SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549







FORM
      10-QSB/A


Amendment
      No. 1







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


For
      the
      quarterly period ended June 30, 2005




OR




o
            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
            
            7389
            
            65-0955118(State
                or other jurisdiction of
            
            (Primary
                Standard Industrial
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Classification
                Code Number)
            
            Identification
                No.)P.O.
                Box 1118Virginia
                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
x 
      No 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 o




State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the last practicable date: 250,201,992 shares of Common Stock, $0.000666
      Par Value, as of June 30, 2005.











TABLE
      OF
      CONTENTS


PART
      I -
      FINANCIAL INFORMATION





ITEM
                1.
            
            UNAUDITED
                FINANCIAL STATEMENTS
            
            F-1Consolidated
                Balance Sheet as of June 30, 2005 (Unaudited)
            
            F-1Consolidated
                Statements of Operations for the three month periods ended
                June 30,
                2005 and 2004 (Unaudited)
            
            F-3Consolidated
                Statements of Operations for the six month periods ended June
                30,
                2005 and 2004 (Unaudited)
            
            F-4Consolidated
                Statements of Cash Flows for the periods ended June 30, 2005 and
                2004
                (Unaudited)
            
            F-5Notes
                to Financial Statements
            
            F-6-8ITEM
                2.MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
            
            1ITEM
                3.CONTROLS
                AND PROCEDURES
            
            6PART
                II - OTHER INFORMATIONITEM
                1.LEGAL
                PROCEEDINGSITEM
                2.UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            
            10ITEM
                3.DEFAULTS
                UPON SENIOR SECURITIES
            
            10ITEM
                4SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            11ITEM
                5.OTHER
                INFORMATION
            
            11ITEM
                6EXHIBITS
                AND REPORTS ON FORM 8-K
            
            11SIGNATURES
            
            13





**Statement
      Regarding 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, 2004.*
















**PART
      I - FINANCIAL INFORMATION**


**ITEM
      1 - FINANCIAL STATEMENTS**


**GOLDSPRING,
      INC.**





**GOLDSPRING,
        INC.**
 **UNAUDITED
        CONDENSED CONSOLIDATED BALANCE SHEET**


**ASSETS**
                          
                          June
                              30, 2005
                            (Unaudited
                              - restated)
                          
                          As
                              Restated
                            December
                              31,
                            2004CURRENT
                              ASSETS:Cash
                              and cash equivalents
                          
                          $
                          46,295
                          
                          $
                          1,951,802Prepaid
                              expenses and other current assets
                          
                          
                          144,501
                          
                          
                          149,796Finished
                              goods inventory
                          
                          
                          228,286
                          
                          
                          288,687Inventory
                          
                          
                          32,964
                          
                          
                          -TOTAL
                              CURRENT ASSETS
                          
                          
                          452,046
                          
                          
                          2,390,285PLANT,
                              EQUIPMENT, AND MINERAL PROPERTIES, NET:Mineral
                              properties
                          
                          
                          1,334,837
                          
                          
                          1,334,837Plant
                              and Equipment
                          
                          
                          1,451,368
                          
                          
                          1,379,614Plant,
                              Equipment and Mineral Properties
                          
                          
                          2,786,205
                          
                          
                          2,714,451Accumulated
                              depreciation
                          
                          
                          (376,521
                          )
                          
                          (219,834
                          )TOTAL
                              PROPERTY AND EQUIPMENT
                          
                          
                          2,409,684
                          
                          
                          2,494,617OTHER
                              ASSETS:Reclamation
                              deposit
                          
                          
                          377,169
                          
                          
                          377,169Equipment
                              purchase deposit
                          
                          
                          100,000
                          
                          
                          110,000TOTAL
                              OTHER ASSETS
                          
                          
                          477,169
                          
                          
                          487,169TOTAL
                              ASSETS
                          
                          $
                          3,338,899
                          
                          
                          5,372,071CURRENT
                              LIABILITIESAccounts
                              Payable
                          
                          $
                          1,661,371
                          
                          $
                          589,799Accrued
                              Expenses
                          
                          
                          1,911,845
                          
                          
                          792,884Short-Term
                              Lease Obligations
                          
                          
                          34,772
                          
                          
                          34,517Current
                              portion of long-term debt
                          
                          
                          14,564,684
                          
                          
                          11,521,776TOTAL
                              CURRENT LIABILITIES
                          
                          
                          18,172,672
                          
                          
                          12,938,976LONG-TERM
                              DEBT AND OTHER LONG-TERM LIABILITIESLong-term
                              debt, net of current portion
                          
                          
                          38,859
                          
                          
                          243,858Long-term
                              Lease obligation, net of current portion
                          
                          
                          97,102
                          
                          
                          119,152Long-term
                              Reclamation liability
                          
                          
                          553,190
                          
                          
                          553,190TOTAL
                              LONG-TERM DEBT AND OTHER LONG-TERM LIABILITIES
                          
                          
                          689,151
                          
                          
                          916,200TOTAL
                              LIABILITIES
                          
                          $
                          18,861,823
                          
                          $
                          13,855,176
 The
              accompanying notes are an integral part of
              these financial statements.








F-1







June
                      30, 2005
                    (Unaudited
                      - restated)
                  
                  As
                      Restated
                    December
                      31,
                    2004SHAREHOLDERS'
                      DEFICITCommon
                      stock, $.000666 par value, 500,000,000 shares authorized ,
                      250,201,992
                      shares issued and outstanding
                  
                  $
                  166,635
                  
                  $
                  113,966Treasury
                      Stock
                  
                  
                  (67
                  )
                  
                  (67
                  )Additional
                      paid-in capital (See Note C)
                  
                  
                  3,013,208
                  
                  
                  3,574,272Accumulated
                      deficit - Prior years
                  
                  
                  (12,171,276
                  )
                  
                  (2,601,741
                  )Accumulated
                      deficit - Current year
                  
                  
                  (6,531,422
                  )
                  
                  (9,569,535
                  )TOTAL
                      SHAREHOLDERS’ DEFICIENCY
                  
                  
                  (15,522,922
                  )
                  
                  (8,483,105
                  )TOTAL
                      LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
                  
                  $
                  3,338,899
                  
                  $
                  5,372,071








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








F-2








**GOLDSPRING,
                  INC.****UNAUDITED****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****For
                  the three month periods ended June
                  30,**
  **2005**
              
              **2004**(Unaudited
                  - restated)
              
              (Unaudited
                  - restated)REVENUE
                  FROM GOLD SALES, NET
              
              $
              691,861
              
              $
              -COSTS
                  AND EXPENSESCosts
                  Applicable to sales (exclusive of depreciation, and amortization
                  shown
                  separately below)
              
              
              -
              
              
              -Depletion,
                  depreciation and amortization
              
              
              80,899
              
              
              -Reclamation,
                  Exploration and Test Mining Expenses
              
              
              1,541,290
              
              
              1,401,856General
                  and administrative
              
              
              234,281
              
              
              304,580Other
              
              
              174,196
              
              
              15,096TOTAL
                  COSTS AND EXPENSES
              
              
              2,030,666
              
              
              1,721,532OTHER
                  INCOME (EXPENSE)Gain
                  on derivative instruments, net
              
              
              -
              
              
              395,150Liquidated
                  Damages
              
              
              (985,835
              )
              
              -Other
              
              
              -
              
              
              (42,180
              )Interest
                  expense
              
              
              (468,623
              )
              
              -Interest
                  income
              
              
              -
              
              
              12,178(1,454,458
              )
              
              365,148NET
                  LOSS
              
              
              (2,793,263
              )
              
              (1,356,384
              )Net
                  loss per common share - basic
              
              $
              (0.011
              )
              $
              (0.007
              )Basic
                  weighted average common shares outstanding
              
              
              243,982,021
              
              
              193,326,278





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





F-3





**GOLDSPRING,
                  INC.****UNAUDITED****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****For
                  the six month periods ended June
                  30,**
  **2005**
              
              **2004**(Unaudited
                  - restated)
              
              (Unaudited
                  - restated)REVENUE
                  FROM GOLD SALES, NET
              
              $
              1,203,951
              
              $
              -COSTS
                  AND EXPENSESCosts
                  Applicable to sales (exclusive of depreciation, and amortization
                  shown
                  separately below)
              
