----

----

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

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

| NEVADA                                              |   | 1040                                   |   | 65-0955118               |
|-----------------------------------------------------|--------|----------------------------------------|--------|--------------------------|
| (State or other jurisdiction of |   | (Primary Standard Industrial |   | (I.R.S. Employer    |
| incorporation or organization)            |   | Classification Code Number)  |   | Identification No.) |

----

----

----

| PART I – FINANCIAL INFORMATION                                                                 |   |   |   |
|------------------------------------------------------------------------------------------------------|--------|--------|--------|
| Item 1. Financial Statements.                                                                        |   |   | 4      |   |
| CONDENSED CONSOLIDATED BALANCE SHEETS                                                                |   |   | 4      |   |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                                      |   |   | 5      |   |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                                      |   |   | 6      |   |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                                 |   |   | 8      |   |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |   |   | 15     |   |
| Item 4. Controls and Procedures.                                                                     |   |   | 21     |   |
| PART II – OTHER INFORMATION                                                                    |   |   |   |   |
| Item 1. Legal Proceedings.                                                                           |   |   | 23     |   |
| Item 1A. Risk Factors.                                                                               |   |   | 23     |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.                                 |   |   | 23     |   |
| Item 3. Defaults Upon Senior Securities.                                                             |   |   | 23     |   |
| Item 5. Other Information.                                                                           |   |   | 23     |   |
| Item 6. Exhibits.                                                                                    |   |   | 23     |   |
| Signatures                                                                                           |   |   | 24     |   |
| Exhibit Index                                                                                        |   |   | 25     |   |

----

----

|                                                                                                                                                                                                                                                          |   | March 31, |         |   | December 31, |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                          |   | 2011      |         |   | 2010              |   |
| ASSETS                                                                                                                                                                                                                                                        |   |      |         |   |              |   |
| CURRENT ASSETS:                                                                                                                                                                                                                                               |   |      |         |   |              |   |
| Cash and cash equivalents                                                                                                                                                                                                                                     |   | $         | 19,553,625   |   |              | $      | 25,383,309 |   |
| Available for sale securities                                                                                                                                                                                                                                 |   |      | 6,622,303    |   |              |   | 4,410,237 |   |
| Prepaid expenses                                                                                                                                                                                                                                              |   |      | 1,433,292    |   |              |   | 2,042,276 |   |
| Total current assets                                                                                                                                                                                                                                          |   |      | 27,609,220   |   |              |   | 31,835,822 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| MINERAL RIGHTS AND PROPERTIES, PLANT AND EQUIPMENT, Net                                                                                                                                                                                                       |   |      | 4,510,730    |   |              |   | 4,224,597 |   |
| RECLAMATION BOND DEPOSIT                                                                                                                                                                                                                                      |   |      | 721,748      |   |              |   | 721,748 |   |
| RETIREMENT OBLIGATION ASSET                                                                                                                                                                                                                                   |   |      | 331,730      |   |              |   | 339,357 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| TOTAL ASSETS                                                                                                                                                                                                                                                  |   | $         | 33,173,428   |   |              | $      | 37,121,524 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                    |   |      |         |   |              |   |   |   |
| CURRENT LIABILITIES:                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| Accounts payable                                                                                                                                                                                                                                              |   | $         | 649,437      |   |              | $      | 819,817 |   |
| Accrued expenses                                                                                                                                                                                                                                              |   |      | 4,040,838    |   |              |   | 3,965,838 |   |
| Accrued interest payable                                                                                                                                                                                                                                      |   |      | 1,781        |   |              |   | 11,531 |   |
| Mortgage obligations – current portion                                                                                                                                                                                                                  |   |      | 31,529       |   |              |   | 771,530 |   |
| Total current liabilities                                                                                                                                                                                                                                     |   |      | 4,723,585    |   |              |   | 5,568,716 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| LONG-TERM LIABILITIES:                                                                                                                                                                                                                                        |   |      |         |   |              |   |   |   |
| Mortgage obligations                                                                                                                                                                                                                                          |   |      | 673,175      |   |              |   | 680,881 |   |
| Derivative liability - contingent dividend payment                                                                                                                                                                                                            |   |      | 4,143,175    |   |              |   | 4,873,192 |   |
| Long-term reclamation liability                                                                                                                                                                                                                               |   |      | 1,348,150    |   |              |   | 1,332,730 |   |
| Total long-term liabilities                                                                                                                                                                                                                                   |   |      | 6,164,500    |   |              |   | 6,886,803 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| Total liabilities                                                                                                                                                                                                                                             |   |      | 10,888,085   |   |              |   | 12,455,519 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES  (Notes  4, 8, and 10)                                                                                                                                                                                      |   |      |         |   |              |   |   |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| STOCKHOLDERS’ EQUITY (DEFICIT):                                                                                                                                                                                                                         |   |      |         |   |              |   |   |   |
| Common stock, $.000666 par value, 3,950,000,000 shares authorized, 21,727,066 and 21,154,663 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively                                                                              |   |      | 14,470       |   |              |   | 14,089 |   |
| Convertible Preferred Stock; 50,000,000 shares authorized 7.5% Series A-1 convertible preferred stock; $.000666 par value, 1,500,000 shares authorized, 21,775 and 21,775 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively |   |      | 15           |   |              |   | 15 |   |
| 7.5% Series A-2 convertible preferred stock, $.000666 par value, 250,000 shares authorized, 8,282 and 8,382 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively                                                               |   |      | 5            |   |              |   | 5 |   |
| 7.5% Series B convertible preferred stock, $.000666 par value, 600,000 shares authorized, 35,699 and 35,749 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively                                                               |   |      | 24           |   |              |   | 24 |   |
| Additional paid-in capital                                                                                                                                                                                                                                    |   |      | 139,906,302  |   |              |   | 139,906,683 |   |
| Accumulated deficit                                                                                                                                                                                                                                           |   |      | (117,635,473 | )      |              |   | (115,254,811 | ) |
| Total stockholders’ equity (deficit)                                                                                                                                                                                                                    |   |      | 22,285,343   |   |              |   | 24,666,005 |   |
|                                                                                                                                                                                                                                                          |   |      |         |   |              |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                              |   | $         | 33,173,428   |   |              | $      | 37,121,524 |   |

