'                  deficit                                                                        |   |                      |       |                          |   |   |   |
| Preferred                  stock; $0.001 par value; 10,000,000 shares                                         |   |                      |       |                          |   |   |   |
| authorized,                  no shares issued and outstanding                                            |   |                      | -          |                          |   | - |   |
| Common                  stock; $0.001 par value; 100,000,000 shares authorized,                               |   |                      |       |                          |   |   |   |
| 24,587,753                  and 24,555,253 shares issued and outstanding,                  respectively  |   |                      | 24,588     |                          |   | 24,555 |   |
| Additional                  paid-in capital                                                                   |   |                      | 7,831,503  |                          |   | 7,823,411 |   |
| Accumulated                  deficit                                                                          |   |                      | (8,320,601 | )                             |   | (8,070,513 | ) |
| Total                  stockholders' deficit                                                             |   |                      | (464,510   | )                             |   | (222,547 | ) |
|                                                                                                          |   |                      |       |                          |   |   |   |
| Total                  liabilities and stockholders' deficit                                                  |   | $                         | 585,547    |                          | $      | 619,602 |   |

----

| **Can-Cal                    Resources Ltd.**             |
|-----------------------------------------------------------|
| **(An                    Exploration Stage Company)**     |
| **Condensed                    Statements of Operations** |
| **(Unaudited)**                                           |

|                                                                           |   | For                        the Three Months Ended June                        30, |       | For                        the Six Months EndedJune                        30, |   | March                          22, 1995(Inception)to                          June 30, |   |
|--------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|
|                                                                           |   | 2008                                                                              |       | 2007                                                                           |   | 2008                                                                                   |   | 2007 |   | 2008 |   |
| Material                    sales                                              |   | $                                                                                 | -          |                                                                           | $      | -                                                                                      |   | $ | - |   | $ | - |   | $ | 245,500 |   |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Cost                    of sales                                               |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | 263,400 |   |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Gross                    profit                                           |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | (17,900 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Operating                    expenses                                          |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Exploration                    costs                                      |   |                                                                              | 20,991     |                                                                           |   | 55,635                                                                                 |   |   | 38,905 |   |   | 102,943 |   |   | 407,432 |   |
| Depreciation                                                              |   |                                                                              | 2,998      |                                                                           |   | 3,816                                                                                  |   |   | 5,995 |   |   | 6,021 |   |   | 226,320 |   |
| General                    and administrative                             |   |                                                                              | 85,645     |                                                                           |   | 58,251                                                                                 |   |   | 142,640 |   |   | 106,745 |   |   | 5,899,666 |   |
| Officer                    compensation                                   |   |                                                                              | 29,008     |                                                                           |   | 32,886                                                                                 |   |   | 60,000 |   |   | 64,052 |   |   | 671,176 |   |
|  Total                    operating expenses                              |   |                                                                              | 138,642    |                                                                           |   | 150,588                                                                                |   |   | 247,540 |   |   | 279,761 |   |   | 7,204,594 |   |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Loss                    from operations                                        |   |                                                                              | (138,642   | )                                                                              |   | (150,588                                                                               | )      |   | (247,540 | ) |   | (279,761 | ) |   | (7,222,494 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Other                    income (expense)                                      |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Other                    income from legal judgement                      |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | 47,200 |   |
| Interest                    income                                        |   |                                                                              | 4          |                                                                           |   | 3,505                                                                                  |   |   | 102 |   |   | 6,959 |   |   | 52,890 |   |
| Rental                    revenue                                         |   |                                                                              | 16,689     |                                                                           |   | 5,625                                                                                  |   |   | 26,614 |   |   | 11,250 |   |   | 258,614 |   |
| Gain                    (loss) on sale of fixed assets                    |   |                                                                              | -          |                                                                           |   | 3,701                                                                                  |   |   | - |   |   | 3,701 |   |   | 26,801 |   |
| Interest                    expense                                       |   |                                                                              | (15,460    | )                                                                              |   | (14,307                                                                                | )      |   | (29,264 | ) |   | (28,887 | ) |   | (1,010,012 | ) |
| Total                    other income (expense)                                |   |                                                                              | 1,233      |                                                                           |   | (1,476                                                                                 | )      |   | (2,548 | ) |   | (6,977 | ) |   | (624,507 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Loss                    before provision for income taxes                      |   |                                                                              | (137,409   | )                                                                              |   | (152,064                                                                               | )      |   | (250,088 | ) |   | (286,738 | ) |   | (7,847,001 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Provision                    for income taxes                                  |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | - |   |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss from continuing operations                         |   |                                                                              | (137,409   | )                                                                              |   | (152,064                                                                               | )      |   | (250,088 | ) | $ | (286,738 | ) |   | (7,847,001 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Income                    from discontinued operations                         |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Income                    (loss) from discontinued operations             |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | 116,400 |   |
| Gain                    (loss) on disposal of operations (net of taxes)   |   |                                                                              | -          |                                                                           |   | -                                                                                      |   |   | - |   |   | - |   |   | (590,000 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Net                    loss                                                    |   | $                                                                                 | (137,409   | )                                                                              | $      | (152,064                                                                               | )      | $ | (250,088 | ) | $ | (286,738 | ) | $ | (8,320,601 | ) |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Basic                    loss per common share                                 |   | $                                                                                 | (0.01      | )                                                                              | $      | (0.01                                                                                  | )      | $ | (0.01 | ) | $ | (0.01 | ) |   |   |   |
|                                                                           |   |                                                                              |       |                                                                           |   |                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Basic                    weighted average common shares outstanding            |   |                                                                              | 24,587,753 |                                                                           |   | 24,157,828                                                                             |   |   | 24,584,884 |   |   | 23,922,171 |   |   |   |   |

