SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549





FORM
      10-QSB







o
              QUARTERLY REPORT PURSUANT TO SECTION
                13 OR
                15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For
                  the quarterly period ended March 31, 2007ORo
              TRANSITION REPORT PURSUANT TO SECTION
                13 OR
                15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
  For
        the
        transition period from ______________ to ______________
  Commission
        File No. 000-32429





GOLDSPRING,
      INC.


(Exact
      name of small business issuer as specified in its charter)





FLORIDA
              (State
                or other jurisdiction of
              incorporation
                or organization)
            7389
              (Primary
                Standard Industrial
              Classification
                Code Number)
            65-0955118
              (I.R.S.
                Employer
              Identification
                No.)





P.O.
      Box
      1118


Virginia
      City, NV 89440


(775)
      847-5272


(Address,
      including zip code, and telephone number,


including
      area code, of registrant's principal executive offices)





Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
      period that the issuer was required to file such reports), and (2)has been
      subject to such filing requirements for the past 90 days. Yes
xNo
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the issuer's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-QSB or any
      amendment to this Form 10-QSB x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12-b2 of the Exchange Act). o Yes  x  No





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the last practicable date: 1,262,114,574 shares of Common Stock, $0.000666
      Par Value per share, as of April 30, 2007.









TABLE
      OF
      CONTENTS




PART
                I - FINANCIAL INFORMATIONITEM
                1.
            UNAUDITED
                FINANCIAL STATEMENTS
            F-1Consolidated
                Balance Sheet as of March 31, 2007 (Unaudited)
            F-1Consolidated
                Statement of Operations (Unaudited)
            F-3Consolidated
                Statement of Cash Flows (Unaudited)
            F-4Notes
                to Financial Statements
            F-5ITEM
                2.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
            1ITEM
                3.
            CONTROLS
                AND PROCEDURES
            8PART
                II - OTHER INFORMATIONITEM
                1.
            LEGAL
                PROCEEDINGS
            9ITEM
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            11ITEM
                3.
            DEFAULTS
                UPON SENIOR SECURITIES
            11ITEM
                4
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            11ITEM
                5.
            OTHER
                INFORMATION
            11ITEM
                6
            EXHIBITS
                AND REPORTS ON FORM 8-K
            11SIGNATURES
            13









**PART
      I - FINANCIAL INFORMATION**




**ITEM
      1 - FINANCIAL STATEMENTS**





**GOLDSPRING,
      INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEET**




**March
                  31, 2007**(Unaudited)**ASSETS**CURRENT
                  ASSETS:Prepaid
                  expenses and other current assets
              
              $
              75,690Deferred
                  financing fees, net
              
              
              716,981TOTAL
                  CURRENT ASSETS
              
              
              792,671PLANT,
                  EQUIPMENT, MINE DEVELOPMENT, AND MINERAL PROPERTIES, NET:Mineral
                  properties
              
              
              1,619,837Plant,
                  Equipment, Mine Development
              
              
              685,088TOTAL
                  PROPERTY AND EQUIPMENT
              
              
              2,304,925Reclamation
                  deposit
              
              
              377,169TOTAL
                  ASSETS
              
              $
              3,474,765





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




F-1


**LIABILITIES
      AND SHAREHOLDERS' DEFICIENCY**




CURRENT
                  LIABILITIESBank
                  Overdraft
              
              $
              2,882Accounts
                  Payable
              
              
              670,288Accrued
                  Expenses
              
              
              1,195,305Accrued
                  liquidated damages
              
              
              1,759,072Accrued
                  interest payable
              
              
              1,998,837Derivative
                  Liabilities
              
              
              274,706Short-Term
                  Lease Obligations
              
              
              29,945Convertible
                  debentures
              
              
              10,262,118Promissory
                  notes
              
              
              2,475,000Other
                  notes payable and current portion of long-term debt
              
              
              406,958TOTAL
                  CURRENT LIABILITIES
              
              
              19,075,111LONG-TERM
                  DEBT AND OTHER LONG-TERM LIABILITIESLong-term
                  debt, net of current portion
              
              
              20,735Long-term
                  Lease obligation, net of current portion
              
              
              39,092Long-term
                  Asset retirement obligations
              
              
              553,190TOTAL
                  LONG-TERM DEBT AND OTHER LONG-TERM LIABILITIES
              
              
              613,017TOTAL
                  LIABILITIES
              
              
              19,688,128SHAREHOLDERS'
                  DEFICITCommon
                  stock, $.000666 par value, 3,950,000,000 shares authorized ,1,178,751,631
                  shares issued and outstanding
              
              
              758,049Additional
                  paid-in capital
              
              
              12,064,333Accumulated
                  deficit - Prior years
              
              
              (27,940,829
              )Accumulated
                  deficit - Current year
              
              
              (1,121,916
              )TOTAL
                  SHAREHOLDERS’ DEFICIENCY
              
              
              (16,240,363
              )TOTAL
                  LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
              
              $
              3,474,765




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




F-2





**GOLDSPRING,
      INC.**


**CONDENSED CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**For
      the three month period ended March 31,**


**2007**
              
              **2006**(Unaudited)
              
              (Unaudited)Revenue
                  from gold sales, net
              
              $
              199,905
              
              $
              537,806Cost
                  and expenses:Costs
                  Applicable to sales (exclusive of depreciation, andamortization
                  shown separately below)
              
              
              -
              
              
              -Depletion,
                  depreciation and amortization
              
              
              73,054
              
              
              150,024Exploration
              
              
              375,994
              
              
              425,776General
                  and administrative
              
              
              133,640
              
              
              180,073Consulting
                  and professional services
              
              
              58,666
              
              
              154,817641,354
              
              
              910,690Operating
                  Loss
              
              
              (441,449
              )
              
              (372,884
              )Other
                  income (expense)Gain
                  on sale of fixed assets
              
              
              -
              
              
              105.397Derivative
                  change in fair value
              
              
              123,606
              
              
              -Interest
                  expense
              
              
              (840,073
              )
              
              (749,646
              )Interest
                  income
              
              
              -
              
              
              -(680,467
              )
              
              (644,249
              )Net
                  loss:
              
              
              (1,121,916
              )
              
              (1,017,133
              )Net
                  loss per common share - basic
              
              $
              (0.001
              )
              $
              (0.002
              )Basic
                  weighted average common shares outstanding
              
              
              1,047,278,758
              
              
              418,221,956




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




F-3


**GOLDSPRING,
      INC.**


**CONDENSED CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE MONTH ENDED MARCH 31, 2007 AND 2006**


**2007**
              
              **2006**(Unaudited)
              
              (Unaudited)**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (1,121,916
              )
              $
              (1,017,133
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Depreciation,
                  depletion, and amortization
              
              
              250,470
              
              
              226,848Interest
                  paid through the issuance of stock
              
              
              240,601
              
              
              -Changes
                  in operating assets and liabilities:Inventories
              
              
              -
              
              
              52,000Prepaid
                  and other current assets
              
              
              (51,083
              )
              
              (54,100
              )Accounts
                  receivable
              
              
              -
              
              
              (199,286
              )Bank
                  overdraft
              
              
              (12,609
              )Accounts
                  payable
              
              
              150,618
              
              
              (870,529Accrued
                  expenses
              
              
              80,131
              
              
              827,040Accrued
                  interest
              
              
              385,012
              
              
              (229,109
              )Net
                  change - derivative change fair value
              
              
              (123,606)
              
              
              -Other
              
              
              (8,878
              )
              
              999,486Net
                  cash used in operating activities
              
              
              (211,260
              )
              
              (264,783
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES:****Net
                  cash provided by (used in) investing activities**
              
              
              -
              
              
              -**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Proceeds
                  from financing net
              
              
              
              
              
              400,000Proceeds
                  from the issuance of notes payable to related party
              
              
              220,000
              
              
              -Principal
                  payment Note Payable
              
              
              (8,740
              )
              
              (60,189Net
                  Cash flows provided by financing activities
              
              
              211,260
              
              
              339,811Net
                  decrease in cash and cash equivalents
              
              
              -
              
              
              75,028
              )Cash
                  - beginning of period
              
              
              -
              
              
              26,865Cash
                  - end of period
              
              $
              -
              
              $
              101,893**Supplemental
                  disclosures of non-cash investing and financing activities:**Issuance
                  of company stock for interest
              
              $
              240,601
              
              
              955,259Issuance
                  of company stock for liquidated
              
              $
              154,346
              
              $
              -Conversion
                  of debt into common shares
              
              $
              212,221
              
              $
              2,320,841


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


F-4




GOLDSPRING,
      INC.


