SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








x
            Quarterly
      Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of
      1934 for the period ended September 30,
2009





o
            Transition
      report under Section 13 or 15(d) of the Exchange Act for the transition
      period from         
      to





Commission
file number:   333-72163





DUTCH
GOLD RESOURCES, INC.





Nevada
            58-2550089(State
      of Incorporation)
            (I.R.S.
      Employer Identification No.)




3500
Lenox Road, NE


Suite
1500


Atlanta,
Georgia  30326


(Address
of principal executive offices)




(404)
419-2440


(Issuer’s
telephone number, including area code)




Check
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 past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.




Yes o               No
x




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:





Class
            
            Outstanding
      at September 30, 2009Common
      Stock, par value $0.001 per share
            
            96,204,042





Transitional
      Small Business Disclosure Format:
            Yes
      o
            
            No
      x











TABLEOF CONTENTS








PART
      I
            FINANCIAL
      INFORMATIONITEM
      1.
            FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEET
            F-1CONSOLIDATED STATEMENTS OF OPERATION
            F-2CONSOLIDATED STATEMENTS OF CASH FLOWS
            F-3NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
            F-5CONSOLIDATED STATEMENTS OF SHAREHOLDERS’
    EQUITY
            F-4ITEM
      2.
            MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
      AND FINANCIAL CONDITION
            1FORWARD LOOKING STATEMENTS
            1OVERVIEW AND RESULTS OF OPERATIONS
            1TWELVE MONTH BUSINESS OUTLOOK
            2OPERATING EXPENSES AND CAPITAL
    EXPENDITURES
            6SOURCE OF REVENUE
            6OPERATING LOSSES
            6LIQUIDITY AND CAPITAL RESOURCES
            6ITEM
      3.
            CONTROLS AND PROCEDURES
            6PART
      II
            OTHER
      INFORMATION
            6ITEM
      1.
            LEGAL PROCEEDINGSITEM
      2.
            RISK FACTORS
            8ITEM
      3.
            CHANGES IN SECURITIES AND USE OF PROCEEDS
            8ITEM
      4.
            DEFAULTS UPON SENIOR SECURITIES
            9ITEM
      5.
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
            9ITEM
      6.
            OTHER INFORMATION
            9ITEM
      7.
            EXHIBITS
      AND REPORTS ON FORM 8-KSIGNATURES
            9





Table of Contents


I

tem 1. Financial Statements (Unaudited).





PageDutch
      Gold Resources, Inc. Consolidated Financial Statements
            F-1Consolidated
      Balance Sheets at September 30, 2009 and December 31, 2008
            F-2Consolidated
      Statements of Operations for the nine and three months ended September 30,
      2009 and 2008
            F-3Consolidated
      Statements of Cash Flows for the nine months ended September 30, 2009 and
      2008
            F-4Consolidated
      Statements of Stockholders Equity for the nine months ended September 30,
      2009
            F-5Notes
      to Consolidated Financial Statements
            F-6




Table of Contents


DUTCH
GOLD RESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 CONSOLIDATED
BALANCE SHEETS
 As
of SEPTEMBER 30, 2009 and DECEMBER 31, 2008
 
  September
      30,
              
              
              December
      31,2009
              
              
              2008(unaudited)ASSETSCURRENT
      ASSETS:Cash
      and cash equivalents
              
              $
              670
              
              
              $
              (1,063
              )Prepaid
      expenses and other current assets
              
              
              1,468,070
              
              
              
              -Total
      current assets
              
              
              1,468,740
              
              
              
              (1,063
              )Property,
      plant and equipmentProperty,
      plant and equipment at cost
              
              
              2,398,776
              
              
              
              2,398,776Less
      accumulated depreciation
              
              
              (1,512,314
              )
              
              
              (1,152,497
              )Net
      property, plant and equipment
              
              
              886,462
              
              
              
              1,246,279Other
      Assets
              
              
              179,852
              
              
              
              179,852TOTAL
      ASSETS
              
              $
              2,535,054
              
              
              $
              1,425,068LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIES:Accounts
      payable
              
              $
              2,127,075
              
              
              $
              1,217,256Accounts
      payable-related parties
              
              
              222,613
              
              
              
              222,613Convertible
      Debentures
              
              
              -
              
              
              
              525,000Payroll
      liabilities
              
              
              (99,373
              )
              
              
              (99,373
              )Accrued
      liabilities
              
              
              618,629
              
              
              
              420,415Loans
      from shareholders
              
              
              493,633
              
              
              
              453,072Total
      current liabilities
              
              
              3,362,577
              
              
              
              2,738,983LONG-TERM
      LIABILITIES:Long-term
      Notes payable-related parties
              
              
              2,514,926
              
              
              
              2,514,926Total
      long-term liabilities
              
              
              2,514,926
              
              
              
              2,514,926TOTAL
      LIABILITIES
              
              
              5,877,503
              
              
              
              5,253,909Commitments
      and contingencies
              
              
              -
              
              
              
              -STOCKHOLDERS'
      DEFICITPreferred
      stock, $.001 par value 10,000,000 authorized, no shares issued and
      outstanding at September 30, 2009 and December 31, 2008Common
      stock, $.001 par value 500,000,000 shares authorized, 96,204,042 and
      52,985,409 issued and outstanding at September 30, 2009 and December 31,
      2008 respectively
              
              
              96,204
              
              
              
              52,985Additional
      paid-in-capital
              
              
              9,093,654
              
              
              
              2,335,934Accumulated
      deficit
              
              
              (12,532,307
              )
              
              
              (6,217,760
              )Total
      stockholders' deficit
              
              
              (3,342,449
              )
              
              
              (3,828,841
              )TOTAL
      LIABILITIES AND STOCKHOLDER'S DEFICIT
              
              $
              2,535,054
              
              
              $
              1,425,068
  See notes to consolidated financial
statements
  F-1
 Table of Contents
   DUTCH
GOLD RESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30,
2008
 
 Three
      Months Ended September 30,
              
              
              Nine
      Months EndedSeptember
      30,2009
              
              
              2008
              
              
              2009
              
              
              2008(unaudited)
              
              
              (unaudited)
              
              
              (unaudited)
              
              
              (unaudited)RevenueSales
              
              $
              -
              
              
              $
              27,709
              
              
              $
              -
              
              
              $
              628,669Cost
      of sales
              
              
              -
              
              
              
              104,214
              
              
              
              -
              
              
              
              1,490,022Gross
      profit
              
              
              -
              
              
              
              (76,505
              )
              
              
              -
              
              
              
              (861,353
              )Operational
      ExpensesOrganizational,
      selling, general and administrative expenses
              
              
              72,574
              
              
              
              184,205
              
              
              
              855,269
              
              
              
              982,377Professional
      fees
              
              
              2,005,896
              
              
              
              524,356
              
              
              
              4,075,331
              
              
              
              1,265,164Rent
      and repairs and maintenance
              
              
              (1,316
              )
              
              
              1,901
              
              
              
              903
              
              
              
              2,955Depreciation
              
              
              119,939
              
              
              
              239,664
              
              
              
              359,817
              
              
              
              475,495Total
      operating expenses
              
              
              2,197,093
              
              
              
              950,126
              
              
              
              5,291,320
              
              
              
              2,725,991Operating
      loss
              
              
              (2,197,093
              )
              
              
              (1,026,631
              )
              
              
              (5,291,320
              )
              
              
              (3,587,344
              )Other
      income (expense)Interest
      expense
              
              
              (345,798
              )
              
              
              (22,074
              )
              
              
              (1,023,227
              )
              
              
              (334,732
              )Income
      before income taxes
              
              
              (2,542,891
              )
              
              
              (1,048,705
              )
              
              
              (6,314,547
              )
              
              
              (3,922,076
              )Income
      tax provision
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Net
      income (loss) for the period
              
              
              (2,542,891
              )
              
              
              (1,048,705
              )
              
              
              (6,314,547
              )
              
              
              (3,922,076
              )Basic
      earnings (loss) per share
              
              $
              (0.03
              )
              
              $
              (0.03
              )
              
              $
              (0.08
              )
              
              $
              (0.09
              )Weighted
      average shares outstanding
              
              
              78,056,164
              
              
              
              41,648,732
              
              
              
              78,056,164
              
              
              
              41,648,732Fully
      diluted earnings (loss) per share
              
              $
              (0.03
              )
              
              $
              (0.03
              )
              
              $
              (0.08
              )
              
              $
              (0.09
              )Fully
      diluted weighted average shares outstanding
              
              
              78,056,164
              
              
              
              41,648,732
              
              
              
              78,056,164
              
              
              
              41,648,732
  See
notes to consolidated financial statements
  F-2
 Table of Contents
  DUTCH GOLDRESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND SEPTEMBER 30, 2008
  