----

|                                                       |   | Three Months EndedMarch 31, |          |
|------------------------------------------------------------|--------|-----------------------------|---------------|
|                                                       |   | 2011                        |          |   | 2010 |   |
| REVENUE                                                    |   | $                           | —       |   |   | $ | — |   |
|                                                       |   |                        |          |   |   |   |   |   |
| COST AND EXPENSES                                          |   |                        |          |   |   |   |   |   |
| Depletion, depreciation and amortization                   |   |                        | 24,958        |   |   |   | 108,236 |   |
| Reclamation, exploration and test mining expenses          |   |                        | 2,195,907     |   |   |   | 491,324 |   |
| General and administrative                                 |   |                        | 690,266       |   |   |   | 355,424 |   |
| Consultants and professional fees                          |   |                        | 226,162       |   |   |   | 149,306 |   |
| Total cost and expenses                                    |   |                        | 3,137,293     |   |   |   | 1,104,290 |   |
|                                                       |   |                        |          |   |   |   |   |   |
| LOSS FROM OPERATIONS                                       |   |                        | (3,137,293    | ) |   |   | (1,104,290 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                                     |   |                        |          |   |   |   |   |   |
| Change in fair value of debt beneficial conversion feature |   |                        | —       |   |   |   | (585,841 | ) |
| Change in fair value of warrants                           |   |                        | —       |   |   |   | (292,615 | ) |
| Change in fair value of contingent dividend payment        |   |                        | 730,017       |   |   |   | — |   |
| Interest expense                                           |   |                        | (12,590       | ) |   |   | (859,647 | ) |
| Interest income                                            |   |                        | 39,204        |   |   |   | — |   |
| Gain on sale of mineral rights                             |   |                        |  — |   |   |   | 300,000 |   |
| Other, net                                                 |   |                        |  — |   |   |   | (86,914 | ) |
| Total other expense, net                                   |   |                        | 756,631       |   |   |   | (1,525,017 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| NET LOSS                                                   |   |                        | (2,380,662    | ) |   |   | (2,629,307 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| DIVIDENDS ON CONVERTIBLE PREFERRED STOCK                   |   |                        | (1,232,908    | ) |   |   | — |   |
|                                                       |   |                        |          |   |   |   |   |   |
| NET LOSS AVAILABLE TO COMMON SHAREHOLDERS                  |   | $                           | (3,613,570    | ) |   | $ | (2,629,307 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| Net loss per common share – basic                    |   | $                           | (0.17         | ) |   | $ | (0.14 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| Net loss per common share – diluted                  |   | $                           | (0.17         | ) |   | $ | (0.14 | ) |
|                                                       |   |                        |          |   |   |   |   |   |
| Weighted average common shares outstanding — basic   |   |                        | 21,720,706    |   |   |   | 18,910,218 |   |
|                                                       |   |                        |          |   |   |   |   |   |
| Weighted average common shares outstanding — diluted |   |                        | 21,720,706    |   |   |   | 18,910,218 |   |

