----

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| Nevada                          | 26-1240056          |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

| Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting Company x |
|--------------------------------|--------------------------|------------------------------|----------------------------------|
|                           |                     | (Do not check if a smaller   |                             |
|                           |                     | reporting Company)           |                             |

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|     |                                                                                                         |   | Page No. |
|----------|--------------------------------------------------------------------------------------------------------------|--------|----------|
|     |                                                                                                         |   |     |
|     | PART I                                                                                                       |   |     |
|     |                                                                                                         |   |     |
| Item 1.  | Business                                                                                                     |   | 4        |
| Item 1A. | Risk Factors                                                                                                 |   | 19       |
| Item 1B. | Unresolved Staff Comments                                                                                    |   | 19       |
| Item 2.  | Properties                                                                                                   |   | 19       |
| Item 3.  | Legal Proceedings                                                                                            |   | 19       |
| Item 4.  | Mine Safety Disclosures                                                                                      |   | 20       |
|     |                                                                                                         |   |     |
|     | PART II                                                                                                      |   |     |
|     |                                                                                                         |   |     |
| Item 5.  | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   | 20       |
| Item 6.  | Selected Financial Data                                                                                      |   | 21       |
| Item 7.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                        |   | 21       |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                                   |   | 22       |
| Item 8.  | Financial Statements and Supplementary Data                                                                  |   | 23       |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         |   | 35       |
| Item 9A. | Controls and Procedures                                                                                      |   | 35       |
| Item 9B. | Other Information                                                                                            |   | 36       |
|     |                                                                                                         |   |     |
|     | Part III                                                                                                     |   |     |
|     |                                                                                                         |   |     |
| Item 10. | Directors, Executive Officers and Corporate Governance                                                       |   | 37       |
| Item 11. | Executive Compensation                                                                                       |   | 38       |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |   | 39       |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence                                    |   | 40       |
| Item 14. | Principal Accounting Fees and Services                                                                       |   | 40       |
|     |                                                                                                         |   |     |
|     | Part IV                                                                                                      |   |     |
|     |                                                                                                         |   |     |
| Item 15. | Exhibits and Financial Statement Schedules                                                                   |   | 41       |
|     | Signatures                                                                                                   |   | 41       |

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PART I

ITEM 1.          BUSINESS

| Term          | Definition                                                                                                                                                                                                                                         |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                               |
| Amphibole     | Any of a large group of structurally similar hydrated double silicate minerals, such as hornblende, containing various combinations of sodium, calcium, magnesium, iron, and aluminum.                                                             |
|          |                                                                                                                                                                                                                                               |
| Andesite      | Medium to dark coloured vesicular volcanic rocks, mostly fine grained with typically porphyric texture.                                                                                                                                            |
|          |                                                                                                                                                                                                                                               |
| Anticline     | A ridge or ridge-shaped fold of stratified rock in which the strata slope downward from the crest.                                                                                                                                                 |
|          |                                                                                                                                                                                                                                               |
| Aplite        | Light-colored and fine-grained granitic rock consisting chiefly of quartz and feldspars.                                                                                                                                                           |
|          |                                                                                                                                                                                                                                               |
| Aresenopyrite | Metallic silver-white to steel gray mineral.  The most common arsenic mineral and principal mineralized material of arsenic; occurs in many sulfide mineralized material deposits, particularly those containing lead, silver, and gold. |
|          |                                                                                                                                                                                                                                               |
| Assay         | The testing of a metal or mineralized material to determine its ingredients and quality.                                                                                                                                                           |
|          |                                                                                                                                                                                                                                               |
| Batholith     | A very large igneous intrusion extending deep in the Earth's crust.                                                                                                                                                                                |
|          |                                                                                                                                                                                                                                               |
| Bedrock       | A deposit of solid rock that is typically buried beneath soil and other broken or unconsolidated material.                                                                                                                                         |
|          |                                                                                                                                                                                                                                               |
| Biotite       | A black, dark brown, or greenish black micaceous mineral.                                                                                                                                                                                          |
|          |                                                                                                                                                                                                                                               |
| Breccia       | A coarse-grained clastic rock, composed of angular broken rock fragments held together by a mineral cement or in a fine-grained matrix                                                                                                             |
|          |                                                                                                                                                                                                                                               |
| Calcite       | A mineral composed of calcium carbonate (CaCO3).                                                                                                                                                                                                   |
|          |                                                                                                                                                                                                                                               |
| Cenozoic      | Relating to or denoting the most recent era, following the Mesozoic era and comprising the Tertiary and Quaternary periods. The Cenozoic period covers the period from approximately 65.5 million years ago to the present day.                    |
|          |                                                                                                                                                                                                                                               |
| Chalcopyrite  | A mineral, a sulfide of copper and iron.                                                                                                                                                                                                           |
|          |                                                                                                                                                                                                                                               |
| Chlorite      | A generally green or black secondary mineral, often formed by metamorphic alteration of primary dark rock minerals that appears as a spot of green and resembles mica.                                                                             |

