UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549 Form 10-QSB (Mark One) xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period endedNovember 30, 2006 [
        ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to __________ Commission file number000-50931 AURELIO RESOURCE CORPORATION(Exact name of small business issuer as specified in its charter)  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) 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.     YesxNo [   ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [
        ]
        Nox 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:32,436,500 common shares issued and outstanding as of January 19, 2007. Transitional Small Business Disclosure Format (Check one):
        Yes [
        ]
        Nox        PART I  -  FINANCIAL INFORMATION Item1.
        Financial Statements  It is the opinion of management that the interim consolidated financial statements for the quarter ended November 30, 2006 include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading.      3   AURELIO RESOURCE CORPORATION (An Exploration Stage Company) CONSOLIDATED BALANCE SHEET November 30, 2006  ASSETSCurrent assetsCash
        
        
        
        
        
        $       762,163Advances and vendor deposits
        
        
        
        
        
        150,893Total current assets
        
        
        
        913,056Mineral properties
        
        
        
        
        1,304,014Property and equipment, net
        
        
        
        53,547Security deposit
        
        
        
        1,1051,358,666Total Assets
        
        
        
        
        
        $     2,271,722LIABILITIES & STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
        
        
        
        
        $       236,567Current portion of long-term debt
        
        
        
        8,605Total current liabilities
        
        
        
        245,172Long-term debt
        
        
        
        
        
        18,674Note payable mineral property - Courtland Claims
        
        
        
        
        
        950,000968,674Total Liabilities
        
        
        
        
        
        1,213,846Stockholders EquityCommon stock, $.001 par value;487,500,000 shares authorized;32,436,500 issued and outstanding
        
        
        32,436Additional paid in capital
        
        
        
        1,772,896Accumulated deficit
        
        
        
        
        (747,456)Total Stockholders Equity
        
        
        
        1,057,876Total Liabilities and Stockholders Equity
        
        
        $     2,271,722   The accompanying notes are an integral part of the consolidated financial statements.       4   AURELIO RESOURCE CORPORATION (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS  Feb. 19, 2004 (Inception) Through
Nov. 30, 2006
        
        Three Months Ended
Nov. 30, 2006
        
        Three Months Ended
Nov. 30, 2005
        
        Six Months
Ended
Nov. 30, 2006
        
        Six Months Ended
Nov. 30, 2005Revenue
        $                   -
        
        $                   -
        
        $                   -
        
        $                   -
        
        $                   -Expenses:Bank charges
        1,728
        
        1,190
        
        22
        
        1,327
        
        90Depreciation
        1,031
        
        975
        
        -
        
        1,031
        
        -Non-cash compensation
        168,000
        
        168,000
        
        -
        
        168,000
        
        -General and administrative
        171,820
        
        155,658
        
        -
        
        171,820
        
        -Exploration and mineral    property expenditures
        252,834
        
        201,085
        
        4,643
        
        202,710
        
        6,429Office expenses
        38,450
        
        35,187
        
        22
        
        37,086
        
        22Professional and filing fees
        103,682
        
        22,174
        
        3,246
        
        44,876
        
        8,636Transfer agent
        3,375
        
        1,700
        
        500
        
        1,700
        
        500Travel
        12,914
        
        11,818
        
        -
        
        12,914
        
        -753,834
        
        597,787
        
        8,433
        
        641,464
        
        15,677Loss from operations
        (753,834)
        
        (597,787)
        
        (8,433)
        
        (641,464)
        
        (15,677)Other income (expense)Interest income
        7,133
        
        6,818
        
        -
        
        6,818
        
        -Interest expense
        (755)
        
        (755)
        
        -
        
        (755)
        
        -Income (loss) before provision for income tax
        (747,456)
        
        (591,724)
        
        (8,433)
        
        (635,401)
        
        (15,677)Provision for income tax
        -
        
        -
        
        -
        
        -
        
        -Net loss
        (747,456)
        
        (591,724)
        
        (  8,433)
        
        (635,401)
        
        ( 15,677)Other comprehensive income (loss) - net of taxForeign currency translation gains (losses)
        (956)
        
        -
        
        -
        
        (956)
        
        -Comprehensive loss
        $      (748,412)
        
        $      (591,724)
        
        $        (  8,433)
        
        $      (636,357)
        
        $       ( 15,677)Net loss per share(Basic and fully diluted)
        
        
        $          (  0.02)
        
        $          (  0.00)
        
        $          (  0.02)
        
        $          (  0.00)Weighted average number of common shares outstanding
        
        
        31,205,731
        
        4,831,000
        
        31,061,117
        
        4,831,000 The accompanying notes are an integral part of the consolidated financial statements.       5   AURELIO RESOURCE CORPORATION (An Exploration Stage Company) CONSOLIDATED STATEMENTS OF CASH FLOWS   Feb. 19, 2004(Inception)
        
