UNITED STATES



FORM 10-Q



x

For the quarterly period ended January 31, 2011



o



Commission File Number:        000-52550









ZORO MINING CORP.(Exact name of registrant as specified in its charter)





|Nevada                                                         |  | N/A                                 
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               |  |                                     
|3040 North Campbell Avenue #110Tucson, Arizona                 |  | 85719                               
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                               |  |                                     
|(520) 299-0390                                                 |  |                                     
|(Registrant's telephone number, including area code)           |  |                                     



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



Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes



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





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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes



State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.  28,651,536 shares of common stock as of March 21, 2011.



---



ZORO MINING CORP.

INDEX





|PART I - FINANCIAL INFORMATION | 1                                                                                    
|------------------------------ | -------------------------------------------------------------------------------------
|                               |                                                                                      
|Item 1.                        | Financial Statements                                                                 
|Item 2.                        | Management's Discussion and Analysis of Financial Condition and Results of Operations
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                           
|Item 4.                        | Controls and Procedures                                                              
|                               |                                                                                      
|PART II - OTHER INFORMATION    | 26                                                                                   
|                               |                                                                                      
|Item 1.                        | Legal Proceedings                                                                    
|Item 1A.                       | Risk Factors                                                                         
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                          
|Item 3.                        | Defaults Upon Senior Securities                                                      
|Item 4.                        | (Removed and Reserved)                                                               
|Item 5.                        | Other Information                                                                    
|Item 6.                        | Exhibits                                                                             





This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties.  Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations.  Such forward-looking statements involve risks and uncertainties regarding the market price of copper, availability of funds, government regulations, permitting, common share prices, operating costs, capital costs, outcomes of ore reserve development, recoveries  and other factors.  Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition.  Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology.  Actual events or results may differ materially.  In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended April 30, 2010, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the "SEC").  These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.







- i -



---



Item 1.                      Financial Statements



The following unaudited interim financial statements of Zoro Mining Corp. (sometimes referred to as "we", "us" or "our Company") are included in this quarterly report on Form 10-Q:



ZORO MINING CORP.



|Interim Consolidated Balance Sheets as at January 31, 2011 (unaudited) and April 30, 2010 (audited)                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                           
|Interim Consolidated Statements of Operations and Comprehensive Loss for the nine months and three months endedJanuary 31, 2011 and January 31, 2010 and for the period from inception (April 20, 2004) to January 31, 2011
|                                                                                                                                                                                                                           
|Interim Consolidated Statements of Cash Flows for the nine months ended January 31, 2011 and January 31, 2010 and for the period from inception (April 20, 2004) to January 31, 2011                                       
|                                                                                                                                                                                                                           
|Interim Consolidated Statement of Stockholders' Equity and Deficiency for the period from inception (April 20, 2004) to January 31, 2011                                                                                   
|                                                                                                                                                                                                                           
|Condensed Notes to the Interim Consolidated Financial Statements                                                                                                                                                           







- 1 -



---



Zoro Mining Corp.



|                                                                                |  | January 31,
2011$ |             |   | April 30,
2010$ | 
|------------------------------------------------------------------------------- |  | ----------------- | ----------- | - | --------------- | 
|CURRENT ASSETS                                                                  |  |                   |             |   |                 | 
|Cash                                                                            |  |                   | 8,169       |   |                 | 
|Prepaid expenses (note 8)                                                       |  |                   | 56,668      |   |                 | 
|Other receivables                                                               |  |                   | 9,078       |   |                 | 
|Total Current Assets                                                            |  |                   | 73,915      |   |                 | 
|EQUIPMENT (Note 4)                                                              |  |                   | 95,849      |   |                 | 
|MINERAL PROPERTIES (Note 3)                                                     |  |                   | 8           |   |                 | 
|TOTAL ASSETS                                                                    |  |                   | 169,772     |   |                 | 
|                                                                                |  |                   |             |   |                 | 
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                        |  |                   |             |   |                 | 
|Current Liabilities                                                             |  |                   |             |   |                 | 
|Accounts payable and accrued liabilities                                        |  |                   | 1,169,246   |   |                 | 
|Promissory notes payable (Note 6)                                               |  |                   | 482,094     |   |                 | 
|Convertible Note (Note 6)                                                       |  |                   | 228,091     |   |                 | 
|Due to related parties (Note 5)                                                 |  |                   | 1,586,840   |   |                 | 
|Total Current Liabilities                                                       |  |                   | 3,466,271   |   |                 | 
|CONVERTIBLE NOTE (Note 6)                                                       |  |                   | -           |   |                 | 
|Total Liabilities                                                               |  |                   | 3,466,271   |   |                 | 
|                                                                                |  |                   |             |   |                 | 
|Stockholders' Deficiency                                                        |  |                   |             |   |                 | 
|Capital stock (Note 7)
180,000,000 common shares authorized, $0.00001 par value |  |                   |             |   |                 | 
|28,651,536 shares issued and outstanding (April 30, 2010 - 28,401,536)          |  |                   | 1,112       |   |                 | 
|Additional paid-in capital                                                      |  |                   | 16,816,879  |   |                 | 
|Equity component of convertible notes (Note 5)                                  |  |                   | 126,701     |   |                 | 
|Donated capital                                                                 |  |                   | 34,500      |   |                 | 
|Deficit accumulated during the exploration stage                                |  |                   | (20,275,691 | ) |                 | 
|Total Stockholders' Deficiency                                                  |  |                   | (3,296,499  | ) |                 | 
|                                                                                |  |                   |             |   |                 | 
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                  |  |                   | 169,772     |   |                 | 



GOING CONCERN   (Note 2)



The accompanying notes are an integral part of the interim consolidated financial statements.



- 2 -



---



Zoro Mining Corp.



|                                                                         |  | For the Three months Ended January 31, 2011 |   |  | For the Three months Ended January 31, 2010 |   |  | For the
Nine months 
Ended January 31, 2011 |            |   | For the
Nine months 
Ended January 31, 2010 |  |             | Cumulative since inception to January 31, 2011 | 
|------------------------------------------------------------------------ |  | ------------------------------------------- | - |  | ------------------------------------------- | - |  | ------------------------------------------- | ---------- | - | ------------------------------------------- |  | ----------- | ---------------------------------------------- | 
|                                                                         |  | $                                           |   |  | $                                           |   |  | $                                           |            |   | $                                           |  |             | $                                              | 
|Expenses                                                                 |  |                                             |   |  |                                             |   |  |                                             |            |   |                                             |  |             |                                                | 
|Bad Debt                                                                 |  | -                                           |   |  | -                                           |   |  |                                             | -          |   |                                             |  | -           |                                                | 
|Depreciation                                                             |  | 14,537                                      |   |  | 25,819                                      |   |  |                                             | 43,996     |   |                                             |  | 78,347      |                                                | 
|Donated services                                                         |  | -                                           |   |  | -                                           |   |  |                                             | -          |   |                                             |  | -           |                                                | 
|Filing and transfer agent fees                                           |  | 3,151                                       |   |  | 2,224                                       |   |  |                                             | 13,257     |   |                                             |  | 8,047       |                                                | 
|Impairment of mineral property costs                                     |  | -                                           |   |  | 9,699,998                                   |   |  |                                             | -          |   |                                             |  | 9,699,998   |                                                | 
|Interest expense                                                         |  | 31,986                                      |   |  | 33,705                                      |   |  |                                             | 148,451    |   |                                             |  | 97,518      |                                                | 
|Investor relations                                                       |  | 122,499                                     |   |  | 10,000                                      |   |  |                                             | 238,630    |   |                                             |  | 11,450      |                                                | 
|Management and administration 
   fees(Note 5)                           |  | 140,472                                     |   |  | 135,868                                     |   |  |                                             | 443,479    |   |                                             |  | 386,134     |                                                | 
|Mineral exploration costs (Note 3)                                       |  | 98,540                                      |   |  | 121,190                                     |   |  |                                             | 316,693    |   |                                             |  | 445,427     |                                                | 
|Office and general (Note 5)                                              |  | 23,632                                      |   |  | 21,966                                      |   |  |                                             | 110,868    |   |                                             |  | 64,974      |                                                | 
|Professional fees                                                        |  | 5,576                                       |   |  | 17,197                                      |   |  |                                             | 70,085     |   |                                             |  | 43,478      |                                                | 
|                                                                         |  | (440,393                                    | ) |  | (10,067,967                                 | ) |  |                                             | (1,385,459 | ) |                                             |  | (10,835,373 | )                                              | 
|Other income                                                             |  |                                             |   |  |                                             |   |  |                                             |            |   |                                             |  |             |                                                | 
|Federal income tax recovery                                              |  | -                                           |   |  | -                                           |   |  |                                             | -          |   |                                             |  | -           |                                                | 
|Gain on sale of fixed assets                                             |  | -                                           |   |  | -                                           |   |  |                                             | -          |   |                                             |  | -           |                                                | 
|Interest income                                                          |  | -                                           |   |  | -                                           |   |  |                                             | -          |   |                                             |  | -           |                                                | 
|                                                                         |  |                                             |   |  |                                             |   |  |                                             |            |   |                                             |  |             |                                                | 
|Net loss                                                                 |  | (440,093                                    | ) |  | (10,067,967                                 | ) |  |                                             | (1,385,459 | ) |                                             |  | (10,835,373 | )                                              | 
|                                                                         |  |                                             |   |  |                                             |   |  |                                             |            |   |                                             |  |             |                                                | 
|Basic and dilutedloss per common
share                                   |  | (0.02                                       | ) |  | (0.50                                       | ) |  |                                             | (0.05      | ) |                                             |  | (1.00       | )                                              | 
|                                                                         |  |                                             |   |  |                                             |   |  |                                             |            |   |                                             |  |             |                                                | 
|Weighted average number of common shares outstanding - basic and diluted |  | 28,651,536                                  |   |  | 20,286,101                                  |   |  |                                             | 28,499,362 |   |                                             |  | 10,844,314  |                                                | 



The accompanying notes are an integral part of the interim consolidated financial statements.



