UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC  20549





FORM
10-Q





[ X
]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934


FOR THE
QUARTERLY PERIOD ENDED OCTOBER 31, 2008





Commission
File Number 0-20722





FIRSTGOLD
CORP.


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





DELAWARE
                  
                  16-1400479(State
      of other jurisdiction of incorporation or organization)
                  
                  (I.R.S.
      Employer Identification Number)3108
      Ponte Morino Drive, Suite 210
                    Cameron
      Park, CA
                  
                  95682(Address
      of Principal Executive Offices)
                  
                  Zip
      CodeIssuer's
      telephone number: (530)
      677-5974





Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the issuer 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 by Rule
12b-2 of the Exchange Act)




YES                                              NO X


Common
stock, $0.001 par value, of which 131,145,543 were issued and outstanding as
of December 15, 2008.




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




Large
      accelerated filer
                          
                          Accelerated
      filerNon-accelerated
      filer
                          
                          Smaller
      reporting company X






1


INDEX






PagePART
      I - FINANCIAL INFORMATION
              3ITEM 1. FINANCIAL STATEMENTS
              3ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATIONS
              20ITEM 4T. CONTROLS AND PROCEDURES
              26PART
      II - OTHER INFORMATION
              26ITEM 1A. FACTORS AFFECTING FUTURE OPERATING
      RESULTS
              26ITEM 2. UNREGISTERD SALES OF EQUITY
      SECURITIES
              29ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
              29ITEM 6. EXHIBITS
              29





























2


PART
I - FINANCIAL INFORMATION




ITEM 1. FINANCIAL
STATEMENTS





FIRSTGOLD
CORP.


INDEX
TO UNAUDITED FINANCIAL STATEMENTS







PageCondensed Balance Sheet as of October 31, 2008
      (Unaudited)and for fiscal year ended January 31, 2008
      (Audited)
              4Condensed Statements of Operations for the nine and
      three months endedOctober 31, 2008 and 2007
    (Unaudited)
              6Condensed Statements of Cash Flows for the nine
      monthsended October 31, 2008 and 2007
      (Unaudited)
              7Notes to Unaudited Financial Statements
              10
















































































3


FIRSTGOLD CORP.


(A
DEVELOPMENT STAGE COMPANY)


BALANCE
SHEET


October
      31
                  
                  
                  January
      31,2008
                  
                  
                  2008(unaudited)ASSETSCurrent
      assets:Cash
                  
                  $
                  467,602
                  
                  
                  $
                  383,223Receivables
                  
                  
                  52,776
                  
                  
                  
                  196,811Deposits
                  
                  
                  71,668
                  
                  
                  
                  295,281Prepaid
      expense
                  
                  
                  235,514
                  
                  
                  
                  242,577Inventory
                  
                  
                  208,026
                  
                  
                  
                  7,721Total
      current assets
                  
                  
                  1,035,586
                  
                  
                  
                  1,125,613Property, plant and
      equipment, net of accumulated depreciation
      of    $583,914 and $205,084 at October 31 and January
      31, 2008, respectively
                  
                  
                  13,545,730
                  
                  
                  
                  8,438,997Other
      AssetsRestricted
      cash
                  
                  
                  2,980,102
                  
                  
                  
                  674,850Deferred
      reclamation costs
                  
                  
                  2,864,172
                  
                  
                  
                  680,326Total
      other assets
                  
                  
                  5,844,277
                  
                  
                  
                  1,355,176Total
      assets
                  
                  $
                  20,425,593
                  
                  
                  $
                  10,919,786
  LIABILITIES
AND SHAREHOLDERS' DEFICIT
 
 Current
      liabilitiesAccounts
      payable
                  
                  $
                  1,228,839
                  
                  
                  $
                  2,730,596Accrued
      expenses
                  
                  
                  1,085,349
                  
                  
                  
                  538,987Convertible
      debenture net of deferred financing costs of$17,577
      and $32,162 at October 31 and January 31, 2008,
    respectively
                  
                  
                  632,423
                  
                  
                  
                  501,520Note
      payable
                  
                  
                  79,619
                  
                  
                  
                  163,726Total
      current liabilities
                  
                  
                  3,026,230
                  
                  
                  
                  3,934,829Long-term
      liabilitiesSenior
      secured notes net of deferred  financing  costs
      of$7,934,109
      and $0 and original issue discount of $1,542,682 and $0at
      October 31 and January 31, 2008, respectively
                  
                  
                  4,065,891
                  
                  
                  
                  -Accrued
      reclamation costs
                  
                  
                  2,864,172
                  
                  
                  
                  680,326Notes
      payable
                  
                  
                  798,184
                  
                  
                  
                  192,691Deferred
      revenue
                  
                  
                  800,000
                  
                  
                  
                  937,650Total
      long-term liabilities
                  
                  
                  8,528,247
                  
                  
                  
                  1,810,667Total
      liabilities
                  
                  
                  11,554,477
                  
                  
                  
                  5,745,496


4


FIRSTGOLD
CORP.


(A
DEVELOPMENT STAGE COMPANY)


BALANCE
SHEET





October
      31,
                                            
                                            
                                            January
      31,2008
                                            
                                            
                                            2008(unaudited)Commitments
      and contingenciesShareholders'
      surplus (deficit)Common
      stock, $0.001 par value250,000,000
      shares authorized at October 31 and January 31, 2008,
      respectively131,145,543
      and 117,432,317 shares issued and outstanding atOctober
      31 and January 31, 2008, respectively
                                            
                                            
                                            131,146
                                            
                                            
                                            
                                            117,432Additional
      paid in capital
                                            
                                            
                                            49,813,400
                                            
                                            
                                            
                                            36,447,996Deficit
      accumulated during the exploration stage
                                            
                                            
                                            (41,073,430
                                            )
                                            
                                            
                                            (31,391,142
                                            )Total
      shareholders' surplus (deficit)
                                            
                                            
                                            8,8171,116
                                            
                                            
                                            
                                            5,174,290Total
      liabilities and shareholders' surplus
                                            
                                            $
                                            20,425,593
                                            
                                            
                                            $
                                            10,919,786


5


FIRSTGOLD CORP.


(AN
EXPLORATION STAGE COMPANY)


STATEMENTS
OF OPERATIONS


For
the Nine and Three Months Ended October 31, 2008 and 2007


and
for the Period from January 1, 1995 to October 31, 2008







For
      the Nine Months Ended
                    
                    
                    For
      the Three Months Ended
                    
                    
                    For
      the Period From January 1,October 31,
                    
                    
                    October 31,
                    
                    
                    1995
      to October2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007
                    
                    
                    31, 2008Net
      Sales
                    
                    $
                    722,466
                    
                    
                    $
                    -
                    
                    
                    $
                    77,106
                    
                    
                    $
                    -
                    
                    
                    $
                    1,273,745Exploration
      and maintenance costs
                    
                    
                    4,382,503
                    
                    
                    
                    870,828
                    
                    
                    
                    1,368,990
                    
                    
                    
                    505,037
                    
                    
                    
                    8,471,855Gross
      loss
                    
                    
                    (3,660,037
                    )
                    
                    
                    (970,828
                    
                    
                    
                    (1,291,884
                    )
                    
                    
                    (505,037
                    )
                    
                    
                    (7,198,110
                    )Operating
      expenses
                    
                    
                    (4,638,709
                    )
                    
                    
                    (3,933,654
                    
                    
                    
                    (1,669,783
                    )
                    
                    
                    (1,664,954
                    )
                    
                    
                    (26,221,683
                    )Loss
      from operations
                    
                    
                    (8,298,746
                    )
                    
                    
                    (4,904,482
                    )
                    
                    
                    (2,961,667
                    )
                    
                    
                    (2,169,991
                    )
                    
                    
                    (33,419,796
                    )Other
      (expense)Interest
      income
                    
                    
                    23,876
                    
                    
                    
                    172,310
                    
                    
                    
                    1,344
                    
                    
                    
                    89,004
                    
                    
                    
                    302,547Dividend
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    30,188Gain
      on settlement of obligations
                    
                    
                    22,851
                    
                    
                    
                    455,533
                    
                    
                    
                    -
                    
                    
                    
                    454,653
                    
                    
                    
                    1,149,375Other
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    6,565Adjustments
      to fair value of derivatives
                    
                    
                    -
                    
                    
                    
                    (703,992
                    )
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,357,903
                    )Interest
      expense
                    
                    
                    (1,430,271
                    )
                    
                    
                    (831,319
                    )
                    
                    
                    (1,275,991
                    )
                    
                    
                    (307,780
                    )
                    
                    
                    (5,305,727
                    )Loss
      from joint venture
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (859,522
                    )Loss
      on sale of marketable securities
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (281,063
                    )Bad
      debt expense
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (40,374
                    )Loss
      on disposal of plant, propertyand
      equipment
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (334,927
                    )Loss
      on disposal of bond
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (21,000
                    )Total
      other income (expense)
                    
                    
                    (1,383,544
                    )
                    
                    
                    (907,468
                    )
                    
                    
                    (1,274,647
                    )
                    
                    
                    (235,877
                    )
                    
                    
                    (6,711,841Net
      loss
                    
                    $
                    (9,682,290
                    
                    
                    $
                    (5,811,950
                    )
                    
                    $
                    (4,236,314
                    )
                    
                    $
                    (1,934,114
                    )
                    
                    $
                    (40,131,637Basic
      and diluted loss per share
                    
                    $
                    (0.08
                    )
                    
                    $
                    (0.06
                    )
                    
                    $
                    (0.03
                    )
                    
                    $
                    (0.02
                    )Basic
      and diluted weighted-average
      sharesoutstanding
                    
