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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009or

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________________________ to
__________________________

Commission File Number 000-52767

SUNERGY, INC.(Exact name of registrant as specified in its charter)

|Nevada                                                               | 26-4828510                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|14362 N. Frank Lloyd Wright Blvd., Suite 1000,
      Scottsdale, AZ  | 85260                            
|(Address of principal executive offices)                             | (Zip Code)                       

480.477.5810(Registrants telephone
number, including area code)

n/a(Former name, former address and
former fiscal year, if changed since last report)

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

[X] YES    [   ] NO

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

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


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

[   ] YES    [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court.

[   ] YES    [   ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
53,797,500 common shares issued and outstanding as of August 13, 2009

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The interim financial statements included herein are unaudited
but reflect, in management's opinion, all adjustments, consisting only of normal
recurring adjustments that are necessary for a fair presentation of our
financial position and the results of our operations for the interim periods
presented. Because of the nature of our business, the results of operations for
the quarterly period ended June 30, 2009 are not necessarily indicative of the
results that may be expected for the full fiscal year.

2

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SUNERGY, INC.

(A Exploration Stage Company)

INTERIM FINANCIAL STATEMENTS

June 30, 2009

(Stated in US Dollars)

(Unaudited)







3

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SUNERGY, INC.(An Exploration Stage Company)
INTERIM BALANCE SHEETS June 30, 2009 and December 31, 2008 (Stated
in US Dollars) (Unaudited)

|                                                        |   | June 30, |   |   | December 31, |  
|------------------------------------------------------- | - | -------- | - | - | ------------ | -
|                                                        |   | 2009     |   |   | 2008         |  
|**ASSETS**                                              |  
|                                                        |   |          |   |   |              |  
|Current                                                 |   |          |   |   |              |  
|Cash                                                    | $ | 313      |   | $ | 648          |  
|                                                        |   |          |   |   |              |  
|Mineral properties  Note 3                             |   | 762,500  |   |   | 762,500      |  
|                                                        |   |          |   |   |              |  
|                                                        | $ | 762,813  |   | $ | 763,148      |  
|                                                        |   |          |   |   |              |  
|LIABILITIES                                             |  
|                                                        |   |          |   |   |              |  
|Current                                                 |   |          |   |   |              |  
|Accounts payable and
      accrued liabilities  Note 6 |   | 125,766  |   | $ | 111,782      |  
|Advance payable  Note 7                                | $ | 6,100    |   |   |              |  
|Related party loan
       Note 6                       |   | 10,180   |   |   | 10,180       |  
|Promissory note  Notes 3 and 4                         |   | 250,000  |   |   | 250,000      |  
|                                                        |   |          |   |   |              |  
|                                                        |   | 392,046  |   |   | 371,962      |  
|                                                        |   |          |   |   |              |  
|STOCKHOLDERS EQUITY                                    |  
|                                                        |   |          |   |   |              |  
|Common stock, $0.001 par value                          |   |          |   |   |              |  
|375,000,000 shares authorized                           |   |          |   |   |              |  
|53,797,500 shares issued (2008: 53,297,500)             |   | 53,798   |   |   | 53,298       |  
|Additional paid-in capital                              |   | 963,450  |   |   | 663,950      |  
|Deferred compensation  Note 5                          |   | (200,000 | ) |   | -            |  
|Subscriptions received  Note 5                         |   | 61,700   |   |   | 5,000        |  
|Deficit accumulated during the pre-exploration stage    |   | (508,181 | ) |   | (331,062     | )
|                                                        |   |          |   |   |              |  
|                                                        |   | 370,767  |   |   | 391,186      |  
|                                                        |   |          |   |   |              |  
|                                                        | $ | 762,813  |   | $ | 763,148      |  

SEE ACCOMPANYING NOTES 4

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SUNERGY, INC.(An Exploration Stage Company)
INTERIM STATEMENTS OF OPERATIONS for the six months ended June 30, 2009
and 2008 and for the period January 28, 2003 (Date of Inception) to June 30,
2009 (Stated in US Dollars) (Unaudited)

|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   | January 28, |  
|--------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   | 2003        |  
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   | (Date of    |  
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   | Inception)  |  
|                                  |   | Three Months Ended |   |   | Six Months Ended |   |   | To         |  
|                                  |   | June 30,           |   |   | June 30,         |   |   | June 30,   |  
|                                  |   | 2009               |   |   | 2008             |   |   | 2009       |   |   | 2008       |   |   | 2009        |  
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|Expenses                          |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|Accounting and audit fees         | $ | 4,947              |   | $ | 9,224            |   | $ | 17,172     |   | $ | 15,468     |   | $ | 115,394     |  
|Bank charges                      |   | 179                |   |   | 87               |   |   | 325        |   |   | 138        |   |   | 1,411       |  
|Consulting fees                   |   | 75,000             |   |   | -                |   |   | 100,000    |   |   | -          |   |   | 105,000     |  
|Director fees
         Note 6    |   | 4,500              |   |   | -                |   |   | 9,000      |   |   | -          |   |   | 13,500      |  
|Filing and transfer agent fees    |   | 2,092              |   |   | 778              |   |   | 3,088      |   |   | 3,937      |   |   | 26,882      |  
|Foreign exchange                  |   | 970                |   |   | -                |   |   | 970        |   |   | -          |   |   | 1,455       |  
|Interest  Note 5 and 6           |   | 5,000              |   |   | 1,023            |   |   | 10,000     |   |   | 1,736      |   |   | 18,078      |  
|Legal fees                        |   | 3,631              |   |   | -                |   |   | 13,716     |   |   | 3,000      |   |   | 38,074      |  
|Office and miscellaneous          |   | 35                 |   |   | -                |   |   | 35         |   |   | -          |   |   | 135         |  
|Management fees
         Note 6  |   | 9,000              |   |   | 3,000            |   |   | 18,000     |   |   | 6,000      |   |   | 95,000      |  
|Mineral property costs            |   | 933                |   |   | 475              |   |   | 933        |   |   | 941        |   |   | 13,872      |  
|Rent  Note
        6             |   | 2,380              |   |   | 1,500            |   |   | 3,880      |   |   | 3,000      |   |   | 39,380      |  
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|Net loss for the period           | $ | (108,667           | ) | $ | (16,087          | ) | $ | (177,119   | ) | $ | (34,220    | ) | $ | (468,181    | )
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|Basic and diluted loss per share  | $ | (0.00              | ) | $ | (0.00            | ) | $ | (0.00      | ) | $ | (0.00      | ) |   |             |  
|                                  |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|Weighted average number of shares |   |                    |   |   |                  |   |   |            |   |   |            |   |   |             |  
|outstanding                       |   | 53,797,500         |   |   | 50,697,500       |   |   | 53,572,500 |   |   | 50,697,500 |   |   |             |  

SEE ACCOMPANYING NOTES 5

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SUNERGY, INC.(An Exploration Stage Company)
INTERIM STATEMENTS OF CASH FLOWS for the six months ended June 30, 2009
and 2008 and for the period January 28, 2003 (Date of Inception) to June 30,
2009 (Stated in US Dollars) (Unaudited)

|                                                    |   |                  |   |   |               |   |   | January 28,   |  
|--------------------------------------------------- | - | ---------------- | - | - | ------------- | - | - | ------------- | -
|                                                    |   |                  |   |   |               |   |   | 2003 (Date of |  
|                                                    |   | Six Months Ended |   |   | Inception) to |  
|                                                    |   | June 30,         |   |   | June 30,      |  
|                                                    |   | 2009             |   |   | 2008          |   |   | 2009          |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Operating Activities                                |   |                  |   |   |               |   |   |               |  
|Net loss for the period                             | $ | (177,119         | ) | $ | (34,220       | ) | $ | (468,181      | )
|Adjustments to reconcile
      net loss to net cash |   |                  |   |   |               |   |   |               |  
|used in operating activities:                       |   |                  |   |   |               |   |   |               |  
|Common
      shares issued for consulting fees      |   | 100,000          |   |   | -             |   |   | 100,000       |  
|Interest                                            |   | -                |   |   | -             |   |   | 3,298         |  
|Accrued
      interest                              |   | 10,000           |   |   | -             |   |   | 10,000        |  
|Prepaid expenses                                    |   | -                |   |   | 2,712         |   |   | -             |  
|Accounts
      payable and accrued liabilities      |   | 3,984            |   |   | 9,969         |   |   | 115,766       |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Cash used in operating activities                   |   | (63,135          | ) |   | (21,539       | ) |   | (239,117      | )
|                                                    |   |                  |   |   |               |   |   |               |  
|Financing Activities                                |   |                  |   |   |               |   |   |               |  
|Capital stock issued                                |   | -                |   |   | -             |   |   | 173,950       |  
|Subscriptions received                              |   | 56,700           |   |   | -             |   |   | 61,700        |  
|Increase in related party loan                      |   | -                |   |   | 21,403        |   |   | 10,180        |  
|Increase in advance
      payables                  |   | 6,100            |   |   | -             |   |   | 6,100         |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Cash provided by financing activities               |   | 62,800           |   |   | 21,403        |   |   | 251,930       |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Investing Activity                                  |   |                  |   |   |               |   |   |               |  
|Acquisition of mineral property                     |   | -                |   |   | -             |   |   | (12,500       | )
|                                                    |   |                  |   |   |               |   |   |               |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Increase (decrease) in cash during the period       |   | (335             | ) |   | (136          | ) |   | 313           |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Cash, beginning of the period                       |   | 648              |   |   | 195           |   |   | -             |  
|                                                    |   |                  |   |   |               |   |   |               |  
|Cash, end of the period                             | $ | 313              |   | $ | 59            |   | $ | 313           |  

