**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
 ___________
  **FORM
        10-QSB**
 _______________
  **x**
              **QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
  **For
        the quarterly period ended September 30, 2007**
   **o**
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
 
 **For
        the transition period from
        ______to______.**
  **Sustut
        Exploration, Inc.**
 **(Exact
        name of registrant as specified in Charter**
 
  **Delaware**
              
              **333-143215****(State
                  or other jurisdiction of**
                **incorporation
                  or organization)**
              
              **(Commission
                  File No.)**
              
              **(IRS
                  Employee Identification
                  No.)**
 
 **1420
        5th Avenue
        #220**
 **Seattle,
        Washington 98101**
 **(Address
        of Principal Executive Offices)**
 **___________**
 
 **(206)
        274-5321**
 **(Issuer
        Telephone number)**
 **___________**
 
 
 **(Former
        Name or Former Address if Changed Since Last Report)**
  Check
        whether the issuer (1) has filed all reports required to be filed by Section
        13
        or 15(d) of the Exchange Act 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 o
  Indicate
        by check mark whether the registrant is a shell company as defined in Rule
        12b-2
        of the Exchange Act.
 Yes
x  No
o
  State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of November 12, 2007: 16,059,000 shares of common stock.
  
 
  **SUSTUT
        EXPLORATION, INC.**
  **FORM
        10QSB**
  **SEPTEMBER
        30, 2007**
  **INDEX**
  **PART
        I-- FINANCIAL INFORMATION**
  Item
                  1.
              Financial
                  StatementsItem
                  2.
              Management’s
                  Discussion and Analysis of Financial ConditionItem
                  3.
              Control
                  and Procedures
   **PART
        II-- OTHER INFORMATION**
  Item
                  1A.
              Risk
                  FactorsItem
                  2.
              Unregistered
                  Sales of Equity Securities and Use of ProceedsItem
                  3.
              Defaults
                  Upon Senior SecuritiesItem
                  4.
              Submission
                  of Matters to a Vote of Security HoldersItem
                  5.
              Other
                  InformationItem
                  6.
              Exhibits
                  and Reports on Form 8-K
   **SIGNATURE**
  **Item
        1. Financial Information**


**SUSTUT
        EXPLORATION, INC.**
 **(an
        exploration stage company)**
 
 **FINANCIAL
        STATEMENTS**
 
 **AS
        OF SEPTEMBER 30, 2007**
 
 
 
 
 
 
 
  
 
 
 **SUSTUT
        EXPLORATION, INC.**
 **(an
        exploration stage company)**
 
 
 
 
 
 
 BALANCE
                  SHEET
              F-1STATEMENT
                  OF OPERATIONS
              F-2/F-3STATEMENT
                  OF STOCKHOLDERS’ EQUITY
              F-4STATEMENT
                  OF CASH FLOWS
              F-5FINANCIAL
                  STATEMENT FOOTNOTES
              F-6
 
 
 
 
 
 
 
 
 **SUSTUT
                    EXPLORATION, INC.****(an
                    exploration stage company)****BALANCE
                    SHEET****As
                    of September 30, 2007****ASSETS****CURRENT
                    ASSETS**
                
                **9/30/2007**
                
                
                **12/31/2006**Cash
                
                $
                13,617
                
                
                $
                4,893Total
                    Current Assets
                
                
                13,617
                
                
                
                4,893**TOTAL
                    ASSETS**
                
                $
                13,617
                
                
                $
                4,893**LIABILITIES
                    AND STOCKHOLDERS' EQUITY****CURRENT
                    LIABILITIES**Accrued
                    Expenses
                
                $
                3,500
                
                
                $
                2,500Payable
                    agreement for claim rights
                
                
                20,000
                
                
                
                -Total
                    Current Liabilities
                
                
                23,500
                
                
                
                2,500**LONG-TERM
                    LIABILITIES**Payable
                    agreement for claim rights
                
                
                -
                
                
                
                20,000**TOTAL
                    LIABILITIES**
                
                
                23,500
                
                
                
                22,500**STOCKHOLDERS'
                    EQUITY**Common
                    Stock, $.001 par valueAuthorized:
                    200,000,000Issued:
                    16,059,000 and 16,000,000, respectively
                
                
                16,059
                
                
                
                16,000Additional
                    paid
                    in capital
                
                
                71,641
                
                
                
                54,000Accumulated
                    deficit during development stage
                
                
                (97,583
                )
                
                
                (87,607
                )Total
                    Stockholders' Equity
                
                
                (9,883
                )
                
                
                (17,607
                )**TOTAL
                    LIABILITIES AND EQUITY**
                
                $
                13,617
                
                
                $
                4,893
 The
          accompanying notes are an integral part of these financial
          statements
 