        Six Months
        
        Six MonthsThrough
        
        Ended
        
        EndedNov. 30, 2006
        
        Nov. 30, 2006
        
        Nov. 30, 2005Cash Flows From Operating Activities:Net loss
        
        
        $        (748,412)
        
        $        (636,357)
        
        $         (15,677)Adjustments to reconcile net income tonet cash provided by (used for)operating activities:Depreciation
        1,031
        
        1,031
        
        -Non-cash compensation
        168,000
        
        168,000
        
        -Changes in  non-cash working capital items:Advances and vendor deposits
        (150,893)
        
        (150,893)
        
        -Security deposit
        (1,105)
        
        (1,105)
        
        -Accounts payable and accrued liabilities
        237,522
        
        219,147
        
        (23,862)Other assets
        
        
        -
        
        (10,000)
        
        -Net cash provided by (used for)operating activities
        
        (493,857)
        
        (410,177)
        
        (39,539)Cash Flows From Investing Activities:Purchase of mineral properties - net
        
        (354,014)
        
        (344,014)
        
        -Purchase of fixed assets - net
        
        (27,298)
        
        (27,299)
        
        -Net cash provided by (used for)investing activities
        
        (381,312)
        
        (371,313)
        
        -(Continued On Following Page)   The accompanying notes are an integral part of the consolidated financial statements.       6   AURELIO RESOURCE CORPORATION (An Exploration Stage Company) CONSOLIDATED STATEMENT OF CASH FLOWS  (Continued From Previous Page)  Feb. 19, 2004
(Inception)
Through
Nov. 30, 2006
        
        Six Months
Ended
Nov. 30, 2006
        
        Six Months
Ended
Nov. 30, 2005Cash Flows From Financing Activities:Issuance of common stock
        
        1,637,332
        
        1,541,132
        
        --Net cash provided by (used for)financing activities
        
        1,637332
        
        1,541,132
        
        -Effect of exchange rate changes on cash
        -
        
        -
        
        -Net Increase (Decrease) In Cash
        762,163
        
        759,642
        
        (39,539)Cash At The Beginning Of The Period
        -
        
        2,521
        
        51,337Cash At The End Of The Period
        
        $         762,163
        
        $         762,163
        
        $           11,798Schedule Of Non-Cash Investing And Financing ActivitiesNoneSupplemental DisclosureMineral properties
        
        
        
        
        $     1,304,014
        
        $      1,294,014
        
        $                  -Less note payable
        
        
        
        
        (950,000)
        
        (950,000)
        
        -Fixed assets
        
        
        
        
        $          54,477
        
        $           54,578
        
        $                  -Less long-term debt
        
        
        
        
        (27,279)
        
        (27,279)
        