----

|                                                                          |   | Three Months EndedMarch 31, |       |
|-------------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                          |   | 2011                        |       |   | 2010 |   |
| OPERATING ACTIVITIES:                                                         |   |                        |       |   |   |   |
| Net loss                                                                      |   | $                           | (2,380,662 | ) |   | $ | (2,629,307 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:   |   |                        |       |   |   |   |   |   |
| Depreciation and amortization                                                 |   |                        | 24,956     |   |   |   | 108,236 |   |
| Gain on sale of mineral rights                                                |   |                        | —    |   |   |   | (300,000 | ) |
| Stock, warrants, and stock-based compensation and services                    |   |                        | —    |   |   |   | 38,969 |   |
| Accretion of reclamation liability                                            |   |                        | 15,420     |   |   |   | 80,583 |   |
| Other, non cash items                                                         |   |                        |       |   |   |   | 120,915 |   |
| Net change in derivative fair values                                          |   |                        | (730,017   | ) |   |   | 878,456 |   |
| Changes in operating assets and liabilities:                                  |   |                        |       |   |   |   |   |   |
| Prepaid expenses                                                              |   |                        | 608,984    |   |   |   | (149,000 | ) |
| Accounts payable                                                              |   |                        | (170,380   | ) |   |   | (738,745 | ) |
| Accrued expenses                                                              |   |                        | 75,000     |   |   |   | 396,731 |   |
| Accrued interest payable                                                      |   |                        | (9,750     | ) |   |   | 388,739 |   |
| NET CASH USED IN OPERATING ACTIVITIES                                         |   |                        | (2,566,449 | ) |   |   | (1,804,423 | ) |
|                                                                          |   |                        |       |   |   |   |   |   |
| INVESTING ACTIVITIES:                                                         |   |                        |       |   |   |   |   |   |
| Purchase of available-for-sale securities                                     |   |                        | (2,212,066 | ) |   |   | — |   |
| Purchase of mineral rights and properties, plant and equipment                |   |                        | (303,462   | ) |   |   | (10,000 | ) |
| Proceeds from sale of mineral rights and properties, plant and equipment |   |                        | —    |   |   |   | 550,000 |   |
| NET CASH USED IN (PROVIDED BY) INVESTING ACTIVITIES                           |   |                        | (2,515,528 | ) |   |   | 540,000 |   |
|                                                                          |   |                        |       |   |   |   |   |   |
| FINANCING ACTIVITIES:                                                         |   |                        |       |   |   |   |   |   |
| Principal payments on mortgage obligations and convertible debentures         |   |                        | (747,707   | ) |   |   | (250,000 | ) |
| Proceeds from the issuance of convertible debentures                          |   |                        | —    |   |   |   | 1,675,000 |   |
| NET CASH PROVIDED BY  (USED IN) FINANCING ACTIVITIES                |   |                        | (747,707   | ) |   |   | 1,425,000 |   |
|                                                                          |   |                        |       |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              |   |                        | (5,829,684 | ) |   |   | 160,577 |   |
|                                                                          |   |                        |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                  |   |                        | 25,383,309 |   |   |   | 246,214 |   |
| CASH AND CASH EQUIVALENTS, END OF YEAR                                        |   | $                           | 19,553,625 |   |   | $ | 406,791 |   |
|                                                                          |   |                        |       |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                           |   |                        |       |   |   |   |   |   |
| INCOME TAXES PAID                                                        |   | $                           | —    |   |   | $ | — |   |
| INTEREST PAID                                                                 |   | $                           | 11,940     |   |   | $ | 23,112 |   |