- 3 -



---



Zoro Mining Corp.

|                                                                        | For the
Nine months
Ended January 31, 2011$ |   |  | For the
Nine months
Ended
January 31, 2010$ |             |   | From
April 20, 2004
(Date of Inception)
to January 31, 2011$ | 
|----------------------------------------------------------------------- | ------------------------------------------- | - |  | ------------------------------------------- | ----------- | - | ------------------------------------------------------------ | 
|Cash Flows Used In Operating Activities                                 |                                             |   |  |                                             |             |   |                                                              | 
|Net loss                                                                | (1,385,459                                  | ) |  |                                             | (10,835,373 | ) |                                                              | 
|Adjustments to reconcile net loss to cash used in operating activities: |                                             |   |  |                                             |             |   |                                                              | 
|Federal income tax recovery                                             | -                                           |   |  |                                             | -           |   |                                                              | 
|Depreciation                                                            | 43,996                                      |   |  |                                             | 78,347      |   |                                                              | 
|Non-cash management fees and investor relations expense                 | 143,582                                     |   |  |                                             | -           |   |                                                              | 
|Accrued interest income                                                 | -                                           |   |  |                                             | -           |   |                                                              | 
|Gain on sale of fixed assets                                            | -                                           |   |  |                                             | -           |   |                                                              | 
|Accretion of interest on convertible note                               | 61,751                                      |   |  |                                             | 45,482      |   |                                                              | 
|Bad debt                                                                | -                                           |   |  |                                             | -           |   |                                                              | 
|Impairment of mineral properties                                        | -                                           |   |  |                                             | 9,699,998   |   |                                                              | 
|Donated rent                                                            | -                                           |   |  |                                             | -           |   |                                                              | 
|Donated services                                                        | -                                           |   |  |                                             | -           |   |                                                              | 
|Change in operating assets and liabilities:                             |                                             |   |  |                                             |             |   |                                                              | 
|Decrease (increase) in other receivables                                | (6,750                                      | ) |  |                                             | 6,072       |   |                                                              | 
|Increase  in due to related parties                                     | 464,592                                     |   |  |                                             | 551,743     |   |                                                              | 
|Increase in accounts payable and accrued liabilities                    | 566,793                                     |   |  |                                             | 247,486     |   |                                                              | 
|Net Cash Used in Operating Activities                                   | (111,495                                    | ) |  |                                             | (206,245    | ) |                                                              | 
|                                                                        |                                             |   |  |                                             |             |   |                                                              | 
|Cash Flows Used In Investing Activities                                 |                                             |   |  |                                             |             |   |                                                              | 
|Purchase of equipment                                                   | -                                           |   |  |                                             | -           |   |                                                              | 
|Proceeds from Sale of Equipment                                         | -                                           |   |  |                                             | -           |   |                                                              | 
|Loan receivable                                                         | -                                           |   |  |                                             | -           |   |                                                              | 
|Net Cash Used In Investing Activities                                   | -                                           |   |  |                                             | -           |   |                                                              | 
|                                                                        |                                             |   |  |                                             |             |   |                                                              | 
|Cash Flows From Financing Activities                                    |                                             |   |  |                                             |             |   |                                                              | 
|Promissory note payable                                                 | 84,874                                      |   |  |                                             | 86,000      |   |                                                              | 
|Convertible note                                                        | -                                           |   |  |                                             | -           |   |                                                              | 
|Proceeds from common stock issuances and subscriptions                  | -                                           |   |  |                                             | 136,600     |   |                                                              | 
|Net Cash From Financing Activities                                      | 84,874                                      |   |  |                                             | 222,600     |   |                                                              | 
|                                                                        |                                             |   |  |                                             |             |   |                                                              | 
|Increase (Decrease) in Cash                                             | (26,621                                     | ) |  |                                             | 16,355      |   |                                                              | 
|Cash - Beginning                                                        | 34,790                                      |   |  |                                             | 4,485       |   |                                                              | 
|Cash - Ending                                                           | 8,169                                       |   |  |                                             | 20,840      |   |                                                              | 
|                                                                        |                                             |   |  |                                             |             |   |                                                              | 
|Supplemental Disclosures                                                |                                             |   |  |                                             |             |   |                                                              | 
|Interest paid                                                           | -                                           |   |  |                                             | -           |   |                                                              | 
|Income taxes paid                                                       | -                                           |   |  |                                             | -           |   |                                                              | 
|Shares issued for services (note 8)                                     | 143,332                                     |   |  |                                             |             |   |                                                              | 



The accompanying notes are an integral part of the interim consolidated financial statements.



- 4 -



---



Zoro Mining Corp.

|                                                                             |  |              |   |         |   | Additional
Paid-in |   | Equity Component of Convertible |  | Common Stock Subscrip- |   | Deficit Accumulated During the Exploration |   | Don-
ated |  |           |  
|---------------------------------------------------------------------------- |  | ------------ | - | ------- | - | ------------------ | - | ------------------------------- |  | ---------------------- | - | ------------------------------------------ | - | --------- |  | --------- | -
|                                                                             |  | Common Stock |   | Capital |   | Debt               |   | tions                           |  | Stage                  |   | Capital                                    |   | Total     | 
|                                                                             |  | #            |   | $       |   | $                  |   | $                               |  | $                      |   | $                                          |   | $         |  | $         |  
|Balance - April 20, 2004 (Date of Inception)                                 |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | -                                          |   | -         |  | -         |  
|Issuance of common shares for cash at $.0002/share                           |  | 7,200,000    |   | 1,440   |   | (1,400             | ) | -                               |  | (40                    | ) | -                                          |   | -         |  | -         |  
|Net loss for the period                                                      |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | (1,858                                     | ) | -         |  | (1,858    | )
|Balance - April 30, 2004                                                     |  | 7,200,000    |   | 1,440   |   | (1,400             | ) | -                               |  | (40                    | ) | (1,858                                     | ) | -         |  | (1,858    | )
|Issuance of common shares for cashat $.0002/share                            |  | 1,800,000    |   | 360     |   | (350               | ) | -                               |  | (10                    | ) | -                                          |   | -         |  | -         |  
|Share subscriptions received                                                 |  | -            |   | -       |   | -                  |   | -                               |  | 40                     |   | -                                          |   | -         |  | 40        |  
|Donated rent and services                                                    |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | -                                          |   | 10,500    |  | 10,500    |  
|Net loss for the year                                                        |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | (32,480                                    | ) | -         |  | (32,480   | )
|Balance - April 30, 2005                                                     |  | 9,000,000    |   | 1,800   |   | (1,750             | ) | -                               |  | (10                    | ) | (34,338                                    | ) | 10,500    |  | (23,798   | )
|Share subscriptions received                                                 |  | -            |   | -       |   | -                  |   | -                               |  | 10                     |   | -                                          |   | -         |  | 10        |  
|Donated rent and services                                                    |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | -                                          |   | 12,000    |  | 12,000    |  
|Net loss for the year                                                        |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | (12,690                                    | ) | -         |  | (12,690   | )
|Balance - April 30, 2006                                                     |  | 9,000,000    |   | 1,800   |   | (1,750             | ) | -                               |  | -                      |   | (47,028                                    | ) | 22,500    |  | (24,478   | )
|Issuance of common shares for cashat $0.0544/share                           |  | 1,822,500    |   | 364     |   | 100,886            |   | -                               |  | -                      |   | -                                          |   | -         |  | 101,250   |  
|Share subscriptions received                                                 |  | -            |   | -       |   | -                  |   | -                               |  | 2,600,000              |   | -                                          |   | -         |  | 2,600,000 |  
|Donated rent and services                                                    |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | -                                          |   | 12,000    |  | 12,000    |  
|Net loss for the year                                                        |  | -            |   | -       |   | -                  |   | -                               |  | -                      |   | (220,450                                   | ) | -         |  | (220,450  | )
|Balance - April 30, 2007                                                     |  | 10,822,500   |   | 2,164   |   | 99,136             |   | -                               |  | 2,600,000              |   | (267,478                                   | ) | 34,500    |  | 2,468,322 |  
|Shares and warrants issued for private placement at $25 per unit (Note 8(a)) |  | 157,514      |   | 32      |   | 3,765,908          |   | -                               |  | (2,600,000             | ) | -                                          |   | -         |  | 1,165,940 |  
|Share cancellation (Note 8(a))                                               |  | (6,642,500   | ) | (1,328  | ) | 1,328              |   | -                               |  | -                      |   | -                                          |   | -         |  | -         |  
|Fair value of warrants issued for mineral properties (Note 4)                |  | -            |   | -       |   | 840,000            |   | -                               |  | -                      |   | -                                          |   | -         |  | 840,000   |  
|Fair value of warrants issued for services (Note 8(b))                       |  | -            |   | -       |   | 209,293            |   | -                               |  | -                      |   | -                                          |   | -         |  | 209,293   |  



- 5 -



---





|Net loss                                                                  |  | -          |  | -     |  | -          |  | -       |  | - |  | (3,539,499  | ) | -      |  | ( 3,539,499 | )
|------------------------------------------------------------------------- |  | ---------- |  | ----- |  | ---------- |  | ------- |  | - |  | ----------- | - | ------ |  | ----------- | -
|Balance - April 30, 2008                                                  |  | 4,337,514  |  | 868   |  | 4,915,665  |  | -       |  | - |  | (3,806,977  | ) | 34,500 |  | 1,144,056   |  
|Issuance of common shares for services                                    |  | 7,500      |  | 1     |  | 119,999    |  | -       |  | - |  | -           |   | -      |  | 120,000     |  
|Equity component of convertible note                                      |  | -          |  | -     |  | -          |  | 84,026  |  | - |  | -           |   | -      |  | 84,026      |  
|Net loss                                                                  |  | -          |  | -     |  | -          |  | -       |  | - |  | (3,412,934  | ) | -      |  | (3,412,934  | )
|Balance - April 30, 2009                                                  |  | 4,345,014  |  | 869   |  | 5,035,664  |  | 84,026  |  | - |  | (7,219,911  | ) | 34,500 |  | (2,064,852  | )
|Shares issued in exchange for retirement of notes and other debt (Note 8) |  | 4,366,522  |  | 45    |  | 1,746,563  |  | -       |  | - |  | -           |   | -      |  | 1,746,608   |  
|FV adjustment on convertible note - (Note 7)                              |  | -          |  | -     |  | -          |  | 42,675  |  | - |  | -           |   | -      |  | 42,675      |  
|Shares issued for private placement at $0.50 per unit (Note 8)            |  | 290,000    |  | 3     |  | 134,847    |  | -       |  | - |  | -           |   | -      |  | 134,850     |  
|Shares issued for mineral properties at $.50 (Note 8)                     |  | 19,400,000 |  | 193   |  | 9,699,807  |  | -       |  | - |  | -           |   | -      |  | 9,700,000   |  
|Net loss                                                                  |  | -          |  | -     |  | -          |  | -       |  | - |  | (11,670,321 | ) | -      |  | (11,670,321 | )
|Balance - April 30, 2010                                                  |  | 28,401,536 |  | 1,110 |  | 16,616,881 |  | 126,701 |  | - |  | (18,890,232 | ) | 34,500 |  | (2,111,040  | )
|Issuance of common shares for services                                    |  | 250,000    |  | 2     |  | 199,998    |  | -       |  | - |  | -           |   | -      |  | 200,000     |  
|Net loss                                                                  |  | -          |  | -     |  | -          |  | -       |  | - |  | (1,385,459  | ) | -      |  | (1,385,459  | )
|Balance - January 31, 2011                                                |  | 28,651,536 |  | 1,112 |  | 16,816,879 |  | 126,701 |  | - |  | (20,275,691 | ) | 34,500 |  | (3,296,499  | )





The accompanying notes are an integral part of the interim consolidated financial statements.