Supplemental Cash Flow Information  Note 9

SEE ACCOMPANYING NOTES 6

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SUNERGY,INC.(An Exploration Stage
Company) STATEMENT OF STOCKHOLDERS EQUITY for the period January 28,
2003 (Date of Inception) to June 30, 2009 (Stated in US Dollars)
(unaudited)

|                                                        |                |            |               |   |        |           |   |         |            |   |          |              |   |        |               |   |          | Deficit     |   |          |          |  
|------------------------------------------------------- | -------------- | ---------- | ------------- | - | ------ | --------- | - | ------- | ---------- | - | -------- | ------------ | - | ------ | ------------- | - | -------- | ----------- | - | -------- | -------- | -
|                                                        |                |            |               |   |        |           |   |         |            |   |          |              |   |        |               |   |          | Accumulated |   |          |          |  
|                                                        |                |            |               |   |        |           |   |         | Additional |   |          |              |   |        |               |   |          | During the  |   |          |          |  
|                                                        |                |            | Common Shares |   |        | Paid-in   |   |         | Deferred   |   |          | Share        |   |        | Exploration   |   |          |             |  
|                                                        |                |            | Number        |   |        | Par Value |   |         | Capital    |   |          | Compensation |   |        | Subscriptions |   |          | Stage       |   |          | Total    |  
|Capital stock issued for cash (1)                       |  at $0.001    |            | 50,000,000    |   | $      | 50,000    |   | $       |            |   | $        | -            |   | $      | -             |   | $        | (40,000     | ) | $        | 10,000   |  
|                                                        |  at $0.10     |            | 697,500       |   |        | 698       |   |         | 13,252     |   |          |              |   |        |               |   |          | -           |   |          | 13,950   |  
|Net loss for the period                                 |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (30,313     | ) |          | (30,313  | )
|Balance, as at December 31, 2003                        |                | 50,697,500 |               |   | 40,698 |           |   | 13,252  |            |   | -        |              |   | -      |               |   | (70,313  | )           |   | (6,363   | )       
|Contributed interest                                    |                |            | -             |   |        | -         |   |         | 401        |   |          | -            |   |        | -             |   |          | -           |   |          | 401      |  
|Net loss for the year                                   |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (41,362     | ) |          | (41,362  | )
|Balance, as at December 31, 2004                        |                | 50,697,500 |               |   | 50,698 |           |   | 13,653  |            |   | -        |              |   | -      |               |   | (111,675 | )           |   | (47,324  | )       
|Contributed interest                                    |                |            | -             |   |        | -         |   |         | 938        |   |          | -            |   |        | -             |   |          | -           |   |          | 938      |  
|Net loss for the year                                   |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (26,093     | ) |          | (26,093  | )
|Balance, as at December 31, 2005                        |                | 50,697,500 |               |   | 50,698 |           |   | 14,591  |            |   | -        |              |   | -      |               |   | (137,768 | )           |   | (72,479  | )       
|Contributed interest                                    |                |            | -             |   |        | -         |   |         | 1,959      |   |          | -            |   |        | -             |   |          | -           |   |          | 1,959    |  
|Net loss for the year                                   |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (39,746     | ) |          | (39,746  | )
|Balance, as at December 31, 2006                        |                | 50,697,500 |               |   | 50,698 |           |   | 16,550  |            |   | -        |              |   | -      |               |   | (177,514 | )           |   | (110,266 | )       
|Net loss for the year                                   |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (55,103     | ) |          | (55,103  | )
|Balance, as at December 31, 2007                        |                | 50,697,500 |               |   | 50,698 |           |   | 16,550  |            |   | -        |              |   | -      |               |   | (232,617 | )           |   | (165,369 | )       
|Capital stock issued for cash                           |  at $0.25     |            | 600,000       |   |        | 600       |   |         | 149,400    |   |          | -            |   |        | -             |   |          | -           |   |          | 150,000  |  
|Capital stock issued pursuant to
      mineral property |                |            |               |   |        |           |   |         |            |   |          |              |   |        |               |   |          |             |   |          |         
|acquisition agreement                                   |  at $0.25     |            | 2,000,000     |   |        | 2,000     |   |         | 498,000    |   | $        | -            |   |        | -             |   |          | -           |   |          | 500,000  |  
|Share subscriptions  Note 5                            |                | -          |               |   | -      |           |   | -       |            |   |          |              |   | 5,000  |               |   | -        |             |   | 5,000    |         
|Net loss for the year                                   |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (98,445     | ) |          | (98,445  | )
|                                                        |                |            |               |   |        |           |   |         |            |   |          |              |   |        |               |   |          |             |   |          |          |  
|Balance, as at December 31, 2008                        |                | 53,297,500 |               |   | 53,298 |           |   | 663,950 |            |   | -        |              |   | 5,000  |               |   | (331,062 | )           |   | 391,186  |         
|Share subscriptions  Note 5                            |                | -          |               |   | -      |           |   | -       |            |   | -        |              |   | 56,700 |               |   | -        |             |   | 56,700   |         
|Capital stock issued for consulting services            | 
    at $0.60 |            | 500,000       |   |        | 500       |   |         | 299,500    |   |          | (200,000     | ) |        | -             |   |          | -           |   |          | 100,000  |  
|Net loss for the period                                 |                |            | -             |   |        | -         |   |         | -          |   |          | -            |   |        | -             |   |          | (177,119    | ) |          | (177,119 | )
|                                                        |                |            |               |   |        |           |   |         |            |   |          | -            |   |        |               |   |          |             |   |          |          |  
|Balance, as at June 30, 2009                            |                | 53,797,500 |               | $ | 53,798 |           | $ | 963,450 |            | $ | (200,000 | )            | $ | 61,700 |               | $ | (508,181 | )           | $ | 370,767  |         

(1) The number of shares issued and outstanding was
retroactively restated to reflect a 5 for 1 forward stock split, effective
October 7, 2008. The par value of the share issuances is adjusted to reflect the
restated par value of each share issuance.

SEE ACCOMPANYING NOTES7

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SUNERGY, INC.(An Exploration Stage Company)
SCHEDULE OF RESOURCE PROPERTY COSTS for the period ended June 30, 2009
(Stated in US Dollars)

|                                                    |   | British Columbia |  |   | Ghana           |  |   |         | 
|--------------------------------------------------- | - | ---------------- |  | - | --------------- |  | - | ------- | 
|                                                    |   | Hummingbird      |  |   | Nyinahin Mining |  |   |         | 
|                                                    |   | Claim            |  |   | Concession      |  |   | Total   | 
|                                                    |   |                  |  |   |                 |  |   |         | 
|Balance, December 31, 2007                          | $ | -                |  | $ | -               |  | $ | -       | 
|                                                    |   |                  |  |   |                 |  |   |         | 
|Acquisition costs:                                  |   |                  |  |   |                 |  |   |         | 
|Cash                                                |   | -                |  |   | 12,500          |  |   | 12,500  | 
|Shares                                              |   | -                |  |   | 500,000         |  |   | 500,000 | 
|Issuance of a promissory note  Notes 4
      and 5 |   | -                |  |   | 250,000         |  |   | 250,000 | 
|                                                    |   |                  |  |   |                 |  |   |         | 
|Balance, December 31, 2008 and June 30,             |   |                  |  |   |                 |  |   |         | 
|2009                                                | $ | -                |  | $ | 762,500         |  | $ | 762,500 | 

SEE ACCOMPANYING NOTES 8

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SUNERGY, INC.(A Exploration Stage Company)
|NOTES TO THE INTERIM FINANCIAL STATEMENTS June 30, 2009 (Stated in
US Dollars) (Unaudited)

|Note 1 | Nature of Operations and
      Ability to Continue as a Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | The Company was incorporated in the State of Nevada on
      January 28, 2003 and is in the exploration stage. The Company has mineral
      properties located in the Republic of Ghana and has not yet determined
      whether these properties contain reserves that are economically
      recoverable. The recoverability of amounts from these properties will be
      dependent upon the discovery of economically recoverable reserves,
      confirmation of the Companys interest in the underlying properties, the
      ability of the Company to obtain necessary financing to satisfy the
      expenditure requirements under the property agreements to complete the
      development of the properties and upon future profitable production or
      proceeds for the sale thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | These financial statements have been prepared in
      accordance with generally accepted accounting principles in the United
      States of America on a going concern basis, which assumes that the Company
      will continue to realize its assets and discharge its obligations and
      commitments in the normal course of operations. Realization values may be
      substantially different from carrying values as shown and these financial
      statements do not give effect to adjustments that would be necessary to
      the carrying values and classification of assets and liabilities should
      the Company be unable to continue as a going concern. At June 30, 2009,
      the Company had negative working capital, an accumulated deficit of
      $508,181 (December 31, 2008 - $331,062) since its inception and expects to
      incur further losses in the development of its business, all of which
      casts substantial doubt about the Companys ability to continue as a going
      concern. The Companys ability to continue as a going concern is dependent
      upon its ability to generate future profitable operations and/or to obtain
      the necessary financing to meet its obligations and repay its liabilities
      arising from normal business operations when they come due. Management has
      no formal plan in place to address this concern but is considering
      obtaining additional funds by debt financing to the extent there is a
      shortfall from operations. While the Company is expending its best efforts
      to achieve the above plans, there is no assurance that any such activity
      will generate funds for operations.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | These statements reflect all adjustments, consisting of
      normal recurring adjustments, which in the opinion of management are
      necessary for fair presentation of the information contained therein. It
      is suggested that these interim financial statements be read in
      conjunction with the audited financial statements of the Company for the
      year ended December 31, 2008. The interim results are not necessarily
      indicative of the operating results expected for the fiscal year ending on
      December 31, 2009. Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with generally
      accepted accounting principles have been condensed or omitted pursuant to
      such rules and regulations, although the Company believes that the
      disclosures herein are adequate to make the information presented not
      misleading.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