----

|                                                                                         |   | Three Months EndedMarch 31, |    |
|----------------------------------------------------------------------------------------------|--------|-----------------------------|---------|
|                                                                                         |   | 2011                        |    |   | 2010 |   |
| Supplemental disclosure of non-cash investing and financing  activities:           |   |                        |    |   |   |   |
| Conversion of Series A-2 and Series B convertible preferred stock  to common stock |   | $                           | 122     |   |   | $ | — |   |
| Dividends paid in common stock                                                               |   |                        | 259     |   |   |   | — |   |
| Issuance of common stock for convertible debenture principal                                 |   |                        | — |   |   |   | 349,975 |   |
| Issuance of common stock for convertible debenture interest                                  |   |                        | — |   |   |   | 388,739 |   |
| Issuance of company stock for consulting services                                            |   |                        | — |   |   |   | 34,000 |   |
| Issuance of company stock to employees                                                       |   |                        | — |   |   |   | 3,400 |   |

----

|                                                                 |   | March 31, |      |   | December 31, |   |
|----------------------------------------------------------------------|--------|-----------|-----------|--------|--------------|--------|
|                                                                 |   | 2011      |      |   | 2010         |   |
| FDIC insured certificates of deposit maturing in less than 12 months |   | $         | 5,148,968 |   |         | $      | 2,940,128 |   |
| FDIC insured certificates of deposit maturing in more than 12 months |   |      | 1,473,335 |   |         |   | 1,470,109 |   |
| Total                                                                |   | $         | 6,622,303 |   |         | $      | 4,410,237 |   |

----

|                   |   | March 31, |      |   | December 31, |   |
|------------------------|--------|-----------|-----------|--------|--------------|--------|
|                   |   | 2011      |      |   | 2010         |   |
| Prepaid leases         |   | $         | 1,176,113 |   |         | $      | 1,708,060 |   |
| Other prepaid expenses |   |      | 257,179   |   |         |   | 334,216 |   |
| Total                  |   | $         | 1,433,292 |   |         | $      | 2,042,276 |   |

|                                                        |   | 2011   |         |   | 2010   |   |
|-------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|
| Long-term reclamation liability — beginning of period |   | $      | 1,332,730    |   |   | $      | 1,186,966 |   |
| Additional obligations incurred                             |   |   | —      |   |   |   |     — |   |
| Accretion expense of the reclamation liability              |   |   |  15,420 |   |   |   | 20,406 |   |
| Long-term asset reclamation liability — end of period |   | $      | 1,348,150    |   |   | $      | 1,207,372 |   |

|                                                    |   | 2011   |    |   | 2010   |   |
|---------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Retirement obligation asset — beginning of period |   | $      | 339,357 |   |   | $      | 340,159 |   |
| Additional obligations incurred                         |   |   | — |   |   |   | — |   |
| Amortization of retirement obligation asset             |   |   | (7,627  | )      |   |   | (17,008 | ) |
| Retirement obligation asset — end of period       |   | $      | 331,730 |   |   | $      | 323,151 |   |

|                        |   | March 31, |      |   | December 31, |   |
|-----------------------------|--------|-----------|-----------|--------|--------------|--------|
|                        |   | 2011      |      |   | 2010         |   |
| Tax indemnification accrual |   | $         | 3,861,340 |   |         | $      | 3,861,340 |   |
| Other accrued expenses      |   |      | 179,498   |   |         |   | 104,498 |   |
|                        |   | $         | 4,040,838 |   |         | $      | 3,965,838 |   |