- 6 -



---



Zoro Mining Corp.



|1. | Nature of Operations and Basis of Consolidation
|-- | -----------------------------------------------



Unaudited Interim Consolidated Financial Statements



The Company was incorporated in the State of Nevada on April 20, 2004 as Rochdale Mining Corporation. Effective on March 19, 2007, solely for the purposes of effecting a name change, the Company (as Rochdale Mining Corporation), merged with a new wholly-owned subsidiary, Zoro Mining Corp., pursuant to Articles of Merger that the Company filed with the Nevada Secretary of State. The merger was in the form of a parent/ subsidiary merger, with the Company as the surviving corporation. Upon completion of the merger, the Company's name was changed to "Zoro Mining Corp." and the Company's Articles of Incorporation have been amended to reflect this name change.



The Company's common shares trade on the United States OTC Bulletin Board and on the Frankfurt Stock Exchange.  The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property payments are initially capitalized in accordance with the ASC 805-20-55-37, previously referenced as EITF 04-2 when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive Activities - Mining (AS 930) at each fiscal quarter end. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations. The Company assesses the carrying costs for impairment at each fiscal quarter end. The Company has determined that all property payments are impaired and accordingly has written off the acquisition costs to project expense.



Share Splits



On February 9, 2007 the Company increased the number of shares of the Company's authorized share capital and correspondingly increased the number of its issued and outstanding common shares on a thirty-six (36) new shares for one (1) old share basis.  As a result, the Company's authorized share capital was increased from 100,000,000 common shares to 3,600,000,000 common shares, and the Company's issued and outstanding common stock was increased from 6,012,500 common shares to 216,450,000 common shares.



On April 22, 2009, the Company filed a Certificate of Change with the Secretary of State of the state of Nevada to effectuate a reverse stock split of the Company's authorized share capital on the basis of one new common share for twenty old common shares. As a result, as of April 22, 2009, the Company's authorized share capital decreased from 3,600,000,000 shares of common stock to 180,000,000 shares of common stock and its issued and outstanding share capital decreased from 86,900,400 shares of common stock to 4,345,020 shares of common stock.



All references to the number of common shares issued and outstanding have been restated to give retroactive effect to the stock splits, unless otherwise noted.



- 7 -



---



Zoro Mining Corp.



|1. | Nature of Operations and Basis of Consolidation, continued
|-- | ----------------------------------------------------------



Principles of Consolidation



The Company has incorporated three wholly-owned subsidiaries in each of Peru (Zoro Mining SAC, dba "Zoro Peru"), Chile (Sociedad Zoro Chile Limitada, dba "Zoro Chile"), and Mexico (Aravena Mexicana, SA, dba "Zoro Mexico") to beneficially hold property titles in each country.  These financial statements include the accounts of Zoro Mining Corp., and its wholly-owned subsidiaries Zoro Peru, Zoro Chile, and Zoro Mexico (collectively the "Company").  All intercompany transactions and balances have been eliminated upon consolidation.



|2. | Going Concern
|-- | -------------



These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent on the ability of the Company to obtain necessary equity financing to continue operations, the continued support of related party creditors, to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company's interests in the underlying properties, and ultimately the attainment of profitable operations. As at January 31, 2011, the Company has accumulated losses of $20,275,691 since inception and has a working capital deficiency of $3,392,356. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In conjunction with the April 22, 2009 reverse share consolidation, the Company plans to finance its activities utilizing debt and equity instruments that should be more favorably received by the investment community due to the corporate restructuring. On August 17, 2009 the Company settled some of its existing debts with equity in order to reduce current liabilities and improve the overall financial condition of the Company.



- 8 -



---



Zoro Mining Corp.



|3. | Mineral Properties
|-- | ------------------



Mineral exploration costs by area of exploration for the nine months ended January 31, 2011 and 2010 were as follows:





|                               |  | Nine months ended January 31, 2011 |         |  | Nine months ended January 31, 2010 |  
|------------------------------ |  | ---------------------------------- | ------- |  | ---------------------------------- | -
|Chile                          |  |                                    |         |  |                                    |  
|Drilling                       |  | $                                  | -       |  |                                    | $
|Field supplies                 |  |                                    | 3,325   |  |                                    |  
|Geological, mapping and survey |  |                                    | 3,247   |  |                                    |  
|Property maintenance           |  |                                    | 2,333   |  |                                    |  
|Site administration            |  |                                    | 262,898 |  |                                    |  
|Travel                         |  |                                    | 29,890  |  |                                    |  
|                               |  |                                    | 301,693 |  |                                    |  
|Peru                           |  |                                    |         |  |                                    |  
|Field supplies                 |  |                                    | -       |  |                                    |  
|Geological, mapping and survey |  |                                    | -       |  |                                    |  
|Property maintenance           |  |                                    | -       |  |                                    |  
|Site administration            |  |                                    | 15,000  |  |                                    |  
|Travel                         |  |                                    | -       |  |                                    |  
|                               |  |                                    | 15,000  |  |                                    |  
|Mexico                         |  |                                    |         |  |                                    |  
|Geological, mapping and survey |  |                                    | -       |  |                                    |  
|Property maintenance           |  |                                    | -       |  |                                    |  
|Site administration            |  |                                    | -       |  |                                    |  
|                               |  |                                    | -       |  |                                    |  
|Total                          |  | $                                  | 316,693 |  |                                    | $



|4. | Equipment
|-- | ---------



Equipment is comprised of certain assets located primarily in Peru and Chile relating to exploration activity.





|                       |  | CostJanuary 31, 2011 |         |  | AccumulatedDepreciationJanuary 31, 2011 |   |         | Net BookValueJanuary 31,2011 |  |   | Net Book ValueApril 30,2010 | 
|---------------------- |  | -------------------- | ------- |  | --------------------------------------- | - | ------- | ---------------------------- |  | - | --------------------------- | 
|North America          |  |                      |         |  |                                         |   |         |                              |  |   |                             | 
|Computers              |  | $                    | 7,020   |  |                                         | $ | 7,020   |                              |  | $ | -                           | 
|South America          |  |                      |         |  |                                         |   |         |                              |  |   |                             | 
|Computers              |  |                      | 3,315   |  |                                         |   | 3,221   |                              |  |   | 94                          | 
|Furniture              |  |                      | 12,639  |  |                                         |   | 8,153   |                              |  |   | 4,486                       | 
|Exploration equipment  |  |                      | 14,204  |  |                                         |   | 9,837   |                              |  |   | 4,367                       | 
|Vehicles               |  |                      | 105,752 |  |                                         |   | 62,850  |                              |  |   | 42,902                      | 
|Earth moving equipment |  |                      | 159,999 |  |                                         |   | 115,999 |                              |  |   | 44,000                      | 
|                       |  |                      | 295,909 |  |                                         |   | 200,060 |                              |  |   | 95,849                      | 
|Total                  |  | $                    | 302,929 |  |                                         | $ | 207,080 |                              |  | $ | 95,849                      | 



- 9 -



---



Zoro Mining Corp.





|5. | Related Party Transactions
|-- | --------------------------



During the nine months ended January 31, 2011, the Company incurred the following amounts to officers, directors, and other related parties to the Company.  All unpaid balances due to related parties are unsecured, and only cash advances may bear interest at stated rates of 8-10% per annum simple interest if formalized into promissory notes.



a)



b)



c)



d)



e)



f)



The Company participates in a cost sharing arrangement with another public company, Pacific Copper Corp. (OTCBB: PPFP) that has three directors and four officers in common with the Company and shares South American operating offices. The expenditures relate to shared exploration in similar operating areas of Chile and Peru including shared site offices and staff in each country. During the year ended April 30, 2009 Pacific Copper loaned the Company $430,000 secured by non-interest bearing promissory notes of which $105,166 was owing as at January 31, 2011 (April 30, 2010: $160,000) (Note 6).



During the year ended April 30, 2010 the Company acquired the right to receive $2,000 per month in mineral concession maintenance payments from Pan American Lithium Corp. (TSX-V: PL) ("Pan American") in connection with an agreement relating to the Piedra Parada concessions owned by Zoro. Pan American has one director and three officers in common with the Company. During the nine months ended January 31, 2011 the Company has received payments totaling $18,000 from Pan American.



All related party transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.



- 10 -



---



Zoro Mining Corp.



|6. | Convertible and Promissory Notes
|-- | --------------------------------



Convertible Notes



On October 31, 2008, the Company issued a $200,000 6% convertible note with a term to January 31, 2011 convertible into units at $3.20 per unit for a period of two years.  Each unit is comprised of one common share and one share purchase warrant exercisable at $5 per share for a two year term from the date of conversion. The convertible debt was allocated between its debt and equity components on a relative fair value basis with the fair value of the debt portion ($115,974) being determined based on an estimated fair value discount rate of 15% and the fair value of the equity portion ($84,026) being determined using the Black-Scholes pricing model for the embedded share and warrant issuable upon conversion, and utilizing an expected life of 2 years, a risk free interest rate average of 1.56%, a dividend yield of 0%, and an expected volatility of 140%.  On January 31, 2010, the parties to the convertible note changed the conversion rights of accrued interest and principal to enable conversion by the holder at the rate of US$0.40 per post consolidation share without the requirement for issuance of warrants on conversion. The Company will record further interest expense above the stated 6% per annum rate over the term of the convertible note of $84,026 resulting from the difference between the stated value and carrying value at the date of issuance using the effective interest rate method.  At January 31, 2011, $154,792 in accretion interest has been recorded corresponding to an aggregate convertible note carrying value at that date of $228,091.



Promissory Notes



During the year ended April 30, 2009, the Company borrowed $437,000 from an unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing. During the year ended April 30, 2010, the Company borrowed an additional $113,565 from this unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing and also settled various amounts by way of stock issuances. During the nine months ended January 31, 2011, the Company borrowed an additional $64,600 from this unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing.  At January 31, 2011 the balance owing including interest was $403,705 (April 30, 2010: $326,069).



During the year ended April 30, 2009, the Company borrowed $48,529 from an unrelated company by way of promissory notes bearing interest at a rate of 8% per annum and due nine months from signing. During the year ended April 30, 2010, the Company borrowed an additional $19,000 from this unrelated company by way of a promissory note bearing interest at 8% per annum and due twelve months from signing and also settled various amounts by way of stock issuances. At January 31, 2011, the balance owing including interest was $43,331 (April 30, 2010: $40,972).



During the year ended April 30, 2010, the Company borrowed $32,000 at 8% interest from unrelated companies. At January 31, 2011, the balance owing including interest was $35,058 (April 30, 2010: $33,550).