1

---

Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 2

|Note 2 | Summary of Significant
      Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On September 15, 2006, FASB issued Statement No. 157,
      Fair Value Measurements (SFAS No. 157). SFAS No. 157 provides guidance
      for using fair value to measure assets and liabilities. SFAS No. 157
      references fair value as the price that would be received to sell an asset
      or paid to transfer a liability in an orderly transaction between market
      participants in the market in which the reporting entity transacts. SFAS
      No. 157 applies whenever other standards require (or permit) assets or
      liabilities to be measured at fair value. SFAS No. 157 does not expand the
      use of fair value in any new circumstances. Originally, SFAS No. 157 was
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007, and interim periods within those fiscal years.
      Accordingly, we adopted SFAS No. 157 in the first quarter of fiscal year
      2008. In February 2008, the FASB issued FASB Staff Position No. 157-2,
      Effective Date of FASB Statement No. 157, which provides a one year
      deferral of the effective date of SFAS No. 157 for non-financial assets
      and non-financial liabilities, except those that are recognized or
      disclosed in the financial statements at fair value at least annually.
      Therefore, the Company has adopted the provisions of SFAS No. 157 with
      respect to its financial assets and liabilities only.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Effective January 1, 2008, the Company adopted Statement
      of Financial Accounting Standard (SFAS) No. 159, The Fair Value Option
      for Financial Assets and Financial Liabilities- Including an amendment of
      FASB Statement No. 115. SFAS No. 159 gives the Company the irrevocable
      option to elect fair value for the initial and subsequent measurement for
      certain financial assets and liabilities on a contract-by-contract basis
      with the difference between the carrying value before election of the fair
      value option and the fair value recorded upon election as an adjustment to
      beginning retained earnings. As of December 31, 2008, the Company had not
      elected the fair value option for any eligible financial asset or
      liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Recent Accounting Pronouncements Not Yet
      Adopted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In December 2007, FASB issued Statement No. 141 (Revised
      2007), Business Combinations (SFAS 141(R)) and SFAS No. 160, Accounting
      and Reporting of Non-controlling Interests in Consolidated Financial
      Statements, an amendment of ARB No. 51 (SFAS 160)\                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | SFAS 141(R) requires companies to: (i) recognize, with
      certain exceptions, 100% of the fair values of assets acquired,
      liabilities assumed, and non-controlling interests in acquisitions of less
      than a 100% controlling interest when the acquisition constitutes a change
      in control of the acquired entity; (ii) measure acquirer shares issued in
      consideration for a business combination at fair value on the acquisition
      date; (iii) recognize contingent consideration arrangements at their
      acquisition-date fair values, with subsequent changes in fair value
      generally reflected in earnings; (iv) with certain exceptions, recognize
      pre-acquisition loss and gain contingencies at their acquisition-date fair
      values; (v) capitalize in-process research and development (IPR&D)
      assets acquired; (vi) expense, as incurred, acquisition-related
      transaction costs; (vii) capitalize                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

2

---

Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 3

|Note 2 | Summary of Significant Accounting Policies -
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | acquisition-related restructuring costs only if the
      criteria in SFAS No. 146, Accounting for Costs Associated with Exit or
      Disposal Activities , are met as of the acquisition date; and (viii)
      recognize changes that result from a business combination transaction in
      an acquirers existing income tax valuation allowances and tax uncertainty
      accruals as adjustments to income tax expense. SFAS 141(R) is required to
      be adopted concurrently with SFAS 160 and is effective for business
      combination transactions for which the acquisition date is on or after the
      beginning of the first annual reporting period beginning on or after
      December 15, 2008. The Company does not believe the adoption of these
      statements will have a material impact on significant acquisitions
      completed after January 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In May 2008, the FASB issued FSP No. APB 14-1,
      Accounting for Convertible Debt Instruments That May Be Settled in Cash
      upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). FSP
      APB 14-1 applies to convertible debt instruments that, by their stated
      terms, may be settled in cash (or other assets) upon conversion, including
      partial cash settlement, unless the embedded conversion option is required
      to be separately accounted for as a derivative under SFAS 133. Convertible
      debt instruments within the scope of FSP APB 14-1 are not addressed by the
      existing APB 14. FSP APB 14-1 requires that the liability and equity
      components of convertible debt instruments within the scope of FSP APB
      14-1 be separately accounted for in a manner that reflects the entitys
      nonconvertible debt borrowing rate. This requires an allocation of the
      convertible debt proceeds between the liability component and the embedded
      conversion option (i.e., the equity component). The difference between the
      principal amount of the debt and the amount of the proceeds allocated to
      the liability component will be reported as a debt discount and
      subsequently amortized to earnings over the instruments expected life
      using the effective interest method. FSP APB 14- 1 was effective for the
      Companys fiscal year beginning January 1, 2009. There was no impact on
      the Companys financial statements upon adoption of FSP APB 14-1.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In June 2008, the FASB reached consensus on EITF Issue
      No. 07-05 (EITF 07-05), Determining Whether an Instrument (or embedded
      feature) Is Indexed to an Entitys Own Stock.. EITF 07-05 clarifies the
      determination of whether an instrument (or an embedded feature) is indexed
      to an entitys own stock, which would qualify as a scope exception under
      SFAS 133. EITF 07-05 is effective for financial statements issued for
      fiscal years beginning after December 15, 2008. Early adoption of EITF
      07-05 is not permitted. Adoption of EITF 07-05 did not have a material
      impact on the Companys financial position, results of operations or cash
      flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In May 2009, the FASB issued SFAS No. 165, Subsequent
      Events. This statement establishes guidance related to accounting for and
      disclosure of events that happen after the date of the balance sheet but
      before the release of the financial statements. SFAS No. 165 is effective
      for reporting periods ending after June 15, 2009. We do not expect the
      adoption of this statement to have a material effect on our results of
      operations or financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

3

---

Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 4

|Note 2 | Summary of Significant
      Accounting Policies - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | In June 2009, the FASB issued SFAS No.168, The FASB
      Accounting Standards Codification and the Hierarchy of Generally Accepted
      Accounting Principles (SFAS 168). SFAS 168 establishes the FASB
      Accounting Standards Codification (Codification), which officially
      launched July 1, 2009, to become the source of authoritative U.S.
      generally accepted accounting principles (GAAP) recognized by the FASB
      to be applied by nongovernmental entities. Rules and interpretive releases
      of the Securities and Exchange Commission (SEC) under authority of
      federal securities laws are also sources of authoritative U.S. GAAP for
      SEC registrants. The subsequent issuances of new standards will be in the
      form of Accounting Standards Updates that will be included in the
      Codification. Generally, the Codification is not expected to change U.S.
      GAAP. All other accounting literature excluded from the Codification will
      be considered non-authoritative. SFAS 168 is effective for financial
      statements issued for interim and annual periods ending after September
      15, 2009. We will adopt SFAS 168 for our quarter ending September 30,
      2009. We are currently evaluating the effect on our financial statement
      disclosures as all future references to authoritative accounting
      literature will be references in accordance with the Codification.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Note 3 | Mineral Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Hummingbird Claim                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | By a mineral property staking and sales agreement dated
      April 10, 2003, the Company acquired a 100% undivided right, title and
      interest in and to the Hummingbird Claims located in the province of
      British Columbia, Canada. During the six months ended June 30, 2009, the
      Company incurred exploration costs of $933 (2008: $941) on the Hummingbird
      Claims. Exploration costs incurred from inception to June 30, 2009 were
      $13,872. During the quarter ended June 30, 2009, the Company decided to
      abandon the Hummingbird Claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Nyinahin Mining Concession                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | By a mining acquisition agreement dated October 31, 2008
      and amended by agreement on December 5, 2008, the Company agreed to
      acquire a 100% interest in a mineral concession located in the Ashanti
      region of Ghana, known as the Nyinahin concession, in consideration
      consisting of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | a) | $500,000 to be paid within 5 days of the effective date
      of the agreement;                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                              
| |    | i)                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                              
| |    | ii)                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                              
| |    | iii)                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                              
| |    | iv)                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                              
| | b) | 2,000,000 restricted shares of common stock of the
      Company valued at a value of $0.25 per share (based upon the price per
      share received on a private placement around the time of this agreement)
      for a total of $500,000.