----

| Clastic           | Denoting rocks composed of broken pieces of older rocks.                                                                                                                                                                                                         |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |                                                                                                                                                                                                                                                             |
| Cretaceous        | Of, relating to, or denoting the last period of the Mesozoic era, between the Jurassic and Tertiary periods. The Cretaceous period lasted from about 146 million to 65 million years ago.                                                                        |
|              |                                                                                                                                                                                                                                                             |
| Crystal           | A piece of a homogeneous solid substance having a naturally geometrically regular form with symmetrically arranged plane faces.                                                                                                                                  |
|              |                                                                                                                                                                                                                                                             |
| Crystalline       | Of, relating to, or composed of crystals.                                                                                                                                                                                                                        |
|              |                                                                                                                                                                                                                                                             |
| Development Stage | Includes all issuers engaged in the preparation of an established commercially minable deposit (reserves) for its extraction which are not in the production stage.                                                                                              |
|              |                                                                                                                                                                                                                                                             |
| Diabase           | Fine- to medium-grained, dark gray to black intrusive igneous rock.                                                                                                                                                                                              |
|              |                                                                                                                                                                                                                                                             |
| Dike              | A sheetlike body of igneous rock that cuts across layering or contacts in the rock into which it intrudes.                                                                                                                                                       |
|              |                                                                                                                                                                                                                                                             |
| Dip               | The angle that a rock unit, fault or other rock structure makes with a horizontal plane. Expressed as the angular difference between the horizontal plane and the structure. The angle is measured in a plane perpendicular to the strike of the rock structure. |
|              |                                                                                                                                                                                                                                                             |
| Diorite           | Coarse-grained, intrusive igneous rock that is intermediate in composition between granite and gabbro.                                                                                                                                                           |
|              |                                                                                                                                                                                                                                                             |
| Dore              | Unrefined gold and silver bullion bars.                                                                                                                                                                                                                          |
|              |                                                                                                                                                                                                                                                             |
| Electrowinning    | Process used to remove metal ions from liquid solutions. Most often used to recover precious metals.                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                             |
| Exploration Stage | Includes all issuers engaged in the search for mineral deposit (reserves) which are not in either the development or production stage.                                                                                                                           |
|              |                                                                                                                                                                                                                                                             |
| Extrusive Rock    | Igneous rocks which form by the crystallization of magma at the surface of the Earth.                                                                                                                                                                            |
|              |                                                                                                                                                                                                                                                             |
| Facies            | The character of a rock expressed by its formation, composition, and fossil content.                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                             |
| Fault             | A fracture or fracture zone in rock along which movement has occurred.                                                                                                                                                                                           |
|              |                                                                                                                                                                                                                                                             |
| Feldspar          | Any of a group of abundant rock-forming minerals occurring principally in igneous, plutonic, and some metamorphic rocks, and consisting of silicates of aluminum with potassium, sodium, calcium, and, rarely, barium.                                           |
|              |                                                                                                                                                                                                                                                             |
| Fissure           | A long, narrow opening in a rock, made by cracking or splitting.                                                                                                                                                                                                 |
|              |                                                                                                                                                                                                                                                             |
| Foliation         | The set of layers visible in many metamorphic rocks as a result of the flattening and stretching of mineral grains during metamorphism.                                                                                                                          |
|              |                                                                                                                                                                                                                                                             |
| Gabbro            | A dark, coarse-grained plutonic rock of crystalline texture.                                                                                                                                                                                                     |
|              |                                                                                                                                                                                                                                                             |
| Galena            | A bluish, gray, or black mineral of metallic appearance, consisting of lead sulfide.                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                             |
| Gneiss            | A metamorphic rock with a banded or foliated structure, typically coarse-grained.                                                                                                                                                                                |
|              |                                                                                                                                                                                                                                                             |
| Gouge             | A layer of soft, earthy or clayey material along the wall of a vein.                                                                                                                                                                                             |
|              |                                                                                                                                                                                                                                                             |
| Halide            | Minerals formed by combining a metal with one of the five halogen elements.                                                                                                                                                                                      |
|              |                                                                                                                                                                                                                                                             |
| Hornblende        | A green to black amphibolic mineral formed in the late stages of cooling in igneous rock.                                                                                                                                                                        |
|              |                                                                                                                                                                                                                                                             |
| Horse-tailing     | Gradual splitting.                                                                                                                                                                                                                                               |
|              |                                                                                                                                                                                                                                                             |
| Hydrothermal      | Of, relating to, or denoting the action of heated water in the Earth's crust.                                                                                                                                                                                    |
|              |                                                                                                                                                                                                                                                             |
| Igneous           | Relating to or involving volcanic processes.                                                                                                                                                                                                                     |

----

| Intrusive Rock   | Igneous rocks which form by the crystallization of magma at a depth within the Earth.                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Jurassic         | Of, relating to, or denoting the second period of the Mesozoic era, between the Triassic and Cretaceous periods. The Jurassic period lasted from about 208 million to 146 million years ago.                                                                                                                                                                                                                                                                                                                 |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Lamprophyre      | Any of a group of dark gray to black intrusive igneous rocks that generally occur as dikes.                                                                                                                                                                                                                                                                                                                                                                                                                  |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Lode             | A mineral deposit in solid rock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mafic            | A term used to describe an igneous rock that has a large percentage of dark-colored minerals such as amphibole, pyroxene and olivine. Also used in reference to the magmas from which these rocks crystallize. Mafic rocks are generally rich in iron and magnesium.                                                                                                                                                                                                                                         |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Matrix           | The solid matter in which a fossil or crystal is embedded.                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mesothermal      | A mineral deposit formed at moderate temperature and pressure, in and along fissures or other openings in rocks, by deposition at intermediate depths, from hydrothermal fluids.                                                                                                                                                                                                                                                                                                                             |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mesozoic         | Of, relating to, or denoting the era between the Paleozoic and Cenozoic eras, comprising the Triassic, Jurassic and Cretaceous periods. The Mesozoic period lasted from about 252 million to 66 million years ago.                                                                                                                                                                                                                                                                                           |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Metallurgy       | Domain of materials science that studies the physical and chemical behavior of metallic elements, their intermetallic compounds, and their mixtures, which are called alloys. It is also the technology of metals: the way in which science is applied to their practical use.                                                                                                                                                                                                                               |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Metamorphic Rock | Rock that has undergone a change from its original form due to changes in temperature, pressure or chemical alteration.                                                                                                                                                                                                                                                                                                                                                                                      |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mica             | A shiny silicate mineral with a layered structure, found as minute scales in granite and other rocks, or as crystals.                                                                                                                                                                                                                                                                                                                                                                                        |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mineral Reserve  | That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.                                                                                                                                                                                                                                                                                                                                                                       |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|             | 1)          Proven (Measured) Reserves. Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well- established.         |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|             | 2)          Probable (Indicated) Reserves. Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation. |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mineralization   | The concentration of metals and their chemical compounds within a body of rock.                                                                                                                                                                                                                                                                                                                                                                                                                              |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Outcrop          | A segment of bedrock exposed to the atmosphere.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Paleozoic        | Of, relating to, or denoting the era between the Precambrian era and the Mesozoic era. The Paleozoic era lasted from about 570 million to 245 million years ago.                                                                                                                                                                                                                                                                                                                                             |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Pegmatitic       | A coarsely crystalline granite or other igneous rock with crystals several centimeters in length.                                                                                                                                                                                                                                                                                                                                                                                                            |
|             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Porphyry         | A heterogeneous rock characterized by the presence of crystals in a relatively finer- grained matrix.                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| Precambrian              | Noting or pertaining to the earliest era of earth history, ending 570 million years ago, during which the earth's crust formed and life first appeared in the seas.                                                                                                 |
|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                     |                                                                                                                                                                                                                                                                |
| Production Stage         | Includes all issuers engaged in the exploitation of a mineral deposit (reserve).                                                                                                                                                                                    |
|                     |                                                                                                                                                                                                                                                                |
| Pyrite                   | A common mineral that consists of iron disulfide, has a pale brass-yellow color and metallic luster.                                                                                                                                                                |
|                     |                                                                                                                                                                                                                                                                |
| Pulverize                | To reduce (as by crushing or grinding) to very small particles (as in fine powder or dust).                                                                                                                                                                         |
|                     |                                                                                                                                                                                                                                                                |
| Quartz                   | A mineral whose composition is silicon dioxide. A crystalline form of silica.                                                                                                                                                                                       |
|                     |                                                                                                                                                                                                                                                                |
| Quaternary               | Period of time covering approximately the last two million years up to the present day.                                                                                                                                                                             |
|                     |                                                                                                                                                                                                                                                                |
| Rhyolite                 | A pale fine-grained volcanic rock of granitic composition.                                                                                                                                                                                                          |
|                     |                                                                                                                                                                                                                                                                |
| Schist                   | A coarse-grained metamorphic rock that consists of layers of different minerals.                                                                                                                                                                                    |
|                     |                                                                                                                                                                                                                                                                |
| Shear                    | A strain produced by pressure in the structure of a substance, when its layers are laterally shifted in relation to each other.                                                                                                                                     |
|                     |                                                                                                                                                                                                                                                                |
| Shear Zone               | Zone composed of rocks that are more highly strained than rocks adjacent to the zone.                                                                                                                                                                               |
|                     |                                                                                                                                                                                                                                                                |
| Silica                   | A hard, unreactive, colorless compound, SiO2, that occurs as the mineral quartz.                                                                                                                                                                                    |
|                     |                                                                                                                                                                                                                                                                |
| Silicate                 | Any of the many minerals consisting of silica combined with metal oxides, forming a major component of the rocks of the earth's crust.                                                                                                                              |
|                     |                                                                                                                                                                                                                                                                |
| Stock                    | Discordant igneous intrusion having a surface exposure of less than 40 square miles (100 km2), differing from batholiths only in being smaller.                                                                                                      |
|                     |                                                                                                                                                                                                                                                                |
| Strain                   | A change in the volume or shape of a rock mass in response to stress.                                                                                                                                                                                               |
|                     |                                                                                                                                                                                                                                                                |
| Stratum (Plural: Strata) | Layer of rock or soil with internally consistent characteristics that distinguishes it from contiguous layers.                                                                                                                                                      |
|                     |                                                                                                                                                                                                                                                                |
| Striation                | One of multiple scratches or minute lines, generally parallel, inscribed on a rock surface by a geologic agent, i.e., glaciers, streams, or faulting.                                                                                                               |
|                     |                                                                                                                                                                                                                                                                |
| Strike                   | The direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane. Strike indicates the attitude or position of linear structural features such as faults, beds, joints, and folds.                              |
|                     |                                                                                                                                                                                                                                                                |
| Sulfide Mineral          | Any member of a group of compounds of sulfur with one or more metals. Most of the sulfides are simple structurally, exhibit high symmetry in their crystal forms, and have many of the properties of metals, including metallic lustre and electrical conductivity. |
|                     |                                                                                                                                                                                                                                                                |
| Tertiary                 | Relating to the first period of the Cenozoic era, about 65 to 1.64 million years ago.                                                                                                                                                                               |
|                     |                                                                                                                                                                                                                                                                |
| Trenching                | The removal of overburden to expose the underlying bedrock.                                                                                                                                                                                                         |
|                     |                                                                                                                                                                                                                                                                |
| Trend                    | The direction of the line formed by the intersection of a fault, bed, or other planar feature and a horizontal plane. Strike indicates the attitude or position of linear structural features such as faults, beds, joints, and folds.                              |
|                     |                                                                                                                                                                                                                                                                |
| Triassic                 | Of, relating to, or denoting the earliest period of the Mesozoic era. The Triassic period lasted about 245 million to 208 million years ago.                                                                                                                        |
|                     |                                                                                                                                                                                                                                                                |
| Vein                     | An occurrence of mineralized material with an irregular development in length, width and depth usually from an intrusion of igneous rock.                                                                                                                           |
|                     |                                                                                                                                                                                                                                                                |
| Vesicles                 | A small cavity formed in volcanic rock by entrapment of a gas bubble during solidification.                                                                                                                                                                         |
|                     |                                                                                                                                                                                                                                                                |
| Volcanic                 | Characteristic of, pertaining to, situated in or upon, formed in, or derived from volcanoes.                                                                                                                                                                        |