 Nine
      Months
                Ended
      September 30,2009
              
              
              2008(unaudited)
              
              
              (unaudited)Cash
      provided by (used in):Operating
      activities:Net
      income
              
              $
              (6,314,547
              )
              
              $
              (3,922,076
              )Adjustments
      to reconcile net loss to cash used by operating activitiesFair
      value of common stock issued for payment of interest
    expense
              
              
              818,656
              
              
              
              37,677Fair
      value of common stock issued for services
              
              
              5,309,783
              
              
              
              922,877Depreciation
              
              
              359,817
              
              
              
              475,495Changes
      in assets and liabilitiesPrepaid
      expenses and other current assets
              
              
              (1,468,070
              )
              
              
              -Inventories
              
              
              -
              
              
              
              257,248Other
      assets
              
              
              -
              
              
              
              (25,000
              )Accounts
      payable
              
              
              909,819
              
              
              
              801,553Accounts
      payable-related parties
              
              
              -
              
              
              
              37,925Accrued
      liabilities
              
              
              198,214
              
              
              
              188,689Payroll
      liabilities
              
              
              -
              
              
              
              9,842Net
      cash used by operating activities
              
              
              (186,328
              )
              
              
              (1,215,770
              )Investing
      activities:Purchase
      of property and equipment
              
              
              -
              
              
              
              (115,693
              )Net
      cash used by investing activities
              
              
              -
              
              
              
              (115,693
              )Financing
      activities:Proceeds
      from sale of Debentures
              
              
              -
              
              
              
              775,000Proceeds
      from sale of common stock, net
              
              
              147,500
              
              
              
              -Proceeds
      from Shareholder loans
              
              
              40,561
              
              
              
              451,392Net
      cash provided by financing activities
              
              
              188,061
              
              
              
              1,226,392Net
      increase/(decrease) in cash
              
              
              1,733
              
              
              
              (105,071
              )Cash
      and cash equivalents at beginning of period
              
              
              (1,063
              )
              
              
              80,541Cash
      and cash equivalents at end of period
              
              $
              670
              
              
              $
              (24,530
              )SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      paid during year for interest
              
              $
              6,000
              
              
              $
              92,620Non-cash
      Transactions:Notes
      payable converted to equity
              
              $
              525,000
              
              
              $
              -Fair
      value of common stock issued for payment of interest
    expense
              
              
              818,656
              
              
              
              37,677Fair
      value of common stock options issued for services
              
              
              5,309,783
              
              
              
              922,877$
              6,653,439
              
              
              $
              960,554
  See
notes to consolidated financial statements
  F-3
 Table of Contents
  DUTCH GOLDRESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 (unaudited)
 
 Common
      StockComnioi
      Shares
              
              
              Stock
                Dollars
      at Par ($.001)
              
              
              Paid
      in Cap. Dollars $
              
              
              Accum
      Deficit
              
              
              Stockholders'
      EquityBalances
      12/31/08
              
              
              52,985,409
              
              
              $
              52,985
              
              
              $
              2,335,934
              
              
              $
              (6,217,760
              )
              
              $
              (3,828,841
              )Common
      shares issued for cash
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              146,500
              
              
              
              
              
              
              
              147,500Common
      shares issued for services
              
              
              31,098,333
              
              
              
              31,099
              
              
              
              5,278,684
              
              
              
              
              
              
              
              5,309,783Common
      shares issued in lieu of payment
              
              
              7,520,300
              
              
              
              7,520
              
              
              
              517,480
              
              
              
              
              
              
              
              525,000Common
      shares issued for payment of interest
              
              
              3,600,000
              
              
              
              3,600
              
              
              
              815,056
              
              
              
              
              
              
              
              818,656Gain
      (loss) for year
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (6,314,547
              )
              
              
              (6,314,547
              )Balances
      09/30/2009
              
              
              96,204,042
              
              
              $
              96,204
              
              
              $
              9,093,654
              
              
              $
              (12,532,307
              )
              
              $
              (3,342,449
              )
 
  See
notes to consolidated financial statements


F-4
 Table of Contents


DUTCH GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 1—NATURE
OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





NATURE
OF OPERATIONS





Dutch
Gold Resources, Inc. (DGRI.PK) is a junior gold miner, experienced in the
exploration, development and production of gold properties, through the
production stage. Its first project was an advanced development and production
stage mine system located in Southern Oregon. The geology of this mine is unique
to this part of the United States. The financial statements are prepared in
conformity with accounting principles generally accepted in the United States of
America applicable to a going concern, which contemplates the realization of
assets and liquidation of liabilities in the normal course of
business.





On
January 7, 2007, the Registrant consummated the terms of its Share Exchange
Agreement (the “Agreement”) with Dutch Mining, LLC (“Dutch Mining”) whereby the
Registrant issued 24,000,000 shares of its common stock, par value $.001 per
share (the “Common Stock”) to the Dutch Mining equity holders and their
designees in exchange for all of the issued and outstanding equity interests of
Dutch Mining (the “Exchange”). Following the Exchange, Dutch Mining became a
wholly owned subsidiary of the Registrant and the Registrant had a total of
30,256,144 shares of Common Stock issued and outstanding.  In
accordance with the Exchange, the Registrant elected Ewald Dienhart as Chairman
of the Board of Directors.





Immediately
following the consummation of this transaction the Company issued 4,000,000
shares of its common stock to several parties holding notes with Dutch Gold
Resources, Inc. Subsequent to this transaction, all notes payable for Dutch Gold
Resources, Inc. were extinguished and the only remaining notes were the ones
acquired in the Dutch Mining, LLC transaction.





PRINCIPLES
OF CONSOLIDATION





Our
Consolidated Financial Statements have been prepared in accordance with
accounting principles generally accepted in the United States of America, and
include our accounts and our wholly owned subsidiaries’ accounts (collectively,
the “Company”). All significant intercompany balances and transactions have been
eliminated in consolidation.





PREPARATION
OF FINANCIAL STATEMENTS





The
Company follows the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America and has adopted a
year-end of December 31.





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 revenues and expenses
during the reporting period. Actual results could differ from those
estimates.





Management
further acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud. The Company’s system of internal accounting
control is designed to assure, among other items, that 1) recorded transactions
are valid; 2) valid transactions are recorded; and 3) transactions are recorded
in the proper period in a timely manner to produce financial statements which
present fairly the financial condition, results of operations and cash flows of
the Company for the respective periods being presented.





In the
opinion of management, the accompanying consolidated balance sheets and related
consolidated interim statements of operations, cash flows, and stockholders’
equity (deficit) include all adjustments, consisting only of normal recurring
items, necessary for their fair presentation in conformity with accounting
principles generally accepted in the United States of America (“U.S.
GAAP”).


F-5
 Table of Contents




DUTCH
GOLD RESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


Interim
results are not necessarily indicative of results for a full year. The
information included in this Form 10-Q should be read in conjunction with
information included in the Dutch gold Resources, Inc.  Form 10-K
filed on February 9, 2010 with the U.S. Securities and Exchange
Commission.




ORGANIZATIONAL
AND START-UP EXPENSES





The
Company has expensed all organizational and start-up expenses for financial
reporting purposes.





USE
OF ESTIMATES





The
preparation of consolidated financial statements in conformity with United
States generally accepted accounting principles requires management to make
estimates and assumptions of future events that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities at the date of
the consolidated financial statements, and the reported amounts of revenues and
expenses for the reporting period. Actual results could differ materially from
those reported.





CASH
AND CASH EQUIVALENTS





Cash
equivalents comprise certain highly liquid instruments with an original maturity
of three months or less when purchased. As at the reporting dates, cash and cash
equivalents consist of cash only.


F-6
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





PROPERTY
PLANT AND EQUIPMENT





Property,
plant and equipment are recorded at cost. Depreciation is recorded on the
straight-line basis over estimated useful lives that range from three to five
years, but do not exceed the useful life of the individual asset. Normal
maintenance and repairs are charged to operations while expenditures for major
maintenance and improvements are capitalized. When assets are retired or sold,
the related cost and accumulated depreciation are removed from the accounts, and
any gain or loss arising from such disposition is included in the consolidated
statement of activities.





REVENUE
RECOGNITION





We
recognize the sale of product when an agreement of sale exists, product delivery
has occurred, title has transferred to the customer and collection is reasonably
assured. The price received is based upon terms of the contract.





MINERAL
CLAIM PAYMENTS AND EXPLORATION EXPENSES





The
Company expenses all costs related to the acquisition, maintenance and
exploration of its unproven mineral properties to which it has secured
exploration rights. If and when proven and probable reserves are determined for
a property and a feasibility study prepared with respect to the property, then
subsequent development costs of the property will be capitalized. To date the
Company has not established the commercial feasibility of its exploration
prospects, therefore all costs have been expensed. The Company capitalizes
certain costs related to the acquisition of mineral rights where proven or
probable reserves are present, or when the Company intends to carry out an
exploration program and has the funds to do so.





