UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-K


(Mark One)





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





For the Fiscal Year Ended April 30, 2011


OR





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





Commission File No. – 333-152002





DAULTON CAPITAL CORP.(Name of Small Business Issuer in its charter)





Nevada

30-0459858(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)





3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169


(Address of principal executive offices)





(888) 387-1403


(Issuer’s telephone number)





Securities registered pursuant to Section 12(b) or 12(g) of the Exchange Act:  None





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes o    No x





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.   Yes o    No x





Indicate by checkmark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x    No o





Indicate by checkmark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K or any amendment to this Form 10-K. o










Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o    No o





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





Large accelerated filer o
Accelerated filer oNon-accelerated filer o
Smaller reporting company x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o    No x





The aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of October 31, 2010 (the Registrant’s most recently completed second fiscal quarter) was approximately $11,020,000.





As of April 30 2011, the Company had 60,240,003 issued and outstanding shares of common stock.





DOCUMENTS INCORPORATED BY REFERENCE





If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933 ("Securities Act"). Not Applicable.













CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION





This Annual Report on Form 10-K (the “Annual Report”) includes "forward-looking statements." All statements other than statements of historical facts included in this Annual Report, regarding Daulton Capital Corp.'s financial position, reserve quantities and net present values, business strategy, plans and objectives of management of the Company for future operations and capital expenditures, are forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements and the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurance that such expectations and assumptions will prove to have been correct.





References in this Annual Report to “we”, “us,” “our,” “Registrant,” Issuer”, “the Company,” and “Daulton Capital” mean Daulton Capital Corp., a Nevada corporation, unless the context otherwise requires.










DAULTON CAPITAL CORP.


INDEX TO ANNUAL REPORT ON FORM 10-K


FOR THE YEAR ENDED APRIL 30, 2011





PAGEPART I.
2Item 1.
Business
2Item 1A.
Risk Factors
6Item 1B.
Unresolved Staff Comments
9Item 2.
Properties
9Item 3.
Legal Proceedings
11Item 4.
(Removed and Reserved).
11PART II.
11Item 5.
Market for Registrant’s Common Equity Related Stockholder Matters
11Item 6.
Selected Financial Data
13Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
13Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
15Item 8.
Financial Statements and Supplementary Data
15Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
15Item 9A.
Controls and Procedures
15Item 9B.
Other Information
18PART III.
18Item 10.
Directors, Executive Officers and Corporate Governance
18Item 11.
Executive Compensation
20Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
21Item 13.
Certain Relationships and Related Transactions, and Director Independence
22Item 14.
Principal Accounting Fees and Services
22Item 15.
Exhibits, Financial Statement Schedules
22





1





PART I





Item 1.
Business.





Organizational History





Daulton Capital Corp. (“Company”,“we” “us” or “our”) was incorporated in Nevada on January 8, 2008 with the intention of pursuing oil and gas exploration opportunities.





On February 15, 2008, the Company filed a Certificate of Amendment to increase our authorized stock into 50,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value.





On October 17, 2008, the Company filed a Certificate of Change with the Nevada Secretary of State effecting a four-for-one forward stock split of our common stock and increasing the our authorized capitalization to 200,000,000 shares of common stock.





On August 7, 2009, the Company filed a Certificate of Amendment to affect a four-for-one forward split of our common stock.





Operational History





The Company acquired a 20% working interest (16% net revenue interest) in an oil well located in Creek County, Oklahoma (“Creek Well”).  As of April 30, 2010, the Creek Well was shut in and not producing.





On July 30, 2008, the Company acquired a 5% working interest (4% net revenue interest) in six wells located in Pawnee County, Oklahoma (“Pawnee Wells”).  In consideration for assignment of the working interest in the Pawnee Wells, the Company issued 300,000 restricted shares of the Company’s common stock to the former owner of the working interest. As of April 30, 2010, the Pawnee Wells were shut in and not producing.





In June 2008, Semcrude, Inc., the purchaser of the oil produced by the Creek Well and Pawnee Wells, filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code. As a result, payments to the Company for oil sold have been suspended.





On  April  25,  2009, the Company signed  an  agreement  to  acquire approximately  90% of the outstanding  shares of Energy Solutions People Inc. in exchange for 7,234,034  restricted shares of the Company’s common stock.  Energy Solutions was incorporated in Nevada in September 2007.  Shortly after its formation, Energy Solutions acquired the rights to various renewable energy products, the most significant of which are wind turbines and solar powered electrical generators.  This agreement was subsequently terminated.





On February 22, 2010, the Company entered into the “Ballarat Option Agreement” with Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Ballarat Property.”  In addition, on February 25, 2010, the Company entered into the “Hunker Option Agreementwith Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Hunker Project.”





On April 18, 2011, the Company and South Pacific Connection Ltd (James Das), entered into a Purchase Agreement for the Company to purchase an 80% working interest of a mining claim in Papua New Guinea.




2





On April 29, 2011, the Company and Shawn Ryan entered into a “Termination Agreement” to terminate the Ballarat Option Agreement, and amendments thereto and the Hunker Option Agreement (collectively, the “Option Agreements”).  Pursuant to the Termination Agreement, the Option Agreements shall no longer be in effect and thus shall be null and void.  Shawn Ryan shall retain all payments and restricted stock that he received pursuant to the Option Agreements.





General Overview of Business





As of April 30, 2011, the Company has abandoned the oil and gas prospects.  The Company plans to evaluate mining prospects and participate in mining activities on those prospects, which in the opinion of management are favorable. If, through the Company’s review, a geographical area indicates geological and economic potential, the Company may attempt to acquire leases or other interests in the area.  The Company may then attempt to sell portions of its leasehold interests in a prospect to unrelated third parties, thus sharing the risks and rewards of the exploration of the prospect with the joint owners.





The Company may also:





●
Acquire a working interest in one or more prospects from others and participate with the other working interest owners in mining, or





●
Purchase producing mining properties.





Our activities will primarily be dependent upon available equity and debt financing for our exploration activities.





Oil and Gas Prospects





The Company has abandoned all of its oil and gas prospects, which included the 20% working interest (16% net revenue interest) in the Creek Well and the 5% working interest (4% net revenue interest) in Pawnee Wells.  Impairment of these long-lived assets was considered under FASB ASC Topic 360.  Future cash flows from and beyond probable reserves was considered to be zero.  The Creek Well and Pawnee Wells were considered 100% impaired in April 2010 and written down accordingly.





Mining Interests





For the year ended April 30, 2011, the Company has engaged in the business of exploration of precious metals with a focus on quartz deposits in North America and gold and precious metals in Papua New Guinea.  As of the date of this Annual Report, the Company’s mineral interests consist of the Purchase Agreement with South Pacific Connection Ltd.  In addition, all exploration of the quartz deposits in North America that the Company was exploring through the Option Agreements has been terminated.  The Company has not established any proven or probable reserves on the claims of which we have an interest.





Papua New Guinea





On April 18, 2011, the Company and South Pacific Connection Ltd., a company formed under the laws of Papua New Guinea (“South Pacific”) entered into the Purchase Agreement for the Company  to purchase an 80% working interest of a mining claim in Papua New Guinea.  In exchange for the mining claim, the Company paid $35,000.00 to South Pacific at the execution of the Purchase Agreement.  Pursuant to the Purchase Agreement, the Company shall issue a total of 2,500,000 shares restricted common stock in staged payments over the next 5 years.  The payments shall be made in increments of 500,000 shares, delivered on September 11 of each year.   In addition, the Company shall incur a total of $3,400,000 in total capital expenditures over the next 5 years to retain the working interest of the mining claim.  The Company’s exploration plans are toconduct stream sediment sampling and geological mapping in conjunction with ridge and spur or grid soil sampling and bulk sampling of stream gravels





3





The key task of our initial plan is to determine appropriate drill targetswithin any mineralized zones found and interpretation of findings. Thus far we have done no work on the property.





Ballarat





On February 22, 2010, the Company and Shawn Ryan, an individual (“Ryan”), entered into the Ballarat Option Agreement that granted the  Company the right to purchase from Ryan an undivided interest in the mining claims on a property described as the “Ballarat Property.”  The Ballarat Option Agreement provided the Company with the option to acquire a 100% interest in the Ballarat Property from Ryan by making staged cash payments and issuing a total of 1,250,000 shares of common shares of stock of the Company on or before February 15, 2014.