              
              -
              
              
              -Depletion,
                  depreciation and amortization
              
              
              156,686
              
              
              -Reclamation,
                  Exploration and Test Mining Expenses
              
              
              2,811,380
              
              
              3,115,950General
                  and administrative
              
              
              518,535
              
              
              578,443Consulting
                  and professional services
              
              
              678,464
              
              
              145,979TOTAL
                  COSTS AND EXPENSES
              
              
              4,165,065
              
              
              3,840,372OTHER
                  INCOME (EXPENSE)Gain
                  on derivative instruments, net
              
              
              -
              
              
              395,150Liquidated
                  Damages
              
              
              (2,860,468
              )
              
              -Other
              
              
              -
              
              
              (42,180
              )Interest
                  expense
              
              
              (723,366
              )
              
              -Interest
                  income
              
              
              13,526
              
              
              12,636(3,570,308
              )
              
              365,606NET
                  LOSS
              
              
              (6,531,422
              )
              
              (3,474,766
              )Net
                  loss per common share - basic
              
              $
              (0.031
              )
              $
              (0.019
              )Basic
                  weighted average common shares outstanding
              
              
              208,705,670
              
              
              184,291,427





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







F-4





**GOLDSPRING,
        INC.** **UNAUDITED** **CONSOLIDATED STATEMENTS OF CASH FLOWS** For
            the
            six month periods ended June
            30,


**2005**
              
              **2004**(Unaudited
                  - restated)
              
              (Unaudited
                  - restated)Cash
                  flows from operating activities:Net
                  loss
              
              $
              (6,531,422
              )
              $
              (3,474,766
              )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Depreciation,
                  depletion, and amortization
              
              
              156,686
              
              
              -Liquidated
                  damages from March 2004 financing and November 2004 restructuring
              
              
              2,860,468
              
              
              -Consulting
                  services provided in exchange for common stock
              
              
              -
              
              
              42,000Accrued
                  Loss on Sale of Gold Investment
              
              
              -
              
              
              42,180(Increase)
                  Decrease in operating assets:Finished
                  goods inventory
              
              
              60,401
              
              
              (106,689
              )Inventory
              
              
              (32,964
              )
              
              -Prepaid
                  and other current assets
              
              
              5,295
              
              
              (70,841
              )Other
                  assets
              
              
              -
              
              
              235,609Increase
                  (decrease) in operating liabilities:Accounts
                  payable
              
              
              1,071,571
              
              
              375,097Accrued
                  expenses
              
              
              34,595
              
              
              191,904Other
              
              
              268,250Total
                  Adjustments to Reconcile Net Loss Used in Operating
                  Activities
              
              
              4,424,303
              
              
              709,260Net
                  cash used in operating activities
              
              
              (2,107,119
              )
              
              (2,765,506
              )Investing
                  activities:Investment
                  in Gold
              
              
              
              
              
              (1,016,700
              )Equipment
                  deposit
              
              
              (10,000
              )
              
              -Acquisition
                  of plant, equipment and mineral properties
              
              
              (71,754
              )
              
              (39,111
              )Net
                  cash used in investing activities
              
              
              (81,754
              )
              
              (1,055,811
              )Financing
                  activities:Net
                  Proceeds from Issuance of Stock
              
              
              -
              
              
              332,500Proceeds
                  from March 2004 financing, net
              
              
              -
              
              
              9,150,000Purchase
                  and Cancellation of Company’s Stock
              
              
              -
              
              
              (150,000
              )Purchase
                  of Company’s Stock and Recorded to Treasury
              
              
              -
              
              
              (75,000
              )Conversion
                  of debt into Company’s common shares
              
              
              460,267Principal
                  payment Note Payable
              
              
              (176,901
              )
              
              (200,000
              )Net
                  Cash flows provided by financing activities
              
              
              283,366
              
              
              9,057,500Net
                  Increase (Decrease) in cash
              
              
              (1,905,507
              )
              
              5,236,183Cash
                  - beginning of period
              
              
              1,951,802
              
              
              364,138Cash
                  - end of period
              
              $
              46,295
              
              $
              5,600,321Supplemental
                  disclosures of non-cash investing and financing activities:Issuance
                  of notes for liquidated damages for failure to deliver
                  shares
              
              $
              403,175
              
              $
              -Issuance
                  of notes for mandatory redemption payment plus accrued interest
              
              $
              6,885,184
              
              $
              -Purchase
                  and cancellation of common stock in connection with mandatory redemption
                  payment
              
              $
              6,801,975
              
              $
              -





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





F-5





GOLDSPRING,
      INC.


NOTES
      TO
      FINANCIAL STATEMENTS


June
      30,
      2005 AND 2004




**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES/ OVERVIEW**




**Forward-Looking
      Statements**




The
      following discussion contains, in addition to historical information,
      forward-looking statements regarding GoldSpring, Inc. (“we,” the "Company," or
      "GSPG"), that involve risks and uncertainties. Our actual results could differ
      materially. For this purpose, any statements contained in this Report that
      are
      not statements of historical fact may be deemed to be forward-looking
      statements. Without limiting the generality of the foregoing, words such as
      "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate,"
      or "continue" or the negative or other variations thereof or comparable
      terminology are intended to identify forward-looking statements. Factors that
      could cause or contribute to such differences include possible need for
      additional financing; dependence on management; government regulation; and
      other
      factors discussed in this report and the Company's other filings with the
      Securities and Exchange Commission.




**Basis
      of Presentation**




The
      accompanying 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 June 30, 2005
      are
      not necessarily indicative of the results that may be expected for the year
      ending December 31, 2005. 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, 2004.





*Restatement
      of Financial Statements*




As
      a
      result of the restatements to our 2004 financials, discussed below, our June
      30,
      2005 financial statements have been restated. The impact of the 2004
      restatements on our financials for the second quarter of 2005 are reflected
      in
      the following table.




Upon
      review of the standards for reporting mineral reserves as defined by SEC
      Industry Guide 7 (“Guide 7”), we have concluded that we did not have sufficient
      information to establish the existence of reserves as of December 31, 2004
      and
      that certain costs that we had incurred in the development of our mining
      facility must be expensed as exploration or “test mining” costs. We have
      restated our 2004 financial statements to classify all costs previously
      capitalized (the recovery of which is dependent upon the economical extraction
      of gold from the mineralized material we are currently processing), as test
      mining expenses. These costs, which total approximately $4.5 million net of
      accumulated depreciation, include our asset retirement obligation asset of
      $453,786. In connection with our restatement of our mineral property assets,
      we
      have also reversed depletion taken on our mineral properties totaling $43,256.




The
      effect of the restatements on the six month period ended June 30, 2005
      consolidated statement of operations is as follows





As
                Previously
            
            Effect
                of
            
            AsReported
            
            Restatement
            
            RestatedMineral
                Properties
            
            $
            1,258,833
            
            $
            76,004
            
            $
            1,334,837Accumulated
                Deficit - Prior Years
            
            
            ($12,214,532
            )
            $
            43,256
            
            
            ($12,171,276
            )Net
                Loss - Current Quarter
            
            
            ($6,564,170
            )
            $
            32,748
            
            
            ($6,531,422
            )Net
                Loss per share
            
            
            ($0.031
            )
            $
            0.00
            
            
            ($0.031
            )






F-6




**NOTE
      B - LIQUIDATED DAMAGES**




For
      the
      first half of 2005 (ended June 30, 2005), we recorded liquidated damages
      expenses due to investors of our March 2004 offering and subsequent November
      30,
      2004 restructuring as follows:




Liquidated
                damages relating to:November
                30, 2004 Non-Registration Provisions
            
            $
            2,761,939Failure
                to timely deliver shares upon notice of converting note
                holders
            
            
            98,529$
            2,860,468




*Non-Registration
      Provisions*




Our
      November 2004 subscription agreement required us to file a registration
      statement with the Securities and Exchange Commission no later than December
      30,
      2004 and to cause the registration statement to be declared effective no later
      than February 14, 2005. Our former Chief Executive Officer withdrew our pending
      registration statement and did not submit a new registration statement during
      the period of his purported control of our company. His failure to submit the
      registration statement to the SEC by December 30, 2004 triggered liquidated
      damages to accrue under the November 2004 subscription agreement. Accordingly,
      at December 31, 2004, we had accrued $222,013 of liquidated damages relating
      to
      Non-Registration Provisions. The liquidated damages continued to accrue in
      the
      amount of $222,013 for each 30-day period after December 30, 2004 until our
      registration statement is declared effective. Through March 29, 2005, the
      accrued liquidated damages totaled $888,052. The Subscription Agreement requires
      the liquidated damages to be paid in cash or stock issued in a transaction
      registered under the Securities Exchange Act of 1933, as amended (the "Act").
      If
      paid in stock, we must issue stock in the amount of 200% of the cash payment
      amount. In lieu of stock issued in a registered transaction, we negotiated
      with
      the investors to issue restricted stock at a discount to market while adhering
      to the other requirements of the subscription agreement. This settlement
      resulted in the issuance of 59,203,918 shares of restricted common
      stock.