CONCENTRATIONS





Concentration
of Credit Risk — Financial instruments, which could potentially subject the
Company to credit risk, consist primarily of cash in bank and receivables. The
Company maintains its cash in bank deposit accounts insured by the Federal
Deposit Insurance Corporation up to $250,000. The Company’s account balances, at
times, may exceed federally insured limits. The Company has not experienced
material losses in such accounts, and believes it is not exposed to any
significant credit risk with respect to its cash accounts. Concentration
of Operations — The Company’s operations are all related to the minerals and
mining industry. A reduction in mineral prices or other disturbances in the
minerals market could have an adverse effect on the Company’s
operations.





ENVIRONMENTAL
COSTS





Environmental
expenditures that relate to current operations are charged to operations or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are charged to operations. Liabilities are recorded when
environmental assessments and/or remedial efforts are probable, and the cost can
be reasonably estimated. Generally, the timing of these accruals coincides with
the earlier of completion of a feasibility study or the Company’s commitments to
plan of action based on the then known facts.





STOCK
BASED COMPENSATION





The
Company has adopted FASB ASC Topic 718 - Stock Compensation, which requires the
Company to measure the compensation cost of stock options and other stock-based
awards to employees and directors at fair value at the grant date and recognize
compensation expense over the requisite service period for awards expected to
vest.The Company ceased the Stock Option program at 31 December
2007.




Convertible
Notes




The
Company reviews the terms of convertible debt and equity instruments it issues
to determine whether there are embedded derivative instruments, including
embedded conversion options that are required to be bifurcated and accounted for
separately as a derivative financial instrument. In circumstances where the
convertible instrument contains more than one embedded derivative instrument,
including conversion options, that are required to be bifurcated, the bifurcated
derivative instruments are accounted for as a single compound instrument. Also,
in connection with the sale of convertible debt and equity instruments, the
Company may issue free standing warrants that may, depending on their terms, be
accounted for as derivative instrument liabilities, rather than as
equity.


F-7
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





When
convertible debt or equity instruments contain embedded derivative instruments
that are to be bifurcated and accounted for separately, the total proceeds
allocated to the convertible host instruments are first allocated to the fair
value of all the bifurcated derivative instruments. The remaining proceeds, if
any, are then allocated to the convertible instruments themselves, usually
resulting in those instruments being recorded at a discount from their face
amount.




When the
Company issues debt securities, which bear interest at rates that are lower than
market rates, the Company recognizes a discount, which is offset against the
carrying value of the debt. Such discount from the face value of the debt,
together with the stated interest on the instrument, is amortized over the life
of the instrument through periodic charges to income, using the effective
interest method.





FINANCIAL
INSTRUMENTS





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





INCOME
TAX





The
Company accounts for income taxes under FASB ASC 740 –. Under ASC 740 deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss carryforwards
and deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment. ASC 740 also requires that
uncertain tax positions are evaluated in a two-step process, whereby (1) it is
determined whether it is more likely than not that the tax positions will be
sustained based on the technical merits of the position and (2) for those tax
positions that meet the more-likely-than-not recognition threshold, the largest
amount of tax benefit that is greater than fifty percent likely of being
realized upon ultimate settlement with the related tax authority would be
recognized.





IMPAIRMENT
OF LONG-LIVED ASSETS





Impairment
of Long-lived Assets — Management reviews and evaluates the net carrying value
of all facilities, including idle facilities, for impairment at least annually,
or upon the occurrence of other events or changes in circumstances that indicate
that the related carrying amounts may not be recoverable. We estimate the net
realizable value of each property based on the estimated undiscounted future
cash flows that will be generated from operations at each property, the
estimated salvage value of the surface plant and equipment, and the value
associated with property interests. All assets at an operating segment are
evaluated together for purposes of estimating future cash flows.




Although
management has made a reasonable estimate of factors based on current conditions
and information, assumptions underlying future cash flows are subject to
significant risks and uncertainties. Estimates of undiscounted future cash flows
are dependent upon estimates of metals to be recovered from proven and probable
ore reserves, and to some extent, identified resources beyond proven and
probable reserves, future production and capital costs and estimated metals
prices (considering current and historical prices, forward pricing curves and
related factors) over the estimated remaining mine life. It is reasonably
possible that changes could occur in the near term that could adversely affect
our estimate of future cash flows to be generated from our operating properties.
In accordance with FASB ASC 360-10-10  if undiscounted cash flows
including an asset’s fair value are less than the carrying value of a property,
an impairment loss is recognized.


F-8
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





ACCOUNTING
FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES




The
Company has adopted FASB ASC 815-10 which requires companies to recognize all
derivatives contracts as either assets or liabilities in the balance sheet and
to measure them at fair value. If certain conditions are met, a derivative may
be specifically designated as a hedge, the objective of which is to match the
timing of gain or loss recognition on the hedging derivative with the
recognition of (i) the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk or (ii) the earnings effect
of the hedged forecasted transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized in income in the period of
change.




The
Company has not entered into derivative contracts either to hedge existing risks
or for speculative purposes. The adoption of this pronouncement does not have an
impact on the Company’s financial statements.




BASIC
AND DILUTED LOSS PER SHARE




The
Company computes net income (loss) per share in accordance with FASB ASC 260,
which requires presentation of both basic and diluted earnings per share (“EPS”)
on the face of the income statement. Basic EPS is computed by dividing net
income (loss) available to common shareholders by the weighted average number of
common shares outstanding during the year. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period using the
treasury stock method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti-dilutive. Because the Company does not
have any potentially dilutive securities only basic loss per share is presented
in the accompanying financial statements. At September 30, 2009, the Company had
no outstanding options, warrants and stock purchase rights that could have a
future dilutive effect on the calculation of earnings per share.





The
Company computes net income (loss) per share in accordance withFASB ASC 260. The
basic net loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted net loss per share
gives effect to all dilutive potential common shares outstanding during the
period using the “as if converted” basis. At September 30, 2009, the Company had
outstanding options, warrants and stock purchase rights to purchase a total of
5,750,000 common shares of the Company that could have a future dilutive effect
on the calculation of earnings per share.





ASSET
RETIREMENT OBLIGATIONS




The
Company follows FASB ASC 410-20, which addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated retirement costs. The standard applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development and normal use of the
asset.




ASC
410-20requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made. The fair value of the liability is added to
the carrying amount of the associated asset and this additional carrying amount
is depreciated over the life of the asset. The liability is accreted at the end
of each period through charges to operating expense. If the obligation is
settled for other than the carrying amount of the liability, the Company will
recognize a gain or loss on settlement. As at September 30, 2009 and December
31, 2008 the Company had no asset retirement obligations.





RECENT
ACCOUNTING PRONOUNCEMENTS





In June
2009, the Financial Accounting Standards Board (“FASB”) issued the Accounting
Standards Codification (“ASC”) (formerly issued as Statement of Financial
Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles — a
replacement of FASB SFAS No. 162), as the single source of authoritative
nongovernmental U.S. GAAP launched on July 1, 2009.  The ASC does not
change current U.S. GAAP, but is intended to simplify user access to all
authoritative U.S. GAAP by providing all the authoritative literature related to
a particular topic in one place. All existing accounting standard documents will
be superseded and all other accounting literature not included in
the


F-9
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





ASC
will be considered no authoritative. The ASC is effective for interim and annual
periods ending after September 15, 2009. The ASC is for disclosure only and will
not impact our financial condition or results of operations. The Company adopted
the ASC for the interim period ended September 30, 2009.  The adoption
of the ASC had no impact on our financial reporting process.





On
January 1, 2009, the Company adopted ASC Subtopic 815-10 (formerly SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities — an amendment
of FASB Statement No. 133), which provides revised guidance for enhanced
disclosures about how and why an entity uses derivative instruments, how
derivative instruments and the related hedged items are accounted for under ASC
Topic 815, and how derivative instruments and the related hedged items affect an
entity’s financial position, financial performance and cash
flows.  Since the Company currently does not have any derivative
instruments, there are no additional disclosures required.