NOTES
      TO
      FINANCIAL STATEMENTS


March
      31,
      2007 AND 2006




**Note
      1 — Nature of Business**




We
      were
      incorporated in the State of Florida effective October 19, 1999 under the name
      of Click and Call, Inc. On June 7, 2000, we filed an amendment to our Articles
      of Incorporation changing our name to STARTCALL.COM, INC. On March 10, 2003,
      we
      changed our name to GoldSpring, Inc. (“we” “Goldspring,” or the “Company”). The
      primary nature of our business is the exploration and development of mineral
      producing properties.




**Note
      2 — Interim Financial Statements**




The
      accompanying interim unaudited condensed financial statements have been prepared
      in accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-QSB and Article
      10 of
      Regulation S-B. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In our opinion, all adjustments (consisting of normal
      recurring accruals) considered necessary for a fair presentation have been
      included. Operating results for the three-month period ended March 31, 2007
      are
      not necessarily indicative of the results that may be expected for the year
      ending December 31, 2007. For further information, refer to the financial
      statements and footnotes thereto included in our Form 10-KSB Report for the
      fiscal year ended December 31, 2006.





**Note
      3 — Going Concern**




The
      accompanying consolidated condensed financial statements have been prepared
      in
      conformity with accounting principles generally accepted in the United States
      of
      America which contemplate continuation of the Company as a going concern.
      However, the Company has year end losses from operations and had minimal
      revenues from operations the three months ended March 31, 2007. During three
      months ended March 31, 2007 the Company incurred a net loss of $1,121,916.
      Further, the Company has inadequate working capital to maintain or develop
      its
      operations, and is dependent upon funds from private investors and the support
      of certain stockholders.





These
      factors raise substantial doubt about the ability of the Company to continue
      as
      a going concern. The financial statements do not include any adjustments that
      might result from the outcome of these uncertainties. In this regard, Management
      is proposing to raise any necessary additional funds through loans and
      additional sales of its common stock. There is no assurance that the Company
      will be successful in raising additional capital.





**Note
      4 — Management Plans**





Our
      plans
      for the continuation of our company as a going concern include developing our
      Plum Mine into a profitable operation and supplementing financing of our
      operations through sales of our unregistered common stock and borrowings from
      affiliates and other shareholders. There are no assurances, however, with
      respect to the future success of these plans. The financial statements do not
      contain any adjustments, which might be necessary, if we are unable to continue
      as a going concern.





F-5




**Note
      5 — Summary of Significant Accounting Policies**




*Forward-Looking
      Statements*





*The
      statements contained in this report on Form 10-QSB that are not purely
      historical are forward-looking statements within the meaning of applicable
      securities laws. Forward-looking statements include statements regarding our
      “expectations,” “anticipation,” “intentions,” “beliefs,” or “strategies”
regarding the future. Forward looking statements also include statements
      regarding fluctuations in the price of gold or certain other commodities, (such
      as silver, copper, diesel fuel, and electricity); changes in national and local
      government legislation, taxation, controls, regulations and political or
      economic changes in the United States or other countries in which we may carry
      on business in the future; business opportunities that may be presented to
      or
      pursued by us; our ability to integrate acquisitions successfully; operating
      or
      technical difficulties in connection with exploration or mining activities;
      the
      speculative nature of gold exploration, including risks of diminishing
      quantities or grades of reserves; and contests over our title to properties.
      All
      forward-looking statements included in this report are based on information
      available to us as of the filing date of this report, and we assume no
      obligation to update any such forward-looking statements. Our actual results
      could differ materially from the forward-looking statements. Among the factors
      that could cause actual results to differ materially are the factors discussed
      in Item 1, “Business - Risk Factors” in our Form 10-KSB for the year ended
      December 31, 2006.*





Summarized
      below are the significant accounting policies of GoldSpring, Inc. (“we,”
“GoldSpring,” or the “Company”). Unless otherwise indicated, amounts provided in
      these notes to the financial statements pertain to continuing
      operations.





*Recent
      Authoritative Pronouncements*




Recent
      accounting pronouncements that the Company has adopted or will be required
      to
      adopt in the future are summarized below.




On
      December 16, 2004, the Financial Accounting Standards Board (the "FASB") issued
      Statement of Financial Accounting Standards, or Statement, No. 123 (revised
      2004), Share-Based Payment ("Statement 123(R)"), which is a revision of FASB
      Statement No. 123, Accounting for Stock-Based Compensation ("Statement 123").
      Statement 123(R) supersedes Accounting Principles Board Opinion No. 25 ("APB
      25"), Accounting for Stock Issued to Employees, and amends FASB Statement No.
      95, Statement of Cash Flows. Generally, the approach in Statement 123(R) is
      similar to the approach described in Statement 123. Statement 123(R) requires
      that all share-based payments to employees, including grants of employee stock
      options, be recognized in the income statement based on their fair values.
      Pro
      forma disclosure is no longer permitted. Statement 123(R) is effective for
      small
      business issuers at the beginning of the first interim or annual period
      beginning after December 15, 2005. As permitted by Statement 123, we currently
      account for share-based payments to employees using APB 25's intrinsic value
      method. We adopted Statement 123(R) on January 1, 2006 using the modified
      prospective method.




In
      November 2004, the FASB issued Statement of Financial Accounting Standards
      (SFAS) 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4." SFAS
      151
      seeks to clarify the accounting for abnormal amounts of idle facility expense,
      freight, handling costs and wasted material (spoilage) in the determination
      of
      inventory carrying costs. The statement requires such costs to be treated as
      a
      current period expense. This statement is effective November 1, 2005 for the
      Company. The Company does not believe that the adoption of SFAS 151 will have
      a
      significant impact on its consolidated financial statements.





F-6




In
      May
      2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections -
      a
      Replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS 154 requires
      retrospective application to prior period financial statements of changes in
      accounting principle, unless it is impracticable to determine either the
      period-specific effects or the cumulative effect of the change. SFAS 154 also
      redefines "restatement" as the revising of previously issued financial
      statements to reflect the correction of an error. This statement is effective
      for accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005 (or fiscal 2007 for the Company). The Company does
      not
      believe that the adoption of SFAS 154 will have a significant impact on its
      consolidated financial statements.




In
      June
      2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
      No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of
      FASB
      Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty
      in
      tax positions. This Interpretation requires that we recognize in our financial
      statements the benefit of a tax position if that position is more likely than
      not of being sustained on audit, based on the technical merits of the position.
      The provisions of FIN 48 become effective as of the beginning of our 2008 fiscal
      year, with the cumulative effect of the change in accounting principle recorded
      as an adjustment to opening retained earnings. We are currently evaluating
      the
      impact that FIN 48 will have on our financial statements.





In
      September 2006, the FASB issued Statement No. 157, "Fair Value Measurements"
      (FAS 157), which defines fair value, establishes a framework for measuring
      fair
      value, and expands disclosures about fair value measurements. The provisions
      of
      FAS 157 become effective as of the beginning of our 2009 fiscal year. We do
      not
      expect the adoption of SFAS No. 157 to have a material impact on its
      consolidated financial position, results of operations or cash
      flows.





In
      September 2006, the FASB issued Statement No. 158, "Employer's Accounting for
      Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB
      Statements No. 87, 88, 106, and 132(R)" (FAS 158). FAS 158 requires that
      employers recognize the funded status of their defined benefit pension and
      other
      postretirement plans on the balance sheet and recognize as a component of other
      comprehensive income, net of tax, the plan-related gains or losses and prior
      service costs or credits that arise during the period but are not recognized
      as
      components of net periodic benefit cost. We do not feel the implementation
      of
      this will effect our financial statements.





In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements" (SAB 108),
      which
      addresses how to quantify the effect of financial statement errors. The
      provisions of SAB 108 become effective as of the end of our 2007 fiscal year.
      We
      do not expect the adoption of SAB 108 to have a significant impact on our
      financial statements.





In
      February 2007, the FASB issued Statement No. 159, "The Fair Value Option for
      Financial Assets and Financial Liabilities, including an amendment of FASB
      Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure
      many financial instruments and certain other items at fair value that are not
      currently required to be measured at fair value and establishes presentation
      and
      disclosure requirements designed to facilitate comparisons between companies
      that choose different measurement attributes for similar types of assets and
      liabilities. The provisions of FAS 159 become effective as of the beginning
      of
      our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will
      have on our financial statements.





