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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-QSB



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(Mark One)



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

For the quarterly period ended March 31, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission file number 000-50931



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AURELIO RESOURCE CORPORATION

(Exact name of small business issuer as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Nevada                                                         |  | 33-1086828                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

Suite 200, 5554 South Prince Street, Littleton, Colorado, 80120

(Address of principal executive offices)

303.795.3030

(Issuers telephone number)

Not Applicable

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



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Check whether the issuer
(1) 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  x    No ̈

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.     Yes ̈No ̈

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the
issuers classes of common equity, as of the latest practicable date: 32,690,600 common shares issued and outstanding as of May 11, 2007.

Transitional Small Business Disclosure Format (Check one):     Yes ̈No  x



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PART I - FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

It is the opinion of management that the
interim consolidated financial statements for the quarter ended March 31, 2007 include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading.



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AURELIO RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                               |  |                |            |   |               |   |            |  
|---------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ------------- | - | ---------- | -
|                                                                                               |  | March 31, 2007 |            |   | Dec. 31, 2006 |  
|ASSETS                                                                                         |  |                |            |   |               |   |            |  
|Current assets                                                                                 |  |                |            |   |               |   |            |  
|Cash                                                                                           |  | $              | 247,431    |   |               | $ | 464,521    |  
|Advances                                                                                       |  |                | 1,224      |   |               |   |           |  
|Security deposits                                                                              |  |                | 5,255      |   |               |   | 2,255      |  
|Prepaid expenses                                                                               |  |                | 8,348      |   |               |   |           |  
|Deposit for core drilling                                                                      |  |                |           |   |               |   | 150,000    |  
|                                                                                               |  |                |            |   |               |   |            |  
|Total current assets                                                                           |  |                | 262,258    |   |               |   | 616,776    |  
|                                                                                               |  |                |            |   |               |   |            |  
|Mining claims                                                                                  |  |                | 1,203,614  |   |               |   | 1,203,614  |  
|Equipment, net                                                                                 |  |                | 53,660     |   |               |   | 55,489     |  
|                                                                                               |  |                |            |   |               |   |            |  
|                                                                                               |  |                | 1,257,274  |   |               |   | 1,259,103  |  
|                                                                                               |  |                |            |   |               |   |            |  
|Total Assets                                                                                   |  | $              | 1,519,532  |   |               | $ | 1,875,879  |  
|                                                                                               |  |                |            |   |               |   |            |  
|LIABILITIES & STOCKHOLDERS EQUITY                                                             |  |                |            |   |               |   |            |  
|Current liabilities                                                                            |  |                |            |   |               |   |            |  
|Accounts payable                                                                               |  | $              | 48,685     |   |               | $ | 242,301    |  
|Accounts payable - related parties                                                             |  |                | 25,514     |   |               |   | 15,319     |  
|Stock subscriptions received                                                                   |  |                | 200,000    |   |               |   |           |  
|Current portion of long-term debt                                                              |  |                | 10,363     |   |               |   | 8,693      |  
|                                                                                               |  |                |            |   |               |   |            |  
|Total current liabilities                                                                      |  |                | 284,562    |   |               |   | 266,313    |  
|                                                                                               |  |                |            |   |               |   |            |  
|                                                                                               |  |               
|Long-term debt                                                                                 |  |                | 15,565     |   |               |   | 17,908     |  
|Note payable - Courtland Claims                                                                |  |                | 950,000    |   |               |   | 950,000    |  
|                                                                                               |  |                |            |   |               |   |            |  
|                                                                                               |  |                | 965,565    |   |               |   | 967,908    |  
|                                                                                               |  |                |            |   |               |   |            |  
|Total Liabilities                                                                              |  |                | 1,250,127  |   |               |   | 1,234,221  |  
|                                                                                               |  |                |            |   |               |   |            |  
|Stockholders Equity                                                                           |  |                |            |   |               |   |            |  
|Common stock, $0.001 par value;487,500,000 shares authorized;32,690,600 issued and outstanding |  |                | 32,691     |   |               |   | 32,437     |  
|Additional paid in capital                                                                     |  |                | 2,044,323  |   |               |   | 1,680,077  |  
|Deficit accumulated during exploration stage                                                   |  |                | (1,805,675 | ) |               |   | (1,069,276 | )
|Cumulative effect of currency translation                                                      |  |                | (1,934     | ) |               |   | (1,580     | )
|                                                                                               |  |                |            |   |               |   |            |  
|Total Stockholders Equity                                                                     |  |                | 269,405    |   |               |   | 641,658    |  
|                                                                                               |  |                |            |   |               |   |            |  
|Total Liabilities and Stockholders Equity                                                     |  | $              | 1,519,532  |   |               | $ | 1,875,879  |  
|                                                                                               |  |                |            |   |               |   |            |  

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



3



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AURELIO RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|---------------------------------------------------- |  | -------------------------------- | ---------- | - | ------------------------------ | - | ---------- | ---------------------------------------------- |  | - | ---------- | -
|                                                     |  | Three MonthsEnded March 31, 2007 |            |   | Three MonthsEndedFeb. 28, 2006 |   |            | Feb. 19, 2004(Inception)Through March 31, 2007 | 
|Revenue                                              |  | $                                |           |   |                                | $ |           |                                                |  | $ |           |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Expenses:                                            |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Bank charges                                         |  |                                  | 207        |   |                                |   | 23         |                                                |  |   | 2,168      |  
|Depreciation                                         |  |                                  | 2,766      |   |                                |   |           |                                                |  |   | 5,394      |  
|Directors fees                                      |  |                                  | 230,000    |   |                                |   |           |                                                |  |   | 230,000    |  
|General and administrative expenses                  |  |                                  | 40,807     |   |                                |   |           |                                                |  |   | 117,988    |  
|Mineral property expenditures                        |  |                                  | 242,398    |   |                                |   |           |                                                |  |   | 752,357    |  
|Office expenses                                      |  |                                  | 42,731     |   |                                |   |           |                                                |  |   | 82,175     |  
|Professional and filing fees                         |  |                                  | 163,724    |   |                                |   | 3,128      |                                                |  |   | 583,856    |  
|Transfer agent                                       |  |                                  | 103        |   |                                |   |           |                                                |  |   | 3,478      |  
|Travel                                               |  |                                  | 239        |   |                                |   |           |                                                |  |   | 22,271     |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|                                                     |  |                                  | 722,975    |   |                                |   | 3,151      |                                                |  |   | 1,799,687  |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Loss from operations                                 |  |                                  | (722,975   | ) |                                |   | (3,151     | )                                              |  |   | (1,799,687 | )
|                                                     |  |                                  |           
|Other income (expense)                               |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Interest income                                      |  |                                  | 869        |   |                                |   |           |                                                |  |   | 9,338      |  
|Interest expense                                     |  |                                  | (14,293    | ) |                                |   |           |                                                |  |   | (15,326    | )
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Income (loss) before provision for income tax        |  |                                  | (736,399   | ) |                                |   | (3,151     | )                                              |  |   | (1,805,675 | )
|Provision for income tax                             |  |                                  |           |   |                                |   |           |                                                |  |   |           |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Net income (loss)                                    |  |                                  | (736,399   | ) |                                |   | (3,151     | )                                              |  |   | (1,805,675 | )
|                                                     |  |                                  |           
|Other comprehensive income (loss) - net of tax       |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Foreign currency translation gain (loss)             |  |                                  | (354       | ) |                                |   |           |                                                |  |   | (1,934     | )
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Comprehensive loss                                   |  | $                                | (736,753   | ) |                                | $ | (3,151     | )                                              |  | $ | (1,807,609 | )
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Net income (loss) per share                          |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|(Basic and fully diluted)                            |  | $                                | (0.02      | ) |                                | $ | (0.00      | )                                              |  |   |            |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  
|Weighted average number of common shares outstanding |  |                                  | 32,597,602 |   |                                |   | 31,401,500 |                                                |  |   |            |  
|                                                     |  |                                  |            |   |                                |   |            |                                                |  |   |            |  