Pursuant to the Ballarat Option Agreement, Ryan retained a 2% net smelter return interest that requires an advance royalty payment for $30,000 starting Aug 20, 2014.  At the option of the Company, the net smelter return interest may be reduced to 1% upon making a $2 million dollar payment to Ryan.  The Company’s exploration plans for the Ballarat Property were to establish a soil and ground magnetic survey.  The soil-sampling program would then have been followed up with a portable excavator-trenching program.





Pursuant to the Ballarat Option Agreement, the first payment of $25,000 was due to Ryan on or about March 15, 2010.  However, the Company and Ryan entered into the “Ballarat Extension Agreement” to extend such payment by 10 days.  The Company then paid Ryan the first payment of $25,000.  Our plans for exploration of the Ballarat Property were to continue soil sampling to be carried out by Ryan Wood Exploration, Inc, which is a company owned and operated by Shawn Ryan, a party to the Ballarat Option Agreement and the Hunker Option Agreement, to evaluate both properties as target areas for further (25) meter sampling, possible ground magnetic survey, geological mapping and excavator trenching followed by a possible drill program.  However, no such exploration occurred in 2011.





On March 31, 2010, the Company entered into an Amendment to Ballarat Option Agreementwhich amended the Ballarat Option Agreement as follows: (a) the BallaratProperty  consisted of 94 Yukon Quartz Mining Claims located in the Dawson Mining District, Yukon Territory, Canada and (b) the claim block  covered approximately 19 square kilometers and straddledBallarat Creek.





However, pursuant to the Termination Agreement, the aforementioned Ballarat Option Agreement and the Amendment to the Ballarat Option Agreement have been terminated and are therefore null and void as of the date of this report.Pursuant to the Termination Agreement Ryan shall keep the payment of $25,000 and the issuance of 250,000 shares of restricted common stock.





Hunker





On February 25, 2010, the Company and Ryan entered into the Hunker Option Agreement for the Company to acquire from Ryan an undivided interest in the mining claims of a property described as the “Hunker Project.”  The Hunker Option Agreement granted the Company the option to earn 100% interest in the “Hunker Property” from Ryan by making staged cash payments and issuing a total of 1,000,000 shares of common stock of the Company to Mr. Ryan on or before February 15, 2014. Ryan shall retain a 2% net smelter return interest that requires an advance royalty payment for $30,000.  At the option of the Company, the net smelter return interest of Ryan may be reduced to 1% upon making a $2 million dollar payment to Ryan.  The Company paid Ryan the first payment of $25,000.





4




The Hunker Project consisted of 121 Yukon Quartz Mining Claims located in the Dawson Mining District, Yukon Territory Canada.  The claim block was situated 15 miles southeast of Dawson City on 6,000 acres or 24 square kilometers straddling Hunker Creek.  The exploration plan on the Hunker Project was to be primarily based on the 1959 grid auger soil samples obtained by Ryanwood Exploration, Inc. from 2001-2009.




However, pursuant to the Termination Agreement, the aforementioned Hunker Option Agreement has been terminated and thus is null and void as of the date of this report.Pursuant to the Termination Agreement Ryan shall keep the payment of $25,000 and the issuance of 1,000,000 shares of restricted common stock.





Sampling





At this time the Company does not have any analytical procedures and has not developed any Quality Assurance/Quality Control (QA/QC) protocols for our exploration program.





The Company has relied onSouth Pacific, the owner of the property,to implement proper procedures on the Papua New Guinea Property.  As of this Annual Report, there has been no work done by the Company.





The Company has relied solely on Ryanwood Exploration, Inc., to implement proper procedures on the Ballarat and Hunker properties.There has been some soil sampling and both the Ballarat Property and the Hunker Property are in good condition having been basically undisturbed. Ryanwood Exploration Inc., which is the company doing the soil sampling,employs both engineers and geologists who have physically examined the Ballarat and the Hunker properties.





Government Regulation of Mining Interests





The Company’s exploration activities are, or will be, subject to extensive laws and regulations governing prospecting, taxes, labor standards, occupational health, waste disposal, protection and remediation of the environment, protection of endangered and protected species, mine safety, toxic substances and other matters.  Mining exploration is also subject to risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production.  Compliance with these laws and regulations may impose substantial costs on us and will subject us to significant potential liabilities.  Changes in these regulations could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on our business operations.





The Company’s exploration activities are subject to certain regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation.  Specifically, the Company may be subject to regulation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes.  However, such laws and regulations, whether foreign or domestic, are frequently changed and we are unable to predict the ultimate cost of compliance.  Costs have not been incurred to date with respect to compliance with environmental laws but such costs may be expected to increase with an increase in scale and scope of exploration.




5





Exploration operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our business operations.  Mining operations are also subject to foreign, federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment.  Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received.  Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on results of the Company.  Additionally, the Company may be subject to liability for pollution or other environmental damages, which the Company may elect not to insure against due to prohibitive premium costs and other reasons.  As of the date of this Annual Report, the Company has not been required to spend any material amount on compliance with environmental regulations.  However, the Company may be required to do so in future and this may affect the ability of the Company to expand or maintain its operations.





Competition and Marketing of Mining Interests





The Company operates in a highly competitive industry, competing with other mining and exploration companies, and institutional and individual investors, which are actively seeking metal and mineral-based exploration properties throughout the world together with the equipment, labor and materials required to exploit such properties.  Many of the competitors of the Company have substantially greater financial resources, staff and facilities than the Company. The principal area of competition is encountered in the financial ability to cost effectively acquire prime metal and minerals exploration prospects and then exploit such prospects.  Competition for the acquisition of metal and minerals exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, the Company may not be successful in acquiring and developing profitable properties in the face of this competition.  No assurance can be given that a sufficient number of suitable metal and minerals exploration properties will be available for acquisition and development.





General





The Company has never been a party to any bankruptcy, receivership, reorganization, readjustment or similar proceedings.  Since the Company is engaged in the mining business, the Company does not allocate funds to product research and development in the conventional sense.  The Company does not have any patents, trademarks, or labor contracts.  The Company does not have any licenses, franchises, concessions or royalty agreements.  The business of the Company is not subject to renegotiation of profits or termination of contracts or subcontracts at the election of federal government.





As of April 30, 2011, the Company did not have any full time employees.





Item 1a.
Risk Factors.





You should consider each of the following risk factors and any other information set forth herein and in the Company's reports filed with the SEC, including the Company's financial statements and related notes, in evaluating the Company's business and prospects. The risks and uncertainties described below are not the only ones that impact the Company's operations and business. Additional risks and uncertainties not presently known to the Company, or that we currently consider immaterial, may also impair our business or operations. If any of the following risks actually occur, the Company's business and financial results or prospects could be harmed. In that case, the value of the common stock could decline.





6




IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.





The Company recently began operations and has only nominal revenues. The Company will require additional financing to sustain its business operations if the Company is not successful in earning significant revenues in the future.  The Company currently does not have any arrangements for additional financing and may not be able to obtain financing when required.





BECAUSE THE COMPANY WILL NEED ADDITIONAL FINANCING TO FUND OUR CONTINUING GROWTH, THE COMPANY’S AUDITORS BELIEVE THERE IS SUBSTANTIAL DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN.





The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations.  The Company’s auditors have issued a going concern opinion and have raised substantial doubt regarding the ability of the Company to continue as a going concern. When an auditor issues a going concern opinion, the auditor has substantial doubt that the company will continue to operate indefinitely and not go out of business and liquidate its assets.  This is a significant risk to our shareholders of the Company’s common stock because there is an increased risk the Company may not be able to generate and/or raise enough capital to remain operational for an indefinite period.  Potential investors should also be aware of the difficulties normally encountered by new business ventures and the high rate of failure of such enterprises.  The auditor’s going concern opinion may inhibit the ability of the Company to raise sufficient financing remain operational for an indefinite period resulting in investors failing to receive any return on their investment.





BECAUSE THE COMPANY HAS ONLY RECENTLY COMMENCED BUSINESS OPERATIONS, THE COMPANY FACES A HIGH RISK OF BUSINESS FAILURE.





The mineral exploration of the Company constitutes a new business venture. As a result, the Company has limited financial information on which you can evaluate the Company’s performance.  The Company is subject to all of the business risks and uncertainties associated with any new business, including the risk the Company will not achieve its business objectives.  The Company has just begun the initial stages of its business plan, i.e. exploration.  As a result, the Company has no way to evaluate the likelihood of its ability to operate the business successfully.  The Company has earned minimal revenues as of the date of this report, and thus faces a high risk of business failure.