F-7




**Note
      6 —Notes Payable Stockholders**




As
      of
      March 31, 2007, the Company is in default of the terms on several outstanding
      note payable with several of its note holders with principal balance due of
      $13,144,076 and accrued interest of $1,998,837. Because we are in default,
      the
      entire note balances have been recorded as current liabilities.




**Note
      7 —Other Items**




***The
      Settlement of the Parent Litigation***




On
      March
      23, 2007, the Company and related parties entered into a global settlement
      with
      Stephen B. Parent, Goldspring’s former CEO and related parties, which brought
      final resolution in the following cases:  (i) GoldSpring,
      Inc. v. Stephen B. Parent, et al. ,
      Case
      No. CV2004-021755, Maricopa County Superior Court (“the State Court Action”);
      and (ii) Robert
      T. Faber, et al. v. Stephen B. Parent, et al. ,
      Case
      No. CV04-2960-PHX-EHC, the United States District Court, District of Arizona
      (“the Federal Court Action”).The settlement agreement contains the following
      terms, among others:




·
            Settlement
                without payment of cash consideration by either side in either
                case




·
            Dismissal
                of both the Federal Court Action and the State Court Action with
                prejudice
                (including dismissal by Parent of the pending Federal Court
                appeal)




·
            Mutual
                release of liability and covenants not to
                sue




·
            Invalidity
                of Consent Resolutions described in the Federal Court’s April 18, 2006
                Order Granting Preliminary Injunction in the Federal Court Action
                and
                agreement by the Parents and Medhi further to not further contest
                or
                challenge in any way the election of GoldSpring’s current Board of
                Directors or any of the actions taken by GoldSpring’s Board of Directors
                or its officers at any time up to the date of this Agreement, including,
                but not limited to the approval and/or implementation of the November
                30,
                2004 financial restructuring.





·
            No
                admission of liability by any party to either the Federal Court Action
                or
                the State Court Action.





*Degerstrom
      Suit*




On
      April
      11, 2006, in the First Judicial District Court, Storey County, Nevada, wherein
      N.A. Degerstrom, Inc. (“Degerstrom”) sued the Company on various counts,
      including breach of contract, *quantum
      merit* ,
      foreclosure of mechanic's lien, and assertion that the Degerstrom lien has
      priority over all other liens on the Plum Mine property. The plaintiff claims
      damages in excess of $806,000 plus interest. The Company subsequently answered
      the Complaint and counterclaimed for breach of contract, breach of implied
      covenant of good faith and fair dealing, and for negligence, alleging damages
      in
      excess of $10,000.





F-8




The
      lawsuit arises out of a dispute as to how much the Company owes the Degerstrom
      for services provided. Pursuant to a December 27, 2005 agreement, the parties
      agreed that the amount to be paid by the Company to Degerstrom would be subject
      to volume reconciliation by aerial survey. According to Company management,
      pursuant to prepared aerial and ground surveys, the Company has been over-billed
      for amounts of ore and waste which have been hauled by Degerstrom. The results
      of the surveys are to be presented to the Court as evidence as to the Company’s
      affirmative defenses that it does not owe the amounts claimed by
      Degerstrom.





Additionally,
      the Company has what it believes to be valid counterclaims, arising out of
      activities of Degerstrom, including, but not limited to, negligent crushing
      of
      ore, failure to accurately measure and charge for waste and ore hauled and
      crushed, and failure to adequately man the job and provide sufficient equipment.
      These activities, as alleged in the Counterclaim, resulted in damages to the
      Company in excess of $10,000.





Degerstrom
      filed a mechanic's lien against the property of Plum, and at the time of filing
      of the Complaint, filed and recorded a lis pendens against the property of
      Plum
      based upon Degerstrom's claim. Counsel has advised management that the Company
      may challenge the lis pendens by asserting that the lis pendens is based upon
      a
      mechanic's lien which is overstated. However, the time is not ripe for the
      bringing of such a motion until the survey results have been presented and
      analyzed. Alternatively, Plum may request the court to establish a bond in
      an
      amount that would secure, pending litigation, Degerstrom's mechanic's lien
      claim. Typically, the court would charge one and one-half times the amount
      it
      found to be the mechanic's lien claim.





Management
      believes the ground and aerial surveys support a much lower amount of ore and
      waste which was processed by Degerstrom than is alleged in the Complaint, and
      if
      the Court accepts that volume reconciliation would be as established by such
      surveys (as is established in the written documentation between the parties),
      there is a reasonable probability of success in reduction, if not elimination,
      of the amount claimed by Degerstrom.





However,
      until the Court rules on the method of volume reconciliation, it is premature
      to
      predict the probability of likelihood of success on the merits.




During
      the first quarter of 2007, there was little activity in this lawsuit, other
      than
      the beginning of discovery by the parties, which is continuing through the
      second quarter. Trial on this matter is currently set for late July
      2007.





**Note
      8 —Convertible Debentures and Notes Payable**




*Convertible
      Debentures-Investors*




We
      completed a private placement of securities transaction during March 2004
      (the “March Offering”). In connection with the offering, we received gross
      proceeds of $10 million from a group of accredited institutional and individual
      investors. Subsequent to the closing of the March Offering, we failed to meet
      certain provisions of the offering that required for us to provide for an
      effective registration statement with the Securities and Exchange
      Commission.




As
      a
      result, and effective November 30, 2004, we restructured the private
      placement transaction and entered into a new subscription agreement. In
      connection with the restructuring, we exchanged 8% convertible notes in the
      aggregate principal amount of approximately $11.1 million and four-year
      warrants to purchase approximately 27.8 million shares of common stock at
      an exercise price of $0.20 per share, subject to anti-dilution adjustments,
      for
      21,739,129 shares of common stock and 21,739,129 warrants to purchase shares
      of
      common stock issued in the March Offering. The principal amount of the
      convertible notes consist of the original $10.0 million investment plus
      approximately $1.1 million of accrued penalties associated with the delay
      in effectiveness of our registration statement covering the resale of the shares
      of common stock held by the investors.




F-9




The
      8%
      convertible notes mature in November 2006. We must make monthly payments of
      102% of 1/20 th of the
      initial principal amount, together with accrued interest. We have the option
      to
      repay such amounts in shares of our common stock at a conversion rate equal
      to
      85% of the average of the five lowest closing bid prices of our common stock
      during the 20 trading days preceding each payment date. We may prepay the
      outstanding principal amount by paying the holders of the notes 115% of the
      then-outstanding principal amount. Each holder of notes may convert the notes
      into shares of common stock at an initial conversion price of $0.20 per share,
      which is subject to anti-dilution adjustments. During the first 20 days
      following the closing date, the conversion price may be reduced to a price
      equal
      to 70% of the average of the five lowest closing prices of our common stock
      during the 20 trading days preceding the closing date.




On
      April
      1, 2005, we failed to make our first payment on the notes and were in default
      of
      the terms of the convertible notes. On December 20, 2004, we received notice
      from holders of approximately $3.8 million of convertible notes of their
      intention to convert into shares of our common stock. The applicable conversion
      rate was approximately $0.11 per share, and we were obligated to issue
      33,817,594 shares of our common stock. Under the terms of the subscription
      agreement, we had three business days following receipt of the notice of
      conversion of notes to deliver to the note holders’ free-trading common stock
      certificates (the “Delivery Date”). Although the shares were due to be delivered
      in December 2004, they were not delivered until 2005. As a result of our failure
      to deliver shares, we were subject to liquidated damages that were settled
      by
      the issuance of notes payable to the investors.




*Convertible
      Debentures-Mandatory Redemption Payment*




The
      failure to deliver the shares by the Delivery Date resulted in liquidated
      damages of 1% of the note principal amount being converted per business day
      after the Delivery Date. We did not deliver the share certificates within the
      period required in the subscription agreement and as a result, in March of
      2005,
      John V. Winfield, a major shareholder and note holder elected to demand payment
      of approximately $6.9 million pursuant to the mandatory redemption payment
      provisions of the subscription agreement and forfeit his right to receive the
      shares in favor of the payment.




On
      March
      31, 2005, we entered into a Settlement Agreement (“Settlement”) with the Mr.
      Winfield and agreed to convert the mandatory redemption payment into six
      Convertible Debentures (“the Debentures”). Accordingly, we accrued a liability
      for approximately $6.9 million and reduced our paid-in-capital account for
      approximately $3.5 million. The Debentures are subject to various covenants
      and
      conditions, including, but not limited to anti-dilution rights and protective
      rights.