----

|                                                              |   | March 31, |    |   | December 31, |   |
|-------------------------------------------------------------------|--------|-----------|---------|--------|--------------|--------|
|                                                              |   | 2011      |    |   | 2010         |   |
| Note Description                                                  |   |      |    |   |         |   |   |   |
| Debt – Note (Obester Property) – Paid in full in 2011 |   | $         | — |   |         | $      | 650,000 |   |
| Debt – Note (Petrini Property) – Paid in full in 2011 |   |      | — |   |         |   | 90,000 |   |
| Debt – Note (Donovan Property)                              |   |      | 704,704 |   |         |   | 712,411 |   |
| Subtotal                                                          |   |      | 704,704 |   |         |   | 1,452,411 |   |
| Less current portion                                              |   |      | (31,529 | )      |         |   | (771,530 | ) |
| Long-term portion of mortgage obligations                         |   | $         | 673,175 |   |         | $      | 680,881 |   |

----

|                                       |   |   |       |   | Fair Value Measurements atMarch 31, 2011 |   |
|--------------------------------------------|--------|--------|------------|--------|---------------------------------------------------------|--------|
|                                       |   |   |       |   | Quoted                                                  |   |   | Significant |   |   |   |   |
|                                       |   |   |       |   | Prices                                                  |   |   | Other |   |   | Significant |   |
|                                       |   |   |       |   | in Active                                               |   |   | Observable |   |   | Unobservable |   |
|                                       |   |   |       |   | Markets                                                 |   |   | Inputs |   |   | Inputs |   |
|                                       |   | Total  |       |   | (Level 1)                                               |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets:                                    |   |   |       |   |                                                    |   |   |   |   |   |   |   |
| Certificates of deposit                    |   | $      | 6,622,303  |   |                                                    | $      | — |   |   | $ | 6,622,303 |   |   | $ | — |   |
| Liabilities:                               |   |   |       |   |                                                    |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liability - contingent dividend |   |   | 4,143,175  |   |                                                    |   | — |   |   |   | — |   |   |   | 4,143,175 |   |
| Total Assets and Liabilities               |   |   | 10,765,478 |   |                                                    | $      | — |   |   | $ | 6,622,303 |   |   | $ | 4,143,175 |   |

----

|                                       |   |   |      |   | Fair Value Measurements atDecember 31, 2010 |   |
|--------------------------------------------|--------|--------|-----------|--------|----------------------------------------------------------------------|--------|
|                                       |   |   |      |   | Quoted                                                               |   |   | Significant |   |   |   |   |
|                                       |   |   |      |   | Prices                                                               |   |   | Other |   |   | Significant |   |
|                                       |   |   |      |   | in Active                                                            |   |   | Observable |   |   | Unobservable |   |
|                                       |   |   |      |   | Markets                                                              |   |   | Inputs |   |   | Inputs |   |
|                                       |   | Total  |      |   | (Level 1)                                                            |   |   | (Level 2) |   |   | (Level 3) |   |
| Assets:                                    |   |   |      |   |                                                                 |   |   |   |   |   |   |   |
| Certificates of deposit                    |   | $      | 4,410,237 |   |                                                                 | $      | — |   |   | $ | 4,410,237 |   |   | $ | — |   |
| Liabilities:                               |   |   |      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liability - contingent dividend |   |   | 4,873,192 |   |                                                                 |   | — |   |   |   | — |   |   |   | 4,873,192 |   |
| Total Assets and Liabilities               |   | $      | 9,283,429 |   |                                                                 | $      | — |   |   | $ | 4,410,237 |   |   | $ | 4,873,192 |   |