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



4



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AURELIO RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                                     |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|---------------------------------------------------------------------------------------------------- |  | --------------------------------- | -------- | - | -------------------------------- | - | ------ | ------------------------------------------------ |  | - | ---------- | -
|                                                                                                     |  | Three Months Ended March 31, 2007 |          |   | Three Months Ended Feb. 28,
2006 |   |        | Feb. 19, 2004 (Inception) Through March 31, 2007 | 
|                                                                                                     |  |                                   |         
|                                                                                                     |  |                                   |         
|Cash Flows From Operating Activities:                                                                |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Net loss                                                                                             |  | $                                 | (736,399 | ) |                                  | $ | (3,151 | )                                                |  | $ | (1,805,675 | )
|Adjustments to reconcile comprehensive loss to net cash provided by (used for) operating activities: |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Depreciation                                                                                         |  |                                   | 2,766    |   |                                  |   |       |                                                  |  |   | 5,394      |  
|Non-cash, stock-based compensation                                                                   |  |                                   | 364,500  |   |                                  |   |       |                                                  |  |   | 532,500    |  
|Changes in current assets and liabilities:                                                           |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Advances                                                                                             |  |                                   | (1,224   | ) |                                  |   |       |                                                  |  |   | (1,224     | )
|Security deposits                                                                                    |  |                                   | (3,000   | ) |                                  |   |       |                                                  |  |   | (5,255     | )
|Prepaid expenses                                                                                     |  |                                   | (8,348   | ) |                                  |   |       |                                                  |  |   | (8,348     | )
|Deposit for core drilling                                                                            |  |                                   | 150,000  |   |                                  |   |       |                                                  |  |   |           |  
|Accounts payable and accrued liabilities                                                             |  |                                   | (193,616 | ) |                                  |   | (480   | )                                                |  |   | 48,685     |  
|Accounts payable - related parties                                                                   |  |                                   | 10,195   |   |                                  |   |       |                                                  |  |   | 25,514     |  
|Stock subscriptions received                                                                         |  |                                   | 200,000  |   |                                  |   |       |                                                  |  |   | 200,000    |  
|                                                                                                     |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Net cash provided by/(used for) operating activities                                                 |  |                                   | (215,126 | ) |                                  |   | (3,631 | )                                                |  |   | (1,008,409 | )
|                                                                                                     |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Cash Flows From Investing Activities:                                                                |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Purchase of mining claims                                                                            |  |                                   |         |   |                                  |   |       |                                                  |  |   | (253,614   | )
|Purchase of fixed assets                                                                             |  |                                   | (937     | ) |                                  |   |       |                                                  |  |   | (32,453    | )
|                                                                                                     |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  
|Net cash provided by/(used for) investing activities                                                 |  |                                   | (937     | ) |                                  |   |       |                                                  |  |   | (286,067   | )
|                                                                                                     |  |                                   |          |   |                                  |   |        |                                                  |  |   |            |  

(Continued On Following Page)

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



5



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AURELIO RESOURCE CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Continued From Previous Page)



|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|------------------------------------------------------- |  | --------------------------------- | -------- | - | -------------------------------- | - | ------ | ---------------------------------------------- |  | - | --------- | -
|                                                        |  | Three Months Ended March 31, 2007 |          |   | Three Months Ended Feb. 28,
2006 |   |        | Feb. 19, 2004 (Inception)ThroughMarch 31, 2007 | 
|Cash Flows From Financing Activities:                   |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|Instalment payment of loan principal                    |  |                                   | (673     | ) |                                  |   |        |                                                |  |   | (673      | )
|Issuance of common stock for cash                       |  |                                   |         |   |                                  |   |       |                                                |  |   | 1,544,514 |  
|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|Net cash provided by/(used for) financing activities    |  |                                   | (673     | ) |                                  |   |       |                                                |  |   | 1,543,841 |  
|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|Effect of exchange rate changes on cash                 |  |                                   | (354     | ) |                                  |   |       |                                                |  |   | (1,934    | )
|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|Net Increase/(Decrease) In Cash                         |  |                                   | (217,090 | ) |                                  |   | (3,631 | )                                              |  |   | 247,431   |  
|Cash At The Beginning Of The Period                     |  |                                   | 464,521  |   |                                  |   | 11,798 |                                                |  |   |          |  
|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|Cash At The End Of The Period                           |  | $                                 | 247,431  |   |                                  | $ | 8,167  |                                                |  | $ | 247,431   |  
|                                                        |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|                                                        |  |                                   |         
|Schedule Of Non-Cash Investing And Financing Activities |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|                                                        |  |                                   |         
|Acquisition of Minera Milenium, S.A. de C.V.            |  | $                                 |         |   |                                  | $ |       |                                                |  | $ | (46       | )
|Acquisition of Aurelio Resources, Inc.                  |  |                                   |         |   |                                  |   |       |                                                |  |   | (151,640  | )
|Mineral properties                                      |  |                                   |         |   |                                  |   |       |                                                |  |   | 1,203,614 |  
|Less note payable                                       |  |                                   |         |   |                                  |   |       |                                                |  |   | (950,000  | )
|Fixed asset purchases                                   |  |                                   |         |   |                                  |   |       |                                                |  |   | 59,046    |  
|Less long-term debt                                     |  |                                   |         |   |                                  |   |       |                                                |  |   | (25,928   | )
|                                                        |  |                                   |         
|Supplemental Disclosure                                 |  |                                   |          |   |                                  |   |        |                                                |  |   |           |  
|                                                        |  |                                   |         
|Cash paid for interest                                  |  | $                                 | (14,293  | ) |                                  | $ |       |                                                |  | $ | (15,326   | )
|Cash paid for income taxes                              |  |                                   |         |   |                                  |   |       |                                                |  |   |          |  

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



6



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AURELIO RESOURCE CORPORATION

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

February 19, 2004 (Inception) through March 31, 2007

(Unaudited)

NOTE 1 HISTORY AND ORGANIZATION OF THE COMPANY

The Company was incorporated on February 19, 2004, under the Laws of the State of Nevada and is in the business of exploring mineral properties. Effective
June 16, 2006 we changed our name to Aurelio Resource Corporation and effective September 28, 2006, we changed our balance date from May 31 to December 31. The Company has not yet determined whether its properties contain mineral
resources that may be economically recoverable. Therefore, the Company has not reached the development stage and is considered to be an exploration stage company.