 
 F-1
 
 **SUSTUT
                    EXPLORATION, INC.****(an
                    exploration stage company)****STATEMENT
                    OF OPERATIONS****For
                    the nine months ended September 30, 2007 and 173 days ended September
                    30,
                    2006, and****From
                    inception (April 11, 2006) through September 30,
                    2007****FROM****09/30/07**
                
                
                **09/30/06**
                
                
                **INCEPTION****REVENUE**
                
                $
                -
                
                
                $
                -
                
                
                $
                -**COST
                    OF SERVICES**
                
                
                -
                
                
                
                -
                
                
                
                -**GROSS
                    PROFIT OR (LOSS)**
                
                
                -
                
                
                
                -
                
                
                
                -**GENERAL
                    AND ADMINISTRATIVE EXPENSES**
                
                
                9,976
                
                
                
                10,085
                
                
                
                22,583**GENERAL
                    EXPLORATION**
                
                
                -
                
                
                
                75,000
                
                
                
                75,000**OPERATING
                    INCOME**
                
                
                (9,976
                )
                
                
                (85,085
                )
                
                
                (97,583
                )**ACCUMULATED
                    DEFICIT, BEGINNING**
                
                
                (87,607
                )
                
                
                -
                
                
                
                -**ACCUMULATED
                    DEFICIT, ENDING**
                
                $
                (97,583
                )
                
                $
                (85,085
                )
                
                $
                (97,583
                )**Earnings
                    (loss) per share, basic**
                
                $
                (0.00
                )
                
                $
                (0.02
                )**Weighted
                    average number of common shares**
                
                
                16,008,263
                
                
                
                4,509,589
  The
          accompanying notes are an integral part of these financial
          statements
   F-2
  **SUSTUT
                    EXPLORATION, INC.****(an
                    exploration stage company)****STATEMENT
                    OF OPERATIONS****For
                    the three months ended September 30, 2007 and
                    2006****09/30/07**
                
                
                **09/30/06****REVENUE**
                
                $
                -
                
                
                $
                -**COST
                    OF SERVICES**
                
                
                -
                
                
                
                -**GROSS
                    PROFIT OR (LOSS)**
                
                
                -
                
                
                
                -**GENERAL
                    AND ADMINISTRATIVE EXPENSES**
                
                
                2,969
                
                
                
                13**GENERAL
                    EXPLORATION**
                
                
                -
                
                
                
                -**OPERATING
                    INCOME**
                
                
                (2,969
                )
                
                
                (13
                )**ACCUMULATED
                    DEFICIT, BEGINNING**
                
                
                (94,614
                )
                
                
                (85,072
                )**ACCUMULATED
                    DEFICIT, ENDING**
                
                $
                (97,583
                )
                
                $
                (85,085
                )
  The
          accompanying notes are an integral part of these financial
          statements
 
 
 
 F-3
 
 **SUSTUT
                    EXPLORATION, INC.****(an
                    exploration stage company)****STATEMENT
                    OF STOCKHOLDERS' EQUITY****As
                    of September 30, 2007****ADDITIONAL****COMMON**
                
                
                **PAR**
                
                
                **PAID
                    IN**
                
                
                **ACCUM.**
                
                
                **TOTAL****STOCK**
                
                
                **VALUE**
                
                
                **CAPITAL**
                
                
                **DEFICIT**
                
                
                **EQUITY**Common
                    stock issued for compensationApril
                    11, 2006 at $0.001 per share
                
                
                10,000,000
                
                
                
                10,000
                
                
                
                -
                
                
                
                -
                
                
                
                10,000Common
                    stock issued for cashApril
                    16, 2006 at $0.01per
                    share on private placement
                
                
                6,000,000
                
                
                
                6,000
                
                
                
                54,000
                
                
                
                -
                
                
                
                60,000Net
                    income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (87,607
                )
                
                
                (87,607
                )Balance,
                    December 31, 2006
                
                
                16,000,000
                
                
                
                16,000
                
                
                
                54,000
                
                
                
                (87,607
                )
                
                
                (17,607
                )Common
                    stock issued for cash
                
                
                59,000
                
                
                
                59
                
                
                
                17,641
                
                
                
                
                
                
                
                17,700February
                    21, 2007 at $0.30per
                    share on private placementCancellation
                    of common stock
                
                
                (1,000
                )
                
                
                (1
                )
                
                
                (299
                )
                
                
                
                
                
                
                (300
                )issued
                    for cash March 21, 2007at
                    $.30 per shareCommon
                    Stock issued for cash
                
                
                1,000
                
                
                
                1
                
                
                
                299
                
                
                
                
                
                
                