|                       |   | Contingent  |      |
|----------------------------|--------|-------------|-----------|
|                       |   | Dividend    |      |
|                       |   | Payment on  |      |
|                       |   | Convertible |      |
|                       |   | Preferred   |      |
|                       |   | Stock       |      |
| Balance at January 1, 2011 |   | $           | 4,873,192 |   |
| Change in fair value       |   |        | (730,017  | ) |
| Balance at March 31, 2011  |   | $           | 4,143,175 |   |

|                                            |   | Convertible |          |   |     |   |
|-------------------------------------------------|--------|-------------|---------------|--------|----------|--------|
|                                            |   | Debenture   |          |   |     |   |
|                                            |   | Beneficial  |          |   |     |   |
|                                            |   | Conversion  |          |   |     |   |
|                                            |   | Feature     |          |   | Warrants |   |
| Balances at January 1, 2009                     |   | $           | 2,744,059     |   |     | $      |  1,756,130 |   |
| Additions:                                      |   |        |          |   |     |   |   |   |
| Issuance of convertible debentures and warrants |   |        | 373,772       |   |     |   | 124,947 |   |
| Change in fair value                            |   |        | 585,841  |   |     |   | 292,615 |   |
| Reductions:                                     |   |        |  — |   |     |   |  — |   |
| Balances at March 31, 2010                      |   | $           | 3,703,672     |   |     | $      | 2,173,692 |   |

----

|                                  |   |   |       |   |   |   |       | Per Share |   |
|---------------------------------------|--------|--------|------------|--------|--------|--------|------------|-----------|--------|
|                                  |   |   |       |   | Shares |   |       | Amount    |   |
| Three Months Ended March 31, 2011:    |   |   |       |   |   |   |       |      |   |
| Net loss                              |   | $      | (2,380,662 | )      |   |   |       |      |   |   |
| Preferred stock dividends             |   |   | (1,232,908 | )      |   |   |       |      |   |   |
|                                  |   |   |       |   |   |   |       |      |   |   |
| Basic loss per share                  |   |   |       |   |   |   |       |      |   |   |
| Loss available to common shareholders |   |   | (3,613,570 | )      |   |   | 21,720,706 |      |   | $ | (0.17 | ) |
|                                  |   |   |       |   |   |   |       |      |   |   |   |   |
| Effect of dilutive securities         |   |   |       |   |   |   | —    |      |   |   | — |   |
|                                  |   |   |       |   |   |   |       |      |   |   |   |   |
| Diluted loss per share                |   |   |       |   |   |   |       |      |   |   |   |   |
| Loss available to common shareholders |   | $      | (3,613,570 | )      |   |   | 21,720,706 |      |   | $ | (0.17 | ) |

|                                  |   |   |       |   |   |   |       | Per Share |   |
|---------------------------------------|--------|--------|------------|--------|--------|--------|------------|-----------|--------|
|                                  |   |   |       |   | Shares |   |       | Amount    |   |
| Three Months Ended March 31, 2010:    |   |   |       |   |   |   |       |      |   |
| Net loss                              |   | $      | (2,629,307 | )      |   |   |       |      |   |   |
| Preferred stock dividends             |   |   | —    |   |   |   |       |      |   |   |
|                                  |   |   |       |   |   |   |       |      |   |   |
| Basic loss per share                  |   |   |       |   |   |   |       |      |   |   |
| Loss available to common shareholders |   |   | (2,629,307 | )      |   |   | 18,910,218 |      |   | $ | (0.14 | ) |
|                                  |   |   |       |   |   |   |       |      |   |   |   |   |
| Effect of dilutive securities         |   |   |       |   |   |   | —    |      |   |   | — |   |
|                                  |   |   |       |   |   |   |       |      |   |   |   |   |
| Diluted loss per share                |   |   |       |   |   |   |       |      |   |   |   |   |
| Loss available to common shareholders |   | $      | (2,629,307 | )      |   |   | 18,910,218 |      |   | $ | (0.14 | ) |

|                         |   | Shares    |       |
|------------------------------|--------|-----------|------------|
|                         |   | March 31, |       |
|                         |   | 2011      |       |   | 2010 |   |
| Convertible debt             |   |      | —    |   |   |   | 15,572,000 |   |
| Stock options                |   |      | 450,000    |   |   |   | 950,000 |   |
| Preferred convertible shares |   |      | 67,806,031 |   |   |   | — |   |
| Warrants                     |   |      | 2,333,500  |   |   |   | 1,954,332 |   |
|                         |   |      | 70,589,531 |   |   |   | 18,476,332 |   |