- 11 -



---



Zoro Mining Corp.



|7. | Capital Stock
|-- | -------------



a)       During the nine months ended January 31, 2011, the Company issued 250,000 shares of its common stock under a consulting agreement (note 8). During the same period the Company did not grant any stock options or warrants.



b)       Warrants:



On May 18, 2007 and in connection with the Mineral Property Acquisition Agreement, the Company issued an aggregate of 233,500 warrants to purchase restricted common shares of the Company at a price of $14 per share for a term until May 18, 2009.  The warrants were granted for mineral property acquisition costs in connection with the exploration properties acquired. The fair value of these warrants at the date of grant of $840,000 was estimated using the Black-Scholes warrant pricing model with an expected life of 2 years, a risk free interest rate of 4.38%, a dividend yield of 0%, and an expected volatility of 40%.  The warrants subsequently expired unexercised.



On May 18, 2007 and in connection with management services to be rendered over a one year period by the then-current President and director of the Company, the Company issued an aggregate of 40,000 warrants to purchase common shares of the Company at a price of $30 per share for a term until May 18, 2009.  The fair value of these warrants at the date of grant of $209,293 was estimated using the Black-Scholes option pricing model with an expected life of 2 years, a risk free interest rate of 4.38%, a dividend yield of 0%, and an expected volatility of 40%, and was recorded  to management and administration fees. The warrants subsequently expired unexercised.



Between November 9, 2009 and December 9, 2009, and in connection with a private placement, the Company issued in two tranches a total of 290,000 warrants  to purchase common shares stock at a price of $0.75 until 24 months following the issue date. The fair value of these warrants at the date of grant of $85,181 was estimated using the Black-Scholes option pricing model with an expected life of 2 years, a risk free interest rate of 1.41%, a dividend yield of 0%, and an expected volatility of  304.93%,



Between November 9, 2009 and December 9, 2009 in connection with a private placement, the Company issued 16, 800 broker warrants to purchase common shares at a price of $0.75 until 24 months following the issue date.

The fair value of these warrants at the date of grant of $4,953 was estimated using the Black-Scholes option pricing model with an expected life of 2 years, a risk free interest rate of 1.41%, a dividend yield of 0%, and an expected volatility of 304.93%.



Warrant transactions are summarized as follows:





|                          |  | Number of Warrants |          |   | Weighted Average Exercise Price per Share ($) |  | Weighted Average Contractual Life Remaining (in Years)
|------------------------- |  | ------------------ | -------- | - | --------------------------------------------- |  | ------------------------------------------------------
|Balance, April 30, 2007   |  |                    | -        |   |                                               |  | -                                                     
|Granted during the year   |  |                    | 436,060  |   |                                               |  | 21.37                                                 
|Balance, April 30, 2008   |  |                    | 436,060  |   |                                               |  | 21.37                                                 
|Granted during the year   |  |                    | -        |   |                                               |  | -                                                     
|Balance, April 30, 2009   |  |                    | 436,060  |   |                                               |  | 21.37                                                 
|Granted during the year   |  |                    | 306,800  |   |                                               |  | .75                                                   
|Expired during the year   |  |                    | (436,060 | ) |                                               |  | 14.00                                                 
|Balance, April 30, 2010   |  |                    | 306,800  |   |                                               |  | .75                                                   
|Granted during the year   |  |                    | -        |   |                                               |  | -                                                     
|Balance, January 31, 2011 |  |                    | 306,800  |   |                                               |  | .75                                                   



- 12 -



---



Zoro Mining Corp.



8.       Commitments and Contingencies



On May 1, 2007, the Company entered into a corporate support services agreement effective January 1, 2007 with a third party to perform office and administrative services for approximately $12,000 per month. Effective August 1



The Company is a guarantor of a lease agreement effective September, 1, 2007 that obligates the Company under conditions of default by a related party lessee (a company which at the time had one director in common with the Company), to pay for the entire lease relating to the Company's Tucson, Arizona office until the end of the lease term through January 31, 2011 or as amended or renewed.  As at April 30, 2010, the gross value of the guarantee was $212,774.  The lessee has defaulted on the lease and subsequently moved offices. The potential liability, if any, as a result of the lessee's default due to joint and severable provisions relating to the lease guarantee is presently not determinable, and the Company has not been advised of the results, if any of negotiations by the lessee to settle this potential liability with the landlord.



On January 20, 2010 a vendor entered into a contract with the Company to provide financing and capital markets advisory services with the goal of raising equity funding for the Company. The term of the contract is from signing until January 31, 2011 and automatically renews in 90 day increments unless and until cancelled by either party. In consideration the Company agreed to pay the vendor a retainer fee of $10,000 plus 8% of any equity financing secured by the vendor. In the event the equity financing occurs with an entity introduced by certain excluded entities, the fee is reduced to 3%. In addition, the Company has agreed to issue the vendor share purchase warrants equal to 10% of the securities sold in such equity financing at a price of $0.70 and expiry date which is 3 years from the issue date. In the event the vendor secures debt financing, the fees paid to the vendor are as follows; 8% of the first $2,000,000, plus 6% of proceeds between, $2,000,001 and $7,000,000 if any, plus 4% of proceeds in excess of $7,000,000 if any. Subsequent to January 31, 2011 the Company formally terminated this agreement.



The Company has entered into an Asset Purchase Agreement dated February 22, 2010, with two vending parties to acquire a 100% interest in three property mineral exploration concessions covering approximately 1,500 hectares as an extension to the Company's existing Yura gold prospect located 30 kilometers west of Arequipa, Peru (the "Fortuna Properties"). The Fortuna Properties target precious metals and are comprised of three concessions that are accessible year round via paved highway and improved roads. The Company's VP Business Development and Chairman is an indirect minority shareholder of one of the vending parties.



Subject to final due diligence and other customary closing conditions for the Fortuna Properties, the Company plans to (i) issue 6,000,000 restricted shares of its common stock to the Vending Parties; (ii) pay to the Vending Parties $100,000 prior to the closing of the acquisition, $125,000 at the closing date, and $100,000 nine months from the closing date; and (iii) grant to the Vending Parties, a 2.5% net smelter return ("NSR") royalty on the proceeds of any production from the Fortuna Properties capped at $20,000,000, 1.5% of which can be repurchased by the Company at any time before commencement of any production for the sum of $8,000,000. The NSR also calls for an advance minimum yearly payment of $100,000 to the Vending Parties, which amounts are credited against any royalties ultimately payable.



The Company has entered into an agreement dated August 17, 2010 with a consultant who will provide investor relations services for a term of nine months at a cost of $7,500 per month. The Company will also issue 200,000 shares of its commons stock to the consultant when the agreement is completed. As of January 31, 2011 the Company is in negotiations to terminate this agreement.





- 13 -



---



Zoro Mining Corp.



8.       Commitments and Contingencies, continued



The Company has entered into an agreement dated September 22, 2010 with a consultant who will provide website and communications services for a term of nine months at a total cost of $240,000.



The company will pay $40,000 in cash and has issued 250,000 common shares to the consultant for a value of $200,000 being the fair value of the services to be provided. The company has recorded proportionate investor relation expenses of $143,332 during the period ended January 31, 2011. The unexpended balance ($56,668) is shown as a prepaid expenses and will be amortized over the term of the consulting agreement.



The Company has entered into an agreement dated October 11, 2010 with a consultant who will provide strategic planning, fund raising, and capital structuring advisory services for a term of nine months. In consideration for the services the company will cause the delivery of  200,000 shares of its common stock to the consultant, 100,000 of which will be delivered at the end of four months, and 100,000 of which will be delivered at the end of nine months. In addition the Company will issue 200,000 options to the consultant to purchase Company shares at such time as the company has closed on at least $2 million in net proceeds attributable to the efforts of the consultant. In addition and subject to certain conditions, the Company will issue to the consultant 100,000 options to purchase Company shares for every $1 million in additional net proceeds attributable to the efforts of the consultant.





9.



The following is a list of events subsequent to January 31, 2011 and not previously discussed in the notes.



On February 14, 2011, the Company entered into a Securities Purchase Agreement with an unrelated party providing for the issuance of a Convertible Promissory Note in the principal amount of $42,500 and bearing  interest at an annual rate of 8% and maturing nine months after the date of  issuance (the "Note"). The holder has the right to convert the outstanding principal and interest of the Note at any time between the date that is six months from the date of issuance and the date of maturity. The conversion price will be determined by multiplying the "Market Price" by 58% representing a 42% discount. The Market Price will be determined by taking the average of the lowest 3 trading prices in the ten days preceding the conversion date. The issuer has the right to prepay the aggregate of the principal and interest (the "Total") of and retire the Note by paying 130% of the Total within 60 days of issuance, 135% of the Total between the 61st and 90th day following the date of issue, 140% of the Total between the 91st and 120th day following the date of issue, 150% of the Total between the 121st and 180th day following the date of issue, and 175% of the Total between the 181st day and the date of maturity,



On February 3, 2011, the Company entered into an agreement with a consultant who will act as a non-exclusive placement agent to arrange the sale of shares of the Company's common stock and other securities to institutional and/or accredited investors on behalf of the Company. The term of the contract is for a period of twelve months. The Company shall pay the consultant a cash placement fee of ten percent for the first closing and then eight percent for later closings on the gross proceeds received by the Company in connection with financings arranged by the consultant. In addition, a $15,000 due diligence fee was paid by the Company to the consultant and the fee is creditable against future cash placement fees. In connections with the financings the Company agreed to issue to the consultant warrants to purchase such number of the shares of the Company's commons stock equal to ten percent of the aggregate number of shares issued in connection with the financings. The warrants issued to the consultant shall bear identical terms as the warrants issued pursuant to the financings.



- 14 -



---



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



The following discussion of our financial condition, changes in financial condition and results of operations for the nine months ended January 31, 2011 and 2010 should be read in conjunction with our unaudited interim financial statements and related notes for the nine months ended January 31, 2011 and 2010.  The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions.  Our actual results may differ materially from those anticipated in these forward-looking statements.



Overview of our Business



We were incorporated under the laws of the State of Nevada on April 20, 2004 under the name "Rochdale Mining Corp". Effective March 19, 2007, we merged with a wholly-owned subsidiary, Zoro Mining Corp., pursuant to Articles of Merger filed with the Nevada Secretary of State.  The merger was in the form of a parent/subsidiary merger with Rochdale Mining Corp. as the surviving corporation.  Upon completion of the merger, our corporate name was changed to "Zoro Mining Corp." and our Articles of Incorporation were amended to reflect this name change. Our shares of common stock are quoted on the Over-the-Counter Bulletin Board under the symbol "ZORM.OB".