On
January 1, 2009, the company adopted guidance issued by the FASB on business
combinations ASC 805including that the purchase method be used for all business
combinations and for an acquirer to be identified for each business combination.
This standard defines the acquirer as the entity that obtains control of one or
more businesses in the business combination and establishes the acquisition date
as the date that the acquirer achieves control instead of the date that the
consideration is transferred. In a business combination, including business
combinations achieved in stages (step acquisition), the acquirer is required to
recognize the assets acquired, liabilities assumed, and any noncontrolling
interest in the acquiree at the acquisition date, measured at their fair values
as of that date, with limited exceptions. It also requires the recognition of
assets acquired and liabilities assumed arising from certain contractual
contingencies as of the acquisition date, measured at their acquisition-date
fair values. Additionally, it requires acquisition-related costs to be expensed
in the period in which the costs are incurred and the services are received
instead of including such costs as part of the acquisition price. The adoption
has not had a material impact on the company’s financial
statements.





In April
2009, the FASB issued ASC 820 “Determining Fair Values When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly." This FSP provides guidance on
(1) estimating the fair value of an asset or liability when the volume and level
of activity for the asset or liability have significantly declined and (2)
identifying transactions that are not orderly. The FSP also amends certain
disclosure provisions of SFAS No. 157 to require, among other things,
disclosures in interim periods of the inputs and valuation techniques used to
measure fair value. This pronouncement is effective prospectively beginning
April 1, 2009. The Company is evaluating the impact that the adoption of this
standard will have on the Company's results of operations and financial
condition.





In April
2009, the FASB issued ASC 820 and ASC 320-10-65 "Recognition and Presentation of
Other-Than-Temporary Impairments". This ASC modifies the requirements for
recognizing other-than-temporarily impaired debt securities and changes the
existing impairment model for such securities. The ASC also requires additional
disclosures for both annual and interim periods with respect to both debt and
equity securities. Under the ASC, impairment of debt securities will be
considered other-than-temporary if an entity (1) intends to sell the security,
(2) more likely than not will be required to sell the security before recovering
its cost, or (3) does not expect to recover the security's entire amortized cost
basis (even if the entity does not intend to sell). The ASC further indicates
that, depending on which of the above factor(s) causes the impairment to be
considered other-than-temporary, (1) the entire shortfall of the security's fair
value versus its amortized cost basis or (2) only the credit loss portion would
be recognized in earnings while the remaining shortfall (if any) would be
recorded in other comprehensive income. ASC 820 requires entities to initially
apply the provisions of the standard to previously other-than-temporarily
impaired debt securities existing as of the date of initial adoption by making a
cumulative-effect adjustment to the opening balance of retained earnings in the
period of adoption. The cumulative-effect adjustment potentially reclassifies
the noncredit portion of a previously other-than-temporarily impaired debt
security held as of the date of initial adoption from retained earnings to
accumulated other comprehensive income. This pronouncement is effective April 1,
2009. The Company has adopted this pronouncement for the quarter ended June 30,
2009; however, since the Company has no such investments in debt or equity
securities, there was no impact on the Company’s financial position or results
of operations as a result of the adoption.





In April
2009, the FASB issued ASC 825, "Interim Disclosures about Fair Value of
Financial Instruments." This ASC essentially expands the disclosure about fair
value of financial instruments that were previously required only annually to
also be required for interim period reporting. In addition, the ASC requires
certain additional disclosures regarding the methods and significant assumptions
used to estimate the fair value of financial instruments.


F-10
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





In May
2009, the FASB issued, "Subsequent EventsASC 855-10-05, which provides guidance
to establish general standards of accounting for and disclosures of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. ASC 855-10-05 also requires entities to disclose the
date through which subsequent events were evaluated as well as the rationale for
why that date was selected. ASC 855-10-05 is effective for interim and annual
periods ending after June 15, 2009, and accordingly, the Company adopted this
pronouncement during the second quarter of 2009. ASC 855-10-05 requires that
public entities evaluate subsequent events through the date that the financial
statements are issued. The Company has looked at subsequent events through
February 10, 2010 and has included all subsequent events in Note 13 - Subsequent
Events.





In June
2009, the FASB issued, "Accounting For Transfers of Financial Assets -- An
Amendment Of FASB Statement ASC860, which requires entities to provide more
information regarding sales of securitized financial assets and similar
transactions, particularly if the entity has continuing exposure to the risks
related to transferred financial assets. ASC 860 eliminates the concept of a
"qualifying special-purpose entity", changes the requirements for derecognizing
financial assets and requires additional disclosures. ASC 860 is effective for
fiscal years beginning after November 15, 2009. The Company has not completed
its assessment of the impact ASC860 will have on its financial condition,
results of operations or cash flows.





In June
2009, the FASB issued "Amendments to FASB Interpretation No. 46(RASC 810-10,
which modifies how a company determines when an entity that is insufficiently
capitalized or is not controlled through voting (or similar rights) should be
consolidated. ASC 810-10 clarifies that the determination of whether a company
is required to consolidate an entity is based on, among other things, an
entity's purpose and design and a company's ability to direct the activities of
the entity that most significantly impact the entity's economic performance. ASC
810-10 requires an ongoing reassessment of whether a company is the primary
beneficiary of a variable interest entity. SFAS 167 also requires additional
disclosures about a company's involvement in variable interest entities and any
significant changes in risk exposure due to that involvement. ASC 810-10 is
effective for fiscal years beginning after November 15, 2009. The Company has
not completed its assessment of the impact ASC 810-10 will have on its financial
condition, results of operations or cash flows.





NOTE 2—PREPAID
AND OTHER CURRENT ASSETS





Prepaid
and Other Current Assets are comprised of:





September
      30,
              
              
              December
      312009
              
              
              2008Prepaid
      consulting fees
              
              $
              1,468,070
              
              
              $
              -Total
      prepaid and other current assets
              
              $
              1,468,070
              
              
              $
              -





NOTE
3—PROPERTIES, PLANT AND EQUIPMENT





Our major
components of properties, plants, equipment are:


September
      30,
                
                
                December
      312009
                
                
                2008


Office
      equipment
                
                $
                11,127
                
                
                $
                11,127Lab
      equipment
                
                
                30,494
                
                
                
                30,494Mill
      equipment
                
                
                1,488,482
                
                
                
                1,488,482Mine
      - structural
                
                
                359,782
                
                
                
                359,782Mine
      equipment
                
                
                508,891
                
                
                
                508,8922,398,776
                
                
                
                2,398,776Less:
      accumulated depreciation, depletion and amortization
                
                
                1,512,314
                
                
                
                1,152,497Net
      carrying value
                
                $
                886,462
                
                
                $
                1,246,279


F-11
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS








Depreciation
expense was $ 359,817 for the nine months ended September 2009.





The
Internal Revenue Service has a federal lien on the company’s subsidiary Dutch
Mining, LLC’s equipment, real property and leases in the amount of
$567,062.  The State of Oregon Department of Revenue has a lien on the
company’s subsidiary Dutch Mining, LLC’s personal and real property in the
amount of $118,663. Dutch Gold Resources, Inc. is not liable for the taxes
associated with these liens, except to the extent that it makes additional
capital available to Dutch Mining, LLC.


F-12
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS








NOTE 4—ACCRUED
EXPENSES AND ACCOUNTS PAYABLE





Accrued
expenses and Accounts Payable are comprised of:





September
      30,
              
              
              December
      31,2009
              
              
              2008Accrued
      interest expense
              
              $
              618,629
              
              
              $
              420,415Accounts
      Payable
              
              
              2,127,075
              
              
              
              1,217,256Accounts
      Payable-related parties
              
              
              0222,613
              
              
              
              222,613Total
      Accrued expenses and Accounts Payable
              
              $
              2,968,317
              
              
              $
              1,860,284





NOTE 5—INCOME
TAX





The
Company accounts for income taxes under the provisions of ASC 740, which
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Deferred income taxes are provided using the
liability method. Under the liability method, deferred income taxes are
recognized for all significant temporary differences between the tax and
financial statement bases of assets and liabilities.





Uncertain
Tax Positions





On
January 1, 2007, we adopted ASC 740. ASC 740 prescribes a recognition threshold
and measurement attribute for the recognition and measurement of tax positions
taken or expected to be taken in income tax returns. ASC 740 also provides
guidance on de-recognition of income tax assets and liabilities, classification
of current and deferred income tax assets and liabilities, and accounting for
interest and penalties associated with tax positions.





Based on
our assessment of ASC 740, we concluded that the adoption of ASC 740, had no
significant impact on our results of operations or financial position, and
required no adjustment to the opening balance sheet accounts. Our year-end
analysis supports the same conclusion, and we do not have an accrual for
uncertain tax positions as of September 30, 2009. As a result, tabular
reconciliation of beginning and ending balances would not be meaningful. If
interest and penalties were to be assessed, we would charge interest to interest
expense, and penalties to other operating expense. It is not anticipated that
unrecognized tax benefits would significantly increase or decrease within 12
months of the reporting date.