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|                                             |   | Quarter   |      |   | Quarter   |   |      |       |   |
|--------------------------------------------------|--------|-----------|-----------|--------|-----------|--------|-----------|------------|--------|
|                                             |   | Ended     |      |   | Ended     |   |      |       |   |
|                                             |   | March 31, |      |   | March 31, |   |      |       |   |
|                                             |   | 2011      |      |   | 2010      |   |      | Difference |   |
| Revenue                                          |   | $         | —   |   |      | $      | —   |       |   | $ | — |   |
| Depletion and amortization                       |   |      | 24,958    |   |      |   | 108,236   |       |   |   | (83,278 | ) |
| Reclamation, exploration and test mining expense |   |      | 2,195,907 |   |      |   | 491,324   |       |   |   | 1,704,583 |   |
| General and administration                       |   |      | 690,266   |   |      |   | 355,424   |       |   |   | 334,842 |   |
| Consulting and professional service fees         |   |      | 226,162   |   |      |   | 149,306   |       |   |   | 76,856 |   |
| Loss from operations                             |   |      | 3,137,293 |   |      |   | 1,104,290 |       |   |   | 2,033,003 |   |
| Gain on sale of mineral rights                   |   |      | 0         |   |      |   | (300,000  | )          |   |   | 300,000 |   |
| Derivative change in fair value                  |   |      | (730,017  | )      |      |   | 878,456   |       |   |   | (1,608,473 | ) |
| Interest income                                  |   |      | (39,204   | )      |      |   | 0         |       |   |   | (39,204 | ) |
| Interest expense                                 |   |      | 12,590    |   |      |   | 859,647   |       |   |   | (847,057 | ) |
| Other, net                                       |   |      | 0         |   |      |   | 86,914    |       |   |   | (86,914 | ) |
| Net loss                                         |   | $         | 2,380,662 |   |      | $      | 2,629,307 |       |   | $ | (248,645 | ) |

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| Condensed Consolidated Balance Sheets as of  March 31, 2011 (Unaudited)                                     |
|-----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                  |
| Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2011 and 2010 (Unaudited) |
|                                                                                                                  |
| Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2011 and 2010 (Unaudited) |
|                                                                                                                  |
| Notes to Condensed Consolidated Financial Statements (Unaudited)                                                      |

| ExhibitNumber |   | Exhibit                                                                                                                                                                                         |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1          |   | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
|          |   |                                                                                                                                                                                       |
| 32.1          |   | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                         |

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|               | COMSTOCK MINING INC. |                                                                                                                                                                                                           |
|--------------------|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               | (Registrant)         |                                                                                                                                                                                                           |
|               |                 |                                                                                                                                                                                                           |   |
| Date: May 16, 2011 | By:                  | /s/ Corrado De Gasperis                                                                                                                                                                                        |   |
|               |                 | Name: Corrado De Gasperis                                                                                                                                                                                      |   |
|               |                 | Title:   Chief Executive Officer                                                                                                                                                                     |   |
|               |                 |             (Principal Executive Officer and              Principal Financial Officer) |   |

|               |   |                                        |   |
|--------------------|--------|---------------------------------------------|--------|
| Date: May 16, 2011 | By:    | /s/ Robert T. Faber                         |   |
|               |   | Name: Robert T. Faber                       |   |
|               |   | Title:   Chief Accounting Officer |   |
|               |   |                                        |   |

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| ExhibitNumber |   | Exhibit                                                                                                                                                                                         |
|---------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1          |   | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended. |
|          |   |                                                                                                                                                                                       |
| 32.1          |   | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                         |

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