UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.   20549




Form 10-Q






QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE ACT OF 1934




For the quarterly period ended:March 31, 2012




Commission File Number: 000-25301




SIERRA RESOURCE GROUP, INC.


(Exact name of registrant as specified in its charter)




NEVADA

(State or other jurisdiction of incorporation or organization)
88-0413922

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




9550 S. Eastern Ave., Suite 253, Las Vegas, NV  89123


(Address of principal executive offices)




Registrant's telephone number, including area code: (702) 462-7285




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




Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [x] Yes   [  ]  No




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




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




Large accelerated filer

Non-accelerated filer
[  ]

[  ]
Accelerated filer

Smaller reporting company
[  ]

[ X]




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




APPLICABLE ONLY TO CORPORATE ISSUERS




Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of March 31, 2012 the issuer had 301,191,344 issued shares of Common Stock, $0.001 par value.


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TABLE OF CONTENTS











PagePART I - FINANCIAL INFORMATIONItem 1.    Condensed financial statements

3Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

37Item 3.    Quantitative and Qualitative Disclosures About Market Risk

42Item 4T.  Controls and Procedures

42PART II - OTHER INFORMATIONItem 1.    Legal Proceedings

43Item 1A.  Risk Factors

43Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

55Item 3.    Defaults Upon Senior Securities

56Item 4.    Removed and Reserved

56Item 5.    Other Information

Item 6      Exhibits

54SIGNATURES

59









CERTIFICATIONS









31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.32.2
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.32.2
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.




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PART I






FINANCIAL INFORMATION











Item 1.
Condensed financial statements











The accompanying reviewed interim condensed financial statements have been prepared in accordance with the instructions to Form 10-Q.  Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles.  Except as disclosed herein, there has been no material change in the information disclosed in the notes to the condensed financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.  In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.  Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2011.




SIERRA RESOURCE GROUP, INC.(An Exploration Stage Company)CONDENSED BALANCE SHEETSMarch 31,


December 31,2012


2011ASSETSCURRENT ASSETSCash and cash equivalents

$
46,127


$
132Accounts receivable, netTOTAL CURRENT ASSETS


46,127



132Mining Interest


6,500TOTAL ASSETS

$
52,627


$
132LIABILITIES AND STOCKHOLDERS' DEFICITCURRENT LIABILITIESAccounts payable and accrued expenses

$
254,551


$
369,882Embedded derivative liabilities


2,262



2,262Officer advances


90,573



90,573Subscribed Shares - Not Issued


75,000



75,000Note payable


1,016,939



801,963TOTAL CURRENT LIABILITIES


1,439,325



1,339,680TOTAL LIABILITIES


1,439,325



1,339,680COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' DEFICITClass A Common stock, $0.001 par value: 440,000,000 shares authorized;301,191,344 and 206,804,004 issued and outstandingat March 31, 2012 and December 31, 2011, respectively


301,191



206,804Class B Common stock, $0.001 par value: 10,000,000 shares authorized;none issued and outstanding at March 31, 2012 and December 31, 2011, respectively


-



-Preferred stock, $0.001 par value: 10,000,000 shares authorized;none issued and outstanding at March 31, 2012 and December 31, 2011, respectively


-



-Common stock subscribed, not issued $.001 par value 13,707,467 and  2,200,000at March 31, 2012 and December 31, 2011, respectively


278,921



262,000Additional Paid-in capital


8,612,607



8,495,151Accumulated deficit


(10,579,417
)


(10,303,503
)TOTAL STOCKHOLDERS' DEFICIT


(1,386,698
)


(1,339,548
)TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$
52,627


$
132The accompanying notes are an integral part of these condensed financial statements.




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SIERRA RESOURCE GROUP, INC.(An Exploration Stage Company)CONDENSED STATEMENT OF OPERATIONSFor the Three Months Ended


December 21, 1992March 31,


(Inception) to2012


2011


March 31, 2012REVENUERevenue

$
—


$
—


$
1,275Total revenue


—



—



1,275OPERATING EXPENSESAmortization






—



11,972Selling, general and administrative expenses


223,999



493,759



1,824,309Total operating expenses


223,999



493,759



1,836,281Operating loss


(223,999
)


(493,759
)


(1,835,006
)Other Income (expense)Gain on Forgivess of Debt


125,449







125,449Interest expense


(177,366
)


(6,844
)


(656,346
)Amortization of discount on convertible debt


—



(3,486
)


(293,671
)Loss on embedded derivative


—



—



(22,474
)Loss on Impairment of goodwill and equipment


—



—



(7,907,597
)Total other income (expense)


(51,917
)


(10,330
)


(8,754,639
)LOSS BEFORE INCOME TAXES


(275,916
)


(504,089
)


(10,579,417
)PROVISION FOR INCOME TAXES


—



—NET LOSS


(275,916
)

$
(504,089
)


(10,579,417
)BASIC NET LOSS PER COMMON SHARE

$
(0.00
)

$
(0.00
)WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGat December 31, 2010 and 2009, respectively


251,929,486



118,733,236The accompanying notes are an integral part of these condensed financial statements.






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SIERRA RESOURCE GROUP, INC.(An Exploration Stage Company)CONDENSED STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31, 2011AND FOR THE PERIOD FROM DECEMBER 21, 1992 (INCEPTION) THROUGH MARCH 31, 2012For the Three Months Ended


December 21, 1992March 31,


(Inception) to2012

2011


March 31, 2012Cash flows from operating activities:Net loss

$
(275,916
)

$
(504,089
)

$
(10,579,417
)Adjustments to reconcile net loss to net cash used in operating activities:Stock issued for services


0



414,700



751,134Stock subscribed not issued for services


0







262,000Loss on Impairment


0



0



7,907,597Loss on embedded derivatives


0



3,486



2,262Amortization


0



0



11,972Changes in operating assets and liabilities:Gain of forgivess of debt


(125,449
)






(125,449
)Accounts receivable


0



0Accrued Interest - related party


(259
)


6,844



98,557Accounts payable


(10,118
)


17,238



357,683Net cash used in operating activities


(411,742
)


(61,821
)


(1,313,661
)Cash Flows from Investing ActivitiesInvestment in oil and gas interests


(6,500
)






(36,000
)Net cash used in investing activities


(6,500
)






(29,500
)Cash flows from financing activities:Issuance of common stock










1,860Interest expense for conversion of stock


196,737







573,822Proceeds from issuance of subscribed stock


10,000



0



85,000Proceeds from officer advances


0



0



90,573Proceeds from note payable-related party


67,500



55,000



97,000Proceeds from note payable


190,000



0



541,033Net cash provided by financing activities


464,237



55,000



1,389,288Net increase (decrease) in cash and cash equivalents

117,552,000 and 12,090,000 issued and outstanding


45,995



(6,821
)


46,127Cash and cash equivalents at beginning of period


132



23,431Cash and cash equivalents at end of period

and at December 31, 2009, respectively


46,127



16,610


$
46,127The accompanying notes are an integral part of these condensed financial statements.







-5-


SIERRA RESOURCE GROUP, INC.


(An Exploration Stage Company)


NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS


FOR THE THREE MONTHS ENDED MARCH 31, 2012


(UNAUDITED)




NOTE 1. DESCRIPTION OF BUSINESS




Sierra Resource Group, Inc. (the “Company,” “we,” “us,” and “our “) was incorporated in the state of Nevada on December 21, 1992, to engage in the lease, acquisition, exploration and development of interests in natural resource properties such as those involving oil and gas interests. The Company has not commenced significant operations and, in accordance with ASC Topic 915, the Company is considered an exploratory stage company





Our business plan has been to lease, acquisition, exploration and development of interests in natural resource properties since our inception.





NOTE 2.GOING CONCERN ISSUES





The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. At March 31, 2012, we had an accumulated deficit of $10,579,417 and a working capital deficit of $1,393,619. During the quarter ended March 31, 2012, we incurred a loss of $265,739. We had no significant revenues or earnings from operations.  We will in all likelihood sustain operating expense without corresponding revenues. This may result in us incurring a net operating loss, which will increase continuously unless and until we can achieve meaningful revenues.





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





The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing, achievement of profitable operations and/or the discovery, exploration, development and sale of mining reserves. The Company cannot reasonably be expected to earn revenue in the exploration stage of operations. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all.





NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation





The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.  Significant accounting policies are as follows:





Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net sales and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial
statements; accordingly, actual results could differ from these estimates.





These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.





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Exploration Stage Enterprise





The Company's financial statements are prepared pursuant to the provisions of Topic 26, “Accounting for Development Stage Enterprises,” as it devotes substantially all of its efforts to acquiring and exploring mining interests that will eventually provide sufficient net profits to sustain the Company’s existence. Until such interests are engaged in major commercial production, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the development stage. Mining companies subject to Topic 26 are required to label their financial statements as an “Exploratory Stage Company,” pursuant to guidance provided by SEC Guide 7 for
Mining Companies.





Revenue Recognition





As the Company is continuing exploration of its mineral properties, no significant revenues have been earned to date. The Company recognizes revenues at the time of delivery of the product to the customers





Revenue includes sales value received for our principle product, silver, and associated by-product revenues from the sale of by-product metals consisting primarily of gold and copper. Revenue is recognized when title to silver and gold passes to the buyer and when collectability is reasonably assured. The passing of title to the customer is based on terms of the sales contract. Product pricing is determined at the point revenue is recognized by reference to active and freely traded commodity markets for example, the London Bullion Market, an active and freely traded commodity market, for both gold and silver, in an identical form to the product sold.





Pursuant to guidance in Topic 605, "Revenue Recognition for Financial Statements", revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, no obligations remain and collectability is probable. The passing of title to the customer is based on the terms of the sales contract. Product pricing is determined at the point revenue is recognized by reference to active and freely traded commodity markets, for example the London Bullion Market for both gold and silver, in an identical form to the product sold.





Cash and Cash Equivalents





The Company considers all highly liquid investments with an original maturity of year ended or less to be cash equivalents.  Cash equivalents include cash on hand and cash in the bank.





Property and Equipment




Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon.  Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.