----

| **Can-Cal                      Resources Ltd.**                                                     |
|-----------------------------------------------------------------------------------------------------|
| **(An                      Exploration Stage Company)**                                             |
| **Condensed                      Statement of Stockholders' Equity                      (Deficit)** |

|                                                                                                                                                                             |   | Common                      Stock |         | Additional |   |         |   | Total       |         |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------------|------------|--------|--------------|--------|-------------|--------------|
|                                                                                                                                                                             |   | Number                      of    |         |       |   | Paid-in      |   | Accumulated |         | Stockholders' |   |
|                                                                                                                                                                             |   | Shares                            |         | Amount     |   | Capital      |   | (Deficit)   |         | (Deficit) |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |
| Balance                      December 31, 2005                                                                                                                                   |   |                              | 18,972,071   |       | $      | 19,000       |   | $           | 5,813,500    |   | $ | (6,844,600 | ) | $ | (1,012,100 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for cash                                                                                                                               |   |                              | 2,448,213    |       |   | 2,400        |   |        | 642,100      |   |   | - |   |   | 644,500 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      warrants issued for cash                                                                                                                             |   |                              | 174,000      |       |   | 200          |   |        | 43,300       |   |   | - |   |   | 43,500 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for services                                                                                                                           |   |                              | 19,500       |       |   | -            |   |        | 5,000        |   |   | - |   |   | 5,000 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                          shares issued in satisfaction of accounts payable and accrued                          liabilities                                               |   |                              | 385,714      |       |   | 400          |   |        | 80,600       |   |   | - |   |   | 81,000 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                          shares issued in satisfaction of notes payable-related                          parties                                                          |   |                              | 56,821       |       |   | 100          |   |        | 11,800       |   |   | - |   |   | 11,900 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                          shares issued in satisfaction of convertible debenture,                          (including accrued                          interest of $1,895) |   |                              | 206,767      |       |   | 200          |   |        | 41,700       |   |   | - |   |   | 41,900 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for asset acquisition                                                                                                                  |   |                              | 1,000,000    |       |   | 1,000        |   |        | 399,000      |   |   | - |   |   | 400,000 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Option                      granted to officers and directors                                                                                                                    |   |                              | -            |       |   | -            |   |        | 123,500      |   |   | - |   |   | 123,500 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Warrants                      granted for services                                                                                                                               |   |                              | -            |       |   | -            |   |        | 2,200        |   |   | - |   |   | 2,200 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Warrants                          granted in satisfaction of accounts payable and accrued                          liabilities                                                   |   |                              | -            |       |   | -            |   |        | 65,400       |   |   | - |   |   | 65,400 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Warrants                            granted in satisfaction of notes payable-related                            parties                                                          |   |                              | -            |       |   | -            |   |        | 9,600        |   |   | - |   |   | 9,600 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Warrants                          granted in satisfaction of convertible                          debenture                                                                      |   |                              | -            |       |   | -            |   |        | 40,000       |   |   | - |   |   | 40,000 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Net                      (loss)                                                                                                                                                  |   |                              |    |       |   |    |   |        |    |   |   | (621,000 | ) |   | (621,000 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Balance                      December 31, 2006                                                                                                                                   |   |                              | 23,263,086   |       |   | 23,300       |   |        | 7,277,700    |   |   | (7,465,600 | ) |   | (164,600 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for cash                                                                                                                               |   |                              | 492,795      |       |   | 482          |   |        | 188,708      |   |   | - |   |   | 189,190 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      warrants issued for cash                                                                                                                             |   |                              | 745,372      |       |   | 719          |   |        | 185,624      |   |   | - |   |   | 186,343 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for services                                                                                                                           |   |                              | 4,000        |       |   | 4            |   |        | 2,010        |   |   | - |   |   | 2,014 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                          shares issued in satisfaction of accounts payable and accrued                          liabilities                                               |   |                              | 50,000       |       |   | 50           |   |        | 21,950       |   |   | - |   |   | 22,000 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Debt                      forgiveness, related party                                                                                                                             |   |                              | -            |       |   | -            |   |        | 147,419      |   |   | - |   |   | 147,419 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Net                      (loss)                                                                                                                                                  |   |                              |    |       |   |    |   |        |    |   |   | (604,913 | ) |   | (604,913 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Balance                      December 31, 2007                                                                                                                                   |   |                              | 24,555,253   |       |   | 24,555       |   |        | 7,823,411    |   |   | (8,070,513 | ) |   | (222,547 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Common                      shares issued for cash                                                                                                                               |   |                              | 32,500       |       |   | 33           |   |        | 8,092        |   |   | - |   |   | 8,125 |   |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Net                      (loss)                                                                                                                                                  |   |                              |    |       |   |    |   |        |    |   |   | (112,679 | ) |   | (112,679 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Balance,                      March 31, 2008                                                                                                                                     |   |                              | 24,587,753   |       |   | 24,588       |   |        | 7,831,503    |   |   | (8,183,192 | ) |   | (327,101 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Net                      (loss)                                                                                                                                                  |   |                              |    |       |   |    |   |        |    |   |   | (137,409 | ) |   | (137,409 | ) |
|                                                                                                                                                                             |   |                              |         |       |   |         |   |        |         |   |   |   |   |   |   |   |
| Balance,                      June 30, 2008                                                                                                                                      |   |                              | 24,587,753   |       | $      | 24,588       |   | $           | 7,831,503    |   | $ | (8,320,601 | ) | $ | (464,510 | ) |