        -Cash paid for interest
        
        
        $               755
        
        $                755
        
        $                  -Cash paid for income taxes
        
        $                   -
        
        $                   -
        
        $                  -   The accompanying notes are an integral part of the consolidated financial statements.       7    AURELIO RESOURCE CORPORATION (An Exploration Stage Company) NOTES TO FINANCIAL STATEMENTS February 19, 2004 (Inception) through November 30, 2006   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. 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 development of its properties and upon future profitable production or receiving proceeds from the disposition of the properties.  The timing of such events occurring, if at all, is not yet determinable.  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.  November 30, 2006 Deficit accumulated during the exploration stage
        $(747,456)Working capital
        $ 667,884   ******NOTE 3.******
        ******SIGNIFICANT ACCOUNTING POLICIES**************  The financial statements are stated in U.S. dollars in accordance with U.S. generally accepted accounting principles and include the accounts of the Company and its subsidiaries. Significant accounting policies adopted by the Company are as follows:  Cash and cash equivalents  The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents.  Use of estimates  The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.       8   Foreign Currency Translation  The U.S. dollar is the functional currency of the Company.  Transactions involving foreign currencies for items included in operations are translated into U.S. dollars using the monthly average exchange rate; monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date and all other balance sheet items are translated at the historical rates applicable to the transactions that comprise the amounts.  Translation gains and losses are included in the determination of net income (loss).  Mineral properties and exploration expenditures  The costs of acquiring mineral properties are capitalized and will be amortized over their estimated useful lives following the commencement of commercial production or written-off if the properties are sold or abandoned.  Exploration expenses and the costs for carrying and retaining mineral properties are expensed as incurred.  When it is determined that a mineral deposit can be economically and legally extracted or produced based on established proven and probable reserves and the results of feasibility studies, further exploration costs and development costs incurred after such determination will be capitalized.  Upon the commencement of commercial production, capitalized costs will be amortized on the units of production basis using the estimated proven and probable reserves as the depletion basis.  Investments  Investments are considered to be held to maturity and are carried at cost. Investments are continually reviewed to determine whether any events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. The Company bases its evaluation on such impairment indicators as the nature of the investments, the future economic benefit of the investments, any historical or future profitability measurements as well as other external market values, conditions or factors that may be present. If it is determined that the value of the investment is permanently impaired, it is written down to its estimated net realizable value. Environmental requirements  At the report date, environmental requirements related to mineral properties acquired are unknown and therefore an estimate of any future cost cannot be made.  Income taxes  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expenses (benefit) result from the net change during the period of deferred tax assets and liabilities.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.  Net loss per share  Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding during the period. In periods of loss, diluted net loss per share is equal to the basic loss per share.  Recent Accounting Pronouncements  In February 2006, the FASB issued SFAS No. 155 Accounting for Certain Hybrid Financial Instruments  an amendment of FASB Statements No. 133 and 140, to simplify and make more consistent the accounting for certain financial instruments. The Company has adopted the provisions of SFAS No. 155, which are effective in general for financial instruments acquired or issued in fiscal years beginning after September 15, 2006. The adoption did not have a material effect on the results of operations of the Company.       9   In March 2006, the FASB issued SFAS No. 156 Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The Company has adopted the provisions of SFAS No. 156, which are effective in general for an entitys fiscal year beginning after September 15, 2006. The adoption did not have a material effect on the results of operations of the Company.  In June 2006, the FASB issued FIN 48 Accounting for Uncertainty in Income Taxes which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109,Accounting for Income Taxes.This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition and is effective for fiscal years beginning after December 15, 2006.  In September 2006, the FASB issued SFAS 157 Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement, which is effective for years beginning after November 15, 2007, applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements.  In September 2006, the FASB issued SFAS 158 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans which takes effect as of the end of the fiscal year ending after December 15, 2006.  However, as the Company does not have any such plans and does not intend to implement such, this will have no impact on the Company.  NOTE 4.
        FINANCIAL INSTRUMENTS  The Companys financial instruments consist of cash and cash equivalents, 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. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.  NOTE 5.
        SEGMENT INFORMATION  The Company operated in two reportable segments, these being the exploration of copper and gold exploration properties.  NOTE 6.
        BUSINESS ACQUISITIONS  On July 5, 2006 the Company acquired 98% of the outstanding stock Minera Milenium, S.A. de C.V. (Minera Milenium) in a transfer of benefit from Aurelio Resources, Inc in a transaction accounted for as a business purchase. Aurelio Resources, Inc 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), and the purchase gave the Company certain rights to the Gavilanes property in Mexico.  On August 17, 2006 the Company acquired 100% of Aurelio Resources, Inc. (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 $(141,410).  During September 2006 we acquired 100% of the outstanding stock of Bolsa Resources, Inc. (Bolsa) an Arizona corporation to facilitate the acquisition of the Arizona mineral properties as set out in Note 7.  The net worth of Bolsa at fair value on September 14, 2006 was Nil.        10   NOTE 7.