The range of estimated useful lives used to calculated depreciation for principal items of property and equipment are as follow:


Asset Category

Depreciation/

Amortization PeriodFurniture and Fixture

3 YearsOffice equipment

3 YearsLeasehold improvements

5 Years




Mine Exploration and Development Costs





All exploration costs are expensed as incurred. Mine development costs are capitalized after proven and probable reserves have been identified.  Amortization is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces.





-7-


Mineral Properties





Significant payments related to the acquisition of mineral properties, mineral rights, and mineral leases are capitalized.  If a commercially mineable ore body is discovered, such costs are amortized when production begins using the units-of-production method based on proven and probable reserves. If no commercially mineable ore body is discovered, or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined the property has no future economic value.





Property Evaluations





Management of the Company will periodically review the net carrying value of its properties on a property-by-property basis. These reviews will consider the net realizable value of each property to determine whether a permanent impairment in value has occurred and the need for any asset write-down. An impairment loss will be recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of an asset are less than the carrying amount of the asset.  Measurement of an impairment loss will be based on the estimated fair value of the asset if the asset is expected to be held and used.





Although management will make its best estimate of the factors that affect net realizable value based on current conditions, it is reasonably possible that changes could occur in the near term which could adversely affect management's estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs.





Reclamation and Remediation Costs (Asset Retirement Obligations)




The Company had no operating properties at March 31, 2012, respectively, but the Company’s mineral properties will be subject to standards for mine reclamation that are established by various governmental agencies. For these non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Costs of future expenditures for environmental remediation are not discounted to their present value. Such costs are based on management's current estimate of amounts that are expected to be incurred when the remediation work is performed within current laws and regulations.





It is reasonably possible that due to uncertainties associated with defining the nature and extent of environmental contamination, application of laws and regulations by regulatory authorities, and changes in remediation technology, the ultimate cost of remediation and reclamation could change in the future. The Company continually reviews its accrued liabilities for such remediation and reclamation costs as evidence becomes available indicating that its remediation and reclamation liability has changed.





The Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred, if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the associated long-lived assets and depreciated over the lives of the assets on a units-of-production basis.  Reclamation costs are accreted over the life of the related assets and are adjusted for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate on the underlying obligation.





Mineral property rights




All direct costs related to the acquisition of mineral property rights are capitalized. Exploration costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, at which time subsequent exploration costs and the costs incurred to develop a property are capitalized.





The Company reviews the carrying values of its mineral property rights whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts. An impairment loss is recognized when the carrying value of those assets is not recoverable and exceeds its fair value. As of December 31, 2010, management has determined that it would impair the mining claim located in Arizona to zero.





At such time as commercial production may commence, depletion of each mining property will be provided on a unit-of-production basis using estimated proven and probable recoverable reserves as the depletion base. In cases where there are no proven or probable reserves, depletion will be provided on the straight-line basis over the expected economic life of the mine.  The company impaired its mining claim and recorded an impairment of $163,000 as of December 31, 2010.





-8-


Asset retirement obligations





The Company plans to recognize liabilities for statutory, contractual or legal obligations, including those associated with the reclamation of mineral and mining properties and any plant and equipment, when those obligations result from the acquisition, construction, development or normal operation of the assets. Initially, a liability for an asset retirement obligation will be recognized at its fair value in the period in which it is incurred. Upon initial recognition of the liability, the corresponding asset retirement cost will be added to the carrying amount of the related asset and the cost will be amortized as an expense over the economic life of the asset using either the unit-of-production method or the
straight-line method, as appropriate. Following the initial recognition of the asset retirement obligation, the carrying amount of the liability will be increased for the passage of time and adjusted for changes to the amount or timing of the underlying cash flows needed to settle the obligation.





Impairment of Long-Lived Assets





In accordance with ASC Topic 360, long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the
carrying amount of the asset exceeds the fair value of the asset. The company impaired its mining claim and recorded an impairment of $163,000 and $125,000 in mining interest during the year ended December 31, 2010.





Goodwill and Other Intangible Assets





The Company adopted Statement of Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 350 Goodwill and Other Intangible Assets, effective July 1, 2002. In accordance with (“ASC Topic 350”) "Goodwill and Other Intangible Assets," goodwill, which represents the excess of the purchase price and related costs over the value assigned to net tangible and identifiable intangible assets of businesses acquired and accounted for under the purchase method, acquired in business combinations is assigned to reporting units that are expected to
benefit from the synergies of the combination as of the acquisition date. Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. The Company assesses goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter, or more frequently if events and circumstances indicate impairment may have occurred in accordance with ASC Topic 350. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference. ASC Topic 350 also requires that the fair value of indefinite-lived purchased intangible assets be estimated and compared to the carrying value. The Company recognizes an impairment loss when the estimated fair value of the indefinite-lived purchased intangible assets is less than the carrying value.





The company impaired its goodwill of approximately $7,602,000 during the year ended December 31, 2010.





Income Taxes





Deferred income taxes are provided based on the provisions of ASC Topic 740, "Accounting for Income Taxes", to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.





The Company adopted the provisions of ASC Topic 740; "Accounting For Uncertainty In Income Taxes-An Interpretation Of ASC Topic 740 ("Topic 740").  Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions.  The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement.  The Company considers many factors
when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At March 31, 2012 and December 31, 2011, respectively, the Company did not record any liabilities for uncertain tax positions.





-9-


We have adopted “Accounting for Uncertainty in Income Taxes”. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption of ASC 740-10-25 had no effect on our financial statements.





Concentration of Credit Risk





The Company maintains its operating cash balances in banks in Tampa, Florida.  The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $250,000.





Share-Based Compensation





The Company applies Topic 718 “Share-Based Payments” (“Topic 718”) to share-based compensation, which requires the measurement of the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.  Compensation cost is recognized when the event occurs.  The Black-Scholes option-pricing model is used to estimate the fair value of options granted.





Basic and Diluted Net Loss Per Share




Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted net loss per share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be antidilutive.




Fair Value of Financial Instruments





The company financial instruments consist primarily of cash, affiliate receivable, settlement receivable, accounts payable and accrued expenses and debt.  The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.  The estimated fair value is not necessarily indicative of the amounts the Company would realize in a current market exchange or from future earnings or cash flows.





The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosure about fair value measurements.  The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The standard also prioritizes, within the measurement of fair value, the use of market-based measurements.





The three-level hierarchy for fair value measurements is defined as follows:




·
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;




·
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable of the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active;




·
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.




-10-


Reclassifications





Certain prior year amounts have been reclassified to conform to the current period presentation for comparative purposes.





Recent Accounting Pronouncements




ASU 2011-04 – Amendments to achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRSs





The amendments in ASU 2011-04 do not modify the requirements for when fair value measurements apply; rather, they generally represent clarifications on how to measure and disclose fair value under ASC 820, Fair Value Measurement, including the following revisions:





• The concepts of highest and best use and valuation premise are relevant only for measuring the fair value of nonfinancial assets and do not apply to financial assets and liabilities.





• An entity should measure the fair value of an equity-classified financial instrument from the perspective of the market participant that holds the instrument as an asset.





• An entity that holds a group of financial assets and financial liabilities whose market risk (that is, interest rate risk, currency risk, or other price risk) and credit risk are managed on the basis of the entity’s net risk exposure may apply an exception to the fair value requirements in ASC 820 if certain criteria are met. The exception allows such financial instruments to be measured on the basis of the reporting entity’s net, rather than gross, exposure to those risks.





• Premiums or discounts related to the unit of account are appropriate when measuring fair value of an asset or liability if market participants would incorporate them into the measurement (for example, a control premium). However, premiums or discounts related to size as a characteristic of the reporting entity’s holding (that is, a “blockage factor”) should not be considered in a fair value measurement.





The amendments to ASC 820, Fair Value Measurement, included in ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, are effective prospectively for public entities for interim and annual periods beginning after December 15, 2011 (that is, the quarter ending March 31, 2012 for calendar-year entities). Early adoption is not permitted for public entities





ASU 2011-03 – Reconsideration of effective control for repurchase agreements




The amendments to ASC 860-10 included in ASU 2011-03, simplified the accounting for financial assets transferred under repurchase agreements (repos) and similar arrangements, by eliminating the transferor’s




ability criteria from the assessment of effective control over those assets as well as the related implementation guidance.





Currently under ASC 860-10-40-24 a transferor must meet four criteria to maintain effective control of securities transferred in a repo and to therefore account for the transfer as a secured borrowing rather than a sale. One of these criteria states that the transferor must be able to either repurchase or redeem the transferred securities on substantially the agreed terms, even if the transferee is in default. This criterion is satisfied only if the transferor has cash or collateral sufficient to fund substantially the entire cost of purchasing replacement securities.





The amendments in ASU 2011-03 remove this criterion and related implementation guidance from the Codification, thereby reducing the criteria that transferors must satisfy to qualify for secured borrowing accounting and, as a result, likely reducing the number of transfers accounted for as sales.





The amendments to ASC 860-10, Transfers and Servicing, included in ASU 2011-03, Reconsideration of Effective Control for Repurchase Agreements, are effective for both public and nonpublic entities prospectively for new transfers and existing transactions modified as of the first interim or annual period beginning on or after December 15, 2011 (that is, the fiscal year beginning January 1, 2012 for calendar-year entities). Early adoption is not permitted.




-11-


ASU 2011-02 -FASB amends creditor troubled debt restructuring guidance





This bulletin discusses ASU 2011-02, which was issued by the FASB to provide creditors with additional guidance in evaluating whether a restructuring of debt is a troubled debt restructuring. The new guidance does not amend the guidance for debtors. It is generally effective for public entities in the quarter ended September 30, 2011.




ASU 2011-01 - Troubled debt restructuring disclosures for public-entity creditors deferred





The FASB issued Accounting Standards Update (ASU) 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20, which temporarily defers the date when public-entity creditors are required to provide the new disclosures for troubled debt restructurings in ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The deferred effective date will coincide with the effective date for the clarified guidance about what constitutes a troubled debt restructuring, which the Board is currently
deliberating. The clarified guidance is expected to apply for interim and annual periods ending after June 15, 2011.