The
      Debentures accrue interest at 12% per annum and are payable in monthly
      installments of principal and interest over a 24 month period with the remaining
      entire balance of unpaid principal and interest due on March 31, 2007. The
      debentures are subject to the following terms:




*Conversion
      Rights*




The
      Debentures are convertible, in all or in part, into shares of our common stock
      (“Conversion Shares”) at any time. The conversion price shall is equal to the
      lesser of: (i) eighty-five percent (85%) of the average of the five (5) lowest
      closing bid prices of the common stock as reported by Bloomberg L.P. for the
      twenty (20) trading days preceding the date the Company was obligated to pay
      the
      mandatory redemption Payment; and (ii) eighty-five percent (85%) of the average
      of the five (5) lowest closing bid prices of the common stock as reported by
      Bloomberg L.P. for the twenty (20) trading days preceding the date of any such
      conversion; provided, however, until the effective date of the registration
      statement (see below), the conversion price shall be fifty-percent (50%) of
      the
      average of the five (5) lowest closing bid prices of the Common Stock as
      reported by Bloomberg L.P. for the twenty (20) trading days preceding the date
      of any such conversion. In no event shall the conversion price be higher than
      (i) $0.1131 and (ii) the conversion price of the convertible notes (See Note
      6),
      as adjusted from time to time, whichever is lower.




F-10




*Security
      Agreement*




Pursuant
      to the terms of the Settlement Agreement, the Debentures are granted a priority
      collateralized position, second only to our note payable to the Brockbank Trust
      (See Note 7) in substantially all of our assets.




*Mandatory
      Registration Rights*




The
      terms
      of the Debenture agreement require that we must file with the Securities and
      Exchange Commission on a Form SB-2 registration statement, or such other form
      that we are eligible to use, to register the Conversion Shares, together with
      any other shares of Common stock issuable hereunder for resale and distribution
      under the 1933 and cause to be filed not later than April 30, 2005 and declared
      effective not later than June 30, 2005. If we fail to make effective a
      registration statement we are subject to liquidated damages, an amount equal
      to
      two percent (2%) for each thirty (30) days or part thereof, thereafter of the
      principal amount of the Debenture remaining unconverted and purchase price
      of
      Conversion Shares issued upon conversion of the Debenture owned of record by
      the
      holder. The Company must pay the liquidated damages in cash or an
      amount ****** equal
      to
      two hundred percent of such cash liquidated damages if paid in additional shares
      of registered un-legended free ****** trading
      shares of common stock. As of March 31, 2007 we had failed to make any monthly
      payments on the debentures and are in default.




On
      December 20, 2004, we received notice from holders of approximately $500,000
      of
      convertible notes payable of their intention to convert into shares of our
      common stock. As a result, we recorded the issuance of 4,243,791 shares on
      December 20, 2004. We were required to deliver certificates representing
      unrestricted, free-trading stock within three business days of our receipt
      of
      the notices of conversion (the “Delivery Date”). The failure to deliver the
      shares by the Delivery Date resulted in liquidated damages of 1% of the Note
      principal amount being converted per business day after the Delivery Date.
      Our
      former Chief Executive Officer did not deliver the stock certificates within
      the
      required period. On March 18, 2005 we delivered the certificates representing
      the shares of common stock to these converting note holders. The 84 -day delay
      in delivering the shares resulted in liquidated damages of $403,175. We
      recognized these damages during the fourth quarter of 2004 and the first quarter
      of 2005. We issued convertible notes for the amount of liquidated damages
      due.




**$2,250,000
      Principal Amount Convertible Debenture Financing**





On
      August
      23 and 24, 2006, the Company formally entered into an agreement with several
      investors to loan $1,900,000 to the Company. In March 2007, the Company amended
      the agreement increasing the loan amount to $2,250,000. The notes evidencing
      the
      loan bear interest at the rate of 12% per annum, payable monthly on the first
      of
      each month commencing October 1, 2006, along with 1/24 of the principal amount
      of such notes on each repayment date and were issued between May 18, 2006 -
      August 24, 2006, with the second quarter notes being treated as “bridge debt”
until the loan agreement was formally signed.. The notes are also convertible
      into Common Stock at a 50% discount to market until a registration statement
      registering the Common Stock underlying the notes is effective and at a 15%
      discount to market thereafter. As additional consideration, the investors are
      to
      be issued a total of 20,000,000 warrants to purchase common stock at exercise
      prices based upon the same formulas as for conversion of the amounts due under
      the notes. The notes are secured by a lien on the assets of Goldspring, Inc.
      and
      a pledge of all of the interests in Plum Mine Special Purpose, LLC, which owns
      the Plum Mine operation. In connection with this loan, the lender has agreed
      to
      acquire the existing mortgage on the Plum Mine property from the Brockbank
      Trust
      . To date, $1,300,000 of the $2,200,000 has been funded by the investors.





F-11




The
      notes
      issued as of March 31, 2007 are as follows:





Issued
                date
            
            Face
                amountWinfield
                Debenture Payable
            
            
            5/15/2006
            
            $
            300,000Winfield
                Debenture Payable
            
            
            6/21/2006
            
            
            300,000Winfield
                Debenture Payable
            
            
            8/23/2006
            
            
            300,000Longview
                Debenture Payable
            
            
            8/24/2006
            
            
            300,000Winfield
                Debenture Payable
            
            
            12/12/2006
            
            
            100,000Winfield/Longview
                Debenture Payable
            
            
            First
                Quarter 2007
            
            
            331,120Total
            
            
            
            
            $
            1,631,120




Accordingly,
      at March 31, 2007 and 2006, we classified the following convertible debentures
      as current liabilities as follows:




**2007**
            
            **2006**Convertible
                Debentures Payable-Investors
            
            $
            2,438,962
            
            $
            3,899,619Convertible
                Debentures Payable- Mandatory Redemption payment
            
            
            5,835,688
            
            
            6,885,184Convertible
                Debentures Payable- Failure to Deliver Shares
            
            
            356,348
            
            
            356,348Convertible
                Notes Payable - 2006
            
            
            1,631,120
            
            
            -Total
            
            $
            10,262,118
            
            $
            11,141,151




**Note
      9 —Promissory Notes Payable**




*Promissory
      Notes Payable—July Financing*




In
      July
      of 2005, we borrowed $1.2 million from companies controlled by John V. Winfield,
      a major shareholder. Proceeds from the notes were reduced by a 33.3% original
      issue discount and other origination fees. Net proceeds received by the Company
      from the borrowing were $740,000. The notes accrue interest at 15% per annum
      and
      are payable in monthly installments of principal and interest over a 24 month
      period with the remaining entire balance of unpaid principal and interest due
      on
      July 15, 2007.




F-12




The
      notes
      are collateralized by substantially all of the Company’s assets subject to the
      security interest of the Brockbank Trust (See Note 7). As of March 31, 2007
      we
      had failed to make any monthly payments on the notes and are in
      default.




*Promissory
      Notes Payable—September Financing*




In
      September of 2005, we borrowed $300,000 from Longview Fund L.P., a major
      shareholder. Proceeds from the notes were reduced by a 33.3% original issue
      discount and other origination fees. Net proceeds received by the Company from
      the borrowing were $165,500.The notes accrue interest at 15% per annum and
      are
      payable in monthly installments of principal and interest over a 24 month period
      with the remaining entire balance of unpaid principal and interest due on July
      15, 2007. The notes are collateralized by substantially all of the Company’s
      assets subject to the security interest of the Brockbank Trust (See Note 7)
      and
      the Winfield convertible debentures of March 2005.




The
      notes
      share a security interest with the Winfield notes issued in July 2004. As of
      March 31, 2007, we had failed to make any monthly payments on the notes and
      are
      in default.




*Promissory
      Notes Payable: December Financing*




Accordingly,
      at March 31, 2007 and 2006, we classified the following notes payable as current
      liabilities as follows:




**2007**
            
            **2006**Promissory
                Notes Payable-July 2005 Financing
            
            $
            1,200,000
            
            $
            1,200,000Promissory
                Notes Payable-September 2005 Financing
            
            
            300,000
            
            
            300,000Promissory
                Notes Payable-December 2005 Financing
            
            
            575,000
            
            
            575,000Promissory
                Notes Payable-February 2006 Financing
            
            
            250,000
            
            
            250,000Promissory
                Notes Payable-March 2006 Financing
            
            
            150,000
            
            
            150,000Total
            
            $
            2,475,000
            
            $
            2,475,000




**Note
      10 —Other Long-term Debt**




*Notes
      Payable- Plum Mine*




We
      have a
      non-interest bearing note payable to a shareholder related to our purchase
      of
      the Plum Mining property. The note is payable in ten quarterly payments through
      June 2006.