        MINERAL PROPERTY ACQUISITION  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 and there were legal closing costs.  The purchase agreement required a $250,000 down payment, of which $10,000 was paid by way of earnest money with $240,000 due at closing.  The remaining balance of $950,000 will be carried on an interest-only four year term 6% straight line annual interest-only promissory note, with a balloon payment at the end of year four. On September 15, 2006, ARI and our other wholly-owned subsidiary, Bolsa, and Hope MMC entered into an agreement amending the terms of the purchase agreement dated May
15, 2006.  Pursuant to the amending agreement, Bolsa accepted the assignment from ARI of all rights and obligations under the May 15, 2006 purchase and sale agreement and pursuant to the purchase and sale agreement as assigned, Bolsa completed the acquisition of the 30 patented mining claims from Hope MMC on September 18, 2006, paying the balance of the initial installment of $250,000.  NOTE 8.
        STOCKHOLDERS EQUITY  On September 29, 2006, the Company completed a private placement of four million shares of common stock at $0.40 per share for total gross proceeds of $1.6 million.  The Company has recorded $168,000 in non-cash compensation for stock option expense for five-year stock options granted in September and October 2006 under the Companys 2006 Stock Option Plan approved by the Board on September 15, 2006.  We used 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.        11   Item2.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 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 consolidated unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. 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 United States 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 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.  Prior to the completion of the acquisition of ARI, we had a 100% interest in twenty-five mineral claims, subject to a 3% net proceeds interest to the State of Alaska.  During November 2006 we allowed our interest in the Alaska property to lapse and we have no ongoing interest in that property.  Upon our the completion of our acquisition of ARI, we now have 100% rights to mineral exploration and development in 13 mining claims in Arizona (the MAN claims), and an option to earn a 100% interest in the mineral exploration and development of 3 mining claims/concessions covering approximately 1,000 hectares, in Durango, Mexico.  We also acquired 30 patented claims referred to as the Courtland claims in Cochise County, Arizona on September 18,
2006 from Hope Mining and Milling Company (Hope MMC) through our wholly-owned subsidiary, Bolsa.  We have also staked 19 additional claims around the MAN and Courtland claims and we intend to explore our Arizona properties with a view to exploiting any mineral deposits we discover or selling or otherwise assigning the rights to do so. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined.  We have no known reserves of any type of mineral.  To date, we have not discovered an economically viable mineral deposit on the mineral property, and there is no assurance that we will discover one. Mineral property exploration is typically conducted in phases.  Before it is carried out, each subsequent phase of exploration work is recommended by a geologist based on the results from the most recent phase of exploration.  We have only recently commenced the initial phase of exploration on the properties held by Bolsa and Minera Milenium.  Once we complete a phase of exploration, we will make a decision as to whether or not we proceed with each successive phase      12  based upon the analysis of the results of that program.  Our directors will make these decisions based upon the recommendations of the independent geologist who oversees the program and records the results. Our plan of operations is to conduct exploration work on each of our properties in order to ascertain whether any possess commercially exploitable quantities of minerals.  There can be no assurance that such mineral deposits exist on any of our properties. Even if we complete our proposed exploration programs on our properties and we are successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know whether we have a commercially viable mineral deposit. We are interested in exploring for minerals such as copper, gold, silver and zinc on our properties but we are not restricting our exploration to any one type or select types of minerals.  We may also seek to acquire other properties for mineral exploration in the United States, Mexico, Latin America or elsewhere. Our objective is to pursue deposits of any type of mineral and to develop, sell or otherwise assign the rights to develop the properties if and when any commercially viable deposits of minerals are found on our properties. Corporate History We were incorporated on February 19, 2004, under the laws of the state of Nevada under the name Furio Resources Inc.  Effective June 16, 2006 we changed our name to Aurelio Resource Corporation and effected 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.  Except as otherwise stated, all references to shares and prices per share have been adjusted to give retroactive effect to the stock split. On August 17, 2006 we completed our acquisition of all of the issued and outstanding common stock of 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.  During September 2006 we acquired 100% of the outstanding stock of Bolsa to facilitate the acquisition of the Arizona mineral properties as noted below. Acquisition of the Courtland Claims  September, 2006 Our subsidiary, ARI, entered into a purchase and sale agreement, dated for reference May 15, 2006, with 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, in south eastern Arizona.  On September 15, 2006, ARI, our other wholly-owned subsidiary, Bolsa, and Hope MMC entered into an agreement amending the terms of the purchase agreement dated May 15, 2006.  Pursuant to the amending agreement, Bolsa, an Arizona corporation, accepted the assignment from ARI of all rights and obligations under the May 15, 2006 purchase and sale agreement for the acquisition of 30 patented mining claims from Hope MMC and closed the acquisition on September 18, 2006, paying the balance of the initial instalment of $250,000.  The remainder of the overall purchase price of $1.2 million is to be