4

---

Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 5

|Note 3 | Mineral Property - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | On December 30, 2008, the Company entered into a
      promissory note in the amount of $250,000 with a shareholder of the
      Company (Note 3) whereby the shareholder satisfied the Companys
      obligations in respect of the Nyinahin Mining Concession agreement for the
      payments totalling $250,000 that were due by December 31, 2008. During the
      year ended December 31, 2008, the Company paid $12,500 to the vendor of
      the Nyinahin Mining Concession which amount has been credited toward the
      $250,000 obligation due on April 30, 2009.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | As at April 30, 2009, the Company had not made the
      payment of $237,500 in respect of the final payment required on the
      acquisition of the Nyinahin Mining Concession. The Company, however,
      expects to re-negotiate an extension of the terms of the acquisition of
      this concession.                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Subsequent to June 30, 2009, the Company has entered into
      an agreement for settlement for the final terms of mining acquisition
      agreement. The vendor agreed to accept 2,000,000 restricted shares of
      common stock of the Company in satisfaction of the $250,000 final payment.
      The excess $12,500 payment was deemed as a penalty charge for late
      payment. The common stock has not yet been issued.                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The vendor shall retain a 5% Net Smelter Return on the
      Property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 4 | Promissory Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The promissory note bears interest at 8% per annum. The
      outstanding principal balance and accrued interest is due and payable on
      December 31, 2009. The promissory note was issued to a shareholder of the
      Company in exchange for the shareholder, on behalf of the Company, paying
      500,000 common shares of the Company in satisfaction of payments totaling
      $250,000 pursuant to the Nyinahin Mining Concession Acquisition Agreement
      dated October 31, 2008 and amended on December 5, 2008.                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Subsequent to June 30, 2009, the Company has entered into
      a debt settlement agreement with the shareholder. The investor has entered
      into an agreement to accept 2,100,000 restricted shares of common stock of
      the Company in full satisfaction of the $ 250,000 debt including interest.
      The common stock has not yet been issued.                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 5 | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | On October 10 2008, the Company issued 600,000 units at
      $0.25 per unit for gross proceeds of $150,000. Each unit consists of one
      common share and one common share purchase warrant. Each warrant entitles
      the holder to purchase one share of common stock at $0.25 per share up to
      October 10, 2010.                                                                                                                                                                                                                                                   

5

---

Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 6

|Note 5 | Capital Stock - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On December 10, 2008, the Company issued 2,000,000 common
      shares valued at $0.25 per share for a total of $500,000 pursuant to the
      agreement to acquire the Nyinahin Mining Concession in the Republic of
      Ghana.                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | On March 23, 2009, the Company signed an agreement with a
      consultant to provide consulting services for a period of one year. The
      consultant was compensated by the issuance of 500,000 common shares of the
      Company. These shares were issued at their fair value of $0.60 per share
      for a total of $300,000. The Company has recorded this charge as a
      deferred compensation for which it is amortizing over the term of the
      contract. During the six months ended June 30, 2009, the Company expensed
      $100,000 in respect of this agreement.  Note 9
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| | a) | Share Purchase Warrants                                                                 
| | -- | ----------------------------------------------------------------------------------------
| |    |                                                                                         
| |    | A summary of the Companys share purchase warrants
      outstanding is presented below:

| |                                         | 2009     | 
| | --------------------------------------- | -------- | 
| |                                         |          | 
| |                                         | Number   | 
| |                                         | of       | 
| |                                         | Warrants | 
| | Outstanding, December 31, 2008 and June |          | 
| | 30, 2009                                | 600,000  | 

| | b) | Share Subscriptions                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | As at June 30, 2009, the Company had received $61,700 in
      respect of a subscription for 246,800 units at $0.25 per unit. Each unit
      consists of a common share and one common share purchase warrant entitling
      the holder to purchase an additional common share at $0.25 per share for a
      period of 24 months from the date of closing of the offering. These units
      have not yet been issued.

Note 6
    Related Party TransactionsThe Company was charged director and management fees,
      rent and interest on a loan provided by a director of the Company as
      follows:


6

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Sunergy, Inc. (an Exploration Stage Company) Notes to
the Interim Financial Statements June 30, 2009 (Stated in US Dollars)
(Unaudited)  Page 7

|Note 6 | Related Party Transactions- (contd)
|------ | ------------------------------------

| |                 |   |                    |  |   |                  |  |   |               |  |   |        |  |   | January 28, 2003 | 
| | --------------- | - | ------------------ |  | - | ---------------- |  | - | ------------- |  | - | ------ |  | - | ---------------- | 
| |                 |   |                    |  |   |                  |  |   |               |  |   |        |  |   | (Date of         | 
| |                 |   | Three Months Ended |  |   | Six Months Ended |  |   | Inception to) | 
| |                 |   | June 30,           |  |   | June 30,         |  |   | June 30,      | 
| |                 |   | 2009               |  |   | 2008             |  |   | 2009          |  |   | 2008   |  |   | 2009             | 
| |                 |   |                    |  |   |                  |  |   |               |  |   |        |  |   |                  | 
| | Interest        | $ | -                  |  | $ | 896              |  | $ | -             |  | $ | 1,609  |  | $ | 8,078            | 
| | Management fees |   | 9,000              |  |   | 3,000            |  |   | 18,000        |  |   | 6,000  |  |   | 95,000           | 
| | Director fees   |   | 4,500              |  |   | -                |  |   | 9,000         |  |   | -      |  |   | 13,500           | 
| | Rent            |   | 500                |  |   | 1,500            |  |   | 2,000         |  |   | 3,000  |  | $ | 37,500           | 
| |                 |   |                    |  |   |                  |  |   |               |  |   |        |  |   |                  | 
| |                 | $ | 14,000             |  | $ | 5,396            |  | $ | 29,000        |  | $ | 10,609 |  | $ | 154,078          | 

|       | These charges were measured by the exchange amount which
      is the amount agreed upon by the transacting parties.                                                                                                
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                     
|       | Included in accounts payable and accrued liabilities is
      $46,105 (December 31, 2008: $45,920) owing to directors of the Company for
      unpaid rent and management fees.                                     
|       |                                                                                                                                                                                                                     
|       | Included in the related party loan is $10,180 (December
      31, 2008: $10,180) due to a director of the Company, which bears interest
      of 5% per annum, is unsecured and has no specific terms for repayment.
|       |                                                                                                                                                                                                                     
|Note 7 | Advance Payable                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                     
|       | Included in advance payable is $6,100 (December 31, 2008:
      $nil) which is non-interest bearing, unsecured and has no specific terms
      of repayment                                                         
|       |                                                                                                                                                                                                                     
|Note 8 | Commitments                                                                                                                                                                                                         

| | a) | Effective October 1, 2008, the Company entered into a
      management agreement with the Companys President for his services at a
      rate of one thousand five hundred dollars ($1,500) per month. The
      agreement is for a term of one year and will continue thereafter on a
      month to month basis unless terminated               
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                    
| | b) | Effective October 1, 2008, the Company entered into a
      management agreement with the Companys Secretary and Treasurer for his
      services at a rate of one thousand five hundred dollars ($1,500) per
      month. The agreement is for a term of one year and will continue
      thereafter on a month to month basis unless terminated.
| |    |                                                                                                                                                                                                                                                                                                                                                    
| | c) | Effective October 1, 2008, the Company entered into a
      director fee agreement with a director of the Company for his services at
      a rate of one thousand five hundred dollars $1,500) per month. The
      agreement is for a term of one year and will continue thereafter on a
      month to month basis unless terminated.           

|Note 9 | Supplemental Cash Flow Information                                                                                                                                                                                                                                                                                     
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                        
|       | Investing and financing activities that do not have an
      impact on current cash flows are excluded from the statements of cash
      flows. During the six months ended June 30, 2009, the Company issued
      500,000 shares at $0.60 per share for a total of $300,000 pursuant to a
      consulting agreement.

7

---

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States
dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles. The following discussion should be read in conjunction
with our financial statements and the related notes that appear elsewhere in
this quarterly report. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "common
stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our",
"our company" and Sunergy mean Sunergy, Inc., unless otherwise stated.

Corporate Overview

We were incorporated in the State of Nevada, USA, on January
28, 2003. We are an exploration stage company engaged in the acquisition, and
exploration of mineral properties with a view to exploiting any mineral deposits
we discover that demonstrate economic feasibility.

On April 10, 2003, we acquired the Humming Bird Property
located in British Columbia from Ashworth Explorations Ltd. We acquired a total
of three mineral claims located in the Vancouver Mining Division of British
Columbia that have the potential to contain copper, silver and gold
mineralization or deposits. Under the new claim ownership system in British
Columbia, the property has now been reduced and converted into one claim that
totals 15 cells and covers an area of 311 hectares. A cell is a subunit of a
claim and measures approximately 20 hectares. In order to acquire a 100%
interest in these claims, we paid $3,450 to Ashworth Explorations Ltd. In 2005,
2006, 2007 and 2008 we retained an agent, David Heyman of Vancouver, British
Columbia, to re-stake the property and hold it in trust for us. In 2006, we
reduced the size of the property so that it only covers areas upon which we have
discovered mineralization in our initial exploration program. As of June 30,
2009, our Company has decided to abandon the Humming Bird Property.

On September 12, 2008, Lorne Lilley resigned as treasurer,
secretary and a director of our company and Christian Brule resigned as
president of our company. As a result of these resignations, George
Polyhronopolous and Joseph B. Guerrero were elected directors of our company. On
the same date Mr. Polyhronopolous was appointed secretary and treasurer of our
company and Mr. Guerrero was elected president. Our board of directors now
consists of Christian Brule, George Polyhronopolous and Joseph Guerrero.

On September 16, 2008, our board of directors approved a one
(1) old for five (5) new forward stock split of our authorized and issued and
outstanding shares of common stock. The certificate of change was filed with the
Nevada

8

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Secretary of State on September 23, 2008, effective October 7,
2008. Following the stock spilt our authorized capital has increased from
75,000,000 shares of common stock with a par value of $0.001 to 375,000,000
shares of common stock with a par value of $0.001. We have issued five (5)
shares of common stock in exchange for every one (1) share of common stock
issued and outstanding.