NOTE 6—CONVERTIBLE
DEBENTURES





The
Company had no convertible debentures outstanding at September 30, 2009 and
$525,000 at December 31, 2008. The notes bear an interest at a rate of 8% per
annum. Under the convertibility terms of the notes payable, the principal, plus
accrued interest, can be converted immediately, at the option of the holder,
either in whole, or in part, into fully paid common shares of the
Company.





NOTE
7—ACQUISITION OF SUBSIDIARY





In
January 4, 2007, the company entered into a definitive Share Exchange agreement
(the “Agreement”) with Dutch Mining, L.L.C., an Oregon limited liability company
(‘Dutch Mining’).  Pursuant to the agreement, the company agreed to
acquire 100% of the outstanding equity of Dutch Mining from the stockholders of
Dutch Mining (the “Dutch Mining Shareholders”) in exchange for the issuance by
the company to the Dutch Mining Shareholders of an aggregate of 24,000,000 newly
issued shares of common stock (“the Exchange Shares”). The Exchange shares were
issued to the Dutch Mining Shareholders on a pro rata basis, in proportion to
the ratio that the percentage of Dutch Mining Interest held by such Dutch Mining
Shareholder bears to the number of shares of Dutch Mining Interests held by all
the Dutch Mining Shareholders as of the contract closing date.


F-13
 Table of Contents




DUTCH
GOLD RESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


The
transactions was accounted for as a recapitalization, with the shares issued as
consideration being recorded at $3,936,480 that being value given up after
considering price fluctuations and liquidity issues.





NOTE 8—CAPITAL
STOCK





Common
Stock





As of
September 30, 2009, the Company has 96,204,042 shares of its $0.001 par value
common stock issued and outstanding.


F-14
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





Warrants





As of
September 30, 2009 the Company had the following warrants for the purchase of
shares of common stock issued and outstanding:




Warrants
      Outstanding
              
              
              Weighted
      Average Exercise Price
              
              
              Aggregate
      Intrinsic ValueOutstanding,
      December 31, 2008
              
              
              1,916,667
              
              
              
              -
              
              
              
              -Granted
              
              
              3,833,333
              
              
              
              -
              
              
              
              -Forfeited
              
              
              -
              
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -
              
              
              
              -Outstanding,
      September 30, 2009
              
              
              5,750,000
              
              
              $
              0.84
              
              
              $
              0





The fair
value of the warrants is measured at the end of the reporting period with
changes in fair value recognized in net income. None was recognized in the
period ending September 30, 2009. The value determined for these warrants at
September 30, 2009 was $ $1,824,059.  Using the Black-Scholes valuation
model and the market price and volatility of the Company’s shares of common
stock as quoted on the OTCBB as of September 30, 2009, the value of these
warrants at September 30, 2009 is determined to be zero.  The warrants do
not confer upon the holders any rights or interest as a shareholder of the
Company.





As at
September 30, 2009, the following share purchase warrants were
outstanding:





Warrants
              
              
              Exercise
              
              ExpirationOutstanding
              
              
              Price
              
              Date500,000
              
              
              $
              1.15
              
              January
      5, 2013250,000
              
              
              
              1.15
              
              January
      5, 201341,667
              
              
              
              0.60
              
              February
      27, 2010100,000
              
              
              
              0.97
              
              February
      27, 201012,500
              
              
              
              0.95
              
              April
      14, 201312,500
              
              
              
              0.95
              
              April
      14, 2013833,333
              
              
              
              1.00
              
              September
      4, 2010166,667
              
              
              
              1.00
              
              September
      4, 20103,333,333
              
              
              
              0.50
              
              March
      12, 201162,500
              
              
              
              0.50
              
              June
      9, 2012437,500
              
              
              
              0.50
              
              June
      9, 20125,750,000





NOTE 8—RELATED
PARTY TRANSACTIONS





The
Company assumed a note issued by Dutch Mining, LLC in the amount of $1.2M to
Embassy International, LLC, and Florida limited liability company controlled by
the family of the Chairman of the Board, Ewald Dienhart. The note is dated
December 31, 2006 and carries an interest rate of 10.0%.  The note is
unsecured and may be converted into shares of the Company.  The
related parties have agreed not to demand the loans through December 31, 2012
therefore the loans are recorded as long-term liabilities





The
Company assumed notes issued by Dutch Mining, LLC in the amount of $250K to
Gabriela Dienhart-Engel, who is the daughter of the Chairman of the Board, Ewald
Dienhart. The note is dated July 31, 2006 and carries an interest rate of
6.0%.  The note is partially secured by the title to the Gold Bug
Mine, and may be converted into shares of the Company.  The related
parties have agreed not to demand the loans through December 31, 2012 therefore
the loans are recorded as long-term liabilities





The
Company assumed notes issued by Dutch Mining, LLC in the amount of $100,000 to
Dienhart-Caruso TBE Family LLC, a Florida limited liability company that is
controlled by the wife of the Chairman of the Board, Ewald Dienhart. The note is
dated July 31, 2006 and carries an interest rate of 6.0%.  The note is
partially secured by the title to certain equipment used by the Company, and may
be converted into shares of the Company.  The related parties have
agreed not to demand the loans through December 31, 2012 therefore the loans are
recorded as long-term liabilities.


F-15
 Table of Contents


DUTCH
GOLD RESOURCES, INC.


(Formerly
SMALL TOWN RADIO, INC.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





The
Company assumed a note issued by Dutch Mining LLC in the amount of $950,000 to
Josef Bauer for working capital.  The note is guaranteed by Ewald
Dienhart and carries an interest rate of 13.0%.  The related parties
have agreed not to demand the loans through December 31, 2012 therefore the
loans are recorded as long-term liabilities.





The
Company leases space from Rendata Industrial Park, LLC and Rendata is
substantially controlled by Ewald Dienhart, the company’s
Chairman.  For the period ended September 30, 2009 the Company accrued
rent and related expenses in the amount of $129,535 and had a payable balance
accrued of $298,185 at September 30, 2012.





The
Company had an agreement with HPUs, LLC, whose Managing Member Patrick Engel, is
related to the Company’s Chairman, effective November 30, 2007 to provide
management services. The contract was for one year, automatically renewable
unless terminated for a monthly amount of $9,500.  The Company had a
payable balance accrued of $212,338 at September 30, 2009.





The
company owed $69,683 to Ewald J. Dienhart for short term advances at September
30, 2009.





NOTE
9—FINANCIAL CONDITION AND GOING CONCERN





The
Company's continuance is dependent on raising capital and generating revenues
sufficient to sustain operations. The Company believes that the necessary
capital will be raised and has entered into discussions to do so with certain
individuals and companies. However, as of the date of these consolidated
financial statements, no formal agreement exists.





The
accompanying consolidated financial statements do not include any adjustments
that might be necessary should the Company be unable to secure the necessary
capital and continue as a going concern.





NOTE 10
– SUBSEQUENT EVENTS





Settlement
of Claim





On
February 5, 2008, the Company issued 500,000 shares to settle an outstanding
claim relating to the purchase of the Benton Mine.  This settled all
outstanding matters relating to this transaction.





Acquisition
of Control of Aultra Gold, Inc.





On
December 31, 2009, pursuant to a Stock Purchase Agreement by and among the
Company, Rauno Perttu, Strategic Minerals Inc., a Nevada corporation, and Aultra
Gold Capital Inc., a Turks and Caicos corporation, the Company acquired
controlling interest of Aultra Gold for a purchase price of One Million
newly-issued shares of the Company’s common stock, par value $0.001 per
share.





Employment
Agreement





On
December 31, 2009 the Company entered into an employment agreement with Mr.
Daniel Hollis the Company’s Chief Executive Officer for an initial one-year
period.  The agreement may be renewed at the option of the Corporation
for successive one-year periods. The agreement provides for an annual salary of
$96,000 plus a signing bonus of $25,000.





Acquisition
of Aultra Gold, Inc.’s Assets





On
January 6, 2010, the Company entered into an Asset Purchase Agreement with
Aultra Gold, Inc. effective as of December 31, 2009.  Pursuant to the
Agreement, the Company acquired all of Aultra Gold’s assets.  As
consideration for these assets, the Company issued 9,614,667 shares of its
common stock, par value $0.001 per share, to Aultra Gold.





In
accordance with the transaction, the Company acquired substantially all of the
assets related to Aultra Gold’s gold and mineral business, including inventory,
accounts receivable, certain supply and distribution and other vendor contracts,
good will and other various assets and intangibles. The parties made customary
representations, warranties and indemnities that are typical and consistent for
a transaction of this size and scope.