As of the date of this Quarterly Report, we are engaged in the acquisition and exploration of mineral properties located in South America and Mexico.  We have not established any proven or probable reserves on our mineral property interests.  To date, we have been engaged primarily in organizational activities and have engaged in minimal initial exploration at several of our projects, including exploratory drilling at one of our properties located in Chile. We plan to conduct exploration programs on our properties with the objective of ascertaining whether any of our properties contain economic concentrations of minerals that are prospective for mining. As such, we are considered an exploration or exploratory stage company. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic feasibility of our properties is determined. We have no known reserves of gold, copper, platinum or any other type of mineral on our properties.



Subsidiaries



During May 2007 through July 2007 and in accordance with applicable local laws and regulations in Chile, Peru and Mexico, we incorporated three wholly-owned subsidiaries in Chile, Peru and Mexico as follows: Sociedad Zoro Chile Limitada, in Chile; Zoro Mining SAC, in Peru; and Aravena Mexicana, SA in Mexico. We have completed property transfers in Chile, and have prepared for the transfer of title to our property interests in Peru to Zoro Mining SAC pending payment of required fees.  Property transfers in Mexico are pending from Aravena Internacional SA to Aravena Mexicana SA pending the payment of required fees.



Current Business Operations



We are a natural resource exploration company currently engaged in the exploration and acquisition of property located in South America and Mexico. We plan to conduct exploration programs on our properties with the objective of ascertaining whether any of our properties contain economic concentrations of minerals that are prospective for mining. We currently have interests in an aggregate of approximately 34,215 acres located in Chile, approximately 5,224 acres in Peru, and a further 6,822 acres located in Mexico, targeting gold, copper and platinum.





- 15 -



---



Our current acreage and location of our property is summarized as follows:





|Location             |  | Project                |  | Exploration Target          |  | Concession Hectares/Acres | 
|-------------------- |  | ---------------------- |  | --------------------------- |  | ------------------------- | 
|Sonora, Mexico       |  | The Las Animas Project |  | Gold, Copper                |  | 2,761/6,822               | 
|Chile, South America |  | The Escondida Project  |  | Gold, Platinum              |  | 2,050/5,063               | 
|Chile, South America |  | Don Beno Project       |  | Gold, Copper                |  | 5,900/14,574              | 
|Chile, South America |  | Sierra Fritis Project  |  | Gold, Copper                |  | 2,300/5,683               | 
|Chile, South America |  | Piedra Parada Project  |  | Gold, platinum group metals |  | 3,600/8,895(1)(2)         | 
|Peru, South America  |  | The Yura Project       |  | Gold                        |  | 2,114/5,224(3)            | 
|                     |  |                        |  | Total Net Hectares/Acres:   |  | 18,725/46,261             | 
|                     |  |                        |  |                             |  |                           | 

(1)



(2)



(3)



The Company's properties are discussed in greater detail in the Company's Annual Report on Form 10-K for the Company's fiscal year ended April 30, 2010.  The Company has been concentrating its exploration initiatives primarily in Peru on its Yura gold prospect and in Chile on its Don Beno gold and copper project and its Escondida gold and platinum project.



By resolutions dated July 16, 2010, the Board of Directors authorized the release and dropping of the Costa Rica and Rio Sur concessions in Chile. These properties, which were and are not material to the Company, in the aggregate covered 3,100 hectares (7,637 acres).



Recommended Exploration Programs and Budgets



Don Beno Project



The recommended exploration program at the Don Beno property is estimated at $241,038 for Phase 1 and $482,900 for Phase 2 if justified. The table below provides a breakdown of projected expenditures for the proposed geochemical and geophysical surveys, along with follow-up drilling.



Proposed Budget Phase 1





|Activity                            |  | Description             |  | Total |        
|----------------------------------- |  | ----------------------- |  | ----- | -------
|Geology                             |  |                         |  |       |        
|Geologic Mapping                    |  | 60days @ $700/day       |  | $     | 42,000 
|Structural Analysis                 |  | 10days @ $700/day       |  | $     | 7,000  
|Landsat Imagery & thematic analysis |  | Est. $25,000            |  | $     | 25,000 
|                                    |  |                         |  |       |        
|Geochemistry                        |  |                         |  |       |        
|Rock chip sampling                  |  | 45 days @ $500/day      |  | $     | 22,500 
|Rock chip analyses                  |  | 15 smpls/day x 45 x $35 |  | $     | 23,625 
|                                    |  |                         |  |       |        
|Geophysical Surveys                 |  |                         |  |       |        
|Aeromagnetic Survey                 |  | 15 days est. $35,000    |  |       | 35,000 
|Radiometrics Survey                 |  | Est. $50,000            |  | $     | 50,000 
|Ground magnetometry+report          |  | 20 days @ $ 700/day     |  | $     | 14,000 
|SubTotal                            |  |                         |  | $     | 219,125
|Contingency @ 10%                   |  |                         |  |       | 21,913 
|Phase 1 Total                       |  |                         |  | $     | 241,038



- 16 -



---



Proposed Budget Phase 2



|Activity                    |  | Description                 |                  |  | Total |        
|--------------------------- |  | --------------------------- | ---------------- |  | ----- | -------
|Drill Program               |  |                             |                  |  |       |        
|Drill Mobilization Costs    |  |                             |                  |  | $     | 25,000 
|Core Drilling               |  | $                           | 3000 m's x 100/m |  |       | $      
|                            |  |                             |                  |  |       |        
|Geological & supervision    |  | 35 days @ $700              |                  |  | $     | 24,500 
|Analyses - rock             |  | 1500 samples at $35/sample  |                  |  | $     | 52,500 
|                            |  |                             |                  |  |       |        
|Support                     |  |                             |                  |  |       |        
|Misc. supplies & materials  |  | Estimate                    |                  |  | $     | 5,000  
|Food & Lodging, 2 personnel |  | Estimate 60 days @ $300/day |                  |  | $     | 18,000 
|Vehicles                    |  | Estimate 70 days @ $200/day |                  |  | $     | 14,000 
|                            |  | Subtotal                    |                  |  | $     | 439,000
|Contingency @ 10%           |  |                             |                  |  |       | $      
|Total                       |  |                             |                  |  |       | $      



Escondida Project



The recommended two-phase exploration program at the Escondida property is estimated at $92,400 for Phase 1, and $437,800 for Phase 2 if justified. The program total is $530,200. The tables below provide a breakdown of projected expenditures for the proposed mapping and geochemical surveys, with follow-up drilling if merited.



Proposed Budget Phase 1



|Description       |  | Explanation                      |  | Mth 1 |      |  | Mth 2 |  |       | Mth 3 |  |  | Mth 4 |  | Mth5 |      | Mth 6 |  | SbTot    | 
|----------------- |  | -------------------------------- |  | ----- | ---- |  | ----- |  | ----- | ----- |  |  | ----- |  | ---- | ---- | ----- |  | -------- | 
|Personnel         |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Sr.Geol-2mos, $750/day           |  |       | 7500 |  |       |  | 7500  |       |  |  |       |  |      | 7500 |       |  |          | 
|                  |  | Jr. Geol-4mos,$350/day           |  |       |      |  |       |  | 7000  |       |  |  | 7000  |  |      |      | 7000  |  |          | 
|Logistics         |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Food & Lodging est$25/day        |  |       | 250  |  |       |  | 1000  |       |  |  | 500   |  |      |      | 750   |  |          | 
|                  |  | Travel-Sr. Geol expat            |  |       | 2000 |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Travel-Jr. Geol                  |  |       |      |  |       |  | 500   |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Vehicle-est $1500/mo             |  |       | 1500 |  |       |  | 1500  |       |  |  | 1500  |  |      |      | 1500  |  |          | 
|Field Activities  |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Mapping- purch imagery est $2500 |  |       | 2500 |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Thin sections/Microprobe         |  |       |      |  |       |  |       |       |  |  | 2500  |  |      |      |       |  |          | 
|                  |  | Trenching- excavator             |  |       |      |  |       |  | 10000 |       |  |  | 10000 |  |      |      |       |  |          | 
|                  |  | Geochemistry-est 100smpls, $25ea |  |       |      |  |       |  |       |       |  |  |       |  |      |      | 2500  |  |          | 
|Office & Analysis |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  | Computer entry & analysis        |  |       |      |  |       |  |       |       |  |  |       |  |      |      | 1,000 |  |          | 
|                  |  | Report & Recommend-Sr Geol       |  |       |      |  |       |  |       |       |  |  |       |  |      |      | 1,000 |  |          | 
|                  |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  |          | 
|                  |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  | Subtot   | 
|                  |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  | 10%cont  | 
|                  |  |                                  |  |       |      |  |       |  |       |       |  |  |       |  |      |      |       |  | Ph 1 Tot | 



- 17 -



---



Phase 2 Drill Program



|Description       |  | Explanation                     |  | Mth 1 |  | Mth 2 |  | Mth 3 |  | Mth 4 |  | Mth5     |        |  | Mth 6 |  |        | SbTot |  
|----------------- |  | ------------------------------- |  | ----- |  | ----- |  | ----- |  | ----- |  | -------- | ------ |  | ----- |  | ------ | ----- | -
|Personnel         |  |                                 |  |       |  |       |  |       |  |       |  |          |        |  |       |  |        |       |  
|                  |  | Sr.Geol-1/2mos, $750/day        |  |       |  |       |  |       |  |       |  |          | 3750   |  |       |  | 3750   |       |  
|                  |  | Jr. Geol-1mos,$350/day          |  |       |  |       |  |       |  |       |  |          | 7000   |  |       |  |        |       |  
|Logistics         |  |                                 |  |       |  |       |  |       |  |       |  |          |        |  |       |  |        |       |  
|                  |  | Food & Lodging est$25/day       |  |       |  |       |  |       |  |       |  |          | 500    |  |       |  |        |       |  
|                  |  | Travel-Sr. Geol expat           |  |       |  |       |  |       |  |       |  |          | 2000   |  |       |  |        |       |  
|                  |  | Travel-Jr. Geol                 |  |       |  |       |  |       |  |       |  |          | 500    |  |       |  |        |       |  
|                  |  | Vehicle-est $1500/mo            |  |       |  |       |  |       |  |       |  |          | 1500   |  |       |  | 1500   |       |  
|Field Activities  |  |                                 |  |       |  |       |  |       |  |       |  |          |        |  |       |  |        |       |  
|                  |  | Drilling - 2500m H core@ $125/m |  |       |  |       |  |       |  |       |  |          | 312500 |  |       |  |        |       |  
|                  |  | Field supplies                  |  |       |  |       |  |       |  |       |  |          | 500    |  |       |  |        |       |  
|                  |  | Drill Geochem-2500smpls, $25ea  |  |       |  |       |  |       |  |       |  |          |        |  |       |  | 62,500 |       |  
|                  |  |                                 |  |       |  |       |  |       |  |       |  |          |        |  |       |  |        |       |  
|Office & Analysis |  |                                 |  |       |  |       |  |       |  |       |  |          |        |  |       |  | 1000   |       |  
|                  |  | Computer entry & analysis       |  |       |  |       |  |       |  |       |  |          |        |  |       |  | 1000   |       |  
|                  |  | Report & Recommend-Sr Geol      |  |       |  |       |  |       |  |       |  |          |        |  |       |  |        |       |  
|                  |  |                                 |  |       |  |       |  |       |  |       |  | Sbtot    |        |  |       |  |        |       | $
|                  |  |                                 |  |       |  |       |  |       |  |       |  | 10% cont |        |  |       |  |        |       | $
|                  |  |                                 |  |       |  |       |  |       |  |       |  | Ph 2 Tot |        |  |       |  |        |       | $
|                  |  |                                 |  |       |  |       |  |       |  |       |  | Tot Prgm |        |  |       |  |        |       | $



Yura Project



The recommended exploration program at the Yura property is estimated at $384,450 for Phase 1 and $760,650 for Phase 2. The table below provides a breakdown of projected expenditures for the proposed geochemical and geophysical surveys, along with follow-up drilling.