When providing the new disclosures under ASU 2010-20, public entities would be required to retrospectively apply the clarified guidance on what constitutes a troubled debt restructuring to restructurings occurring on or after the beginning of the year in which the proposed clarified guidance is adopted.





The Company has implemented all new accounting pronouncements that are in effect and that may impact its condensed financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.





NOTE 4 - NET LOSS PER SHARE





The net loss per common share is calculated by dividing the loss by the weighted average number of shares outstanding:




The following table represents the computation of basic and diluted losses per share:March 31,


March 31,2012


2011Losses available for common shareholders


(275,916
)


(504,089
)Weighted average common shares outstanding


(251,929,486
)


(118,733,236
)Basic loss per share


(.00
)


(.00
)Net loss per share is based upon the weighted average shares of common stock outstanding




NOTE 5. CHLORIDE COPPER PROJECT





On April 23, 2010, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Medina Property Group LLC, a Florida limited liability company (“Medina”). Pursuant to the Purchase Agreement, and upon the terms and subject to the conditions thereof, the Company agreed to purchase 80% of certain mining interests of Medina known as the Chloride Copper Project, a former copper producer comprised of a mineral deposit and some infrastructure located near Kingston, Arizona (the “Copper Mine”).





The Company's acquisition of the Chloride Copper Project was accounted for in accordance with ASC 805 Business Combinations and the Company has allocated the purchase price based upon the fair value of the net assets acquired and liabilities assumed.





The purchase price was $7,505,529 which, pursuant to the Purchase Agreement, The purchase price included the issuance of 12,750,000 shares of common stock by the Company to Medina or its assignees, return of 5,358,000 by Black Diamond and the payment of $125,000 to the original seller of certain equipment where the Chloride Copper Mine is located, as designated by Medina in the Purchase Agreement. The purchase price was determined based on the Company's analysis of a recently completed comparable acquisition and based on the value of the associated underlying shares of the Company’s common stock which value of $1.00 per share represented the offering price of the Company’s Common Stock in its most
recently completed equity transaction prior to the date of the Purchase Agreement.  The Company recognized goodwill of $7,602,069 and assumed $384,540 in liabilities, which consisted of a $360,000 promissory note and $3,040 in accrued interest and $21,500 in accounts payable.




-12-





The following table summarizes the acquisition with a total purchase price of $507,500:




Mining Property

$
163,000Equipment

$
125,000Liabilities

$
(384,540
)Goodwill

$
7,602,069Net Assets

$
7,505,529




In addition, pursuant to the Purchase Agreement, Black Diamond Realty Management, LLC returned 5,348,000 shares of the Company’s Common Stock, and as a result, a change of our shareholder voting control occurred. The Acquisition formally closed on June 21, 2010. The shares of Common Stock constituting the equity portion of the purchase price were issued on August 9, 2010 to certain assignees of Medina, and although this issuance of shares approximately doubled our outstanding shares of Common Stock, no single person or cohesive group took a controlling interest in our Company as a result of this transaction.




The Company had impairment on the entire purchase price for the Medina Property acquisition and impairment on the Chloride Cooper Project related to fixed assets and mining interests. During the year ended December 31, 2010 impairment was  $7,890,069 was comprised of $7,602,069 write-off of goodwill, $163,000 write-off of mining interests and $125,000 for the write-down of fixed assets. All these assets were acquired and recorded as part of the Chloride Copper Project.





NOTE 6 – NOTE PAYABLE




The Company had the following notes payable outstanding as of December 31, 2011 and March 31, 2012:December 31, 2011


March 31, 2012Promissory note payable dated August 16, 2010 due to Brian Hebb including accrued interest.

$
42,055


$
46,765Promissory note payable dated August 6, 2010 due to Black Diamond Realty Mgmt including accrued interest.


26,126



26,126Promissory note payable dated May 5, 2010 due to Brian Hebb including accrued interest.


155,146



172,402Notes payable acquisition as a part of the Chloride Copper Project dated March 22, 2010 including accrued interest


413,001



421,239Promissory note payable dated September 30, 2011 due to South Concord Corp including accrued interest


35,667



38,539Promissory notes payable dated May 18, 2011 due to Black Pool Partners LLC including accrued interest.


6,857Promissory notes payable dated June 8, 2011 due to Asher Enterprises including accrued interest


26.149Promissory notes payable dated July 1, 2011 due to Asher Enterprises including accrued interest


26.002Promissory notes payable dated August 30, 2011 due to Asher Enterprises including accrued interest


38,511



18,759
  Promissory notes payable dated October 17, 2011 due to Tangiers Investors, LP including accrued interest


32,147



32,933Promissory notes payable dated January 13, 2012 due to Asher Enterprises including accrued interest


-0-



38,141Promissory notes payable dated February 16, 2012 due to Grand View Ventures including accrued interest






191,832Promissory notes payable dated February 29, 2012 due to Asher Enterprises including accrued interest


-0-



30,203Total Notes Payable – Current Portion


801,931



1,016,879
  Total Notes Payable – Long-Term Portion

-0-




-0-





-13-


The Company entered into a promissory note with Brian Hebb on August 16, 2010 in the amount of $34,527. The note has an interest rate of 8% with the maturity date of July 15, 2011. The Company is currently in default of the note.





The Company entered into a promissory note with Black Diamond Realty Mgmt on August 6, 2010 in the amount of $25,000. The note does not have an interest rate on the principal balance and matured on August 16, 2011. The Company is currently in default of the note.





The Company entered into a promissory note with Brian Hebb on May 5, 2010 in the amount of $125,000. The note has an interest rate of 8% with the maturity date of August 16, 2011. The Company is currently in default of the note.





The Company entered into the purchase interest of the Chloride Copper Project from Medina Property Group, LLC which resulted in the Company acquiring the debt and a promissory note dated March 22, 2010 in the amount of $360,000. The note has an interest rate of 8% with the maturity date of September 22, 2010. The Company is currently in default of the note,




The Company entered into a Convertible Promissory Note with South Concord, a related party, on September 30, 2010 in the amount of $30,000. The note has an interest rate of 10% with the maturity date of September 30, 2011. The Company is currently in default of the note.





The Company entered into a demand Promissory Note with Blackpool Partners LLC; a company owned the Company’s CEO and a related party, on May 18, 2011 in the amount of $6,700. The note has an interest rate of 4%.





The Company entered into a Convertible Promissory Note with Asher Enterprises Inc. on June 8, 2011 in the amount of $32,500. The note has an interest rate of 8% with the maturity date of March 13, 2012. During the course of the year ended December 31, 2011 Asher Enterprises converted $10,000 in principle balance of the note to the Company’s common stock in accordance to the terms of the Agreement.





The Company entered into a Convertible Promissory Note with Asher Enterprises Inc. on July 1, 2011 in the amount of $25,000. The note has an interest rate of 8% with the maturity date of April 5, 2012.





The Company entered into a Convertible Promissory Note with Asher Enterprises Inc. on August 30, 2011 in the amount of $37,500. The note has an interest rate of 8% with the maturity date of June 4, 2012.





The Company entered into a Convertible Promissory Note with Tangiers. on October 14, 2011 in the amount of $31,500. The note has an interest rate of 10% with the maturity date of July 14, 2012.





The Company entered into a Convertible Promissory Note with Asher Enterprises Inc. on January 13, 2012 in the amount of $37,500. The note has an interest rate of 8% with the maturity date of January 7, 2013.





The Company entered into a Convertible Promissory Note with Asher Enterprises Inc. on February 29, 2012 in the amount of $30,000. The note has an interest rate of 8% with the maturity date of February 23, 2013.





The Company entered into a Promissory Note with Grand View Ventures. on February 16, 2012 in the amount of $190,000. The note has an interest rate of 8% with the maturity date of February 16, 2013.





NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS




The Company measures fair value in accordance with a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described below:




Level 1
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;Level 2
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; andLevel 3
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).





The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy.  Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.





The table below sets forth a summary of the fair values of the Company’s financial assets and liabilities as of December 31, 2011 and March 31, 2012:




Total


Level 1


Level 2


Level 3LIABILITIES:Embedded derivative liability

$
2,262


$
-


$
-


$
2,262$
2,262


$
-


$
-


$
2,262




-14-
 The Company’s conversion option liabilities are valued using pricing models and the Company generally uses similar models to value similar instruments.  Where possible, the Company verifies the values produced by its pricing models to market prices.  Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility and correlations of such inputs.  These financial liabilities do not trade in liquid markets, and as such, model inputs cannot generally be verified and do involve significant management judgment.  Such instruments are typically classified within Level 3 of the fair value hierarchy.





NOTE 8. ADVANCE RELATED PARTY


In connection with consummation of the Share Purchase Agreement on March 17, 2010, Brian Hebb a related party advance the Company $90,573 for working capital expenses.As of December 31, 2011 and March 31, 2012, an advance payable of $90,573 was due to Brian Hebb, a related party.





NOTE 9. EQUITY





As of March 31, 2012, the Company is authorized to issue 450,000,000 shares of common stock, $0.001 par value and 10,000,000 shares of preferred stock, $0.001 par value.. The Company’s common stock was divided into two classes of common stock with 440,000,000 shares to the Class A common stock and 10,000,000 shares to the Class B common stock.





On June 17, 2011 the Company amended its articles of incorporation (the “Articles”), to increase the number of shares of the Company’s common stock authorized for issuance to 460,000,000 shares, of which 10,000,000 shares were designated as “blank check” preferred stock. The amendment also created two classes of common stock of the corporation and designated 250,000,000 shares to the Class A common stock and 200,000,000 shares to the Class B common stock.





On December 20, 2011, the Company amended its articles of incorporation as follows: The Company Class A Common stock was changed from 250 million (250,000,000) to 440 million (440,000,000) and the number of Class B Common Stock was changed from 200 million (200,000,000) to 10 million (10,000,000). The Total authorized common shares were 450,000,000 and the total authorized  and Preferred Stock  was 10,000,000 Preferred shares for the year ended December 31, 2011.