On October 31, 2008, we entered into an agreement with General
Metals Corporation (OTCBB:GNMT) for the acquisition of its 100% owned Nyinahin
Mining Concession located in Ghana, West Africa. The consideration for the
acquisition is to consist of $500,000 in cash, which shall be payable as
follows: (i) $50,000 which is to be provided within 5 days of the effective date
of the agreement with General Metals, (ii) $200,000 which is to be provided by
December 31, 2008, and (iii) the balance of $250,000 which is to be provided by
April 30, 2009; and 2,000,000 restricted shares of common stock of our company,
issued at a fair value of $0.25 per share.

On October 31, 2008, we provided a partial payment of $12,500
due on the principal payment as noted under the agreement for the acquisition of
the Nyinahin Mining. This $12,500 payment is to be credited towards the payment
due to General Metals Corporation on April 30, 2009. On December 5, 2008, we
amended the agreement with General Metals Corporation to allow for the initial
$250,000 payment to be made on or before December 31, 2008 with the remainder of
the $250,000 payment to be payable on or before April 30, 2009. As of the date
of this quarterly report, we had not yet made the remainder of the $250,000
payment (being $237,500) due on or before April 30, 2009 to General Metals
Corporation. We are actively negotiating an extension for this payment with
General Metals Corporation.

As of December 31, 2008, we issued 2,000,000 restricted shares
of our common stock to General Metals Corporation at a fair value of $0.25 per
share as noted in the description of the agreement above.

A shareholder of our company, Global Partners LLC, agreed to
settle the initial payment of $250,000 to General Metals Corporation. As a
result of this, we entered into a promissory note with Global Capital Partners
LLC on December 30, 2008, wherein we agreed to pay the principal amount of
$250,000 including interest at a rate of 8% per annum by December 31, 2009.

Effective October 1, 2008, we entered into a management
agreement with Joseph B. Guerrero, our President and director. We pay
remuneration for his services at a rate of one thousand five hundred dollars
($1,500) per month. The agreement is for a term of one year and will continue
thereafter on a month to month basis unless terminated.

Effective October 1, 2008, we entered into a management
agreement with George Polyhronopolous, our Secretary, Treasurer and director. We
pay remuneration for his services at a rate of one thousand five hundred dollars
($1,500) per month. The agreement is for a term of one year and will continue
thereafter on a month to month basis unless terminated.

Effective October 1, 2008, we entered into a director fee
agreement with Christian Brule, a director of our company. We pay directors fees
at a rate of one thousand five hundred dollars ($1,500) per month. The agreement
is for a term of one year and will continue thereafter on a month to month basis
unless terminated.

On March 23, 2009, we entered into a consulting agreement with
Mark Iacono. The consulting agreement is for a term of one year and is effective
as of the 1st day of March, 2009. Pursuant to the terms of the
consulting agreement we agreed to issue 500,000 restricted shares of our common
stock to Mr. Iacono and to reimburse him for all reasonable out-of-pocket
expenses.

On July 29, 2009, we entered into an agreement with General
Metals Corporation for the final terms for the acquisition of the Nyinahin
Mining Concession from General Metals. Pursuant to the agreement with General
Metals, as amended, the outstanding consideration payable by our company
consisted of $237,500 plus interest and penalties, which was due on April 30,
2009. In full and final satisfaction of all amounts, General Metals has agreed
to accept 2,000,000 restricted shares of common stock of our company. The result
is that our company will have provided a total share and cash consideration of
$1,012,500 for the acquisition of the Concession, given the amounts previously
provided.

9

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On August 3, 2009, we entered into a debt settlement agreement
with Global Partners who has been owed $250,000 since December 30, 2008. The
terms were for 1 year @ 8% interest. The investor agreed to accept 2,100,000
restricted shares of common stock of our company in full settlement of the debt
including interest.

Our Current Business

We are an exploration stage mining company engaged in the
exploration of minerals on properties located in British Columbia and Ghana,
West Africa.

Our plan of operation for the twelve months following the date
of this quarterly report is to complete the recommended grid establishment, line
cutting, soil sampling and mapping on the Hummingbird property, to complete the
terms of the acquisition agreement with General Metals Corporation and to
commence our exploration program on the Nyinahin mining concession.

Humming Bird Property

Our Humming Bird Property is located in the Vancouver Mining
Division approximately 25 kilometers northeast of Powell River, British Columbia
and 100 kilometers northwest of the city of Vancouver. The property lies on the
northwest part of Goat Island, which is located in Powell Lake. As of June 30,
2009, our Company has decided to abandon the Humming Bird Property.

Nyinahin Mining Concession

The 150 square kilometer Nyinahin mining concession is located
between two geological gold belts, the Bibiani Belt to the west and the
Asankrangwa to the east. The license allows for the exploration and mining of
gold, silver, base metals and diamonds. About 80% of the Nyinahin Concession
lies to the west of the Offin River within the Ashanti Region of Ghana. There
are several historical pits and adits with a strong clustering of artisan pits
located along the Offin River. Three old gold prospects exist on the concession.
The property is accessed via the main Kumasi-Bibiani trunk road. It falls under
the jurisdiction of the Atwima Mponua District Assembly with headquarters at
Nyinahin.

The Nyinahin Mining Concession is comprised of the Nyinahin
Mineral Licence LVB 8936/05 and Land Registry No. 1535/2005, and subsequently
converted into a Full Prospecting License (LVB 3857/08). The Concession is
situated 20km northeast of Bibiani and about 48km Southwest of Kumasi. The
concession which covers an approximate area of 172 sq. km. has been reduced to
150 sq. km to conform to statutory requirements regarding the maximum size for
Prospecting Licenses by the Minerals Commission.

Future Exploration

We have designed a four-phased exploration program as detailed
below:

We are committed in spending a total of US$286,000 over a two
year period depending on the type and size of any deposit to be discovered. This
estimate includes a 10% contingency cost. Phases II and III are contingent upon
a favorable result from earlier phases.

Phases I and II (Duration 12 months -end of first year)

Proposed Exploration

- Geological Mapping
- Line Cutting
- Geochemical Soil Sampling
- Trenching
- Pitting
- Geophysical Investigation

10

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The Fieldwork will begin with preliminary geological mapping
and documentation to confirm the general structures and formations. A review of
work done during the reconnaissance licence period will also be carried out.

Line cutting will be carried out on known mineralized zones
identified within the concession at initial grid spacing of 800m. This will be
in-filled with lines spaced at 400m and 200m over selected grounds. It is
expected that about 100km of lines will be cut in all. Geochemical soil-sampling
program will be conducted at an initial interval of 400 and in-filled at 100m
and 50m along the grid lines.

Trenching, the most cost effective exploration method available
in locating significant in-situ mineralization will be employed. Preliminary
trenching based on results of the geochemical soil sampling will be carried out.
An estimated 800m of trenches will be excavated.

Pitting will be carried out at some soil location points along
the proposed mineralized trend where trenching is not merited. Areas without
significant gold values along the mineralized trend will also be pitted to check
the possibility of transported materials.

Geophysical methods (VLF-EM/SP) will be used to identify
mineralized zones/anomalies within the concession area. Other work to be tackled
are clarification of the general forms of the mineral deposits (or anomalies),
the size of the main ore bodies, their quality, mineralogy and technical
problems which will generally assist in the evaluation of the deposit.

Finally, other geological works will be carried out if
considered necessary. It is hoped that any geophysical work already conducted in
the area by the Geological Survey will help in the interpretation of the
structural problems. At the end of this phase, an internal report will be
prepared. The report will form the basis of the Annual Report and on which the
detailed prospecting phase will be projected and carried out as the next phase
of the project.

Phase III (Duration up to 6 months - beginning of second
year)

Detailed Prospecting

- Geochemical Investigations
- Trenching and Pitting
- Structural Geological Mapping
- Assay
- Survey work

Geochemical samples will be taken along the geophysical
traverses and analyzed to cross check any prospects/anomalies picked up by the
geophysics. All the geochemical anomalies recorded will be prioritized.

Detailed soil sampling at a closer grid system of 200 X 50m,
and 100 X 25m will be undertaken when it becomes necessary.

Trenching, pitting, sampling and structural geological mapping
will be tightened up. Any other geological work deemed necessary would also be
carried out.

Assaying of all samples will be carried out locally in the
first instance. Some external cross checking of the assay values will also be
made as and when appropriate.

Survey work all work from this stage will be performed on a
surveyed grid system. All trench locations from the previous phase and the
subsequent ones will be surveyed and put on plan and sections. This will enable
a more effective picture of the prospecting work to be viewed and interpreted.

Mineralogical and petrographical studies will be carried out.

11

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A report will be prepared at the end of the period. This will
involve project appraisal and projections for the next phase of the prospecting
program.

Phase IV (Duration up to 6 months - end of second year)

Target Delineation and Resource Estimation

- Trenching, Pitting and Sampling
- RC Drilling (1000m)
- Other Detailed Geological Work
- Geological Report.

Work will be concentrated in areas, which have shown positive
results during the previous phases and carried out according to the importance
of the results. Area(s), which could be mined first, will be prospected in more
detail. The aim will be to accurately define the geological structure, forms,
attitude of the ore bodies or the ore deposit.