Phase 1 Proposed Budget



|Activity                             |  | Description             |  | Total |        
|------------------------------------ |  | ----------------------- |  | ----- | -------
|Geology                              |  |                         |  |       |        
|Geologic Mapping                     |  | 60days @ $700/day       |  | $     | 42,000 
|Aerial photography detailed mapping  |  | 15days@$700/day         |  | $     | 10,500 
|Landsite & thematic imagery analysis |  | Acq., analysis          |  | $     | 32,500 
|Geochemistry                         |  |                         |  |       |        
|collection                           |  | 2geos-120days@ $500     |  | $     | 60,000 
|analysis                             |  | 1500smpls@$50ea         |  | $     | 75,000 
|Trenching & Roads                    |  |                         |  |       |        
|Trenching                            |  | 30days@$125/hr          |  | $     | 30,000 
|Roads                                |  | 30days@$125/hr          |  | $     | 30,000 
|Bulk Sample                          |  |                         |  |       |        
|Collection                           |  | 500kg est               |  | $     | 2,500  
|Analysis                             |  | Mult testwork est       |  | $     | 15,500 
|Logistics                            |  |                         |  |       |        
|Vehicles                             |  | Assume 3, 1500/mo*3     |  | $     | 13,500 
|Food & Lodging                       |  | 90days, 2geos, $125/day |  | $     | 22,500 
|Field Supplies                       |  | Estimate                |  | $     | 5,000  
|Office- report & target defin.       |  | 15days@$700/day         |  | $     | 10,500 
|Subtotal                             |  |                         |  | $     | 349,500
|10%contingency                       |  |                         |  | $     | 34,950 
|Phase 1 total                        |  |                         |  | $     | 384,450



- 18 -



---

Phase 2 Proposed Budget



|Activity                    |  | Description                 |                  |  | Total |        
|--------------------------- |  | --------------------------- | ---------------- |  | ----- | -------
|Drill Program               |  |                             |                  |  |       |        
|Drill Mobilization Costs    |  |                             |                  |  | $     | 25,000 
|Core Drilling               |  | $                           | 5000 m's x 100/m |  |       | $      
|                            |  |                             |                  |  |       |        
|Geological & supervision    |  | 60 days @ $700              |                  |  | $     | 42,000 
|Analyses - rock             |  | 2,500 samples at $35/sample |                  |  | $     | 87,500 
|                            |  |                             |                  |  |       |        
|Support                     |  |                             |                  |  |       |        
|Misc. supplies & materials  |  | Estimate                    |                  |  | $     | 5,000  
|Food & Lodging, 2 personnel |  | Estimate 60 days @ $300/day |                  |  | $     | 18,000 
|Vehicles                    |  | Estimate 70 days @ $200/day |                  |  | $     | 14,000 
|                            |  | Subtotal                    |                  |  | $     | 691,500
|Contingency @ 10%           |  |                             |                  |  |       | $      
|Total                       |  |                             |                  |  |       | $      



Results of Operations



We are an exploration stage company and have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.



The summarized financial data set forth in the table below is derived from and should be read in conjunction with our unaudited financial statements for the nine month period ended January 31, 2011 and January 31, 2010, including the notes to those financial statements which are included in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements.



The following table sets forth selected financial information for the periods indicated.





|                                     | For the
Three months Ended
January 31, 2011 |   | For the
Three months Ended
January 31, 2010 |   |  | For the
Nine months Ended January 31, 2011 |            |   | For the
Nine months Ended January 31, 2010 |  |             | Cumulative since inception to January 31, 2011 | 
|------------------------------------ | ------------------------------------------- | - | ------------------------------------------- | - |  | ------------------------------------------ | ---------- | - | ------------------------------------------ |  | ----------- | ---------------------------------------------- | 
|                                     | $                                           |   | $                                           |   |  | $                                          |            |   | $                                          |  |             | $                                              | 
|Expenses                             |                                             |   |                                             |   |  |                                            |            |   |                                            |  |             |                                                | 
|Bad Debt                             | -                                           |   | -                                           |   |  |                                            | -          |   |                                            |  | -           |                                                | 
|Depreciation                         | 14,537                                      |   | 25,819                                      |   |  |                                            | 43,996     |   |                                            |  | 78,347      |                                                | 
|Donated services                     | -                                           |   | -                                           |   |  |                                            | -          |   |                                            |  | -           |                                                | 
|Filing and transfer agent fees       | 3,151                                       |   | 2,224                                       |   |  |                                            | 13,257     |   |                                            |  | 8,047       |                                                | 
|Impairment of mineral property costs | -                                           |   | 9,699,998                                   |   |  |                                            | -          |   |                                            |  | 9,699,998   |                                                | 
|Interest expense                     | 31,986                                      |   | 33,705                                      |   |  |                                            | 148,451    |   |                                            |  | 97,518      |                                                | 
|Investor relations                   | 122,499                                     |   | 10,000                                      |   |  |                                            | 238,630    |   |                                            |  | 11,450      |                                                | 
|Management and administration fees   | 140,472                                     |   | 135,868                                     |   |  |                                            | 443,479    |   |                                            |  | 386,134     |                                                | 
|Mineral exploration costs            | 98,540                                      |   | 121,190                                     |   |  |                                            | 316,693    |   |                                            |  | 445,427     |                                                | 
|Office and general                   | 23,632                                      |   | 21,966                                      |   |  |                                            | 110,868    |   |                                            |  | 64,974      |                                                | 
|Professional fees                    | 5,576                                       |   | 17,197                                      |   |  |                                            | 70,085     |   |                                            |  | 43,478      |                                                | 
|                                     | (440,393                                    | ) | (10,067,967                                 | ) |  |                                            | (1,385,459 | ) |                                            |  | (10,835,373 | )                                              | 
|Other income                         |                                             |   |                                             |   |  |                                            |            |   |                                            |  |             |                                                | 
|Federal income tax recovery          | -                                           |   | -                                           |   |  |                                            | -          |   |                                            |  | -           |                                                | 
|Gain on sale of fixed assets         | -                                           |   | -                                           |   |  |                                            | -          |   |                                            |  | -           |                                                | 
|Interest income                      | -                                           |   | -                                           |   |  |                                            | -          |   |                                            |  | -           |                                                | 
|                                     |                                             |   |                                             |   |  |                                            |            |   |                                            |  |             |                                                | 
|Net loss                             | (440,393                                    | ) | (10,067,967                                 | ) |  |                                            | (1,385,459 | ) |                                            |  | (10,835,373 | )                                              | 



- 19 -



---

Nine month period ended January 31, 2011 Compared to Nine month period ended January 31, 2010.



During the nine month periods ended January 31, 2011 and 2010, we did not generate any revenue.



During the nine month period ended January 31, 2011, we incurred expenses of $1,385,459 compared to $10,835,373 incurred during the nine month period ended January 31, 2010 (a decrease of $9,449,914). These expenses incurred during the nine month period ended January 31, 2011 and January 31, 2010 consisted of: (i) depreciation of $43,996 (2010: $78,347); (ii) filing and transfer agent fees of $13,257 (2010: $8,047); (iii) management and administration fees of $443,479 (2010: $386,134); (iv) mineral exploration costs of $316,693 (2010: $445,427); (v) office and general of $110,868 (2010: $64,974); (vi) professional fees of $70,085 (2010: $43,478); (vii) interest expense of $148,451 (2010: $97,518); (viii) investor relations of $238,630 (2010: $11,450); and (ix) impairment of mineral properties of $nil (2010: $9,699,998).  Total expenses incurred during the nine month period ended January 31, 2011 decreased compared to the nine month period ended January 31, 2010 primarily due a charge to impairment of mineral properties in 2010 and lower mineral explorations costs in 2011, offset by higher investor relations expense, interest expense, office and general expense, and management and administration fees in 2011.



Our net loss for the nine month period ended January 31, 2011 was $1,385,459 compared to a net loss of $10,835,373 during the nine month period ended January 31, 2010 (a decrease of $9,449,914).  Our net loss during the nine month period ended January 31, 2011 was $0.05 per share compared to a net loss $1.00 per share during the nine month period ended January 31, 2010. The weighted average number of shares outstanding was 28,499,362 for the nine month period ended January 31, 2011 compared to 10,844,314 for the nine month period ended January 31, 2010.



Three month period ended January 31, 2011 Compared to Three month period ended January 31, 2010.



During the three month periods ended January 31, 2011 and 2010, we did not generate any revenue.



During the three month period ended January 31, 2011, we incurred expenses of $440,393 compared to $10,067,967 incurred during the three month period ended January 31, 2010 (a decrease of $9,627,574). These expenses incurred during the three month period ended January 31, 2011 and January 31, 2010 consisted of: (i) depreciation of $14,537 (2010: $25,819); (ii) filing and transfer agent fees of $3,151 (2010: $2,224); (iii) management and administration fees of $140,472 (2010: $135,868); (iv) mineral exploration costs of $98,540 (2010: $121,190); (v) office and general of $23,632 (2010: $21,966); (vi) professional fees of $5,576 (2010: $17,197); (vii) interest expense of $31,986 (2010: $33,705); (viii) investor relations of $122,499 (2010: $10,000); and (ix) impairment of mineral properties of $nil (2010: $9,699,998).  Total expenses incurred during the three month period ended January 31, 2011 decreased compared to the three month period ended January 31, 2010 primarily due a charge to impairment of mineral properties in 2010 and lower mineral explorations costs in 2011, offset by higher investor relations expense in 2011.



Our net loss for the three month period ended January 31, 2011 was $440,393 compared to a net loss of $10,067,967 during the three month period ended January 31, 2010 (a decrease of $9,627,574).  Our net loss during the three month period ended January 31, 2011 was $0.02 per share compared to a net loss $0.50 per share during the three month period ended January 31, 2010. The weighted average number of shares outstanding was 28,651,536 for the three month period ended January 31, 2011 compared to 20,286,101 for the three month period ended January 31, 2010.