                    
                    129,011,548
                    
                    
                    
                    94,725,487
                    
                    
                    
                    130,855,326
                    
                    
                    
                    109,455,871








6
 
 FIRSTGOLD CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS
 For
the Nine Months Ended October 31, 2008 and 2007
 and
for the Period from January 1, 1995 to October 31, 2008
    For
      the PeriodFor
      the Nine Months Ended
                                                    
                                                    
                                                    From
      January 1, 1995October 31,
                                                    
                                                    
                                                    to
      October 31,2008
                                                    
                                                    
                                                    2007
                                                    
                                                    
                                                    2008Cash
      flows from operating activitiesNet
      loss
                                                    
                                                    $
                                                    (9,682,290
                                                    )
                                                    
                                                    $
                                                    (5,811,950
                                                    )
                                                    
                                                    $
                                                    (37,279,345
                                                    )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Accretion
      of warrants issued as a debt discount
                                                    
                                                    
                                                    456,547
                                                    
                                                    
                                                    
                                                    32,370
                                                    
                                                    
                                                    
                                                    1,776,692Accretion
      of beneficial conversion
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    107,468Accretion
      of debt discount
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    279,437
                                                    
                                                    
                                                    
                                                    531,110Adjustments
      to  fair value of derivatives
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    703,992
                                                    
                                                    
                                                    
                                                    1,357,904Loss
      from joint venture
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    859,522Loss
      on sale of marketable securities
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    281,063Depreciation
      and amortization
                                                    
                                                    
                                                    742,191
                                                    
                                                    
                                                    
                                                    509,733
                                                    
                                                    
                                                    
                                                    1,005,521Loss
      on disposal of property, plant and equipment
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    334,927Impairment
      in value of property, plant and equipment
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    807,266Loss
      on disposal of bond
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    21,000Impairment
      in value of Relief Canyon Mine
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    3,311,672Impairment
      in value of joint  investments
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    490,000Bad
      debt
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    40,374Assigned
      value of stock and warrants exchanged for services
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    358,062
                                                    
                                                    
                                                    
                                                    2,108,452Assigned
      value of stock options issue for compensation
                                                    
                                                    
                                                    179,518
                                                    
                                                    
                                                    
                                                    83,015
                                                    
                                                    
                                                    
                                                    958,743Gain
      on write off of note payable
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (7,000
                                                    )Judgment
      loss accrued
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    250,000(Increase)
      decrease in:Restricted
      cash
                                                    
                                                    
                                                    (2,305,252
                                                    )
                                                    
                                                    
                                                    (463,169
                                                    )
                                                    
                                                    
                                                    (2,967,888
                                                    )Receivables
                                                    
                                                    
                                                    144,035
                                                    
                                                    
                                                    
                                                    82,647
                                                    
                                                    
                                                    
                                                    39,052Deposits
                                                    
                                                    
                                                    223,613
                                                    
                                                    
                                                    
                                                    (563,372
                                                    )
                                                    
                                                    
                                                    93,633Deferred
      reclamation costs
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    214,848Prepaid
      expenses
                                                    
                                                    
                                                    7,063
                                                    
                                                    
                                                    
                                                    (35,997
                                                    )
                                                    
                                                    
                                                    (251,449
                                                    )Inventory
                                                    
                                                    
                                                    (200,305
                                                    )
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (289,362
                                                    )Reclamation
      bonds
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    185,000Other
      assets
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    (1,600
                                                    )Increase
      (decrease) in:Accounts
      payable
                                                    
                                                    
                                                    (1,501,757
                                                    )
                                                    
                                                    
                                                    (392,957
                                                    )
                                                    
                                                    
                                                    (425,419
                                                    )
   7
   Accrued
      expenses
                                              
                                              
                                              (546,363
                                              )
                                              
                                              
                                              (139,827
                                              )
                                              
                                              
                                              420,013Net
      cash used by operating activities
                                              
                                              
                                              (12,483,000
                                              )
                                              
                                              
                                              (5,358,016
                                              )
                                              
                                              
                                              (25,965,159
                                              )Cash
      flows from investing activitiesProceeds
      from sale of marketable securities
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              34,124Investment
      in marketable securities
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (315,188
                                              )Advances
      from shareholder
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              7,436Contribution
      from joint venture partner
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              775,000Purchase
      of joint venture partner interest
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (900,000
                                              )Capital
      expenditures
                                              
                                              
                                              (5,485,563
                                              )
                                              
                                              
                                              (2,019,313
                                              )
                                              
                                              
                                              (16,139,347
                                              )Proceeds
      from disposal of property, plant and equipment
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              278,783Investments
      in joint ventures
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (490,000
                                              )Note
      receivable
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (268,333
                                              )Repayment
      of note receivable
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              268,333Net
      cash used by investing activities
                                              
                                              
                                              (5,485,563
                                              )
                                              
                                              
                                              (2,019,313
                                              )
                                              
                                              
                                              (16,749,192
                                              )Cash
      flows from financing activitiesProceeds
      from the issuance of common stock
                                              
                                              
                                              7,621,515
                                              
                                              
                                              
                                              11,010,441
                                              
                                              
                                              
                                              28,258,782Proceeds
      from notes payable
                                              
                                              
                                              12,149,707
                                              
                                              
                                              
                                              1,010,000
                                              
                                              
                                              
                                              19,390,474Principal
      repayments of notes payable
                                              
                                              
                                              (1,580,630
                                              )
                                              
                                              
                                              (13,085
                                              )
                                              
                                              
                                              (4,044,446
                                              )Repayment
      of advances to affiliate
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (231,663
                                              )Deferred
      revenue
                                              
                                              
                                              (137,650
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              800,000Net
      cash provided by financing activities
                                              
                                              
                                              18,052,942
                                              
                                              
                                              
                                              12,007,356
                                              
                                              
                                              
                                              44,173,137Net
      increase  in cash
                                              
                                              
                                              84,379
                                              
                                              
                                              
                                              4,630,027
                                              
                                              
                                              
                                              460,915Cash,
      beginning of year
                                              
                                              
                                              383,223
                                              
                                              
                                              
                                              150,647
                                              
                                              
                                              
                                              6,687Cash,
      end of period
                                              
                                              $
                                              467,602
                                              
                                              
                                              $
                                              4,780,674
                                              
                                              
                                              $
                                              467,602
 
 
 
 
 
 
 
 
 
 
 8
 FIRSTGOLD
CORP.
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS
 For
the Nine Months Ended October 31, 2008 and 2007
 and
for the Period from January 1, 1995 to October 31, 2008
 Supplemental
cash flow information for the nine months ended October 31, 2008 and 2007 and
January 1, 1995 through October 31, 2008 as follows:
 For
      the PeriodFor
      the Nine Months Ended
                                                                
                                                                
                                                                From
      January 1,October 31,
                                                                
                                                                
                                                                1995
      to October2008
                                                                
                                                                
                                                                2007
                                                                
                                                                
                                                                
                                                                31,
      2008Cash
      paid for interest
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                161,107Cash
      paid for income taxes
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -Non
      Cash Investing and Financing Activities:Conversion
      of related party note payable to commonstock,including
      interest payable of $446,193
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                2,093,573Conversion
      of convertible debentures to common stock,including
      interest of $217,151
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                3,186,203
                                                                
                                                                
                                                                $
                                                                4,359,609Issuance
      of warrants as financing costs in connectionwith
      convertible debt
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                2,093,573Issuance
      of common stock as payment for settlement of liabilities
                                                                
                                                                $
                                                                111,999
                                                                
                                                                
                                                                $
                                                                -
                                                                
                                                                
                                                                $
                                                                2,141,573




9


FIRSTGOLD CORP.


(A
DEVELOPMENT STAGE COMPANY)


NOTES
TO FINANCIAL STATEMENTS


For
the Nine Months Ended October 31, 2008







NOTE
1 - ORGANIZATION AND LINE OF BUSINESS





Firstgold
Corp. has been in the business of acquiring, exploring, developing, and
producing gold properties.  Firstgold had rights to mine properties in
Nevada and Montana.  Its primary focus was on the Relief Canyon
mine located near Lovelock, Nevada, where it has performed development and
exploratory drilling and was in the process of obtaining permits to allow
operation of the Relief Canyon Mine.  In December 1997, Firstgold
placed the Relief Canyon Mine on care and maintenance status.  From
mid-2001 until the beginning of 2003 Firstgold was essentially inactive, only
continuing with some of the care and maintenance at Relief Canyon, as
provided for by a non-affiliate company owned by the Chief Operating Officer of
Firstgold.





Firstgold
has embarked on a business strategy whereby it will invest in and/or manage the
exploration of gold and other mineral producing
properties.  Currently, Firstgold’s principal assets include various
mineral leases associated with the Relief Canyon mine located near
Lovelock, Nevada along with various items of mining equipment located at that
site.  Firstgold’s business will be to acquire, explore and, if
warranted, develop various mining properties located in the state of
Nevada.  Firstgold plans to carryout comprehensive exploration and
development programs on its properties.  Firstgold plans to
conduct these activities itself, although some activities may be
outsourced.  Consequently, Firstgold's current plan will require the
hiring of significant amounts of mining employees to carry out its future
mining and current exploration activities.





NOTE
2 - GOING CONCERN




These
financial statements have been prepared on a going concern
basis.  During the years ended January 31, 2008 and 2007 and the
period from January 1, 1995 to January 31, 2008, Firstgold incurred net losses
of approximately $7,632,537, $4,728,070,  and $30,449,347,
respectively.  In addition, Firstgold has been in the exploration
stage since inception and through October 31, 2008.  Information for
the nine months ended October 31, 2008 include a net loss of $9,682,290,
negative cash flows from operations of $12,483,000 and a deficit accumulated
during the exploration stage of $40,131,637.  The Company's ability to
continue as a going concern is dependent upon its ability to generate profitable
operations in the future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business operations
when they come due.  The outcome of these matters cannot be predicted
with any certainty at this time.  Since inception, the Company has
satisfied its capital needs by issuing equity and debt securities.