*Failure
      to Timely Deliver Conversion Shares*




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, stock issued in a registered transaction 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.







F-7








**NOTE
      C - MANDATORY REDEMPTION PAYMENT**




Under
      the
      terms of the November 2004 subscription agreement, convertible note holders
      have
      the right to a mandatory redemption payment in the event we are prohibited
      or
      otherwise fail to deliver shares of our common stock to converting note holders.
      The mandatory redemption payment is calculated as an amount equal to the product
      of the number of shares of common stock otherwise deliverable upon conversion
      of
      the note’s principal and interest multiplied by the highest price of our common
      stock for the period beginning with the Deemed Conversion Date (the date the
      holder elects to convert the note) and ending with the payment date. On March
      7,
      2005, we received a mandatory redemption payment demand relating to our failure
      to deliver stock certificates representing 29,573,803 shares of our common
      stock. Under the mandatory redemption payment provisions of the November 2004
      subscription agreement, we repurchased the 29,573,803 shares of common stock
      at
      $0.23 per share, or $6,801,975. We issued a secured convertible note in the
      aggregate amount of $6,885,184 with a 12% interest rate for the 29,573,803
      shares and accrued interest.










F-8





**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 June 30, 2005, as well as our future results.




***Overview***




We
      are a
      North American natural resource company whose objective is to achieve growth
      and
      profitability through enhancements at our active gold and silver-producing
      mine
      near Reno, Nevada and through the acquisition of additional mining projects
      that
      can be efficiently put into near-term operation and production. We currently
      own
      mineral property rights and conduct our primary mining operations in Storey
      County, Nevada, located about 30 miles southeast of Reno, Nevada. This operation
      consists of the Plum Mining facility. We also own mineral permits in Alberta,
      Canada. We have no active operations in Canada.




Our
      current management team was reinstated in mid-February 2005 (see Part II, Item
      1
      - Legal Proceedings). One of current management's top priorities upon regaining
      control of the company was to improve efficiencies and increase production
      at
      our Plum Mine. To this end, we hired a new mine manager, who has significant
      experience in gold mining, primarily in and around the area of our current
      operation. We also implemented modifications to our plant, equipment, and
      operations during the first half of 2005 to address our past difficulties and
      increasing operating efficiency. In the spirit of maximizing overall operating
      performance and reducing costs, effective August 1, 2005, the Company has
      consolidated its corporate office with the Plum Mine facility. The relocation
      will reduce costs and allow for more effective utilization of our resources,
      both human and capital. The new contact information for the corporate office
      and
      personnel is listed below.




The
      new
      contact information for the corporate office, effective August 1, 2005,
      is:




P.O.
      Box
      1118


Virginia
      City, NV 89440


Tel
      775.847.5272


Fax
      775.847.4762


www.goldspring.us




Additional
      Contact Information:




Lisa
      Boksenbaum, Corporate and Investor Relations


(480)
      203-0510


E-mail:
      lisab@goldspring.us




Robert
      Faber, President and CEO


(480)
      603-5151


E-mail:
      rfaber@goldspring.us




We
      believe that many of the non-operating issues that have plagued our company
      since early-December 2004 are now being resolved. We are now focusing our
      efforts on achieving positive cash flow and increased production in 2005. Our
      ability to maintain that focus will depend largely upon our relationships with
      a
      number of our investors that are now note holders as the result of our 2004
      financial restructuring. Although this debt obligation is substantial, we
      believe that we will be able to reach an arrangement with our investors that
      will allow us to structure the repayments in a manageable fashion.







1








During
      the first half of 2005, we incurred approximately $2.8 million of liquidated
      damages and other expenses related to our obligations under the March 2004
      and
      November 2004 subsription agreements.  The damages were compounded by
      the
      former Chief Executive Officer’s decision to withdraw the SEC registration
      statement and his failure to deliver common shares pursuant to the November
      2004
      restructuring agreement. We filed the SB-2 registration statement in April
      of
      2005 and have delivered the shares. We are now in the process of trying to
      get
      the registration statement declared effective by the SEC. Until the registration
      statement is declared effective, we continue to incur liquidated damages under
      the November 30, 2004 Subscription Agreement (See Recent Financing Events and
      Restructuring for additional information). Between April 28, 2005 and June
      30,
      2005, the end of the period covered by this report, we incurred approximately
      $
      600,000 in liquidated damages, and such damages continued to accrue after the
      end of such period. Pursuant to the terms of the Subscription Agreement, the
      damages may be paid in cash or in unrestricted common stock. If paid in stock,
      we are required to pay 200% of the cash penalty, or approximately $1.2 million.
      Because we do not have the cash or stock which was issued in a registered
      transaction to pay the liquidated damages, we have reached a settlement
      agreement with the investors to pay the $1.2 million in liquidated damages
      in
      restricted common stock valued at $0.03 per share. We accrued $1.2 million
      in
      the second quarter of 2005 to reflect this obligation. Pursuant to this
      settlement agreement, we will be issuing approximately 40 million shares of
      restricted common stock in the third quarter of 2005.




The
      Plum
      Mine operation showed material improvements in efficiency and production in
      the
      second quarter of 2005. The crusher, which has been the primary source of
      setbacks in increasing production, received substantial mechanical improvements
      early in the quarter. Due to these improvements, we crushed 144,000 tons of
      mineralized material in the second quarter, representing an increase of 141%
      from the first quarter 2005. We are in the process of assembling our crushing
      circuit. Our third-party contractor has discontinued its crushing operations
      to
      allow for the set-up of our crushing equipment. We expect our crushing
      operations to commence in mid-August 2005. This transition from a third-party
      crushing operator to an in-house operation will bring immediate cost savings
      and
      should allow us to reach our target of crushing 60,000 tons of material per
      month. We also made significant improvements to the Merrill Crowe processing
      plant during the second quarter. Through a change in pumps and the addition
      of a
      second clarifier, we increased capacity at the plant from 100 gallons per minute
      to 300 gallons per minute and we are now operating 24 hours per day, 7 days
      per
      week. We will continue to focus on improving efficiency at the Plum Mine
      operation through the remainder of 2005.




The
      improvements at the Plum Mine have resulted in a steady increase in gold
      production during the second quarter. We produced 353 ounces of gold in April,
      527 ounces in May, 1,126 ounces in June, and we are ramping up to our target
      production of 2,000 ounces of gold per month. Our primary objectives in the
      third quarter of 2005 are to achieve positive cash-flow and to improve our
      overall mine operation.




We
      continue to look for growth opportunities. This process consists of actively
      conducting exploration to identify additional mineralized material. 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
      also
      seek growth through the acquisition of mining projects which have proven
      in-ground reserves, advanced permitting, and solid exploration potential. We
      seek to acquire proven projects whose business operations and business models
      make those projects economically feasible for a company of our
      size.




In
      line
      with this strategy, on May 4, 2005, we announced that we executed a Letter
      of
      Intent to acquire the leases on three patented mineral claims from Comstock
      Gold, LLC. The Justice, Woodville, and Keystone claims are adjacent to our
      existing operation at the Plum Mine. The Letter of Intent is subject only to
      the
      successful completion of our due diligence and our board’s approval. We expect
      to complete our due diligence prior to September 30, 2005, after which time
      we
      plan to enter into a definitive purchase agreement. The proximity of these
      claims should allow us to develop the property in a cost-effective manner and
      likely increase the efficiency of our overall mining operation. This acquisition
      is important for our company for a number of other reasons as well. First,
      the
      claims will expand our mining property by 40 acres, increasing our mineralized
      material inventory by approximately 33%. Second, the claims will contribute
      to
      the enhancement of overall mine extraction and waste disposal efficiencies.
      Third, these claims will enlarge our footprint in the Comstock Lode region
      and
      have the potential for expanding the life of our existing Plum Mine operation.
      Finally, the addition of these properties will improve our geologic
      understanding of the entire physical area and its trends.