Trenching will continue at an aggressive rate and at closer
grid spacing than before. Sampling, survey work and structural geological
mapping of all exploration work will be carried out.

RC drilling of the gold deposit for resource estimation will be
carried out. It is estimated that about 800m of RC drilling will be carried out.

Assay of all samples will be done locally and externally as and
when necessary.

Resource Estimation based on trench and RC drilling will be
carried out

Reserves estimation will be attempted at this stage to
determine the extent of the economic mineral potential of the concession area.

Results of Operations[NTD  please update as
required]

Three month Summary ending June 30, 2009 and 2008

Three Months EndedJune 302009
      
      
      2008Revenue
      $
      Nil
      
      $
      NilOperating Expenses
      $
      108,667
      
      $
      16,087Net Loss
      $
      (108,667
      )
      $
      (16,087
      )


Expenses

Our operating expenses for the three month periods ended June
30, 2009 and June 30, 2008 are outlined in the table below:

Three Months EndedJune 302009
      
      
      2008Accounting and audit fees
      $
      4,947
      
      $
      9,244Bank charges
      $
      179
      
      $
      87Consulting fees
      $
      75,000
      
      $
      NilDirector fees
      $
      4,500
      
      
      Nil


12

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Filing and transfer agent
      fees
    $
    2,092
    
    $
    778Foreign exchange
    $
    970
    
    
    NilInterest
    $
    5,000
    
    $
    1,023Legal fees
    $
    3,631
    
    $
    NilOffice and miscellaneous
    $
    35
    
    $
    NilManagement fees
    $
    9,000
    
    $
    3,000Mineral property costs
    $
    933
    
    $
    475Rent
    $
    2,380
    
    $
    1,500


Operating expenses for the three months ended June 30, 2009,
increased by 575% as compared to the comparative period in 2008 primarily as a
result of increases in bank charges, consulting fees, director fees, foreign
exchange, interest, legal fees, office and miscellaneous, management fees,
mineral property costs and rent.

Six month Summary ending June 30, 2009 and 2008

Six Months EndedJune 302009
      
      
      2008Revenue
      $
      Nil
      
      $
      NilOperating Expenses
      $
      177,119
      
      $
      34,220Net Loss
      $
      (177,119
      )
      $
      (34,220
      )


Expenses

Our operating expenses for the six month periods ended June 30,
2009 and June 30, 2008 are outlined in the table below:

Six Months EndedJune 302009
      
      
      2008Accounting and audit fees
      $
      17,172
      
      $
      15,468Bank charges
      $
      325
      
      $
      138Consulting fees
      $
      100,000
      
      $
      NilDirector fees
      $
      9,000
      
      
      NilFiling and transfer agent fees
      $
      3,088
      
      $
      3,937Interest
      $
      10,000
      
      $
      1,736Foregin Exchange
      $
      970
      
      $
      -Legal fees
      $
      13,716
      
      $
      3,000Office and miscellaneous
      $
      35
      
      $
      NilManagement fees
      $
      18,000
      
      $
      6,000Mineral property costs
      $
      933
      
      $
      941Rent
      $
      3,880
      
      $
      3,000


Operating expenses for the six months ended June 30, 2009, increased
  by 417% as compared to the comparative period in 2008 primarily as a result
  of increases in accounting and audit fees, bank charges, consulting fees, director
  fees, interest, legal fees, office and miscellaneous, management fees and rent.

13

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Revenue

We did not earn any revenues during the period ending June 30,
2009. We do not anticipate earning revenues until such time as we have entered
into commercial production on either the Nyinahin Mining Concession. We can
provide no assurance that we will discover economic mineralization on either of
our properties, or if such minerals are discovered, that we will enter into
commercial production.

Equity Compensation

We currently do not have any stock option or equity
compensation plans or arrangements.

Liquidity and Financial Condition

Working Capital

|                          |   | At       |   |   | At       |   |   |           |  
|------------------------- | - | -------- | - | - | -------- | - | - | --------- | -
|                          |   | June 30, |   |   | Dec. 31, |   |   | Increase/ |  
|                          |   | 2009     |   |   | 2008     |   |   | Decrease  |  
|Current Assets            | $ | 313      |   | $ | 648      |   | $ | (335      | )
|Current Liabilities       | $ | 392,046  |   | $ | 371,962  |   | $ | 20,084    |  
|Working Capital (deficit) | $ | (391,733 | ) | $ | (371,314 | ) | $ | 20,419    |  

Cash Flows

|                                                          |   | Six months |   |   | Six months |  
|--------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                          |   | Ended      |   |   | Ended      |  
|                                                          |   | June 30,   |   |   | June 30,   |  
|                                                          |   | 2009       |   |   | 2008       |  
|Net Cash Provided (Used in)
      by Operating Activities | $ | (63,135    | ) | $ | (21,539    | )
|Net Cash Provided by Investing Activities                 | $ | Nil        |   | $ | Nil        |  
|Net Cash Provided by
      Financing Activities           | $ | 62,800     |   | $ | 21,403     |  
|Decrease in Cash During the Period                        | $ | (335       | ) | $ | (136       | )

On October 10, 2008, we issued 600,000 units at a purchase
price of $0.25 per unit for gross proceeds of $150,000 to three subscribers.
Each unit consists of one common share and one common share purchase warrant.
Each warrant entitling the holder to purchase one share of our common stock at a
price of $0.25 per share for a period of 24 months from the date of issuance. An
aggregate of 400,000 units were issued to two U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of
Regulation D of the Securities Act of 1933 and 200,000 units were issued to one
non-U.S. person (as that term is defined in Regulation S promulgated under the
Securities Act of 1933) relying on the exemption from registration provided by
Regulation S and/or Section 4(2) of the Securities Act of 1933.

As at March 31,2009, we received $36,700 in respect of share
subscriptions for 146,800 units at $0.25 per unit. Each unit consists of one common share and one common share
purchase warrant. Each warrant entitles the holder to purchase an additional
common share $0.25 per share for a period of 24 months from the date of the
closing of offering. These shares have not yet been issued.

During our quarter ended June 30, 2009, we received $25,000 in
respect of share subscriptions for 100,000 units at $0.25 per unit. Each unit
consists of a common share and one common share purchase warrant entitling the
holder to purchase an additional common share at $0.25 per share for a period of
24 months from the date of closing of the offering. These units have not yet
been issued.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

14

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Going Concern

In their audit report relating to our financial statements for
the period ended December 31, 2008, our independent accountants indicated that
there are a number of factors that raise substantial doubt about our ability to
continue as a going concern. Such factors identified in the report are our net
loss position, our failure to attain profitable operations and our dependence
upon obtaining adequate financing. All of these factors continue to exist and
raise doubt about our status as a going concern.

We anticipate that additional funding will be required in the
form of equity financing from the sale of our common stock. At this time, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or through a loan from our
directors to meet our obligations over the next twelve months. We do not have
any arrangements in place for any future debt or equity financing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
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 is material to
stockholders.

Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.

Exploration Stage Company

The Company complies with Financial Accounting Standards Board
Statement No. 7 and Securities and Exchange Commission Act Guide 7 for its
characterization of the Company as exploration stage. All losses accumulated
since inception has been considered as part of the Companys exploration stage
activities.

Mineral Property Costs

Mineral property exploration costs are expensed as incurred.
Mineral property acquisition costs are initially capitalized when incurred using
the guidance in EITF 04-02, Whether Mineral Rights Are Tangible or
Intangible Assets. The Company assesses the carrying costs for impairment
under SFAS 144, Accounting for Impairment or Disposal of Long Lived
Assets at each fiscal quarter end. When it has been determined that a
mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs then incurred to develop such property,
are capitalized. Such costs will be amortized using the units-of-production
method over the estimated life of the probable reserve. If mineral properties
are subsequently abandoned or impaired, any capitalized costs will be charged to
operations.

15

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Environmental Costs

Environmental expenditures that relate to current operations
are expensed or capitalized as appropriate.

Expenditures that relate to an existing condition caused by
past operations, and which do not contribute to current or future revenue
generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or the Companys commitments to plan of action
based on the then known facts.

Asset Retirement Obligation

The Company accounts for asset retirement obligations in
accordance with the provisions of SFAS No. 143 "Accounting for Asset Retirement
Obligations". SFAS No. 143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in which it incurs a
legal obligation associated with the retirement of tangible long-lived assets
that result from the acquisition, construction, development and/or normal use of
the assets. At December 31, 2008, the Company had not undertaken any drilling
activity on its properties and had not incurred significant reclamation
obligations. As such, no asset retirement obligation accrual was made in the
December 31, 2008 and 2007 financial statements.

Impairment of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets
as required by SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, whenever events or changes in circumstances indicate that
the carrying amount of such assets may not be recoverable. The estimated future
cash flows are based upon, among other things, assumptions about future
operating performance, and may differ from actual cash flows. Long-lived assets
evaluated for impairment are grouped with other assets to the lowest level for
which identifiable cash flows are largely independent of the cash flows of other
groups of assets and liabilities. If the sum of the projected undiscounted cash
flows (excluding interest) is less than the carrying value of the assets, the
assets will be written down to the estimated fair value in the period in which
the determination is made.