*Notes
      Payable- Seller Note*




In
      connection with our acquisition of the Justice, Woodville and Keystone patented
      claims we issued a promissory note to the seller for $160,000. The note is
      payable in ten quarterly payments through June 2008.




F-13




*Notes
      Payable- Equipment Financing*




During
      2004, we purchased certain equipment and financed our purchases through GMAC
      and
      Ford Motor Company credit agencies. Aggregated principal and interest due
      pursuant to the financings is due monthly in equal installments of $1,054,
      at an
      averaged interest rate of 7.2%. The equipment purchased is pledged as collateral
      for the debt. At March 31, 2007 and 2006, we had the following amounts due
      under
      the financings as follows:




**2007**
            
            **2006**Long-term
                Debt-Current Plum Mine
            
            $
            9,758
            
            $
            9,108Long-term
                Debt-Current Seller Note
            
            
            397,200
            
            
            414,000Other
                Long-term Debt-Current
            
            
            -
            
            
            28,870Total
            
            $
            406,958
            
            $
            451,978





**2007**
            
            **2006**Long-term
                Debt-non current Plum Mine
            
            $
            20,735
            
            $
            32,328Long-term
                Debt-non current Seller Note
            
            
            -
            
            
            96,000Other
                Long-term Debt -Non-current
            
            
            -
            
            
            69,572Total
            
            $
            20,735
            
            $
            197,900




Principal
      payments on other long-term debt related to equipment financing for the next
      four years are as follows:




2007
            
            $
            8,0752008
            
            $
            11,4412009
            
            $
            10,9772010
                and thereafter
            
            $
            -Total
            
            $
            30,493





*Convertible
      Notes Payable-Failure to Deliver Shares*




In
      March
      of 2005, and pursuant to our settlement with investors for our failure to
      deliver shares of our common stock upon their conversion of debentures during
      2004 (See above), we issued convertible notes payable that accrue interest
      at 8%
      and are payable in equal monthly installments including interest beginning
      April
      1, 2006. In the event of our default on the notes the interest rate increased
      to
      15%.




*Conversion
      Rights*




The
      notes
      are convertible, in all or in part, into shares of our common stock at any
      time
      at an initial conversion price of $0.20, subject to certain anti-dilution
      provisions that include the sale of assets, reclassifications of our equity,
      issuance of additional shares and stock splits and dividends.




*Borrower’s
      Repayment Election* .





The
      monthly amount due on a repayment date shall be paid by the Company at its
      election (i) in cash at the rate of 102% of such monthly amount otherwise due
      on
      such repayment date within three (3) business days of the applicable repayment
      date, or (ii) with registered, freely transferable common stock at an applied
      conversion rate equal to eighty-five percent (85%) of the average of the five
      (5) lowest closing bid prices of the common stock as reported by Bloomberg
      L.P.
      for the twenty (20) trading days preceding such repayment date.




F-14




On
      April
      1, 2005, we failed to make our first payment on the convertible debentures
      and
      were in default of the terms of the convertible notes. At March 31, 2007 and
      2006 we classified the following notes payable as current liabilities as
      follows:




**2007**
            
            **2006**Convertible
                Notes Payable
            
            $
            10,262,118
            
            $
            11,141,151Promissory
                notes
            
            
            2,475,000
            
            
            2,475,000Total
            
            $
            12,737,118
            
            $
            13,616,151





F-15




**Item
      2.**  **Management’s
      Discussion and Analysis or Plan of Operations**





The
      following discussion provides information that we believe is relevant to an
      assessment and understanding of the consolidated results of operations and
      financial condition of our company. It should be read in conjunction with the
      Consolidated Financial Statements and accompanying Notes.





The
      following discussion addresses matters we consider important for an
      understanding of our financial condition and results of operations as of and
      for
      the quarter ended March 31, 2007, as well as our future results.





*Overview*





We
      are a
      North American precious metals mining company with an operating gold and silver
      test mine in northern Nevada. Our Company was formed in mid-2003, and we
      acquired the Plum property in November 2003. In our relatively short history,
      we
      secured permits, built an infrastructure and brought the Plum exploration
      project into test mining production. Beginning in 2005, we started
      acquiring additional properties around the Plum project in Northern Nevada,
      expanding our footprint and creating opportunities for exploration. We are
      an
      emerging company, looking to build on our success through the acquisition of
      other mineral properties in North America with reserves and exploration
      potential that can be efficiently put into near-term production. Our objectives
      are to increase production; increase reserves through exploration and
      acquisitions; expand our footprint at the Plum mine; and maximize cash flow
      and
      return for our shareholders.




We
      started to reap the benefits of the operational improvement program that we
      initiated in 2005, including our first reported net profit for the first quarter
      of 2006. This program began with a complete review of every facet of the
      operation to insure maximum efficiency. We have nearly completed our review
      of
      the various processes and have implemented several changes, which have increased
      efficiencies. Most recently, we have made the decision to take over our mining
      operations, which are currently being performed by an outside contractor.
      Although we had planned to have our mining operation completely in place by
      the
      end of May 2006, delays in financing have dictated that we rely on contract
      mining assistance through the end of November. However, when we do take over
      operations, based on our mine plan and internal calculations and reach our
      targeted production numbers, we expect our production cost to be less than
      $400
      per ounce.




Our
      first
      quarter production was hampered by inclement weather in northern Nevada in
      late
      2005 and early 2006. Our Plum Mine received fourteen inches of rain between
      mid-December and the end of February, filling our leach ponds, including our
      one
      hundred year storm pond, nearly to capacity. The high levels of effluents in
      the
      ponds prevented us from adding additional reagents to our leach pads. Because
      we
      were unable to add new material to the pad and put it under leach, we ceased
      mining operations in early-January. Our team at the mine did an excellent job,
      in a challenging situation, to insure the environmental integrity of our
      operation. The team worked closely with the regulatory authorities throughout
      this process. In order to resume mining and processing with the necessary
      reagents, the level of effluents in the ponds must be reduced through
      evaporation. The necessary level was reached in late June.





Due
      to
      the six month cessation of mining activities, there was little ore to
      produce in the second quarter, and therefore revenues in the second quarter
      were
      markedly lower in the first quarter, when there was still a supply of ore,
      mined
      in the fourth quarter of 2005, to process and sell. A lapse in mining typically
      leads to reduced saleable materials in the next fiscal quarter as the
      mining-processing-sales cycle is approximately 60 - 90 days. However, as mining
      activities recommenced in late June, the fourth quarter should yield
      comparatively favorable revenue results. The third quarter marked the
      recommencement of mining activities. Recent focus has including (i) ramping
      up
      of mining and processing on a continued basis; (ii) stockpiling of ore for
      processing during inclement weather; and (iii) transition preparation for
      December 1, 2006 takeover of mining operations by the Company’s own staff.
      Furthermore, significant fluid management steps had been taken to avoid another
      shut down of activity as experienced during the first five months of
      2006.




1




Our
      Company has been involved in litigation with its founder since late 2004 when
      he
      attempted a takeover of the Company through a purported consent solicitation
      in
      violation of federal securities laws. The litigation was recently settled,
      thus
      the Company can focus resources on production and exploration.





In
      the
      first quarter three of our four remaining directors resigned to pursue other
      opportunities which leaves the Company with the opportunity to seek a new Board
      well experienced in the mining industry.





The
      Company turned a corner in the first quarter of 2007 with the final settlement
      of the Parent litigation as continued financial and human resource drain which
      all but consumed the Company is finally over. Given the end of this litigation,
      change in Board composition and continued challenges in capital raising efforts,
      the Company’s management has determined that there is a need to reevaluate the
      Company’s business plan with a view toward the best way to maximize shareholder
      value and protection of our secured creditors.





In
      detail, this evaluation is covering the following matters:





·
            Expanding
                our footprint in the Comstock Region and other acquisition
                opportunities





·
            Further
                exploration in the Comstock Region to accomplish the
                above





·
            Completion
                of the Plum Mine reserve report





·
            Strategic
                acquisitions in other areas of North
                America





Once
      the
      Company has made some final decisions as to the best way to realign its business
      plan, it will then need to look at various capital raising opportunities to
      fund
      the business plan.





In
      conjunction with the business plan reconsideration, the Company has taken steps
      to minimize operations in order to conserve cash flow and has presented a
      temporary Mine Closure Plan to the NDEP, which if approved, would call for
      closure through March 2008, at the latest.