2








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




Our
      Plum
      Mine, which is located in Storey County, Nevada, went into production in late
      third quarter 2004. The region experienced record level snowfalls at
      approximately the same time, continuing through the winter of 2004/2005. While
      the unusually heavy precipitation did not interfere with the overall recovery
      of
      mineralized material, it did impact our ability to mine and crush the
      mineralized material. As mentioned above, our mining operations essentially
      shut
      down in January 2005 due to a combination of harsh weather, equipment
      difficulties, and management disruption. Although mining operations resumed
      when
      the current management was reinstated in mid-February 2005, the equipment
      difficulties continued throughout the first quarter. For example, between March
      15, 2005 and April 1, 2005, we had no crusher production due to inoperable
      equipment. We have since taken steps to remedy our equipment challenges,
      including replacing the cone and screen plant on the crusher. Due to these
      improvements, we crushed 144,000 tons of mineralized material in the second
      quarter, representing an increase of 141% from the first quarter 2005.




We
      have
      made several other improvements to our equipment and operations during the
      second quarter of 2005 to increase production and improve operating efficiency.
      On the operations side, we have added additional solution lines to the
      mineralized material on leach pad number two, adjusted the amount of cement
      used
      during the agglomeration phase of processing, and added an agglomeraid to our
      mineralized material. We believe these adjustments will increase recovery
      results and minimize problems with the crusher. We have also increased
      production capacity at our Merrill Crowe processing plant by adding a new
      clarifier, changing the pumps and raising the height of the vacuum tower. With
      these changes, we increased capacity at the plant from 100 gallons per minute
      to
      300 gallons per minute and we are now operating 24 hours per day, 7 days per
      week. We believe the combination of the equipment modifications, operational
      improvements, and management changes made since late-February 2005 leaves us
      poised to reach our goals for 2005.




In
      the
      remainder of 2005, we plan to focus the bulk of our efforts on achieving
      additional operational improvements in both production and efficiency at our
      Plum Mine operation. We are continuing to pursue operational improvements
      through enhancements to our existing processes. These enhancements are expected
      to stem from increasing our volume of production combined with lowering the
      cost
      of our processes. Our objective for operational performance in 2005 is to
      establish a stable and predictable level of gold and silver production at the
      Plum Mine resulting in profitability and positive cash flow.




***Comparative
      Financial Information:***





**Six
                Months ended June 30, 2005**
            
            **Six
                Months ended June 30, 2004**
            
            **Difference**Revenue
            
            $
            1,203,952
            
            $
            0.0
            
            $
            1,203,952Exploration
                Expense
            
            $
            2,811,380
            
            $
            3,112,951
            
            $
            (301,571
            )Liquidated
                Damages
            
            $
            3,749,266
            
            $
            0.0
            
            $
            3,749,266Net
                Loss
            
            
            ($6,531,422
            )
            
            ($3,474,766
            )
            
            ($3,056,656
            )








3








We
      sold
      2,817 ounces of gold at an average price of $427 per ounce during the six-month
      period ended June 30, 2005 compared to no gold sales during the same period
      of
      2004. We spent the first six months of 2004 completing the required
      infrastructure to complete our “test mine”.





Exploration
      Expenses were $301,571 less for the first six months of 2005 than the same
      period in 2004. This 2005 expense reduction reflects lower infrastructure
      expenditures in 2005 and a shift to “test mining”. Our Company is an Exploration
      Stage enterprise and in accordance with Industry Guide 7 infrastructure
      expenditures such as haul roads, leach pads and start-up costs were expensed.
      The majority of our infrastructure work was performed in 2004.





In
      March
      2004 we completed a private placement which was subject to Non-Registration
      Events Provisions (“Non-Registration Provisions”). The Non-Registration
      Provisions required us to file and cause to become effective a registration
      statement with the Securities and Exchange Commission so that investors may
      sell
      their shares of common stock without restriction. Pursuant to the Subscription
      Agreement, liquidated damages accrue at a rate of percent (2%) of the investment
      amount for each thirty day period or part thereof for not having an effective
      Registration Statement starting in the 3 rd quarter
      2004. In November 2004 we capitalized 100% or $1.1 million of liquidated damages
      as part of the November 2004 restructuring. Our November 2004 subscription
      agreement also required us to file a registration statement with the Securities
      and Exchange Commission no later than December 30, 2004 and to cause the
      registration statement to be declared effective no later than February 14,
      2005.
      Our former Chief Executive Officer withdrew our pending registration statement
      and did not submit a new registration statement. His failure to submit the
      registration statement to the SEC by December 30, 2004 triggered liquidated
      damages to accrue at a rate of percent (2%) of the principal amount of the
      Debenture for each thirty day period or part thereof for not having an effective
      Registration Statement.







**Quarter
                ended June 30, 2005**
            
            **Quarter
                ended June 30, 2004**
            
            **Difference**Revenue
            
            $
            691,861
            
            $
            0.0
            
            $
            691,861Exploration
                Expense
            
            $
            1,541,290
            
            $
            1,401,856
            
            $
            139,434Liquidated
                Damages
            
            $
            1,874,633
            
            $
            0.0
            
            $
            1,874,633Net
                Loss
            
            
            ($2,793,263
            )
            
            ($1,356,384
            )
            
            ($1,436,879
            )







During
      the 2 nd quarter
      2005 we sold 1,625 ounces of gold at an average price of $426 per ounce compared
      to no gold sales during the same period of 2004. Our “test mine” became
      operational during the 3 rd quarter
      2004 when we began selling gold. Prior to the 3 rd quarter
      2004 we were focused on constructing the required infrastructure to complete
      our
“test mine”.





Exploration
      Expenses in the 2 nd quarter
      2005 were $139,434 more than 2 nd quarter
      2004. This variance reflects the exploration drilling performed the
      2 nd quarter
      2005 plus the shift from infrastructure construction to “test mining”. Our
      Company is an Exploration Stage enterprise and in accordance with Industry
      Guide
      7 infrastructure expenditures such as haul roads, leach pads and start-up costs
      were expensed.





4








In
      March
      2004 we completed a private placement which was subject to Non-Registration
      Events Provisions (“Non-Registration Provisions”). The Non-Registration
      Provisions required us to file and cause to become effective a registration
      statement with the Securities and Exchange Commission so that investors may
      sell
      their shares of common stock without restriction. Pursuant to the Subscription
      Agreement, liquidated damages accrue at a rate of percent (2%) of the investment
      amount for each thirty day period or part thereof for not having an effective
      Registration Statement starting in the 3 rd quarter
      2004. In November 2004 we capitalized 100% or $1.1 million of liquidated damages
      as part of the November 2004 restructuring. Our November 2004 subscription
      agreement also required us to file a registration statement with the Securities
      and Exchange Commission no later than December 30, 2004 and to cause the
      registration statement to be declared effective no later than February 14,
      2005.
      Our former Chief Executive Officer withdrew our pending registration statement
      and did not submit a new registration statement. His failure to submit the
      registration statement to the SEC by December 30, 2004 triggered liquidated
      damages to accrue at a rate of percent (2%) of the principal amount of the
      Debenture for each thirty day period or part thereof for not an effective
      Registration Statement.





***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 Project. 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. In a separate transaction, we obtained mineral permits in Alberta,
      Canada in May 2004.




The
      Big
      Mike Copper Project is located in Pershing County, Nevada. It covers a total
      of
      310 acres and consists of 17 unpatented lode claims and one placer claim. We
      have not established any proven or probable reserves that meet the requirements
      of SEC Industry Guide 7. We have not completed any exploration activity on
      the
      project. The property includes an open pit, mineralized material in a stockpile
      and waste dumps. We believe the property has exploration potential for primary
      and oxide copper. In November 2004, we entered into a Memorandum of
      Understanding to form a joint venture to begin exploration activities on this
      property. The negotiations were put on hold in December 2004 by the dispute
      over
      control of the company. We continue to look for a business partner to develop
      this project. We are still in discussions with the party who executed the
      Memorandum of Understanding in November 2004.




In
      May
      2004, the Alberta government granted us mineral permits for all non-energy
      minerals on nearly 800 square miles of Alberta, Canada mineral property.
      Sedimentary Oolitic iron bearing material was discovered in 1953 from oil and
      gas drilling in the area covered by our mineral permits. We are in the process
      of reviewing existing data and conducting a pre-feasibility study on the
      project. The study will include new test work to follow-up earlier test work
      performed on the property. From 1995 through 1997, a series of tests were
      performed that showed the mineralized material present was amenable to treatment
      to produce iron pellets and pig iron. We are negotiating the acquisition of
      the
      coal rights in this area. We are also investigating the possible acquisition
      of
      the rights to the energy minerals, gas, and oil on this property.