GENERAL ECONOMIC AND MARKET CONDITIONS





The success of the Company's activities may be affected by general economic conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political circumstances.





General economic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, and national and international political circumstances may affect the success of the Company.





Mineral exploration, the industry of which the Company is involved, may adversely change, thereby reducing the value of our shares of common stock.  The general economic prospects of the United States or any general fluctuations in the capital markets may also affect the value of the shares of common stock.





THE COMPANY MAY EXPERIENCE FLUCTUATIONS IN ITS OPERATING RESULTS.





The Company may experience fluctuations in our operating results due to a number of factors, including the level of expenses, the degree to which the Company encounters competition in our markets and general economic conditions.  As a result, of these factors, results for any period should not be relied upon as being indicative of performance in future periods.





7




WE WILL BE DEPENDENT UPON KEY PERSONNEL FOR OUR FUTURE SUCCESS. IF WE LOSE ANY MEMBER OF OUR MANAGEMENT TEAM, OUR ABILITY TO IMPLEMENT OUR BUSINESS STRATEGY COULD BE SIGNIFICANTLY HARMED.





The Company will depend on the diligence, skill and network of business contacts of the members of our management team. Our future success will depend to a significant extent on the continued service and coordination of the senior management team, particularly Mr. Terry Fields. The departure of Mr. Fields could have a material adverse effect on our ability to achieve our business objectives.





OUR MANAGEMENT TEAM LACKS TECHNICAL TRAINING AND EXPERIENCE





Our management team lacks technical training and experience with exploring for, starting, and/or operating a mine.  Thus, with no direct training or experience in these areas, management may not be fully aware of many of the specific requirements related to working within this industry.  Therefore, management decisions and choices may not take into account standard engineering or managerial approaches mineral exploration companies commonly used.  Thus, the Company’s operations, earnings, and ultimate financial success could suffer due to management’s lack of experience in this industry.





OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL DEPEND ON OUR ABILITY TO MANAGE OUR FUTURE GROWTH EFFECTIVELY.





The Company is subject to the business risks and uncertainties associated with any new business enterprise. Our ability to achieve our business objectives will depend on our ability to grow. In the future, will need to hire, train, supervise and manage new employees.  Failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.





OUR EXPLORATION ACTIVITIES MAY NOT BE COMMERCIALLY SUCCESSFUL, WHICH COULD LEAD US TO ABANDON OUR BUSINESS PLAN.





The Company's long-term success depends on our ability to establish commercially recoverable quantities of ore that can be developed into commercially viable mining operations; however the Company is only in the exploration state.  Mineral exploration is highly speculative in nature, involves many risks and is frequently non-productive.  These risks include unusual or unexpected geologic formations, and the inability to obtain suitable or adequate machinery, equipment or labor.





The success of mineral exploration is determined in part by the following factors:





●
Identification of potential mineralization based on superficial analysis;●
Availability of government-granted exploration permits;


●
The quality of management and geological and technical expertise; and●
The capital available to us for exploration.





During this exploration stage, we are evaluating the substantial expenditures which are going to be required to establish proven and probable reserves through drilling and analysis to develop processes to extract minerals and to develop the mining and processing facilities at any chosen site. Whether a mineral deposit will be commercially viable depends on a number of factors, which include, but are not limited to the particular attributes of the deposit and government  regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental  protection.  We may invest significant capital and resources in exploration activities and abandon such investments if we are unable to identify commercially viable mineral reserves.  The decision to abandon a project may reduce the trading price of our common stock and impair our ability to raise future financing. We cannot provide any assurance to investors that we will discover or acquire any mineralized material in sufficient quantities on any of our properties to justify commercial operations.




8




OUR ACTIVITIES WILL BE SUBJECT TO EXISTING FOREIGN, FEDERAL AND STATE LAWS AND REGULATIONS GOVERNING THE ENVIRONMENTAL AND POLLUTION CONTROL.





Compliance with environmental requirements and reclamation laws imposed by foreign, federal, state, and local governmental authorities may necessitate significant capital outlays and may materially affect our future earnings. It is impossible to predict the impact of environmental legislation and regulations on our operations in the future although compliance may necessitate significant capital outlays, materially affect our earning power or cause material changes in our intended business. In addition, we may be exposed to potential liability for pollution and other damages.





THE MINERAL EXPLORATION AND MINING INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE WILL BE SUCCESSFUL.





The mineral exploration industry is intensely competitive, and we will compete with other companies that have greater resources.  Many of these companies not only explore for and produce certain minerals, but also market certain minerals and other products on a regional, national or worldwide basis.  These companies may be able to pay more for productive mineral properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial resources permit.  In addition, these companies may have a greater ability to continue exploration activities during periods of low mineral market prices.  Our larger competitors may be able to absorb the burden of present and future foreign, federal, state, local and other laws and regulations more easily than we can, which would adversely affect our competitive position.  Our ability to acquire additional properties and to discover productive prospects in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment.  In addition, because we have fewer financial resources than many companies in our industry, we will be at a disadvantage in bidding for exploratory prospects and producing mineral properties.


Item 1b.
Unresolved Staff Comments.





Not applicable.


Item 2.
Properties.





Principal Executive Offices





The Company’s offices are located at 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169.  The Company leases office space requiring rental payments of $246.00 per month.  The Company believes this office space if sufficient to meet its immediate needs.





9





Papua New Guinea





The nature of the ownership interests in the Papua New Guinea ELA 1857 claims (the “ELA Claims”) are that the Company has an option to acquire an 80% interest in the claims.  The ELA Claims cover 750,000 hectares or 1.8 million acres.  The claims are without known reserves and the proposed program is exploratory in nature.





Under the Purchase Agreement, South Pacific has been paid a total of $35,000, and we are to incur total expenditures in the amount of $3,400,000 and issue a total of 2,500,000 shares of restricted stock in exchange for an undivided 80% interest in the ELA Claims.





The ELA Claims are located in Yangoru in East Sepik Province, which is part of the Sandaun Province of Papua New Guinea.





The ELA Claims are licensed with the Papua New Guinea Government, License No. ELA1857.  The claims comprising the ELA Claims were properly recorded and filed with appropriate governmental agencies; (ii) all assessment work required to hold the claims have been performed and all governmental fees have been paid, if any, and all filings required to maintain the property comprising the ELA Claims are in good standing have been properly and timely recorded or filed with appropriate governmental agencies





At this time there is no equipment, infrastructure, or other facilities, as far as we know, on the property in which the ELA Claims are located.  In addition, as far as we are aware, there have been no improvements or equipment that has been moved onto the properties.





In the future, the anticipated minimum total exploration costs for the next fiscal year shall be $150,000.00.





At this time we do not have a map of the ELA Claims which include the location and access to the property.  The Property in which the ELA Claims are located are without known reserves and the proposed program for the ELA Claims is exploratory in nature.





Ballarat and Hunker Properties





As of February 25, 2011, all exploration activities on the Ballarat and Hunker Properties have been abandoned due to the Termination Agreement.  However, the nature of the ownership interests in the Ballarat Property and the Hunker Property were that the Company had an option to acquire an undivided 100% right, title and interest in both properties.  The claims on the Ballarat Property, covered 1,900 acres, and the claims on the Hunker Property covered 6,000 acres.  Both the Ballarat Property and the Hunker Property were without known reserves and the program was exploratory in nature.





Under the Ballarat Option Agreement, Mr. Ryan was to be paid a total of $400,000, incur total expenditures in the amount of $1,260,000 and was to be issued a total of 1,250,000 shares of restricted common stock in exchange for an undivided 100% right, title and interest in the Ballarat Property.  The Ballarat Property was located in the Yukon Territory of Canada, in the newly recognized White Gold District formerly known as the Thistle Area. It straddled the Ballarat Creek and there was an access road.  According to the Geological Survey of Canada (GSC), and the Yukon Geological Survey (YTG) geological maps, the Ballarat Property is covering mainly augengneiss with minor amphibolites and quartzmica schist. The GSC regional magnetic data indicated that the Ballarat Project straddled a regional north east trending magnetic high similar to discoveries of other companies in the area. The GSC has collected soil samples of the Ballarat Property reporting data upwards of 32 ppb Au.