Stock Split





Effective June 1, 2010, we amended our Certificate of Incorporation and declared a six (6) share stock split for each one share of the issued and outstanding shares. Total shares to be issued was six to 1. The record date and that date such shares were issued was June 25, 2010. The number of common stock outstanding increased from 19,592,000 to 117,552,000.





Common Stock





On December 21, 1992, we issued one thousand eight hundred and sixty (1,860) shares of our common stock in consideration of $1,860 in cash.





On December 18, 1998, we amended and restated our Articles of Incorporation, to increase our authorized capitalization from two thousand five hundred (2,500) common stock to twenty five million (25,000,000) common stock. The no par value was changed to $0.001 per share.





On December 18, 1998, our shareholders approved a forward split of our common stock at the ratio of one thousand (1,000) shares for every one (1) share of the existing shares. The number of common stock outstanding increased from one thousand eight hundred and sixty (1,860) to one million eight hundred sixty thousand (1,860,000). Prior period information has been restated to reflect the stock split, on a retroactive basis.





On July 14, 2006, our shareholders declared a five and one half (5.5) share dividend for each one share of the issued and outstanding shares. The record date was July 28, 2006; payable July 31, 2006. The number of common stock outstanding increased from 1,860,000 to 12,090,000.  Prior period information has been restated to reflect the stock dividend on a retroactive basis.





-15-


See Note 4. Chloride Copper Project – Business Combination for a discussion of an Asset Purchase Agreement (the “Purchase Agreement”) entered into by the Company together with Medina Property Group LLC, a Florida limited liability company (“Medina”), pursuant to which the Company agreed to purchase 80% of certain assets of Medina known as the Chloride Copper Project and pursuant to which the purchase price consisted of the issuance of 12,750,000 shares of our common stock, which shares were issued on or about August 9, 2010, to Medina and certain of its designees.  In connection with and pursuant to the terms of
the Purchase Agreement, Black Diamond Realty Management, LLC returned 5,348,000 shares of the Company’s Common Stock, which shares were returned on June 23, 2010 and, as a result, a change of our shareholder voting control occurred. The net shared issued for this transactions is 7,402,000 shares. The Company recorded these issuance at the market value of the stock at that time which was $1 per share. The net value for this issuance was $7,402,000





On June 1, 2010, the Company issued Michael Doherty, our former Director, President (Principal Executive Officer), Chief Financial Officer, and Secretary of the Company, 100,000 shares of the Company’s Common Stock in consideration for his services to the Company which shares of common stock were valued at $3,00 based on the value of the associated underlying shares of the Company’s common stock which value of $1.00 per share, represented the offering price of the Company’s Common Stock in its most recently completed equity transaction prior to the date of the Purchase Agreement and for which the Company recorded a debit to consulting expense in the amount of $100,000.





Effective June 1, 2010, we amended our Certificate of Incorporation and declared a six (6) share stock split for each one share of the issued and outstanding shares. Total shares to be issued was six to 1. The record date and that date such shares were issued was June 25, 2010. The number of common stock outstanding increased from 19,592,000 to 117,552,000.





At August 23, 2010, the Company entered into a subscription agreement with an investor in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended.  The Company issued and sold to the investor an aggregate of 300,000 shares of its common stock.  This issuance resulted in aggregate gross proceeds to the Company of $75,000. At March 31, 2012 the 300,000 shares of common stock had not yet been issued and accordingly, the Company recorded a credit to subscribed shares.





On January 13, 2011 the Company issued Patrick Champney, our former Chief Executive Officer, and a Director of the Company, 1,000,000 shares of the Company’s Common Stock in consideration for his services to the Company and as per his employment agreement.  The shares of common stock were valued at $510,000 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.51 per share.




On January 19, 2011 the Company issued Brenda Hamilton, an attorney for the Company, 120,000 shares of the Company’s Common Stock in consideration for her services to the Company. The shares of common stock were valued at $62,400 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.52 per share.





On January 19, 2011 the Company issued, Kathi Rodriguez a contractor for the Company, 10,000 shares of the Company’s Common Stock in consideration for her services to the Company. The shares of common stock were valued at $5,200 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.52 per share.





On January 24, 2011 the Company issued Cella Lange and Cella, LLP an attorney for the Company, 100,000 shares of the Company’s Common Stock in consideration for their services to the Company. The shares of common stock were valued at $53,000 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.53 per share.





On February 2, 2011 the Company issued Cella Lange and Cella, LLP an attorney for the Company, 100,000 shares of the Company’s Common Stock in consideration for their services to the Company. The shares of common stock were valued at $19,000 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.19 per share.





On February 2, 2011 the Company issued Bradley Hacker our Chief Financial Officer for the Company, 100,000 shares of the Company’s Common Stock in consideration for his services to the Company and terms for his appointment as Chief Financial Officer.





The shares of common stock were valued at $19,000 based on the value of the associated underlying shares of the Company’s common stock as per the trading price at issuance, which was $.19 per share.





On April 18, 2011 the Company issued Eduardo Munoz a consultant for the Company, 100,000 shares of the Company’s Common Stock in consideration for his services and reimbursement of expenses to the Company.  The Company recorded professional expenses and travel costs in the amount of $6,000 based on the market trading value of the shares on the date of issuance.





From May, 12, 2011 through December 31, 2011 the Company issued Asher Enterprises during seventeen dates a total of 86,672,004 shares of the Company’s Common stock.  The stock was issued in exchange for the conversion of notes payable totaling $538,493 issued during 2010 and 2011.





-16-


Fram January 31, 2012 through March 31, 2012 the Company issued Asher Enterprises during eleven dates a total of 94,387,340 shares of the Company’s Common stock.  The stock was issued in exchange for the conversion of notes payable totaling $84,119 issued during 2012.





On May 24, 2011 the Company issued First Capital Partners, Inc. a public relations firm for the Company, 750,000 shares of the Company’s Common Stock in consideration for their services to the Company.  The Company recorded professional expenses of $15,000 based on the market trading value of the shares on the date of issuance.





On June 7, 2011 the Company issued Michael Rowland as consultant for the Company, 300,000 shares of the Company’s Common Stock in consideration for his services to the Company.  The Company recorded professional expenses of $6,000 based on the market trading value of the shares on the date of issuance





Common Shares Subscribed, Not Issued





During the year ending December 31, 2010, the Company entered into a subscription agreement. Whereas for the value of $75,000 the company agreed to issue 300,000 shares of the Company’s common stock. The Company received the $75,000 however as of December 31, 2011 and 2010 the company had not issued the common shares to the third party. The Company considers the value of the stock as subscribed stock, Not Issue and as a short term liability as of December 31, 2011 since  as over twelve months have elapsed since the subscription agreement was entered into by the Company.





Effective March 10, 2011, the Company entered into a two month independent consulting agreement with J. Rod Martin, its current CEO, in consideration for 200,000 shares of restricted Common Stock. The terms of the agreement were satisfied; however as of this filing the Company has not issued these shares.  Effective May 11, 2011, the Company entered into a four month independent consulting agreement with J. Rod Martin, its current CEO, in consideration for 2,000,000 shares of restricted Common Stock. The terms of the agreement were satisfied; however as of this filing the Company has not issued these shares. The Company recorded a consulting expense on the date agreements were issued.





Following is a summary of the subscribed share activity:





Shares Subscribed, Not Issued


-----------------------------





During the Year Ended December 31, 2011, the Company subscribed 2,200,000 shares of common stock its current CEO J. Rod Martin.





The shares had not been issued as of December 31, 2011 and March 31, 2012.




During the quarter ended March 31, 2012, the Company entered into a subscription agreement with Grandview Ventures. Whereas for the value of $10,000 the company agreed to issue 8,650,000 shares of the Company’s common stock. The Company received the $10,000 however as of March 31, 2012 the company had not issued the common shares to the third party. The Company considers the value of the stock as subscribed stock,


Preferred Stock





As of December 31, 2011 and March 31, 2012, respectively the company had 10,000,000 shares of Preferred Stock, with a par value of $0.001 per share





NOTE 10. INCOME TAXES





The Company adopted ASC Topic 740, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.




-17-


For income tax reporting purposes, the Company’s aggregate unused net operating losses approximate $10,300,000, which expire in various years through 2030, subject to limitations of Section 382 of the Internal Revenue Code, as amended.  The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company, it is more likely than not that the benefits will not be realized.





Under the Tax Reform Act of 1986, the benefits from net operating losses carried forward may be impaired or limited on certain circumstances.  Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, cumulative ownership changes of more than 50% over a three-year period.  The impact of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined.





The provision (benefit) for income taxes from continued operations for the years ended December 31, 2011 and March 31, 2012consist of the following:


Current:

December 31, 2011


March 31, 2012Federal

$
-


$
-State


-



-Deferred:Federal

$
573,778


$
88,000State


88,819



13,000662,597



101,000Change in valuation allowance


(662,597
)


(101,000
)Provision for income taxes, net

$
-


$
-





The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:


December 31, 2011


March 31, 2012Statutory federal income tax rate


34.00
%


34.00
%State income taxes and other


5.50
%


5.50
%Valuation allowance


(39.50)



(39.50)
%Effective tax rate


-0-
%


-0-
%





Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:




DECEMBER 31, 2011


MARCH 31, 2012Net operating loss carryforward


10,300,000



10,579,000Valuation allowance


(10,300,000)



(10,579,000)Deferred income tax asset


-



-





The Company has a net operating loss carry forward of approximately $10,300,000 available to offset future taxable income through 2030.





-18-


NOTE 11. OTHER EVENTS




On January 11, 2012, the Company Amended its Article of Incorporation and increased  the authorized common stock of the company from 450,000,000 to 1,500,000,000 shares. Subsequently, on April 13, 2012 the Company canceled the Amendment.  Therefore, the company continues to operate with 450,000,000 common shares and 10,000,000 preferred shares of authorized stock under its Articles of Incorporation.





On January 31, 2012 the Company filed for an amendment of its Articles of Incorporation creating two classes of Preferred stock with 1,000,000 shares of Class A preferred Shares and 9,000,000 shares of Class B Preferred Shares.