This
      is
      an early stage project and our activities associated with this mineral area
      are
      exploratory in nature. We have not established any reserves on this property.
      The scope and size of this potential project will require substantial capital,
      time and outside assistance during both the pre- and post-feasibility stages.
      We
      are considering several financial alternatives, including a joint venture,
      to
      develop this project.







5








***Liquidity
      and Capital Resources***




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 July 2005, we received $800,000 in financing (See Recent Financing
      Events and Restructuring, below). While this additional funding will 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. As disclosed in the report of our
      independent registered public accounting firm in our financial statements
      provided in our Form 10-KSB for the year ended December 31, 2004, our recurring
      losses and negative cash flow from operations raise substantial doubt about
      our
      ability to continue as a going concern.




Under
      the
      terms of our November 2004 subscription agreement, we issued 8% convertible
      notes to an investor group. Under the terms of the notes, our first principal
      and interest repayment was scheduled for April 1, 2005. Prior to April 1, 2005,
      knowing that we did not have sufficient cash available to meet these
      obligations, we began negotiations with the major note holders in an effort
      to
      delay repayment of both the principal and interest amounts for a 12-month
      period. Our negotiations with these note holders regarding the repayment delay
      have so far been successful and we have reached a tentative agreement regarding
      the 12-month payment deferral. We remain optimistic that we will reach a
      definitive agreement. However, we are in default on these notes, and in the
      event we are not successful in achieving a payment deferral, we will be unable
      to meet the current note obligations. While failure to reach a resolution would
      likely cause us to seek external funding in order to meet our obligation, there
      can be no assurance that such funding would be available. If such funding were
      not available, we might have no alternative other than to default on these
      notes.




We
      have
      yet to realize an operating profit at our Plum Mine location. However, we
      believe that our Plum Mine operations will become profitable and generate
      positive cash flow during the year 2005.




We
      expect
      to expand our existing leach pads, which currently number three, to a total
      of
      either four or five leach pads during 2005. The cost of this expansion will
      be
      approximately $600,000. We are also in the process of taking over the crushing
      operations from our third-party contractor. This transition requires us to
      acquire and assemble our own crushing equipment, at an approximate cost of
      $100,000. These expenditures represent our only major capital expenditures
      currently planned for 2005. We intend to finance our crushing equipment, our
      leach pad expansion project and any other capital expenditures in 2005 through
      the issuance of debt and equity instruments to existing shareholders and other
      parties.




***Restatement
      of Financial Statements***




Upon
      review of the standards for reporting mineral reserves as defined by SEC
      Industry Guide 7 (“Guide 7”), we have concluded that we did not have sufficient
      information to establish the existence of reserves as of December 31, 2004
      and
      that certain costs that we had incurred in the development of our mining
      facility must be expensed as exploration or “test mining” costs. We have
      restated our 2004 financial statements to classify all costs previously
      capitalized (the recovery of which is dependent upon the economical extraction
      of gold from the mineralized material we are currently processing), as test
      mining expenses. These costs, which total approximately $4.5 million net of
      accumulated depreciation, include our asset retirement obligation asset of
      $453,786. In connection with our restatement of our mineral property assets,
      we
      have also restated our asset retirement obligation liability, classifying it
      as
      an environmental reclamation liability and not an asset retirement obligation
      as
      described by Financial Accounting Standards Board Statement No.
      143.




We
      have
      also restated our shareholders’ equity. 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. In connection with the
      notice we reduced convertible notes payable by $3.8 million and recorded an
      additional 33,817,594 shares (converted at approximately $0.11 per share) at
      December 31, 2004. Upon further consideration, we have determined that since
      the
      shares had not been physically issued prior to year end, the liability and
      stockholders’ equity accounts should not be adjusted until the shares have been
      issued. Accordingly, we restated our convertible note and stock holder equity
      accounts by approximately $3.8 million. The restatement has no affect on net
      loss or cash flows as previously reported.







6








***Recent
      Financing Events and Restructuring***




On
      July
      15, 2005, we completed a financing transaction, which has provided us with
      $800,000 in funding. In consideration for the financing, the Company has issued
      promissory notes with a face value of $1.2 million, reflecting an original
      issue
      discount of thirty-three and one-third (33.3%) percent. The term of the notes
      is
      two years, with an optional extension of one year at the option of the investor.
      The annual interest rate on the notes is 15% of the face value and is payable
      monthly. The funds will be used for working capital and general corporate
      purposes.




In
      2004,
      we offered securities in a private placement transaction completed 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 offering’s close, we failed to meet
      certain requirements of the offering regarding filing an effective registration
      statement with the Securities and Exchange Commission. Under the terms of the
      March 2004 subscription agreement, failure to have an effective registration
      statement by the required date resulted in liquidated damages in the amount
      of
      2% of the principal investment amount (i.e., $200,000) for each 30-day period
      until the registration statement was declared effective. We accrued
      approximately $1.1 million in liquidated damages through November 30, 2004
      associated with our failure to cause our registration statement to be effective.




During
      the SEC review process of the registration statement we filed in connection
      with
      the March Offering, we learned that our founder and former Chief Executive
      Officer may have misrepresented the value of certain mineral properties that
      his
      company sold to us in a June 2003 transaction. Our discussions with the SEC
      led
      to our decision to restate our annual and quarterly SEC filings to reflect
      our
      reevaluation of the value of those mineral properties. This reevaluation led
      to
      an investigation into the activities of our founder. On November 9, 2004, we
      filed a lawsuit in Maricopa County (Arizona) Superior Court against Stephen
      B.
      Parent and four other Defendants, together with their spouses, and Ecovery,
      Inc.
      (See - Legal Proceedings). 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
      allegations made in our lawsuit raised questions about the representations
      that
      our founder made during the March 2004 Offering. The delay in effectiveness
      of
      our registration statement combined with the allegations raised in the lawsuit
      caused concern among the investors in the March 2004 Offering. We worked with
      the investors to address their concerns in a manner that would not force us
      to
      pay a large cash penalty or face a lawsuit, both of which would be detrimental
      to our shareholders. In consideration for restructuring the original
      transaction, the investors agreed to grant us a release for any
      misrepresentations that may have been made, allowed us to capitalize the accrued
      liquidated damages, and provided us with an additional 90 days to cause the
      registration statement to become effective, thereby avoiding potential
      liquidated damages of $600,000 if the registration statement were to be filed
      before December 30, 2004.




As
      a
      result, and effective November 30, 2004, we restructured the private
      placement transaction. In connection with the restructuring, we exchanged the
      21,739,129 shares of common stock and the 21,739,129 warrants to purchase shares
      of common stock issued to the investors in the March Offering for 8% convertible
      notes in the aggregate principal amount of approximately $11.1 million
      and
      four-year warrants to purchase 27,750,000 shares of common stock at an exercise
      price of $0.20 per share, subject to anti-dilution adjustments. The principal
      amount of the convertible notes consists 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. The restructured
      subscription agreement also permitted the convertible note holders to convert
      their notes into common stock at a discounted conversion rate if they delivered
      their notices of conversion within 20 trading days of the November 30, 2004
      restructuring closing date.







7








On
      or
      about December 9, 2004, Mr. Parent and fellow directors Jerrie W. Gasch and
      Purnendu K. Rana Medhi purportedly seized control of our company. They attempted
      to remove the remaining seven members of our board and announced their intention
      not to honor the restructured subscription agreement of November 30, 2004,
      which
      both Mr. Medhi and Mr. Gasch had approved. On December 21, 2004, Mr. Parent
      caused our pending registration statement to be withdrawn from SEC
      consideration, resulting in further delays to the registration process and
      additional liquidated damages. Mr. Parent remained in control of our corporate
      office until February 16, 2005 (See - Legal Proceedings). During his period
      of
      purported control of our company, Mr. Parent refused to honor our obligations
      under either the March 2004 subscription agreement or the restructured November
      2004 subscription agreement.




On
      December 20, 2004, we received notice from holders of approximately $3.8 million
      of convertible notes payable of their intention to convert into shares of our
      common stock. As a result, we recorded the issuance of 33,817,594 shares on
      December 20, 2004. We were required to deliver certificates representing
      unrestricted, stock which was issued in a registered transaction within
      three business days of our receipt of the notices of conversion. As discussed
      above, our former Chief Executive Officer did not deliver the stock certificates
      within the required period, resulting in material financial damages to our
      company.