Recent Accounting Pronouncements

Recently adopted accounting pronouncements

On September 15, 2006, FASB issued Statement No. 157, Fair
Value Measurements (SFAS No. 157). SFAS No. 157 provides guidance for using
fair value to measure assets and liabilities. SFAS No. 157 references fair value
as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants in the market in
which the reporting entity transacts. SFAS No. 157 applies whenever other
standards require (or permit) assets or liabilities to be measured at fair
value. SFAS No. 157 does not expand the use of fair value in any new
circumstances. Originally, SFAS No. 157 was effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. Accordingly, we adopted SFAS No. 157 in the first
quarter of fiscal year 2008. In February 2008, the FASB issued FASB Staff
Position No. 157-2, Effective Date of FASB Statement No. 157, which provides a
one year deferral of the effective date of SFAS No. 157 for non-financial assets
and non-financial liabilities, except those that are recognized or disclosed in
the financial statements at fair value at least annually. Therefore, our company
has adopted the provisions of SFAS No. 157 with respect to its financial assets
and liabilities only.

Effective January 1, 2008, our company adopted Statement of
Financial Accounting Standard (SFAS) No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities-Including an amendment of FASB
Statement No. 115. SFAS No. 159 gives our company the irrevocable option to
elect fair value for the initial and subsequent measurement for certain
financial assets and liabilities on a contract-by-contract basis with the
difference between the carrying value before election of the fair value option
and the fair value recorded upon election as an adjustment to beginning retained
earnings. As of December 31, 2008, our company had not elected the fair value
option for any eligible financial asset or liability.

16

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Recent Accounting Pronouncements Not Yet
Adopted

In December 2007, FASB issued Statement No. 141 (Revised 2007),
Business Combinations (SFAS 141(R)) and SFAS No. 160, Accounting and Reporting
of Non-controlling Interests in Consolidated Financial Statements, an amendment
of ARB No. 51 (SFAS 160)\

SFAS 141(R) requires companies to: (i) recognize, with certain
exceptions, 100% of the fair values of assets acquired, liabilities assumed, and
non-controlling interests in acquisitions of less than a 100% controlling
interest when the acquisition constitutes a change in control of the acquired
entity; (ii) measure acquirer shares issued in consideration for a business
combination at fair value on the acquisition date; (iii) recognize contingent
consideration arrangements at their acquisition-date fair values, with
subsequent changes in fair value generally reflected in earnings; (iv) with
certain exceptions, recognize pre-acquisition loss and gain contingencies at
their acquisition-date fair values; (v) capitalize in-process research and
development (IPR&D) assets acquired; (vi) expense, as incurred,
acquisition-related transaction costs; (vii) capitalize acquisition-related
restructuring costs only if the criteria in SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities , are met as of the acquisition
date; and (viii) recognize changes that result from a business combination
transaction in an acquirers existing income tax valuation allowances and tax
uncertainty accruals as adjustments to income tax expense. SFAS 141(R) is
required to be adopted concurrently with SFAS 160 and is effective for business
combination transactions for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. Our company does not believe the adoption of these statements will
have a material impact on significant acquisitions completed after January 1,
2009.

In May 2008, the FASB issued FSP No. APB 14-1, Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement) (FSP APB 14-1). FSP APB 14-1 applies to
convertible debt instruments that, by their stated terms, may be settled in cash
(or other assets) upon conversion, including partial cash settlement, unless the
embedded conversion option is required to be separately accounted for as a
derivative under SFAS 133. Convertible debt instruments within the scope of FSP
APB 14-1 are not addressed by the existing APB 14. FSP APB 14-1 requires that
the liability and equity components of convertible debt instruments within the
scope of FSP APB 14-1 be separately accounted for in a manner that reflects the
entitys nonconvertible debt borrowing rate. This requires an allocation of the
convertible debt proceeds between the liability component and the embedded
conversion option (i.e., the equity component). The difference between the
principal amount of the debt and the amount of the proceeds allocated to the
liability component will be reported as a debt discount and subsequently
amortized to earnings over the instruments expected life using the effective
interest method. FSP APB 14-1 was effective for our companys fiscal year
beginning January 1, 2009. There was no impact on our companys financial
statements upon adoption of FSP APB 14-1.

In June 2008, the FASB reached consensus on EITF Issue No.
07-05 (EITF 07-05), Determining Whether an Instrument (or embedded feature)
Is Indexed to an Entitys Own Stock.. EITF 07-05 clarifies the determination of
whether an instrument (or an embedded feature) is indexed to an entitys own
stock, which would qualify as a scope exception under SFAS 133. EITF 07-05 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. Early adoption of EITF 07-05 is not permitted. Adoption of
EITF 07-05 did not have a material impact on our companys financial position,
results of operations or cash flows.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events.
This statement establishes guidance related to accounting for and disclosure of
events that happen after the date of the balance sheet but before the release of
the financial statements. SFAS No. 165 is effective for reporting periods ending
after June 15, 2009. We do not expect the adoption of this statement to have a
material effect on our results of operations or financial position.

In June 2009, the FASB issued SFAS No.168, The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles (SFAS 168). SFAS 168 establishes the FASB Accounting
Standards Codification (Codification), which officially launched July 1,
2009, to become the source of authoritative U.S. generally accepted accounting
principles (GAAP) recognized by the FASB to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange
Commission (SEC)

17

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under authority of federal securities laws are also sources of
authoritative U.S. GAAP for SEC registrants. The subsequent issuances of new
standards will be in the form of Accounting Standards Updates that will be
included in the Codification. Generally, the Codification is not expected to
change U.S. GAAP. All other accounting literature excluded from the Codification
will be considered non-authoritative. SFAS 168 is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. We will adopt SFAS 168 for our quarter ending September 30, 2009. We are
currently evaluating the effect on our financial statement disclosures as all
future references to authoritative accounting literature will be references in
accordance with the Codification.

Item 3. Quantitative Disclosures About Market Risks

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 4T. Controls and Procedures.

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (who
is acting as our principal executive officer) and our treasurer (who is acting
as our principal financial officer and principle accounting officer) to allow
for timely decisions regarding required disclosure. In designing and evaluating
our disclosure controls and procedures, our management recognizes that any
controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. 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. As of June 30, 2009, the end of the
quarter covered by this report, we carried out an evaluation, under the
supervision and with the participation of our president (who is acting as our
principal executive officer) and our treasurer (who is acting as our principal
financial officer and principle accounting officer), of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on the
foregoing, our president (who is acting as our principal executive officer) and
our treasurer (who is acting as our principal financial officer and principle
accounting officer) concluded that our disclosure controls and procedures were
not effective as of the end of the period covered by this quarterly report in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordances with US generally accepted accounting principles due to the
existence of significant deficiencies constituting material weaknesses, as
described in greater detail below. A material weakness is a control deficiency,
or combination of control deficiencies, such that there is a reasonable
possibility that a material misstatement of the annual or interim financial
statements will not be prevented or detected on a timely basis.

Managements Report on Internal Control over Financial
Reporting

Management is responsible for establishing and maintaining
adequate internal control over our financial reporting, as such term is defined
in Exchange Act Rule 13a-15(f). Our management evaluated, under the supervision
and with the participation of our principal executive and principal financial
officer, the effectiveness of our internal control over financial reporting as
of June 30, 2009.

Based on its evaluation under the framework in Internal
ControlIntegrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission, our management, with the participation
of our principal executive and principal financial officer concluded that our
internal control over financial reporting was not effective as of June 30, 2009,
due to the existence of significant deficiencies constituting material
weaknesses, as described in greater detail below. A material weakness is a
control deficiency, or combination of control

18

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deficiencies, such that there is a reasonable possibility that
a material misstatement of the annual or interim financial statements will not
be prevented or detected on a timely basis.

Material Weaknesses Identified

Based on our managements evaluation required by paragraph (d)
of Rule 13a-15 and of Rule 15d-15 of the Exchange Act, certain significant
deficiencies in internal control became evident to management that our
management believes represent material weaknesses, including:

| | (i)   | Insufficient segregation of duties in our finance and
      accounting functions due to limited personnel. During the quarter ended
      June 30, 2009, we had limited staff that performed nearly all aspects of
      our financial reporting process, including, but not limited to, access to
      the underlying accounting records and systems, the ability to post and
      record journal entries and responsibility for the preparation of the
      financial statements. This creates certain incompatible duties and a lack
      of review over the financial reporting process that would likely result in
      a failure to detect errors in spreadsheets, calculations, or assumptions
      used to compile the financial statements and related disclosures as filed
      with the SEC. These control deficiencies could result in a material
      misstatement to our interim or annual consolidated financial statements
      that would not be prevented or detected;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | There is a lack of sufficient supervision and review by
      our management;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | Insufficient corporate governance policies. Although we
      have a code of ethics which provides broad guidelines for corporate
      governance, our corporate governance activities and processes are not
      always formally documented. Specifically, decisions made by the board to
      be carried out by management should be documented and communicated on a
      timely basis to reduce the likelihood of any misunderstandings regarding
      key decisions affecting our operations and management; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iv)  | Our company's accounting staff does not have sufficient
      technical accounting knowledge relating to accounting for income taxes and
      complex US GAAP matters. Management corrected any errors prior to the
      release of our company's June 30, 2009 financial
  statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Plan for Remediation of Material Weaknesses

We intend to take appropriate and reasonable steps to make the
necessary improvements to remediate these deficiencies. We intend to consider
the results of our remediation efforts and related testing as part of our
year-end 2009 assessment of the effectiveness of our internal control over
financial reporting.