The recoverability of mineral property costs is dependent upon the existence of economically recoverable reserves, confirmation of the Companys interest in the underlying mineral claims, the ability of the Company to obtain necessary
financing to complete the exploration and upon future profitable production.

On August 17, 2006, we completed our acquisition of all of the issued
and outstanding common stock of Aurelio Resources, Inc. (ARI), a privately-owned Colorado corporation engaged in mineral exploration, pursuant to an agreement we entered into with ARI and its shareholders dated April 27, 2006, as
amended on June 9, 2006 and further amended on July 13, 2006 and on July 21, 2006. As a result of our acquisition of ARI, we indirectly acquired all of its assets. In particular, we acquired properties in Arizona, now held through our
wholly-owned subsidiary Bolsa Resources, Inc. (Bolsa), and a 98% interest in Minera Milenium S.A. de C.V. (Minera Milenium), a company incorporated in Mexico which holds an option to acquire a 100% interest in a property in
Mexico.

NOTE 2 GOING CONCERN

These financial
statements have been prepared with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions noted below currently exist which raise
substantial doubt about the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be
unable to continue as a going concern.

The operations of the Company have primarily been funded by the sale of common stock. Continued operations of the
Company are dependent on the Companys ability to complete additional equity financings or generate profitable operations in the future. Managements plan in this regard is to secure additional funds through future equity financings. Such
financings may not be available or may not be available on reasonable terms.

March 31, 2007:



|                                                 |  |            |         |  
|------------------------------------------------ |  | ---------- | ------- | -
|Deficit accumulated during the exploration stage |  | $1,805,675 |        
|                                                 | 
|Working capital deficit                          |  | $          | (22,304 | )

NOTE 3 ACCOUNTING POLICIES

These financial statements are stated in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States. They are unaudited but, in the opinion of management,
include all adjustments, consisting only of normal recurring items, necessary for a fair presentation. Interim results are not necessarily indicative of results which may be achieved in the future. These consolidated financial statements should be
read in conjunction with our audited consolidated financial statements and notes thereto for the seven months ended December 31, 2006 included in our Form 10-KSB for the period ended December 31, 2006 on file with the Securities and
Exchange Commission. The accounting policies set forth in the audited consolidated financial statements are the same as the accounting policies utilized in the preparation of these unaudited consolidated financial statements, except as modified for
appropriate interim presentation. The comparative figures shown in the statements of operations and statements of cash flows are for the three months ended February 28, 2006, which is prior to the change of balance date and prior to the
acquisition of ARI.



7



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NOTE 4 RELATED PARTY TRANSACTIONS

We have consulting contracts with our president, company officers, directors and their wholly-owned companies, through which they provide services to our company. During the quarter we paid consulting fees in lieu of
salaries to our president, company officers and directors of $38,484 in total. These fees were in the normal course of business and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related
parties. In addition, during the three months ended March 31, 2007, we issued 237,110 shares under the Stock Compensation Plan to our directors and officers for directors fees and fees for attending meeting for the seven months ended
December 31, 2006 and for the period to February 1, 2007. The shares had a total fair market value of $230,000.

As of March 31, 2007 the
Company owed $25,514 to the same related parties for consulting fees and for the reimbursement of business expenses.

NOTE 5 FINANCIAL INSTRUMENTS

The Companys financial instruments consist of cash and cash equivalents, notes payable and accounts payable and accrued liabilities. Unless
otherwise noted, it is managements opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. In each case, the fair value of these financial instruments approximate
their carrying values, unless otherwise noted.

NOTE 6 SEGMENT INFORMATION

The Company operated in two reportable segments, these being the exploration for copper and zinc on its Hill Copper Project in Arizona and the exploration for gold on its Gavilanes Property in Mexico.

NOTE 7 BUSINESS ACQUISITIONS

On July 5, 2006 the Company
acquired 98% of the outstanding stock Minera Milenium in a transfer of benefit from ARI in a transaction accounted for as a business purchase. ARI was not a related party at the date of transfer. The net worth of Minera Milenium at fair value on
July 5, 2006 was $(46). The primary reason for this acquisition was to acquire the rights to the option to earn a 100% interest in three mining claims/concessions in Durango, Mexico.

On August 17, 2006 the Company acquired 100% of ARI in a transaction accounted for as a business purchase, by issuing 10,000,000 shares for 100% of the outstanding
stock of ARI. The net worth of ARI measured at fair value on August 17, 2006 was $(151,640). The primary reason for the acquisition was to acquire the 100% interest in the 13 MAN mining claims on a property located in southeastern Arizona, part
of what is now known as the Hill Copper Property. The business objective of the company is to continue to progress the discovery, acquisition and exploration of advanced stage mineral properties with the potential to be expanded.

The purchase cost and the allocation of the purchase costs to ARIs assets and liabilities (unaudited) are as follows:

Purchase cost



|                                                      |  |            |  |       |          |  
|----------------------------------------------------- |  | ---------- |  | ----- | -------- | -
|                                                      |  | Amount     |  | Value |         
|Issuance of Aurelio Resource Corporation common stock |  | 10,000,000 |  | $     | (151,640 | )
|                                                      |  |            |  |       |          |  
|Allocation of Purchase Cost                           |  |            |  |       |          |  
|                                                      |  |           
|Current assets                                        |  |            |  | $     | 10,875   |  
|                                                      |  |           
|Equipments, net                                       |  |            |  |       | 1,239    |  
|                                                      |  |           
|Accounts payable                                      |  |            |  |       | (40,741  | )
|                                                      |  |           
|Advance on investment                                 |  |            |  |       | (103,150 | )
|                                                      |  |           
|Accounts payable  related parties                    |  |            |  |       | (19,863  | )
|                                                      |  |            |  |       |          |  
|Net Asset Value                                       |  |            |  | $     | (151,640 | )
|                                                      |  |            |  |       |          |  



8



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NOTE 8 PROPERTY ACQUISITIONS

On May 15, 2006 our subsidiary, ARI, entered into a purchase and sale agreement with Hope Mining and Milling Company (Hope MMC), an Arizona corporation, concerning the acquisition by ARI of 30 patented mining claims known
as the Courtland Claims and located in the Turquoise Mining District, Cochise County, Arizona. The purchase price for the subject property was $1.2 million with a $250,000 down payment. The remaining balance of $950,000 is being carried on an
interest-only four year term 6% straight-line annual interest-only (payable monthly) promissory note, secured by a deed of trust, with a balloon payment at the end of year four. On September 15, 2006, ARI, Bolsa and Hope MMC entered into an
agreement amending the terms of the purchase agreement and, pursuant to the amending agreement, Bolsa accepted the assignment and completed the acquisition of the 30 patented mining claims from Hope MMC on September 18, 2006.