----

| **Can-Cal                        Resources Ltd.**             |
|---------------------------------------------------------------|
| **(An                        Exploration Stage Company)**     |
| **Condensed                        Statements of Cash Flows** |
| **(Unaudited)**                                               |

|                                                                                   |   | For                            the Six Months EndedJune                            30, |     | March                              22, 1995(Inception)to                              June 30, |   |
|----------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------------------------|--------|
|                                                                                   |   | 2008                                                                                   |     | 2007                                                                                           |   | 2008 |   |
| Cash                        flows from operating activities:                           |   |                                                                                   |     |                                                                                      |   |    |   |
| Net                        loss                                                        |   | $                                                                                      | (250,088 | )                                                                                              | $      | (286,738 | ) | $ | (8,320,601 | ) |
| Adjustments                        to reconcile net loss to net                        |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| cash                        used by operating activities:                              |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Depreciation                        and amortization                                   |   |                                                                                   | 5,995    |                                                                                           |   | 6,021 |   |   | 243,320 |   |
| Bad                        debts                                                       |   |                                                                                   | -        |                                                                                           |   | - |   |   | 207,100 |   |
| (Gain)                        loss on sale of fixed assets                             |   |                                                                                   | -        |                                                                                           |   | (3,701 | ) |   | (6,501 | ) |
| Stock                        based compensation                                        |   |                                                                                   | -        |                                                                                           |   | 24,000 |   |   | 532,814 |   |
| Stock                        issued for financing and interest                         |   |                                                                                   | -        |                                                                                           |   | - |   |   | 523,200 |   |
| Beneficial                        conversion feature on convertible debts              |   |                                                                                   | -        |                                                                                           |   | - |   |   | 25,200 |   |
| Loss                        on disposal of investment property                         |   |                                                                                   | -        |                                                                                           |   | - |   |   | 938,600 |   |
| Undistributed                        earnings of affiliate                             |   |                                                                                   | -        |                                                                                           |   | - |   |   | (174,300 | ) |
| Gain                        on discontinued operations                                 |   |                                                                                   | -        |                                                                                           |   | - |   |   | (116,400 | ) |
| Loss                        on foreign currency translation                            |   |                                                                                   | -        |                                                                                           |   | - |   |   | 8,500 |   |
| Decrease                        (increase) in assets:                                  |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Accounts                        receivable                                        |   |                                                                                   | -        |                                                                                           |   | 3,600 |   |   | - |   |
| Other                        current assets                                       |   |                                                                                   | (5,100   | )                                                                                              |   | - |   |   | (95,800 | ) |
| Other                        assets                                               |   |                                                                                   | -        |                                                                                           |   | (34 | ) |   | (1,895 | ) |
| Increase                        (decrease) in liabilities:                             |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Accounts                        payable                                           |   |                                                                                   | (4,531   | )                                                                                              |   | (11,570 | ) |   | 23,868 |   |
| Accrued                        interest                                           |   |                                                                                   | 28,071   |                                                                                           |   | 24,231 |   |   | 339,391 |   |
| Accrued                        officer salary                                     |   |                                                                                   | 49,497   |                                                                                           |   | (51,256 | ) |   | 160,149 |   |
| Accrued                        payroll taxes                                      |   |                                                                                   | (21,395  | )                                                                                              |   | - |   |   | 458 |   |
| Unearned                        revenues                                          |   |                                                                                   | 37,686   |                                                                                           |   | 11,225 |   |   | 47,061 |   |
|  Net                        cash used by operating activities                     |   |                                                                                   | (159,865 | )                                                                                              |   | (284,222 | ) |   | (5,665,836 | ) |
|                                                                                   |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Cash                        flows from investing activities:                           |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Purchase                        of investment property                                 |   |                                                                                   | -        |                                                                                           |   | - |   |   | (1,083,600 | ) |
| Proceeds                        from sale of investment property                       |   |                                                                                   | -        |                                                                                           |   | - |   |   | 319,300 |   |
| Purchase                        of property, equipment and mineral interests           |   |                                                                                   | -        |                                                                                           |   | (51,788 | ) |   | (768,644 | ) |
| Proceeds                        from sale of property, equipment and mineral interests |   |                                                                                   | -        |                                                                                           |   | 7,000 |   |   | 26,100 |   |
|  Net                        cash used in investing activities                     |   |                                                                                   | -        |                                                                                           |   | (44,788 | ) |   | (1,506,844 | ) |
|                                                                                   |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Cash                        flows from financing activities:                           |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Proceeds                        from notes payable                                     |   |                                                                                   | 83,500   |                                                                                           |   | - |   |   | 773,400 |   |
| Principal                        payments on notes payable                             |   |                                                                                   | -        |                                                                                           |   | - |   |   | (689,900 | ) |
| Proceeds                        from notes payable, related parties                    |   |                                                                                   | 40,000   |                                                                                           |   | - |   |   | 727,800 |   |
| Principal                        payments on notes payable, related parties            |   |                                                                                   | (4,920   | )                                                                                              |   | (23,116 | ) |   | (332,170 | ) |
| Proceeds                        from issuance of common stock                          |   |                                                                                   | 8,125    |                                                                                           |   | 292,145 |   |   | 6,766,377 |   |
|  Net                        cash provided by financing activities                 |   |                                                                                   | 126,705  |                                                                                           |   | 269,029 |   |   | 7,245,507 |   |
|                                                                                   |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Net                        increase (decrease) in cash                                 |   |                                                                                   | (33,160  | )                                                                                              |   | (59,981 | ) |   | 72,827 |   |
| Cash,                        beginning of period                                       |   |                                                                                   | 105,987  |                                                                                           |   | 419,700 |   |   | - |   |
|                                                                                   |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Cash,                        end of period                                             |   | $                                                                                      | 72,827   |                                                                                           | $      | 359,719 |   | $ | 72,827 |   |
|                                                                                   |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Supplemental                        disclosure of cash flow information:               |   |                                                                                   |     |                                                                                           |   |   |   |   |   |   |
| Cash                        paid for income taxes                                      |   | $                                                                                      | -        |                                                                                           | $      | - |   | $ | - |   |
| Cash                        paid for interest                                          |   | $                                                                                      | -        |                                                                                           | $      | - |   | $ | - |   |