                300July
                    4, 2007 at $0.30 pershare
                    on private placementNet
                    income (loss)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (9,976
                )
                
                
                (9,976
                )Balance,
                    September 30, 2007
                
                
                16,059,000
                
                
                $
                16,059
                
                
                $
                71,641
                
                
                $
                (97,583
                )
                
                $
                (9,883
                )
  The
          accompanying notes are an integral part of these financial
          statements
   
 F-4
 
 **SUSTUT
                    EXPLORATION, INC.****(an
                    exploration stage company)****STATEMENTS
                    OF CASH FLOWS****For
                    the nine months ended September 30, 2007 and 173 days ended September
                    30,
                    2006, and****From
                    inception (April 11, 2006) through September 30,
                    2007****FROM****CASH
                    FLOWS FROM OPERATING ACTIVITIES**
                
                **09/30/07**
                
                
                **09/30/06**
                
                
                **INCEPTION**Net
                    income (loss)
                
                $
                (9,976
                )
                
                $
                (85,085
                )
                
                $
                (97,583
                )Adjustments
                    to
                    reconcile net income to net cashprovided
                    by  (used in) operating activities:Stock
                    issued in the form of compensation
                
                
                -
                
                
                
                10,000
                
                
                
                10,000Increase
                    (Decrease) in Accrued Expenses
                
                
                1,000
                
                
                
                -
                
                
                
                3,500Increase
                    (Decrease) in claims payable
                
                
                -
                
                
                
                20,000
                
                
                
                20,000Total
                    adjustments to net income
                
                
                1,000
                
                
                
                30,000
                
                
                
                33,500Net
                    cash provided by (used in) operating activities
                
                
                (8,976
                )
                
                
                (55,085
                )
                
                
                (64,083
                )**CASH
                    FLOWS FROM INVESTING ACTIVITIES**None
                
                
                -
                
                
                
                -
                
                
                
                -Net
                    cash flows provided by (used in) investing activities
                
                
                -
                
                
                
                -
                
                
                
                -**CASH
                    FLOWS FROM FINANCING ACTIVITIES**Proceeds
                    from
                    stock issuance
                
                
                17,700
                
                
                
                60,000
                
                
                
                77,700Net
                    cash provided by (used in) financing activities
                
                
                17,700
                
                
                
                60,000
                
                
                
                77,700**CASH
                    RECONCILIATION**Net
                    increase (decrease) in cash
                
                
                8,724
                
                
                
                4,916
                
                
                
                13,617Cash
                    -
                    beginning balance
                
                
                4,893
                
                
                
                -
                
                
                
                -**CASH
                    BALANCE END OF PERIOD**
                
                $
                13,617
                
                
                $
                4,916
                
                
                $
                13,617
   The
          accompanying notes are an integral part of these financial
          statements
  
 
 
 F-5
 
 
 
 **SUSTUT
        EXPLORATION, INC.**
 **(an
        exploration stage company)**
 
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **AS
        OF SEPTEMBER 30, 2007**
 
 **NOTE  1  -  OPERATIONS  AND  BASIS  OF  PRESENTATION**
 
 Sustut
        Exploration, Inc. (the Company), an exploration stage company, was incorporated
        on April 11, 2006 in the State of Delaware.  The Company is an
        exploration stage mineral company.  On May 5, 2006 the Company became
        actively engaged in acquiring mineral properties and raising
        capital.  The Company did not have any significant exploration
        operations or activities from inception; accordingly, the Company is deemed
        to
        be in the development stage.
 
 The
        Company’s fiscal year end is December 31.
 
 On
        May 5,
        2006, the Company acquired one mineral claim located near Smithers, British
        Columbia, Canada.  The property consists of one mineral claim and is
        contiguous hard rock mineral.
 
 The
        Company's financial statements have been presented on the basis
        that  it  is  a going concern, which contemplates
        the realization of the mineral
        properties  and  other  assets and the
        satisfaction of liabilities in the normal
        course  of  business.  The  Company  has  incurred  losses
        from inception  to September 30, 2007. The Company has not realized
        economic production
        from  its  mineral  properties  as  of  September
        30, 2007.    These factors raise
        substantial  doubt  about  the Company's ability
        to continue as a going concern.
        Management  continues  to  actively  seek  additional
        sources of capital to fund
        current  and  future  operations. There is no
        assurance that the Company will be
        successful  in  continuing to raise additional capital,
        establishing probable or
        proven  reserves,  or  determining  if  the
        mineral properties can be mined economically. These financial statements
        do not
        include any adjustments that might
        result  from  the  outcome  of  these  uncertainties.
 