NOTE 9 LONG-TERM DEBT AND CONTRACTUAL OBLIGATIONS



|                                               |  |                     |        
|---------------------------------------------- |  | ------------------- | -------
|                                               |  | As of March 31,2007
|Current debt:                                  |  |                     |        
|Bank debt  portion payable within one year(1) |  | $                   | 10,363 
|                                               |  |                     |        
|                                               |  | $                   | 10,363 
|                                               | 
|Long-term debt:                                |  |                     |        
|Bank debt  portion payable after one year(1)  |  | $                   | 15,565 
|Note payable  Courtland Claims(2)             |  |                     | 950,000
|                                               |  |                     |        
|                                               |  | $                   | 965,565

There was no long-term debt in prior periods.



|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|-------------------------------------------- |  | ----- | ------- | ---------------- | - | ----------- |  | ----------- | ------- | ----------------- | - | ------- |  | - | -
|Contractual Obligations as of March 31, 2007 |  | Total |         | Less than 1 year |   | 1  3 years |  | 3  5 years |         | More than 5 years
|Long-term debt(1)                            |  | $     | 25,928  |                  | $ | 10,363      |  | $           | 15,565  |                   | $ |        |  | $ | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Note payable  Courtland Claims(2)           |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Interest                                     |  |       | 194,750 |                  |   | 57,000      |  |             | 114,000 |                   |   | 23,750  |  |   | 
|Principal                                    |  |       | 950,000 |                  |   |            |  |             |        |                   |   | 950,000 |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|MAN Claims  annual renewal fees(3)          |  |       | 3,875   |                  |   | 3,875       |  |             | 7,750   |                   |   | 7,750   |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Gavilanes option payments(4)                 |  |       | 470,000 |                  |   | 15,000      |  |             | 90,000  |                   |   | 365,000 |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  

---

|(1) | The long-term debt was to finance the purchase of office equipment and is a 36-month note payable under a business installment loan from JPMorgan Chase Bank, NA. The interest rate
is 12.25% simple interest and the loan is cash collateralized.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The purchase of the 30 patented Courtland Claims which form part of the Hill Copper Project (as described in Note 8 above) from Hope Mining and Milling Company was closed on
September 15, 2006 with the payment of the deposit of $250,000. In addition to the acquisition price, the seller is entitled to receive a net smelter return royalty, up to a cumulative total of $3 million, of 3% for precious metals, and 1.5%
for base metals produced from the property. At any time prior to the commencement of commercial production, we can buy this royalty for $2 million.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | For each of our 31 MAN claims on the Hill Copper Project there is an annual renewal fee of $125 per claim payable to the Bureau of Land Management, an agency of the U.S. Department
of the Interior. These claim fees are payable annually, as long as we are actively exploring on this land.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | In addition to the total purchase price of the three mining claims (covering approximately 1,000 hectares) making up the Gavilanes property, the property is subject to a 3% net
smelter return royalty in favor of Mr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9



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NOTE 10 OTHER COMMITMENTS AND CONTINGENCIES



|a. | Property related Commitments
|-- | ----------------------------

As described in Note
9 and set out in the table above, we have commitments for the interest on the Note Payable for the purchase of the Courtland Claims, annual renewal fees on our unpatented MAN claims, and option payments to retain the Gavilanes option. Meeting these
obligations is fundamental to our being able to retain and explore our mineral properties.

In addition, should we produce precious or base
metals on our properties, we would have to pay net smelter return royalties, also as described in Note 9 above.



|b. | Office Rentals
|-- | --------------

We rent office space in Littleton,
Colorado for $1,868 per month, including utilities, with a commitment through August 2007. We rent office space in Arizona, near our Hill Copper Project, for $500 per month with a commitment through October 2007. We also rent storage space near the
Arizona property for $535 per month with a commitment through October 2007. We rent office space in Culiacan, Sinaloa, Mexico for P1,700 (approximately $160) per month, with a commitment through October 2007. Our total rent expense during the seven
months ended December 31, 2006 was $9,794.

NOTE 11 PROPERTY AND EQUIPMENT



|                             |  |      |        |              |   |                |  |   |       
|---------------------------- |  | ---- | ------ | ------------ | - | -------------- |  | - | ------
|As at March 31, 2007         |  | Cost |        | Depreciation |   | Net Book Value
|Littleton  office furniture |  | $    | 10,099 |              | $ | 709            |  | $ | 9,390 
| office equipment           |  |      | 35,188 |              |   | 3,618          |  |   | 31,570
|Mexico - truck               |  |      | 10,267 |              |   | 856            |  |   | 9,411 
|- furniture and equipment    |  |      | 3,492  |              |   | 203            |  |   | 3,289 
|Total                        |  | $    | 59,046 |              | $ | 5,386          |  | $ | 53,660

NOTE 12 STOCKHOLDERS EQUITY



|a. | Authorized
|-- | ----------

On June 16, 2006 we changed our
name to Aurelio Resource Corporation and implemented a six and one-half (6.5) for one (1) forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital has increased from 75,000,000 shares
of common stock with a par value of $0.001 to 487,500,000 shares of common stock with a par value of $0.001.



|b. | Issued and outstanding
|-- | ----------------------

On August 16, 2006 we
cancelled 12,965,000 shares of our common stock as part of the transaction for the acquisition of ARI. On August 17, 2006 we completed our acquisition of all of the issued and outstanding common stock of ARI, a privately-owned Colorado
corporation, pursuant to an agreement we entered into with ARI and its shareholders dated April 27, 2006, as amended on June 9, 2006 and further amended on July 13, 2006 and on July 21, 2006. On August 17, 2006 we issued
10,000,000 shares of our common stock to the shareholders of ARI, in exchange for all of the issued and outstanding common shares of ARI.

On September 29, 2006, we completed a private placement of four million shares of common stock at $0.40 per share for total gross proceeds of $1,600,000.

On February 1, 2007 we issued 237,110 shares of our stock under the Stock Compensation Plan (as described in 13 below) to our directors and officers for directors fees and meeting fees for the seven months
ended December 31, 2006 and for the period through February 1, 2007 at a market value of $0.97 per share for a total non-cash cost of $230,000. On March 2, 2007 we issued a further 16,990 shares to consultants at $1.03 per share for a
total non-cash cost of $17,500.

On March 27, 2007 we received an amount of $200,000 which is being held as subscription proceeds for
our proposed financing.



10



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NOTE 13 STOCK-BASED COMPENSATION



|a. | Stock Options
|-- | -------------

At March 31, 2007, 2,025,000
options were available for grant under the 2006 Stock Option Plan.