10





Under the Hunker Option Agreement, Mr. Ryan was to be paid a total of $400,000, incur a total of $1,730,000 in expenditures and be issued a total of 1,000,000 shares of restricted common stock.  The Hunker Property was located in the Dawson Mining District of the Yukon Territory of Canada.  It was situated less than 15 miles South East of Dawson City, and straddled the Hunker Creek where there was an access road.  The Hunker Property straddles Hunker Creek, one of the most famous placer creeks.  The Hunker Property was also staked to cover the northwest trending thrust fault.  There has been soil sampling since 2003, over 1,500 in number, and have shown a gold-copper soil anomaly measuring 550 meters by 900 meters.





The claims for the Ballarat Property and the Hunker Property were registered with the Yukon Territory Government.  The claims comprising the Ballarat Property and the Hunker Property were properly recorded and filed with appropriate governmental agencies; (ii) all assessment work required to hold the claims comprising the Ballarat Property and the Hunker Property were performed and all governmental fees were paid, if any, and all filings required to maintain the claims comprising the Ballarat Property and the Hunker Property were in good standing having been properly and timely recorded or filed with appropriate governmental agencies





At the time of the Termination Agreement there were no equipment, infrastructure, or other facilities, as far as the Company knew, on either the Ballarat Property or the Hunker Property.  In addition, as far as the Company was aware, there were no improvements or equipment that had been moved onto either of the properties before the date of the Termination Agreement.





A small scaled map, which includes the location and access to the property, was attached and incorporated by reference in the Company’s 10-K filing for the fiscal year ended April 30, 2011, and all amendments thereto.


Item 3.
Legal Proceedings.





A complaint was filed in the Superior Court of Las Vegas against the Company by Mr. William Hart, attorney at law.  The causes of action in the complaint were in regards to payment of attorney’s fees owed to Mr. Hart for services rendered to the Company.  A judgment was obtained on February 2, 2010 in favor of Mr. Hart for $12,737.43, including costs of $292.   The judgment has been paid in full and thus satisfied.





Other than as noted above, there were no other legal proceedings against the Company with respect to matters arising in the ordinary course of business.  Neither the Company nor any of its officers or directors is involved in any other litigation other than as creditors in the Semicrude, Inc. bankruptcy proceeding, or is involved as either plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.


Item 4.
(Removed and Reserved).





PART II


Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.





The following table shows the high and low sale prices of the Company’s common stock during the periods presented as quoted on the OTCBB under the trading symbol of DUCP.  The closing sale prices reflect inter-dealer prices without adjustment for retail markups, markdowns or commissions and may not reflect actual transactions.





11




Closing Sale PriceCommon StockQuarter Ended
High
LowJuly 31, 2009
$0.30
$0.30October 30, 2009
$0.70
$0.56January 29, 2010
$0.62
$0.57April 30, 2010
$0.34
$0.31July 31, 2010
$0.19
$0.18October 30, 2010
$0.22
$0.22January 31, 2011
$0.17
$0.17April 30, 2011
$0.26
$0.22





As of April 30, 2011 there were approximately 14 holders of the Company’s common stock.





The market price of the Company's common stock is subject to significant fluctuations in response to, and may be adversely affected by (i) variations in quarterly operating results, (ii) developments in the mining industry generally and more particularly within the geographically and geological areas that the Company owns and/or operates properties, and (iii) general stock market conditions.





Holders of the Company’s common stock are entitled to receive dividends as may be declared by the Board of Directors.  Our Board of Directors is not restricted from paying any dividends but is not obligated to declare a dividend. No dividends have ever been declared and it is not anticipated that dividends will ever be paid.





The Company's Articles of Incorporation authorize our Board of Directors to issue up to 5,000,000 shares of preferred stock.  The provisions in the Articles of Incorporation relating to the preferred stock allow our directors to issue preferred stock with multiple votes per share and dividend rights, which would have priority over any dividends paid with respect to the holders of our common stock.  The issuance of preferred stock with these rights may make the removal of management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of limiting shareholder participation in certain transactions such as mergers or tender offers if these transactions are not favored by our management.





Recent Sales of Unregistered Securities





During the fiscal year ended April 30, 2011, the Company initiated a private offering for shares of restricted common stock at $0.30 per share.  The Company raised a total of $76,000 from two accredited investors.





The restricted shares of common stock of the Company that have been authorized to be issued to the aforementioned persons or entities relied upon exemptions provided for in Sections 4(2) and 4(6) or Regulation S of the Securities Act of 1933, as amended, including Regulation D promulgated there under based on the aforementioned knowledge of our operations and financial condition and experience in financial and business matters that allowed them to evaluate the merits and risk of receipt of these securities.


12


Item 6.
Selected Financial Data.
 
 Not applicable.


Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.





This Annual Report includes "forward-looking statements." All statements other than statements of historical facts included in this report, regarding our financial position, reserve quantities and net present values, business strategy, plans and objectives of management of the Company for future operations and capital expenditures, are forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements and the assumptions upon which such forward-looking statements are based are reasonable, we can give no assurance that such expectations and assumptions will prove to have been correct.





The following discussion of financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements, which are included elsewhere in this report.





Organizational History





We were incorporated in Nevada on January 8, 2008 and planned to be involved in the exploration of oil and gas.





On February 15, 2008, we filed a Certificate of Amendment to increase our authorized stock into 50,000,000 shares of common stock, $0.001 par value and 5,000,000 shares of preferred stock, $0.001 par value.





On October 17, 2008, we filed a Certificate of Change with the Nevada Secretary of State effecting a four-for-one forward stock split of our common stock and increasing the our authorized capitalization to 200,000,000 shares of common stock.





On August 7, 2009, we filed a Certificate of Amendment to affect a four-for-one forward split of our common stock.





Operational History





We have a 20% working interest (16% net revenue interest) in an oil well located in Creek County, Oklahoma.  As of April 30, 2010, the well was shut in and not producing.





On July 30, 2008, we acquired a 5% working interest (4% net revenue interest) in six wells located in Pawnee County, Oklahoma. In consideration for assignment of the working interest in these wells, we issued 300,000 shares of its restricted common stock to the former owner of the working interest. As of April 30, 2010, the wells were shut in and not producing.





In June 2008, Semicrude, Inc., the purchaser of the oil produced by our wells, filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code. As a result, payments to us for oil sold have been suspended.





On  April  25,  2009  we signed  an  agreement  to  acquire approximately  90% of the outstanding  shares of Energy Solutions People Inc. in exchange for 7,234,034  shares of our  common stock.  Energy Solutions was incorporated in Nevada in September 2007.  Shortly after its formation, Energy Solutions acquired the rights to various renewable energy products, the most significant of which are wind turbines and solar powered electrical generators.  This agreement was subsequently terminated.




13


On February 22, 2010, we entered into an option agreement with Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Ballarat Property.”  In addition, on February 25, 2010, we entered into an option agreement with Shawn Ryan to purchase an undivided interest of mining claims of a property described as “Hunker Project.”  Our exploration activities on the Ballarat Property and the Hunker Project werelimited only to soil sampling.  However, as of the date of this annual report, the option agreements, and all amendments thereto have been terminated as of April 29, 2011.





On April 18, 2011, we entered into a Purchase Agreement with South Pacific Connection Limited (James Das), to purchase an 80% working interest of a mining claim in Papua New Guinea.  In exchange for the Mining Claim, the Company paid $35,000.00 to South Pacific at the execution of the Purchase Agreement.  Pursuant to the Purchase Agreement, the Company shall issue a total of 2,500,000 shares restricted common stock in staged payments over the next 5 years.  The payments shall be made in increments of 500,000 shares, delivered on September 11 of each year.   In addition, the Company shall incur a total of $3,400,000 in total capital expenditures over the next 5 years to retain the working interest of the mining claim.  As of the date of this annual report there have been no exploration activities.





We will need to raise the funds required for excavation from third parties to continue with our exploration activities. We may also attempt to raise needed capital through the private sale of our securities or by borrowing from third parties. If we are able to raise such capital, we intend to spend such capital over the next 12 months with soil and stream sampling,geological mappingand possibly initiating a ground magnetic survey  and excavator trenching followed by an evaluation of a possible drill program. However, we may not be successful in raising the capital needed for the aforementioned exploration activities.





Our future plans will be dependent upon the amount of capital we are able to raise. We do not have any commitments or arrangements from any person to provide us with any additional capital.