 **NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES**
 
 Revenue
        and Cost Recognition
 
 The
        Company uses the accrual basis of accounting for financial statement
        reporting.  Revenues and expenses are recognized in accordance with
        Generally Accepted Accounting Principles for the industry.  Certain
        period expenses are recorded when obligations are incurred.
   F-6
 **SUSTUT
          EXPLORATION, INC.**
 **(an
          exploration stage company)**
 
 **NOTES
          TO FINANCIAL STATEMENTS**
 
 **AS
          OF SEPTEMBER 30, 2007**
 Use  of  Estimates
 
 The  preparation  of  the  financial  statements  in  conformity  with
        generally
        accepted  accounting  principles  requires  management  to  make  estimates  and
        assumptions  that  affect  the  reported  amount  of
        assets and liabilities, and
        disclosure  of  contingent  liabilities at the
        date of the financial statements,
        and  the  reported  amount of revenues and
        expenses during the reporting period.
        Actual  results  could  differ  from  those  results.
 
 Accounts
        Receivable, deposits, Accounts Payable and accrued Expenses
 
 Accounts
        receivable have historically been immaterial and therefore no allowance for
        doubtful accounts has been established.  Normal operating refundable
        Company deposits are listed as Other Assets.  Accounts payable and
        accrued expenses consist of trade payables created from the normal course
        of
        business.
 
 Non-mining
        Property and Equipment
 
 Property
        and equipment purchased by the Company are recorded at cost. Depreciation
        is
        computed by the straight-line method based upon the estimated useful lives
        of
        the respective assets.  Expenditures for repairs and maintenance are
        charged to expense as incurred as are any items purchased which are below
        the
        Company’s capitalization threshold of $1,000.
 
 For
        assets sold or otherwise disposed of, the cost and related accumulated
        depreciation are removed from accounts, and any related gain or loss is
        reflected in income for the period.
 
 Income  Taxes
 
 The  Company
        accounts for income taxes using the liability method which requires
        recognition  of  deferred tax liabilities and assets for the
        expected future tax consequences  of  events  that
        have been included in the financial statements or
        tax  returns.  Deferred  tax  assets and
        liabilities are determined based on the
        difference  between  the  financial  statements  and  tax  basis  of  assets
        and
        liabilities  using  enacted  tax  rates  in  effect  for  the  year
        in which the
        differences  are  expected  to  reverse.  The
        Company’s management determines if a valuation allowance is necessary to reduce
        any tax benefits when the available benefits are more likely than not to
        expire
        before they can be used.
 
 Stock  Based  Compensation
 
 The
        Financial Accounting Standards Board issued Statement of
        Financial  Accounting  Standards  No.  123(R),  "Accounting  for  Stock-Based
        Compensation,"  (SFAS  123(R)).  SFAS  123(R)  requires  that  companies  recognize
        compensation  expense  for  grants  of  stock,  stock  options,
        and other equity instruments  based on fair
        value.  The  Company has adopted
        SFAS  123(R)  in accounting for stock-based
        compensation.
   F-7
 **SUSTUT
        EXPLORATION, INC.**
 **(an
        exploration stage company)**
 
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **AS
        OF SEPTEMBER 30, 2007**
 
 Cash  and  Cash  Equivalents,
        and Credit Risk
 
 For  purposes  of
        reporting cash flows, the Company considers all cash accounts with maturities
        of
        90 days or less and which are not subject to withdrawel restrictions or
        penalties, as cash and cash equivalents in the accompanying balance
        sheet.
 
 The
        portion of deposits in a financial institution that insures its deposits
        with
        the FDIC up to $100,000 per depositor in excess of such insured amounts are
        not
        subject to insurance and represent a credit risk to the Company.
 
 Foreign
        Currency Translation and Transactions
 
 The
        Company’s functional currency is the US dollar.  No material
        translations or transactions have occurred.  Upon the occurrence of
        such material transactions or the need for translation adjustments, the Company
        will adopt Financial Accounting Standard No. 52 and other methods in conformity
        with Generally Accepted Accounting Principles.
 
 Earnings  Per  Share
 
 In  February  1997,  the  Financial  Accounting  Standards  Board  (FASB)
        issued Statement  of  Financial  Accounting
        Standards No. 128 (SFAS 128), "Earnings Per Share".  SFAS
        128  replaces the presentation of primary earnings per share with a
        presentation
        of  basic  earnings  per  share based
        upon the weighted average number of common
        shares  for  the  period.
 
 **NOTE  3  -  AFFILIATES  AND  RELATED  PARTIES**
 
 Significant
        relationships with (1) companies affiliated through common ownership
        and/or  management,  and  (2)  other  related  parties  are  as  follows:
 
 The
        Company has ownership of the Don 1-2 claims which were placed in trust with
        the
        Company’s President.
 
