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

|  ̈ | TRANSITION REPORT PURSUANT TO UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------------|

| Loreto Resources Corporation                                   |
|----------------------------------------------------------------|
| (Exact name of registrant as specified in its charter)         |
|                                                           |   |   |
| Nevada                                                         |   | 20-5308449 |
| (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Identification No.) |
|                                                           |   |   |
| 1266 1st Street, Suite 4Sarasota, FL 34236                     |   | None |
| (Address of principal executive offices)                       |   | (Postal Code) |

| Securities registered under Section 12(b) of the Act: | None   |   |
|-------------------------------------------------------|--------|--------|
|                                                  |   |   |
| Securities registered under Section 12(g) of the Act: | None   |   |

| Large Accelerated Filer  ̈ | Accelerated Filer  ̈    |
|--------------------------------|-----------------------------|
|                           |                        |
| Non-Accelerated Filer  ̈   | Smaller reporting company x |

----

| Item Number and Caption    |                                                                                                               | Page   |
|----------------------------|--------------------------------------------------------------------------------------------------------------------|--------|
| Forward-Looking Statements |                                                                                                               | 3      |
|                       |                                                                                                               |   |
| PART I                     |                                                                                                               | 4      |
|                       |                                                                                                               |   |   |
| 1.                         | Business                                                                                                           |   | 4 |
| 1A.                        | Risk Factors                                                                                                       |   | 5 |
| 1B.                        | Unresolved Staff Comments                                                                                          |   | 5 |
| 2.                         | Properties                                                                                                         |   | 5 |
| 3.                         | Legal Proceedings                                                                                                  |   | 6 |
| 4.                         | (Removed and Reserved)                                                                                             |   | 6 |
|                       |                                                                                                               |   |   |
| PART II                    |                                                                                                               | 6      |
|                       |                                                                                                               |   |   |
| 5.                         | Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities |   | 6 |
| 6.                         | Selected Financial Data                                                                                            |   | 8 |
| 7.                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |   | 8 |
| 8.                         | Financial Statements and Supplemental Data                                                                         |   | 9 |
| 9A.                        | Controls And Procedures                                                                                            |   | 10 |
| 9B.                        | Other Information                                                                                                  |   | 11 |
|                       |                                                                                                               |   |
| PART III                   |                                                                                                               | 11     |
|                       |                                                                                                               |   |   |
| 10.                        | Directors, Executive Officers, and Corporate Governance                                                            |   | 11 |
| 11.                        | Executive Compensation                                                                                             |   | 14 |
| 12.                        | Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters                     |   | 16 |
| 13.                        | Certain Relationships And Related Transactions and Director Independence                                           |   | 18 |
| 14.                        | Principal Accountant Fees And Services                                                                             |   | 19 |
|                       |                                                                                                               |   |   |
| PART IV                    |                                                                                                               | 20     |
|                       |                                                                                                               |   |   |
| 15.                        | Exhibits and Financial Statement Schedules                                                                         |   | 20-23 |

----

----

----

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| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
|---------|--------------------------------------------------------------------------------------------------------------------|

| Fiscal Year Ended December 31, 2010Quarter Ended |   | High Bid |   |   | Low Bid |   |
|--------------------------------------------------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                                                           |   |          |   |   |         |   |
| January 4, 2010 through January 28, 2010                                       |   | $             | 0.40   |   |         | $      | 0.25 |   |
| February 1, 2010 through March 31, 2010 (1)                                    |   | $             | 0.05   |   |         | $      | 0.01 |   |
| June 30, 2010                                                                  |   | $             | 0.03   |   |         | $      | 0.01 |   |
| September 30, 2010                                                             |   | $             | 0.01   |   |         | $      | 0.01 |   |
| December 31, 2010                                                              |   | $             | 0.043  |   |         | $      | 0.01 |   |
|                                                                           |   |          |   |   |         |   |
| Fiscal Year Ended December 31, 2009Quarter Ended                               |   | High Bid |   |   | Low Bid |   |
|                                                                           |   |          |   |   |         |   |   |   |
| January 2, 2009 through January 30, 2009                                       |   | $             | 0.07   |   |         | $      | 0.07 |   |
| February 2, 2009 through March 31, 2009 (2)                                    |   | $             | 0.05   |   |         | $      | 0.05 |   |
| June 30, 2009                                                                  |   | $ None   |   |   | $ None  |   |
| September 30, 2009                                                             |   | $ None   |   |   | $ None  |   |
| December 31, 2009                                                              |   | $             | 0.40   |   |         | $      | 0.40 |   |