There
      are
      also several specific risk factors attendant to operation of a gold mining
      concern which bear repetition here due to events in 2006, although this is
      not
      intended to be a full blown list of risk factors (and we encourage you to review
      our October 11, 2005 424(b)(3) for a further discussion of risk factors
      attendant to our business):




·
            Weather
                - As disclosed in this Quarterly Report, excessive rains has caused
                material delays in our ability to operate as high levels of water
                in our
                leaching ponds and flooding have prevented us from being able to
                leach
                materials, a necessary part of the gold production process. Excessive
                snows, which can occur in the area in which the Plum Mine is located,
                would also hamper mining as the Plum Mine is an open pit
                mine.·
            Current
                Political Instability in the Middle East - Commodities such as gold
                tend
                to have widely fluctuating markets, and the current problems in areas
                such
                as Lebanon and Iraq, which are causing much political and economic
                instability internationally, may very well be a contributing factor
                to the
                volatile gold market.




2




There
      are
      also risks involved in the fact that one individual and his affiliates, as
      of
      March 31, 2007, beneficially own in excess of 50% of our voting stock. Pursuant
      to our recent financing agreement, this convertible debt holder and his
      affiliates with a 61 day notice can waive the 4.9% ownership restriction,
      allowing him to convert 100% of his convertible debt and related interest,
      which
      totals $7,862,000 at March 31, 2007, into our common shares. This group, if they
      waive the ownership restriction and convert all convertible debt and related
      interest into our voting common stock *,* may
      take
      actions that could conflict with your interests *.* This
      includes the election of Company directors, approval of actions generally
      requiring the approval of the holders of our voting stock, including
      adopting amendments to our articles of incorporation and bylaws and approving
      mergers, certain acquisitions or sales of all or substantially all of our
      assets, which could delay or prevent someone from acquiring or merging with
      us
      or limit the ability of our other stockholders to approve transactions that
      they
      may deem to be in their best interests.




***Results
      of Operations and Operational Plan***




Our
      Plum
      Mine, which is located in Storey County, Nevada, went into test mining
      production in late third quarter 2004. We have not established reserves on
      this
      exploration project. Therefore, all of our activities on this property are
      considered test mining or exploratory in nature. One of our top priorities
      in
      2005 was to improve efficiencies and increase test mining production at our
      Plum
      Mine. In March 2005, we initiated a program to improve the operational
      efficiency of our mining operation. As part of this program, we consolidated
      our
      corporate office with the Plum Mine office. We also made improvements to our
      processing plant and took over crushing operations from our third-party
      contractor, reducing costs and increasing our control over the crushing process.
      Our improvement program continued throughout the year. In November 2005, we
      retained licensed mining engineer Jim Golden, who became our COO in 2006, to
      conduct a comprehensive review of all aspects of the Plum Mine operation,
      including the overall mine plan, with the objective of further improving
      efficiency, increasing production, and reducing costs. Furthermore Mine
      Development and Associates of Reno, Nevada is expected to complete a detailed
      mine plan and a reserve report for the Plum Mine by the end of the third quarter
      2007. Recent changes have included revising the mine plan to reflect the current
      higher gold prices; adding various efficiencies in the processing area; and
      re-positioning personnel to maximize overall performance. The mine plan and
      reserve report are the culmination of a twelve-month undertaking by our Company
      and Mine Development & Associates. We believe that these improvements,
      including the updated mine plan, will improve our overall performance at the
      Plum Mine.




Inclement
      weather in northern Nevada in late 2005 and early 2006 presented a challenge
      to
      our Plum Mine operation. The mine received twelve inches of rain between
      mid-December and mid-January, filling our leach ponds nearly to capacity. This
      situation impacted our ability to mine and to process at our normal capacity,
      thus decreasing production. Our team at the mine did an excellent job, in a
      challenging situation, to insure the environmental integrity of our operation.
      The team worked closely with the regulatory authorities throughout this process.
      In mid-January, we ceased mining operations to allow time for our crew to
      stabilize the leach ponds and the processing plant. During this interruption
      from mining, we took steps to implement additional process modifications
      identified through our operational improvement plan.




3




We
      also
      plan to continue our exploration program in 2007 if capital resources allow.
      In
      March 2006, we retained Larry Martin, a registered geologist, to oversee our
      exploration program at the Plum Mine and in the Comstock Lode district. Mr.
      Martin has over twenty-five years of diverse geological and exploration
      experience in the mining industry. He has worked for several major mining
      enterprises, including Peter Kiewit, where he served as manager of geological
      services. We have allocated a budget of $500,000 to explore and develop our
      claims at the Plum Mine. We hoped to begin exploration in late spring or
      early summer of 2006 but due to inability to obtain a large enough capital
      investment this exploration is substantially delayed into sometime in 2007
      (assuming the Company is able to secure adequate financing). We intend to target
      our exploration toward replenishing and expanding our mineralized material
      inventory at our existing mine and toward developing new mineral properties.
      The
      successful location of additional mineralized material on the existing property
      would allow us to expand the size and the lifespan of the Plum mining project,
      exclusive of new property acquisitions. It is our belief that we possess an
      advantage with our status as likely the only heap leach gold mining permit
      holder in the area. This permit is relatively difficult to obtain, and it is
      one
      that we can expand to include new areas in the event we locate and wish to
      process new deposits.




We
      held
      our Annual Shareholders’ Meeting on October 26, 2005 in Carson City, Nevada. At
      that meeting, our shareholders elected the following slate of five independent
      directors: Christopher L. Aguilar, Todd S. Brown, Stanley A. Hirschman, Bill
      Nance and Rex L. Outzen. The new Board of Directors elected Mr. Aguilar to
      serve
      as Chairman of the Board. The Board also re-elected Robert Faber to serve as
      our
      Company’s President and Chief Executive Officer and elected Lisa Boksenbaum to
      serve as our Company’s Secretary and Treasurer. Lisa Boksenbaum resigned from
      her position with our company in February 2006. All of the Board members, other
      than Bill Nance, resigned effective on or before March 23, 2007.




In
      December 2005, we initiated a review of the invoices of our mining contractor.
      Specifically, we sought to reconcile the volume of material for which we were
      billed with the volume of material that was actually mined. We used an outside
      surveyor to conduct a comprehensive analysis of bank cubic yards mined. The
      results of the survey indicated that we had been over-billed by over $500,000.
      We met with the mining contractor in early 2006 to discuss this issue and
      presented our proposed billing adjustment. The mining contractor has contracted
      an engineering firm to perform an independent analysis of the data generated
      from our surveys to determine the accuracy of our calculations. We anticipated
      a
      resolution of this issue by June of 2006 but due to continuing litigation this
      issue is still outstanding.





In
      all
      2006 proved to be another challenging year for the Company although some
      advances were made. In the first half of 2006, weather conditions caused delays
      which prevented any ore processing and mining activity ceased. Additionally,
      the
      Company undertook substantial corrective measures to ensure proper water
      management and continuation of mining activity during future heavy moisture
      periods. Additionally, an aerial survey was completed which confirmed over
      billing by Degerstrom Inc, the former mining contractor. The Company took
      advantage of the “down time” in 2006 to improve the overall operation of the
      mine with solid results in reduced costs and improved efficiencies.





In
      the
      second half of 2006, a new mining contractor was hired, with mining activities
      recommencing in July 2006 and again suspended in early 2007.





On
      a
      positive note is the resolution, without liability to the Company, of the 2
      and
1⁄2 year legal battle with a former director thus stopping the ongoing drain of
      litigation on the human and financial resources of the Company. To date, over
      $1,000,000 was spent on legal fees in that litigation. With the litigation
      settled, all diverted human and financial resources can be refocused on
      readjusting the business plan of the Company with the goal of restarting and
      revamping operations no later than early 2008.




4





Among
      the
      exploration and business development activities that were to be completed in
      2007 are:





·
            Ore
                body delineation





·
            Reserve
                definition





·
            Completion
                of reserve report





·
            Development
                of comprehensive mine plan from exploration
                results





·
            Increase
                of ore reserves





·
            Augment
                ability to mine and operate at more efficient
                levels





·
            Intent
                to cease mine operations until completion of the exploration program
                and
                related reports





·
            Expansion
                of existing footprint in the Comstock
                region





·
            Identification
                of properties outside the Comstock region to complement Comstock
                activities and increase Company
                operations




**Due
      to our current plan to realign our operations, we may not be able to meet any
      or
      all of the above goals.**





***Placer
      Claims, Water Rights, and Mineral Permits***




We
      originally became a mineral company through an acquisition of unpatented placer
      mineral claims and the Big Mike copper claims in June 2003 from Ecovery, Inc.
      The transaction had an effectuation date of March 11, 2003. Specifically, that
      acquisition provided us with a number of Nevada-based placer claims, including
      the Gold Canyon and Spring Valley claims, and 17 unpatented lode claims called
      the Big Mike Copper property. This acquisition did not include any real property
      rights. In November 2003, we acquired the Plum mine facility as well as water
      rights that are usable at Plum Mine and the Gold Canyon and Spring Valley placer
      claims.