 The
        Company has stock-based compensation with directors of the Company as disclosed
        in Footnote No. 7.
 
 **NOTE  4  -  MINERAL  PROPERTIES**
 
 The  Company's  net  investment
        in mineral properties include one claim as described in footnote number 1
        have
        all costs related to the claim have be expended in accordance with Generally
        Accepted Accounting Principles for the industry .  Currently the
        Company does not have proven reserves by a geological study and will begin
        to
        capitalize amortizable property once reserves have been proven.
   F-8
 **SUSTUT
          EXPLORATION, INC.**
 **(an
          exploration stage company)**
 
 **NOTES
          TO FINANCIAL STATEMENTS**
 
 **AS
          OF SEPTEMBER 30, 2007**
 **NOTE  5
        -  INCOME  TAXES**
 
 The
        Company has available net operating loss carryforwards of $97,583 for
        financial  statement  and  federal  income  tax  purposes.  These
        loss  carryforwards  expire  if not used by the
        year 2026 and 2007.  The Company’s management has decided a valuation
        allowance in the amount of approximately $17,600 is necessary to reduce any
        tax
        benefits of using the net operating losses to offset future tax
        liabilities.  The future
        available  benefits  are  more likely than not to
        expire before they can be used based on current uncertainties.
 
 **NOTE
        6 – CLAIM AGREEMENT**
 
 On
        May 5,
        2006, the Company entered into an agreement with Richard Simpson of Vancouver,
        BC to acquire one rock mineral claim covering 445.70 hectares.  The
        agreement called for a 100% interest in the claims subject to a 2.5% Net
        Smelter
        Royalty (NSR) for a total of $25,000.  1.5% of the NSR can be acquired
        for $1.0 million within 12 months from commencement of commercial
        production.  Advance royalties of $20,000 shall be paid annually
        commencing  January 17, 2010.  The purchase of the claim
        required payment of $55,000 on May 15, 2006 and a further $20,000 on or before
        May 15, 2008
 
 **NOTE  7
        -  SHAREHOLDERS'  EQUITY**
 
 Common
        Stock
 
 The
        Company has authorized two hundred million (200,000,000) shares of common
        stock
        with a par value of $.001.
 
 Upon
        incorporation the Company issued 10,000,000 common shares to directors of
        the
        Company as compensation in the amount of $10,000, or $0.001 per
        share.
 
 During
        April 2006 the Company undertook a Section 4(2) registration under the
        Securities Act of 1933 to raise $60,000 in the issuance of 6,000,000 shares
        of
        common stock for the purpose of acquisition and exploration of mining
        properties.  The Company’s management considers this offering to be
        exempt under the Securities Act of 1933.
 
 During
        February 2007, the Company undertook a Section 4(2) registration under the
        Securities Act of 1933 to raise $17,700 in the issuance of 59,000 shares
        of
        common stock at $.30 per share. The Company’s management considers this offering
        to be exempt under the Securities Act of 1933.
 
 During
        March 2007, the Company cancelled the issuance of 1,000 shares of common
        stock
        at $.30 per share.
   F-9
 **SUSTUT
          EXPLORATION, INC.**
 **(an
          exploration stage company)**
 
 **NOTES
          TO FINANCIAL STATEMENTS**
 
 **AS
          OF SEPTEMBER 30, 2007**
 During
        July 2007, the Company has reissued 1,000 shares of common stock at $0.30
        per
        share that were cancelled during March 2007.
 
 **NOTE  8
        -  COMMITMENTS  AND  CONTINGENCIES**
 
 The
        Company’s claim will revert back to the seller within no less than a 10 day
        period if the Company fails to make the advance royalty payments per the
        sales
        contract commencing 5 years from the date of the agreement.
 
 Management
        is not aware of any contingent matters that could have a material adverse
        effect
        on the Company’s financial condition, results of operations, or
        liquidity.
 
 **NOTE  9
        -  LITIGATION, CLAIMS AND ASSESSMENTS**
 
 From
        time
        to time in the normal course of business the Company will be involved in
        litigation.  The Company’s management has determined any asserted or
        unasserted claims to be immaterial to the financial
        statements.