Effective February 20, 2012 the board of directors approved the purchase of half of the minority interest in the Chloride Copper Mine from the Medina Property Group, LLC under the terms of a letter of intent. The execution of this transaction would increase the Company’s interests in the Chloride Copper Mine to 90%. The Company paid an initial deposit in February 2012 of $6,500 for the additional interest .  The letter intent has been extended to June 15, 2012 at which time a definitive agreement will be executed.





On March 9, 2012, former Director James Stonehouse and the Company entered in to a settlement agreement and general release of claims whereby all debt of approximately $106,000 owed by the Company to Mr. Stonehouse were satisfied in exchange for 250,000 options at an exercise price of  $0.05 per share.




-19-




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





The following discussion and analysis should be read in conjunction with our condensed financial statements and related notes thereto included elsewhere in this quarterly report. Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this quarterly report should be read as applying to all related forward-looking statements wherever they appear in this quarterly report.  From time to time, we may publish forward-looking statements relative to such matters as anticipated financial
performance, business prospect, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. All statements other than statements of historical fact included in this section or elsewhere in this report are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, the following: changes in the economy; changes in operating expenses; the effect of commodity price increases or decreases; the variability and timing of business opportunities including acquisitions, alliances; our ability to realize the anticipated benefits of acquisitions and
other business strategies; the incurrence of debt and contingent liabilities in connection with acquisitions; changes in accounting policies and practices; the effect of organizational changes within the Company, adverse state and federal regulation and legislation; and the occurrence of extraordinary events, including natural events and acts of God, fires, floods and accidents.





Forward-looking statements involve risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors and risks that could affect our results and achievements and cause them to materially differ from those contained in the forward-looking statements include those identified in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the period ended December 31, 2011, as well as other factors that we are currently unable to identify or quantify, but that may exist in the future.





In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.





Overview




The primary effort of the Company is to acquire the necessary funding to bring the Chloride Copper Mine into production in order to generate working capital from its operation.  The Company will also continue its strategy to acquire other mining prospects in addition to further development of the Chloride Copper Mine.




To date the Company has received initial assay results from its Chloride Copper Mine (AKA Emerald Isle Mine) drill program on the tailings impoundment at its Chloride Copper Mine Property near the town of Chloride, in Mohave County Arizona. Copper grade ranged from a minimum of 0.16% Cu to a maximum of 0.43% Cu with the average being 0.36% Cu.  The report also estimated the tailings to contain approximately 1.2 million tons of material.




The objectives of this drill program were designed to collect material in order to confirm the grade of copper mineralization that was previously reported by SGV Resources Inc. The copper distribution appears to be consistent over all the samples collected from the tailings impoundment.




The tailings are the waste product from the previous operation of the Emerald Isle Mine from 1943 to 1973 when copper recovery was much lower than recovery rates available with today’s technology. This low recovery indicates that a substantial amount of copper-bearing material was sent to the tailings impoundment. The objective of this tailings program is to determine whether the tailings can be economically mined and processed to recover the contained copper in them.  There can be no assurance that the Company will receive material value for the tailings.




The Chloride Copper Mine property consists of 37 unpatented lode mining claims and 12 mill site claims and it is located 24km northwest of Kingman, in the Wallapai District, Mohave County, Arizona. The Chloride Copper Mine is comprised of an open pit mine and the existing onsite SXEW (Solvent extraction/electrowinning) processing plant.




The Chloride Copper Mine deposit is hosted by Late Tertiary conglomerates and, to a lesser extent, by Quaternary alluvium and Cretaceous granitic rocks. Copper mineralization at Chloride Copper Mine is in the form of mineralized lenses contained within a paleochannel a few thousands of feet long and up to 750 feet wide. The source of copper at Chloride Copper Mine is interpreted to be the low grade porphyry-type copper mineralization at Alum Wash, about 3.5 miles northeast of the Chloride Copper Mine deposit. The mineralization is characterized by dark blue to black rock similar to the Exotica deposit, a satellite deposit of the huge Chuquicamata copper deposit in Chile.




-20-




Effective February 20, 2012 the board of directors approved the purchase of half of the minority interest in the Chloride Copper Mine from the Medina Property Group, LLC under the terms of a letter of intent. The execution of this transaction would increase the Company’s interests in the Chloride Copper Mine to 90%.  The letter of intent is attached hereto as Exhibit 1.01 and is incorporated herein by reference.




Amendments to our By-Laws




On January 6, 2011, our board of directors and the holders of a majority of the outstanding shares of our Company entitled to vote approved an amendment to Article II Section 3 of our Bylaws, increasing the authorized number of Directors from three (3) directors to seven (7) directors




At its annual meeting of the stockholders held on April 21, 2011, a majority of our stockholders approved an amendment to the Company’s Articles of Incorporation (the “Articles”), to increase the number of shares of the Company’s common stock authorized for issuance there under from 160,000,000 shares to 460,000,000 shares. The amendment also created two classes of common stock of the corporation and designated 250,000,000 shares to the Class A common stock and 200,000,000 shares to the Class B common stock. The amendment to the Articles was filed with the Nevada Secretary of State on June 17, 2011. References to “common stock” in this Report are to the Class A common
stock, unless specifically indicated to be the Class B common stock.





Critical accounting estimates




The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates and assumptions.




We have identified the following as critical accounting estimates, which are defined as those that are reflective of significant judgments and uncertainties, are the most pervasive and important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.





Income taxes





Income taxes are accounted for under the asset and liability method.  Under this method, deferred tax assets and liabilities are recognized to reflect the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the differences are expected to be recovered or settled.  For the Company, the differences are attributable to differing methods of reflecting depreciation and stock based compensation for financial statement and income tax
purposes.





The likelihood of a material change in the Company's expected realization of these assets is dependent on, among other factors, future taxable income and tax settlements.  While management believes that its judgments and interpretations regarding income taxes are appropriate, significant differences in actual experience may require future adjustments to our tax assets and liabilities, which could be material.




We are also required to assess the reliability of our deferred tax assets.  We evaluate positive and negative evidence and use judgments regarding past and future events, including operating results and available tax planning strategies that could be implemented to realize the deferred tax assets.  Based on this assessment, we determine when it is more likely than not that all or some portion of our deferred tax assets may not be realized, in which case we would be required to apply a valuation allowance to offset our deferred tax assets in an amount equal to future tax benefits that may not be realized.  We currently do not apply a valuation allowance to our deferred tax
assets.  However, if facts and circumstances change in the future, valuation allowances may be required.





Significant judgment is required in determining income tax provisions and in evaluating tax positions.  We establish additional provisions for income taxes when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum probability threshold, which is a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority.  In the normal course of business, the Company and its subsidiaries are examined by various federal and state tax authorities.  We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in
determining the adequacy of our provision for income taxes.  We adjust the income tax provision, the current tax liability and deferred taxes in any period in which facts that give rise to an adjustment become known.  The ultimate outcomes of the examinations of our income tax returns could result in increases or decreases to our recorded tax liabilities, which could affect our financial results





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Results of Operations





Net Loss





For the three months ended March 31, 2012 and the three months ended March 31, 2011, we had a net loss of approximately $275,916 and $504,089, respectively. The decrease in loss is mainly the result of expenses related to the costs of professional fees of $400,000 in 2011 of which $375,000 of the costs was stock issued to professionals for services rendered and $25,000 is for payroll in the quarter. There were no expenses for professional fees in exchange for stock in 2012.





Liquidity and Capital Resources





We had working capital deficit of approximately $1,393,619 and $1,339,548 at March 31, 2012 and December 31, 2011, respectively.





The primary effort of the Company is to acquire the necessary funding to bring the Chloride Copper Mine into production in order to generate working capital from its operation.





However, without obtaining the necessary funding, there is substantial doubt about our ability to continue as a going concern.





Total Assets were approximately $52,627 at March 31, 2012 compared to $132 at December 31, 2011.  The increase in total assets is exclusively attributed to funds used for working capital during the first quarter related to professional fees of a public company and loans obtained from third parties.





Off-Balance Sheet Arrangements





We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues and results of operations, liquidity, or capital expenditures.





At March 31, 2012 and through the date of this report, we did not and do not have any material commitments for capital expenditures, nor do we have any other present commitment that is likely to result in our liquidity increasing or decreasing in any material way.






WHERE YOU CAN FIND MORE INFORMATION





You are advised to read this Quarterly Report on Form 10-Q in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.




Item 3. Quantitative and Qualitative Disclosures About Market Risk.





We are a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.





Item 4. Controls and Procedures.




(a)
Evaluation of Disclosure Controls and Procedures





We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired
control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.




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Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed financial
statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, our Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting was effective as of March 31, 2012 . There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over
financial reporting.








(b)
Changes in Internal Controls Over Financial Reporting






There have been no changes in our internal controls over financial reporting or in other factors that could materially affect, or are reasonably likely to affect, our internal controls over financial reporting during the quarter ended March 31, 2012. There have not been any significant changes in the Company's critical accounting policies identified since the Company filed its Annual Report on Form 10-K as of December 31, 2011.





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PART II





Item 1. Legal Proceedings.





We may be subject to legal proceedings from time to time in the ordinary course of our business.The Company is not currently a party to, nor is any of its property currently the subject of, any material legal proceeding. None of the Company’s directors, officers or affiliates is involved in a proceeding adverse to the Company’s business or has a material interest adverse to the Company’s business.




Item 1A. Risk Factors.





You should carefully consider the following risk factors together with the other information contained in this Report on Form 10-K, and in prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended.  If any of the risks factors actually occur, our business, financial condition or results of operations could be materially adversely affected. In such cases, the trading price of our common stock could decline. We believe there are no changes that constitute material changes from the risk factors previously disclosed in the prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933 and include or reiterate
the following risk factors:




Risks Related to our Business




We engaged in mining developmental activities, which subjects us to risks associated with similarly situated development stage companies in the mining business.