Results of Operations





During fiscal year ended April 30, 2011, we incurred general and administrative expenses in the aggregate amount of $58,453 compared to $12,914 incurred during fiscal year ended April 30, 2010 (an increase of $45,539).  The operating expenses incurred during fiscal year ended April 30, 2011 consisted of: (i) salary and wages of $-0- (2010: $45,000); (ii) consulting fees of $238,500 (2010: $-0-); (iii) professional fees of $16,120 (2010: $26,517); (iv) occupancy expense of $3,266 (2010: $1,494); (v) stock transfer fees of $4,726(2010: $1,000); (vi) abandonment loss of $385,000 (2010: $-0-); and (vii) impairment of oil and gas leases $-0- (2009:  $190,000).





Our net income (loss) for the fiscal year ended April 30, 2011 was approximately ($706,065) compared to our net income (loss) of ($276,925) for the fiscal year ended April 30, 2010.  During the fiscal year ended April 30, 2011 we generated $-0- in revenue.





The basic weighted average number of shares outstanding was 59,552,941 at April 30, 2011 and 57,600,000 on April 30, 2010.





14




Liquidity and Capital Resources





Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.





As at April 30, 2011, our current assets were $4,199 and our total current liabilities were $90,492, resulting in a working capital deficit of ($86,293). As at April 30, 2011, our total assets were $4,199 compared to total assets of $60,764 as at April 30, 2010.  As at April 30, 2011, our current liabilities were $90,492 compared to current liabilities of $45,492 at April 30, 2010.





Stockholders' equity increased to ($86,293) as at April 30, 2011 from $15,272 at April 30, 2010.





Off-Balance Sheet Arrangements





As of the date of this  report,  we did not have  any  off-balance  sheet arrangements  that have, or is  reasonably  likely  to have, a current or future effect on our financial condition,  changes in financial condition,  revenues or expenses,  results of operations,  liquidity,  capital  expenditures  or capital resources that are material to investors.





Material Commitments





As of April 30, 2011, we did not have any material capital commitments, other than funding our operating losses. It is anticipated that any capital commitments that may occur will be financed principally through the sale of shares of our common stock or other equity securities. However, there can be no assurance that additional capital resources and financings will be available to us on a timely basis, or if available, on acceptable terms.


Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.


Not applicable.


Item 8.
Financial Statements and Supplementary Data.
 
 Please refer to the financial statements and the notes to the financial statements at the end of this report.


Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.





None.


Item 9A.
Controls and Procedures.





Disclosure Controls and Procedures





Our management, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that as of April 30, 2010, the Company’s disclosure controls and procedures were not effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely discussions regarding required disclosure; due to the material weaknesses described below.





15




In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure that our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations, changes in stockholders’ equity and cash flows for the periods presented.





Management Report on Internal Control Over Financial Reporting





The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:





1.
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;





2.
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and





3.
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our financial statements.





All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5) or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.





16




Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our Principal Executive Officer and Principal Accounting Officer concluded that our internal control over financial reporting was not effective due to the material weaknesses described below.





Material Weaknesses





1.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of April 30, 2011. In making this assessment, the Company’s management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control – Integrated Framework.” Based on this assessment, management concluded that, as of April 30, 2011, the Company’s internal control over financial reporting was not effective based on this framework.





Management evaluated the impact of ineffective control over financial reporting and concluded that the control deficiency represented a material weakness.





2.
In connection with the audit of our consolidated financial statements for the year ended April 30, 2011, our independent registered accounting firm reported to the Company’s Board of Directors that they observed inadequate review and approval of certain aspects of the accounting process that they considered to be a material weakness in internal control due to us having to add additional disclosure material and restating our financial statements in our Annual Report on Form 10-K/A for the fiscal year ended April 30, 2010, and for the Quarterly Report on Form 10-Q/A for the quarter ended October 31, 2010.





After a review of the Company’s current review and approval of certain aspects of the accounting process, management concluded that the inadequate review and approval process represented a material weakness.





Remediation of Material Weaknesses





To remediate the material weaknesses identified above, we have done the following subsequent to April 30, 2011, which correspond to the two material weaknesses identified above.





1.
In connection with the ineffective assessment of the Company’s internal control over financial reporting, management plans to implement additional controls to improve the effectiveness of the Company’s disclosure controls and procedures.





Management believes this remediation will remediate the corresponding material weakness described in Item 1, immediately above.





2.
In connection with the reported inadequate review and approval of certain aspects of the accounting process, management has reiterated the Company’s current review and approval processes, to insure that all accounting reconciliations, journal entries and complex transactions are reviewed and approved on a timely basis.





Management believes this remediation has remediated the corresponding material weakness described in Item 2, immediately above.





17





Attestation Report of the Independent Registered Public Accounting Firm





This annual report does not include an attestation report by the Company’s registered public accounting firm regarding internal control over financial reporting, because Management’s report in the annual report was not subject to attestation by the Company’s independent registered public accounting firm, pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.





Inherent Limitations on the Effectiveness of Controls





Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.





These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of a simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.





Changes in Internal Control over Financial Reporting





There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under the Exchange Act) during the Company's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


Item 9B.
Other Information.





None.


PART III


Item 10.
Directors, Executive Officers and Corporate Governance.





Below is a list of the Company’s officers and directors as of April 30, 2011. The directors will generally be elected at the annual shareholders' meeting and hold office until the next annual shareholders' meeting or until their successors are elected and qualified. Our executive officers are elected by its board of directors and serve at its discretion.





Name
Age
PositionTerry Fields
68
President, Chief Executive Officer, Chief Financial Officer, Secretary and DirectorPeter Stecher
55
Director




18





Background of Executive Officers and Directors





Terry Fields has been engaged in the private practice of law since 1969.  Since 1985 Mr. Fields has been President and Director of ten public companies in the United States and Canada, mostly in the natural resource area.  He was President of High Desert Mineral Resources from 1985 until 2000 when it was sold to Royal Gold Corporation for over $25,000,000.  Presently, Mr. Fields is a Director and President of Willow Creek Enterprises, Inc. (WLOC), First Pursuit Ventures Ltd. (FPVH), and Malwin Ventures Inc. (MLWN). In addition, Mr. Fields is the Director and Chief Financial Officer of Uniontown Energy, Inc. (UTOG). Mr. Fields received his Bachelor of Science Degree from the University of California in 1965 and his law degree from Loyola University School of Law in 1968.





Peter Stecher is a graduate of Sir George Williams University where he majored in Marketing. In addition, Mr. Stecher undertook postgraduate studies at the University of Colorado, where he obtained a certificate in metallurgy.  Mr. Stecher’s experience has been focused on spearheading numerous start-up companies. Daulton Capital does not have a compensation committee.  Daulton Capital’s Directors serve as its Audit Committee.  Daulton Capital does not have a financial expert.





Involvement in Certain Legal Proceedings





Since our inception, the Company  believes that none of our directors or executive officers have been  involved in any legal proceeding concerning: (i) any  bankruptcy  petition  filed by or against any  business of which such person was a general partner or executive  officer either at the time of the bankruptcy or within two years prior to that time; (ii) any conviction in a criminal  proceeding  or  being  subject  to a  pending  criminal  proceeding (excluding traffic violations and other minor offenses);  (iii) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction permanently or  temporarily  enjoining, barring,  suspending or otherwise limiting involvement in any type of business, securities or banking  activity;  or (iv) being found by a court, the Securities and Exchange  Commission or the  Commodity  Futures  Trading  Commission to have violated a federal or state securities or commodities law (and the judgment has not been reversed, suspended or vacated).





Family Relationships





There are no family relationships among the Company’s officers and directors.





Due to a lack of resources, the Company has not adopted a written code of ethics applying to our executive officers.





Section 16(a) Beneficial Ownership Reporting Compliance





Ryan Beamin has filed his initial report on Form 3, but has not updated his beneficial ownership by filing a Form 4 to update his holdings.  However, Messrs. Fields and Stecher have filed their initial reports on Form 3.





19


Item 11.
Executive Compensation.