Management
plans to continue to provide for its capital needs during the year ending
January 31, 2009 by issuing equity securities or incurring additional debt
financing, with the proceeds to be used to re-establish mining operations at
Relief Canyon as well as improve its working capital
position.  These financial statements do not include any adjustments
to the amounts and classification of assets and liabilities that may be
necessary should Firstgold be unable to continue as a going
concern.




NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of
Presentation


These
financial statements have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission
(“SEC”).  Certain information and footnotes normally included in
financial statements prepared in accordance with generally accepted accounting
principles in the United States of America have been condensed or omitted
pursuant to these rules and regulations.




10




These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in Firstgold’s
Form 10-KSB, as filed with the SEC for the year ended January 31,
2008.





Exploration Stage
Company


Effective
January 1, 1995 (date of inception), the Company is considered a development
stage Company as defined in SFAS No. 7.  The Company’s development
stage activities consist of the development of several mining properties located
in Nevada. Sources of financing for these development stage activities have been
primarily debt and equity financing.  The Company has, at the present
time, not paid any dividends and any dividends that may be paid in the future
will depend upon the financial requirements of the Company and other relevant
factors.





Cash and Cash
Equivalents


For the
purpose of the statements of cash flows, Firstgold considers all highly liquid
investments purchased with original maturities of three months or less to be
cash equivalents.





Restricted
Cash


Restricted
cash represents a certificate of deposit with Umpqua Bank to serve as collateral
for a reclamation bond with the Nevada Department of Environmental Protection at
the Relief Canyon Mine.





Deferred Reclamation
Costs


In August
2001, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset
Retirement Obligations,” which established a uniform methodology for accounting
for estimated reclamation and abandonment costs.  The statement was
adopted February 1, 2003.  The reclamation costs will be allocated to
expense over the life of the related assets and will be adjusted for changes
resulting from the passage of time and revisions to either the timing or amount
of the original present value estimate.





Prior to
adoption of SFAS No. 143, estimated future reclamation costs were based
principally on legal and regulatory requirements.  Such costs related
to active mines were accrued and charged over the expected operating lives of
the mines using the UOP method based on proven and probable
reserves.  Future remediation costs for inactive mines were accrued
based on management’s best estimate at the end of each period of the
undiscounted costs expected to be incurred at a site.  Such cost
estimates included, where applicable, ongoing care, maintenance and monitoring
costs.  Changes in estimates at inactive mines were reflected in
earnings in the period an estimate was revised.





Valuation of Derivative
Instruments


FAS
No. 133 "Accounting for Derivative Instruments and Hedging Activities"
requires bifurcation of embedded derivative instruments and measurement of their
fair value for accounting purposes. In determining the appropriate fair value,
the Company uses the Black Scholes model as a valuation
technique.  Derivative liabilities are adjusted to reflect fair value
at each period end, with any increase or decrease in the fair value being
recorded in results of operations as Adjustments to Fair Value of Derivatives.
In addition, the fair values of freestanding derivative instruments such as
warrants are valued using Black Scholes models.




Revenue
Recognition


Revenues
will be recognized when deliveries of gold are made, title and risk of loss
passes to the buyer and collectibility is reasonably
assured.  Deferred revenue represents non-refundable cash received in
exchange for royalties on net smelter returns on the Relief Canyon
Mine.  Deferred revenue will be amortized to earnings based on
estimated production in accordance with the royalty agreement.




11




Risks Associated with Gold
Mining


The
business of gold mining is subject to certain types of risks, including
environmental hazards, industrial accidents, and theft.  Prior to
suspending operations, Firstgold carried insurance against certain property
damage loss (including business interruption) and comprehensive general
liability insurance.  While Firstgold maintained insurance consistent
with industry practice, it is not possible to insure against all risks
associated with the mining business, or prudent to assume that insurance will
continue to be available at a reasonable cost.  Firstgold has not
obtained environmental liability insurance because such coverage is not
considered by management to be cost effective.  Firstgold currently
carries no insurance on any of its properties due to the current status of the
mine and Firstgold’s current financial condition.





Comprehensive
Income


Firstgold
utilizes SFAS No. 130, “Reporting Comprehensive Income.”  This
statement establishes standards for reporting comprehensive income and its
components in a financial statement.  Comprehensive income as defined
includes all changes in equity (net assets) during a period from non-owner
sources.  Examples of items to be included in comprehensive income,
which are excluded from net income, include foreign currency translation
adjustments, minimum pension liability adjustments, and unrealized gains and
losses on available-for-sale marketable securities.  Comprehensive
income is presented in Firstgold's financial statements since Firstgold did have
unrealized gain (loss) from changes in equity from available-for-sale marketable
securities.





Estimates


The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period.  Actual results could differ from those
estimates.





Loss Per
Share


Firstgold
utilizes SFAS No. 128, “Earnings per Share.”  Basic loss per share is
computed by dividing loss available to common shareholders by the
weighted-average number of common shares outstanding.  Diluted loss
per share is computed similar to basic loss per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive.  Common equivalent
shares are excluded from the computation if their effect is
anti-dilutive.





The
following common stock equivalents were excluded from the calculation of diluted
loss per share since their effect would have been anti-dilutive:





2008
                      
                      
                      2007Warrants
                      
                      
                      65,125,530
                      
                      
                      
                      39,500,976Stock
      options
                      
                      
                      5,833,790
                      
                      
                      
                      3,750,000




Recent Accounting
Pronouncements


In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (SFAS 159).  Under the
provisions of SFAS 159, Companies may choose to account for eligible financial
instruments, warranties and insurance contracts at fair value on a
contract-by-contract basis. Changes in fair value will be recognized in earnings
each reporting period. SFAS 159 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.




12


The
Company adopted the provisions of SFAS 159 beginning in the first quarter of
fiscal 2009. The Company does not expect the adoption of SFAS 159 will have a
material impact on Firstgold's results of operations, financial position or cash
flow.





In
December 2007, the FASB released FAS 141R, “Business Combinations” and FAS 160,
“Non-controlling Interests in Consolidated Financial
Statements.”  Both standards will be effective for transactions that
occur after January 1, 2009.  FAS 141R applies to all business
combinations and will require the acquiring entity to recognize the assets and
liabilities acquired at their respective fair value.  This standard
changes the accounting for business combinations in several areas.  If
we complete an acquisition after the effective date of FAS 141R, some of these
changes could result in increased volatility in our results of operations and
financial position.  For example, transaction costs, which are
currently capitalized in a business combination, will be expensed as
incurred.  Additionally, pre-acquisition contingencies (such as
in-process lawsuits acquired) and contingent consideration (such as additional
consideration contingent on specified events in the future) will be recorded at
fair value at the acquisition date, with subsequent changes in fair value
reflected in our results of operations.  Under current accounting
guidance, adjustments to these contingencies are reflected in the allocation of
purchase price if they occur within a certain period of time after the
acquisition date.





NOTE
4 - PROPERTY AND EQUIPMENT





Property
and equipment was recorded at $14,129,644 and $2,968.192 at October 31, 2008 and
2007, respectively.  Depreciation expense was $378,830 and $110,389
for the nine months ended October 31, 2008 and 2007, respectively





NOTE
5 - NOTES PAYABLE





Notes
payable consist of the following at October 31, 2008:





Equipment
      notes payable
                
                $
                550,684The
      first note does not bear any interest and is due in December
      2010.  The second note bears interest at 8.6% and is due June
      2011.  The third note bears interest at 5.7% and is due June
      2013.The loans are secured by a Caterpillar loader, backhoe and
      grader.Mortgage
      notes payable
                
                
                315,000The
      first note of $247,500 bears interest at 6.75% with monthly principal and
      interest payments and is due in September 2013.  The second note
      of $67,500 bears interest at 6.75% and is due March 2009 with accrued
      interest and principal due at maturity.  If Firstgold completes
      required water line improvements to the property by the due date of the
      second note then the second note and accrued interest will be
      forgiven.  The loans are secured by a building and five acres of
      land in Lovelock, NV.Insurance
      premium note payable
                
                
                12,119The
      note bears interest at 5.6%, is payable monthly and is due December
      2008.Total
      notes payable
                
                $
                877,803





13


Firstgold
recorded interest expense of $1,275,991 and $1,430,271 for the three months and
nine months ended October 31, 2008 compared to interest expense of $307,780 and
$831,319 for the three months and nine months ended October 31,
2007.





NOTE
6 – CONVERTIBLE DEBENTURES AND SENIOR SECURED NOTES





September 2006 Convertible
Debenture


In
September 2006, Firstgold entered into a Securities Purchase Agreement (the
“Purchase Agreement”) and other agreements, as amended on November 1, 2006, in
connection with the private placement of convertible debentures, in the
aggregate principal amount of $3,000,000 and bearing interest at 8% per annum
(the “Debenture”).  The Debentures were funded $1,000,000 on September
26, 2006, $1,000,000 upon the filing of a resale registration statement with the
SEC on December 1, 2006 and $1,000,000 on March 15, 2007.  Of the
$1,000,000 funded on September 26, 2006, $120,000 was paid for various loan fees
and closing costs; of the $1,000,000 funded December 1, 2006, $90,000 was paid
for various loan fees and closing costs; and of the $1,000,000 funded March 19,
2007, $90,000 was paid for various loan fees and closing
costs.