Under
      the
      terms of the November 2004 subscription agreement, convertible note holders
      have
      the right to a mandatory redemption payment in the event we are prohibited
      or
      otherwise fail to deliver shares of our common stock to converting note holders.
      The mandatory redemption payment is calculated as an amount equal to the product
      of the number of shares of common stock otherwise deliverable upon conversion
      of
      the note’s principal and interest multiplied by the highest price of our common
      stock for the period beginning with the Deemed Conversion Date (the date the
      holder elects to convert the note) and ending with the payment date. On March
      7,
      2005, we received a mandatory redemption payment demand relating to our failure
      to deliver stock certificates representing 29,573,803 shares of our common
      stock. Under the mandatory redemption payment provisions of the November 2004
      subscription agreement, we repurchased the 29,573,803 shares of common stock
      at
      $0.23 per share, or $6,801,975. We issued a convertible note in the aggregate
      amount of $6,885,184 for the 29,573,803 shares and accrued interest.




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, stock which was issued in a registered transaction 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.




Our
      November 2004 subscription agreement required us to file a registration
      statement with the Securities and Exchange Commission no later than December
      30,
      2004 and to cause the registration statement to be declared effective no later
      than February 14, 2005. As discussed above, our former Chief Executive Officer
      withdrew our pending registration statement and did not submit a new
      registration statement during the period of his purported control of our
      company. His failure to submit the registration statement to the SEC by December
      30, 2004 triggered liquidated damages to accrue under the November 2004
      subscription agreement. Pursuant to the terms of the Subscription Agreement,
      the
      damages may be paid in cash or in unrestricted common stock. If paid in stock,
      we are required to pay 200% of the cash penalty. Because we do not have the
      cash
      or stock which was issued in a registered transaction to pay the liquidated
      damages, we reached a settlement agreement with the investors to pay the
      liquidated damages in restricted common stock valued at $0.03 per share. The
      total liquidated damages accrued between December 30, 2004 and April 27, 2005
      was approximately $ 1,776,000. Pursuant to this settlement agreement, we issued
      approximately 59 million shares of restricted common stock in April 2005.







8








During
      the first half of 2005, we incurred approximately $2.8 million of liquidated
      damages and other expenses related to our obligations under the March 2004
      and
      November 2004 subscription agreements. The damages were compounded by the former
      Chief Executive Officer’s decision to withdraw the SEC registration statement
      and his failure to deliver common shares pursuant to the November 2004
      restructuring agreement. We filed the SB-2 registration statement in April
      of
      2005 and have delivered the shares. We are now in the process of trying to
      get
      the registration statement declared effective by the SEC. Until the registration
      statement is declared effective, we continue to incur liquidated damages under
      the November 30, 2004 Subscription Agreement (See Recent Financing Events and
      Restructuring for additional information). Pursuant to the terms of the
      Subscription Agreement, the damages may be paid in cash or in unrestricted
      common stock. If paid in stock, we are required to pay 200% of the cash penalty.
      Because we do not have the cash or stock which was issued in a registered
      transaction to pay the liquidated damages, we have reached a settlement
      agreement with the investors to pay the liquidated damages in restricted common
      stock valued at $0.03 per share. The total liquidated damages accrued between
      April 28, 2005 and July 26, 2005, was approximately $ 1.2 million. Pursuant
      to
      this settlement agreement, we will issue approximately 40 million shares of
      restricted common stock in the third quarter of 2005.




Off-Balance
      Sheet Arrangements.




We
      were
      not a party to any off-balance sheet arrangements during the period covered
      by
      this report. [See Regulation S-B 303(c) for required disclosure of off-balance
      sheet arrangements. I have made the assumption that there were none, but if
      the
      company did have them, they need to be disclosed here under a separate
      caption.]




**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 SEC.




We
      have
      identified conditions as of June 30, 2005 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 since the end of the second quarter of 2005 to remedy these
      deficiencies. These measures include our decision to consolidate 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.




In
      December 2003 our CFO implemented a business expense reimbursement policy which
      he reviewed with all employees who regularly traveled for business including
      the
      Company’s founder, CEO and Chairman. The CFO discussed the policy again with the
      former CEO and Chairman in January 2004 due to his failure to comply with the
      policy. The CEO’s continued failure to properly document business expenses led
      the CFO to discuss the problem with the Company’s Board of Directors, the
      Company’s outside auditor and legal counsel. In April / May 2004 the Company’s
      outside auditor spoke with the CEO regarding his failure to document travel
      and
      entertainment expenses. In August 2004 the Company’s Board of Directors decided
      to take firm measures to resolve this problem with the CEO. These steps led
      to
      the CEO’s resignation on September 3, 2004. The Board then appointed the CFO as
      President and Chief Executive Officer.







9








In
      response to this deficiency, five independent board members were added and
      an
      audit committee, composed of directors’ independent of the Company’s day-to-day
      management function, was formed to oversee the financial reporting and to review
      and approve executive expense account charges.




As
      our
      former CFO is assuming the duties of the CEO and the Company has presently
      not
      hired another individual to act as CFO, we believe we have 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 acknowledge 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 estimate that the
      annual cost of a qualified individual to act as the Company’s CFO would be
      between $75,000 and $100,000.




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




**PART
      II - OTHER INFORMATION**





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




***The
      State Court Case***




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.




On
      November 29, 2004, we moved for a temporary restraining order, or TRO,
      prohibiting Mr. Parent and his spouse from selling, transferring, assigning,
      or
      otherwise disposing of up to approximately 123,000,000 shares of our stock
      in
      their possession. After a hearing, at which the Parents appeared through
      counsel, the Honorable Anna M. Baca granted the motion, conditioned on the
      posting of an $8 million bond. We did not post the bond, and the TRO was
      subsequently dissolved.




On
      or
      about December 9, 2004, Mr. Parent and fellow GoldSpring directors Jerrie W.
      Gasch and Purnendu K. Rana Medhi purportedly seized control of our company.
      Afterward, the Parent-led GoldSpring purported to fire Greenberg Traurig, LLP,
      or GT, as counsel for our company in this litigation and to hire Ronan &
      Firestone, PLC, or Ronan, as substitute counsel. Thereafter, on December 22,
      2004, Ronan filed a stipulation to dismiss the lawsuit, purportedly on behalf
      of
      our company. Also on December 22, 2004, the Parents filed their answer, in
      which
      they generally denied the allegations of the complaint.









10








On
      December 29, 2004, GT filed a motion on behalf of our company to strike the
      stipulation to dismiss that Ronan had filed. Judge Baca heard oral argument
      on
      the motion on February 2, 2005 and took the matter under advisement. Further
      oral argument was heard on March 22, 2005. In light of the preliminary
      injunction that was issued in a related shareholder action in federal district
      court (discussed below), and the resolutions passed by our Board of Directors
      on
      February 22, 2005, Judge Baca granted the motion in an Order dated March 22,
      2005 and struck Ronan’s purported stipulation to dismiss.




In
      the
      same ruling, Judge Baca said that “there are serious conflicts in the continued
      representation of the Parents in this lawsuit by Gust Rosenfeld.” The Court was
      referring to the fact that Parent had hired Gust Rosenfeld as our counsel after
      purportedly taking over our company on December 9, 2004. The Court therefore
      ordered further briefing on whether Gust Rosenfeld should be disqualified as
      the
      Parents’ counsel. Shortly thereafter, on March 28, 2005, Gust Rosenfeld
      voluntarily withdrew as the Parents’ counsel. The Parents have since retained
      new counsel. The discovery process is currently ongoing.




Mr.
      Treminio has since been dismissed from the suit in accordance with the terms
      of
      a prior settlement agreement between Mr Treminio and GoldSpring, Inc..
      Mr. Shaw filed an answer, *in
      pro per* ,
      on
      April 6, 2005, and generally denied the allegations of the complaint. Mr.
      Haswell and Mr. Doyle have filed answers and generally denied the allegations
      of
      the complaint. Ecovery, Inc. has not yet responded to the complaint.




***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. As discussed
      below, Messrs. Gasch and Medhi no longer support the Parent-led
      board.