financed over four years with only interest payments at 6% being payable over this period with the balance of the purchase price payable on May 16, 2010. Our Current Business As a result of the above, we have acquired properties in Arizona and a 98% interest in Minera Milenium, a company incorporated in Mexico which holds an option to acquire a 100% interest in a property in Mexico. Hill Copper Project, Arizona The Hill Copper Project is comprised of (a) the Courtland Area covered by the Courtland claims acquired from Hope MMC (as detailed above), and (b) the MAN Area covered by the MAN claims.  We acquired and are now the registered owner of a 100% interest in thirteen unpatented lode-mining claims (covering approximately 260 acres), staked on federal      13  lands administered by the United States Bureau of Land Management in south eastern Arizona.  The unpatented mining claims are identified as MAN 1 through MAN 6, which are contiguous, and MAN 7 through MAN 13, which were staked on two occasions and which are all contiguous with one another.  The MAN Area is immediately to the south of the Courtland Area. The mining claims are in good standing with all regulatory authorities, and the mining claims are properly registered at Cochise County in Bisbee and the United States Bureau of Land Management in Phoenix, Arizona. The current annual maintenance fees are $125 per mining claim due on or before August 31stof each year. Gavilanes Property, Mexico Since July 5, 2006, we own 98% of the issued and outstanding common shares of Minera Milenium, a company incorporated under the laws of Mexico.  Minera Milenium holds an option to earn a 100% undivided interest in certain mining claims/concessions situated in the Tamazula District in the State of Durango, Mexico. The Gavilanes Property consists initially of mining claims/concessions covering approximately a 100 hectares identified as title number 185397, expediente 321.1/24569 and granted by the Direcion General de Minas and inscribed with number 577, on page 145 of Volume number 251 of the General book of Mining Concessions of the Public Mines register in Mexico City, D.F.   Subsequently, 900 hectares exploration concessions were staked around the initial Gavilanes property. Pursuant to the terms of the option agreement, dated for reference August 18, 2005, between ARI and Minera Holmex S.A. de C.V., a company incorporated under the laws of the State of Sinaloa, Republic of Mexico, and wholly-owned by Dr. Frederik Warnaars, ARI acquired the right to earn up to a 100% interest in the mineral exploration and development in 3 mining claims/concessions, covering approximately 1,000 hectares, in Durango, Mexico, free and clear of all charges, encumbrances and claims.  ARI assigned all of its interest in this option to its 98% owned subsidiary, Minera Milenium. In consideration for granting the option, ARI paid Minera Holmex an amount equal to the taxes in arrears for the years 2001 and 2002 and the aggregate sum of P63,536 Mexican Pesos plus late payment penalties (approximately $6,100).  Minera Milenium paid the sum of $5,000 to the Gavilanes property owner, Mr Modesto Rivas, in accordance with the options provisions, which was due on February 1, 2006. To maintain the option in good standing, we will need to make the following payments to Minera Holmex S.A. de C.V. no later than the dates provided below: Payment Due DateFebruary 15, 2007
        $15,000August 15, 2007
        15,000February 15, 2008
        20,000August 15, 2008
        20,000February 15, 2009
        25,000August 15, 2009
        25,000February 15, 2010
        30,000August 15, 2010
        30,000February 15, 2011
        305,000Total Payments
        $490,000 The Gavilanes Property is subject to a 3% net smelter royalty in favour of Mr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico.  There are no provisions in the option whereby we can purchase all or a portion of the smelter royalty from Mr. Modesto Rivas Beltran. The smelter royalty is payable only from the actual proceeds received by Minera Milenium from any mint, smelter, refinery or other purchaser from the sale of our ore, metals (including bullion) or concentrates produced from the Gavilanes Property and sold, or proceeds received from an insurer in respect of our mineral products, after deducting certain expenses related to certain costs to our company of the extraction, preparation and sale of our mineral products.  The smelter royalty shall be paid to Mr. Modesto Rivas Beltran on a quarterly basis within 45 days of the end of each fiscal quarter.       14   Lake Iliamna Property, Alaska By mineral staking in March 2004, we acquired a 100% interest in twenty-five mineral claims located in the State of Alaska approximately 7.5 miles northwest of Lake Iliamna which is 215 miles south-west of Anchorage, Alaska. During November 2006, we allowed our interest in the Alaska property to lapse and we have no ongoing interest in that property. PLAN OF OPERATIONS AND CASH REQUIREMENTS You should read the following discussion of our financial condition and results of operations together with our unaudited financial statements and the related notes as at and for the three month and six month periods ended November 30, 2006, which appear elsewhere in this quarterly report.  The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.  Our actual results could differ materially from those discussed in the forward looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report. 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 implementation of phased exploration programs for our Hill Copper Project in Arizona and our Gavilanes Property in Mexico. 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 through negotiations with private landholders and through staking additional unpatented mining claims on free land.  We anticipate that the Phase I work program will cost $110,000. We commenced a drill program during the quarter ended November 30, 2006 and plan to drill up to 15 diamond drill holes 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 have budgeted $500,000 for Phase II of the recommended work program. Gavilanes Property We plan to make the option payment of $15,000 due February 15, 2007 in order to keep the Gavilanes Option in good standing. We plan to implement Phase I work for the Gavilanes Property.  We will review and evaluate all the pertinent data available in Culiacan.  We will follow-up with a field examination at the Gavilanes Property.  Anticipated costs for this Phase I review are $20,000. We plan to conduct a drilling program to test three of the best ten targets identified at the Gavilanes Property.  Our goal is to identify an economic, bulk mineable, open pittable deposit with a total of 750 meters.  We anticipate that this drill program will take one month to complete and is estimated to cost $100,000. If warranted by the results of Phase I and the initial drilling program, we will conduct a Phase II drill program consisting of seven holes for a total of 1,750 meters.  We estimate the cost of Phase II to be $270,000 and take three to four months to complete. General Operating Expenses We anticipate spending approximately $20,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $240,000 over the next twelve months.  The general and      15  administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees, annual mineral claim fees, maintaining an office in Littleton, Colorado and maintaining a field office in Culiacan, Mexico, and general office expenses. At November 30, 2006, we had cash on hand of $762,163 and working capital of $667,884. Over the next twelve months we intend to use our available funds to expand on the exploration and development of our leases, as follows: Estimated Net Expenditures During the Next Twelve Months General, Administrative and Corporate Expenses