----

| **WEIGHTED                    AVERAGE - BASIC** |   |   |   |          |   |   |   |          |   |   |   |   |
|-------------------------------------------------|--------|--------|--------|---------------|--------|--------|--------|---------------|--------|--------|--------|--------|
| 2007                                            |   |   |   |          |   |   |   |          |   | 2008   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |          |   | Days   |   |          |   |   |   |   |   |   |   | Days |   |   |   |   |   |   |
|                                            |   | Mth    |   | Shares        |   | I/O    |   |          |   |   |   | Mth    |   | Shares |   | I/O |   |   |   |   |   |   |
|                                            |   |   |   |          |   |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   | Jan    |   | 23,263,083    |   | 3      |   | 69,789,249    |   |   |   | Jan    |   | 24,555,253 |   | 15 |   | 368,328,795 |   |   |   |   |
|                                            |   | Jan    |   | 23,312,955    |   | 23     |   | 536,197,965   |   |   |   | Jan    |   | 24,575,253 |   | 3 |   | 73,725,759 |   |   |   |   |
|                                            |   | Jan    |   | 23,372,955    |   | 4      |   | 93,491,820    |   |   |   | Jan    |   | 24,587,753 |   | 13 |   | 319,640,789 |   |   |   |   |
|                                            |   | Jan    |   | 23,387,241    |   | 1      |   | 23,387,241    |   |   |   | Feb    |   | 24,587,753 |   | 29 |   | 713,044,837 |   |   |   |   |
|                                            |   | Feb    |   | 23,439,241    |   | 1      |   | 23,439,241    |   |   |   | Mar    |   | 24,587,753 |   | 31 |   | 762,220,343 |   |   |   |   |
|                                            |   | Feb    |   | 23,467,813    |   | 3      |   | 70,403,439    |   |   |   | Apr    |   | 24,587,753 |   | 31 |   | 762,220,343 |   |   |   |   |
|                                            |   | Feb    |   | 23,797,813    |   | 1      |   | 23,797,813    |   |   |   | May    |   | 24,587,753 |   | 31 |   | 762,220,343 |   |   |   |   |
|                                            |   | Feb    |   | 23,807,813    |   | 3      |   | 71,423,439    |   |   |   | Jun    |   | 24,587,753 |   | 30 |   | 737,632,590 |   |   |   |   |
|                                            |   | Feb    |   | 23,827,813    |   | 5      |   | 119,139,065   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 23,927,813    |   | 2      |   | 47,855,626    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 23,995,313    |   | 4      |   | 95,981,252    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 24,000,313    |   | 2      |   | 48,000,626    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 24,008,313    |   | 1      |   | 24,008,313    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 24,010,313    |   | 3      |   | 72,030,939    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Feb    |   | 24,010,313    |   | 3      |   | 72,030,939    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Mar    |   | 24,010,313    |   | 11     |   | 264,113,443   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | Q1 |   |   |
|                                            |   | Mar    |   | 24,010,313    |   | 20     |   | 480,206,260   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | 91 |   | 2,236,960,523.00 |
|                                            |   | Apr    |   | 24,010,313    |   | 6      |   | 144,061,878   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   | 24,581,983.77 |
|                                            |   | Apr    |   | 24,115,313    |   | 5      |   | 120,576,565   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Apr    |   | 24,126,013    |   | 6      |   | 144,756,078   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Apr    |   | 24,188,013    |   | 13     |   | 314,444,169   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | May    |   | 24,223,713    |   | 14     |   | 339,131,982   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | May    |   | 24,240,594    |   | 7      |   | 169,684,158   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | May    |   | 24,247,594    |   | 2      |   | 48,495,188    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | May    |   | 24,257,594    |   | 1      |   | 24,257,594    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | May    |   | 24,258,594    |   | 7      |   | 169,810,158   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | June   |   | 24,258,594    |   | 6      |   | 145,551,564   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | June   |   | 24,262,592    |   | 7      |   | 169,838,144   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | June   |   | 24,267,592    |   | 12     |   | 291,211,104   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | June   |   | 24,271,592    |   | 4      |   | 97,086,368    |   |   |   |   |   | 0 |   | 0 |   | 0 |   | Q2 |   |   |
|                                            |   | June   |   | 24,275,592    |   | 1      |   | 24,275,592    |   |   |   |   |   | 0 |   | 0 |   | 0 |   | 92 |   | 2,262,073,276.00 |
|                                            |   | July   |   | 24,279,592    |   | 3      |   | 72,838,776    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   | 24,587,753.00 |
|                                            |   | July   |   | 24,290,592    |   | 8      |   | 194,324,736   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | July   |   | 24,293,592    |   | 2      |   | 48,587,184    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | July   |   | 24,315,538    |   | 14     |   | 340,417,532   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | July   |   | 24,317,538    |   | 4      |   | 97,270,152    |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Aug    |   | 24,350,538    |   | 31     |   | 754,866,678   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   |   |
|                                            |   | Sept   |   | 24,355,538    |   | 15     |   | 365,333,070   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | Q3 |   |   |
|                                            |   | Sept   |   | 24,360,538    |   | 15     |   | 365,408,070   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | - |   | - |
|                                            |   | Oct    |   | 24,362,538    |   | 31     |   | 755,238,678   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   | #DIV/0! |
|                                            |   | Nov    |   | 24,528,250    |   | 30     |   | 735,847,500   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | Q4 |   |   |
|                                            |   | Dec    |   | 24,538,250    |   | 6      |   | 147,229,500   |   |   |   |   |   | 0 |   | 0 |   | 0 |   | - |   | - |
|                                            |   | Dec    |   | 24,555,253    |   | 25     |   | 613,881,325   |   |   |   |   |   | 0 |   | 0 |   | 0 |   |   |   | #DIV/0! |
|                                            |   |   |   |          |   |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   | 1,035,201,191 |   | 365    |   | 8,829,720,413 |   |   |   |   |   | 196,657,024 |   | 183 |   | 4,499,033,799 |   |   |   |   |
| W/A                                             |   |   |   |          |   |   |   | 24,191,015    |   | W/A    |   |   |   |   |   |   |   | 24,584,884 |   |   |   |   |