----

----

| (1) | Pricing from February 1, 2010 reflects the January 2010 2:1 forward stock split. |
|-----|----------------------------------------------------------------------------------|

| (2)  | Pricing from February 2, 2009 reflects the January 2009 2:1 forward stock split. |
|-----------|----------------------------------------------------------------------------------|

----

----

----

----

|   | 1. | We do not have an audit committee.  While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2. | We did not maintain proper segregation of duties for the preparation of our financial statements.  We currently only have one officer overseeing all transactions.  This has resulted in several deficiencies including the lack of control over preparation of financial statements, and proper application of accounting policies: |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name            |         | Age    |         | Title                                           |         | Date First Appointed |
|-----------------|--------------|--------|--------------|-------------------------------------------------|--------------|----------------------|
|            |         |   |         |                                            |         |                 |
| Nadine C. Smith |         | 53     |         | Director and Chairman of the Board              |         | July 3, 2008         |
|            |         |   |         |                                            |         |                 |
| Luis F. Saenz   |    | 40     |    | President, Chief Executive Officer and Director |    | July 21, 2008        |

----

----

----

----

| Name andPrincipal Position   |   | Year   |   | Salary($) |    |   | Bonus($) |   |   | StockAwards($) |   |   | OptionAwards($) |   |   | Non-EquityIncentivePlanCompen-sation ($) |    |   | ChangeinPensionValueand Non-qualifiedDeferredCompen-sationEarnings($) |   |   | All OtherCompensation($) |   |   | Total ($) |   |
|----------------------------------------|--------|--------|--------|-----------|---------|--------|----------|--------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------------------------------|---------|--------|----------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|----------------|--------|
| (a)                                    |   | (b)    |   | (c)       |    |   | (d)      |   |   | (e)            |   |   | (f)             |   |   | (g)                                           |    |   | (h)                                                                        |   |   | (i)                           |   |   | (j)            |   |
|                                   |   |   |   |      |    |   |     |   |   |           |   |   |            |   |   |                                          |    |   |                                                                       |   |   |                          |   |   |           |   |
| Luis F. Saenz, Chief Executive Officer |   | 2010   |   |      | 70,512  |   |     |   | 0      |           |   |   | 0               |   |   |                                          | 0       |   |                                                                       |   | 0      |                          |   |   | 0              |   |   |   | 0 |   |   |   | 70,512 |   |
|                                   |   | 2009   |   |      | 250,000 |   |     |   | 0      |           |   |   | 0               |   |   |                                          | 421,724 |   |                                                                       |   | 0      |                          |   |   | 0              |   |   |   | 0 |   |   |   | 671,724 |   |

|                                   |   | Option awards                                                 |   |
|----------------------------------------|--------|--------------------------------------------------------------------|--------|
| Name andPrincipal Position   |   | Number ofsecuritiesunderlyingunexercisedoptionsexercisable(#) |   |   | Number ofsecuritiesunderlyingunexercisedoptionsunexercisable(#) |   |   | Equityincentiveplanawards:Number ofsecuritiesunderlyingunexercisedunearnedoptions (#) |   |   | Optionplanexerciseprice($) |   |   | Optionexpirationdate |   |
| (a)                                    |   | (b)                                                                |   |   | (c) |   |   | (d) |   |   | (e) |   |   | (f) |   |
| Luis F. Saenz, Chief Executive Officer |   |                                                               | 0      |   |   |   | 0 |   |   |   | 0 |   |   |   | - |   |   |   | - |   |

----

| Plan Category                                         |   | Number of securities to beissued upon exercise ofoutstanding options,warrants and rights |   |   | Weighted-averageexercise price ofoutstanding options,warrants and rights |   |   | Number of securitiesremaining availablefor future issuanceunder equitycompensation plans |   |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|--------|
| Equity compensation plans approved by security holders     |   |                                                                                                                                       | -      |   |                                                                                              |   | -      |                                                                                                                        |   |   | - |   |
|                                                       |   |                                                                                                                                       |   |   |                                                                                              |   |   |                                                                                                                        |   |   |   |   |
| Equity compensation plans not approved by security holders |   |                                                                                                                                       | -      |   |                                                                                              |   | -      |                                                                                                                        |   |   | - |   |
|                                                       |   |                                                                                                                                       |   |   |                                                                                              |   |   |                                                                                                                        |   |   |   |   |
| Total                                                      |   |                                                                                                                                       | -      |   |                                                                                              |   | -      |                                                                                                                        |   |   | - |   |