----

| Property Name                                      |   | State and County                |   | Township, Range & Section | Claim Number | Expiration of Claims | Date of Purchase | Area of Claim in Acres |
|----------------------------------------------------|--------|---------------------------------|--------|-------------------------------|--------------|----------------------|------------------|------------------------|
|                                               |   |                            |   |                          |         |                 |             |                   |
| Tennessee Lode & Great Lead Lode Mining Claims |   | State of Arizona, Mohave County |   | 24N, 18W, 3                   | 308-04-013   | Perpetual            | 11/15/2007       | 34.14                  |
| Schuylkill Lode Mining Claim                       |   | State of Arizona, Mohave County |   | 24N, 18W, 34                  | 340-10-009   | Perpetual            | 11/15/2007       | 4.95                   |

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----

----

----

----

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ITEM 1A.       RISK FACTORS

ITEM 1B.       UNRESOLVED STAFF COMMENTS

ITEM 2.          PROPERTIES

ITEM 3.          LEGAL PROCEEDINGS

----

ITEM 4.          MINE SAFETY DISCLOSURES

PART II

ITEM 5.          MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

|                                |   | BID PRICE PER SHARE |   |
|-------------------------------------|--------|---------------------|--------|
|                                |   | HIGH                |   |   | LOW |   |
|                                |   |                |   |   |   |   |
| Three Months Ended April 30, 2011   |   |                | 1.01   |   |   |   | 2.03 |   |
| Three Months Ended July 31, 2011    |   | $                   | 3.87   |   |   | $ | 2.02 |   |
| Three Months Ended October 31, 2011 |   | $                   | 2.29   |   |   | $ | 1.40 |   |
| Three Months Ended January 31, 2012 |   | $                   | 2.04   |   |   | $ | 1.30 |   |
| Three Months Ended April 30, 2012   |   | $                   | 1.67   |   |   | $ | 0.48 |   |
| Three Months Ended July 31, 2012    |   | $                   | .52    |   |   | $ | .16 |   |

----

ITEM 6.          SELECTED FINANCIAL DATA

ITEM 7.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

| Balance Sheet Data             |   | July 31, 2011 |       |   | July 31, 2012 |   |
|--------------------------------|--------|---------------|------------|--------|---------------|--------|
| Cash and Cash Equivalents      |   | $             | 2,052,048  |   |          | $      | 22,118 |   |
| Total Assets                   |   | $             | 10,182,646 |   |          | $      | 14,049,298 |   |
| Total Liabilities              |   | $             | 308,325    |   |          | $      | 3,825,063 |   |
| Shareholders' Equity (Deficit) |   | $             | 9,874,321  |   |          | $      | 10,224,225 |   |

----

|   | (A) | Step into full processing at the pilot facility. |
|--------|-----|--------------------------------------------------|
|   | (B) | Begin 24-hour tailings processing.               |
|   | (C) | Start excavations of known deposits.             |
|   | (D) | Begin design of automated facility.              |
|   | (E) | Complete testing of all acquired properties.     |

ITEM 7A.       QUANTITIATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

|                    |   | Years  |   |
|-------------------------|--------|--------|--------|
|                    |   |   |   |
| Machinery and equipment |   | 3-15   |   |
| Furniture and fixtures  |   | 3-10   |   |
| Engineering equipment   |   | 5-12   |   |

----

ITEM 8.          FINANCIAL STATEMENTS

| Consolidated Financial Statements                                                                      |   | Page   |
|--------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                   |   |   |
| Report of Independent Registered Public Accounting Firm                                                |   | F-1    |
|                                                                                                   |   |   |
| Consolidated Balance Sheets as of July 31, 2012 (Restated) and July 31, 2011.                          |   | F-2    |
|                                                                                                   |   |   |
| Consolidated Statements of Operations for the years ended July 31, 2012 (Restated) and 2011            |   | F-3    |
|                                                                                                   |   |   |
| Consolidated Statements of Stockholders' Equity for the years ended July 31, 2012 (Restated) and 2011. |   | F-4    |
|                                                                                                   |   |   |
| Consolidated Statements of Cash Flows for the years ended July 31, 2012 (Restated) and 2011.           |   | F-5    |
|                                                                                                   |   |   |
| Notes to Consolidated Financial Statements (Restated)                                                  |   | F-6    |