*The
      Temporary Restraining Order*




Following
      a hearing on December 22, 2004, at which the Court heard evidence and argument
      of counsel, the Honorable Earl H. Carroll issued a December 23, 2004 Order
      Granting Plaintiffs’ Motion for Temporary Restraining Order, or TRO. The TRO
      precluded Defendants and their agents from (1) making any withdrawals from
      any
      bank accounts of our company, other than reasonable withdrawals necessary to
      the
      daily operations of the business; (2) rescinding or interfering in any way
      with
      any transactions approved by our company’s Board of Directors prior to December
      9, 2004; (3) entering into any contracts or agreements with third parties on
      behalf of our company or disposing of or transferring any property or assets
      of
      our company; and (4) issuing or otherwise transferring any stock or debentures.







11








The
      Court
      subsequently continued the TRO through February 15, 2005 and confirmed that
      none
      of the Defendants were to receive any payments from our company during the
      pendency of the TRO. Despite the Court’s Order, the Defendants have since
      produced business records of our company demonstrating that, after adopting
      the
      December Consent Resolutions, the Defendants arranged for our company to pay
      them a collective total of $38,721, including $20,869 in payments to Stephen
      Parent.




*The
      Preliminary Injunction and Notice of Appeal*




Following
      additional hearings in which the Court heard witness testimony and evidence,
      the
      Court issued an Order on February 15, 2005 granting Plaintiffs’ Motion for a
      Preliminary Injunction. The Preliminary Injunction ordered the reinstatement
      of
      our company’s Board of Directors as it existed prior to December 10, 2004. As a
      result of the Court’s Order, John F. Cook, Robert T. Faber, Christopher L.
      Aguilar, Todd S. Brown, Leslie L. Cahan, Stanley A. Hirschman, and Phil E.
      Pearce have been reinstated as directors. Stephen B. Parent, Jerrie W. Gasch,
      and Purnendu K. Rana Medhi remained directors until Mr. Medhi’s resignation in
      April 2005. The Court’s February 15 Order also stayed the implementation of the
      Consent Resolutions, and directed us to hold a special shareholders meeting
      within 30 days.




In
      concluding that the Preliminary Injunction should issue, the Court stated,
“The
      Court is specifically concerned about the irreparable injury that would occur
      to
      GoldSpring and its shareholders and investors if Defendants [Mr. Parent, his
      wife, Jerrie W. Gasch, and Purnendu K. Rana Medhi] are permitted to manage
      the
      corporation. There is substantial evidence of Parent’s wrongdoing in his former
      position as CEO of GoldSpring, such as his misappropriation of corporate assets
      for his personal use. The Defendants’ attempt to rescind the [financing]
      transaction that was approved at the Board of Directors meeting on November
      30,
      2004 could adversely impact GoldSpring’s ability to meet its obligations under
      the agreement. Rescission of the refinancing transaction would prove detrimental
      for GoldSpring because the corporation would be forced to pay the $200,000.00
      monthly penalty for failing to file the S-1 Registration with the SEC within
      ninety (90) days of the March 22, 2004 agreement between GoldSpring and [various
      investors]. This penalty had accrued to over $1,000,000.00 as of November 30,
      2004.”




Thereafter,
      the Defendants filed a motion for reconsideration in which they asked that
      the
      Preliminary Injunction be dissolved or, alternatively, that the Court clarify
      the injunction order and require the Plaintiffs to post a bond. On February
      25,
      2005, the Court held a hearing on the Defendants’ motion for reconsideration.
      The Court denied the Defendants’ requests to dissolve the Preliminary Injunction
      and to require the posting of a bond. In response to Defendants’ request for
      clarification of the injunction order, the Court ordered that our company is
      not
      to issue additional shares prior to the special shareholders meeting, and that
      the record date for the special shareholders meeting shall be December 9,
      2004.




Our
      company believed that this ruling would disenfranchise the investors that
      participated in the November 30, 2004 restructuring transaction by preventing
      them from receiving and voting the shares they are entitled to receive through
      the conversion of their notes. A December 9, 2004 record date would also have
      disenfranchised all shareholders that acquired their stock on the open market
      after December 9, 2004.




Therefore,
      on February 28, 2005, our company filed a legal memorandum with the Court
      addressing these issues. In it, we pointed out that applicable federal
      securities laws require us to provide shareholders with current financial
      statements, which will not be available until March 31, 2005, and that Florida
      law and our company’s bylaws require that a record date be fixed in advance
      rather than in the past. On March 14, 2005, the Court held a hearing on these
      issues. After hearing argument of counsel, the Court indicated that it agreed
      with our position.







12








Accordingly,
      on March 17, 2005, the Court vacated its earlier Order directing us to hold
      a
      special shareholders meeting and setting December 9, 2004 as the record date
      for
      purposes of that meeting. The Court also vacated the provision of its February
      25 Order prohibiting us from issuing additional shares. Finally, the Court
      reaffirmed its earlier Order reinstating our Board of Directors as it existed
      prior to December 10, 2004. In doing so, the Court ordered that the reinstated
      board shall remain in place until the Court orders otherwise.




On
      April
      13, 2005, a notice of appeal was filed on behalf of the Parents, the Gaschs,
      and
      the Medhis seeking to reverse the Court’s March 17 Order. On April 21, 2005, the
      Gaschs moved to dismiss their appeal. On June 10, 2005, the Parents filed their
      opening appellate brief. The response to the Parents’ opening brief is due on
      August 16, 2005.




*The
      Investors’ Motion to Intervene*




On
      March
      2, 2005, Longview Fund LP, Longview Equity Fund, Longview International Equity
      Fund, and Alpha Capital AG (collectively, the “Investors”) moved to intervene in
      the Litigation. In doing so, the Investors sought to dissolve the portion of
      the
      Court’s February 25, 2005 Order that prohibited our company from issuing stock
      to them under the refinancing transaction.




In
      their
      motion to intervene, the Investors alleged that they are holders of more than
      $3
      million of Convertible Notes issued by us, which they received pursuant to
      the
      transaction in March 2004. The Investors further alleged that, under the terms
      of the Convertible Notes, they are entitled to convert the notes, in whole
      or in
      part, into our stock at any time. The Investors contended that, by preventing
      us
      from issuing stock, the Court’s February 25 Order is a de facto preliminary
      injunction in favor of the Defendants, and effectively deprived the Investors
      of
      much of the benefits to which they are contractually entitled. Because the
      Defendants had not met the requirements for injunctive relief, the Investors
      argued, that portion of the Court’s Order should be dissolved. Alternatively,
      the Investors asked the Court to order the Defendants to post a $3.5 million
      bond to protect the Investors against any damages stemming from the de facto
      injunction.




On
      March
      7, 2005, the Defendants filed their response to the Investors’ motion. They
      contended that Judge Carroll’s February 25 Order was not an injunction and, in
      any event, that the Investors had failed to meet the requirements for
      intervention. Accordingly, they argued that the motion should be denied.




On
      March
      18, 2005, the Court issued an Order denying the Investors’ motion as moot. The
      Court reasoned that, since its March 17 Order lifted the prohibition on the
      issuance of additional shares of our stock, the Investors had, in essence,
      already received the relief they requested in their motion to intervene.
      Therefore, the issues raised in that motion had become moot.




*The
      Company’s Motion Re: the Gust Rosenfeld Retainer*




After
      purportedly seizing control of our company on December 9, 2004, Stephen Parent,
      acting as the putative president of GoldSpring, authorized the payment of a
      $250,000 retainer to the law firm of Gust Rosenfeld using funds of our company.
      On March 1, 2005, we filed a motion for an order requiring Gust Rosenfeld to
      provide a detailed accounting of its use of these funds and to refund the unused
      portion.




On
      March
      14, 2005, Gust Rosenfeld sent us a refund check for $83,903.38 and a “ledger”
      showing how the firm spent the other $166,096.62. Among other things, the ledger
      revealed that Gust Rosenfeld withdrew approximately $109,000 as payment for
      its
      attorneys’ fees and costs. The ledger also showed payments to other lawyers and
      outside vendors totaling approximately $57,000. Included in this amount were
      two
“refund” payments to Stephen Parent totaling $21,000.




We
      have
      filed a reply brief asking the Court to order Gust Rosenfeld to provide a more
      detailed accounting of its expenditures, including billing invoices for legal
      services it purportedly rendered to our company. We have also asked the Court
      to
      require Gust Rosenfeld to provide a written explanation for the payments to
      other lawyers and outside vendors, as well as the so-called refund payments
      to
      Parent.