Liquidity and Capital Resources



As at the nine month period ended January 31, 2011, our current assets were $73,915 and our current liabilities were $3,466,271, which resulted in a working capital deficiency of $3,392,356. As at the nine month period ended January 31, 2011, current assets were comprised of $8,169 in cash, $56,668 in prepaid expenses, and $9,078 in other receivables. As at the nine month period ended January 31, 2011, current liabilities were comprised of: (i) 1,169,246 in accounts payable and accrued liabilities; (ii) $1,586,840 due to related parties; (iii) $482,094 in promissory notes payable, and (iv) $228,091 in convertible notes.



As at the nine month period ended January 31, 2011, our total assets were $169,772 comprised of: (i) $73,915 in current assets; (ii) $95,849 in equipment and (iii) $8 in valuation of mineral properties, compared to total assets of $176,971 as at our year ended April 20, 2010. The decrease in total assets during the nine month period ended January 31, 2011 was primarily due to a decrease in cash and equipment, offset by an increase in prepaid expenses.



As at the nine month period ended January 31, 2011, our total liabilities were $3,466,271 comprised of $3,466,271 in current liabilities, compared to total liabilities of $2,288,011 as of our fiscal year ended April 30, 2010.  The increase in liabilities during the nine month period ended January 31, 2011 resulted from increased liabilities related to accounts payable and accrued liabilities, promissory notes payable, convertible note, and amounts due to related parties.



- 20 -



---

Stockholders' deficit increased from $2,111,040 as at the Company's year ended April 30, 2010 to $3,296,499 as at January 31, 2011.



Cash Flows Used in Operating Activities



We have not generated positive cash flows from operating activities. For the nine month period ended January 31, 2011, net cash flows used in operating activities was $111,495, consisting of a net loss of $1,385,459, adjusted by $43,996 for depreciation, $143,582 for non cash management fees and office and general expense, and $61,751 for accretion of interest on convertible notes.  Net cash flows used in operating activities was further changed by an increase in other receivables of $6,750, an increase in amounts due to related parties of $464,592, and an increase in accounts payable and accrued liabilities of $566,793.



For the nine month period ended January 31, 2010, net cash flows used in operating activities was $206,245 consisting of a net loss of $10,835,373, adjusted by $78,347 in depreciation, $45,482 in accretion of interest on convertible notes, and $9,699,998 in impairment of mineral properties.  Net cash flows used in operating activities was further changed by a decrease of $6,072 in other receivables, an increase in amounts due to related parties of $551,743 and an increase in accounts payable and accrued liabilities of $247,486.



Cash Flows from Investing Activities



We did not have any cash flows from investing activities for the nine month period ended January 31, 2011 or for the nine month period ended January 31, 2010.



Cash Flows from Financing Activities



We have financed our operations primarily from either advances or the issuance of equity and debt instruments. For the nine month period ended January 31, 2011, net cash flows provided from financing activities was $84,874 compared to $222,600 for the nine month period ended January 31, 2010. Cash flows from financing activities for the nine month period ended January 31, 2011 consisted of $84,874 from the issuance promissory notes. Cash flows from financing activities for the nine month period ended January 31, 2010 consisted of $86,000 from the issuance of  promissory notes and $136,600 from the issuance of common stock.



We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities, debt instruments, and related party loans or advances. Our working capital requirements are expected to increase in line with the growth of our business.



Plan of Operations



Our plan of operations for the next twelve months is to focus on the exploration of our Don Beno, Escondida and Yura properties.  In particular, in terms of priority, we intend to pursue the recommended Phase I exploration program at the Yura property, and, pending sufficient funding, the programs at the other two projects. We anticipate that we will require a total of approximately $1,720,000 for our plan of operations over the next twelve months, as follows:



(a)      approximately $720,000 in the aggregate for the Phase I exploration programs at each of the Don Beno, Escondida and Yura properties; and



(b)      approximately $1,000,000 for management and administration fees, professional fees, and other general expenses over the next twelve months.



At January 31, 2011, we had cash of $8,169 and a working capital deficit of $3,392,356.  During the twelve month period following the date of this report, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations for and beyond the next twelve months.  Management anticipates that further advances and debt instruments, and equity private placements will be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity to third parties, and debt instruments from related and non-related parties.



We cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock, issuance of debt, advances or otherwise to fund our exploration programs going forward. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.



- 21 -



---

Material Commitments



As of the date of this Quarterly Report, the agreements discussed below summarize our material commitments.



Mineral Property Acquisition Agreements



In accordance with the terms and conditions of a Mineral Property Acquisition Agreement dated April 12, 2007 and effective on May 7, 2007 (the "Option Agreement"), as entered into among us and each of Eduardo Esteffan M., Fresia Sepulveda H., Eduardo Esteffan S., Gretchen Esteffan S., Claudio Esteffan S. and Integrity Capital Group, LLC (collectively, the "Vendors"), the Vendors granted to us the sole and exclusive option (the "Option") to acquire a 100% undivided legal, beneficial and registerable interest in and to six separate unencumbered mineral property interests totaling approximately 39,787 gross acres located in Chile, Peru and Mexico and targeting potential gold, copper and platinum group prospects (collectively, the "Property").



In order to complete the acquisition of the Property, three wholly-owned subsidiaries in each of Peru, Chile and Mexico were incorporated by us to beneficially hold property titles in each country in order to comply with all applicable laws relating thereto. As of the date of this Quarterly Report, all properties have been transferred to our wholly-owned subsidiary in Chile, while Peru Property related interests have been executed for transfer by the Vendors and have been submitted to Zoro's Peruvian subsidiary's (Zoro Mining SAC) property transfer notary to complete the transfer, pending the payment of required fees. Property transfers in Mexico are pending from Aravena Internacional SA to Aravena Mexicana SA in Mexico pending the payment of required fees.  In order to complete the acquisition of the Property, we further caused one of our existing founding shareholders to sell an aggregate of 35,500,000 restricted shares of Common Stock held of record by such shareholder to the Vendors at an aggregate purchase price of U.S. $0.00001 per common share.



As of the date of this Quarterly Report, we have paid and will continue to pay to, or on the Vendors' behalf, all underlying regulatory, maintenance, and governmental payments and assessment work required to keep the mineral property interests comprising the Property and any underlying option agreements respecting any of the mineral property interests comprising the Property in good standing through the calendar year of 2010.



The Company has entered into an Asset Purchase Agreement dated February 22, 2010, with two vending parties to acquire a 100% interest in three property mineral exploration concessions covering approximately 1,500 hectares as an extension to the Company's existing Yura gold prospect located 30 kilometers west of Arequipa, Peru (the "Fortuna Properties"). The Fortuna Properties target precious metals and are comprised of three concessions that are accessible year round via paved highway and improved roads. The Company's VP Business Development and Chairman is an indirect minority shareholder of one of the vending parties. The closing of the agreement to purchase the Fortuna Properties has not occurred as of the date of this Quarterly Report.



Subject to final due diligence and other customary closing conditions for the Fortuna Properties, the Company plans to (i) issue 6,000,000 restricted shares of its common stock to the Vending Parties; (ii) pay to the Vending Parties $100,000 prior to the closing of the acquisition, $125,000 at the closing date, and $100,000 nine months from the closing date; and (iii) grant to the Vending Parties, a 2.5% net smelter return ("NSR") royalty on the proceeds of any production from the Fortuna Properties capped at $20,000,000, 1.5% of which can be repurchased by the Company at any time before commencement of any production for the sum of $8,000,000. The NSR also calls for an advance minimum yearly payment of $100,000 to the Vending Parties, which amounts are credited against any royalties ultimately payable.



Related Party Arrangements



During the nine months ended January 31, 2011, we incurred $67,500 (January 31, 2010:  $67,500) to Dr. Hackman, our Vice President of Explorations and a director, for geological services rendered, of which $185,804 was owed this director at January 31, 2011 for unpaid services and reimbursement of expenses, with such costs recorded as mineral exploration costs (April 30, 2010: $100,347).



During the nine months ended January 31, 2011, we incurred to Harold Gardner, Chairman /Vice President of Business Development and a director of the Company, 67,500 (January 31, 2010: $67,500) for management of South American exploration, with such costs recorded as mineral exploration costs.  At January 31, 2011, $706,353 (April 30, 2010: $512,359) was owed to this director for unpaid loans, fees and reimbursement of expenses.



During the nine months ended January 31, 2011, we incurred to Mr. Brodkey, our President/Chief Executive Officer and a director of the Company, $106,033 (January 31, 2010: $110,636) for management services with respect to the administration of the Company.  At January 31, 2011, $226,370 (April 30, 2010: $152,271) was owed to this officer at for unpaid services and reimbursement of expenses.



- 22 -



---

During the nine months ended January 31, 2011, we incurred to Jodi Henderson, Corporate Secretary of the Company, $34,151.83 (January 31, 2010: $27,423) for management services with respect to the administration of the Company.



During the nine months ended January 31, 2011, we incurred a total of $190,875 (January 31, 2010 - $252,743 ) to Gareste Limitada, a private Chilean company with a director in common with us that provides exploration services to us in Chile.  An aggregate of $363,147 was owing at January 31, 2011 (April 30, 2010: $197,272).



During the nine months ended January 31, 2011, we incurred to Frank Garcia, CFO of the Company, $37,119 (January 31, 2010: $34,998) for management services with respect to accounting for the Company.



We participate in a cost sharing arrangement with another public company, Pacific Copper Corp. (OTCBB: PPFP) (with two directors and four officers in common with us) who shares South American operating offices. The expenditures relate to shared exploration staging and administration in similar operating areas of Chile and Peru including shared site offices and staff in each country, and in the United States. During the fiscal year ended April 30, 2009, a total of $430,000 was advanced to us from Pacific Copper Corp. by way of demand promissory notes.  This amount is unsecured, bears no interest and is repayable on demand. As at January 31, 2011, $105,166 remains outstanding to Pacific Copper Corp. (April 30, 2010: $160,000).



During the year ended April 30, 2010 the Company acquired the right to receive $2,000 per month in mineral concession maintenance payments from Pan American Lithium Corp. (TSX-V: PL)  ("Pan American") in connection with an agreement relating to the Piedra Parada concessions owned by Zoro. Pan American has one director and three officers in common with the Company. During the nine months ended January 31, 2011 the Company has received payments totaling $18,000 from Pan American.