The
Debentures were due and payable three years after the issue date unless
converted into shares of common stock or repaid prior to its expiration
date.  The conversion rate was adjustable and at any conversion date,
would be the lower of $0.45 per share or 95% of the Market Conversion
Price.  On July 13, 2007 $450,000 of the Debenture dated March 15,
2007 was converted into 1,000,000 shares of common stock. On September 13, 2007
the $1,000,000 Debenture dated September 26, 2006 was converted into 2,222,222
shares of common stock. On October 12, 2007 $450,000 of the Debenture dated
December 1, 2006 was converted into 1,000,000 shares of common stock. On October
16, 2007 $450,000 of the Debenture dated December 1, 2006 was converted into
1,000,000 shares of common stock. On October 30, 2007 1,444,444 shares of common
stock were issued in conversion of the remaining $650,000 in principal of
outstanding Secured Convertible Debentures.  An additional 413,784
shares of common stock was issued in conversion of $186,203 of accrued interest
on the Secured Convertible Debentures.





October 2006 Convertible
Debentures





In
October 2006, Firstgold issued convertible debentures in the aggregate principal
amount of $650,000 and bearing interest of 8% per annum.  The
Debentures and accrued interest are convertible into shares of Firstgold common
stock at a conversion rate of $0.405 per share.  The Debentures are
due and payable three years from the date of issue unless they are converted
into shares of the Company’s common stock or are repaid prior to their
expiration date.  Additionally, the investors were issued warrants to
purchase an aggregate of 746,843 shares of Firstgold common stock exercisable at
$0.45 per warrant.  The warrants were issued as financing costs and
total deferred financing cost of $173,114 was recorded in relation to this
debt.





May 2008 Convertible
Debenture





In May
2008, Firstgold issued a convertible debenture in the principal amount of
$1,100,000 and bearing interest of 10% per annum.  The Debentures and
accrued interest are convertible into shares of Firstgold common stock at a
conversion rate of $0.80 per share.  The Debentures are due and
payable 20 months from the date of issue unless they are converted into shares
of the Company’s common stock or are repaid prior to their expiration
date.  Additionally, the investor was issued warrants to purchase an
aggregate of 1,100,000 shares of Firstgold common stock exercisable at $1.00 per
warrant.  The warrants were issued as financing costs and total
deferred financing cost of $296,102 was recorded in relation to this
debt.  The May 2008 Convertible Debenture along with a $250,000 Note
Payable were repaid in full in August 2008..





14


August/September 2008 Senior
Secured Promissory Notes





On August
7, 2008, Firstgold Corp. (the “Company”) entered into a Note and Warrant
Purchase Agreement (the “Agreement”) with Platinum Long-Term Growth, LLC and
Lakewood Group, LLC, two US-based investment funds (the
“Lenders”).  Pursuant to the Agreement, the Lenders will fund up to
$15,750,000 in Senior Secured Promissory Notes.  Funding of the loan
will occur in five tranches of which the first occurred at the initial closing
on August 7, 2008 in the aggregate amount of $6,742,625 (the “Initial Note
Amount”).  A first interim funding occurred August 27, 2008 in the
amount of $472,973. A second interim funding occurred September 10, 2008 in the
amount of $1,351,351.  The second close funding occurred September 29,
2008 in the amount of $3,433,051.  Three additional tranches of
$1,250,000 each will be available during the months of November and December,
2008 and January 2009 subject to the Company achieving certain operational
conditions.  The loans bear an interest rate of 4% per annum with
interest payments commencing in September, 2008.  The loans are due
and payable on March 1, 2010.




During
the time that any debt remains owed to the Lenders the Agreement limits the
Company’s ability to incur any additional indebtedness and, the Company must
obtain the Lender’s consent to enter into certain future transactions including
any future merger, sale of a substantial portion of its assets or becoming
involved in any partnership or joint venture.




In
conjunction with the making of the loan, the lenders were issued, on a pro rata
basis, Warrants to purchase up to 15,000,000 shares of the Company’s common
stock at an exercise price of $.4357 cents per share which may be adjusted
downward based on future market conditions but in no event less than $.3961
cents per share.  The Warrants have a term of 3 years. The Warrants
also provide for a Put Right in which the Warrant holder after August 7, 2009
may require the Company to repurchase the Warrants at a redemption price of $.30
per Warrant.  The Put Right is exercisable for a period of one
year.




The cost
of the loan transaction includes an original issue discount of 15% on each note
amount plus a 4% origination fee and 7% broker’s commission.




NOTE
7 - COMMITMENTS AND CONTINGENCIES





Except
for the advance royalty and rent payments noted below, Firstgold is not
obligated under any capital leases or non-cancelable operating lease with
initial or remaining lease terms in excess of one year as of October 31,
2008.  However, minimum annual royalty payments are required to retain
the lease rights to Firstgold’s properties.





Relief Canyon
Mine


Our
mining property rights are represented by 141 unpatented mill site and mining
lode claims which were re-staked in October 2004 and June
2006.  Unpatented mining claims are generally considered subject to
greater title risks than patented mining claims or real property interests that
are owned in fee simple.  To remain valid, such unpatented claims are
subject to annual maintenance fees.  As of October 31, 2008, we were
current in the payment of such maintenance fees.





During
1996, Repadre Capital Corporation (“Repadre”) purchased for $500,000 a net
smelter return royalty (Repadre Royalty).  Repadre was to receive a
1.5% royalty from production at each of the Relief Canyon Mine and Mission
Mines. In July 1997, an additional $300,000 was paid by Repadre for an
additional 1% royalty from the Relief Canyon Mine.  In October, 1997,
when the Mission Mine lease was terminated, Repadre exercised its option to
transfer the Repadre Royalty solely to the Relief Canyon Mine resulting in a
total 4% royalty.  The total amount received of $800,000 has been
recorded as deferred revenue in the accompanying financial
statements.





15


On
February 8, 2007, a complaint was filed against ASDi, LLC, Crescent Red Caps
LLC, Firstgold, and Scott Dockter by the Lessors of the Crescent Valley and
Red Caps mining properties.  The complaint was filed in the Sixth
Judicial District Court of Lander County, Nevada (Case No. 9661). In the
complaint the plaintiffs allege that ASDi, LLC wrongfully assigned its lessee
rights in the Crescent Valley and Red Caps mining properties to Crescent
Red Caps LLC (of which Firstgold is the Managing
Member).




In late
March, 2008 the parties reached a settlement agreement and the case was
dismissed by the Court on April 4, 2008.  As a result of the
Settlement, Firstgold paid $150,000 to Plaintiffs and Firstgold, ASDi LLC and
Crescent Red Caps LLC relinquished all right, title and interest in the Red Caps
and Crescent Valley leases to the Plaintiffs.  Consequently,
Firstgold no longer has any interest in these leases and will not pursue any
further exploration activity on such leased property.




On
September 24, 2007, a complaint was served on Firstgold by Swartz Private
Equity, LLC.  The complaint was filed in the District Court for the
Western District of New York (Case No. 07CV6447).  In the complaint,
plaintiff alleges that pursuant to an Investment Agreement dated October 4,
2000, and entered into with Firstgold’s former management, it is entitled to the
exercise of certain warrants in the amount of 1,911,106 shares of Firstgold
common stock or the equivalent cash value of $0.69 per share and a termination
fee of $200,000.  Firstgold filed an answer to the complaint on
December 3, 2007 and expects to vigorously defend this action.  The
lawsuit is now in the discovery phase.




On
January 30, 2008, a complaint was served on Firstgold by Park Avenue Consulting
Group, Inc.  The complaint was filed in the Supreme Court of the State
of New York but was subsequently removed to the Federal District Court for the
Southern District of New York (Case No. 08CV01850).  In late October
2008 the parties reached a settlement agreement.  As a result of the
Settlement, Firstgold is to pay to the Plaintiff $300,000 cash of which $50,000
has been paid and $250,000 remains outstanding; issue 300,000 shares of common
stock and issue 250,000 warrants to purchase shares of common stock at a price
of $0.4357 for a term of 3 years.




Firstgold
is involved in various other claims and legal actions arising in the ordinary
course of business.  In the opinion of management, the ultimate
dispositions of these matters will not have a material adverse effect on
Firstgold’s financial position, results of operations or liquidity.





NOTE
8 - SHAREHOLDERS' SURPLUS





Common
Stock


In
February 2008 warrants to purchase 250,000 shares of common stock were exercised
at an average exercise price of $0.25 per share.




In
February 2008 Firstgold received proceeds of $3,450,975 upon the issuance of
Units consisting of 5,309,193 shares of common stock and warrants to purchase
2,654,460 shares of common stock at an exercise price of $0.80 per
share.   The warrants have a term of 18 months.





In March
2008 Firstgold received proceeds of $4,261,822 upon the issuance of Units
consisting of 6,556,650 shares of common stock and warrants to purchase
3,278,325 shares of common stock at an exercise price of $0.80 per
share.   The warrants have a term of 18 months.





In April
2008 Firstgold received proceeds of $330,100 upon the issuance of Units
consisting of 507,846 shares of common stock and warrants to purchase 253,923
shares of common stock at an exercise price of $0.80 per
share.   The warrants have a term of 18 months.





16


In April
2008 warrants to purchase 200,000 shares of common stock were exercised at an
exercise price of $0.50 per share.





In May
2008 Firstgold received proceeds of $300,000 upon the issuance of Units
consisting of 461,538 shares of common stock and warrants to purchase 230,769
shares of common stock at an exercise price of $0.80 per
share.   The warrants have a term of 18 months.





In May
2008 Firstgold issued 127,999 shares of common stock to one person in settlement
of an existing note payable and accrued interest totaling $63,999.