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| 1931 East 37th Street, Suite 7 |   | 2626 Royal Circle     |
|--------------------------------|--------|-----------------------|
| Odessa, Texas 79762            |   | Kingwood, Texas 77339 |
| (432) 363-0067                 |   | (281) 359-7224        |
| Fax (432) 363-0376             |   | Fax (281) 359-7112    |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

| /s/ KWCO, PC |   |
|------------------------|--------|
| KWCO, PC               |   |
| Odessa, Texas          |   |

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CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                    |   | July 31, 2012 |        |   | July 31, 2011 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-------------|--------|---------------|--------|
|                                                                                                                                                                    |   | (Restated)    |        |   |          |   |
| ASSETS                                                                                                                                                                  |   |
| Current Assets:                                                                                                                                                         |   |          |        |   |          |   |
| Cash and cash equivalents                                                                                                                                               |   | $             | 22,118      |   |          | $      | 2,052,048 |   |
| Prepaid assets                                                                                                                                                          |   |          | 32,402      |   |          |   | 59,386 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Total Current Assets                                                                                                                                                    |   |          | 54,520      |   |          |   | 2,111,434 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Properties, Equipment, and Buildings:                                                                                                                                   |   |          |        |   |          |   |   |   |
| Vehicles                                                                                                                                                                |   |          | 67,183      |   |          |   | 67,183 |   |
| Office equipment                                                                                                                                                        |   |          | 226,986     |   |          |   | 56,428 |   |
| Mining equipment                                                                                                                                                        |   |          | 6,249,238   |   |          |   | 4,129,601 |   |
| Plant and buildings                                                                                                                                                     |   |          | 4,904,272   |   |          |   | 1,539,387 |   |
| Land and mineral properties, net of $920,000 allowance for impairment                                                                                                   |   |          | 2,574,318   |   |          |   | 2,278,513 |   |
| Accumulated depreciation                                                                                                                                                |   |          | (37,213     | )      |          |   | — |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Total Properties, Equipment, and Buildings                                                                                                                              |   |          | 13,984,784  |   |          |   | 8,071,112 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Other Assets                                                                                                                                                            |   |          | 9,994       |   |          |   | 100 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| TOTAL ASSETS                                                                                                                                                            |   | $             | 14,049,298  |   |          | $      | 10,182,646 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                                    |   |
| Current Liabilities:                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Senior loan payable, net of $403,071 debt discount                                                                                                                      |   | $             | 846,929     |   |          | $      | — |   |
| Promissory notes payable                                                                                                                                                |   |          | 125,000     |   |          |   | — |   |
| Note payable - related party                                                                                                                                            |   |          | 21,686      |   |          |   | — |   |
| Accounts payable and accrued liabilities                                                                                                                                |   |          | 112,531     |   |          |   | 293,066 |   |
| Accounts payable - related parties                                                                                                                                      |   |          | 101,263     |   |          |   | 15,259 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Total Current Liabilities                                                                                                                                               |   |          | 1,207,409   |   |          |   | 308,325 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Common Stock Liability                                                                                                                                                  |   |          | 1,668,554   |   |          |   | — |   |
| Derivative Liability                                                                                                                                                    |   |          | 949,110     |   |          |   | — |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Total Liabilities                                                                                                                                                       |   |          | 3,825,073   |   |          |   | 308,325 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Shareholders' Equity:                                                                                                                                                   |   |          |        |   |          |   |   |   |
| Common stock, $0.001 par value, 200,000,000 shares authorized 82,546,170 and 57,711,390 shares issued and outstanding at July 31, 2012 and 2011, respectively |   |          | 82,546      |   |          |   | 57,711 |   |
| Additional paid-in capital                                                                                                                                              |   |          | 20,969,828  |   |          |   | 13,220,847 |   |
| Treasury stock, at cost                                                                                                                                                 |   |          | (12,921     | )      |          |   | (12,921 | ) |
| Accumulated (deficit)                                                                                                                                                   |   |          | (10,815,228 | )      |          |   | (3,391,316 | ) |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| Total Shareholders' Equity                                                                                                                                              |   |          | 10,224,225  |   |          |   | 9,874,321 |   |
|                                                                                                                                                                    |   |          |        |   |          |   |   |   |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                              |   | $             | 14,049,298  |   |          | $      | 10,182,646 |   |

----

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                          |   | 2012       |       |   | 2011   |   |
|-----------------------------------------------|--------|------------|------------|--------|--------|--------|
|                                          |   | (Restated) |       |   |   |   |
| Revenue                                       |   |       |       |   |   |   |
| Mineral Sales                                 |   | $          | —    |   |   | $      | — |   |
| Cost of Revenue                               |   |       | 129,489    |   |   |   | — |   |
| Gross Loss                                    |   |       | (129,489   | )      |   |   | — |   |
|                                          |   |       |       |   |   |   |   |   |
| Operating Expenses                            |   |       |       |   |   |   |   |   |
| Officers' and directors' fees                 |   |       | 1,151,435  |   |   |   | 761,050 |   |
| Professional fees                             |   |       | 4,197,433  |   |   |   | 707,774 |   |
| Derivative Expense                            |   |       | 949,110    |   |   |   | — |   |
| General and administrative                    |   |       | 847,634    |   |   |   | 299,648 |   |
| Total Operating Expenses                      |   |       | 7,145,612  |   |   |   | 1,768,472 |   |
|                                          |   |       |       |   |   |   |   |   |
| Loss from Operations                          |   |       | (7,275,101 | )      |   |   | (1,768,472 | ) |
|                                          |   |       |       |   |   |   |   |   |
| Other Income (Expense)                        |   |       |       |   |   |   |   |   |
| Other income                                  |   |       | 18,183     |   |   |   | 15,930 |   |
| Interest expense                              |   |       | (166,994   | )      |   |   | (28,548 | ) |
|                                          |   |       |       |   |   |   |   |   |
| Net (Loss)                                    |   | $          | (7,423,912 | )      |   | $      | (1,781,090 | ) |
|                                          |   |       |       |   |   |   |   |   |
| (Loss) per share                              |   |       |       |   |   |   |   |   |
| Basic and fully diluted:                      |   |       |       |   |   |   |   |   |
| Weighted average number of shares outstanding |   |       | 66,424,837 |   |   |   | 41,352,159 |   |
| (Loss) per share                              |   | $          | (0.11      | )      |   | $      | (0.04 | ) |