We are a development stage company with a limited operating history since inception. We have no revenues and no record of profitability in our current business.  Our likelihood of success must be considered in light of the risks, expenses, difficulties and delays frequently encountered by companies that have a limited operating history.




Because the probability of any of our properties or claims being profitable is subject to many variables,, any funds that we spend on exploration may be lost.




We own an eighty percent (80%) interest in one property, the Chloride Copper Project, which may not have deposits of copper or other metals that may be mined at a profit. Whether we will be able to mine this property at a profit, depends upon many factors, including:




●
the size and grade of the deposit;●
whether we can obtain sufficient financing on acceptable terms to conduct our exploration activities;●
volatile and cyclical price activity of copper and other precious metals; and the cost, personnel, and time burdens of governmental regulation, including taxes,  royalties, land use, importing and exporting of minerals, and environmental protection.




If we are unable to operate the Chloride Copper project at a profit because the deposits may not be of the quality or size that would enable us to make a profit from actual mining activities or because it may not be economically feasible to extract metals from the deposits, any funds spent on exploration activities could be lost, which may result in a loss of part or all of your investment.




Development of the Chloride Copper Project may lead to increased costs and burdens on our operations, which may negatively affect our financial condition and results of operations.




Development of the Chloride Copper Projectwill involve substantial efforts by us and/or third parties we retain.  We may encounter various technical and control problems during our development of this property.   Our proposed mining operations may involve longer periods of time or greater expenditures then are presently contemplated.  Such technical or operational problems may negatively impact the economic performance of the mining project and our financial condition.




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Production of the Copper Chloride Mine is dependent on the availability of a sufficient water supply to support our mining operations.




Our mining operations require water for mining, ore processing and related support facilities.  Production at the Chloride Copper Mine is dependent on continuous maintenance of our water rights. Under Arizona law groundwater outside an active management area may be withdrawn and used for reasonable and beneficial use. The character of the water right that is groundwater versus surface water, may at some point become at issue and may be subject to adjudication to the extent certain water is determined to be surface water, which may subject us to additional costs and delays.




We may not have access to all of the materials we need to begin exploration, which could cause us to delay or suspend activities.




Due to competitive demands for exploration services and obtaining necessary supplies and/or equipment, there may be disruptions in our planned exploration activities, especially if there are unforeseen shortages. While we intend to attempt to arrange alternatives and redundancy, we have not yet attempted to locate or negotiate with any alternative suppliers of products, equipment or materials. We will attempt to locate suitable equipment, materials, manpower and fuel if sufficient funds are available; if we are unable to do so, we will experience delays or suspension of our planned activities, which will adversely affect our exploration activities and financial condition.




Our estimates of reserves may be subject to uncertainty.




Reserve estimates are subject to uncertainty. Estimates are arrived at by using standard acceptable geological techniques, and are based on interpretive geological data obtained from drill holes, sampling techniques, assaying, surveying, and mapping. Feasibility studies are used to derive estimates of cash operating costs based on anticipated tonnage and grades of copper to be mined and processed, predicted configuration of ore bodies, expected recovery rates of metal from copper, operating costs, and other factors. Actual cash operating costs and economic returns may differ significantly from original estimates due to:




●
fluctuations in current prices of metal commodities extracted from the deposits;●
changes in fuel prices and equipment;●
labor rates;●
changes in permit requirements; and●
variations in actual extraction costs from those projected.




Any one or a combination of these factors may negatively affect the relative certainty or uncertainty of geological reports or reserve estimates.




Our Business depends upon the continued involvement of our Existing Management.




The loss, individually or cumulatively, of Messrs. Martin, Benjamin or Hacker could adversely affect our business, prospects, and our ability to successfully conduct our exploration activities. We anticipate that our business may become dependent upon other key personnel and/or consultants in the future. We do not presently carry key-man insurance on any of our officers, directors or employees, and cannot predict when or whether we will carry such insurance in the near future. We do not believe that we will be able to operate as planned in the event that we lose their services. Before you decide whether to invest in our common stock, you should carefully consider our reliance upon these personnel and that if we lose
the benefit of their expertise, your investment may be negatively impacted.




Should we fail to effectively manage our growth, our operations and financial condition will be negatively affected.




We have plans to develop the Chloride Copper project, which will place a significant strain on our management, operational and financial resources.  We expect to add additional key personnel to develop the property.  Additional employees will place significant demands on our management.  In order to manage the expected growth of our operations, we will be required to engage mining personnel, to improve existing structures, including improvement of internal management systems, on a timely basis.  There can be no assurance that our current personnel, systems, procedures and controls will be adequate to support our future operations or that management will be able to identify,
hire, train, retain, motivate and manage required personnel or that management will be able to manage and exploit existing and potential opportunities successfully.  If we are unable to manage our operations effectively, our business, results of operations and financial condition will be materially adversely affected.


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We may never achieve production, which is dependent on a number of assumptions and factors beyond our control.




Although we have prepared estimates of future copper production, we may never achieve our production estimates.  Our estimated mining costs and assumptions regarding ore grades and recovery rates may be incorrect.  Additionally, ground conditions, physical conditions of mineralization and our ability to obtain and maintain development and production related permits also may negatively affect whether we successfully enter and maintain a production phase. Our actual production may vary from our estimates if any of these assumptions prove to be incorrect and we may never achieve profitability.




Our estimate of ore reserves at the Chloride Copper Mine is based on total copper assays rather than soluble copper assays.




A reserve estimate based on total copper is an indirect measurement of copper recovery through leaching. Accordingly, we may have over-estimated the amount of recoverable copper at the Chloride Copper Mine.




We may be subject to unanticipated risks related to inadequate infrastructure.




Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure, such as reliable roads, bridges, power sources and water supply. Unusual or infrequent weather phenomena, sabotage, government or other interference could adversely affect infrastructure and hence our mining operations.




Our development of new ore bodies and other capital costs may cost more and provide less return than we estimate.




Capitalized development projects may cost more and provide less return than we estimate. If we are unable to realize a return on these investments, we may incur a related asset write-down that could adversely affect our financial results or condition. Before we can begin a development project, we must first determine whether it is economically feasible to do so.




This determination is based on estimates of several factors, including:





●
ore reserves;●
expected recovery rates of metals from the ore;●
future metals prices;●
facility and equipment costs;●
availability of affordable sources of power and adequacy of water supply;●
exploration and drilling success;●
capital and operating costs of a development project;●
environmental considerations and permitting;●
adequate access to the site, including competing land uses (such as agriculture);●
applicable tax rates;●
assumptions used in determining the value of our pension plan assets and liabilities;●
foreign currency fluctuation and inflation rates; and●
availability of financing.




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These estimates are based on geological and other interpretive data, which may be imprecise. As a result, actual operating and capital costs and returns from a development project may differ substantially from our estimates as a result of which it may not be economically feasible to continue with a development project.




Our ore reserve estimates may be imprecise.




Our ore reserve figures and costs are estimates and should not be interpreted in any way that we will actually recover the indicated quantities of these metals. You are strongly cautioned not to place undue reliance on estimates of reserves.  Reserve estimation is interpretive and based upon available data and various assumptions. Our reserve estimates may change based on actual production experience. Further, reserves are valued based on estimates of costs and metals prices, which may be inconsistent with our other operating and non-operating properties.




The economic value of ore reserves may be adversely affected by:




●
declines in the market price of the various metals we mine;●
increased production or capital costs;●
reduction in the grade or tonnage of the deposit;●
increase in the dilution of the ore; and●
reduced recovery rates.




Short-term operating factors relating to our ore reserves, such as the need to sequentially develop ore bodies and the processing of new or different ore grades, may adversely affect our cash flow. We may use forward sales contracts and other hedging techniques to partially offset the effects of a drop in the market prices of the metals we mine. However, if the prices of metals that we produce decline substantially below the levels used to calculate reserves for an extended period, we could experience:




●
delays in new project development;●
net losses;●
reduced cash flow;●
reductions in reserves; and●
write-downs of asset values.




Efforts to expand the finite lives of our mines may be unsuccessful, which could hinder our growth and decrease the value of our stock.




Mineral exploration, particularly for copper is highly speculative and expensive. It involves significant risks and is often non-productive. Even if we have a valuable mineral deposit, it may be several years before production from that deposit is possible. During that time, it may become no longer feasible to produce those minerals for economic, regulatory, political or other reasons. As a result of high costs and other uncertainties, we may not be able to expand or replace our existing ore reserves as they are depleted, which would adversely affect our business and financial position in the future.




Our ability to market our metals production may be affected by disruptions or closures of custom smelters and/or refining facilities.




We may sell substantially all of our metallic concentrates to custom smelters, with our ore bars sent to refiners for further processing before being sold to metal traders. If our ability to sell concentrates to such smelters becomes unavailable, our operations could be adversely affected.




Mining accidents or other adverse events at an operation could decrease our anticipated production.




Production may be reduced below our historical or estimated levels as a result of mining accidents; unfavorable ground conditions; work stoppages or slow-downs; lower than expected ore grades; the metallurgical characteristics of the ore are less economical than anticipated; or our equipment or facilities fail to operate properly or as expected.




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Our operations may be adversely affected by risks and hazards associated with the mining industry that may not be fully covered by insurance.




Our business is subject to a number of risks and hazards including:


●
environmental hazards;●
labor disputes or strikes;●
unusual or unexpected geologic formations;●
cave-ins;●
explosive rock failures; and●
unanticipated hydrologic conditions, including flooding and periodic interruptions due to inclement or hazardous weather conditions.




Such risks and hazards could result in:


●
personal injury or fatalities;●
damage to or destruction of mineral properties or producing facilities;●
environmental damage;●
delays in exploration, development or mining;●
monetary losses; and●
legal liability.




We presently do not maintain insurance to protect against losses that may result from some of these risks at levels consistent with our historical experience, industry practice and circumstances surrounding each identified risk. Insurance against environmental risks is generally either unavailable or, we believe, too expensive for us, and we therefore do not maintain environmental insurance. Occurrence of events for which we are not insured may have an adverse effect on our business.




Financial Risks




Should we fail to successfully compete with our competitors, our name, operations, and financial condition will be negatively affected.