A summary of the status of the Plan as of March 31, 2007 showing
the grants made during the three months then ended is as follows:



|                               |  |         |  |                                |     
|------------------------------ |  | ------- |  | ------------------------------ | ----
|                               |  | Options |  | Weighted AverageExercise Price
|Outstanding at January 1, 2007 |  | 500,000 |  | $                              | 0.81
|Grants during the period       |  | 275,000 |  | $                              | 1.01
|(all exercisable)              |  |         |  |                                |     
|Outstanding at March 31, 2007  |  | 775,000 |  | $                              | 0.88

The fair value of each option granted was estimated on the date of the grant using the
Black-Scholes model with the following assumptions: volatility 81%; risk-free interest rate of 4.97%; dividend yield of Nil; an expected life of between one and two years; and immediate vesting of the options. The weighted-average grant date fair
market value of stock options granted during the three months ended March 31, 2007 was $0.43.



|b. | Stock Compensation Plan
|-- | -----------------------

The board of directors
adopted the 2006 Incentive Compensation Plan (the Compensation Plan) on October 12, 2006 and reserved 2,200,000 common shares to be made available for grant under the Compensation Plan. The purpose of the Compensation Plan is to
afford the persons who provide services to the Company or any of its subsidiaries or affiliates, whether directors, officers, consultants or employees of our Company or its subsidiaries or affiliates, an opportunity to obtain a proprietary interest
in the Company by permitting them to be paid in common shares of our stock and to conserve our cash by being able to pay and consultants or others who provide services to us in shares in lieu of cash. Under the terms of the Compensation Plan, the
board of directors has full authority to administer the Compensation Plan in accordance with the terms of the Compensation Plan and at any time to establish additional terms, conditions, rules or procedures for the Compensation Plan provided,
however, that no such terms shall be inconsistent with the provisions of the Compensation Plan. At March 31, 2007, 1,945,900 shares were available for grant under the Compensation Plan.

NOTE 14 INCOME TAXES

The Company has net operating loss
carry-forwards of approximately $1,805,675 (December 31, 2006: $1,069,276) available for deduction against future years taxable income. The valuation allowance increased to $631,986 (December 31, 2006: $378,590) during the three months ended
March 31, 2007, since the realization of the net operating loss carry-forwards is doubtful. It is reasonably possible that our estimate of the valuation allowance will change. The operating loss carry-forwards will expire in 2026.

NOTE 15 SUBSEQUENT EVENTS

In April 2007, we executed and made the
initial payment under a purchase agreement with a subsidiary of Newmont Mining Corporation, whereby the Company has an option to purchase two patented mining claims covering 30 acres adjacent to our MAN claims in Cochise County, Arizona. The
purchase price is $100,000, payable in four equal installments of $25,000 upon each of signing and six, nine and 12 months after the signing of the purchase agreement, whereupon the option will be exercised and the properties purchased. Newmont will
also receive a 1% Net Smelter Returns Royalty on the patented claims and on any properties Aurelio currently owns or acquires within a designated Area of Interest.

In April 2007, we also completed a mineral lease and option agreement with three individual owners of 65 Gold Coin mineral claims and three Arizona State Exploration Permits on the Hill Copper Project in Cochise County, Arizona.
The Gold Coin claims and the three Exploration Permits form one continuous block of claims covering 1540 acres. These new properties are all located to the south and southeast of the MAN claims. The option agreement includes an initial
payment of $20,000 with additional staged payments spread over four years totaling $1.5 million. In addition, there is a royalty of 1% of production of base metals and 2.5% of precious metals.



11



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NOTE 16 COMPARATIVE FIGURES

The comparative figures shown in the statements of operations and statements of cash flows are for the three months ended February 28, 2006, which is prior to the change of balance date (on September 28, 2006 we changed our
balance date from May 31 to December 31) and prior to the acquisition of ARI.



12



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|Item 2. | Managements Discussion and Analysis or Plan of Operations
|------- | ----------------------------------------------------------

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should,
expects, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks included in Part I of our Form 10-KSB for the year ended December 31, 2006 on file with the Securities and Exchange
Commission in the section entitled Risk Factors that may cause our or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in United States (U.S.) dollars and are prepared in accordance with U.S. Generally Accepted Accounting
Principles. The following discussion should be read in conjunction with our audited consolidated financial statements and notes thereto for the seven months ended December 31, 2006 included in our Form 10-KSB for the year ended
December 31, 2006 on file with the Securities and Exchange Commission. The accounting policies set forth in the audited consolidated financial statements are the same as the accounting policies utilized in the preparation of these unaudited
consolidated financial statements, except as modified for appropriate interim presentation.

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. Factors that could cause or contribute to such differences include, but are not limited to, those
discussed below and elsewhere in this quarterly report, particularly in the section entitled Risk Factors of this quarterly report.

In this
quarterly report, unless otherwise specified, all dollar amounts are expressed in U.S. dollars. All references to Cdn $ refer to Canadian dollars and all references to common shares refer to the shares of our common stock.

As used in this quarterly report, the terms we, us, our and Aurelio mean Aurelio Resource Corporation, our
wholly-owned subsidiaries, Aurelio Resources, Inc. (ARI) and Bolsa Resources, Inc. (Bolsa) and our 98% owned subsidiary, Mineral Milenium S.A. de C.V. (Minera Milenium), unless otherwise indicated.

Overview

We were incorporated in the State of Nevada on
February 19, 2004 under the name Furio Resources, Inc. We are an exploration stage company engaged in the exploration of mineral properties and we may also, from time to time, acquire additional mineral properties to explore. We have focused
our efforts since incorporation acquiring mineral properties and carrying out exploration activities on those mineral properties.

We changed our name to
Aurelio Resource Corporation effective June 16, 2006 and implemented a six and one-half (6.5) for one (1) forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital has increased
from 75,000,000 shares of common stock with a par value of $0.001 to 487,500,000 shares of common stock with a par value of $0.001.

On August 17,
2006 we completed our acquisition of all of the issued and outstanding common stock of Aurelio Resources, Inc., a privately-owned Colorado corporation engaged in mineral exploration, pursuant to an agreement we entered into with Aurelio Resources,
Inc. (ARI) and its shareholders dated April 27, 2006, as amended on June 9, 2006 and further amended on July 13, 2006 and on July 21, 2006. As a result of our acquisition of ARI, we indirectly acquired all of its
assets. In particular, we acquired properties in Arizona, now referred to as our Hill Copper Project and held through our wholly-owned subsidiary Bolsa Resources, Inc. (Bolsa), and a 98% interest in Minera Milenium S.A. de C.V.
(Minera Milenium), a company incorporated in Mexico which holds an option to acquire a 100% interest in the Gavilanes Property.

We continue to
focus our efforts on the acquisition and exploration of mineral properties. To date, we have not discovered an economically viable mineral deposit on the mineral claims, and there is no assurance that we will discover one. A great deal of further
exploration will be required before a final evaluation as to the economic and legal feasibility for our future development is determined.



13



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We have no revenues, have experienced losses since inception, have no operations, have been issued a going concern
opinion by our auditors, and rely upon the sale of our securities to fund operations.

Plan of Operations

Our plan of operations for the next twelve months involves the implementation of further exploration programs and additional property acquisitions for our Hill Copper
Project in Arizona and our Gavilanes Property in Mexico. We will undertake these operations with our existing management and field personnel and will contract for additional labor on a project basis as required. While payments for purchases of
additional patented mining claims presently being negotiated could cost as much as $700,000 over the next 12 months, we do not anticipate any major purchases or sales of plant and equipment, as we intend to sub-contract the drilling programs and
outsource the assaying, resource estimation, engineering and metallurgical studies.