        $    240,000Phase I program on Hill Copper Property
        110,000Drill program on Hope Property
        220,000Phase II program on Hill Copper Property
        200,000Option payment due February 15, 2007 on Gavilanes Property
        15,000Phase I review of Gavilanes Property
        20,000Drilling program on Gavilanes Property
        100,000Phase II program on Gavilanes Property
        170,000Working Capital
        125,000Total
        $1,200,000 As at November 30, 2006, we had $245,172 in current liabilities. Our financial statements report net losses of $591,724 and $635,401 respectively for the three and six month periods ended November 30, 2006 compared to net losses of $8,433 and $15,677 respectively for the three and six month periods ended November 30, 2005.  Our net cash used in operations for the six months ended November 30, 2006 was $493,857 compared to $39,539 used in the six months ended November 30, 2005.  Our accumulated losses increased to $747,456 as of November 30, 2006.  General, administrative and corporate expenses increased to $155,658 and $171,820 respectively for the three and six month periods ended November 30, 2006, as compared to $Nil and $Nil for the three and six month periods ended November 30, 2005, which reflects the change in focus of the Company and the significant increase in exploration activities. Our total liabilities as of November 30, 2006 were $1,213,846 as compared to total liabilities of $6,580 as of November 30, 2005. Liquidity and Capital Resources At November 30, 2006, we had cash on hand of $762,163 and working capital of $667,884. In order to proceed with our plans we raised funds by way of a private placement of equity securities in our company during September 2006 and issued 4,000,000 common shares of our capital stock for total gross proceeds of $1,600,000. 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 phases 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 the mineral claims.  We have not undertaken any efforts to locate a joint venture partner for the mineral claims.  Even if we determined to      16  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. Product Research and Development We do not intend to spend any funds on product research and development over the twelve months. Purchase of Significant Equipment We do not intend to purchase any significant equipment over the twelve months. Employees As of the date of this quarterly report, we do not have any employees other than our officers who serve the company on a contract consulting basis.  We intend to retain independent geologists and consultants on a contract basis to conduct the work programs on our mineral properties. Subsidiaries On August 17, 2006, we completed our acquisition of all of the issued and outstanding common stock of ARI, a privately-owned Colorado corporation engaged in mineral exploration.  As a result, ARI is now a wholly-owned subsidiary of our company. ARI owned a 100% interest in the 13 MAN unpatented mining claims on a property located in south eastern Arizona. We also own 98% of the issued and outstanding common shares of Minera Milenium, a Mexican incorporated company, which holds an option to earn a 100% interest in 3 mining claims/concessions in Durango, Mexico, known as the Gavilanes Property. We acquired Bolsa, an Arizona company, in September 2006, to facilitate the acquisition of the Courtland claims in south eastern Arizona.  We now refer to the Courtland Area and the MAN Area together as the Hill Copper Project. 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 annual financial statements for the year ended May 31, 2006, 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. Off-Balance Sheet Arrangements We have no significant 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.       17   Recent Accounting Pronouncements In February 2006, the FASB issued SFAS No. 155 Accounting for Certain Hybrid Financial Instruments  an amendment of FASB Statements No. 133 and 140, to simplify and make more consistent the accounting for certain financial instruments. We have adopted the provisions of SFAS No. 155, which are effective in general for financial instruments acquired or issued in fiscal years beginning after September 15, 2006. The adoption did not have a material effect on the results of operations of our company. In March 2006, the FASB issued SFAS No. 156 Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. Our company has adopted the provisions of SFAS No. 156, which are effective in general for an entitys fiscal year beginning after September 15, 2006. The adoption did not have a material effect on the results of operations of our company. In June 2006, the FASB issued FIN 48 Accounting for Uncertainty in Income Taxes which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with FASB Statement No. 109,Accounting for Income Taxes.This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition and is effective for fiscal years beginning after December 15, 2006. In September 2006, the FASB issued SFAS 157 Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement, which is effective for years beginning after November 15, 2007, applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. In September 2006, the FASB issued SFAS 158 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans which takes effect as of the end of the fiscal year ending after December 15, 2006.  However, as the Company does not have any such plans and does not intend to implement such, this will have no impact on the Company. Application of Critical Accounting Policies The preparation of financial statements in conformity with United States 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. RISK FACTORS Much of the information included in this quarterly report includes or is based upon estimates, projections or other forward looking statements. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other forward looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward looking statements.       18   Our common shares are considered speculative. Prospective investors should consider carefully the risk factors set out below. Risks Related To Our Business Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake.  These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  If the results of our exploration do not reveal viable commercial