We will compete with other companies engaged in the copper mining industry, most of which are well established, have substantially greater financial and other resources than us, and have an established reputation for success in mining.  Therefore, we will face substantial competition in hiring and retaining of highly qualified mining, metallurgical, financial and administrative personnel. Accordingly, there can be no assurance that we will be able to compete successfully with other companies or that we will achieve profitability.




We have not had any significant revenues since our inception and there is no assurance that we will be able to achieve the financing necessary to enable us to precede with our exploration activities.




We have not had any significant revenues since our inception.  We will apply any proceeds from copper sales generated from our activities at the Chloride Copper Project to help cover our exploration expenditures, but we anticipate that revenue may not be generated until FY2013. Our projected expenditures will likely far exceed proceeds from sales over the next twelve months, which will require that we obtain substantial financing in order for us to pursue our current plan of operations.  If we do not achieve the necessary financing, then we will not be able to proceed with other planned activities, including our planned exploration activities, and our financial condition, business prospects and
results of operations could be materially adversely affected to the point of having to cease operations, which would likely cause our investors to lose their entire investment.




Our financial condition raises substantial doubt about our ability to continue as a going concern.




We have an accumulated deficit of $10,303,503 as of December 31, 2011, and our auditor has issued a going concern opinion. This means that there is substantial doubt whether we can continue as an ongoing business.We will need substantial financing to conduct our planned exploration activities; if we fail to obtain sufficient financing, we will be unable to pursue our business plan or our business operations will have to be curtailed or terminated, in which case you will lose part or all of your investment in our common stock.


-28-





We have limited cash resources and may be dependent on accessing additional financing to meet our expected cash needs.




We have cash requirements for ongoing operating expenses, capital expenditures, working capital, and general corporate purposes, which we may be unable to obtain.




The global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.




The continued credit crisis and related turmoil in the global financial system has had and may continue to have an impact on our business and financial position. The financial crisis may limit our ability to raise capital through credit and equity markets.




We have accumulated losses that may continue and/or increase in the future.




Many of the factors affecting our operating results are beyond our control, including the volatility of metals prices; smelter terms; diesel fuel prices; interest rates; global or regional political or economic policies; inflation; developments and crises; governmental regulations; continuity of ore bodies; and speculation and sales by central banks and other holders and producers of copper in response to these factors. We cannot foresee whether our operations will continue to generate sufficient revenue in order for us to generate net cash from operating activities.




We will have to spend additional funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit.




We may also need capital more rapidly than currently anticipated and we may be unsuccessful in obtaining sufficient capital to accomplish any or all of our objectives Our inability to raise additional funds on a timely basis could prevent us from achieving our business objectives and could have a negative impact on our business, financial condition, results of operations and the value of your investment.




A major increase in our input costs, such as those related to acid, electricity, fuel and supplies, may have an adverse effect on our financial condition.




Our operations are affected by the cost of commodities and goods such as electrical power, sulfuric acid, fuel and supplies.  A major increase in any of these costs may have an adverse impact on our financial condition. For example, we expect that sulfuric acid and energy, including electricity and diesel fuel, will represent a significant portion of production costs at our operations. Shortages of sulfuric acid, electricity and fuel, may have an adverse effect on our financial condition. Sulfuric acid supply in the southwestern U.S. is produced primarily as a smelter by product at smelters in the southwest U.S. and in Mexico. We may not have an adequate supply of sulfuric acid without interruptions and we
may be subject to market fluctuations in the price and supply of sulfuric acid.




Other risks pertaining to mining operations may negatively affect our potential profitability or lead to additional accumulated losses or otherwise negatively affect our operations and financial condition.




Our Copper Mining operations inherently imply certain risks, including:




●
Worldwide economic cycles influence prices of base and precious metals.  As economies recede, demand for these commodities may decline, which may negatively impact the supply and demand ratio, causing prices to respond accordingly. The cash flow generated by mining activities is dependent on price levels of the metals produced. Future worldwide economic cycles may cause prices to vary outside assumed parameters in cash flow models, which include certain price assumptions.●
Ore grades vary within ore bodies.  Lower grades than predicted might negatively impact cash flow since less metal may be produced from specific ore blocks.●
Our economic performance is dependent upon production of the predicted and planned tonnage and grade from the mine.  Ground conditions in underground mines can cause fluctuation of tonnage production from that planned.  Lower tonnage from that planned would imply less metal production, and would negatively impact cash flow.●
Economic performance of the mining operation is dependent on sales of the mine production. While both base and precious metals are commodities that are sold worldwide, they still must be sold. Failure to maintain an orderly market for the products would cause an interruption to cash flow until the production is sold.●
The regularity of cash flow is dependent upon a regular sales program that we have not finalized.●
Smelting costs fluctuate over time.●
Transportation of concentrates and final metals produced to the market is subject to weather interruption.●
The start date of mining operations may be impacted by delays in the various permits required by government agencies.


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Legal, Markets and Regulatory Risks





If we fail to successfully acquire additional permits and renewals of permits to reactivate the Chloride Copper Mine, we will be unable to engage in operations.





We need to obtain additional permits, including an aquifer protection permit, renewal applications or permits that pertain to a substantial change to our operations.  Should we fail to do, we may be: (i) prohibited from mining and/or processing operations; (ii) forced to reduce the scale of or all of our mining operations; or (iii) prohibited or restricted from proceeding with planned exploration or development of mineral properties.





We are required to obtain governmental and lessor approvals and permits in order to conduct mining operations.





In the ordinary course of business, mining companies are required to seek governmental approvals and permits for our operations. Obtaining the necessary governmental permits is a complex, time-consuming and costly process. The duration and success of our efforts to obtain permits are contingent upon many variables out of our control. Obtaining environmental permits, including the approval of reclamation plans, may increase costs and cause delays depending on the nature of the activity to be permitted and the interpretation of applicable requirements implemented by the permitting authority. There can be no assurance that all necessary approvals and permits will be obtained and, if obtained, that the costs involved
will not exceed those that we previously estimated or the costs and delays associated with regulatory compliance could become such that we will be unable to proceed with our development activities or operations.





We face substantial governmental regulation and environmental risk.





Our business is subject to federal, state and local laws and regulations governing development, production, labor standards, occupational health, waste disposal, and use of toxic substances, environmental regulations, mine safety and other matters. We are not presently involved in lawsuits or disputes. In the future we could be accused of causing environmental damage, violating environmental laws, or violating environmental permits, and we may be subject to lawsuits or disputes in the future. New legislation and regulations may be adopted or permit limits reduced at any time that result in additional operating expense, capital expenditures or restrictions and delays in the mining, production or development of our
properties.





From time to time, the U.S. Congress considers proposed amendments to the General Mining Law of 1872, as amended, which governs mining claims and related activities on federal lands. The extent of any future changes is not known and the potential impact on us as a result of U.S. Congressional action is difficult to predict. Although a majority of our existing U.S. mining operations occur on private or patented property, changes to the General Mining Law, if adopted, could adversely affect our ability to economically develop mineral reserves on federal lands.





Risks Pertaining to our Common Stock





Our common stock may be diluted which will reduce your percentage of ownership of our common stock.





Our common stock may be subject to substantial dilution, including dilution resulting from issuances of securities:





●
in future offerings;●
to employees, consultants, joint venture partners and third party financing sources in amounts that are uncertain at this time;●
for acquisitions; and●
such as preferred stock with super voting rights, conversion rights or preferences over our common stock with respect to the payment of dividends or upon liquidation, dissolution or winding up.





We do not intend to pay dividends in the future.





We do not intend to pay dividends in the foreseeable future.  Rather, we will retain earnings, if any, to fund our future growth and there is no assurance we will ever pay dividends in the future.





The provisions in our certificate of incorporation, our by-laws and Nevada law could delay or deter tender offers or takeover attempts that may offer a premium for our common stock.


-30-


The provisions in our certificate of incorporation, our by-laws and Nevada law could make it more difficult for a third party to acquire control of us, even if that transaction would be beneficial to stockholders.





Nevada law and our Articles of Incorporation protect our directors from certain types of lawsuits, which could make it difficult for us to recover damages from them in the event of a lawsuit.





Nevada law provides that our directors will not be liable to our company or to our stockholders for monetary damages for all but certain types of conduct as directors. Our Articles of Incorporation require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require our company to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor
judgment, or other circumstances.





Because we are quoted on the OTC Bulletin Board instead of an Exchange or National Quotation System, our investors may have a tougher time selling their stock or may experience negative volatility on the market price of our stock.





Our Class A common stock (referred to as “common stock” in this Report) is traded on the OTCBB. The OTCBB is often highly illiquid.  There is a greater chance of volatility for securities that trade on the OTCBB as compared to a national exchange or quotation system. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume, and market conditions. Investors in our common stock may experience high fluctuations in the market price and volume of the trading market for our securities. These fluctuations, when they occur, have a negative effect on
the market price for our securities. Accordingly, our stockholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our common stock improves.





Trading in our common stock has been limited, and our stock price could potentially be subject to substantial fluctuations.





Trading in our common stock has been limited.  Historically, our stock price has been affected substantially by a relatively modest volume of transactions and could be again so affected. If our stock price falls, our stockholders may not be able to sell their stock when desired or at desirable prices. Further, our stockholders may not be able to resell their shares at or above the public offering price.





Our common stock is subject to penny stock regulation





Our shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act. The Commission generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria
set by the Commission; authorized for quotation on the NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the registrant's net tangible assets; or exempted from the definition by the Commission. Since our shares are deemed to be "penny stock", trading in the shares will be subject to additional sales practice requirements on broker/dealers who sell penny stock to persons other than established customers and accredited investors.





FINRA Sales Practice requirements may also limit a stockholder's ability to buy and sell our stock.





In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least
some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.





There is currently a “Global Lock” on our Common Stock. Failure to have the “Global Lock” removed on a timely basis could make it difficult to sell shares and may negatively affect the value of our Common Stock in the secondary market.