F-16
 Table of Contents




DUTCH
GOLD RESOURCES, INC.
 (Formerly
SMALL TOWN RADIO, INC.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE
11 – MINING LEASE AND OPTION TO PURCHASE





On May 1,
2006 the Company entered into a mining lease and option to purchase mining
property known as Mineral Lot no. 351 final certificate No. 83 consisting of the
Gold Bug, Silver State, Silver Dollar, Oregonian, Bimetallist and US Lode Claims
in Joseph County, Oregon together with related easements with Benton Mines,
Inc.  The agreement is a fifth amendment to a mining lease and option
to purchase dated June 1, 1976.





The
agreement provides for a monthly minimum advance royalty payment of
$5,000.  The production royalty provides that the lessor pay 4% of the
value of ores, minerals, metals, bullion and mineral products derived from the
property to the lessee.  In addition, lessee will pay 1% of the value
of ores, minerals, metals, bullion and mineral products derived within one mile
of the leased property.  The royalties are payable on a monthly
basis.





The
Company has an option to purchase the property subject to the lease for
$10,000,000.


F-17
 Table of Contents


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





Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.   These
forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and
similar expressions.  We intend such forward-looking statements to be
covered by the safe-harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor
provisions.  Forward-looking statements are based on current
expectations and assumptions that are subject to risks and uncertainties, which
may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain.  Factors which could have a
material adverse affect on our operations and future prospects include, but are
not limited to: changes in economic conditions, legislative/regulatory changes,
availability of capital, interest rates, competition, and generally accepted
accounting principles. These risks and uncertainties should also be considered
in evaluating forward-looking statements and undue reliance should not be placed
on such statements.  We undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.  Further information concerning our
business, including additional factors that could materially affect our
financial results, is included herein and in our other filings with the
SEC.





Forward Looking Statements





This
Quarterly Report on Form 10-QSB and the information incorporated by reference
may include "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities and
Exchange Act of 1934, as amended. Various statements, estimates, predictions,
and projections stated under "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," and
elsewhere in this Quarterly Report are "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. These statements appear in a number of places in this Quarterly Report and
include statements regarding the intent, belief or current expectations of Dutch
Gold Resources, Inc. or our officers with respect to, among other things, the
ability to successfully implement our operating and acquisition strategies,
including trends affecting our business, financial condition and results of
operations. While these forward-looking statements and the related assumptions
are made in good faith and reflect our current judgment regarding the direction
of the related business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions, or other
future performance suggested herein. These statements are based upon a number of
assumptions and estimates, which are inherently subject to significant
uncertainties and contingencies, many of which are beyond our control and
reflect future business decisions, which are subject to change. Some of these
assumptions inevitably will not materialize, and unanticipated events will occur
which will affect our results. Some important factors (but not necessarily all
factors) that could affect our revenues, growth strategies, future profitability
and operating results, or that otherwise could cause actual results to differ
materially from those expressed in or implied by any forward-looking statement,
include the following:





These
statements include, but are not limited to, comments regarding:




•
            the
      establishment and estimates of mineral reserves and
    resources;


•
            grade;


•
            expenditures;


•
            exploration;


•
            permits;


•
            closure
      costs;


•
            future
      financing;


•
            liquidity;


•
            estimates
      of environmental liabilities;


•
            our
      ability to obtain financing to fund our estimated expenditure and capital
      requirements;


•
            factors
      impacting our results of
operations;


•
              application
      of Sarbanes-Oxley 404 reporting requirements and our ability to meet those
      reporting requirements; and


•
            the
      impact of adoption of new accounting
standards.




1
 Table of Contents


Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
“expects” or “does not expect”, “is expected”, “anticipates” or “does not
anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions,
events or results “may”, “could”, “would”, “might” or “will” be taken, occur or
be achieved) are not statements of historical fact and may be forward-looking
statements.  Forward-looking statements are subject to a variety of
known and unknown risks, uncertainties and other factors which could cause
actual events or results to differ from those expressed or implied by the
forward-looking statements, including, without limitation:




•
            unexpected
      changes in business and economic
conditions;


•
            significant
      increases or decreases in gold
prices;


•
            unanticipated
      grade changes;


•
            metallurgy,
      processing, access, availability of materials, equipment, supplies and
      water;


•
            determination
      of reserves;


•
            results
      of current and future exploration
activities;


•
            results
      of pending and future feasibility
studies;


•
            joint
      venture relationships;


•
            local
      and community impacts and issues;


•
            timing
      of receipt of government approvals;


•
            accidents
      and labor disputes;


•
            environmental
      costs and risks;


•
            competitive
      factors, including competition for property
  acquisitions;


•
            availability
      of external financing at reasonable rates or at all;
  and


•
            the
      factors discussed in this Quarterly Report on Form 10-QSB under the
      heading “Risk Factors.”




This list
is not exhaustive of the factors that may affect our forward-looking statements.
Some of the important risks and uncertainties that could affect forward-looking
statements are described further under the sections titled “Risk Factors and
Uncertainties”, “Description of the Business” and “Management’s Discussion and
Analysis” of this Quarterly Report.  Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, estimated
or expected.  We caution readers not to place undue reliance on any
such forward-looking statements, which speak only as of the date
made.  We disclaim any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events, except as required by law.





Stockholders
and other users of this Quarterly Report on Form 10-QSB are urged to carefully
consider these factors in connection with the forward-looking statements. We do
not intend to publicly release any revisions to any forward-looking statements
contained herein to reflect events or circumstances occurring after the date
hereof or to reflect the occurrence of unanticipated events.





Overview and Results of Operations





DESCRIPTION
OF BUSINESS





Overview





Dutch
Gold Resources, Inc. is a junior gold miner focused in North
America.  The Company’s mission is to become a recognized gold
producer within two years.  A key to this plan is the acquisition of
late stage exploration and development projects that can be quickly advanced to
production. Our objective is to focus on low-risk and proven reserves that will
be economical and profitable for the shareholders of DGRI.





We are
reviewing engineering and feasibility studies of the Benton Mine. The Benton
Mine in Southern Oregon, which had been in test production, is now in a Care and
Maintenance program.  The Company commissioned a drilling program, the
results of which are being used as the basis to form a long-term mining
plan.


2
 Table of Contents


Operating
Strategy





Our
business strategy is to acquire and develop gold properties in North America. To
achieve these goals, we intend to:





•   optimize
production of the Benton mine


•   upgrade
the resource and mining operations at the Benton mine


•   invest
in exploration of the Jungo mine


•   invest
in further studies on the Basin Gulch Property to prepare for
production


•   acquire
such additional projects and properties that fit the company’s acquisition
profile





Benton
Mine





Dutch
Gold Resources, Inc. owns the lease of The Benton Mine consisting of 24 gold
mining claims on 480 acres; which are all in good standing including eight
patented claims and 16 claims located on US Forest Service Land. Dutch Gold also
owns the adjacent Gold Bug Mine on 110 acres with 5.5 patented
claims.


Dutch
Gold Resources, Inc. acquired these interests in a share exchange agreement with
Dutch Mining, LLC. The mines are located near Grants Pass, OR. The Benton Mine
was the largest gold mine in southwest Oregon during the late 1930’s. It was
founded in 1893 and was the largest underground mine in Oregon.




The
Benton mine is an advanced stage development and production project with a
substantial investment already made in recent exploration and development that
has started delivering gold concentrate in 2007. Dutch Gold recently completed
the construction and fine tuning of its ore mill. This is the only permitted,
commercial scale mill in Oregon.




From 1994
to 1996 Dutch Mining LLC worked to explore and develop the Benton Mine and
undertook a baseline study for all the necessary permits to operate the mine and
build an ore mill to produce gold ore concentrate. While mining the known ore
bodies, the Company feels there is also the potential to significantly upgrade
the resource base of Benton by drilling out areas untapped by historic mining
and drilling. In January 2005 Dutch Mining reopened the Benton Mine and
performed a full rehabilitation of the mine, and built a new gold ore mill to
process 330 tons of ore per day that can be increased to 450 tons as
needed.





Basin
Gulch


Basin
Gulch, Montana





A very
large open-ended gold and silver system in Montana was discovered by Rauno
Perttu and had been partly explored by 323 reverse circulation and core drill
holes, totaling approximately 90,000 feet, plus 17,000 feet of trenches. Most of
the holes were shallow, and largely pattern-drilled for an open-pit reserve. The
system contains multiple areas of mineralization, and an open-ended defined
resource of more than two million ounces of mostly low-grade disseminated gold
and silver, with local shallow higher-grade breccias and inferred veins. The
system covers a known area in excess of 2,600 acres, and appears to be related
to other mineralized areas in the local area. Approximately $3.6 million was
spent on this exploration, which was focused on identifying a large open-pit
minable reserve.