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------|

|   | · | each person or entity known by us to be the beneficial owner of more than 5% of our common stock; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | each of our directors; |
|--------|--------|------------------------|

|   | · | each of our executive officers; and |
|--------|--------|-------------------------------------|

|   | · | all of our directors and executive officers as a group. |
|--------|--------|---------------------------------------------------------|

----

| NAME OF OWNER                                                            | TITLE OFCLASS |   | NUMBER OFSHARES OWNED (1) |       |   | PERCENTAGE OFCOMMON STOCK (2) |   |
|------------------------------------------------------------------------------------|--------------------|--------|------------------------------------------|------------|--------|----------------------------------------------|--------|
|                                                                               |               |   |                                     |       |   |                                         |   |
| Nadine C. Smith                                                                    | Common Stock       |   |                                     | 5,020,000  |   |                                         |   | 7.1 | % |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Luis F. Saenz                                                                      | Common Stock       |   |                                     | 400,000    |   |                                         |   | * |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| All Officers and Directors                                                         | Common Stock       |   |                                     | 5,420,000  |   |                                         |   | 7.7 | % |
| As a Group (2 persons)                                                             |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Magdalena Cruz                                                                     | Common Stock       |   |                                     | 24,000,000 |   |                                         |   | 34.1 | % |
| 47395 Monroe Street, #274                                                          |               |   |                                     |       |   |                                         |   |   |   |
| Indio, CA 92201                                                                    |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Aton Select Fund                                                                   | Common Stock       |   |                                     | 6,000,000  |   |                                         |   | 8.5 | % |
| 3076 Sir Francis Drake's HighwayRaod Town, TortolaBritish Virgin Islands           |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Adrien Ellul                                                                       | Common Stock       |   |                                     | 5,000,000  |   |                                         |   | 7.1 | % |
| SOHO Square21 Lyndhurst TerraceCentral, Hong KongHong Kong SAR                     |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Mark Tompkins                                                                      | Common Stock       |   |                                     | 5,000,000  |   |                                         |   | 7.1 | % |
| c/o Gottbetter & Partners, LLP488 Madison Avenue, 12th FloorNew York, NY 10022 |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Paramount Strategy Corp.                                                           | Common Stock       |   |                                     | 5,000,000  |   |                                         |   | 7.1 | % |
| PO BOX 802West BayCayman IslandsKYI-1303                                           |               |   |                                     |       |   |                                         |   |   |   |
|                                                                               |               |   |                                     |       |   |                                         |   |   |   |
| Affaires Financieres                                                               | Common Stock       |   |                                     | 4,000,000  |   |                                         |   | 5.7 | % |
| Nuschelerstrasse 448001 ZurichSwitzerland                                          |               |   |                                     |       |   |                                         |   |   |   |

----

| TangoCorp, Inc.                                                           | Common Stock |   |   | 4,000,000 |   |   |   | 5.7    | %      |
|---------------------------------------------------------------------------|--------------|--------|--------|-----------|--------|--------|--------|--------|--------|
| 802 Grand PavilionPO Box 10335 APOWest Bay RdGrand Cayman, Cayman Islands |         |   |   |      |   |   |   |   |   |

----

| (1) | Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of common stock subject to options or warrants currently exercisable or convertible, or exercisable or convertible within 60 days of March 25, 2011 are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 13.  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, ANDDIRECTOR INDEPENDENCE |
|----------------|--------------------------------------------------------------------------|

----

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| Fee Category      |   | Fiscal year ended December 31, 2010 |   |   | Fiscal year ended December 31, 2009 |   |
|------------------------|--------|--------------------------------------------------------------|--------|--------|--------------------------------------------------------------|--------|
| Audit fees (1)         |   | $                                                            | 21,635 |   |                                                         | $      | 22,070 |   |
| Audit-related fees (2) |   | $                                                            | 36,476 |   |                                                         | $      | 51,644 |   |
| Tax fees (3)           |   |                                                         | -      |   |                                                         |   | - |   |
| All other fees (4)     |   |                                                         | -      |   |                                                         |   | - |   |
| Total fees             |   | $                                                            | 58,111 |   |                                                         | $      | 73,714 |   |

| (1) | Audit fees consists of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Audit-related fees consists of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.” |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Tax fees consists of fees billed for professional services relating to tax compliance, tax planning, and tax advice. |
|-----|----------------------------------------------------------------------------------------------------------------------|

| (4) | All other fees consists of fees billed for all other services. |
|-----|----------------------------------------------------------------|