F-10




**ITEM
        2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS**
  *This
        report contains certain “forward-looking statements” within the meaning of
        Section 27A of the Securities Act of 1933, as amended, and Section 21E
        of the Exchange Act of 1934, as amended, which are based on management’s
        exercise of business judgment as well as assumptions made by and information
        currently available to, management. When used in this document, the words
“may”,
“will”, “anticipate”, “believe”, “estimate”, “expect”, “intend” and words of
        similar import, are intended to identify any forward-looking statements.
        You
        should not place undue reliance on these forward-looking statements. These
        statements reflect our current view of future events and are subject to certain
        risks and uncertainties as described in this Report on Form 10-QSB as well
        as
        other periodic reports, filed with the Securities and Exchange Commission,
        and
        as noted below. Should one or more of these risks or uncertainties materialize,
        or should underlying assumptions prove incorrect, our actual results could
        differ materially from those anticipated in these forward-looking statements.
        We
        undertake no obligation, and do not intend, to update, revise or otherwise
        publicly release any revisions to these forward-looking statements to reflect
        events or circumstances after the date hereof, or to reflect the occurrence of
        any unanticipated events. Although we believe that our expectations are based
        on
        reasonable assumptions, we can give no assurance that our expectations will
        materialize.*
 
 The
        following discussion and analysis provides information which management believes
        is relevant to an assessment and understanding of our results of operations
        and
        financial condition. On September 30, 2007 we had $13,617 in cash in the
        bank.
        We estimate that in order to carry forward over the next 12 months we will
        need
        approximately $32,500 to pay for office expenses and our “phase 1” exploration
        program. Based upon our present capital, we do not have enough capital to
        pay
        for the $30,000 that is necessary to complete our planned “phase 1” exploration
        program. We need to spend a minimum of $4.00 per hectare in exploration work
        or
        pay the equivalent to the Province of BC Ministry of Finance and a $0.40
        filing
        fee per hectare annually to maintain our claim. Based upon the one claim
        that
        the company has that totals 447 hectares we would need to pay a minimum of
        $1966.80 annually to maintain our claim. Our estimated annual office expenses
        are approximately $2,500. If we do not raise additional capital we will be
        unable to pay the further $20,000 that is owed by May 15, 2008 as per our
        agreement with Richard Simpson the seller of our property.
  We
        will
        need to raise additional funds through private debt or the sale of equities
        to
        meet our capital requirements. We have no present loans or arrangements to
        cover
        our capital requirements. If we do not raise additional capital we will not
        be
        able to implement our business plan. We can only conduct our “phase 1”
exploration program from mid May to mid October only due to inclement weather
        conditions. If we do not raise the $30,000 needed for the “phase 1” program by
        the end of September 2007, we will have to wait until mid May 2008 to commence
        the program.
  The
        accompanying financial statements have been prepared assuming that the company
        will continue as a going concern. As discussed in the notes to the financial
        statements, the company has experienced losses since inception. Our financial
        situation raises substantial doubt about its ability to continue as a going
        concern. The financial statements do not include any adjustments that might
        result from the outcome of this uncertainty.
  The
        following discussion and analysis contains forward-looking statements, which
        involve risks and uncertainties. Our actual results may differ significantly
        from the results, expectations and plans discussed in these forward-looking
        statements.
  **Organization**
  We
        were
        organized as a Delaware Corporation on April 11, 2006 for the purpose of
        locating and developing a copper-gold exploration property in the Province
        of
        British Columbia.
   
  **Overview**
  On
        May 5,
        2006 we entered into an option agreement with Richard Simpson to acquire
        a 100%
        interest in the “Willowvale Project”. The property was acquired from Richard
        Simpson by paying him $55,000 on May 5, 2006. The company must pay advance
        royalties of $20,000 annually commencing on January 17, 2010. Upon commercial
        production, the property will be subject to a 2.5% Net Smelter Royalty (“NSR”).
        1.5% of the “NSR” can be acquired for $1.0 million within 12 months from
        commencement of commercial production.
  If
        Sustut
        fails to make the advance royalty payments on the five yearanniversary
        of
        the claims, as described in the agreement with Richard Simpson the company
        agrees to transfer the claim back to Richard Simpson within no less than
        a 10
        day period.
 