| 2008                            |   |   |   |   |   |   |   |       |   |     |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|------------|--------|----------|
|                            |   |   |   | Shares |   | Cost   |   | Investment |   | Date     |
| Neil                    Waite   |   | Bought |   | 20,000 |   | .25    |   | 5,000.00   |   | 01/15/08 |
| Derek                    Milani |   | Bought |   | 12,500 |   | .25    |   | 3,125.00   |   | 01/18/08 |

----

| **Can-Cal                    Resources, Ltd.**              |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |
|-------------------------------------------------------------|--------|---------------|------------|----------------|--------|----------------|--------|---------------|----------|---------------|--------|---------------|--------|--------------|--------|-----------|
| **CASH                    FLOW**                            |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |
| **6/30/2008**                                               |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |
|                                                        |   | **6/30/2008** |       | **12/31/2007** |   | **Difference** |   | **Operating** |     | **Investing** |   | **Financing** |   | **Non-Cash** |   | **Total** |   | **Diff.** |   | **Explanation** |   |
| Cash                                                        |   |          | 72,827     |           |   | 105,987        |   |          | 33,160   |          |   |          |   |         |   |      |   |   |   |   |   |   |   | - |   |   | 33,160 |   |   |   |   |
| Other                    current assets                     |   |          | 5,100      |           |   | -              |   |          | (5,100   | )             |   | (5,100        | )      |         |   |      |   |   |   |   |   |   |   | (5,100 | ) |   | - |   |   |   |   |
| Property                    and equipment, net              |   |          | 61,953     |           |   | 67,948         |   |          | 5,995    |          |   | 5,995         |   |         | -      |      |   |   |   |   |   |   |   | 5,995 |   |   | - |   |   | Depreciation                    (operating) |   |
| Gain                    on disposal of FA                   |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                    assets                             |   |          | 445,667    |           |   | 445,667        |   |          | -        |          |   | -             |   |         |   |      |   |   |   |   |   |   |   | - |   |   | - |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unearned                    revenues                        |   |          | (47,061    | )              |   | (9,375         | )      |          | 37,686   |          |   | 37,686        |   |         |   |      |   |   |   |   |   |   |   | 37,686 |   |   | - |   |   |   |   |
| Accounts                    payable                         |   |          | (23,868    | )              |   | (28,399        | )      |          | (4,531   | )             |   | (4,531        | )      |         |   |      |   |   |   |   |   |   |   | (4,531 | ) |   | - |   |   |   |   |
| Accrued                    interest                         |   |          | (339,391   | )              |   | (311,320       | )      |          | 28,071   |          |   | 28,071        |   |         |   |      |   |   |   |   |   |   |   | 28,071 |   |   | - |   |   |   |   |
| Accrued                    officers' salary                 |   |          | (160,149   | )              |   | (110,652       | )      |          | 49,497   |          |   | 49,497        |   |         |   |      |   |   |   |   |   |   |   | 49,497 |   |   | - |   |   |   |   |
| Accrued                    payroll taxes                    |   |          | (458       | )              |   | (21,853        | )      |          | (21,395  | )             |   | (21,395       | )      |         |   |      |   |   |   |   |   |   |   | (21,395 | ) |   | - |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Notes                    payable, related party             |   |          | (395,630   | )              |   | (360,550       | )      |          | 35,080   |          |   |          |   |         |   |      |   | 35,080 |   |   | - |   |   | 35,080 |   |   | - |   |   |   |   |
| Notes                    payable                            |   |          | (83,500    | )              |   | -              |   |          | 83,500   |          |   |          |   |         |   |      |   | 83,500 |   |   | - |   |   | 83,500 |   |   | - |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retained                    Earnings                        |   |          | 8,320,601  |           |   | 8,070,513      |   |          | (250,088 | )             |   | (250,088      | )      |         |   |      |   |   |   |   |   |   |   | (250,088 | ) |   | - |   |   | Net                    Loss |   |
| Other                    Equity Accounts                    |   |          | (7,856,091 | )              |   | (7,847,966     | )      |          | 8,125    |          |   | -             |   |         |   |      |   |   |   |   | - |   |   | 8,125 |   |   | - |   |   |   |   |
| Shares                    issued for cash                   |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   | 8,125 |   |   |   |   |   |   |   |   | - |   |   | Stock                    sales for cash |   |
| Shares                    issued for services               |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Debt                    forgiveness - related party         |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Rounding                    to balance equity accounts - PY |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Officer                    wage accruals - stock            |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |          | -          |           |   | -              |   |          | -        |          |   | (159,865      | )      |         | -      |      |   | 126,705 |   |   | - |   |   | (33,160 | ) |   | 33,160 |   |   |   |   |
|                                                        |   |          |       |           |   |           |   |          |     |          |   |          |   |         |   |      |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |

| **Financial                  Statement Presentation**                      |   | Check                  sum |         |
|----------------------------------------------------------------------------|--------|----------------------------|--------------|
| Operating                  activities                                      |   |                       |         |
| Net                  loss                                                  |   |                       | (250,088     | ) |
| Adjustments                  to reconcile net loss from operations         |   |                       |         |   |
| to                  net cash used in operating activities:                 |   |                       |         |   |
| Depreciation                  and amortization                             |   |                       | 5,995        |   |
| Gain                  on asset disposal                                    |   |                       | -            |   |
| Stock                  issued for services                                 |   |                       | -            |   |
| Stock                  issued for wage accruals - related party            |   |                       | -            |   |
| Rounding                  to balance equity accounts - PY                  |   |                       | -            |   |
|                                                                       |   |                       |         |   |
| Changes                  in operating assets:                              |   |                       |         |   |
| Decrease                  (increase) in Other current assets               |   |                       | (5,100       | ) |
| Decrease                  (increase) in Other assets                       |   |                       | -            |   |
|                                                                       |   |                       |         |   |
| Changes                  in operating liabilities:                         |   |                       |         |   |
| Increase                  (decrease) in A/P                                |   |                       | (4,531       | ) |
| Increase                  (decrease) in accrued interest                   |   |                       | 28,071       |   |
| Increase                  (decrease) in accrued officers' salary           |   |                       | 49,497       |   |
| Increase                  (decrease) in accrued payroll taxes              |   |                       | (21,395      | ) |
| Increase                  (decrease) in unearned revenues                  |   |                       | 37,686       |   |
|                                                                       |   |                       |         |   |
|                                                                       |   |                       | (159,865     | ) |
| Investing                  activities                                      |   |                       |         |   |
| Purchase                  of fixed assets                                  |   |                       | -            |   |
|                                                                       |   |                       | -            |   |
|                                                                       |   |                       |         |   |
|                                                                       |   |                       | -            |   |
| Financing                  activities                                      |   |                       |         |   |
| Stock                  issuances for cash                                  |   |                       | 8,125        |   |
| Proceeds                  from (payments on) long term debt, related party |   |                       | 35,080       |   |
| Proceeds                  from (payments on) long term debt                |   |                       | 83,500       |   |
|                                                                       |   |                       |    |   |
|                                                                       |   |                       |         |   |
|                                                                       |   |                       | 126,705      |   |
|                                                                       |   |                       |         |   |
| Net                  change in cash                                        |   |                       | (33,160      | ) |
| Cash                  - beginning                                          |   |                       | 105,987      |   |
|                                                                       |   |                       |         |   |
| Cash                  - ending                                             |   |                       | 72,827       |   |
|                                                                       |   |                       |         |   |
| Check                  sum                                                 |   |                       | -            |   |

| 8/20/2008                  |
|----------------------------|
| 1:55                    AM |

----

| 1. | BASIS                  OF PRESENTATION |
|----|----------------------------------------|

**Exploration        Stage Company**

| 2. | GOING                  CONCERN |
|----|--------------------------------|

| 3. | CORRECTION                  OF ERRORS |
|----|---------------------------------------|

----

| Increase                  of previously reported other assets:                                        |   |    |    |
|-------------------------------------------------------------------------------------------------------|--------|--------------|---------|
| -                  unrecorded value of mineral rights acquired                                        |   | $            | 381,500 |   |
|                                                                                                  |   |         |    |   |
| Increase                  of previously reported additional paid in capital:                          |   |         |    |   |
| -                  unrecorded amount of additional paid in capital on stock                  issuance |   | $            | 381,500 |   |

*Consolidated        Balance Sheet as of June 30, 2007*

|                                               |   | *Previously                  Reported* |       | *Net**Change* |   |  *Restated* |   |
|----------------------------------------------------|--------|----------------------------------------|------------|---------------|--------|------------------|--------|
| Assets                                             |   |                                   |       |          |   |             |   |
| Current                  assets                    |   |                                   |       |          |   |             |   |
| Cash                                               |   | $                                      | 359,719    |          | $      | -                |   | $ | 359,719 |   |
| Total                  current assets              |   |                                   | 359,719    |          |   | -                |   |   | 359,719 |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
| Fixed                  assets, net                 |   |                                   | 61,468     |          |   | -                |   |   | 61,468 |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
| Other                  assets, net                 |   |                                   | 49,134     |          |   | 381,500          |   |   | 430,634 |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
|                                               |   | $                                      | 470,321    |          | $      | 381,500          |   | $ | 851,821 |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
| Current                  liabilities               |   |                                   |       |          |   |             |   |   |   |   |
| Accounts                  payable                  |   | $                                      | 22,630     |          | $      | -                |   | $ | 22,630 |   |
| Accrued                  interest                  |   |                                   | 286,731    |          |   | -                |   |   | 286,731 |   |
| Accrued                  officer salary            |   |                                   | 127,010    |          |   | -                |   |   | 127,010 |   |
| Accrued                  payroll taxes             |   |                                   | 70,089     |          |   | -                |   |   | 70,089 |   |
| Notes                  payable, related parties    |   |                                   | 358,184    |          |   | -                |   |   | 358,184 |   |
| Unearned                  revenues                 |   |                                   | 20,625     |          |   | -                |   |   | 20,625 |   |
| Total                  current liabilities         |   |                                   | 885,269    |          |   | -                |   |   | 885,269 |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
| Commitments                  and contingencies     |   |                                   | -          |          |   | -                |   |   | - |   |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
| Stockholders’                  deficit       |   |                                   |       |          |   |             |   |   |   |   |
| Preferred                  stock                   |   |                                   | -          |          |   | -                |   |   | - |   |
| Common                  stock                      |   |                                   | 24,276     |          |   | -                |   |   | 24,276 |   |
| Additional                  paid-in capital        |   |                                   | 7,313,114  |          |   | 381,500          |   |   | 7,694,614 |   |
| Accumulated                  deficit               |   |                                   | (7,752,338 | )             |   | -                |   |   | (7,752,338 | ) |
| Total                  stockholders’ deficit |   |                                   | (414,948   | )             |   | 381,500          |   |   | (33,448 | ) |
|                                               |   |                                   |       |          |   |             |   |   |   |   |
|                                               |   | $                                      | 470,321    |          | $      | 381,500          |   | $ | 851,821 |   |