One of
the aspects of the project with future potential is a nested diatreme complex
(overlapping volcanic breccia pipes) that extends over a minimal area of 2,600
feet by 3,300 feet. This diatreme complex has not been drilled to depth, and may
contain high-grade gold and silver mineralization in a deeper “boiling zone”.
The diatreme complex is characterized by overall low-grade gold and silver
mineralization and local high-grade mineralization. Nearby shallow much smaller
diatreme zones appear to be adjacent outliers to the main diatreme complex.
These outliers are associated with an inferred controlling fault zone that may
also be an important control for the main diatreme and for some of the inferred
veins. Two of these smaller diatremes appear to contain near-surface “boiling
zones”, and contain high-grade gold and silver mineralization.




Known
Gold Resource




An
independent consulting geologist concluded the existing data show that the
following gold resource is minable under current law:




“approximately426,135 ounces of
combined Probable and Proven gold for the resources in Blocks A and Bonly,for the Basin Gulch site calculated
directly from the drilling data. If 20% is removed to represent uncertainty,
this number is approximately 341,000 ounces of gold. Also adding to this
conservative approach is that thesilver content
was not converted to gold equivalency and added to the gold calculated above. In
some places on the Basin Gulch prospect, the measured silver was well in excess
of 10 opt.” (highlighted emphasis added herein).




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The
consulting geologist did not complete reserve estimates for the other areas
where drilling occurred. These areas also encountered strong mineralization, but
he did not feel the drilling was on close enough centers to use for reserve
estimation. It is important to understand that none of the historic drilling or
trenching was designed to look for higher grade selectively mineable or
underground mineable resources, although several strong exploration targets were
identified. This means that Aultra’s current primary exploration targets at
Basin Gulch have been identified but are not yet included in the above reserve
figures. Aultra believes resources discovered in these exploration targets would
be minable under Montana mining law. The potential size of the exploration
targets is theoretically several million ounces.




2008
Work Plan for Basin Gulch




Basin Gulch, Montana: Aultra
plans to permit and drill a limited number of confirmation holes in previously
identified high-grade gold structures at its advanced Basin Gulch, Montana gold
property. This program is planned to begin in the spring, with the snowmelt. The
company plans to drill five holes into two known high-grade breccia zones that
are in an area in which early test mining is contemplated. The company plans up
to ten additional exploration/evaluation holes along a large structure,
informally called the BG fault zone. This zone is known to contain high-grade
gold values to in excess of an ounce per ton, and extends for more than a mile
through the area of known gold mineralization.




If
sufficient money is raised, a limited number of deep drill holes will be
completed into the Basin Gulch diatreme complex to initially test for high-grade
gold, which is postulated from understanding of the property geology to have
been deposited at a specific geological setting within the diatreme. This
postulated diatreme gold reserve, if found, could be very large.





Recovery
testing: Historic testing showed aspects to the Basin Gulch gold that could be
important to future gold recovery.





Much of
the gold appears to be free (not encapsulated), and was quickly recovered in
leach tests. This suggests that it could be recoverable by simple floatation.
Further, historic testing of the Basin Gulch property demonstrated the presence
of coarse gold in key portions of the property. The historic testing suggested
an overall increase in gold content of more than 40% in bulk assays versus
standard fire assays, based on 1,000 gram and larger samples. This coarse gold
was recovered by gravity methods.





Aultra
plans to conduct recovery testing of the gold by a combination of froth
floatation and gravity methods. If sufficient gold is recoverable by a
combination of gravity and floatation, permitting would be much easier, because
no chemicals, such as cyanide, would be needed. These non-chemical recovery
methods are also relatively inexpensive.





Jungo


Jungo,
Humboldt County, Nevada




Rauno
Perttu discovered the Jungo exploration property in 2006. The property contains
extensive exposures of brecciated and silicified Paleozoic sedimentary rocks in
contact with Tertiary volcanic rocks to the north and east. Surface samples from
the property were anomalous in gold and silver, with several samples assaying
better than 0.1 opt gold, and one sample greater than 0.6 opt. The apparent
southwestern end of a siliceous gold system was exposed in the northern of two
surface trenches completed by Aultra in March of 2007. Very limited exposures
suggest that the possible hot springs silica extends for at least 2,000 feet
northeastward under shallow alluvial cover.




While
both trenches encountered highly altered bedrock, the northern of the two
trenches also crosscut approximately 160 feet of apparent hot springs silica.
Several of the gold discoveries in Nevada, and elsewhere in the world, occur
below such silica deposits. Although the gold deposits in this type of system
generally occur up to several hundred feet below the type of hot springs silica
found in the trench, ten and twenty foot intervals of the trench assayed 0.01
ounce per ton (opt) gold, a 32 foot interval averaged 0.015 opt gold, and a
twenty foot interval of the hot springs rock assayed 0.042 opt gold and more
than 0.5 opt silver. A select sample of the hot springs rock assayed 0.6 opt
gold and 4.44 opt silver, suggesting the potential presence of a high-grade
“feeder”.




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 Table of Contents


One
isolated pit was dug on projection of the hot springs zone under alluvial cover
almost 2,000 feet to the northeast. It encountered hot springs silica that
assayed 0.11 opt gold and 3.80 opt silver. Aultra considers the fact that this
“blind” pit intercepted strongly mineralized apparent hot springs silica
extremely encouraging for the overall property.




The Jungo
property lies between the historic Sleeper and Hycroft mines in Humboldt County,
Nevada.




The
Hycroft Mine historically produced in excess of a million ounces of gold and
recently announced that it plans to go back into production with the recent
discovery of at least a million ounces of additional reserves.




The
Sleeper Mine produced approximately 1.7 million ounces of gold, much of it from
very high-grade near-surface veins. Recent exploration is finding new areas of
strong ore-grade mineralization below the historic mine pit and along newly
identified vein structures outside the historic exploration area.




Aultra’s
geologists believe that the Jungo gold system has important similarities to the
Sleeper property, and look forward to exploring the Jungo property based on that
belief.




Results
of Operations





Three
Months ended September 30, 2009 and 2008





During
the three-month period ended September 30, 2009 the Company incurred operating
expenses of $2,197,093 and interest expenses of $345,798 as compared to
operating expenses of $950,126 and interest expenses of $22,074 for the period
ended September 30, 2008.  The Company's net loss during the
three-month period ended September 30, 2009 was $2,542,891 as compared to a net
loss of $1,048,705 during the three-month period ended September 30,
2008.





The
decrease in income from operations for the quarter ended September 30, 2009 as
compared to the quarter ended September 30, 2008 is primarily attributable to
reduction in mining activities on the Benton Mine due to a reduction in mining
activities due to restricted capital available to fund the business as a result
of the weakness in capital markets.





Nine
Months ended September 30, 2009 and 2008





During
the nine-month period ended September 30, 2009 the Company incurred operating
expenses of $5,291,320 and interest expenses of $1,023,227 as compared to
operating expenses of $2,725,991 and interest expenses of $334,732 for the
period ended September 30, 2008.  The Company's net loss during the
nine-month period ended September 30, 2009 was $6,314,547 as compared to a net
loss of $3,922,076 during the nine-month period ended September 30,
2008.





Twelve-Month Business Outlook





We do not
currently have funds sufficient to carry out any of our operations, or to
execute our plan of becoming a natural resource company.  In order to act
upon our operating plan discussed herein, we must be able to raise sufficient
funds from (i) debt financing; or, (ii) new investments from private investors.
There can be no assurance that we will be able to obtain debt or equity
financing or generate sufficient revenue to produce positive cash flow from
operations.





Operating Expenses and Capital Expenditures





Operating
Expenses





Assuming
that the Company is successful raising funds, we anticipate incurring operating
expenses of approximately $350,000 during the next twelve months.





The
primary operating expenses incurred include management and consulting fees
associated with fundraising and the transition to a natural resources
company.


5
 Table of Contents


Source
of Revenue





The
Company sells gold concentrates and dore to buyers throughout the
world.  The company’s revenue fluctuates as a function of the spot
price of gold and the amount of gold that is produced from its properties. The
Company expects limited production from the Benton mine and limited revenues
throughout the year.





Operating Losses





Assuming
that the Company is successful continuing to pursue it’s plan to change to a
natural resources company we plan realize an operating loss of approximately
$350,000 during the next twelve months.





Liquidity and Capital Resources





We
currently have limited sources of capital, including the public and private
placement of equity securities and the possibility of debt. With limited liquid
assets and depreciating fixed assets the availability of funds from traditional
sources of debt will be limited, and we cannot assure you that there will be a
source of funds in the future.





As of
September 30, 2009, we had a cash balance of $670. We estimate that, based upon
our current business, we will require up to $4,000,000 over the next two
years.  However, the Company cannot properly anticipate the capital
expenditures and working capital needed in connection with the operations. Due
to difficulties in the capital markets as a result of the credit crisis that
began with the liquidation of Bear Stearns, inc., the Company has taken steps to
reduce its cash requirements, resulting in a furlough of the mining operations
personnel, and a temporary halt to production in the Benton Mine.