We wish to complete the following objectives within the time periods
specified, subject to our obtaining the funding necessary for the continued exploration of our mineral properties:

Hill Copper Project, Arizona:

We plan to acquire additional land adjoining our Courtland area and the MAN claims on the Hill Copper Project, through negotiations with private
landholders and through staking free land. These acquisitions could cost as much as $700,000 over the next year. We anticipate that the next phase of the work program, including staged payments for land acquisitions, will cost
approximately $950,000 over the next six months and approximately $3,300,000 over the next twelve months, for exploration, engineering, environmental and metallurgical studies, property payments and land acquisition. We will need to raise additional
funds in order to conduct these exploration programs and for the land acquisitions.

The planned six month exploration program will include further drill
programs totalling approximately 17,000 feet of reverse circulation drilling on our current landholdings to confirm the previously identified resources and to test additional exploration targets with the goal of increasing the resource estimates. We
anticipate that this drill program will cost approximately $950,000 and take most of the six months to complete. We have also budgeted to continue both diamond drilling and reverse circulation drilling in the twelve month program and for preliminary
scoping and pre-feasibility studies.

Gavilanes Property:

We made the option payment in February and plan to make the option payment of $15,000 due August 15, 2007 in order to keep the Gavilanes option in good standing. We will need to raise additional funds in order to keep making option
payments for this property.

Our planned six month exploration program includes 7,000 feet of diamond drilling to test the seven best targets identified to
date on the Gavilanes Property. Based on our review of all the pertinent data available on the property, we are pursuing our goal of identifying a bulk mineable, open pittable deposit at Gavilanes. The budget for this drill program is approximately
$280,000 and, subject to the availability of financing, we would expect that to be completed within a six month period. If this program shows the expected results, we will then undertake a larger program of up to 15,000 feet of diamond drilling on
the property, which is budgeted to cost approximately $600,000 and, as long as funding is available, we would anticipate completing this within the next twelve months.

General Operating Expenses

We anticipate spending approximately $80,000 in ongoing general and administrative
expenses per month for the next six months, while our total general and administrative expense over the whole of the next twelve months is expected to total approximately $2,000,000. The general and administrative expenses for the year will consist
primarily of professional fees for the our management and field personnel, accounting and reporting expenses, audit and legal work relating to our regulatory filings, as well as transfer agent fees, marketing and investor relations activities and
the costs of maintaining our executive office in Littleton, Colorado and our field offices in Arizona and in Culiacan, Mexico. In addition, we plan to make property payments on new and our existing property agreements of approximately $300,000 over
the six months and approximately $1,000,000 in total over the next twelve months, and some of these payments may be expensed. We plan to spend approximately $1,100,000 for exploration and engineering studies over the next six months and
approximately $6,000,000 for exploration programs, land payments and property acquisitions and engineering studies during the twelve months.



14



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At March 31, 2007 we had cash on hand of $247,431 and a working capital deficit of $(22,304). Our cash and working
capital will not be sufficient to enable us to pay for the costs of our exploration and general and administrative expenses. We will have to raise additional capital in order to pay for our exploration and anticipated general and administrative
expenses. Our ability to complete the next phases of our recommended work programs will be subject to us obtaining additional financing as these expenditures will exceed our cash reserves.

During the next twelve-month period, we anticipate that we will not generate any revenue. Accordingly, we will be required to obtain additional financing in order to
continue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in
the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to
fund the next phase of our exploration program. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan might not succeed. Even if we are successful in obtaining equity financing to
fund the next phase of our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims following the completion of the work program. If we do not continue to obtain
additional financing, we will be forced to abandon our mineral claims and our plan of operations.

We may consider entering into a joint venture
arrangement to provide the required funding to develop the mineral claims. We have not undertaken any efforts to locate a joint venture partner for the mineral claims. Even if we determined to pursue a joint venture partner, there is no assurance
that any third party would enter into a joint venture agreement with us in order to fund exploration of our mineral claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our mineral
claims to the joint venture partner.

Cash Requirements

For the next 12 months we plan to continue to explore for base metals on our Hill Copper Project in Arizona, and to explore for precious metals on our Gavilanes Property in Mexico. Our budget for the next six months is $2,000,000 and for
the full 12 months our budget is $6,000,000. Both budgets include anticipated payments for additional property acquisitions on our Hill Copper Project.

We
will require additional funds to implement our exploration and development programs. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares.
There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in
the immediate future in order to proceed with our exploration program.

In order to proceed with our plans, we plan to raise additional funds by way of
private placements of equity securities in our company. In March 2007, we received an amount of $200,000, which is being held as a subscription for a proposed equity financing. While the terms of the proposed financing have yet to be finalized, we
expect these to be settled within the second quarter.

Results of Operations

We have had no operating revenues since our inception on February 19, 2004, through to March 31, 2007.

Since the
acquisition of ARI we have focused most of our attention during the period through to March 31, 2007 on the Hill Copper Project in Arizona. There we purchased 30 patented claims on approximately 549 acres in the Courtland area from Hope Mining
and staked an additional 18 MAN claims on the property and now have a total of 31 unpatented MAN claims. We acquired a data base that includes assay results from 274 holes drilled from the 1950s to the 1990s and we have been able to develop
preliminary in-house copper resource estimates. And, we completed 5,908 feet in a drilling program in the Courtland and South Courtland areas to confirm the results from the historic drilling in the data base and we also explored new targets on the
Hill Copper Project. While our drilling resulted in similar results as the previous drilling campaigns, some of the drilling was significantly better and we discovered two new zones in the South Courtland area, consisting of a near-surface copper
oxide zone and a zone of zinc mineralization. Our mineral property exploration and expenditures totaled $242,398 during the three months ended March 31, 2007, with the completion during the quarter of the drilling program begun in November
2006.



15



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During the comparative period, being the quarter ended February 28, 2006, which was prior to the change of name and
direction of our company, we had incurred mineral property expenditures of $Nil and operating costs of $3,151. During this period the company had been inactive and the costs were incurred for professional and filing fees.

Our loss for the three months ended March 31, 2007 was $736,399, and this included the expensing of all our exploration programs and overhead costs, including
non-cash stock-based compensation expense for stock options and for shares issued for service by our directors and officers. This loss compared with a loss of $3,151 in the quarter ended February 28, 2006. Our loss accumulated since inception
to March 31, 2007 is $1,805,675. Our cash used in operations, which was primarily focused on exploring the Hill Copper Project, was $215,126 during the three months ended March 31, 2007 (compared with cash used of $3,631 in the three
months ended February 28, 2006).

Liquidity and Capital Resources

At March 31, 2007, we had cash on hand of $247,431 and a working capital deficit of $(22,304).

We anticipate that our
cash and working capital will only be sufficient to enable us to pay for the costs of our exploration programs and general and administrative expenses for approximately the next two months. Accordingly, our ability to complete the next phase of our
recommended work programs will be subject to us obtaining additional financing as these expenditures will exceed our cash reserves.