Convertible and Promissory Notes



On October 31, 2008, the Company issued a $200,000 6% convertible note with a term to January 31, 2011 convertible into units at $3.20 per unit for a period of two years.  Each unit is comprised of one common share and one share purchase warrant exercisable for at $5 per share for a two year term from the date of conversion. The convertible debt was allocated between its debt and equity components on a relative fair value basis with the fair value of the debt portion ($115,974) being determined based on an estimated fair value discount rate of 15% and the fair value of the equity portion ($84,026) being determined using the Black-Scholes pricing model for the embedded share and warrant issuable upon conversion, and utilizing an expected life of 2 years, a risk free interest rate average of 1.56%, a dividend yield of 0%, and an expected volatility of 140%.  On January 31, 2010, the parties to the convertible note changed the conversion rights of accrued interest and principal to enable conversion by the holder at the rate of US$0.40 per post consolidation share without the requirement for issuance of warrants on conversion. The Company will record further interest expense above the stated 6% per annum rate over the term of the convertible note of $84,026 resulting from the difference between the stated value and carrying value at the date of issuance using the effective interest rate method.  At January 31, 2011, $154,792 in accretion interest has been recorded corresponding to an aggregate convertible note carrying value at that date of $228,091.



During the year ended April 30, 2009, the Company borrowed $437,000 from an unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing. During the year ended April 30, 2010, the Company borrowed an additional $113,565 from this unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing and also settled various amounts by way of stock issuances. During the nine months ended January 31, 2011, the Company borrowed an additional $64,600 from this unrelated company by way of promissory notes bearing interest from 8% to 10% per annum and due twelve months from signing.  At January 31, 2011 the balance owing including interest was $403,705 (April 30, 2010: $326,069).



During the year ended April 30, 2009, the Company borrowed $48,529 from an unrelated company by way of promissory notes bearing interest at a rate of 8% per annum and due nine months from signing. During the year ended April 30, 2010, the Company borrowed an additional $19,000 from this unrelated company by way of a promissory note bearing interest at 8% per annum and due twelve months from signing and also settled various amounts by way of stock issuances. At January 31, 2011, the balance owing including interest was $43,331 (April 30, 2010: $40,972).



During the year ended April 30, 2010, the Company borrowed $32,000 at 8% interest from unrelated companies. At January 31, 2011, the balance owing including interest was $35,058 (April 30, 2010: $33,550).



- 23 -



---

On February 14, 2011, the Company entered into a Securities Purchase Agreement with an unrelated party providing for the issuance of a Convertible Promissory Note in the principal amount of $42,500 and bearing  interest at an annual rate of 8% and maturing nine months after the date of  issuance (the "Note"). The holder has the right to convert the outstanding principal and interest of the Note at any time between the date that is six months from the date of issuance and the date of maturity. The conversion price will be determined by multiplying the "Market Price" by 58% representing a 42% discount. The Market Price will be determined by taking the average of the lowest 3 trading prices in the ten days preceding the conversion date. The issuer has the right to prepay the aggregate of the principal and interest (the "Total") of the Note by paying 130% of the Total within 60 days of issuance, 135% of the Total between the 61st and 90th day following the date of issue, 140% of the Total between the 91st and 120th day following the date of issue, 150% of the Total between the 121st and 180th day following the date of issue, and 175% of the Total between the 181st day and the date of maturity,



Lease Agreement Guarantor



We have guaranteed the remaining lease term at previous premises previously occupied in Tucson.  The Company is a guarantor of a lease agreement effective September, 1, 2007 that obligates the Company under conditions of default by a previously related party lessee (a company which at the time had one director in common with the Company), to pay for the entire lease relating to the Company's Tucson office until the end of the lease term through January 31, 2011 or as amended or renewed.  As at April 30, 2010, the gross value of the guarantee was $212,774.  The lessee has defaulted on the lease and the lessee subsequently moved offices. The potential liability, if any, as a result of the lessee's default due to joint and severable provisions relating to the lease guarantee is presently not determinable and the Company has not been advised of the results, if any, of negotiations by the lessee to settle this potential liability with the landlord.



Corporate Support Agreement



Effective January 1, 2007 as dated May 1, 2007, our Board of Directors, pursuant to unanimous written consent in lieu of a meeting, authorized and approved the execution of an eighteen month corporate support agreement (the "Corporate Support Agreement") with Sweetwater Capital Corp., a private company organized under the laws of the Province of British Columbia, Canada ("SCC"). In accordance with the terms and provisions of the Corporate Support Agreement: (i) SCC shall provide us with corporate services including, but not limited to, furnished offices, communication services, support services, personnel, and other incidental services in order for us to be able to perform our corporate business operations and activities in Vancouver, British Columbia; (ii) SCC shall further provide at our request financial services, bookkeeping and accounting services, formulation of budget plans, establishment of financial relationships, and preparation and maintenance of proper accounting records; and (iii) we shall pay SCC the aggregate monthly sum of CDN$15,000 plus goods and services tax. Effective December 31, 2008, the monthly amount of the contract was modified to US$12,000 per month.  Effective August 1, 2010, the monthly amount was changed to $8,400 per month. The corporate support agreement's contract term has lapsed and services continue to be provided on a month to month basis.



Advisory Services Agreements



On January 20, 2010 a vendor entered into a contract with the Company to provide financing and capital markets advisory services with the goal of raising equity funding for the Company. The term of the contract is from signing until January 31, 2011 and automatically renews in 90 day increments unless and until cancelled by either party. In consideration the Company agreed to pay the vendor a retainer fee of $10,000 plus 8% of any equity financing secured by the vendor. In the event the equity financing occurs with an entity introduced by certain excluded entities, the fee is reduced to 3%. In addition, the Company has agreed to issue the vendor share purchase warrants equal to 10% of the securities sold in such equity financing at a price of $0.70 and expiry date which is 3 years from the issue date. In the event the vendor secures debt financing, the fees paid to the vendor are as follows; 8% of the first $2,000,000, plus 6% of proceeds between, $2,000,001 and $7,000,000 if any, plus 4% of proceeds in excess of $7,000,000 if any. As of January 31, 2011 the Company has formally terminated this agreement.



On February 3, 2011, the Company entered into an agreement with a consultant who will act as a non-exclusive placement agent to arrange the sale of shares of the Company's common stock and other securities to institutional and/or accredited investors on behalf of the Company. The term of the contract is for a period of twelve months. The Company shall pay the consultant a cash placement fee of ten percent for the first closing and then eight percent for later closings on the gross proceeds received by the Company in connection with financings arranged by the consultant. In addition, a $15,000 due diligence fee was paid by the Company to the consultant and the fee is creditable against future cash placement fees. In connections with the financings the Company agreed to issue to the consultant warrants to purchase such number of the shares of the Company's commons stock equal to ten percent of the aggregate number of shares issued in connection with the financings. The warrants issued to the consultant shall bear identical terms as the warrants issued pursuant to the financings.



- 24 -



---

Consulting Agreements



The Company  entered into an agreement dated August 17, 2010 with a consultant who will provide investor relations services for a term of nine months at a cost of $7,500 per month. The Company will also caused the delivery of  200,000 shares of its common stock to the consultant. As of January 31, 2011 the Company terminated this contract.



The Company has entered into an agreement dated September 22, 2010 with a consultant who will provide website and communications services for a term of nine months at a total  cost of $240,000. The company will pay $40,000 in cash and has issued 250,000 common shares to the consultant for a value of $200,000, being the fair value of the services to be provided.



The Company has entered into an agreement dated October 11, 2010 with a consultant who will provide strategic planning, fund raising, and capital structuring advisory services for a term of nine months. In consideration for the services the company will cause the delivery of  200,000 shares of its commons stock to the consultant, 100,000 of which will be delivered at the end of four months, and 100,000 of which will be delivered at the end of nine months. In addition the Company will issue 200,000 options to the consultant to purchase Company shares at such time as the company has closed on at least $2 million in net proceeds attributable to the efforts of the consultant. In addition and subject to certain conditions, the Company will issue to the consultant 100,000 options to purchase Company shares for every $1 million in additional net proceeds attributable to the efforts of the consultant.



Purchase of Significant Equipment



We do not intend to purchase any significant equipment during the next twelve months.



Off-Balance Sheet Arrangements



As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.



Going Concern



The independent auditors' report accompanying our April 30, 2010 and 2009 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.



Item 3.                      Quantitative and Qualitative Disclosures About Market Risk



Not required because we are a smaller reporting company.



Item 4.                      Controls and Procedures



Evaluation of Disclosure Controls and Procedures



We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.



As of January 31, 2011, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer), and our chief financial officer (also our principal financial and accounting officer) of the effectiveness of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this report due to certain deficiencies that existed in the design or operation of our internal controls over financial reporting as at our year ended April 30, 2010, as disclosed is our Annual Report on Form 10-K for our fiscal year ended April 30, 2010, which may be considered to be material weaknesses and which had not been resolved as of January 31, 2011.



- 25 -



---

Changes in Internal Control over Financial Reporting



There have been no significant changes in our internal controls over financial reporting that occurred during the nine month period ended January 31, 2011 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.



Item 1.                      Legal Proceedings



Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.



Item 1A.                      Risk Factors



Not required because we are a smaller reporting company.



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



We did not issue any unregistered equity securities during our quarter ended January 31, 2011.



Item 3.                      Defaults Upon Senior Securities



None.



Item 4.                      (Removed and Reserved).



Not applicable.



Item 5.                      Other Information



None.



Item 6.                      Exhibits



|Exhibit No. | Document                                                                                                                                                                                                        
|----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         | Articles of Incorporation(1)                                                                                                                                                                                    
|3.1.2       | Certificate of Change effective February 9, 2007(2)                                                                                                                                                             
|3.1.3       | Articles of Merger effective March 19, 2007(2)                                                                                                                                                                  
|3.1.4       | Certificate of Change effective April 22, 2009(3)                                                                                                                                                               
|3.2         | Bylaws(1)                                                                                                                                                                                                       
|10.1        | Mineral Assets Option Agreement dated September 23, 2009 among each of Gareste Limitada, Twaine Assets SA, Agosto Corporation Limited, Yu Cui, Zhao Heng, Ye Bin, Sun Suzhuan, Chen Zou and Zoro Mining Corp.(4)
|10.2        | Asset Purchase Agreement dated February 22, 2010 between Zoro Mining Corp. and South American Inmobilaria S.A.C. and Donald Le Roy Stiles(5)                                                                    
|31.1        | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.                                                                                                
|31.2        | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act.                                                                                                
|32.1        | Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant to Section 906 of the Securities Exchange Act.                                                      

(1)

(2)

(3)

(4)

(5)

(6)





- 26 -



---





SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ZORO MINING CORP.





| | By:                                               | /s/ Andrew Brodkey | 
| | ------------------------------------------------- | ------------------ | 
| | Andrew Brodkey                                   
| | Chief Executive Officer, President and a director





| | Date:   March 22, 2011
| | ----------------------







| | By:                     | /s/ Frank Garcia | 
| | ----------------------- | ---------------- | 
| | Frank Garcia           
| | Chief Financial Officer





| | Date:   March 22, 2011
| | ----------------------









- 27 -