----

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

|                                                            |   |         |       |   |     |   |    |    |   |   | Additional |   |   |      |       |   |   |   |
|-----------------------------------------------------------------|--------|--------------|------------|--------|----------|--------|---------|---------|--------|--------|------------|--------|--------|-----------|------------|--------|--------|--------|
|                                                            |   | Common Stock |       |   | Treasury |   |    | Paid in |   |   | Retained   |   |   |      |       |
|                                                            |   | Shares       |       |   | Amount   |   |    | Stock   |   |   | Capital    |   |   | (Deficit) |       |   | Total  |   |
| Balance, July 31, 2010                                          |   |         | 28,509,140 |   |     | $      | 28,509  |    |   | $      | (12,921    | )      |   | $         | 3,454,560  |   |   | $      | (1,610,226 | ) |   | $ | 1,859,922 |   |
| Shares issued for officers' and directors' fees                 |   |         | 2,546,500  |   |     |   | 2,546   |    |   |   | —    |   |   |      | 758,504    |   |   |   | — |   |   |   | 761,050 |   |
| Shares issued for services                                      |   |         | 796,750    |   |     |   | 797     |    |   |   | —    |   |   |      | 374,278    |   |   |   | — |   |   |   | 375,075 |   |
| Shares issued for services-related party                        |   |         | 193,000    |   |     |   | 193     |    |   |   | —    |   |   |      | 84,807     |   |   |   | — |   |   |   | 85,000 |   |
| Donated management services                                     |   |         | —    |   |     |   | — |    |   |   | —    |   |   |      | 3,000      |   |   |   | — |   |   |   | 3,000 |   |
| Shares issued for interest--related party                       |   |         | 537,250    |   |     |   | 537     |    |   |   | —    |   |   |      | 26,325     |   |   |   | — |   |   |   | 26,862 |   |
| Shares issued for payment of short-term loans--related party    |   |         | 7,855,000  |   |     |   | 7,855   |    |   |   | —    |   |   |      | 384,896    |   |   |   | — |   |   |   | 392,751 |   |
| Shares issued for payment of short-term loans                   |   |         | 50,000     |   |     |   | 50      |    |   |   | —    |   |   |      | 2,450      |   |   |   | — |   |   |   | 2,500 |   |
| Shares issued for acquisition of mining equipment and buildings |   |         | 3,163,500  |   |     |   | 3,164   |    |   |   | —    |   |   |      | 1,189,087  |   |   |   | — |   |   |   | 1,192,251 |   |
| Shares issued in private placement                              |   |         | 14,060,250 |   |     |   | 14,060  |    |   |   | —    |   |   |      | 6,942,940  |   |   |   | — |   |   |   | 6,957,000 |   |
| Net (loss)                                                      |   |         | —    |   |     |   | — |    |   |   | —    |   |   |      | —    |   |   |   | (1,781,090 | ) |   |   | (1,781,090 | ) |
|                                                            |   |         |       |   |     |   |    |    |   |   |       |   |   |      |       |   |   |   |   |   |   |   |   |   |
| Balance, July 31, 2011                                          |   |         | 57,711,390 |   |     |   | 57,711  |    |   |   | (12,921    | )      |   |      | 13,220,847 |   |   |   | (3,391,316 | ) |   |   | 9,874,321 |   |
| Shares issued for officers' and directors' fees                 |   |         | 3,477,000  |   |     |   | 3,477   |    |   |   | —    |   |   |      | 1,147,958  |   |   |   | — |   |   |   | 1,151,435 |   |
| Shares issued for services-related party                        |   |         | 330,000    |   |     |   | 330     |    |   |   | —    |   |   |      | 164,670    |   |   |   | — |   |   |   | 165,000 |   |
| Shares issued for services                                      |   |         | 3,128,000  |   |     |   | 3,128   |    |   |   | —    |   |   |      | 1,321,652  |   |   |   | — |   |   |   | 1,324,780 |   |
| Shares issued for acquistion of mining plant and equipment      |   |         | 1,893,500  |   |     |   | 1,894   |    |   |   | —    |   |   |      | 596,096    |   |   |   | — |   |   |   | 597,990 |   |
| Shares issued for common stock liability                        |   |         | 11,716,880 |   |     |   | 11,717  |    |   |   | —    |   |   |      | (11,717    | )      |   |   | — |   |   |   | — |   |
| Warrants granted on senior loan agreements                      |   |         | —    |   |     |   | — |    |   |   | —    |   |   |      | 537,428    |   |   |   | — |   |   |   | 537,428 |   |
| Warrants granted for services                                   |   |         | —    |   |     |   | — |    |   |   | —    |   |   |      | 1,802,483  |   |   |   | — |   |   |   | 1,802,483 |   |
| Shares issued for warrants exercised                            |   |         | 200,000    |   |     |   | 200     |    |   |   | —    |   |   |      | 149,800    |   |   |   | — |   |   |   | 150,000 |   |
| Shares issued in private placement                              |   |         | 4,089,400  |   |     |   | 4,089   |    |   |   | —    |   |   |      | 2,040,611  |   |   |   | — |   |   |   | 2,044,700 |   |
| Net (loss)                                                      |   |         | —    |   |     |   | — |    |   |   | —    |   |   |      | —    |   |   |   | (7,423,912 | ) |   |   | (7,423,912 | ) |
|                                                            |   |         |       |   |     |   |    |    |   |   |       |   |   |      |       |   |   |   |   |   |   |   |   |   |
| Balance, July 31, 2012 - Restated                               |   |         | 82,546,170 |   |     | $      | 82,546  |    |   | $      | 12,921     | )      |   | $         | 20,969,828 |   |   | $      | (10,815,228 | ) |   | $ | 10,224,225 |   |