In or about January 2012 management learned, the Depository Trust & Clearing Corporation (“DTC”) suspended post-trade settlement services (known as a “Global Lock” or “Chill”) for our securities. Upon our inquiry, the compliance department at DTC advised us that the Global Lock had been instituted due to their uncertainty about the valid issuance of shares of our company held in street name under their nominee Cede & Co.  As a result, our shares of common stock are not eligible for delivery, transfer or withdrawal through the DTC system and will not be eligible until the Global Lock is removed by DTC.  Therefore, the ability to resell your shares will likely
be more difficult and less convenient for purchasers of your shares. Manual trading of our shares between accounts may continue but involves delays associated with manual stock transactions. While our management is communicating with the appropriate departments at DTC and has provided requested documentation necessary to lift the Global Lock, there can be no assurance at this time that the Global Lock will be lifted, and if lifted, how long it will take. -31-





As long as trades of our shares cannot be settled electronically, brokerage firms may be unwilling to trade them.





Since our shares cannot be electronically transferred between brokerage accounts until after the Global Lock is removed, it is likely (based on the realities of today’s marketplace) that certain brokerage accounts will not trade our shares.





Failure to achieve and maintain effective internal controls in accordance with Section 404 of The Sarbanes-Oxley Act could have a material adverse effect on our business and operating results.





It may be time consuming, difficult and costly for us to develop and implement the additional internal controls, processes and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal auditing and other finance staff in order to develop and implement appropriate additional internal controls, processes and reporting procedures. If we are unable to comply with these requirements of the Sarbanes-Oxley Act, we may not be able to obtain the independent accountant certifications that the Sarbanes-Oxley Act requires of publicly traded companies.





If we fail to comply in a timely manner with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock.





Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, beginning with our annual report on Form 10-K for our fiscal period ended December 31, 2009, we were required to prepare assessments regarding internal controls over financial reporting and beginning with our annual report on Form 10-K for our fiscal period ended December 31, 2009, furnish a report by our management on our internal control over financial reporting. Failure to achieve and maintain an effective internal control environment could have a material adverse effect on our stock price.





In addition, in connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover “material weaknesses” in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The PCAOB defines “significant deficiency” as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that
is more than inconsequential will not be prevented or detected.





In the event that a material weakness is identified, we will employ qualified personnel and adopt and implement policies and procedures to address any material weaknesses that we identify. However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls
over our financial process and reporting in the future.





Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we may identify or to implement new or improved controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of the periodic management evaluations of our internal controls and, in the case of a failure to remediate any material weaknesses that we may identify, would adversely affect the annual auditor attestation reports regarding the effectiveness of our internal control over
financial reporting that are required under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.





It is not possible to foresee all risk factors that may affect us.





There can be no assurance that we will effectively manage and develop the Chloride Copper Mine.  You are encouraged to carefully analyze the risks factors discussed above.





Because we do not have an, nominating, or compensation committee, shareholders will have to rely on our board of directors, all of which are not independent, to perform these functions.





We do not have nominating, and compensation committees and our board of directors, as a whole, will perform these functions. There is a potential conflict in that board members who are management will participate in discussions concerning management compensation and audit issues that may affect management decisions, and that such decisions may favor the interest of our management over our minority shareholders or us.


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Our Board of Directors has the ability to issue preferred stock and determine the rights, preferences, privileges and restrictions without shareholder approval, which may dilute your percentage of ownership of our common stock and prevent a change of our control.





We are authorized to issue ten million shares of “blank check” preferred stock.  Our board may issue the shares in response to a hostile take-over attempt, the board could issue such stock to a friendly party or “white knight“ or could establish conversion or other rights in the preferred stock, which would dilute the common stock and make a transaction impossible or less attractive.





Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for our management.





Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities
to compliance activities.





SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED.




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




We did not sell unregistered securities during the period covered by this report, except for the following issuances:





During the quarter ended March 31, 2012 the Company issued Asher Enterprises during a total of 94,387,340 shares of the Company Common stock. The stock was issued in exchange for the conversion of note payable issued in 2011. The conversions were transacted nine (9) times during the quarter as per terms of the agreement.




Terms of the conversion were as follows:




The holder of shall have the right from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days following the date of the Convertible Promissory Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default Amount, to convert all or any part of the outstanding and unpaid principal amount of this Convertible Note into shares of the Company’s Common Stock at a conversion price representing a discount rate of 42% of the then going Market Price which shall be defined as the average of the lowest three (3) Trading Prices for the Company’s Common Stock during the ten (10) Trading Day period ending one Trading




Day prior to the date the Conversion Notice is sent by the holder of this Convertible Note to the Company.





During the quarter ended March 31, 2012, the Company entered into a subscription agreement with Grandview Ventures. Whereas for the value of $10,000 the company agreed to issue 8,650,000 shares of the Company’s common stock.




The above offerings and sale was made in reliance upon the exemption from registration under Rule 506 of Regulation D promulgated under the Securities Act of 1933 and/or Section 4(2) of the Securities Act of 1933, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933 and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain
disclosure materials and all other information requested with respect to our Company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act of 1933, and agreed to transfer such securities only in a transaction registered under the Securities Act of 1933 or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act of 1933or transferred in a transaction exempt from registration under the Securities Act of 1933.


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Item 3.  Defaults Upon Senior Securities.




We are not in default in the payment of principal, interest, asking or purchase fund installment or other default with respect to any indebtedness.




Item 4.   Mine Safety Disclosures




None-as the mine is not operational at this time.





Item 5.  Other Information.




On February 20, 2012 the board of directors approved and the Company agreed to an Employment agreement with J. Rod Martin, CEO.  The employment agreement has a three-year term and is effective January 1, 2012.  The agreement provides for an annual salary of $150,000 until the Company begins production at the Chloride Copper Mine at which time the rate shall increase to $250,000 per year.  The agreement also includes a bonus to be determined in good faith by the Board of Directors at the end of each fiscal year with a target of $350,000 adjusted in accordance with performance.  Included in the agreement, Mr. Martin shall also receive a stock bonus representing up to an
additional 40 million option shares exercisable at $0.05 per share earned in the following manner; 25% upon opening the Chloride copper plant, 25% when the company begins production at the Chloride Copper Plant, 25% upon the Company’s generation of a cumulative $5 million in revenue, and 25% upon the Company’s generation of a cumulative $10 million in revenue.  At the time of the execution of this agreement, the bonus stock option price significantly exceeded the current market price thus they currently hold no value.  The employment agreement also calls for a standard benefits package.





On February 20, 2012 the board of directors approved and the Company agreed to an Employment agreement with Travis Snider, Senior Vice President of Operations.  The employment agreement has a three-year term and is effective January 1, 2012.  It provides for an annual salary of $100,000. The agreement also includes a bonus to be determined in good faith by the Board of Directors at the end of each fiscal year.  Included in the agreement, Mr. Snider shall also receive a stock bonus representing up to an additional 5 million option shares exercisable at $0.05 per share earned in the following manner; 25% upon the execution of the agreement, 25% upon the refurbishment of the Company’s
Chloride Copper plant, 25% upon the Company’s first sale of 99.99% pure copper from the Chloride Copper plant, and 25% upon the Company’s generation of a cumulative $5 million in revenue.  At the time of the execution of this agreement, the bonus stock option price significantly exceeded the current market price thus they currently hold no value.  The employment agreement also calls for a standard benefits package.




On February 20, 2012 the board of directors approved and the Company agreed to a consulting agreement with Timothy Benjamin, Chairman.  The agreement has a three-year term and is effective January 1, 2012.  It provides for an annual compensation of $60,000 until the Company begins production at the Chloride Copper Mine at which time the rate shall increase to $110,000 per year.  Included in the agreement, Mr. Benjamin shall also receive a stock bonus representing up to an additional 20 million option shares exercisable at $0.05 per share earned in the following manner; 25% upon opening the Chloride copper plant, 25% when the company begins production at the Chloride Copper Plant, 25%
upon the Company’s generation of a cumulative $5 million in revenue, and 25% upon the Company’s generation of a cumulative $10 million in revenue.  At the time of the execution of this agreement, the bonus stock exercise option price significantly exceeded the current market price.




On March 9, 2012, former Director James Stonehouse and the Company entered in to a settlement agreement and general release of claims whereby all debt of approximately $106,000 owed by the Company to Mr. Stonehouse were satisfied in exchange for 250,000 options at an exercise price of  $0.05 per share.




On May 2, 2012, the Board of Directors of the Company by unanimous written consent appointed Barton R. Budman and Carlos F. Cordón to its Board of Directors.




On May 3, 2012 the Company issued Grand View Ventures, LLC 6,666,666 shares of the Company’s Common Stock in consideration for $33,3333.  A convertible promissory note in the amount of $133,333 was also executed.  The note has an interest rate of 8% with the maturity date of November 1, 2012.  In conjunction with the $133,333 note, Grand View Ventures also received a common stock purchase warrant to purchase 6,666,666 shares of common stock with an exercise price of $0.012 per share.




On May 3, 2012 the Company issued The Oak Street Trust 3,333,333 shares of the Company’s Common Stock in consideration for $16,667.  In conjunction with the stock consideration, The Oak Stree Trust also received a common stock purchase warrant to purchase 3,333,333 shares of common stock with an exercise price of $0.012 per share.




On May 3, 2012 the Company issued Shadow Capital, LLC 3,333,333 shares of the Company’s Common Stock in consideration for $16,667.  In conjunction with the stock consideration, Shadow Capital, LLC also received a common stock purchase warrant to purchase 3,333,333 shares of common stock with an exercise price of $0.012 per share.




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Item 6.  Exhibits




Number

Description31.01*

Certification by Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act31.02*

Certification by Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act32.01*

Certification by Chief Executive Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code32.02*

Certification by Chief Financial Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code*

Filed herewith.






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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.






SIERRA RESOURCE GROUP, INC.Date:  May 15, 2012
By:
/s/ J. Rod MartinJ. Rod MartinPresident, Chief Executive Officer and

DirectorSIERRA RESOURCE GROUP, INC.Date:  May 15, 2012
By:
/s/ Brad HackerBrad HackerChief Financial Officer






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