13








*The
      “New” Consent Resolutions*




On
      March
      21, 2005, Defendants Stephen and Judith Parent filed a “Motion for Order” asking
      the Court to remove certain directors of our company’s Board of Directors.
      Attached to the motion was a “Consent in Lieu of a Special Meeting of the
      Shareholders of GoldSpring, Inc.,” dated March 18, 2005 (the “March Consent”).
      The March Consent was nearly identical to the one adopted by the Parents and
      others on December 9, 2004. It purported to remove directors Robert T. Faber,
      John F. Cook, Leslie L. Cahan, Todd S. Brown, Christopher L. Aguilar, Stanley
      A.
      Hirschman, and Phillip E. Pierce as directors of our company. The March Consent
      was signed by shareholders Stephen Parent; Judith Parent; Aztech Environmental
      Industries, Inc.; Jasmine House, LLC; Frontline 2001, LLC; Jubilee Investment
      Trust PLC; Ronald M. Haswell; Mark and Jennifer Ward; Walter T. Plummer; Lynn
      Zollinger; Maia Ray; and Rita Hardy.




On
      March
      25, 2005, our company and the Plaintiffs filed a joint response to the Parents’
      Motion for Order. In it, we argued that (1) the shareholders who signed the
      March Consent did not hold a majority of our company’s stock, which rendered the
      Consent ineffective; (2) the Parents solicited more than ten shareholders,
      and
      therefore violated Securities and Exchange Commission Rule 14a; and (3) the
      Parents cannot obtain the relief they seek because they have not asserted an
      affirmative claim in court.




The
      Parents filed a reply and supplemental reply on March 20, 2005, and April 11,
      2005, respectively. In the reply, the Parents argued that the shareholders
      who
      signed the Consent do, in fact, hold a majority of the outstanding shares as
      of
      the date it was executed, and that any shares issued after that date are not
      to
      be counted. They also denied having solicited more than ten persons and denied
      any obligation to state an affirmative claim before seeking the relief asked
      for
      in their motion. In their supplemental reply, the Parents referred to our
      company’s recent Form 8-K filing (the “8-K”) with the Securities and Exchange
      Commission. In the 8-K, we disclosed that our company had issued (1) 59,203,918
      shares of restricted common stock in connection with the Settlement Agreement
      Regarding Failure to File a Registration Statement; (2) six secured convertible
      notes in an aggregate amount of $6,584,005 in connection with the Settlement
      Agreement Regarding Mandatory Redemption Payment; and (3) convertible notes
      in
      the amount of $403,175 in connection with the Settlement Agreement Regarding
      Failure to deliver shares due upon conversion. The Parents contended that the
      transactions referred to in the 8-K constituted an unfair dilution of the
“non-Merriman shareholders’” stock holdings.




On
      April
      20, 2005, we filed a Supplemental Notice to inform the Court that Messrs. Gasch
      and Medhi do not support the March Consent. In addition, we informed the Court
      that Mr. Gasch had signed a Declaration that (1) Mr. Gasch never agreed to
      serve
      on the proposed board of directors contemplated by the March Consent, (2) that
      Mr. Gasch does not support the March Consent and, if the March Consent
      constituted a valid shareholder resolution (which we do not believe) Mr. Gasch
      would immediately vote to reinstate the entire Board of Directors as it
      currently exists, (3) Mr. Gasch denounces and rescinds the purported Director’s
      Consent Resolutions dated December 10, 2004 and no longer supports any of the
      resolutions or purported corporate actions contemplated in that purported
      consent, and (4) Mr. Gasch has terminated Gust Rosenfeld as his counsel because
      he no longer wishes to be associated with or share joint representation with
      Mr.
      Parent. Mr. Medhi also informed us that he resigned as a director of our Board
      of Directors as currently constituted and as a member of the board of directors
      designated by earlier consent resolution. We informed the Court that these
      developments constitute additional reasons to deny the Parents’
      motion.




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




Not
      applicable.







14








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




Under
      the
      terms of our November 2004 subscription agreement, we issued 8% convertible
      notes to an investor group. Under the terms of the notes, our first principal
      and interest repayment was scheduled for April 1, 2005. Prior to April 1, 2005,
      knowing that we did not have sufficient cash available to meet these
      obligations, we began negotiations with the major note holders in an effort
      to
      delay repayment of both the principal and interest amounts for a 12-month
      period. Our negotiations with these note holders regarding the repayment delay
      have so far been successful and we have reached a tentative agreement regarding
      the 12-month payment deferral. We remain optimistic that we will reach a
      definitive agreement. However, in the event we are not successful in achieving
      a
      payment deferral, we will be unable to meet the current note obligations. While
      failure to reach a resolution would likely cause us to seek external funding
      in
      order to meet our obligation, there can be no assurance that such funding would
      be available. If such funding were not available, we might have no alternative
      other than to default on these notes.




**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 June 30, 2005
                (Unaudited)




·
            Consolidated
                Statements of Operations for the three month periods ended June 30,
                2005
                and 2004 (Unaudited)




·
            Consolidated
                Statements of Operations for the six month periods ended June 30,
                2005 and
                2004 (Unaudited)




·
            Consolidated
                Statements of Cash Flows for the periods ended June 30, 2005 and
                2004
                (Unaudited)




·
            Notes
                to Financial Statements







15










(2)  Exhibits
      filed as part of this Report:






Exhibit Number
            
            Exhibit10.8(c)
            
            Funds
                Escrow Agreement, dated as of March 31, 2005 among the Registrant,
                the
                subscriber parties thereto, and the escrow
                agent10.9
            
            Settlement
                Agreement dated as of March 29, 2005 by and among the Registrant
                and the
                subscriber parties to the Subscription Agreement dated as of November
                30,
                2004 related to the payment of liquidated damages incurred for
                Registrant’s failure to have an effective registration
                statement10.10
            
            Settlement
                Agreement dated as of March 31, 2005 by and among the Registrant
                and
                certain subscriber parties to the Subscription Agreement dated as
                of
                November 30, 2004 related to the payment of a mandatory redemption
                payment
                demand incurred for Registrant’s failure to deliver shares following
                Registrant’s receipt of Notices of Conversion10.11
            
            Settlement
                Agreement dated as of March 31, 2005 by and among the Registrant
                and
                certain subscriber parties to the Subscription Agreement dated as
                of
                November 30, 2004 related to the payment of liquidated damages incurred
                for Registrant’s failure to deliver shares following Registrant’s receipt
                of Notices of Conversion10.12
            
            Security
                Agreement, dated as of March 31, 2005, by and among the Registrant
                and the
                parties to the Settlement Agreement dated March 31, 2005 related
                to the
                payment of a mandatory redemption payment demand incurred for Registrant’s
                failure to deliver shares following Registrant’s receipt of Notices of
                Conversion10.13
            
            Form
                of Secured Convertible Debenture, dated as of March 31, 2005 issued
                by the
                Registrant to the subscribers10.14
            
            Form
                of Convertible Note, dated as of March 31, 2005 issued by Registrant
                to
                the subscribers10.15
            
            Loan
                Agreement dated as of July 15, 2005 by and among the Registrant and
                the
                subscriber parties thereto10.16
            
            Security
                Agreement dated as of July 15, 2005 by and among the Registrant and
                the
                subscriber parties to the Loan Agreement dated July 15,
                200510.17
            
            Form
                of Promissory Note, dated as of July 15, 2005 issued by the Registrant
                to
                the subscribers to the Loan Agreement dated July 15,
                200531.1
            
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a),
                promulgated under the Securities Exchange Act of 1934, as
                amended31.2
            
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a),
                promulgated under the Securities Exchange Act of 1934, as
                amended32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232.2
            
            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 June 30,
                2005:




(1)
            A
                Report on Form 8-K was filed with the Securities and Exchange Commission
                on April 6, 2005 under Item 1.01 relating to our entry into three
                settlement agreements concerning liquidated damages owed to certain
                investors pursuant to our November 30, 2004 subscription agreement.
                A
                disclosure was also made in this report under Item 3.02 relating
                to our
                issuance of securities in connection with the settlement
                agreements.




(2)
            A
                Report on Form 8-K was filed with the Securities and Exchange Commission
                on April 14, 2005 under Item 5.02 relating to the resignation of
                one of
                our directors, P.K. Rana Medhi. Mr. Medhi expressed no disagreements
                with the Company in tendering his
                resignation.







16








**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.




Date:
                September 21, 2005
            GOLDSPRING,
                INC.(Registrant)By:
            /s/ Robert
              T. FaberName:
            Robert T. FaberTitle:
            President and Chief Executive OfficerOfficer:


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





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