5




***Comparative
      Financial Information***




**Quarter
                ended March 31, 2007**
            
            **Quarter
                ended March 31, 2006**
            
            **Difference**Revenue
            
            $
            199,905
            
            $
            537,806
            
            
            (337,901
            )Reclamation,
                Exploration and Test Mining Expense
            
            
            375,994
            
            
            425,776
            
            
            (49,782
            )General
                and administration
            
            
            133,638
            
            
            180,073
            
            
            (46,435
            )Consulting
                and Professional Service
            
            
            58,666
            
            
            154,817
            
            
            (96,150
            )Gain
                on Sale of Fixed Asset
            
            
            -0-
            
            
            105,397
            
            
            (105,397
            )Interest
                Expense
            
            
            804,073
            
            
            749,646
            
            
            54,427Net
                Loss
            
            
            ($1,121,916
            )
            
            ($1,017,133
            )
            $
            181,607




During
      the first quarter of 2007, we sold 307 ounces of gold at an average price of
      $651 per ounce as opposed to 992 ounces of gold at an average price of $ 542
      per
      ounce during the first quarter of 2006. Our gold production for the first
      quarter 2006 was adversely impacted by the weather conditions from mid December
      2005 through February 2006. The accumulation of precipitation during this period
      filled our leach ponds, including our one hundred year storm pond, to capacity
      preventing us from adding additional reagents to our leach pads, which slowed
      production. In early January, we ceased mining since we could not efficiently
      leach any new material further reducing production. In spite of these unusual
      challenges, we were able to continue processing solution and producing gold
      during this period





Test
      Mining Expenses in the first quarter of 2007 were $ 49,782 less than the first
      quarter of 2006. In early 2005 we initiated an operational improvement program.
      This program focused on enhancing the efficiencies of **e** ach
      of
      our processes as well as insuring we had the right personnel. **** We
      believe we are now starting to experience the benefits of the operational
      improvement program. We expect to realize further improvements in the upcoming
      months.




General
      and administrative expenses for the three months ended March 31, 2007 and March
      31, 2006 were $133,638and $180,073 , respectively. The $46,435 decrease in
      G&A is based primarily upon reduction in personnel and other operating costs
      due to temporary mine shutdown plans.




The
      $96,150 variance in consulting and professional services in the first quarter
      2007 when comparing the same period in 2006 reflects a reduction in legal fees.





Interest
      expense for the first quarter of 2007 was $54,427 higher than the same quarter
      of 2006. This variance reflects the issuance of additional interest bearing
      notes. At March 31, 2007, our Company had approximately $13,144,000 of
      outstanding debt bearing an average interest rate of 18%, and at March 31,
      2006,
      our Company had approximately $14,266,028 of outstanding debt bearing an average
      interest rate of 15%.




***Liquidity
      and Capital Resources***




We
      are
      actively seeking additional capital to meet our working capital needs and to
      grow our business. We recognize that our cash resources are limited. Our
      continued existence and plans for future growth depend on our ability to obtain
      the capital necessary to operate, through the generation of revenue or the
      issuance of additional debt or equity. In 2006, we raised an aggregate of
      $1,700,000 through three financing transactions. In the first quarter 2007,
      we
      completed an additional financing transaction, which provided us with $220,000
      in net funding. While this additional funding may meet our immediate working
      capital needs, if we are not able to generate sufficient revenues and cash
      flows
      or obtain additional or alternative funding, we will be unable to continue
      as a
      going concern. We have yet to realize an operating profit at our Plum Mine
      location. As disclosed in the report of our independent registered public
      accounting firm in our financial statements included in this Form 10-KSB for
      the
      year ended December 31, 2006, our recurring losses and negative cash flow from
      operations raise substantial doubt about our ability to continue as a going
      concern.




6





At
      the
      date of filing, we do not have any specific commitments for additional
      financing, which will be necessary to implement our revised business plan.
      Additionally, without additional funding, it is unlikely that we will be able
      to
      remain in operation long enough to have the time necessary to fully revise
      the
      business plan.




Our
      operations are significantly affected by changes in the market price of gold.
      Gold prices can fluctuate widely and may be affected by numerous factors, such
      as expectations for inflation, levels of interest rates, currency exchange
      rates, central bank sales, forward selling or other hedging activities, demand
      for precious metals, global or regional political and economic crises, and
      production costs in major gold-producing regions, such as South Africa and
      the
      former Soviet Union. The aggregate effect of these factors, all of which are
      beyond our control, is impossible for us to predict. The demand for and supply
      of gold affect gold prices, but not necessarily in the same manner as supply
      and
      demand affect the prices of other commodities. The supply of gold consists
      of a
      combination of new mineral production and existing stocks of bullion and
      fabricated gold held by governments, public and private financial institutions,
      industrial organizations, and private individuals. As the amount produced in
      any
      single year constitutes a small portion of the total potential supply of gold,
      normal variations in current production do not have a significant impact on
      the
      supply of gold or on its price. If gold prices decline substantially, it could
      adversely affect the realizable value of our assets and potential future results
      of operations and cash flow.




7


**Item
      3.**  **Controls
      and Procedures**




Based
      on
      the most recent evaluation, which was completed as of the end of the period
      covered by this Form 10-QSB, we believe our company’s disclosure controls and
      procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e) are
      effective to ensure that information required to be disclosed by us in this
      report is accumulated and communicated to our management, including our
      principal executive officer and principal financial officer, as appropriate,
      to
      allow timely decisions regarding required disclosure. Our executive officers
      have also concluded that our disclosure controls and procedures are also
      effective to give reasonable assurance that the information required to be
      disclosed in our filings is recorded, processed, summarized and reported within
      the time periods specified in the rules and forms of the Commission.




We
      have
      identified conditions as of March 31, 2007 that we believe are significant
      deficiencies in internal controls that include: 1) a lack of segregation of
      duties in accounting and financial reporting activities; and 2) the lack of
      a
      sufficient number of qualified accounting personnel. We have taken corrective
      measures to remedy these deficiencies. These measures include our consolidation
      of the corporate office with the office at the Plum Mine operation. This
      consolidation has provided the corporate office with additional accounting
      personnel. We believe that the presence of additional qualified accounting
      personnel will allow us to effectively correct the lack of segregation of duties
      in accounting and financial reporting activities.




Our
      former Chief Financial Officer became our Chief Executive Officer in September
      2004. Our Company has not hired another individual to act as Chief Financial
      Officer. We believe the absence of a full-time Chief Financial Officer or Chief
      Accounting Officer has resulted in a significant deficiency with respect to
      the
      lack of qualified accounting personnel. We have been able to mitigate this
      deficiency by engaging outside consultants to assist the Company in its
      accounting activities, but believe that the only effective long-term solution
      to
      our accounting needs is to hire a qualified CFO. Due to our budgetary
      constraints and the small size of our company we are uncertain as to when we
      will be able to accomplish this.




We
      do not
      believe that these deficiencies constitute material weaknesses because of (i)
      additional accounting support through the office consolidation with Plum Mine
      and (ii) the use of outside consultants.




We
      are
      also in the process of taking additional corrective measures to further remedy
      the deficiencies in future periods.




There
      have been no changes during the quarter ended March 31, 2007 in our Company's
      internal control over financial reporting identified in connection with the
      evaluation required by Exchange Act Rules 13a-15(d) and 15d-15(d) that have
      material affected, or are reasonably likely to materially affect, our internal
      controls over our financial reporting.




8


**PART
      II - OTHER INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





***The
      State Court Case***





*Background*




On
      November 9, 2004, we filed a lawsuit in Maricopa County (Arizona) Superior
      Court
      against defendants Stephen B. Parent, Ron Haswell, Walter Doyle, Seth Shaw,
      Antonio Treminio, together with their spouses, and Ecovery, Inc., a Nevada
      corporation, or Ecovery.