During the next
twelve-month period, we anticipate that we will not generate any revenue. Therefore, we must obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be an alternative for funding additional
phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and
we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund the next phase of our exploration program. 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 equity financing to fund the next phase of our exploration programs, there is no assurance that we will obtain the funding necessary to pursue
any advanced exploration of our mineral claims following the completion of the work program. If we do not continue to obtain additional financing, we will be forced to abandon our mineral claims and our plan of operations.

We may consider entering into a joint venture arrangement to provide the required funding to develop our patented and unpatented mineral claims. We have not undertaken
any efforts to locate a joint venture partner for this to date. Even if we determined to pursue a joint venture partner, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund exploration of
our properties. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our properties to the joint venture partner.

In March 2007, we received an amount of $200,000, which is being held as a subscription for a proposed equity financing. While the terms of the proposed financing have yet to be finalized, we expect these to be
settled within the second quarter. Our requirements for additional financing are discussed in further detail above under the heading Plan of Operation.

Cash used in operating activities was $215,126 for the three months ended March 31, 2007, which reflects the costs of our operations for the period, as compared with cash used in operating activities of $3,631 during the three months
ended February 28, 2006. The difference in the amount of cash used in the periods mainly reflects the costs of the drilling program we initiated in November 2006 on the Hill Copper Project in Arizona, which was completed during the quarter.

We will need to continue relying on equity sales of our common shares in order to continue to fund our business operations. Issuance of additional shares
will result in dilution to our existing shareholders. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to
continue our plan of operations, then we will not be able to continue our exploration of our properties.

Subsequent Events

In April 2007, we executed and made the initial payment under a purchase agreement with a subsidiary of Newmont Mining Corporation, whereby the Company has an option to
purchase two patented mining claims covering 30 acres adjacent to our MAN claims in Cochise County, Arizona. The purchase price is $100,000, payable in four equal installments of $25,000 upon each of signing and six, nine and 12 months after the
signing of the purchase agreement, whereupon the option will be exercised and the properties purchased. Newmont will also receive a 1% Net Smelter Returns Royalty on the patented claims and on any properties Aurelio currently owns or acquires within
a designated Area of Interest. In addition, we gave Newmont a Right of First Offer with respect to any option, joint venture, sale or any other disposition of the property to a third party. We had earlier acquired from



16



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Newmont an extensive exploration file of the Courtland-Gleeson Mining District, Cochise County, Arizona, where the Hill Copper Project is located including
the logs and assay results of 274 holes, drilled by ten different companies between the 1950s to the late 1980s. These companies include Santa Fe Mining, Asarco Mining, Kennecott Copper, MEXCO (a division of Union Oil) and Great Gray Resources.

In April 2007, we also completed a mineral lease and option agreement with three individual owners of 65 Gold Coin mineral claims and three
Arizona State Exploration Permits on the Hill Copper Project in Cochise County, Arizona. The Gold Coin claims and the three Exploration Permits form one continuous block of claims covering 1540 acres. These new properties are all located
to the south and southeast of the MAN claims. The option agreement includes an initial payment of $20,000 with additional staged payments spread over four years totaling $1.5 million. In addition, there is a royalty of 1% of production of base
metals and 2.5% of precious metals.

In March 2007, we received an amount of $200,000, which is being held as a subscription for a proposed financing.
While the terms of the proposed financing have yet to be finalized, we expect these to be settled within the second quarter.

Contractual Obligations,
Contingent Liabilities and Commitments



|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|-------------------------------------------- |  | ----- | ------- | ---------------- | - | ----------- |  | ----------- | ------- | ----------------- | - | ------- |  | - | -
|Contractual Obligations as of March 31, 2007 |  | Total |         | Less than 1 year |   | 1  3 years |  | 3  5 years |         | More than 5 years
|Long-term debt(1)                            |  | $     | 25,928  |                  | $ | 10,363      |  | $           | 15,565  |                   | $ |        |  | $ | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Note payable  Courtland Claims(2)           |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Interest                                     |  |       | 194,750 |                  |   | 57,000      |  |             | 114,000 |                   |   | 23,750  |  |   | 
|Principal                                    |  |       | 950,000 |                  |   |            |  |             |        |                   |   | 950,000 |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|MAN Claims  annual renewal fees(3)          |  |       | 3,875   |                  |   | 3,875       |  |             | 7,750   |                   |   | 7,750   |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  
|Gavilanes option payments(4)                 |  |       | 470,000 |                  |   | 15,000      |  |             | 90,000  |                   |   | 365,000 |  |   | 
|                                             |  |       |         |                  |   |             |  |             |         |                   |   |         |  |   |  

| | 
| | 

| | (1) | The long-term debt was to finance the purchase of office equipment and is a 36-month note payable under a business installment loan from JPMorgan Chase Bank, NA. The interest rate
is 12.25% simple interest and the loan is cash collateralized.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The purchase of the 30 patented Courtland Claims which form part of the Hill Copper Project (as described in Note 8 above) from Hope Mining and Milling Company was closed on
September 15, 2006 with the payment of the deposit of $250,000. In addition to the acquisition price, the seller is entitled to receive a net smelter return royalty, up to a cumulative total of $3 million, of 3% for precious metals, and 1.5%
for base metals produced from the property. At any time prior to the commencement of commercial production, we can buy this royalty for $2 million.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | For each of our 31 MAN claims on the Hill Copper Project there is an annual renewal fee of $125 per claim payable to the Bureau of Land Management, an agency of the U.S. Department
of the Interior. These claim fees are payable annually, as long as we are actively exploring on this land.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | In addition to the total purchase price of the three mining claims (covering approximately 1,000 hectares) making up the Gavilanes property, the property is subject to a 3% net
smelter return royalty in favor of Mr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Off-Balance Sheet Arrangements

We have no 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 is material to stockholders.

Related Party Transactions

We have consulting contracts with our president, company officers, directors and their wholly-owned companies,
through which they provide services to our company. During the quarter we paid consulting fees in lieu of salaries to our president, company officers and directors of $38,484 in total. These fees were in the normal course of business and were
measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. In addition, during the three months ended March 31, 2007, we issued 237,110 shares under the Stock Compensation Plan to our
directors and officers for directors fees and fees for attending meeting for the seven months ended December 31, 2006 and for the period to February 1, 2007. The shares had a total fair market value of $230,000.



17



---

As of March 31, 2007 the Company owed $25,514 to the same related parties for consulting fees and for the
reimbursement of business expenses.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management
routinely makes judgments and estimates about the effects of matters that are inherently uncertain. The most significant policy we have implemented is to capitalize the cost of acquiring the patented mining claims which form the core part of our
Hill Copper Project. The accounting policies set forth in the audited consolidated financial statements included in our Form 10-KSB for the period ended December 31, 2006, are the same as the accounting policies utilized in the preparation of
these unaudited consolidated financial statements, except as modified for appropriate interim presentation. These financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary
should we be unable to continue as a going concern. The comparative figures shown in the statements of operations and statements of cash flows are for the three months ended February 28, 2006, which is prior to the change of balance date and
prior to the acquisition of ARI.