mineralization, we may decide to abandon our claims.  If this happens, our business will likely fail. Because of the speculative nature of exploration of mineral properties, there is no assurance that our exploration activities will result in the discovery of new commercially exploitable quantities of minerals. We plan to conduct mineral exploration on our mineral properties.  The search for valuable minerals as a business is extremely risky.  We can provide investors with no assurance that additional exploration on our properties will establish that commercially exploitable reserves of minerals exist on our property.  Additional potential problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish the presence of commercially exploitable reserves of minerals on our property our ability to fund future exploration activities will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company. Because our mineral properties are without known mineral reserves and because we have never made a profit from our operations, our securities are highly speculative and investors may lose all of their investment in our company. Our securities must be considered highly speculative, generally because of the nature of our business and our early stage of exploration.  Our mineral properties are in the exploration stage only and are without known deposits of minerals.  Accordingly, we have not generated revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term.  Any profitability in the future from our business will be dependent upon locating and exploiting mineral reserves or selling the rights to exploit those mineral reserves. The likelihood of any of our mineral properties containing valuable and commercially exploitable minerals is extremely remote.  In all probability, our mineral properties do not contain any reserves and any funds that we spend on exploration will be lost.  We may never discover mineral resources
in our mineral properties or any other area, or we may do so and still not be commercially successful if we are unable to exploit those resources profitably or earn revenues from selling the rights to exploit any mineral resources we discover.  We may not be able to operate profitably and may have to cease operations, the price of our securities may decline and investors may lose all of their investment in our company. Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business. The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  At the present time we have no coverage to insure against these hazards.  The payment of such liabilities may have a material adverse effect on our financial position.       19   The potential profitability of mineral ventures depends in part upon factors beyond the control of our company and even if we discover and exploit mineral deposits, we may never become commercially viable and we may be forced to cease operations. The commercial feasibility of mineral properties is dependent upon many factors beyond our control, including the existence and size of mineral deposits in the properties we explore, the proximity and capacity of processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental regulation.  These factors cannot be accurately predicted and any one or a combination of these factors may result in our company not receiving an adequate return on invested capital.  These factors may have material and negative effects on our financial performance and our ability to continue operations. Exploration and exploitation activities are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company. Exploration and exploitation activities are subject to federal, provincial, and local laws, regulations and policies, including laws regulating the removal of natural resources from the ground and the discharge of materials into the environment.  Exploration and exploitation activities are also subject to federal, provincial, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted, and no assurance can be given that such permits will be received.  Environmental and other legal standards imposed by federal, provincial, or local authorities may be changed and any such changes may prevent us from conducting planned activities or increase our costs of doing so, which would have material adverse effects on our business.  Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us.  Additionally, we may be subject to liability for pollution or other environmental damages which we may not be able to or elect not to insure against due to prohibitive premium costs and other reasons.  Any laws, regulations or policies of any government body or regulatory agency may be changed, applied or interpreted in
a manner which will alter and negatively affect our ability to carry on our business. As we face intense competition in the mineral exploration industry, we will have to compete with our competitors for financing and for qualified managerial and technical employees. Our mineral properties are in Arizona and Mexico and our competition there includes large, established mining companies with substantial capabilities and with greater financial and technical resources than we have.  As a result of this competition, we may have to compete for financing and be unable to acquire financing on terms we consider acceptable.  We may also have to compete with the other mining companies in the recruitment and retention of qualified managerial and technical employees.  If we are unable to successfully compete for financing or qualified employees, our exploration programs may be slowed down or suspended, which may cause us to cease operations as a company. Risks Associated With Our Company We have a history of losses and have a deficit, which raises substantial doubt about our ability to continue as a going concern. We have not generated any revenues since our incorporation and we will continue to incur operating expenses without revenues until we are in commercial deployment.  Our net loss from inception February 19, 2004 to November 30, 2006 was $747,456.  We had cash in the amount of $762,163 as of November 30, 2006.  We currently do not have any operations and we have no income.  We estimate our average monthly operating expenses to be approximately $100,000 each month.  We cannot provide assurances that we will be able to successfully explore and develop our business.  These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors report on our audited financial statements, dated August 21, 2006, as per our Form 10-KSB.  If we are unable to continue as a going concern, investors will likely lose all of their