In
October 2008 Firstgold issued 300,000 shares of common stock at a price of $0.16
per share to a consulting company in partial settlement of a prior
contract.





Warrants


The fair
market value of warrants issued during the nine months ended October 31, 2008 in
conjunction with the issuance of common stock was determined to be $1,836,890
and was calculated under the Black-Scholes option pricing model with the
following assumptions used:





Expected
      life
              1.5  to
      3 yearsRisk
      free interest rate
              1.53%
      to 2.72%Volatility
              63.39%
      to 162.87%Expected
      dividend yield
              None





The fair
value of these warrants has been recorded as both a debit and credit to
additional paid in capital.





The
following table presents warrant activity from January 31, 2008 through October
31, 2008:




Number
                    of
      Shares
                  
                  
                  Weighted-
                    Average
                    Exercise
                    PriceOutstanding,
      January31, 2008
                  
                  
                  39,507,146
                  
                  
                  $
                  0.47Exercised
                  
                  
                  (450,000
                  )
                  
                  $
                  (0.36
                  )Expired
                  
                  
                  (567,311)
                  
                  
                  $
                  (0.65
                  )Granted
                  
                  
                  26,635,695
                  
                  
                  $
                  0.58Outstanding,
      October 31, 2008
                  
                  
                  65,125,530
                  
                  
                  $
                  0.51Exercisable,
      October 31, 2008
                  
                  
                  65,125,530
                  
                  
                  $
                  0.51




Stock
options


The 2006
Plan provides for the issuance of non-qualified or incentive stock options to
employees, non-employee members of the board and consultants. The exercise price
per share is not to be less than the fair market value per share of the
Company’s common stock on the date of grant. The Board of Directors has the
discretion to determine the vesting schedule. Options may be either immediately
exercisable or in installments, but generally vest over a three-year period from
the date of grant. In the event the holder ceases to be employed by the Company,
all unvested options terminate and all vested installment options may be
exercised within an installment period following termination. In general,
options expire ten years from the date of grant. Stockholders voting at the 2007
Annual Stockholders meeting held on September 20, 2007 approved an increase in
the shares issuable under the 2006 Plan to a total of 10,000,000.





17


Effective
February 1, 2006, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 123(R), Share-Based Payment (SFAS 123(R)), which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors, including stock
options based on their fair values. Firstgold had not previously issued any
stock options prior to adoption of the 2006 Plan.  In March 2005,
the SEC issued Staff Accounting Bulletin No. 107 (SAB 107) to provide
guidance on SFAS 123(R). The Company has applied SAB 107 in its adoption of SFAS
123(R).





The
Company adopted SFAS 123(R) using the modified prospective transition method as
of and for the three months ended April 30, 2008. In accordance with the
modified prospective transition method, the Company’s financial statements for
prior periods have not been restated to reflect, and do not include, the impact
of SFAS 123(R). Share-based compensation expense recognized is based on the
value of the portion of share-based payment awards that is ultimately expected
to vest. Share-based compensation expense recognized in the Company’s Statement
of Operations during the three months ended April 30, 2008 includes
compensation expense for share-based payment awards granted during the current
fiscal year.





In
conjunction with the adoption of SFAS 123(R), the Company elected to attribute
the value of share-based compensation to expense using the straight-line method.
Share-based compensation expense related to stock options and restricted stock
grants was $59,311 for the three months ended April 30, 2008, and was recorded
in the financial statements as operating expense.





For the
nine months ended October 31, 2008 the Company’s calculations were made using
the Black-Scholes option pricing model with the following weighted average
assumptions: expected life, 36 months following the grant date; stock
volatility, 63.4% to 165.45%; risk-free interest rates of 1.77% to 2.97%; and no
dividends during the expected term. As stock-based compensation expense
recognized in the consolidated statement of operations pursuant to SFAS
No. 123(R) is based on awards ultimately expected to vest, expense for
grants beginning upon adoption of SFAS No. 123(R) on February 1, 2006
will be reduced for estimated forfeitures. SFAS No. 123(R) requires
forfeitures to be estimated at the time of grant and revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates.
Forfeitures are estimated based on historical experience.





A summary
of the Company’s stock option activity is as follows:





Weighted
      Ave.
                      
                      
                      Aggregate#
      of Shares
                      
                      
                      Exercise
      Price
                      
                      
                      Intrinsic
      ValueOutstanding
      as of January 31, 2008
                      
                      
                      4,650,000
                      
                      
                      $
                      0.61
                      
                      
                      $
                      0Granted
                      
                      
                      1,183,790
                      
                      
                      $
                      0.63
                      
                      
                      $
                      0Exercised
                      
                      
                      0
                      
                      
                      $
                      0.00Cancelled
                      
                      
                      0
                      
                      
                      $
                      0.00Outstanding
      as of October 31, 2008
                      
                      
                      5,751,038
                      
                      
                      $
                      0.61
                      
                      
                      $
                      0Exercisable
      as of October 31, 2008
                      
                      
                      4,075,260
                      
                      
                      $
                      0.59
                      
                      
                      $
                      0







18


NOTE
9 – SUBSEQUENT EVENT





As of
December 16, 2008 the Company was technically in default for non-payment of a
required principal payment of $400,000 on the Senior Secured Promissory
Notes.  As a result of the default, the $12 million principal balance can
be called immediately due and payable by the Lenders and the Lenders can charge
a default interest rate that is the lesser of 18% or the maximum applicable
legal rate per annum.  Additionally, all assets of the Company are
secured by the Senior Secured Notes.  As of December 21, 2008 the
Company had not received a formal notice of default from the Senior Secured
Lenders As described
in Note 6 above, the Senior Secured Note lenders provided for three additional
tranches of $1,250,000 each to be funded based on certain operating conditions
being met.  Operating conditions for the first two tranches in November and
December 2008 were not met and are no longer available to
Firstgold.






































































19


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS





Caution
About Forward-Looking Statements





This Form
10-Q includes “forward-looking” statements about future financial results,
future business changes and other events that haven’t yet
occurred.  For example, statements like Firstgold “expects,”
“anticipates” or “believes” are forward-looking statements.  Investors
should be aware that actual results may differ materially from Firstgold's
expressed expectations because of risks and uncertainties about the
future.  Firstgold does not undertake to update the information in
this Form 10-Q if any forward-looking statement later turns out to be
inaccurate.  Details about risks affecting various aspects of
Firstgold’s business are discussed in Firstgold’s Form 10-KSB as well as
throughout this Form 10-Q and should be considered carefully.





Overview





We are an
exploration-stage company engaged in the acquisition, exploration and, if
warranted, development of various mining properties located in the State of
Nevada.  We are currently conducting a comprehensive exploration and
development program on various mineral leases associated with our Relief Canyon
Mine property located near Lovelock, Nevada. Since February 1, 2007 we have
completed drilling 83 reverse circulation drill holes .  We have also
drilled a total of  57 sonic holes  in the existing heap
leach pads to assess the economic potential of reprocessing the ore and
extracting any remaining gold.  These drill results will be added to
the historic drill hole database to help develop a new mining plan for Relief
Canyon Mine property.





In
preparation for the resumption of ore processing at the Relief Canyon Mine, on
August 7, 2007 we received an “Approval of the Relief Canyon Mine Heap
reprocessing amendment to the Plan of Operations” from the Bureau of Land
Management (“BLM”).  In conjunction with the BLM action, Firstgold
increased its posted reclamation bond to $2.8 million with the BLM.




On August
16, 2008 an “Amended Reclamation Permit No. 264” issued by the Nevada Division
of Environmental Protection (“NDEP”) became final. In addition, Firstgold has
recently received its Water Pollution Control Permit and Air quality Permit from
the NDEP.





The above
approvals and permits allow Firstgold to begin construction of a new heap leach
pad and to construct and operate an ADR Process Plant and crushing facility at
the Relief Canyon Mine site. On December 15, 2008 we completed the new heap
leach pad and on December 16, 2008 commenced stacking ore on the pad. Upon
completion of the stacking, application of the cyanide solution and the leaching
process will commence. In addition, the on-site processing plant and crushing
facilities have been completed.


In
October 2006, we entered into a Mineral Lease Agreement to explore, and, if
warranted, develop up to 25,000 acres of property called Antelope Peak
located in Elko County, Nevada.  The Lease allows us the exclusive
right to explore for, and, if warranted, develop gold, silver and barite
minerals on the leased property.  Based on the results of our
preliminary exploration, we determined that the land package and potential did
not fit the geologic profile we are pursuing at this
time.  Consequently, the lease was terminated on October 24,
2008.





We have
conducted preliminary sampling of approximately 4,200 acres of potentially
mineralized ground in the Horse Creek area located approximately 100 miles
northeast of Reno, Nevada.  During the course of the property
evaluation, rock chip samples were collected showing the potential presence of
intrusion-related mineral systems.  During the third quarter we
commenced the extensive mapping of the area’s bedrock
geology.  Additionally, we plan to conduct an airborne geophysical
survey to map the magnetic character of the rocks.  Geochemical
exploration efforts continued with more rock chip sampling as well as an
in-depth soil sampling survey.





On
January 11, 2008 we secured claims on approximately 2,300 acres of potentially
mineralized ground near Fairview, Nevada referred to as the Fairview-Hunter
property.  We are conducting preliminary sampling of the
area.




20


During
the course of the property evaluation, rock chip samples were
collected.  The next phase of this project will be to conduct
extensive mapping of the area’s bedrock geology.  Additionally, we
plan to conduct an airborne geophysical survey to map the magnetic character of
the rocks.  Geochemical exploration efforts will continue with more
rock chip sampling as well as an in-depth soil sampling survey.