The following table shows the compensation paid or accrued to Daulton Capital’s officers during the period from April 30, 2010 to April 30, 2011:





Name and

Principal

position

Fiscal

year

Salary

(1)

Bonus

(2)

Stock

Awards

(3)

Option

Awards

(4)

All Other

Annual

Compensation

(5)

TotalTerry Fields, President, Chief Executive Officer, Chief Financial Officer and Secretary

2010-2011

60,000  (6)

--

--

--

--

$60,000





The following table shows the compensation paid or accrued to Daulton Capital’s officers during the period from April 30, 2009 to April 30, 2010:


Name and

Principal

position

Fiscal

year

Salary

(1)

Bonus

(2)

Stock

Awards

(3)

Option

Awards

(4)

All Other

Annual

Compensation

(5)

TotalTerry Fields, President, Chief Executive Officer, Chief Financial Officer and Secretary

2010-2011

$60,000 (6)

--

$150,000

--

--

$210,000Michael Mulberry,Vice President, General Manager of Operations, Director

2010-2011

$30,000 (6)

--

$62,500

--

--

$92,500


(1)
The dollar value of base salary (cash and non-cash) earned.(2)
The dollar value of bonus (cash and non-cash) earned.(3)
During the periods covered by the table, the value of Daulton Capital’s shares issued or authorized to be issued as compensation for services to the persons listed in the table.(4)
The value of all stock options granted during the periods covered by the table.


(5)
All other compensation received that Daulton Capital could not properly report in any other column of the table.(6)
Mr. Fields is accruing a salary for services rendered; however he has not been paid as of the date of this Annual Report.  However, Mr. Mulberry forgave all accrued salary for stock prior to his resigning from the Company.





20





Stock Options.  The Company has not granted any stock options and does not have any stock option plans in effect as of the date of April 30, 2011.  In the future, the Company may grant stock options to its officers, directors, employees or consultants.





Long-Term Incentive Plans.  The Company does not provide its officers or employees with pension, stock appreciation rights, long-term incentive or other plans and has no intention of implementing any of these plans for the foreseeable future.





Employee Pension, Profit Sharing or other Retirement Plans.  The Company does not have a defined benefit, pension plan, profit sharing or other retirement plan, although it may adopt one or more of such plans in the future.





Compensation of Directors.  The Company’s directors do not receive any compensation their services as directors.





Mr. Fields plans to spend approximately 25% of his time on the business of Daulton Capital.





The Company does not have any employment agreements with its officers or employees. The Company does not maintain key man insurance on the life or in the event of disability of any of its officers.


Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.





The following table shows the ownership of Daulton Capital’s common stock as of April 30, 2011 by each shareholder known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding shares, each director and executive officer and all directors and executive officers as a group.  Except as otherwise indicated, each shareholder has sole voting and investment power with respect to the shares they beneficially own.





Name and Address

Number of Shares

Percent of ClassTerry Fields

3960 Howard Hughes Parkway, Suite 500

Las Vegas, NV 89169

600,000

.9%Ryan Beamin

3960 Howard Hughes Parkway, Suite 500

Las Vegas, NV 89169

19,000,000

32%Peter Stecher

3960 Howard Hughes Parkway, Suite 500

Las Vegas, NV 89169

0

0%All officers and directors as a group

19,600,000

32.9%





21


Item 13.
Certain Relationships and Related Transactions, and Director Independence.





On April 19, 2010, the Board of Directors authorized 600,000 shares of restricted common stock to be issued to the President, Terry Fields, and 250,000 shares of restricted common stock to Michael Mulberry, Vice President, for services rendered.  The aforementioned shares were issued September 14, 2010.





On December 15, 2010, Vice President and Director Michael Mulberry forgave his loan to the Company of $15,000 upon resigning his offices.  Additional Paid-in Capital was credited accordingly.





Other than as noted above, none of the Company’s directors, officers or principal stockholders, nor any associate or affiliate of the foregoing, have any interest, direct or indirect, in any transaction or in any proposed transactions, which has materially affected or will materially affect us during the fiscal year ended April 30, 2011.


Item 14.
Principal Accounting Fees and Services.





John Kinross-Kennedy served as Daulton Capital’s independent public accountant during the period from the inception of Daulton Capital (January 8, 2008) to the fiscal year ended April 30, 2011.  The following table shows the aggregate fees billed to Daulton Capital during the periods ended April 30, 2011 and 2010 by Mr. Kinross-Kennedy.





2011


2010Audit Fees

$
2,000


$
2,000Audit-Related Fees

$
2,000



600Financial Information Systems


0



0Design and Implementation Fees


0



0Tax Fees


0



0All Other Fees


0



0





Audit fees represent amounts billed for professional services rendered for the audit of Daulton Capital’s annual financial statements and the reviews of the financial statements included in Daulton Capital’s 10-Q reports during the fiscal year.  Before Mr. Kinross-Kennedy was engaged by Daulton Capital to render audit services, the engagement was approved by Daulton Capital’s Board of Directors.





PART IV


Item 15.
Exhibits, Financial Statement Schedules.





The following documents are filed as part of this report or are incorporated by reference to previous filings, if so indicated.





22




EXHIBIT

NO.
DESCRIPTION3.1
Articles of Incorporation and Certificate of Amendment (1)3.2
Amendment to Articles of Incorporation, effective as of October 17, 2008 (2)3.3
Amendment to Articles of Incorporation, effective as of August 7, 2009 (3)3.5
Bylaws (1)5.1
Opinion of John Kinross-Kennedy, CPA10.1
Purchase and Sale Agreement, dated February of 2008, between the Company and Southstar Oil & Gas, Inc. (1)10.2
Purchase and Sale Agreement, dated July 30, 2008 (4)10.3
Purchase and Sale Agreement, dated April 25, 2009, between the Company and Energy Solutions People, Inc. (5)10.4
Ballarat Option Agreement, dated February 22, 2010, between the Company and Shawn Ryan (6)10.4(a)
Ballarat Extension Agreement, dated March 14, 2010, between the Company and Shawn Ryan (7)10.4(b)
Amendment to Ballarat Option Agreement, dated March 31, 2010, between the Company and Shawn Ryan (8)10.5
Hunker Option Agreement, dated February 25, 2010, between the Company and Shawn Ryan (9)10.6
Purchase Agreement, dated April 11, 2011, between the Company and South Pacific Connection (James Das) (10)10.7
Termination Agreement, dated April 29, 2011, between the Company and Shawn Ryan (11)31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-OxleyAct of 2002.31.2
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




(1)
Incorporated by reference to the Company’s Registration Statement on Form S-1 filed on June 27, 2008.(2)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 23, 2008.(3)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 11, 2009(4)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on August 1, 2008.(5)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 30, 2009.(6)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 26, 2010.(7)
Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on March 19, 2010.(8)
Incorporated by reference to the Company’s Current Report on Form 8-K/A filed on April 29, 2010.(9)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on March 2, 2010.(10)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on  April 20, 2011.(11)
Incorporated by reference to the Company’s Current Report on Form 8-K filed on May 5, 2011.





23





SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





DAULTON CAPITAL CORP.Date:   August 11, 2011
By:
/s/ Terry FieldsTerry Fields, Chief Executive and Financial Officer





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.





Date:   August 11, 2011
By:
/s/ Terry FieldsTerry Fields, Chief Executive and Financial Officer and Member of the Board of Directors





Date:   August 11, 2011
By:
/s/ Peter StecherPeter Stecher, Member of the Board of Directors








24




DAULTON CAPITAL CORP.


CONSOLIDATED FINANCIAL STATEMENTS


April 30, 2011





Table of Contents





Report of Independent Registered Public Accounting Firm
F-2Consolidated Balance Sheet as of April 30, 2011 and 2010
F-3Consolidated Statements of Operations
F-4Consolidated Statement of Stockholders’ Equity (Deficit) for the period from inception, January 8, 2008, to April 30, 2011
F-5Consolidated Statements of Cash Flows
F-6Notes to Consolidated Financial Statements
F-7





F-1




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To:  The Board of Directors and Shareholders


Daulton Capital Corporation


Las Vegas, Nevada





I have audited the accompanying balance sheet of Daulton Capital Corporation as of April 30, 2011 and 2010 and the related statements of operations, stockholders’ equity and cash flows for the yearsthen ended including the three month periods ended April 30, 2011 and 2010, and for the period from inception (January 8, 2008) to April 30, 2011 These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audit.





I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provides a reasonable basis for my opinion.





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered losses and is not yet able to cover its operating expenses.  This raises substantive doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





In my opinion, based on my audit, the financial statements referred to above present fairly, in all material respects, the financial position of Daulton Capital Corporation as of April 30, 2011 and 2010 and the results of its operations, its stockholders’ equity and its cash flows for the years then ended, including the three month periods ended April 30, 2011 and 2010, and for the period from inception (January 8, 2008) to April 30, 2011, in conformity with United States generally accepted accounting principles.