*“Financial        Statements”*
*Description        of Property by Issuers Engaged or to Be Engaged in Significant Mining        Operations*

----

*“exploration        stage”*
*“production        stage”*
*“exploration        stage”*

*inception        to date”*

| 4. | NOTES                  PAYABLE, RELATED PARTIES |
|----|-------------------------------------------------|

| matured                    November 2005 (currently in default)                                                |   | $      | 300,000 |   |
|----------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
|                                                                                                           |   |   |         |   |
| Note                    payable to a stockholder, secured by real property,                    bearing         |   |   |         |   |
| interest                    at 8.0% per annum, matured February 2008 (currently in                    default) |   |   | 25,114  |   |
|                                                                                                           |   |   |         |   |
| Note                    payable to a stockholder, secured by real property,                    bearing         |   |   |         |   |
| interest                    at 8.0% per annum, matured January 2008 (currently in                    default)  |   |   | 35,436  |   |
|                                                                                                           |   |   |         |   |
| Unsecured                    promissory notes payable, bearing interest at 8.0% per                    annum,  |   |   |         |   |
| and                    a default interest rate of 12.0% per annum, maturing May 7,                    2009     |   |   | 15,080  |   |
|                                                                                                           |   |   |         |   |
| Unsecured                    promissory notes payable, bearing interest at 8.0% per                    annum,  |   |   |         |   |
| and                    a default interest rate of 12.0% per annum, maturing June 6,                    2009    |   |   | 20,000  |   |
|                                                                                                           |   |   |         |   |
| Current                    portion (amounts due within one year)                                               |   | $      | 395,630 |   |

| 5. | NOTES                  PAYABLE |
|----|--------------------------------|

| Unsecured                    promissory note payable, bearing interest at 8.0% per                    annum,  |   |   |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| and                    a default interest rate of 12.0% per annum, maturing March 10,                    2009 |   | $      | 22,000 |   |
|                                                                                                          |   |   |        |   |
| Unsecured                    promissory note payable, bearing interest at 8.0% per                    annum,  |   |   |        |   |
| and                    a default interest rate of 12.0% per annum, maturing April 7,                    2009  |   |   | 7,500  |   |
|                                                                                                          |   |   |        |   |
| Unsecured                    promissory note payable, bearing interest at 8.0% per                    annum,  |   |   |        |   |
| and                    a default interest rate of 12.0% per annum, maturing March 10,                    2009 |   |   | 12,000 |   |
|                                                                                                          |   |   |        |   |
| Unsecured                    promissory note payable, bearing interest at 8.0% per                    annum,  |   |   |        |   |
| and                    a default interest rate of 12.0% per annum, maturing June 2,                    2009   |   |   | 12,000 |   |
|                                                                                                          |   |   |        |   |
| Unsecured                    promissory note payable, bearing interest at 8.0% per                    annum,  |   |   |        |   |
| and                    a default interest rate of 12.0% per annum, maturing June 6,                    2009   |   |   | 30,000 |   |
|                                                                                                          |   |   |        |   |
| Current                    portion (amounts due within one year)                                              |   | $      | 83,500 |   |

----

| 6. | CHANGES                  IN SECURITIES |
|----|----------------------------------------|

| 7. | COMMITMENTS                  AND CONTINGENCIES |
|----|------------------------------------------------|

| 8. | SUBSEQUENT                  EVENTS |
|----|------------------------------------|

----

**ITEM      2.**
**MANAGEMENT'S      DISCUSSION AND ANALYSIS **

**(a)**
**Plan      of Operation.**

**(b)**
**Results      of Operations for the Three Months Ended June 30, 2008 and      2007.**

**EXPENSES:**

|                                                     |   | Three                Months EndedJune                30, |     |   |   |
|----------------------------------------------------------|--------|----------------------------------------------------------|----------|--------|--------|
|                                                     |   | 2008                                                     |     | 2007   |   | Increase                / (Decrease) |   |
|                                                     |   | Amount                                                   |     | Amount |   |  $ |   | % |   |
|                                                     |   |                                                     |     |   |   |   |   |   |   |
| Expenses:                                                |   |                                                     |     |   |   |   |   |   |   |
|                  Exploration costs                  |   | $                                                        | 20,991   |   | $      | 55,635 |   | $ | (34,644 | ) |   | (62 | %) |
|                  Depreciation                       |   |                                                     | 2,998    |   |   | 3,816 |   |   | (818 | ) |   | (21 | %) |
| General                & administrative expenses     |   |                                                     | 85,645   |   |   | 58,251 |   |   | 27,394 |   |   | 47 | % |
| Officer                compensation                      |   |                                                     | 29,008   |   |   | 32,886 |   |   | (3,878 | ) |   | (12 | %) |
|                   Total operating expenses     |   |                                                     | 138,642  |   |   | 150,588 |   |   | (11,946 | ) |   | (8 | %) |
|                                                     |   |                                                     |     |   |   |   |   |   |   |   |   |   |   |
| Loss                from operations                      |   |                                                     | (138,642 | )      |   | (150,588 | ) |   | (11,946 | ) |   | (8 | %) |
|                                                     |   |                                                     |     |   |   |   |   |   |   |   |   |   |   |
| Other                income (expense):                   |   |                                                     |     |   |   |   |   |   |   |   |   |   |   |
| Interest                income                           |   |                                                     | 4        |   |   | 3,505 |   |   | (3,501 | ) |   | (100 | %) |
| Rental                revenue                            |   |                                                     | 16,689   |   |   | 5,625 |   |   | 11,064 |   |   | 197 | % |
| Loss                on sale of equipment                 |   |                                                     | -        |   |   | 3,701 |   |   | (3,701 | ) |   | (100 | %) |
| Interest                expense                          |   |                                                     | (15,460  | )      |   | (14,307 | ) |   | (1,153 | ) |   | (8 | %) |
|                   Total other income (expense) |   |                                                     | 1,233    |   |   | (1,476 | ) |   | 2,709 |   |   | 184 | % |
|                                                     |   |                                                     |     |   |   |   |   |   |   |   |   |   |   |
| Net                loss                                  |   | $                                                        | (137,409 | )      | $      | (152,064 | ) | $ | (14,655 | ) |   | (10 | %) |