We have implemented certain remediation measures and are in the
process of designing and implementing additional remediation measures for the
material weaknesses described in this annual report. Such remediation activities
include the following:

| | (1) | We intend to hire outside consultants with sufficient
      expertise in accounting for complex US GAAP issues for our 2009 fiscal
      year;                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                
| | (2) | We intend to update the documentation of our internal
      control processes, including formal risk assessment of our financial
      reporting processes and;

19

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Inherent limitations on effectiveness of controls

Our principal executive and principal financial officer does
not expect that our disclosure controls or our internal control over financial
reporting will prevent 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 system 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 all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additional controls
can 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 also is based in part upon 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;
over time, controls may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during our quarter ended June 30, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

In addition to other information in this quarterly report, the
following risk factors should be carefully considered in evaluating our business
because such factors may have a significant impact on our business, operating
results, liquidity and financial condition. As a result of the risk factors set
forth below, actual results could differ materially from those projected in any
forward looking statements. Additional risks and uncertainties not presently
known to us, or that we currently consider to be immaterial, may also impact our
business, operating results, liquidity and financial condition. If any such
risks occur, our business, operating results, liquidity and financial condition
could be materially affected in an adverse manner. Under such circumstances, the
trading price of our securities could decline, and you may lose all or part of
your investment.

Our properties are in the exploration stage. There is no
assurance that we can establish the existence of any mineral resource on our
properties in commercially exploitable quantities. Until we can do so, we cannot
earn any revenues from operations and if we do not do so we will lose all of the
funds that we expend on exploration. If we do not discover any mineral resource
in a commercially exploitable quantity, our business could fail.

Despite pre-exploration work on our mineral properties, we have
not established that they contain any mineral reserve, nor can there be any
assurance that we will be able to do so. If we do not, our business could
fail.

A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the

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Securities and Exchange Commission's Industry Guide 7 is
extremely remote; in all probability our mineral resource property does not
contain any 'reserve' and any funds that we spend on exploration will probably
be lost.

Even if we do eventually discover a mineral reserve on one of
our properties, there can be no assurance that we will be able to develop our
properties into producing mines and extract those resources. Both mineral
exploration and development involve a high degree of risk and few properties
which are explored are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.

Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our properties, our business may fail.

Both mineral exploration and extraction require permits from
various foreign, federal, state, provincial and local governmental authorities
and are governed by laws and regulations, including those with respect to
prospecting, mine development, mineral production, transport, export, taxation,
labour standards, occupational health, waste disposal, toxic substances, land
use, environmental protection, mine safety and other matters. There can be no
assurance that we will be able to obtain or maintain any of the permits required
for the continued exploration of our mineral property or for the construction
and operation of a mine on our property at economically viable costs. If we
cannot accomplish these objectives, our business could fail.

We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain them on
reasonable terms. To the extent such approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.

If we establish the existence of a mineral resource on one
of our properties in a commercially exploitable quantity, we will require
additional capital in order to develop the property into a producing mine. If we
cannot raise this additional capital, we will not be able to exploit the
resource, and our business could fail.

If we do discover mineral resources in commercially exploitable
quantities on our property, we will be required to expend substantial sums of
money to establish the extent of the resource, develop processes to extract it
and develop extraction and processing facilities and infrastructure. Although we
may derive substantial benefits from the discovery of a major deposit, there can
be no assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.

Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.

Mineral exploration, development and production involve many
risks which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure

21

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or against which we may elect not to insure. Any such event
could result in work stoppages and damage to property, including damage to the
environment. We do not currently maintain any insurance coverage against these
operating hazards. The payment of any liabilities that arise from any such
occurrence would have a material adverse impact on our company.

Mineral prices are subject to dramatic and unpredictable
fluctuations.

We expect to derive revenues, if any, either from the sale of
our mineral resource property or from the extraction and sale of precious and
base metals. The price of those commodities has fluctuated widely in recent
years, and is affected by numerous factors beyond our control, including
international, economic and political trends, expectations of inflation,
currency exchange fluctuations, interest rates, global or regional consumptive
patterns, speculative activities and increased production due to new extraction
developments and improved extraction and production methods. The effect of these
factors on the price of base and precious metals, and therefore the economic
viability of any of our exploration properties and projects, cannot accurately
be predicted.

The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.

The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.

In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining
operations.

Risks Related To Our Company

We have a limited operating history on which to base an
evaluation of our business and prospects.

We have been in the business of exploring mineral resource
properties since 2003 and we have not yet located any mineral reserve. As a
result, we have never had any revenues from our operations. In addition, our
operating history has been restricted to the acquisition and exploration of our
mineral properties and this does not provide a meaningful basis for an
evaluation of our prospects if we ever determine that we have a mineral reserve
and commence the construction and operation of a mine. We have no way to
evaluate the likelihood of whether our mineral property contains any mineral
reserve or, if it does that we will be able to build or operate a mine
successfully. We anticipate that we will continue to incur operating costs
without realizing any revenues during the period when we are exploring our
properties. We therefore expect to continue to incur significant losses into the
foreseeable future. We recognize that if we are unable to generate significant
revenues from mining operations and any disposition of our property, we will not
be able to earn profits or continue operations. At this early stage of our
operation, we also expect to face the risks, uncertainties, expenses and
difficulties frequently encountered by companies at the start up stage of their
business development. We cannot be sure that we will be successful in addressing
these risks and uncertainties and our failure to do so could have a materially
adverse effect on our financial condition. There is no history upon which to
base any assumption as to the likelihood that we will prove successful and we
can provide investors with no assurance that we will generate any operating
revenues or ever achieve profitable operations.

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The fact that we have not earned any operating revenues
since our incorporation raises substantial doubt about our ability to continue
to explore our mineral properties as a going concern.

We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a commercially exploitable quantity on either of our mineral
properties and build and operate a mine. We had cash in the amount of $313as of June 30, 2009. At June 30, 2009, we had a working capital deficit of
$391,733. We incurred a net loss of $177,119for the six months ended
June 30, 2009 and $468,181 since inception. We will have to raise additional
funds to meet our currently budgeted operating requirements for the next 12
months. As we cannot assure a lender that we will be able to successfully
explore and develop our mineral properties, we will probably find it difficult
to raise debt financing from traditional lending sources. We have traditionally
raised our operating capital from sales of equity and debt securities, but there
can be no assurance that we will continue to be able to do so. If we cannot
raise the money that we need to continue exploration of our mineral property, we
may be forced to delay, scale back, or eliminate our exploration activities. If
any of these were to occur, there is a substantial risk that our business would
fail.

These circumstances lead our independent registered public
accounting firm, in their report dated April 7, 2009, to comment about our
companys ability to continue as a going concern. Management has plans to seek
additional capital through a private placement of our capital stock. These
conditions raise substantial doubt about our companys ability to continue as a
going concern. Although there are no assurances that managements plans will be
realized, management believes that our company will be able to continue
operations in the future.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like NASDAQ or a stock exchange like Amex. Accordingly,
shareholders may have difficulty reselling any of their shares.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our
stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may

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have the effect of reducing the level of trading activity in
the secondary market for the stock that is subject to these penny stock rules.
Consequently, these penny stock rules may affect the ability of broker-dealers
to trade our securities. We believe that the penny stock rules discourage
investor interest in, and limit the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

|Exhibit | Description                                                                                                                        
|------- | -----------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                    
|        |                                                                                                                                    
|(3)     | Articles of Incorporation and By-laws                                                                                              
|        |                                                                                                                                    
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on February 23, 2004)
|        |                                                                                                                                    
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on February 23, 2004)                   
|        |                                                                                                                                    
|(10)    | Material Contracts                                                                                                                 

24

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|Exhibit | Description                                                                                                                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                     
|10.1    | Mineral Property
        Staking and Purchase Agreement dated April 10, 2003 (incorporated by reference
        from our Registration Statement on Form SB-2/A filed on June 30, 2004)                                                              
|        |                                                                                                                                                                                                                                                     
|10.2    | Mining Acquisition
        Agreement dated October 31, 2008 between our company and General Metals
        Corporation (incorporated by reference from our Current Report on Form
        8-K filed on December 10, 2008)                           
|        |                                                                                                                                                                                                                                                     
|10.3    | Amending Agreement
        to the Mining Acquisition Agreement dated December 5, 2008 between our
        company and General Metals Corporation. (incorporated by reference from
        our Current Report on Form 8-K filed on December 10, 2008)
|        |                                                                                                                                                                                                                                                     
|(14)    | Code of Ethics                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                     
|14.1    | Code of Ethics
        and Business Conduct (incorporated by reference from our Annual Report
        on Form 10- K filed on April 20, 2009)                                                                                                        
|        |                                                                                                                                                                                                                                                     
|(31)    | Rule 13a-14(d)/15d-14(d)
        Certifications                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                     
|31.1*   | Section
        302 Certification of Principal Executive Officer                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                     
|31.2*   | Section
        302 Certification of Principal Accounting Officer and Principal Financial
        Officer.                                                                                                                                          
|        |                                                                                                                                                                                                                                                     
|(32)    | Section 1350
        Certifications                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                     
|32.1*   | Section
        906 Certification of Principal Executive Officer                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                     
|32.2*   | Section
        906 Certification of Principal Accounting Officer and Principal Financial
        Officer.                                                                                                                                          

* Filed herewith

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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.

SUNERGY, INC.

/s/ Joseph B.
GuerreroBy: Joseph B. Guerrero, President and Director (Principal
Executive Officer)

Dated: August 25, 2009



/s/ George
PolyhronopolousBy: George Polyhronopolous, Treasurer, Secretary and Director
(Principal Financial Officer)

Dated: August 25, 2009

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