On
February 22, 2008, we secured claims on approximately 3,300 acres of potentially
mineralized ground north of Winnemucca, Nevada referred to as the Honorine Gold
property.  We are conducting preliminary sampling of the
area.  During the course of the property evaluation, rock chip samples
were collected.  The next phase of this project will be to conduct
extensive mapping of the area’s bedrock geology.  We completed the initial
sampling and 6 drill holes on the project.  Drill results from this
first round of drilling are expected only to provide basic geologic information
and direction for future drill work.  Additionally, we plan to conduct an
airborne geophysical survey to map the magnetic character of the
rocks.  Geochemical exploration efforts will continue with more rock
chip sampling as well as an in-depth soil sampling survey.




In July
2008, Firstgold opened a full service metals and mineral assay laboratory in
leased buildings located in Lovelock, Nevada.  On September 30, 2008
Firstgold purchased the laboratory facility for an aggregate purchase price of
$450,000.  The laboratory will process mineral samples from
Firstgold’s Relief Canyon Mine, other Firstgold exploration properties and
provide excess capacity to process mined samples from other outside mining and
exploration companies.  At peak operation, the laboratory is designed
to process up to 2,200 fire assays and up to 250 geochemical analyses per
day.





Plan
of Operations for the Next Twelve Months





Certain
key factors and objectives will affect our future financial and operating
results.  These include, but are not limited to the
following:




●
            Gold
      prices, and to a lesser extent, silver
prices;





●
            The
      amount of mineralization at the Relief Canyon Mine as estimated by us
      (based on past and current exploration by Firstgold and work done by
      others).





●
            Our
      proposed exploration of properties now include 146 mill site and
      unpatented mining claims contained in about 1,000 acres of the Relief
      Canyon Property; approximately 4,200 acres in the Horse Creek area of
      Nevada; 2,300 acres near Fairview, Nevada and 3,300 acres near Winnemucca,
      Nevada.





●
            Our
      operating plan is to continue exploration work on the Relief Canyon
      mining property during calendar 2008.    During 2008,
      we plan to resume heap leaching at the Relief Canyon Mine and we
      anticipate commencing ore processing at the Relief Canyon Mine
      thereafter.  Through the sale of additional securities and/or
      the use of joint ventures, royalty arrangements and partnerships, we
      intend to progressively enlarge the scope and scale of our current
      exploration, and future mining and processing operations, thereby
      potentially increasing our chances of locating and processing commercially
      viable ore deposits which could increase both our annual revenues and
      ultimately our net profits.  Our objective is to achieve annual
      growth rates in revenue and net profits for the foreseeable
      future.





●
            We
      expect to make capital expenditures in calendar year 2009 of between $5
      million and $10 million, including costs related to the exploration,
      development and operation of the Relief Canyon mining
      property.  If cash flow from operations is not adequate we may
      have to raise additional outside capital to pay for these activities and
      the continuation of exploration activities and possible future production
      at the Relief Canyon mine.




21




●
            Additional
      funding or the utilization of other venture partners will be required to
      fund exploration, research, development and operating expenses at the
      Horse Creek,  Fairview-Hunter and Honorine Gold properties when
      and if such activity is commenced at these properties. In the past we have
      been dependent on funding from the private placement of our securities as
      well as loans from related and third parties as the sole sources of
      capital to fund operations.




●
            Completion
      of the ore processing facility at the Relief Canyon site and
      installation of a new jaw crushing
unit.




Results
of Operation





Our
current business strategy is to invest in, explore and if warranted, conduct
mining operations of our current mining properties and other mineral producing
properties.  Firstgold is a public company that in the past has been
engaged in the exploration, acquisition and development of gold-bearing
properties in the continental United States.  Currently, our principal
assets include various mineral leases associated with the Relief Canyon Mine
located near Lovelock, Nevada along with various items of mining equipment and
improvements located at that site.  We have also entered into (i) the
staking of approximately 4,200 acres of property located in Humboldt County,
Nevada; (ii) claims to explore 2,300 acres of property located near Fairview,
Nevada; and (iii) mineral leases on 3,300 acres of property located near
Winnemucca, Nevada.




Operating Results for the
Fiscal Quarters Ended October 31, 2008 and 2007





Although
we commenced efforts to re-establish our mining business early in fiscal year
2004, no mining operations have commenced and no revenues from mining operations
have been recognized during the quarters ended October 31, 2008 and 2007,
respectively.  We have granted a 4% net smelting return royalty to a
third party related to the Relief Canyon mining property which has been
recorded as an $800,000 deferred option income.  During the third
quarter of fiscal year 2009 we recognized revenue of $35,026 from the leasing of
drill rigs and crew to other nearby mining operations; $35,080 from performing
assays for customers at our lab; and $7,000 from the sale of an internet domain
name.  No revenues were recognized during the comparible quarter of fiscal
2008.





During
the quarter ended October 31, 2008 we spent $1,368,990 for exploration,
reclamation and maintenance expenses related to our mining
properties.  Reclamation and maintenance expenses expended during the
same quarter ended October 31, 2007 were $505,037.  These expenses
relate primarily to exploration activities and installation of processing
facilities at the Relief Canyon Mine.  The increase in costs was due
to extensive building and facility improvements at the Relief Canyon mine
and significant exploration drilling.  During the quarter ended
October 31, 2008 we expended approximately $97,429 on preliminary exploration
activities at the Horse Creek, Fairview-Hunter and Honorine Gold
properties.  We incurred operating expenses of $1,669,783 during the
quarter ended October 31, 2008.  Of this amount, $170,523 reflects
promotion expense, $256,750 reflects officer and director compensation during
the quarter and $432,058 reflect fees for outside professional
services.  We incurred operating expenses of $1,664,954 during the
quarter ended October 31, 2007.  Of this amount, $34,671 reflects
outside director compensation expense, $265,198 reflects promotion expense,
$93,500 reflects officer compensation and related payroll taxes during the
quarter related to stock options issued and $480,785 reflect fees for outside
professional services.




A large
portion of the outside professional services reflects legal and accounting work
pertaining to our annual and quarterly reporting on Form 10-K and Form 10-Q
occurring in fiscal year 2008 and 2009 respectively, as well as the preparation
and filing of Amended Form S-1’s.  It is anticipated that both mining
costs and operating expenses will increase significantly as we continue our
exploration program and prepare for mining operations.







22


We
incurred interest expense of $1,275,991 during the quarter ended October 31,
2008 which compares to interest expenses of $307,780 incurred during the same
quarter of 2007.  The principal balance of loans outstanding at the
end of the third quarter of fiscal year 2009 increased by $12,714,077 to
$13,527,803 compared to a principal balance of $813,726 outstanding at the end
of the third quarter of fiscal year 2008, which was primarily the result of an
increase in senior secured promissory notes issued during the third
quarter..  The increase in accrued interest expense during the quarter
ended October 31, 2008 was primarily due to the increase in the principal
balance of promissory notes outstanding during the period offset by the
write-off of unamortized debt costs related to convertible debt which was
converted in full during the period.




Our total
net loss for the quarter ended October 31, 2008 increased to $4,236,314 compared
to a net loss of $1,934,114 incurred for the same quarter ended October 31,
2007.  The larger net loss in the third quarter of fiscal 2009
reflects the substantial increase in the exploration and mine site improvement
expenses as well as an increase in interest expense. The increase in net
loss for the quarter ended October 31, 2008 was partially offset by the net
sales revenue recognized during the quarter.





Operation results for the
Nine Months Ended October 31, 2008 and 2007





During
the nine months ended October 31, 2008 we recognized revenue of $722,466 from
the leasing of drill rigs and crew to other nearby mining operations and the
operation of the mineral assay laboratory.  No revenues were recorded
for the nine months ended October 31, 2007.





During
the nine months ended October 31, 2008, we spent $4,382,503 on exploration,
reclamation and building and facilities expansion expenses related to our mining
properties.  Reclamation and maintenance expenses expended during the
nine months ended October 31, 2007, were $870,828.  These expenses
relate primarily to repairing and upgrading costs required to resume exploration
drilling and facilities upgrading at our Relief Canyon mining
claims.  We incurred operating expenses of $4,638,709 during the nine
months ended October 31, 2008.  Of this amount, $284,028 reflects
promotion expense; $653,226 reflects director and officer compensation; and
$1,165,876 reflects fees for outside professional services.  A large
portion of the outside professional services reflects legal costs associated
with litigation involving the Crescent Red Caps LLC as well as legal and
accounting work pertaining to our annual and quarterly reporting on Form 10-K
and Form 10-Q and financing activities.  During the nine months ended
October 31, 2007, we incurred operating expenses of $3,933,654, of which
$442,476 reflects outside director compensation expenses related to director
fees and stock options issued, $567,878 reflects promotion expenses, $273,009
represented officer compensation, and $885,883 reflected fees for outside
professional services.  It is anticipated that both mining costs and
operation costs will increase significantly as we continue our exploration
program and initiate mining operations.





We
incurred interest expense of $1,430,271 during the nine months ended October 31,
2008, which compares to interest expenses of $831,319 incurred during the same
nine months of 2007.  The principal balance of loans outstanding at
October 31, 2008 increased by $12,714,077 compared to October 31, 2007,
primarily the result of the issuance of $12 million of Senior Secured Promissory
Notes.  The increase in additional interest expense during the nine
months ended October 31, 2008, was primarily due to the increase in outstanding
promissory notes.


Our total
net loss of the nine months ended October 31, 2008, increased to $9,682,290
compared to a net loss of $5,811,950 incurred for the same nine months ended
October 31, 2007.  The higher net loss in the first nine months of
fiscal 2009 reflects the increase in exploration, maintenance, and operating
expenses as we continue our exploration activities, construct processing
facilities and establish a mineral assay laboratory. These expenses were
partially offset by revenues recognized during the first nine months of fiscal
2009.