The
      12-count complaint alleges claims for violations of Arizona’s racketeering act,
      state-law securities fraud (primary and secondary liability), common-law fraud,
      negligent misrepresentation, breach of fiduciary duty, negligence/gross
      negligence, breach of contract, unjust enrichment/restitution, theft/conversion,
      conspiracy liability, and injunctive relief. In essence, the complaint alleges
      that Stephen Parent misrepresented the value of certain placer mining claims
      that his company, Ecovery, sold to us in 2003 in exchange for approximately
      99,000,000 shares of our stock; that Ecovery no longer had good title to the
      mining claims when they were sold to us; that Mr. Parent and the other
      named defendants conspired to defraud us out of approximately 24,000,000 shares
      of our stock; and that Mr. Parent misappropriated more than $300,000 in company
      funds.




***The
      Federal Court Case***




*Background*




Stephen
      B. Parent and several others purporting to represent a majority of the
      shareholders of our company adopted Consent Resolutions in Lieu of a Special
      Meeting of Shareholder’s dated December 9, 2004, and Mr. Parent, Jerrie W.
      Gasch, and Purnendu K. Rana Medhi, each of whom served as a director of our
      company until Mr. Medhi’s resignation in April 2005, adopted Directors’ Consent
      Resolutions (together the “December Consent Resolutions”) dated December 10,
      2004. Taken together, the December Consent Resolutions, by their purported
      terms, removed John F. Cook, Robert T. Faber, Leslie L. Cahan, Todd S. Brown,
      Christopher L. Aguilar, Stanley A. Hirschman, and Phil E. Pearce as directors,
      rescinded the restructuring of a $10 million financing transaction entered
      into
      in March 2004, removed Mr. Faber as President of our company, named Mr. Parent
      as President of our company and his wife as Secretary of our company, designated
      Mr. Parent as the sole signing officer of our company’s bank accounts, and
      terminated our company’s legal counsel.





On
      December 22, 2004, Robert T. Faber and Leslie L. Cahan (collectively, the
“plaintiffs”), who are shareholders and directors of our company, filed a
      lawsuit in the United States District Court for the District of Arizona,
      entitled Robert T. Faber, et al. v. Stephen B. Parent, et al., No.
      CV04-2960-PHX-EHC (“the Litigation”). The plaintiffs asserted claims in both
      their individual capacities and derivatively, on behalf of our company, against
      directors Stephen B. Parent, Jerrie W. Gasch, and Purnendu K. Rana Medhi
      (collectively, the “defendants”), alleging that, by adopting the Consent
      Resolutions, the defendants had unlawfully orchestrated an illegal coup to
      wrest
      control of our company from its current officers and directors.





9




***The
      Settlement***




On
      March
      23, 2007, the Company and related parties entered into a global settlement
      with
      Stephen B. Parent, Goldspring’s former CEO and related parties, which brought
      final resolution in the following cases:  (i) GoldSpring,
      Inc. v. Stephen B. Parent, et al. ,
      Case
      No. CV2004-021755, Maricopa County Superior Court (“the State Court Action”);
      and (ii) Robert
      T. Faber, et al. v. Stephen B. Parent, et al. ,
      Case
      No. CV04-2960-PHX-EHC, the United States District Court, District of Arizona
      (“the Federal Court Action”).The settlement agreement contains the following
      terms, among others:




·                 
      Settlement without payment of cash consideration by either side in either
      case




·                 
      Dismissal of both the Federal Court Action and the State Court Action with
      prejudice (including dismissal by Parent of the pending Federal Court
      appeal)




·                 
      Mutual release of liability and covenants not to sue




·                 
      Invalidity of Consent Resolutions described in the Federal Court’s April 18,
      2006 Order Granting Preliminary Injunction in the Federal Court Action and
      agreement by the Parents and Medhi further to not further contest or challenge
      in any way the election of GoldSpring’s current Board of Directors or any of the
      actions taken by GoldSpring’s Board of Directors or its officers at any time up
      to the date of this Agreement, including, but not limited to the approval and/or
      implementation of the November 30, 2004 financial restructuring.





·                 
      No admission of liability by any party to either the Federal Court Action or
      the
      State Court Action




*Degerstrom
      Suit*




On
      April
      11, 2006, in the First Judicial District Court, Storey County, Nevada, wherein
      N.A. Degerstrom, Inc. (“Degerstrom”) sued the Company on various counts,
      including breach of contract, *quantum
      merit* ,
      foreclosure of mechanic's lien, and assertion that the Degerstrom lien has
      priority over all other liens on the Plum Mine property. The plaintiff claims
      damages in excess of $806,000 plus interest. The Company subsequently answered
      the Complaint and counterclaimed for breach of contract, breach of implied
      covenant of good faith and fair dealing, and for negligence, alleging damages
      in
      excess of $10,000.





The
      lawsuit arises out of a dispute as to how much the Company owes the Degerstrom
      for services provided. Pursuant to a December 27, 2005 agreement, the parties
      agreed that the amount to be paid by the Company to Degerstrom would be subject
      to volume reconciliation by aerial survey. According to Company management,
      pursuant to prepared aerial and ground surveys, the Company has been over-billed
      for amounts of ore and waste which have been hauled by Degerstrom. The results
      of the surveys are to be presented to the Court as evidence as to the Company’s
      affirmative defenses that it does not owe the amounts claimed by
      Degerstrom.





Additionally,
      the Company has what it believes to be valid counterclaims, arising out of
      activities of Degerstrom, including, but not limited to, negligent crushing
      of
      ore, failure to accurately measure and charge for waste and ore hauled and
      crushed, and failure to adequately man the job and provide sufficient equipment.
      These activities, as alleged in the Counterclaim, resulted in damages to the
      Company in excess of $10,000.




10





Degerstrom
      filed a mechanic's lien against the property of Plum, and at the time of filing
      of the Complaint, filed and recorded a lis pendens against the property of
      Plum
      based upon Degerstrom's claim. Counsel has advised management that the Company
      may challenge the lis pendens by asserting that the lis pendens is based upon
      a
      mechanic's lien which is overstated. However, the time is not ripe for the
      bringing of such a motion until the survey results have been presented and
      analyzed. Alternatively, Plum may request the court to establish a bond in
      an
      amount that would secure, pending litigation, Degerstrom's mechanic's lien
      claim. Typically, the court would charge one and one-half times the amount
      it
      found to be the mechanic's lien claim.





Management
      believes the ground and aerial surveys support a much lower amount of ore and
      waste which was processed by Degerstrom than is alleged in the Complaint, and
      if
      the Court accepts that volume reconciliation would be as established by such
      surveys (as is established in the written documentation between the parties),
      there is a reasonable probability of success in reduction, if not elimination,
      of the amount claimed by Degerstrom. However, until the Court rules on the
      method of volume reconciliation, it is premature to predict the probability
      of
      likelihood of success on the merits.




During
      the third quarter and fourth quarters of 2006, there was little activity in
      this
      lawsuit, other than the beginning of discovery by the parties. Discovery
      continued during the first quarter of 2007.





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





None.





**Item
      3.**  **Defaults
      Upon Senior Securities**





None
      called.




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





Not
      applicable.





**Item
      5.**  **Other
      Information**





Not
      applicable.





**Item
      6.**  **Exhibits
      and Reports on Form 8-K**




(a)
            The
                following documents are filed as part of this
                Report:




(1)
            Financial
                statements filed as part of this
                Report:




·
            Consolidated
                Balance Sheet as of March 31,
                2007(Unaudited)




·
            Consolidated
                Statement of Operations for the three-month periods ended March 31,
                2007
                and 2006 (Unaudited)




·
            Consolidated
                Statement of Cash Flows for the three-month periods ended March 31,
                2007
                and 2006 (Unaudited)




·
            Notes
                to Financial Statements




11




(2)  Exhibits
      filed as part of this Report:


Exhibit
                Number
              
              Exhibit31.1
              
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Rule
                  13a-14(a) and Rule 15d-14(a), promulgated under the Securities
                  Exchange
                  Act of 1934, as amended.32.1
              
              Certification
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of
                  2002




(b)  Reports
      filed on Form 8-K during the quarter ended March 31, 2007:




Current
      report on Form 8-K, filed with the Commission on March 30, 2007, relating to
      the
      settlement of the Parent litigation.




12




**SIGNATURES**





Pursuant
      to the requirements 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.


GOLDSPRING,
                INC.
              (Registrant)Date:
                May 17, 2007
            By:
            /s/
                Robert T. FaberName:
                Robert
                T. FaberTitle:President
                and Chief Executive Officer


By:
            /s/
                Robert T. FaberName:
                Robert
                T. FaberTitle:Chief
                Financial Officer




13