Offices

We maintain
an executive office in Littleton, Colorado and field offices in Pearce, Arizona and Culiacan, Mexico. We believe these spaces are adequate for our current needs and that suitable space will be available to accommodate our future needs.

Going Concern

We have suffered recurring losses from operations.
The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery and
classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the consolidated financial statements for the period ended December 31, 2006 included in our Form
10-KSB, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this
disclosure by our independent auditors.

The continuation of our business is dependent upon us raising additional financial support. The issuance of
additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash
commitments.



|Item 3. | Controls and Procedures
|------- | -----------------------

As required by Rule 13a-15 under the
Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our companys disclosure controls and procedures as of the end of the period covered by this quarterly report, being March 31, 2007. This
evaluation was carried out under the supervision and with the participation of our companys management, including our companys president and chief executive officer and our chief financial officer. Based upon that evaluation, our
companys president and chief executive officer and our chief financial officer concluded that our companys disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no changes in
our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our companys reports
filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed in our companys reports filed under the Exchange Act is accumulated and communicated to management, including our companys president and
chief executive officer and chief financial officer as appropriate, to allow timely decisions regarding required disclosure.



18



---

PART II - OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

We know of no material, existing or pending
legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.



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

On
February 1, 2007, we issued 237,110 shares of our stock under the Stock Compensation Plan to our directors and officers for directors fees and meeting fees for the seven months ended December 31, 2006 and for the period through
February 1, 2007 at a market value of $0.97 per share for a total non-cash cost of $230,000. On March 2, 2007 we issued a further 16,990 shares to consultants at $1.03 per share for a total non-cash cost of $17,500.

On March 27, 2007 we received an amount of $200,000 which is being held as subscription proceeds for our proposed financing.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

On February 1, 2007 we issued 237,110
shares of our stock under the Stock Compensation Plan to our directors and officers for directors fees and meeting fees for the seven months ended December 31, 2006 and for the period through February 1, 2007 at a market value of
$0.97 per share for a total non-cash cost of $230,000. On March 2, 2007 we issued a further 16,990 shares to consultants at $1.03 per share for a total non-cash cost of $17,500.

On March 27, 2007 we received an amount of $200,000 which is being held as subscription proceeds for our proposed financing.



|Item 6. | Exhibits
|------- | --------



|       |  |                                                                                                                                            
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                
|3.1    |  | Articles of Incorporation(1)                                                                                                               
|       | 
|3.2    |  | By-Laws(13)                                                                                                                                
|       | 
|10.1   |  | Agreement between Aurelio Resources, Inc. and Furio Resources, Inc. dated April 27, 2006(5)                                                
|       | 
|10.2   |  | Amended Agreement between Aurelio Resources, Inc. and Furio Resources, Inc. dated June 9, 2006(6)                                          
|       | 
|10.3   |  | Amended Agreement between Aurelio Resources, Inc. and Aurelio Resource Corporation dated July 13, 2006(7)                                  
|       | 
|10.4   |  | Consulting Agreement among Aurelio Resource Corp., International American Resources, Inc. and Dr. Frederik Warnaars dated August 9, 2006(8)
|       | 
|10.5   |  | Consulting Agreement among Aurelio Resource Corp., Jonson Management Company and David C. Jonson dated August 9, 2006(8)                   
|       | 
|10.6   |  | Consulting Agreement among Aurelio Resource Corp., Salzburg Holdings Inc. and Stephen Doppler dated August 9, 2006(8)                      
|       | 
|10.7   |  | Purchase Agreement dated May 15, 2006, between Aurelio Resources, Inc. and Hope Mining and Milling Company(10)                             
|       | 
|10.8   |  | Amending Agreement dated September 11, 2006 between Aurelio Resources, Inc., Bolsa Resources, Inc. and Hope Mining and Milling Company(10) 



19



---

|      |  |                                                                                                                        
|----- |  | -----------------------------------------------------------------------------------------------------------------------
|10.9  |  | Consulting Agreement between Aurelio Resource Corp. and David S. Johnson dated September 1, 2006(14)                   
|      | 
|10.10 |  | Consulting Agreement among Aurelio Resource Corp., Waiata Inc. and Allan J. Marter dated November 1, 2006(14)          
|      | 
|10.11 |  | Aurelio Resource Corporation 2006 Stock Option Plan adopted by the Board of Directors on September 15, 2006(14)        
|      | 
|10.12 |  | Form of Subscription Agreement  US Accredited(12)                                                                     
|      | 
|10.13 |  | Form of Subscription Agreement  Offshore(12)                                                                          
|      | 
|10.14 |  | Aurelio Resource Corporation 2006 Incentive Compensation Plan adopted by the Board of Directors on October 12, 2006(15)
|      | 
|14.1  |  | Code of Ethics(11)                                                                                                     
|      | 
|21    |  | Subsidiaries: Aurelio Resources, Inc., Minera Milenium S.A. de C.V. and Bolsa Resources, Inc.                          
|      | 
|31.1* |  | Certification Statement of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.      
|      | 
|31.2* |  | Certification Statement of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  
|      | 
|32.1* |  | Certification Statement of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       
|      | 
|32.2* |  | Certification Statement of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   

---

|* | Filed herewith.
|- | ---------------

|(1) | Incorporated by reference to our Form SB-2 filed with the Securities and Exchange Commission on July 9, 2004.
|--- | -------------------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on May 2, 2006.
|--- | -----------------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on June 15, 2006.
|--- | -------------------------------------------------------------------------------------------------------------

|(7) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on July 17, 2006.
|--- | -------------------------------------------------------------------------------------------------------------

|(8) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on August 23, 2006.
|--- | ---------------------------------------------------------------------------------------------------------------

|(10) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on September 22, 2006.
|---- | ------------------------------------------------------------------------------------------------------------------

|(11) | Incorporated by reference to our Form 10-KSB filed with the Securities and Exchange Commission on September 12, 2006.
|---- | ---------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on September 25, 2006.
|---- | ------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on October 10, 2006.
|---- | ----------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by reference to our Form 10-KSB for the period ended December 31, 2006 filed with the Securities and Exchange Commission on April 4, 2007.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | Incorporated by reference to our S-8 registration statement filed with the Securities and Exchange Commission on January 25, 2007.
|---- | ----------------------------------------------------------------------------------------------------------------------------------

SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) 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.



|                             |  |                                                       |  |                     |  |     |  |                                                       
|---------------------------- |  | ----------------------------------------------------- |  | ------------------- |  | --- |  | ------------------------------------------------------
|AURELIO RESOURCE CORPORATION |  |                                                       |  |                     |  |    
|                             |  |                                                       |  |                    
|By:                          |  | /s/ Frederik Warnaars                                 |  |                     |  | By: |  | /s/ Allan J. Marter                                   
|                             |  | Frederik Warnaars, President, Chief Executive Officer |  |                     |  |     |  | Allan J. Marter , Chief Financial Officer and Director
|                             |  | (Principal Executive Officer) and Director            |  |                     |  |     |  | (Principal Financial and Accounting Officer)          
|                             |  |                                                      
|Dated: May 15, 2007          |  |                                                       |  | Dated: May 15, 2007



20