Liquidity
and Capital Resources





We have
incurred significant operating losses since inception and during the nine months
ended October 31, 2008 which has resulted in an accumulated deficit of
$41,073,430 as of October 31, 2008.  At October 31, 2008, we had cash
and other current assets of $1,035,586 compared to $1,125,613 at January 31,
2008 and a net working capital deficit of $1,923,144 as of October 31,
2008.




23


Since the
resumption of our business in February 2003, we have been dependent on borrowed
or invested funds in order to finance our ongoing operations.  As of
October 31, 2008, we had outstanding debentures and notes payable in the gross
principal amount of $13,527,803 (net balance of $4,710,433 after $(7,951,686) of
deferred financing costs) which reflects an increase in the gross principal
balance of $12,714,077 compared to notes payable in the gross principal amount
of $817,163, (net balance of $657,775 after $(159,389) of note payable discount
and deferred financing costs) as of October 31, 2007.





During
the nine months ended October 31, 2008 we received proceeds of $7,621,515 from
the issuance of stock and $12,000,000 from the issuance of promissory
notes.





Due to
increased costs and funding delays we believe that an additional $1,000,000 to
$1,500,000 of additional funding will be necessary to bring the Relief Canyon
Mine into full production and carry out planned initial exploration on our other
properties.  To raise these additional funds our intention will be to
pursue several possible funding opportunities including the sale of additional
securities, entering into joint venture arrangements, or incurring additional
debt.





Due to
our continuing losses from business operations, the independent auditor’s report
dated May 15, 2008, includes a “going concern” explanation relating to the fact
that Firstgold’s continuation is dependent upon obtaining additional working
capital either through significantly increasing revenues or through outside
financing.  As of October 31, 2008, Firstgold’s principal commitments
included the following:





It is
likely that we will need to raise additional capital to fund the long-term or
expanded development, promotion and conduct of our mineral
exploration.  Due to our limited cash flow, operating losses and
limited assets, it is unlikely that we could obtain financing through commercial
or banking sources.  Consequently, any future capital requirements
will be dependent on cash infusions from our major stockholders or other outside
sources in order to fund our future operations.  Although we believe
that our creditors and investors would continue to fund Firstgold’s expenses if
such became necessary based upon their significant debt and/or equity interest
in Firstgold, there is no assurance that such investors would continue to pay
our expenses in the future.  If adequate funds are not available in
the future, through public or private financing as well as borrowing from other
sources, Firstgold might not be able to sustain its mineral exploration or
mining program.




Recent Financing
Transactions





During
February, March and April of 2008, Firstgold received gross proceeds of
$8,042,897 upon the private placement of Units consisting of 12,373,689 shares
of common stock and warrants to purchase 6,186,845 shares of common stock at an
exercise price of $0.80 per share.   The warrants have a term of
18 months.





On May 1,
2008, we issued a Convertible Debenture in the principal amount of $1,100,000
and bearing interest of 10% per annum. The transaction included the issuance of
warrants to purchase 1,100,000 shares of Firstgold common stock at an exercise
price of $1.00 per share.  On July 11, 2008 we issued a Note Payable
in the principal amount of $250,000 and bearing interest of 12% per
annum.  The transaction included the issuance of warrants to purchase
500,000 of Firstgold common stock at an exercise price of $0.50 per
share.  On August 7, 2008 both the Convertible Debenture and the Note
Payable were repaid in full for the amount of $1,459,707.





During
the third fiscal quarter of 2008, Firstgold issued Senior Promissory Notes in
the principal amount of $12,000,000 which resulted in net proceeds to Firstgold
of $8,880,000.  The transaction included the issuance of warrants to
purchase 16,050,000 shares of Firstgold common stock at an exercise price of
$0.4357 per share.




24


Off-Balance Sheet
Arrangements





During
the fiscal quarter ended October 31, 2008, Firstgold did not engage in any
off-balance sheet arrangements as defined in Item 303(a) of the SEC’s Regulation
S-K.


Critical
Accounting Policies





The
discussion and analysis of our financial conditions and results of operations
are based upon our financial statements, which have been prepared in accordance
with generally accepted accounting principles in the United
States.  The preparation of financial statements requires management
to make estimates and disclosures on the date of the financial
statements.  On an on-going basis, we evaluate our estimates,
including, but not limited to, those related to revenue
recognition.  We use authoritative pronouncements, historical
experience and other assumptions as the basis for making
judgments.  Actual results could differ from those
estimates.  We believe that the following critical accounting policies
along with those set forth in Note 3 to the financial statements, affect our
more significant judgments and estimates in the preparation of our financial
statements.




Valuation of long-lived
assets





Long-lived
assets, consisting primarily of property and equipment, patents and trademarks,
and goodwill, comprise a significant portion of our total
assets.  Long-lived assets are reviewed for impairment whenever events
or changes in circumstances indicate that their carrying values may not be
recoverable.  Recoverability of assets is measured by a comparison of
the carrying value of an asset to the future net cash flows expected to be
generated by those assets.  The cash flow projections are based on
historical experience, management’s view of growth rates within the industry,
and the anticipated future economic environment.





Factors
we consider important that could trigger a review for impairment include the
following:





(a)
            significant
      underperformance relative to expected historical or projected future
      operating results,




(b)
            significant
      changes in the manner of its use of the acquired assets or the strategy of
      its overall business, and




(c)
            significant
      negative industry or economic
trends.





When we
determine that the carrying value of long-lived assets and related goodwill and
enterprise-level goodwill may not be recoverable based upon the existence of one
or more of the above indicators of impairment, we measure any impairment based
on a projected discounted cash flow method using a discount rate determined by
our management to be commensurate with the risk inherent in its current business
model.





Exploration
Costs





Exploration
costs are expensed as incurred.  All costs related to property
acquisitions are capitalized.





Mine Development
Costs





Mine
development costs consist of all costs associated with bringing mines into
production, to develop new ore bodies and to develop mine areas substantially in
advance of current production. The decision to develop a mine is based on
assessment of the commercial viability of the property and the availability of
financing. Once the decision to proceed to development is made, development and
other expenditures relating to the project will be deferred and carried at cost
with the intention that these will be depleted by charges against earnings from
future mining operations.




25


No
depreciation will be charged against the property until commercial production
commences. After a mine has been brought into commercial production, any
additional work on that property will be expensed as incurred, except for large
development programs, which will be deferred and depleted.




Reclamation
Costs





Reclamation
costs and related accrued liabilities, which are based on our interpretation of
current environmental and regulatory requirements, are accrued and expensed,
upon determination.





Based on
current environmental regulations and known reclamation requirements, management
has included its best estimates of these obligations in its reclamation
accruals.  However, it is reasonably possible that our best estimates
of our ultimate reclamation liabilities could change as a result of changes in
regulations or cost estimates.




ITEM 4T. CONTROLS AND
PROCEDURES




Disclosure Controls and
Procedures.




We have
adopted and maintain disclosure controls and procedures (as such term is defined
in Rules 13a-15 (e) and 15d-15 (e) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) that are designed to ensure that information
required to be disclosed in our reports under the Exchange Act, is recorded,
processed, summarized and reported within the time periods required under SEC's
rules and forms and that the information is gathered and communicated to our
management, including our Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), as appropriate, to allow for timely decisions regarding required
disclosure.





As
required by SEC Rule 15d-15 (b) we carried out an evaluation, under the
supervision and with the participation of management, including our CEO and CFO,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act 15d-14 as of the end of the fiscal quarter
covered by this report. Our management periodically assesses our internal
controls over financial reporting based upon the criteria set forth in the
Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the “COSO
Framework”).  Based upon that evaluation, our CEO and CFO concluded
that our disclosure controls and procedures were effective in timely alerting
them to material information relating to Firstgold that is required to be
included in our periodic SEC reports and to ensure that information required to
be disclosed in our periodic SEC reports is accumulated and communicated to our
management, including our CEO and CFO, to allow timely decisions regarding
disclosure as a result of any deficiency detected in our internal control over
financial reporting.





Changes in Internal Control
Over Financial Reporting





During
the quarter covered by this report, there was no change in Firstgold’s internal
control over financial reporting that has materially affected, or is reasonably
likely to materially effect, the Company’s internal control over financial
reporting.




PART
II - OTHER INFORMATION




ITEM 1A. FACTORS AFFECTING
FUTURE OPERATING RESULTS





We are a
development stage company and an investment in, or ownership position in our
common stock is inherently risky.  Some of these risks pertain to our
business in general, and others are risks which would only affect our common
stock.




26


The price
of our common stock could decline and/or remain adversely affected due to any of
these risks and investors could lose all or part of an investment in our company
as a result of any of these risks coming to pass. Readers of this Report should,
in addition to considering these risks carefully, refer to the other information
contained in this Report, including disclosures in our financial statements and
all related notes.  If any of the events described below were to
occur, our business, prospects, financial condition, or results of operations or
cash flow could be materially adversely affected.  When we say that
something could or will have a material adverse effect on Firstgold, we mean
that it could or will have one or more of these effects.  We also
refer readers to the information in this Report, discussing the impact of
Forward-Looking Statements on the descriptions contained in this Report and
included in the Factors discussed below.





As an
exploration stage company with no proven mineral reserves, we may not be able to
prove viable mineral reserves or achieve positive cash flows and our limited
history of operations makes evaluation of our future business and prospects
difficult.  We reactivated our business operations in early 2003 and
we have not generated any revenues, other than leasing certain of our drill rigs
and crew for short periods of time, since our reactivation.  As a
result, we have only a limited operating history upon which to evaluate our
future potential performance.  Our prospects must be considered in
light of the risks and difficulties encountered by companies which have not yet
established their mining operations.