The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting.





/ s / John Kinross-Kennedy


John Kinross-Kennedy


Certified Public Accountant


Irvine, California


July 13, 2011





F-2









DAULTON CAPITAL CORPORATION(An Exploration Stage Company)Balance Sheetas at April 30,  ASSETS2011


2010Current AssetsCash and Cash Equivalents

$
4,199


$
10,764Other AssetsMining Property Interest:  Ballarat


-



25,000Mining Property Interest:  Hunker


-



25,000-



50,000TOTAL ASSETS

$
4,199


$
60,764LIABILITIES & STOCKHOLDERS' EQUITYCurrent LiabilitiesLoans from Officers


90,492



45,49290,492



45,492Commitments and contingencies (Note 5)Stockholders' EquityPreferred Stock, $0.001 par value, 5,000,000 shares authorized;none outstanding as at April 30, 2010 and 2009.Common Stock, $0.001 par value, 200,000,000 shares authorized,

60,240,003shares issued and outstanding as at April 30, 2011,

57,600,000 shares issued and outstanding as at April 30, 2010


60,240



57,600Additional paid-in capital


896,761



208,901Subscriptions Received


3,000



89,000Deficit accumulated in the exploration stage


(1,046,294
)


(340,229
)Total Stockholders' Equity (Deficit)


(86,293
)


15,272TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$
4,199


$
60,764







F-3




DAULTON CAPITAL CORPORATION(An Exploration Stage Company)Statement of OperationsFor the periodof Inception,from Jan. 8,For the 3 months ended


For the year ended


2008 throughApril 30,


April 30,


April 30,2011


2010


2011


2010


2011RevenuesCrude Oil Production

$
-


$
-


$
-


$
-


$
17,189Costs and ExpensesMining Exploration


-







-







40,203Salary & Wages


-







-



45,000



45,000Consulting


60,000







238,500







247,664Professional Fees


1,230



9,370



16,120



26,517



86,106Occupancy Expense


764



498



3,266



1,494



13,745Stock Transfer Fees


1,000



1,000



4,726



1,000



11,680Abandonment Loss


385,000







385,000







385,000Impairment of mineral property interests


-



190,000



-



190,000



190,000Other General & Administrative


5,359



8,347



58,453



12,914



44,085Total Expenses


453,353



209,215



706,065



276,925



1,063,483-Operating Loss


(453,353
)


(209,215
)


(706,065
)


(276,925
)


(1,046,294
)Net Income (Loss)

$
(453,353
)

$
(209,215
)

$
(706,065
)

$
(276,925
)

$
(1,046,294
)Net Income (Loss) per share,

basic and diluted

$
(0.01
)

$
(0.00
)

$
(0.01
)

$
(0.00
)Weighted average number of sharesoutstanding, basic and diluted


60,873,672



57,600,000



59,552,941



57,600,000







F-4


DAULTON CAPITAL CORPORATION(An Exploration State Company)Statement of Stockholders' Equity (Deficit)For the period from Inception, January 8, 2008, to April 30, 2011  AccumulatedSub-


Additional


Deficit DuringCommon Stock


scriptions


Paid-in


ExplorationShares


Amount


Received


Capital


Stage


TotalBalances at Inception, January 8, 2008


-


$
-


$
-


$
-


$
-


$
-Common stock issued for cash on Jan. 14, 2008 at $0.098


28,800,000



28,800







(11,223
)






17,577Common stock issued for cash on Feb. 21, 2008 at $0.0977


24,000,000



24,000







122,477







146,477Net loss for the period


















(11,594
)


(11,594
)Balances at April 30, 2008


52,800,000


$
52,800


$
-


$
111,254


$
(11,594
)

$
152,460Common stock issued for purchase of a working interest in wells at $0.30 per share Oct.16, 2008


4,800,000



4,800







85,200







90,000Net loss for the year


















(51,710
)


(51,710
)Balances at April 30, 2009


57,600,000


$
57,600


$
-


$
196,454


$
(63,304
)

$
190,750Capital contributed














12,447







12,447Subscriptions Received










89,000











89,000Net loss for the year


















(276,925
)


(276,925
)Balances at April 30, 2010


57,600,000


$
57,600


$
89,000


$
208,901


$
(340,229
)

$
15,272Common stock issued for services September 14, 2010 at $0.21


850,000



850







177,650







178,500Shares issued at $0.32 as partialconsideration in acquisition ofmineral lease Nov. 15, 2010


750,000



750







239,250







240,000Common stock issued for cash Dec 3, 2010 at $0.30 per sh.


33,334



33



(10,000
)


9,967







-Director contributed his loan to the Company, Dec. 15, 2010













15,000







15,000Subscriptions received December 22, 2010










76,000











76,000Shares issued at $0.19 as partialconsideration in acquisition ofmineral lease Jan. 13, 2011


500,000



500







94,500







95,000Common stock issued for cash Mar.11, 2010 at $0.30 per sh.


506,669



507



(152,000
)


151,493Net loss for the year


















(706,065
)


(706,065
)Balances at April 30, 2011


60,240,003


$
60,240


$
3,000


$
896,761


$
(1,046,294
)

$
(86,293
)





F-5




DAULTON CAPITAL CORPORATION(An Exploration Stage Company)Statement of Cash FlowsFor the periodof Inception,from Jan. 8,For the year ended


2008 throughApril 30,


April 30,2011


2010


2011Cash Flows From Operating ActivitiesNet Income (Loss)

$
(706,065
)

$
(276,925
)

$
(1,046,294
)Adjustments to reconcile net loss tonet cash used by operating activities:Non cash issue of stock for services


178,500







178,500Change in operating assets and liabilities:Prepaids






750Net Cash provided by (used by) operating activities


(527,565
)


(276,175
)


(867,794
)Cash Flows From Investing activitiesPurchase mineral and oil & gas property interests






(50,000
)


(240,000
)Non cash issue of stock for interest in oil and gas leasehold


335,000







425,000Abandonment of mineral and oil & gas interests


50,000



190,000



240,000Net Cash (used by) InvestingActivities


385,000



140,000



425,000Cash Flows From Financing ActivitiesProceeds of the sale of Stock










164,054Subscriptions Received


76,000



89,000



165,000Proceeds of loans from officers


60,000



45,492



90,492Contribution of capital






12,447



27,447Net Cash provided by FinancingActivities


136,000



146,939



446,993Net Increase (Decrease) in Cash


(6,565
)


10,764



4,199Cash at beginning of period


10,764



-



-Cash at end of period

$
4,199


$
10,764


$
4,199Cash Paid For:Interest

$
-


$
-


$
-Income Taxes

$
-


$
-


$
-





F-6




Daulton Capital Corporation


(An Exploration Stage Company)


Notes to Financial Statements


April 30, 2011





1.
Basis of Presentation and Nature of Operations





These audited financial statements as of and for the year ended April 30, 2011 reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the period presented in accordance with the accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.





Organization





Daulton Capital Corporation (the “Company”) was incorporated under the laws of the State of Nevada January 8, 2008. The Company was organized for the purpose of engaging in any activity or business not in conflict with the laws of the State of Nevada or of the United States of America.  The company became engaged in the oil and gas industry.





Current Business of the Company





In February, 2008 the Company purchased a 20% working interest /16% Net Revenue Interest in a producing oil well known at Mayberry No. 1,  located in an oil and gas leasehold estate in Creek County, Oklahoma.   In June, 2008 Semcrude, Inc., the collector of the oil produced by the well, reported bankruptcy under Chapter 11 of the Bankruptcy Code.  Payments to the Company for oil sold were suspended. The wells were shut in pending the resolution of issues that arose during bankruptcy proceedings.





On July 30, 2008 the Company purchased a 5% working interest / 4% net revenue interest in six oil wells known as the Glencoe Wells located in an oil and gas leasehold estate in Pawnee County, Oklahoma.   The purchase was paid in restricted common stock. Volumetric calculations of the wells were not performed.




Property Acquisition Costs:UnprovedMayberry No. 1 well

$
100,000Glencoe Wells


90,000$
190,000


Impairment of these long lived assets was considered under FASB ASC Topic 360.  Future cash flows from and beyond probable reserves was considered to be zero.  The wells were considered 100% impaired in April, 2010 and written down accordingly.