----

CONSOLIDATED STATEMENTS OF CASH FLOW

|                                                                          |   | 2012       |       |   | 2011   |   |
|-------------------------------------------------------------------------------|--------|------------|------------|--------|--------|--------|
|                                                                          |   | (Restated) |       |   |   |   |
| Cash flows from operating activities:                                         |   |       |       |   |   |   |
| Net (loss)A                                                                   |   | $          | (7,423,912 | )      |   | $      | (1,781,090 | ) |
| Adjustments to reconcile net (loss) to net cash used in operating activities: |   |       |       |   |   |   |   |   |
| Depreciation expense                                                          |   |       | 37,213     |   |   |   | — |   |
| Common stock issued for services--related party                               |   |       | 165,000    |   |   |   | 375,075 |   |
| Common stock issued for services                                              |   |       | 1,324,780  |   |   |   | 85,000 |   |
| Common stock issued for officers' and directors' fees                         |   |       | 1,151,435  |   |   |   | 761,050 |   |
| Common stock issued for interest-related party                                |   |       | —    |   |   |   | 26,862 |   |
| Warrants granted for services                                                 |   |       | 1,802,483  |   |   |   | — |   |
| Donated management services                                                   |   |       | —    |   |   |   | 3,000 |   |
| Amortization of debt discount                                                 |   |       | 134,357    |   |   |   | — |   |
| Derivative expense                                                            |   |       | 949,110    |   |   |   | — |   |
| Changes in current assets and liabilities:                                    |   |       |       |   |   |   |   |   |
| Accounts receivable                                                           |   |       | —    |   |   |   | 4,200 |   |
| Prepaid assets                                                                |   |       | 26,984     |   |   |   | (59,386 | ) |
| Accounts payable and accrued liabilities                                      |   |       | 171,238    |   |   |   | 293,066 |   |
| Accounts payable - related parties                                            |   |       | 86,004     |   |   |   | 327,487 |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Net cash (used) provided by operating activities                              |   |       | (1,575,308 | )      |   |   | 35,264 |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Cash flows from investing activities:                                         |   |       |       |   |   |   |   |   |
| Purchase of vehicles                                                          |   |       | —    |   |   |   | (67,183 | ) |
| Purchase of office equipment                                                  |   |       | (170,558   | )      |   |   | (56,428 | ) |
| Purchase of mining equipment                                                  |   |       | (495,708   | )      |   |   | (3,301,826 | ) |
| Purchase of buildings                                                         |   |       | (3,074,043 | )      |   |   | (1,163,379 | ) |
| Purchase of land and mining properties                                        |   |       | (295,805   | )      |   |   | (362,038 | ) |
| Deposit on office space                                                       |   |       | (9,894     | )      |   |   | — |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Net cash (used) in investing activities                                       |   |       | (4,046,008 | )      |   |   | (4,950,854 | ) |
|                                                                          |   |       |       |   |   |   |   |   |
| Cash flows from financing activities                                          |   |       |       |   |   |   |   |   |
| Proceeds from shareholder loans                                               |   |       | 1,396,686  |   |   |   | — |   |
| Proceeds from exercise of warrants                                            |   |       | 150,000    |   |   |   | — |   |
| Sale of common stock                                                          |   |       | 2,044,700  |   |   |   | 6,957,000 |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Net cash provided by financing activities                                     |   |       | 3,591,386  |   |   |   | 6,957,000 |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                          |   |       | (2,029,930 | )      |   |   | 2,041,410 |   |
| Cash and cash equivalents, beginning of year                                  |   |       | 2,052,048  |   |   |   | 10,638 |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Cash and cash equivalents, end of year                                        |   | $          | 22,118     |   |   | $      | 2,052,048 |   |
| Supplemental cash flow disclosures:                                           |   |       |       |   |   |   |   |   |
| Cash paid during the year for:                                                |   |       |       |   |   |   |   |   |
| Interest                                                                      |   | $          | 32,637     |   |   | $      | — |   |
| Income Taxes                                                                  |   | $          | —    |   |   | $      | — |   |
|                                                                          |   |       |       |   |   |   |   |   |
| Non-cash investing and financing activities:                                  |   |       |       |   |   |   |   |   |
| Common stock issued for buildings and mining equipment                        |   | $          | 597,990    |   |   | $      | 1,192,251 |   |
| Acquisition of buildings and mining equipment                                 |   |       | (597,990   | )      |   |   | (1,192,251 | ) |
| Common stock issuance liability                                               |   |       | 1,668,554  |   |   |   | 2,500 |   |
| Accounts payable settled through issuance of common stock liability      |   |       | (1,668,554 | )      |   |   | 392,751 |   |
| Payment of short-loan loan                                                    |   |       | —    |   |   |   | (2,500 | ) |
| Payment of short-loan loan--related party                                     |   |       |       |   |   |   | (392,751 | ) |
| Valuation of warrants associated to debt                                      |   |       | (537,428   | )      |   |   | — |   |
| Issuance of warrants associated to debt                                       |   |       | 537,428    |   |   |   | — |   |
|                                                                          |   | $          | —    |   |   | $      | — |   |

----

Notes to Consolidated Financial Statements

----

|     |   | Quoted Active Marketsfor Identical Assets |    |   | Significant OtherObservable Inputs |   |      | SignificantUnobservable Inputs |   |   | Total   |   |
|----------|--------|-------------------------------------------|---------|--------|------------------------------------|--------|-----------|--------------------------------|--------|--------|---------|--------|
| Warrants |   | (Level 1)                                 |    |   | (Level 2)                          |   |      | (Level 3)                      |   |   |    |   |
| 2012     |   | $                                         | — |   |                               | $      | 2,339,911 |                           |   | $      | — |   |   | $ | 2,339,911 |   |
| 2011     |   | $                                         | — |   |                               | $      | —   |                           |   | $      | — |   |   | $ | — |   |

----

|                                                                  |   | 2012   |      |   | 2011   |   |
|-----------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                  |   | Shares |      |   | Amount |   |   | Shares |   |   | Amount |   |
| Common stock issued for directors' and officers fees             |   |   | 3,447,000 |   |   | $      | 1,151,435 |   |   |   | 2,546,500 |   |   | $ | 761,050 |   |
| Common stock issued for payment of interest on short-term loans  |   |   | —   |   |   |   | — |   |   |   | 537,250 |   |   |   | 26,862 |   |
| Common stock issued for payment of short-term loans              |   |   | —   |   |   |   | — |   |   |   | 7,855,000 |   |   |   | 375,075 |   |
| Common stock issued for consulting services - other shareholders |   |   | 330,000   |   |   |   | 165,000 |   |   |   | 193,000 |   |   |   | 85,000 |   |
|                                                                  |   |   | 3,807,000 |   |   | $      | 1,316,435 |   |   |   | 11,131,750 |   |   | $ | 1,247,987 |   |

----

|                       |   | Number |       |   | WeightedAveragePrice |   |    | WeightedAverageLife (Years) |   |
|----------------------------|--------|--------|------------|--------|----------------------|--------|---------|-----------------------------|--------|
| Oustanding, July 31, 2010  |   |   | 3,000,000  |   |                 | $      | 0.83    |                        |   |   | 0.42 |   |
| Granted                    |   |   | 26,658,000 |   |                 |   | 2.50    |                        |   |   | 1.83 |   |
| Forfeited                  |   |   | —    |   |                 |   | — |                        |   |   | — |   |
| Excercised                 |   |   | —    |   |                 |   | — |                        |   |   | — |   |
|                       |   |   |       |   |                 |   |    |                        |   |   |   |   |
|                       |   |   |       |   |                 |   |    |                        |   |   |   |   |
| Outstanding, July 31, 2011 |   |   | 29,658,000 |   |                 |   | 2.33    |                        |   |   | 1.36 |   |
| Granted                    |   |   | 15,702,800 |   |                 |   | 1.74    |                        |   |   | 1.67 |   |
| Forfeited                  |   |   | —    |   |                 |   | — |                        |   |   | — |   |
| Excercised                 |   |   | 200,000    |   |                 |   | 0.75    |                        |   |   | — |   |
|                       |   |   |       |   |                 |   |    |                        |   |   |   |   |
| Outstanding, July 31, 2012 |   |   | 45,160,800 |   |                 | $      | 2.27    |                        |   |   | 1.53 |   |