investments in our company.       20   Our future is dependent upon our ability to obtain financing.  If we do not obtain such financing, we may have to cease our exploration activities and investors could lose their entire investment. There is no assurance that we will operate profitably or will generate positive cash flow in the future.  We will require additional financing in order to proceed beyond the first few months of our exploration program.  We will also require additional financing for the fees we must pay to maintain our status in relation to the rights to our properties and to pay the fees and expenses necessary to become and operate as a public company.  We will also need more funds if the costs of the exploration of our mineral claims are greater than we have anticipated.  We will also require additional financing to sustain our business operations if we are not successful in earning revenues.  We currently do not have any arrangements for further financing and we may not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when it is required.  Our future is dependent upon our
ability to obtain financing.  If we do not obtain such financing, our business could fail and investors could lose their entire investment. Because we may never earn revenues from our operations, our business may fail and then investors may lose all of their investment in our company. We have no history of revenues from operations.  We have never had significant operations and have no significant assets.  We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably.  Our company has a limited operating history and is in the exploration stage.  The success of our company is significantly dependent on the uncertain events of the discovery and exploitation of mineral reserves on our properties or selling the rights to exploit those mineral reserves.  If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company. Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues.  We therefore expect to incur significant losses into the foreseeable future.  We recognize that if we are unable to generate significant revenues from the exploration of our mineral claims in the future, we will not be able to earn profits or continue operations.  There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability.  If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company. Risks Associated With Our Common Stock We do not intend to pay dividends on any investment in the shares of stock of our company. We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future.  To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend.  Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stocks price.  This may never happen and investors may lose all of their investment in our company. Our stock is a penny stock.  Trading of our stock may be restricted by the SECs penny stock regulations which may limit a stockholders ability to buy and sell our stock. Our stock is a penny stock.  The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.  Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors.  The term accredited investor refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standard risk
disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must      21  be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation.  In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.  Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.  We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock. Item3.
        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 November 30, 2006.  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. PART II-OTHER INFORMATION Item1.  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 None. Item 3.
        Defaults Upon Senior Securities None. Item 4.  Submission of Matters to a Vote of Security Holders None. Item 5.Other Information Effective as of June 16, 2006, our board of directors passed a resolution cancelling the Bylaws in their entirety and replacing them with a new set of Bylaws.  Our new Bylaws can be found under Exhibit 3.1 of the current report on Form 8-K filed on October 10, 2006.       22   Item6.Exhibits  Number
        Description3.1
        Articles of Incorporation(1)3.2
        By-Laws (13)3.3
        Specimen Stock Certificate (2)10.1
        Mining Quitclaim Deed (1)10.2
        Mineral Exploration Management Service Agreement between Alaska Earth Sciences, Inc. and Furio Resources Inc. dated March 7, 2005 (3)10.3
        Geophysical Survey Agreement between SJ Geophysical Ltd. and Furio Resources Inc. dated May 5, 2005 (4)10.4
        Agreement between Aurelio Resources Inc. and Furio Resources Inc. dated April 27, 2006 (5)10.5
        Amended Agreement between Aurelio Resources Inc. and Furio Resources Inc. dated June 9, 2006 (6)10.6
        Amended Agreement between Aurelio Resources Inc. and Aurelio Resource Corporation dated July 13, 2006 (7)10.7
        Consulting Agreement among Aurelio Resource Corp., International American Resources Inc. and Dr. Frederik Warnaars dated August 9, 2006 (8)10.8
        Consulting Agreement among Aurelio Resource Corp., Jonson Management Company and David C. Jonson dated August 9, 2006(8)10.9
        Consulting Agreement among Aurelio Resource Corp., Salzburg Holdings Inc. and Stephen Doppler dated August 9, 2006 (8)10.10
        Purchase Agreement dated May 15, 2006, between Aurelio Resources Inc. and Hope Mining and Milling Company (10)10.11
        Amending Agreement dated September 11, 2006 between Aurelio Resources Inc., Bolsa Resources Inc. and Hope Mining and Milling Company (10)10.12
        Form of Subscription Agreement  US Accredited (12)10.13
        Form of Subscription Agreement  Offshore (12)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 and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
        Certification Statement of the Chief Executive Officer and 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. (2) Incorporated by reference to our Form 8-A filed with the Securities and Exchange Commission on September 10, 2004. (3) Incorporated by reference to our Form 10-QSB filed with the Securities and Exchange Commission on April 5, 2005. (4) Incorporated by reference to our Form 10-KSB filed with the Securities and Exchange Commission on July 27, 2005. (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.       23   (9)
        Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on August 11, 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. 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:  January 19, 2007