Options on Mineral Claims





In February 2010 the Company entered into two option agreements with an individual, Shawn Ryan of Dawson City, Yukon Territory, Canada for the purchase of two groups of mineral claims in the Yukon Territory known as the Ballarat Property and the Hunker Project.  The Ballarat Property consists of 38 mineral claims covering 1900 acres and the Hunker Project consists of 121 mineral claims covering 6,000 acres in known gold producing areas.  The options require certain payments on or before February 15, 2014:




F-7





-
staged cash payments to Mr. Ryan totaling $400,000


-
staged issue of 1,250,000 common shares to Mr. Ryan


-
staged expenditures for work on the properties totaling $1,260,000





The Company incurred $40,203 exploration expenses during the year, consisting of soil sampling related to both the Ballarat and Hunker claims. The soil sampling was carried out by Ryanwood Exploration, Inc., a company owned by the optioner, Shawn Ryan.





The first payments of $25,000 due for each option were paid. The Company defaulted on the second annual combined payment of $125,000, which was due February 15, 2011.  On April29, 2011 the Company signed a letter of termination, releasing its interest in the mineral options.The Company issued Mr. Ryan 1,250,000 shares of common stock pursuant to the lease agreement in the year ended April 30, 2010.  A cost of $335,000 was recorded.





Abandonment Loss





The termination of the Ballarat and Hunker mining property leases resulted in an abandonment loss of $385,000.





2.
Summary of Significant Accounting Policies





Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.  Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation.





Cash and equivalents





Cash and equivalents include investments with initial maturities of three months or less.





Fair Value of Financial Instruments





The Financial Accounting Standards Board issued   ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures" for financial assets and liabilities. ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.  FASB ASC 820-10 defines fair value as the price  that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required by the standard that the Company uses to measure fair value:




F-8





-
Level 1:  Quoted prices in active markets for identical assets or liabilities





-
Level 2:  Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;  quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.





-
Level 3:  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.





The carrying amounts of the Company’s financial instruments as of April 30, 2010, reflect





-
Cash:  Level One measurement based on bank reporting.


-
Subscriptions Received: Level 2 based on contract.


-
Loans from Officers: Level 3 based on promissory notes.





Income Taxes




The Company utilizes FASB ACS 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.








Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.





Recent Accounting Pronouncements





Comprehensive Income— In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance on the presentation of comprehensive income. Specifically, the new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.





Fair Value Measurement— In April 2011, the FASB issued new guidance to achieve common fair value measurement and disclosure requirements between GAAP and International Financial Reporting Standards. This new guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. We do not believe our adoption of the new guidance will have an impact on our consolidated financial position, results of operations or cash flows.




F-9





Going Concern





The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.  There was limited activity the current fiscal year.  The company experienced a loss of ($261,064) in the year ended April 30, 2011 and $601,294 since inception January 8, 2008. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.





The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to generate revenue from its mining leases.   The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.





Exploration-Stage Company





The Company is considered an exploration-stage company, with limited operating revenues during the periods presented, as defined by FASB Accounting Standards Codification ASC 915.  ACS 915 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things.  Management has defined inception as January 8, 2008.  Since inception, the Company has incurred an operating loss of $1,046,294. The Company’s working capital has been generated through the sales of common stock and limited revenue from crude oil production.  Management has provided financial data since January 8, 2008 in the financial statements, as a means to provide readers of the Company’s financial information to make informed investment decisions.





Basic and Diluted Net Loss Per Share





Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share, for the period presented.  Basic net loss per share is based upon the weighted average number of common shares outstanding.  Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised.  Dilution is computed by applying the treasury stock method.  Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.





The Company has no potentially dilutive securities outstanding as of April 30, 2010.





The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the years ended April 30, 2010 and 2009, respectively.  The weighted average number of shares outstanding as at April 30, 2009 has been restated to reflect the 4-to-1 forward stock splits of August 6, 2009.




F-10





Numerator:Basic and diluted net loss per share:

2011


2010Net Loss

$
( 706,065
)

$
( 276,925
)DenominatorBasic and diluted weighted averagenumber of shares outstanding


59,552,941



57,600,000Basic and Diluted Net Loss Per Share

$
(0.01
)


(0.00
)




Accounting for Oil and Gas and Mining Producing Activities




The Company utilizes the full-cost method of accounting for extractive properties, per FASB ACS 939. Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of mineral reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of mining of productive and non-productive mines into the full cost pool on a country by country basis.




All capitalized costs of proven reserves, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such determination is made the Company assesses annually whether impairment has occurred, and impairment is expensed in the year of determination.





The Costs of unproved properties are generally combined and impaired over a period that is based on the average holding period for such properties and the company’s experience of successful operations.  Write-downs will be recorded when the carrying value is not supportable.





3.
Recent Sales of Unregistered Securities





During the fiscal year ended April 30, 2011, the Company conducted a private offering for shares of restricted common stock at $0.30 per share.  The Company raised a total of $76,000 from two accredited investors.





The restricted shares of common stock of the Company that have been authorized to be issued to the aforementioned persons or entities relied upon exemptions provided for in Sections 4(2) and 4(6) or Regulation S of the Securities Act of 1933, as amended, including Regulation D promulgated there under based on the aforementioned knowledge of our operations and financial condition and experience in financial and business matters that allowed them to evaluate the merits and risk of receipt of these securities.





4.
Capital Structure





On October 17, 2008 the Company effected a four-to-one forward stock split of common stock. There was no effect on stockholders’ equity.  Par value of $001 per share remained  unchanged.




F-11





On August 6, 2009 the stockholders by a majority vote approved a 4-for-1 forward split of the Company’s common stock.   There was no effect on stockholders’ equity and par value of $0.001 per share remained unchanged.





Between November 2009 and March 2010, $89,000 was received in cash for subscriptions to common stock.





On September 14, 2010, 850,000 shares of common stock were issued for services.  The issue was priced at the prevailing market price of the stock, 21 cents per share, and an expense of $178,500 was recorded.





On November 15, 2010, 750,000 shares of common stock were issued as partial consideration in acquisition of mineral leases Ballarat and Hunker.





On December 3, 2010, 33,334 shares of common stock were issued for subscriptions.





On December 22, 2010, $76,000 cash was received for subscriptions of common stock.





On January 13, 2011 500,000 shares were issued as partial consideration in acquisition of mineral leases Ballarat and Hunker.





On March 11, 2011, 506,559 shares of common stock were issued for subscriptions.





As at April 30, 2011, the Company was authorized to issue 200,000,000 shares of $0.001 par value common stock, of which 60,240,003 shares were issued and outstanding.





The Company was also authorized to issue 5,000,000 shares of preferred stock, of which none was issued and outstanding.





5.
Change in Management





On August 6, 2009 Terry Fields and Michael R. Mulberry were appointed directors. On September 11, 2009, RyanBeamin resigned as President, Secretary and Treasurer of the Company.  He was succeeded by Terry R. Fields, who assumed the offices of President, Chief Executive Officer, Secretary and Treasurer.   Michael R. Mulberry was appointed Vice President and General Manager of Operations.On June 3, 2010 Peter Strecher was appointed a director. On December 15, 2010 Michael R. Mulberry resigned at Vice President and General Manager of Operations, and as a director.





6.
Related Party Transactions





On April 19, 2010, the Board of Directors authorized 600,000 common shares to be issued to the President, Terry Fields, and 250,000 common shares to Michael Mulberry, Vice President, for services rendered.  The shares were issued September 14, 2010.





On December 15, 2010, Vice President and Director Michael Mulberry forgave his loan to the Company of $15,000 upon resigning his offices.  Additional Paid-in Capital was credited accordingly.





7.
Commitments and Contingencies





There were no commitments or contingencies in the year ended April 30, 2011.




F-12





8.
Restatements





The issued and outstanding shares and weighted average shares outstanding in the financial statements of April 30, 2009 were restated to reflect retroactively the four-for-one forward stock split of August 6, 2009.





9.
Legal Proceedings





A complaint was filed for attorney’s fees in Superior Court, and judgment obtained on February 2, 2010 for $12,737.43, including costs of $292.   The judgment was pledged by certain stockholders, subsequently paid, and the judgment satisfied.





There were no other legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation other than as creditors in the Semicrude, Inc. bankruptcy proceeding, or is involved either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors





10.
Subsequent Events





Events subsequent to April 30, 2011 have been evaluated through August 11, 2011, the date these statements were available to be issued, to determine whether they should be disclosed to keep the financial statements from being misleading.  Management found no subsequent events to be disclosed.









F-13