|                                       |   | 2012   |       |   | 2011   |   |
|--------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                       |   | Shares |       |   | Amount |   |   | Shares |   |   | Amount |   |
| Officer's and Directors' Fees              |   |   | 3,477,000  |   |   | $      | 1,151,435 |   |   |   | 2,546,500 |   |   | $ | 761,050 |   |
| Services-related party                     |   |   | 330,000    |   |   |   | 165,000 |   |   |   | 193,000 |   |   |   | 85,000 |   |
| Services                                   |   |   | 3,128,000  |   |   |   | 1,324,780 |   |   |   | 796,750 |   |   |   | 375,075 |   |
| Acquisition of mining plant and equipment  |   |   | 1,893,500  |   |   |   | 597,990 |   |   |   | 3,163,500 |   |   |   | 1,192,251 |   |
| Common stock liability (restated)          |   |   | 11,716,880 |   |   |   | 1,668,554 |   |   |   | — |   |   |   | — |   |
| Exercise of warrants                       |   |   | 200,000    |   |   |   | 150,000 |   |   |   | — |   |   |   | — |   |
| Private placement                          |   |   | 4,089,400  |   |   |   | 2,044,700 |   |   |   | 14,060,250 |   |   |   | 6,957,000 |   |
| Payment of interest-related party          |   |   | —    |   |   |   | — |   |   |   | 537,250 |   |   |   | 26,862 |   |
| Payment of short-term loans-related party  |   |   | —    |   |   |   | — |   |   |   | 7,855,000 |   |   |   | 392,751 |   |
| Payment of short-term loans                |   |   | —    |   |   |   | — |   |   |   | 50,000 |   |   |   | 2,500 |   |
| Warrants granted for services              |   |   | —    |   |   |   | 1,802,483 |   |   |   | — |   |   |   | — |   |
| Warrants granted on senior loan agreements |   |   | —    |   |   |   | 537,428 |   |   |   | — |   |   |   | — |   |
|                                       |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   | 24,834,780 |   |   | $      | 9,442,370 |   |   |   | 29,202,250 |   |   | $ | 9,792,489 |   |

----

|                                  |   | (Restated) |       |   |   |   |
|---------------------------------------|--------|------------|------------|--------|--------|--------|
|                                  |   | 2012       |       |   | 2011   |   |
|                                  |   |       |       |   |   |   |
| Tax benefit at statutory rates of 34% |   | $          | 2,524,130  |   |   | $      | 605,571 |   |
| Non-deductible expenses               |   |       | (394,909   | )      |   |   | (268,989 | ) |
| Change in valuation allowances        |   |       | (2,129,221 | )      |   |   | (336,582 | ) |
|                                  |   |       |       |   |   |   |   |   |
| Net income tax benefit                |   | $          | —    |   |   |   | — |   |
|                                  |   |       |       |   |   |   |   |   |

| The components of the deferred tax assets are as follows: |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|

|                            |   | (Restated) |       |   |   |   |     |
|---------------------------------|--------|------------|------------|--------|--------|--------|----------|
|                            |   |       | 2012       |   |   |   | 2011     |   |
|                            |   |       |       |   |   |   |     |   |
| Deferred tax assets             |   |       |       |   |   |   |     |   |
| Net operating loss carryforward |   | $          | (2,957,603 | )      |   | $      | (834,196 | ) |
| Deferred contributions          |   |       | (5,814     | )      |   |   | —  |   |
|                            |   |       |       |   |   |   |     |   |
| Total Deferred tax asset        |   |       | (2,963,417 | )      |   |   | (834,196 | ) |
| Less: valuation allowance       |   |       | 2,963,417  |   |   |   | 834,196  |   |
|                            |   |       |       |   |   |   |     |   |
|                            |   | $          | —    |   |   | $      | —  |   |

----

| Consolidated Balance Sheet               |   | As Reported |          |   | Difference |   |        | As Restated |   |
|------------------------------------------|--------|-------------|---------------|--------|------------|--------|-------------|-------------|--------|
|                                     |   |        |          |   |       |   |        |        |   |
| Common stock liability                   |   | $           | —       |   |       | $      | 1,668,554   |        |   | $ | 1,668,554 |   |
| Derivative liability                     |   |        | —       |   |       |   | 949,110     |        |   |   | 949,110 |   |
| Total Liabilities                        |   |        | 1,207,409     |   |       |   | 2,617,664   |        |   |   | 3,825,073 |   |
| Additional paid-in capital               |   |        | 22,618,382    |   |       |   | (1,648,554  | )           |   |   | 20,969,828 |   |
| Accumulated (Deficit)                    |   |        | (9,486,118    | )      |       |   | (969,110    | )           |   |   | (10,815,228 | ) |
| Total equity                             |   |        | 12,841,889    |   |       |   | (2,617,664  | )           |   |   | 10,224,225 |   |
|                                     |   |        |          |   |       |   |        |        |   |   |   |   |
| Consolodated Statement of Operations     |   |        |          |   |       |   |        |        |   |   |   |   |
|                                     |   |        |          |   |       |   |        |        |   |   |   |   |
| Derivative expense                       |   |        | —       |   |       |   | 949,110.00  |        |   |   | 949,110.00 |   |
| Professional fees                        |   |        | 4,177,433.00  |   |       |   | 20,000.00   |        |   |   | 4,197,433.00 |   |
| Total Operating expenses                 |   |        | 6,176,502.00  |   |       |   | 969,110.00  |        |   |   | 7,145,612.00 |   |
| Loss from Operations                     |   |        | (6,305,991.00 | )      |       |   | (969,110.00 | )           |   |   | 7,275,101.00 |   |
| Net (loss)                               |   |        | (6,454,802.00 | )      |       |   | (969,110.00 | )           |   |   | (7,423,912.00 | ) |
| (Loss) per share                         |   |        | (0.10         | )      |       |   | (0.01       | )           |   |   | (0.11 | ) |
|                                     |   |        |          |   |       |   |        |        |   |   |   |   |
| Statement of Cash Flows                  |   |        |          |   |       |   |        |        |   |   |   |   |
|                                     |   |        |          |   |       |   |        |        |   |   |   |   |
| Net (loss)                               |   |        | (6,454,802.00 | )      |       |   | (969,110.00 | )           |   |   | (7,423,912.00 | ) |
| Accounts payable and accured liabilities |   |        | 151,238.00    |   |       |   | 20,000.00   |        |   |   | 171,238.00 |   |
| Derivative expense                       |   |        | —       |   |       |   | 949,110.00  |        |   |   | 949,110.00 |   |

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ITEM 9.          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE

ITEM 9A.       CONTROLS AND PROCEDURES

|   | (1) | Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------|

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ITEM 9B.       OTHER INFORMATION

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PART III

ITEM 10.        DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

|  Name                                                             |   |  Age |   |  Position                    |
|------------------------------------------------------------------------|--------|-----------|--------|-----------------------------------|
| William Miertschin15303 N. Dallas Parkway, Suite 1050Addison, TX 75001 |   | 65        |   | President, CEO, and Director      |
|                                                                   |   |      |   |                              |
| Chris Larson15303 N. Dallas Parkway, Suite 1050Addison, TX 75001  |   | 40        |   | CFO and Director                  |
|                                                                   |   |      |   |                              |
| J.C. "Skip" Headen15303 N. Dallas Parkway, Suite 1050Addison, TX 75001 |   | 50        |   | Secretary, Treasurer and Director |
|                                                                   |   |      |   |                              |
| Ben Botello15303 N. Dallas Parkway, Suite 1050Addison, TX 75001        |   | 60        |   | Director                          |
|                                                                   |   |      |   |                              |
| Howard Siegel15303 N. Dallas Parkway, Suite 1050Addison, TX 75001      |   | 68        |   | Director                          |

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ITEM 11.        EXECUTIVE COMPENSATION