 The
        Willovale Project consists of one claim totaling 447 hectares. The property
        is
        owned 100% by Terry Hughes as President in trust for Sustut Exploration Inc.
        The
        claims are located in the Omineca Mining Division, NTS map sheet 94D/10E.
        The
        property is 4.5km east of the Sustut River in the Province of British
        Columbia, Canada. The property is owned by the Province of British Columbia,
        which grants the mineral claim.
  Currently
        we are not aware of any native land claim that might affect our title to
        the
        mineral claim. Although we are unaware of any situation that would threaten
        our
        claim, it is possible that a native land claim could be made in the future.
        The
        Canadian federal and provincial government’s policy at this time is to consult
        with all the potentially affected native bands and other stakeholders in
        the
        area of any proposed commercial production. If we should encounter a situation
        where a native band or group claims an interest in our claim, we may choose
        to
        provide compensation to the affected party in order to continue with our
        exploration work. If such an option is not available we may have to relinquish
        our interest in the willow project.
  The
        British Columbia government released “The BC Mining Plan” in January 2005 to
        help ensure the mining industry that Province is committed to remain competitive
        in the global mineral exploration sector. British Columbia currently has
        nine
        operating mines, of which six produce copper-gold. The exploration expenditures
        in BC topped $100 million in 2004 according to the BC Mine Plan.
  The
        B.C**.**Mine Plan outlines the following:
  **•**
              B.C.
                  Mineral potential is good**•**
              B.C.
                  Has untapped reserves of metals**•**
              Competitive
                  taxes**•**
              Streamlined
                  regulatory requirements**•**
              Electricity
                  rates are among the lowest in North America**•**
              Highly
                  skilled work force**•**
              Well
                  developed infrastructure
   The
        plan
        addresses a range of factors that set the stage for a healthy mining industry
        that delivers community benefits and is sustainable for years to
        come.
  The
        Canadian Federal Government and the Provinces offer very attractive tax breaks
        for investors in exploration companies. The Federal and Provincial Tax Credits
        are a tax advantage investment that is made into a company carrying out
        grassroots exploration work in Canada. The mining company enters into an
        agreement with an investor and “flow-through mining expenditure” is incurred by
        the company and the individual can claim over 100% of that investment off
        earned
        income. The B.C**.** Government will grant in addition to the
        Federal 15% tax credit a further 20% non-refundable tax credit for qualified
        investments made in new B.C. mineral exploration. Hence, an investor who
        is
        taxed at the highest marginal rate would receive a 141% tax deduction from
        earned income. The company must be publicly trading in order to deal with
        this
        tax advantage investment.
   
  **The
        next twelve months**
  The
        companies plan of operations over the next twelve months is to raise additional
        capital to complete the planned “phase 1” exploration program. The following is
        an exploration budget that is outlined in the summary geology report that
        was
        prepared for the company by George Nicholson, P.Geo.
  **Item
                    Description**
                **Cost
                    Estimate**Helicopter
                    support (6 hrs x $1,000/hr)
                $6,000Labour
                    (2 tech. x 7 days @ $350/day)
                $4,900Sample
                    Analyses (100 soil + 50 rock @ $30/sample)
                $4,500Room
                    and board
                $2,000Mob./Demob.
                    + truck + fuel
                $3,000Report
                    and drafting
                $5,00010%
                    contingency
                $2,500**Total**
                **$27,900****ROUNDED
                    = $30,000**
  At
        present, we do not have sufficient cash on hand to complete the filing of
        this
        prospectus and meeting our exploration, general and administration expenses
        and
        we must raise more capital by May 15, 2008 to carry out further exploration
        programs to maintain our interest in the WILLOW claim. If we are unable to
        raise
        sufficient capital to meet our obligations we could lose our interest in
        the
        properties or a portion thereof.
  We
        plan
        to raise a minimum of $30,000 to continue minimum exploration of our properties
        during the next 12 months through a private placement of debt, convertible
        securities, or common equity. If we are successful in raising the necessary
        capital, we may have to significantly dilute the current shareholders. We
        plan
        to initially offer the debt or equity to our current shareholders and
        management. If we are not successful in raising the required capital, we
        will
        offer our debt or equity to new investors. At present, we have no specific
        plans
        regarding a debt or equity offering, but intend to actively commence raising
        the
        required capital during the fall of 2007. As an alternative to raising capital
        through the selling of debt or equity, we will attempt to negotiate a joint
        venture with an industry partner. If the company is required to enter into
        a joint venture, we could end up with a minority interest in our properties.
        We
        have not contacted another party in the industry regarding a joint venture.
        There is no assurance we will raise the necessary capital, therefore there
        is a significant risk that the company may have to abandon or reduce the
        size of
        our property.
  Off-Balance
        Sheet Arrangements
  We
        have
        no significant off-balance sheet arrangements that have or are reasonably
        likely
        to have a current or future effect on our financial condition, changes in
        financial condition, revenues or expenses, results of operations, liquidity,
        capital expenditures or capital resources that is material to
        stockholders.
   