----

**Exploration      costs **

**Depreciation      **

**General      and administrative expenses**

----

**Officer      compensation**

**Total      operating expenses**

**Other      income (expense) **

**Net      loss **

----

**EXPENSES:**

|                                                       |   | Six                  Months EndedJune                  30, |     |   |   |
|------------------------------------------------------------|--------|------------------------------------------------------------|----------|--------|--------|
|                                                       |   | 2008                                                       |     | 2007   |   | Increase                  / (Decrease) |   |
|                                                       |   | Amount                                                     |     | Amount |   | $ |   | % |   |
| Expenses:                                                  |   |                                                       |     |   |   |   |   |   |   |
|                    Exploration costs                  |   | $                                                          | 38,905   |   | $      | 102,943 |   | $ | (64,038 | ) |   | (62 | %) |
|                    Depreciation                       |   |                                                       | 5,995    |   |   | 6,021 |   |   | (26 | ) |   | - | % |
| General                  & administrative expenses     |   |                                                       | 142,640  |   |   | 106,745 |   |   | 35,895 |   |   | 34 | % |
| Officer                  compensation                      |   |                                                       | 60,000   |   |   | 64,052 |   |   | (4,052 | ) |   | (6 | %) |
|                     Total operating expenses     |   |                                                       | 247,540  |   |   | 279,761 |   |   | (32,221 | ) |   | (12 | %) |
|                                                       |   |                                                       |     |   |   |   |   |   |   |   |   |   |   |
| Loss                  from operations                      |   |                                                       | (247,540 | )      |   | (279,761 | ) |   | (32,221 | ) |   | (12 | %) |
|                                                       |   |                                                       |     |   |   |   |   |   |   |   |   |   |   |
| Other                  income (expense):                   |   |                                                       |     |   |   |   |   |   |   |   |   |   |   |
| Interest                  income                           |   |                                                       | 102      |   |   | 6,959 |   |   | (6,857 | ) |   | (99 | %) |
| Rental                  revenue                            |   |                                                       | 26,614   |   |   | 11,250 |   |   | 15,364 |   |   | 137 | % |
| Loss                  on sale of equipment                 |   |                                                       | -        |   |   | 3,701 |   |   | (3,701 | ) |   | (100 | %) |
| Interest                  expense                          |   |                                                       | (29,264  | )      |   | (28,887 | ) |   | 377 |   |   | 1 | % |
|                     Total other income (expense) |   |                                                       | (2,548   | )      |   | (6,977 | ) |   | (4,429 | ) |   | (63 | %) |
|                                                       |   |                                                       |     |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                  |   | $                                                          | (250,088 | )      | $      | (286,738 | ) | $ | (36,650 | ) |   | (13 | %) |

**Exploration        costs **

----

**Depreciation        **

**General        and administrative expenses**

**Officer        compensation**

**Total        operating expenses**

**Other        income (expense) **

**Net        loss **

----

**(d)**
**Liquidity        and Capital Resources and Results of Operations**

|                                         |   | June                    30, 2008 |      | December                    31,2007 |   | **Increase                    / (Decrease)** |       |
|----------------------------------------------|--------|----------------------------------|-----------|-------------------------------------|--------|----------------------------------------------|------------|
|                                         |   |                             |      |                                |   | ** $**                                  | ** ** | **%** |   |
| Current                    Assets            |   | $                                | 77,927    |                                | $      | 105,987                                      |       | $ | (28,060 | ) |   | (26 | %) |
|                                         |   |                             |      |                                |   |                                         |       |   |   |   |   |   |   |
| Current                    Liabilities       |   | $                                | 1,050,057 |                                | $      | 842,149                                      |       | $ | 207,908 |   |   | 25 | % |
|                                         |   |                             |      |                                |   |                                         |       |   |   |   |   |   |   |
| Working                    Capital (deficit) |   | $                                | (972,130  | )                                   | $      | (831,552                                     | )          | $ | 140,608 |   |   | 17 | % |

***Internal        and External Sources of Liquidity***

***Cash        Flow.***

* *

***Satisfaction        of our cash obligations for the next twelve months.***

----

----

----

|                  |                                                                                                          |                               |
|-----------------------|---------------------------------------------------------------------------------------------------------------|------------------------------------|
|                  | CAN-CAL                  RESOURCES LTD. (REGISTRANT)                                                          |
|             |                                                                                                     |                          |
| Date: August 19, 2008 | By:                                                                                                 | /s/                Ronald D. Sloan |
|                  | RONALD                  D. SLOAN, Chief                    Executive Officer and                    President |

----