----

|               |   |   | Salary |    |   | Officer Comp |   |    | Director Fees |   |   | Other Comp |   |   | Total  |    |
|--------------------|--------|--------|--------|---------|--------|--------------|--------|---------|---------------|--------|--------|------------|--------|--------|--------|---------|
| William Miertschin | 2012   |   | $      | — |   |         | $      | 846,000 |          |   | $      | 24,225     |   |   | $      | — |   |   | $ | 870,225 |   |
|               | 2011   |   |   | — |   |         |   | 513,000 |          |   |   | 122,650    |   |   |   | — |   |   |   | 635,650 |   |
|               |   |   |   |    |   |         |   |    |          |   |   |       |   |   |   |    |   |   |   |   |   |
| J.C. "Skip" Headen | 2012   |   |   | — |   |         |   | 102,900 |          |   |   | 24,225     |   |   |   | 50,000  |   |   |   | 177,125 |   |
|               | 2011   |   |   | — |   |         |   | 66,400  |          |   |   | 14,850     |   |   |   | — |   |   |   | 81,250 |   |
|               |   |   |   |    |   |         |   |    |          |   |   |       |   |   |   |    |   |   |   |   |   |
| Christopher Larson | 2012   |   |   | 57,500  |   |         |   | 70,900  |          |   |   | 9,225      |   |   |   | 135,000 |   |   |   | 272,625 |   |
|               | 2011   |   |   | — |   |         |   | — |          |   |   | —    |   |   |   | 75,000  |   |   |   | 75,000 |   |
|               |   |   |   |    |   |         |   |    |          |   |   |       |   |   |   |    |   |   |   |   |   |
| Ben Botello        | 2012   |   |   | — |   |         |   | — |          |   |   | 24,225     |   |   |   | — |   |   |   | 24,225 |   |
|               | 2011   |   |   | — |   |         |   | — |          |   |   | 12,650     |   |   |   | — |   |   |   | 12,650 |   |
|               |   |   |   |    |   |         |   |    |          |   |   |       |   |   |   |    |   |   |   |   |   |
| Howard Siegel      | 2012   |   |   | — |   |         |   | — |          |   |   | 24,225     |   |   |   | — |   |   |   | 24,225 |   |
|               | 2011   |   |   | — |   |         |   | — |          |   |   | 12,650     |   |   |   | — |   |   |   | 12,650 |   |

ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

----

| Name and Address of Beneficial Owner,Directors and Officers:           |  Amount and Nature of Beneficial Ownership | Percentage of Beneficial Ownership (1) |
|------------------------------------------------------------------------|-------------------------------------------------|----------------------------------------|
|                                                                   |                                            |                                   |
| William Miertschin15303 N. Dallas Parkway, Suite 1050Addison, TX 75001 | 14,181,652                                      | 16.9%                                  |
|                                                                   |                                            |                                   |
| J.C. "Skip" Headen15303 N. Dallas Parkway, Suite 1050Addison, TX 75001 | 574,000                                         | 0.06%                                  |
|                                                                   |                                            |                                   |
| Ben Botello15303 N. Dallas Parkway, Suite 1050Addison, TX 75001        | 127,800                                         | 0.015%                                 |
|                                                                   |                                            |                                   |
| Howard Siegel15303 N. Dallas Parkway, Suite 1050Addison, TX 75001      | 139,600                                         | 0.016%                                 |
|                                                                   |                                            |                                   |
| Chris Larson15303 N. Dallas Parkway, Suite 1050Addison, TX 75001       | 942,000                                         | 1.1%                                   |
|                                                                   |                                            |                                   |
| All executive officers and directors as a group (4 people)             | 15,965,052                                      | 19.06%                                 |
| Beneficial Shareholders greater than 5%                                |                                            |                                   |
|                                                                   |                                            |                                   |
| Stephen Grosberg601 E. 20th Street, Apt. #8-cNew York, NY 10010        | 6,560,000                                       | 7.83%                                  |
|                                                                   |                                            |                                   |
| Fast-Cede & CO.55 Water St.New York, NY 10041                      | 23,863,510                                      | 28.5%                                  |

ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

|   | (A)  | any directors or executive officers;                                                                                                                                     |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (B)       | any nominee for election as a director;                                                                                                                                  |
|   | (C)       | any person who is known to beneficially own, directly or indirectly, shares carrying more than 5% of the voting rights attached to the common stock; or                  |
|   | (D)       | any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the foregoing persons named in paragraphs (A), (B) or (C) above |

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ITEM 14.       PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15.       EXHIIBITS AND FINANCIAL STATEMENT SCHEDULE

| ExhibitNumber |   | Description of Exhibit                                                                                                           |   | Filing                                                                                                          |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|
| 3.1           |   | Articles of Incorporation filed with the Nevada Secretary of State on September 25, 2007.                                   |   | Incorporated by reference as an Exhibit to the Registration Statement on Form S-1 filed on September 11, 2009.  |
| 3.1 (a)       |   | Amendment to Articles of Incorporation filed with the Nevada Secretary of State on February 22, 2011.                            |   | Incorporated by reference as an Exhibit to the Current Report on Form 8-K filed on March 8, 2011.               |
| 3.2           |   | Bylaws.                                                                                                                          |   | Incorporated by reference as Exhibits to the Form S-1 filed on September 11, 2009.                              |
| 3.2(a)        |   | Amended Bylaws.                                                                                                                  |   | Incorporated by reference as an Exhibit to the Current Report on Form 8-K filed on March 8, 2011.               |
| 10.1          |   | Engagement letter agreement between Roth Capital Partners and Hondo Minerals Corporation dated November 30, 2011.                |   | Incorporated by reference as an Exhibit to the Amended Annual Report on Form 10-K/A filed on December 21, 2012. |
| 21.1          |   | List of Subsidiaries.                                                                                                            |   | Incorporated by reference as an Exhibit to the Amended Annual Report on Form 10-K/A filed on December 21, 2012. |
| 31.1          |   | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                           |   | Filed herewith.                                                                                                 |
| 31.2          |   | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                           |   | Filed herewith.                                                                                                 |
| 32.1          |   | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                           |   | Filed herewith.                                                                                                 |
| 32.2          |   | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                           |   | Filed herewith.                                                                                                 |
| 95.1          |   | Mine Safety and Health Administration Safety Data                                                                                |   | Incorporated by reference as an Exhibit to the Amended Annual Report on Form 10-K/A filed on December 21, 2012. |
| 99.1          |   | Independent Observation of Hondo Minerals, Inc. Operations by Ralph Page, BA and Dick Wullaert, PhD of Bioguard Industries, Inc. |   | Incorporated by reference as an Exhibit to the Amended Annual Report on Form 10-K/A filed on December 21, 2012. |
| 99.2          |   | List of the Company’s Mineral Claims                                                                                       |   | Incorporated by reference as an Exhibit to the Amended Annual Report on Form 10-K/A filed on August 20, 2013.   |

SIGNATURES

|                    |   | HONDO MINERALS CORPORATION   |
|-------------------------|--------|------------------------------|
|                    |   |                         |
| Dated: October 16, 2013 |   | /s/ William R. Miertschin    |
|                    |   | By: William R. Miertschin    |
|                    |   | Its: Chief Executive Officer |
|                    |   |                         |
| Dated: October 16, 2013 |   | /s/ Chris Larson             |
|                    |   | By: Chris Larson             |
|                    |   | Its: Chief Financial Officer |

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