  **Item
        3. Controls and Procedures**
  Under
        the
        supervision and with the participation of our management, including our
        principal executive officer and principal financial officer, we conducted
        an
        evaluation of our disclosure controls and procedures, as such term is defined
        under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
        Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2007.
        Based
        on this evaluation, our principal executive officer and principal financial
        officer have concluded that our disclosure controls and procedures
        are effective to ensure that information required to be disclosed by us in
        the reports we file or submit under the Exchange Act is recorded, processed,
        summarized, and reported within the time periods specified in the Securities
        and
        Exchange Commission’s rules and forms and that our disclosure and controls are
        designed to ensure that information required to be disclosed by us in the
        reports that we file or submit under the Exchange Act is accumulated and
        communicated to our management, including our principal executive officer
        and
        principal financial officer, or persons performing similar functions, as
        appropriate to allow timely decisions regarding required
        disclosure.
  There
        were no changes (including corrective actions with regard to significant
        deficiencies or material weaknesses) in our internal controls over financial
        reporting that occurred during the third quarter of fiscal 2007 that has
        materially affected, or is reasonably likely to materially affect, our internal
        control over financial reporting.
  **Recent
        Accounting Pronouncements**
  In
        September 2006, the FASB issued SFAS No. 157, “*Fair Value
        Measurements*”. The objective of SFAS 157 is to increase consistency and
        comparability in fair value measurements and to expand disclosures about
        fair
        value measurements. SFAS 157 defines fair value, establishes a framework
        for
        measuring fair value in generally accepted accounting principles, and expands
        disclosures about fair value measurements. SFAS 157 applies under other
        accounting pronouncements that require or permit fair value measurements
        and does not require any new fair value measurements. The provisions of SFAS
        No.
        157 are effective for fair value measurements made in fiscal years beginning
        after November 15, 2007. The adoption of this statement is not expected to
        have
        a material effect on the Company's future reported financial position or
        results
        of operations.
  In
        February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        159, “*The Fair Value Option for Financial Assets and Financial Liabilities
        -
        Including an Amendment of FASB Statement No. 115*”. This statement permits
        entities to choose to measure many financial instruments and certain other
        items
        at fair value. Most of the provisions of SFAS No. 159 apply only to entities
        that elect the fair value option. However, the amendment to SFAS No. 115
        “*Accounting for Certain Investments in Debt and Equity Securities*”
applies to all entities with available-for-sale and trading securities.
        SFAS No.
        159 is effective as of the beginning of an entity’s first fiscal year that
        begins after November 15, 2007. Early adoption is permitted as of the beginning
        of a fiscal year that begins on or before November 15, 2007, provided the
        entity
        also elects to apply the provision of SFAS No. 157, “*Fair Value
        Measurements”.* The adoption of this statement is not expected to have a
        material effect on the Company's financial statements.
   
  **Critical
        Accounting Policies**
  Our
        financial statements and related public financial information are based on
        the
        application of accounting principles generally accepted in the United States
        (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
        subjective interpretations of accounting principles that have an impact on
        the
        assets, liabilities, revenues and expense amounts reported. These estimates
        can
        also affect supplemental information contained in our external disclosures
        including information regarding contingencies, risk and financial condition.
        We
        believe our use of estimates and underlying accounting assumptions adhere
        to
        GAAP and are consistently and conservatively applied. We base our estimates
        on
        historical experience and on various other assumptions that we believe to
        be
        reasonable under the circumstances. Actual results may differ materially
        from
        these estimates under different assumptions or conditions. We continue to
        monitor significant estimates made during the preparation of our financial
        statements.
  Our
        significant accounting policies are summarized in Note 1 of our financial
        statements. While all these significant accounting policies impact our financial
        condition and results of operations, we view certain of these policies as
        critical. Policies determined to be critical are those policies that have
        the
        most significant impact on our financial statements and require management
        to
        use a greater degree of judgment and estimates. Actual results may differ
        from
        those estimates. Our management believes that given current facts and
        circumstances, it is unlikely that applying any other reasonable judgments
        or
        estimate methodologies would cause effect on our consolidated results of
        operations, financial position or liquidity for the periods presented in
        this
        report.
  **Off
        Balance Sheet Arrangements**
  We
        have
        no off-balance sheet arrangements.
  
 
 
  **PART
        II - OTHER INFORMATION**
  **Item
        1. Legal Proceedings.**
  Currently
        we are not aware of any litigation pending or threatened by or against the
        Company.
  **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds**
  None.
 
  **Item
        3. Defaults Upon Senior Securities.**
  None
  **Item
        4. Submission of Matters to a Vote of Security Holders.**
  None.
  **Item
        5. Other Information.**
  None
  **Item
        6. Exhibits and Reports of Form 8-K.**
  (a)           Exhibits
  31.1
        Certifications pursuant to Section 302 of Sarbanes Oxley Act of
        2002
  32.1
        Certifications pursuant to Section 906 of Sarbanes Oxley Act of
        2002
  (b)           Reports
        of Form 8-K
  None.
   
 
  
  **SIGNATURES**
    Pursuant
        to the requirements of the Securities Exchange Act of 1934, as amended, the
        registrant caused this report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
  
  **SUSTUT
                  EXPLORATION, INC.**Date:
                  November 13, 2007
              By:
              */s/
                  Terry Hughes*Terry
                  HughesPresident,
                  Chief Executive Officer and Chief Financial
                  Officer