We
believe we currently have sufficient funds to finance our near-term mining
activities at the Relief Canyon Mine and preliminary exploration activities at
our other properties.  We had cash reserves of $467,602 and a working
capital deficit of $1,923,144 as of October 31, 2008.  Furthermore,
subsequent to the fiscal quarter, on December 15, 2008, we were unable to make a
required $400,000 principal reduction payment to our secured lenders.  As a
result, our ability to fully implement our business plan and meet our long-term
obligations in the ordinary course of business is dependent upon our ability to
raise additional capital through public or private equity financings, establish
cash flows from operations, enter into joint ventures or other arrangements with
capital sources, or secure other sources of financing to fund operations. Our
continuing reliance on outside capital is a consequence of our negative cash
flows from operations.





At any
time, a serious deficiency in cash flows could occur and it is not always
possible or convenient to raise additional capital.  A problem in
raising capital could result in temporary or permanent insolvency and causing
potential claims by unpaid creditors and perhaps closure of the
business.





Our
current independent certified public accountants have expanded their opinion
contained in our financial statements as of and for the years ended January 31,
2008, and January 31, 2007 to include an explanatory paragraph related to our
ability to continue as a going concern, stating, in the audit report dated May
15, 2008, that “the Company has incurred a net loss of $7,632,537 and had
negative cash flow from operations of $4,832,217.  In addition, the
Company had an accumulated deficit of $31,391,142 and a shareholders’ surplus of
$5,174,290 at January 31, 2008.”  These factors, among others, as
discussed in “Note 2- Going Concern” to the financial statements, raise
substantial doubt about our ability to continue as a going
concern.  The auditors recognize that the cash flow uncertainty makes
their basic assumptions about value uncertain.  When it seems
uncertain whether an asset will be used in a “going concern” or sold at auction,
the auditors assume that the business is a “going concern” for purposes of all
their work, and then they disclose that there is material uncertainty about that
assumption.  It is certain, in any case, that analysts and investors
view unfavorably any report of independent auditors expressing substantial doubt
about a company's ability to continue as a going concern.





The price
of gold has experienced an increase in value over the past five years, generally
reflecting among other things relatively low interest rates in the United
States; worldwide instability due to terrorism; inflation affecting the US
dollar and a slow recovery from the global economic slump.  However,
current economic conditions have caused the price of gold to fluctuate
significantly over short periods of time.  Any significant drop in the
price of gold may have a materially adverse affect on the results of our
operations unless we are able to offset such a price drop by substantially
increased production.





27


We have
no proven or probable reserves and have no ability to currently measure or prove
our reserves other than estimating such reserves relying on information produced
in the 1990’s and thus may be unable to actually recover the quantity of gold
anticipated.  We have retained an independent mining consulting firm
to perform a resource evaluation which is expected to be completed early in
2009.  We can only estimate a potential mineral resource which is a
subjective process which depends in part on the quality of available data and
the assumptions used and judgments made in interpreting such
data.  There is significant uncertainty in any resource estimate such
that the actual deposits encountered or reserves validated and the economic
viability of mining the deposits may differ materially from our
expectations.





Gold
exploration is highly speculative in nature.  Success in exploration
is dependent upon a number of factors including, but not limited to, quality of
management, quality and availability of geological data and availability of
exploration capital.  Due to these and other factors, the probability
of our exploration program identifying individual prospects having commercially
significant reserves cannot be predicted.  It is likely that many of
the claims explored will not contain any commercially viable
reserves.  Consequently, substantial funds will be spent on
exploration which may identify only a few, if any, claims having commercial
development potential.  In addition, if commercially viable reserves
are identified, significant amounts of capital will be required to mine and
process such reserves.




Our
mining property rights consist of 146 mill site and unpatented mining claims at
the Relief Canyon Mine, our leasehold interest in the Fairview-Hunter and
Honorine Gold properties, and recently staked claims in the Horse Creek area of
Nevada.  The validity of unpatented mining claims is often uncertain
and is always subject to contest.  Unpatented mining claims are
generally considered subject to greater title risk than patented mining claims,
or real property interests that are owned in fee simple.  If title to
a particular property is successfully challenged, we may not be able to carryout
exploration programs on such property or to retain our royalty or leasehold
interests on that property should production take place, which could reduce our
future revenues.





Mining is
subject to extensive regulation by state and federal regulatory
authorities.  State and federal statutes regulate environmental
quality, safety, exploration procedures, reclamation, employees’ health and
safety, use of explosives, air quality standards, pollution of stream and fresh
water sources, noxious odors, noise, dust, and other environmental protection
controls as well as the rights of adjoining property owners.  We
believe that we are currently operating in substantial compliance with all known
safety and environmental standards and regulations applicable to our Nevada
property.  However, there can be no assurance that our compliance
could not be challenged or that future changes in federal or Nevada laws,
regulations or interpretations thereof will not have a material adverse affect
on our ability to resume and sustain mining operations.





The
business of gold mining is subject to certain types of risks, including
environmental hazards, industrial accidents, and theft.  We carry
insurance against certain property damage loss (including business interruption)
and comprehensive general liability insurance.  While we maintain
insurance consistent with industry practice, it is not possible to insure
against all risks associated with the mining business, or prudent to assume that
insurance will continue to be available at a reasonable cost.  We have
not obtained environmental liability insurance because such coverage is not
considered by management to be cost effective.  We currently carry
insurance on our property, plant and equipment as well as comprehensive general
liability insurance.





As of
October 31, 2008, Firstgold had approximately 131,145,543 shares of Common Stock
outstanding and options and warrants to purchase a total of 65,125,530 shares of
our Common Stock were outstanding as of October 31, 2008.  The
possibility that substantial amounts of our outstanding Common Stock may be sold
by investors or the perception that such sales could occur, often called "equity
overhang," could adversely affect the market price of our Common Stock and could
impair our ability to raise additional capital through the sale of equity
securities in the future.








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ITEM 2. UNREGISTERED SALES OF
EQUITY SECURITIES





On August
7, 2008, Firstgold issued Senior Secured Promissory Notes in the aggregate
principal amount of $7,215,597 which resulted in net proceeds to Firstgold of
$4,989,543. On August 27, 2008, additional promissory notes in the principal
amount of $472,973 were issued resulting in net proceeds of
$350,000.  On September 10, 2008, Firstgold issued additional Senior
Promissory Notes in the aggregate principal amount of $1,351,351, which resulted
in net proceeds to Firstgold of $1,000,000.  On September 29, 2008,
promissory notes in the principal amount of $5,257,375 were issued resulting in
net proceeds of $2,460,457 to Firstgold.  This brought the total
principal amount of promissory notes issued to $12,000,000.  The Notes
bear interest of 4% per annum payable monthly and are due and payable on March
1, 2010.  In addition, commencing in December 2008, Firstgold is
required to make minimum monthly principal reduction payments of $400,000. The
Notes are secured by all of the assets of Firstgold including its interests in
the Relief Canyon Mine property and facilities.  The proceeds of these
Notes will be used to fund the final permitting, deposits and facility
construction at the Relief Canyon Mine site.





The
issuance of the above-referenced debt instruments and warrants were made without
any public solicitation to a limited number of investors or related individuals
or entities.  Each investor represented to us that the securities were
being acquired for investment purposes only and not with an intention to resell
or distribute such securities.  Each of the individuals or entities
had access to information about our business and financial condition and was
deemed capable of protecting their own interests.  The debt
instruments and warrants were issued pursuant to the private placement exemption
provided by Section 4(2) and Regulation D there under or Section 4(6) of the
Securities Act.  The debenture and notes are deemed to be “restricted
securities” as defined in Rule 144 under the Securities Act and the warrant
certificates and stock certificates issuable upon exercise of the warrants will
bear a legend limiting the resale thereof.




ITEM4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS




Subsequent
to the end of our third fiscal quarter we held our Annual Meeting of
Stockholders on November 20, 2008.  At the Annual Meeting of
Stockholders, 130,845,543 shares of common stock were entitled to vote at such
meeting of which there were present in person or by proxy 66,426,137 shares of
common stock which represented a quorum.  At the Annual Meeting, the
holders of our common stock elected the following nominees to our Board of
Directors:  Stephen Akerfeldt, Kevin Bullock, Donald Heimler and
Terrence Lynch.  All of the directors nominated were duly elected by a
vote of 66,108,050 shares voting for the nominees, 262,727 shares voting against
the nominees and 55,360 shares abstaining.  Fraser Berrill did not
stand for re-election.  As a result, Mr. Berrill’s term as a director
ended on November 20, 2008.





Our
stockholders also ratified Hunter & Renfro LLP as Firstgold’s principal
independent public accountants for fiscal year 2009 with 66,342,961 votes cast
for and 71,622 votes against and 11,554 votes abstaining.




ITEM 6. EXHIBITS


31.1
              Certification of CEO pursuant to Section 302 of
      the Sarbanes-Oxley Act of
  2002.


31.2
            Certification of CFO pursuant to Section 302 of
      the Sarbanes-Oxley Act
of2002.


32.
              Certification by CEO and CFO pursuant to Section
      906 of the Sarbanes-Oxley Act of
  2002








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SIGNATURES





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




FIRSTGOLD
      CORP.Dated:
      December 21, 2008
            By:
            /s
      STEPHEN AKERFELDTStephen
      Akerfeldt, Chief Executive Officer/s/
      JAMES KLUBERJames
      Kluber, Principal Accounting Officer and Chief Financial
      Officer
















































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