Our
independent certified public accountants stated in their report dated 28 January
2010 for the fiscal year ending December 31, 2008 that we have incurred
operating losses from our inception and that we are dependent upon our ability
to meet our future financing requirements, and the success of future operations.
These factors raise substantial doubt about our ability to continue as a going
concern.





I

tem 3. Controls and Procedures





(a) Evaluation of Disclosure
Controls and Procedures





The
Company maintains controls and procedures designed to ensure that information
required to be disclosed in the reports that the Company files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission.  Our Chief Executive and Financial Officer evaluated, with
the participation of other members of management, the effectiveness of the
Company’s disclosure controls and procedures (as defined in Exchange Act Rule
15d-15(e)), as of the end of the period covered by this Annual Report on Form
10-KSB.





(b) Changes in Internal
Controls





The
Company made no significant changes in its internal controls or in other factors
that could significantly affect these controls subsequent to the date of the
evaluation of those controls by the Chief Executive and Financial
Officer.





PART
II — OTHER INFORMATION





Item
1  Legal Proceedings





We are
not presently party to any legal proceedings.  We are not aware of any
pending legal proceeding to which any of our officers, directors, or any
beneficial holders of 5% or more of our voting securities are adverse to us or
have a material interest adverse to us.


6
 Table of Contents


Item
1A.  Risk Factors





Our
independent auditors have expressed doubt about our ability to continue as a
going concern.





Our
independent public accountants have expressed doubt about our ability to
continue as a going concern in their report on our December 31, 2008 and
December 31, 2007 financial statements. Our independent public accountants have
advised us that our continuance as a going concern is dependent upon our ability
to raise capital. There is no assurance that we will be able to raise sufficient
capital or generate sufficient cash from operations to continue as a going
concern.





Because
of our limited operations and the fact that we are currently generating limited
revenue, we may be unable to service our debt obligations.





We
currently have approximately $2,514,926 in debt pursuant to promissory notes
issued by us. We are presently unable to meet our interest obligations in the
amount of $618,629 under these notes. We are also trying to secure additional
debt and equity financing. Our ability to satisfy our current debt service
obligations, and any additional obligations we might incur will depend upon our
future financial and operating performance, which, in turn, are subject to
prevailing economic conditions and financial, business, competitive, legislative
and regulatory factors, many of which are beyond our control. If our cash flow
and capital resources continue to be insufficient to fund our debt service
obligations, we may be forced to reduce or delay planned acquisitions, expansion
and capital expenditures, sell assets, obtain additional equity capital or
restructure our debt. We cannot assure you that our operating results, cash flow
and capital resources will be sufficient for payment of our debt service and
other obligations in the future.





If
we lose our key personnel, we may be unable to successfully execute our business
plan; because we currently only have one employee, he may be unable to
successfully manage the business.





Our
business is presently managed by a key employee, Chief Executive Officer, Daniel
W. Hollis. If we lose Mr. Hollis, it could have a material adverse effect on our
operations, and our ability to execute our business plan might be negatively
impacted. We have entered into an employment agreement with Mr. Hollis, which
include provisions restricting his ability to use our confidential information
should he leave the company. However, Mr. Hollis may leave the company if he
chooses to do so, and we cannot guarantee that he will not choose to do so, or
that we would be able to hire similarly qualified executives if he should choose
to leave.





Because
our common stock is quoted on the "OTC Pink Sheets," your ability to sell your
shares in the secondary trading market may be limited.





Our
common stock is currently quoted on the OTC Pink Sheets. Consequently, the
liquidity of our common stock is impaired, not only in the number of shares that
are bought and sold, but also through delays in the timing of transactions, and
coverage by security analysts and the news media, if any, of our company. As a
result, prices for shares of our common stock may be lower than might otherwise
prevail if our common stock was quoted and traded on NASDAQ or a national
securities exchange.





Because
our shares are "penny stocks," you may have difficulty selling them in the
secondary trading market.





Federal
regulations under the Securities Exchange Act of 1934 regulate the trading of
so-called "penny stocks," which are generally defined as any security not listed
on a national securities exchange or NASDAQ, priced at less than $5.00 per share
and offered by an issuer with limited net tangible assets and revenues. Since
our common stock currently is quoted on the Pink Sheets at less than $5.00 per
share, our shares are "penny stocks" and may not be quoted unless a disclosure
schedule explaining the penny stock market and the risks associated therewith is
delivered to a potential purchaser prior to any trade.





In
addition, because our common stock is not listed on NASDAQ or any national
securities exchange and currently is quoted at and trades at less than $5.00 per
share, trading in our common stock is subject to Rule 15g-9 under the Securities
Exchange Act. Under this rule, broker-dealers must take certain steps prior to
selling a "penny stock," which steps include:





•  obtaining
financial and investment information from the investor;


•  obtaining
a written suitability questionnaire and purchase agreement signed by the
investor; and


•  providing
the investor a written identification of the shares being offered and the
quantity of the shares.


7
 Table of Contents


If these
penny stock rules are not followed by the broker-dealer, the investor has no
obligation to purchase the shares. The application of these comprehensive rules
will make it more difficult for broker-dealers to sell our common stock and our
shareholders, therefore, may have difficulty in selling their shares in the
secondary trading market.





The
requirements of complying with the Sarbanes-Oxley act may strain our resources
and distract management





We are
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. The costs
associated with these requirements may place a strain on our systems and
resources. The Exchange Act requires that we file annual, quarterly and current
reports with respect to our business and financial condition. The Sarbanes-Oxley
Act requires that we maintain effective disclosure controls and procedures and
internal controls over financial reporting. Historically, as a private company
we have maintained a small accounting staff, but in order to maintain and
improve the effectiveness of our disclosure controls and procedures and internal
control over financial reporting, significant additional resources and
management oversight will be required. This includes, among other things,
retaining independent public accountants. This effort may divert management’s
attention from other business concerns, which could have a material adverse
effect on our business, financial condition, results of operations and cash
flows. In addition, we may need to hire additional accounting and financial
persons with appropriate public company experience and technical accounting
knowledge, and we cannot assure you that we will be able to do so in a timely
fashion.





It
is our policy not to pay dividends.





We have
never declared or paid cash dividends on our common stock. We currently intend
to retain all of our future earnings, if any, for use in our business and
therefore do not anticipate paying any cash dividends on our common stock in the
foreseeable future.





Existing
shareholders may face dilution from our financing efforts





We are
dependent on raising capital from external sources to execute our business plan.
We plan to issue debt securities, capital stock, or a combination of these
securities. We may not be able to sell these securities, particularly under the
current market conditions. Even if we are successful in finding buyers for our
securities, the buyers could demand high interest rates or require us to agree
to onerous operating covenants, which could in turn harm our ability to operate
our business by reducing our cash flow and restricting our operating activities.
If we were to sell our capital stock, we might be forced to sell shares at a
depressed market price, which could result in substantial dilution to our
existing shareholders. In addition, any shares of capital stock we may issue may
have rights, privileges, and preferences superior to those of our common
shareholders.





Our
future earnings may be adversely affected because of charges resulting from
acquisitions, or an acquisition could reduce shareholder value.





We may be
required to amortize, over a period of years, certain identifiable intangible
assets. The resulting amortization expense could reduce our overall net income
and earnings per share. Changes in future markets or technologies may require us
to amortize intangible assets faster and in such a way that our overall
financial condition or results of operations are harmed. If changes in economic
and/or business conditions cause impairment of goodwill and other intangibles
acquired by acquisition, it is likely that a significant charge against our
earnings would result. If economic and/or business conditions did not improve,
we could incur additional impairment charges against any earnings we might have
in the future. An acquired business could reduce shareholder value if it should
generate a net loss or require invested capital.





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





None.





Item
3.    Defaults Upon Senior Securities


8
 Table of Contents


Not
applicable.





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





Not
applicable.





Item
5.  Other Information





Not
applicable





Item
6.  Exhibits.








Exhibits.





31.1
            Certification
      pursuant to Rule 13a-14(a) under the Securities Exchange Act of
      1934





32.1
            Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002





Reports on Form
8-K.  During the fiscal quarter ended September 30, 2009, the
Company filed the following Current Reports on Form 8-K:





None.





SIGNATURES








In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





DUTCH
      GOLD RESOURCES, INC.By:
            /s/Daniel
      W. HollisDaniel
      W. Hollis, Chief Executive OfficerBy:
            /s/Daniel
      W. HollisDaniel
      W. Hollis, Chief Financial Officer





Date:  February
10 , 2008







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