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| ExhibitNo. |         | SEC ReportReference Number |         | Description                                                                                                                            |
|------------|--------------|--------------------------------------|--------------|----------------------------------------------------------------------------------------------------------------------------------------|
|       |         |                                 |         |                                                                                                                                   |
| 3.1        |         | 3.1                                  |         | Amended and Restated Articles of Incorporation of Registrant as filed with the Nevada Secretary of State on July 3, 2008 (1)           |
|       |         |                                 |         |                                                                                                                                   |
| 3.2        |         | 3.2                                  |         | By-Laws of Registrant (2)                                                                                                              |
|       |         |                                 |         |                                                                                                                                   |
| 3.3        |         | *                                    |         | Form of 2010 10% Convertible Promissory Note                                                                                           |
|       |         |                                 |         |                                                                                                                                   |
| 3.4        |         | *                                    |         | Form of 2011 10% Convertible Promissory Note                                                                                           |
|       |         |                                 |         |                                                                                                                                   |
| 10.1       |         | 10.1                                 |         | Employment Agreement dated July 21, 2008 by and between Loreto Resources Corporation and Luis F. Saenz (3)                        |
|       |         |                                 |         |                                                                                                                                   |
| 10.2       |         | 10.1                                 |         | Contract Termination Agreement between the Registrant and Luis F. Saenz dated May 5, 2010 (3)                                          |
|       |         |                                 |         |                                                                                                                                   |
| 10.3       |         | 10.2                                 |         | Stock Option Agreement dated July 21, 2008 between Loreto Resources Corporation and Luis F. Saenz (4)                                  |
|       |         |                                 |         |                                                                                                                                   |
| 10.4       |         | 10.1                                 |         | Form of Subscription Agreement (5)                                                                                                     |
|       |         |                                 |         |                                                                                                                                   |
| 10.5       |         | 10.4                                 |         | 2008 Equity Incentive Plan (6)                                                                                                         |
|       |         |                                 |         |                                                                                                                                   |
| 10.6       |         | *                                    |         | Form of Subscription Agreement between the Registrant and each subscriber in the 2010 10% convertible notes private placement offering |
|       |         |                                 |         |                                                                                                                                   |
| 10.7       |         | *                                    |         | Form of Subscription Agreement between the Registrant and each subscriber in the 2011 10% convertible notes private placement offering |
|       |         |                                 |         |                                                                                                                                   |
| 14.1       |    | 14                                   |    | Code of Ethics (7)                                                                                                                     |

----

| ExhibitNo. |   | SEC ReportReference Number |   | Description                                                                                                                                                                                                      |
|------------|--------|--------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                 |   |                                                                                                                                                                                                             |
| 21         |   | *                                    |   | List of Subsidiaries                                                                                                                                                                                             |
|       |   |                                 |   |                                                                                                                                                                                                             |
| 31.1/31.2  |   | *                                    |   | Certification of Principal Executive Officer and Interim Principal Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|       |   |                                 |   |                                                                                                                                                                                                             |
| 32.1/32.2  |   | *                                    |   | Certification of Chief Executive Officer and Interim Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**                  |

| (1) | Filed with the SEC on July 10, 2008 as an exhibit, numbered as indicated above, to the Registrant’s current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Filed with the SEC on January 23, 2007 as an exhibit, numbered as indicated above, to the Registrant’s registration statement (SEC File No. 333-140148) on Form SB-2, which exhibit is incorporated herein by reference. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Filed with the SEC on August 20, 2010 as an exhibit, numbered as indicated above, to the Registrant’s quarterly report (SEC File No. 333-140148) on Form 10-Q, which exhibit is incorporated herein by reference. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Filed with the SEC on July 24, 2008 as an exhibit, numbered as indicated above, to the Registrant’s current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Filed with the SEC on September 15, 2008 as an exhibit, numbered as indicated above, to the Registrant’s current report (SEC File No. 333-140148) on Form 8-K, which exhibit is incorporated herein by reference. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Filed with the SEC on April 14, 2009 as an exhibit, numbered as indicated above, to the Registrant’s annual report (SEC File No. 333-140148) on Form 10-K, which exhibit is incorporated herein by reference. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Filed with the SEC on March 31, 2008 as an exhibit, numbered as indicated above, to the Registrant’s annual report (SEC File No. 333-140148) on Form 10-KSB, which exhibit is incorporated herein by reference. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | • | should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------|

|   | • | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                             | LORETO RESOURCES CORPORATION |
|----------------------------------|------------------------------|
|                             |                         |   |   |
| Dated:  April 12, 2011 |                         | By: | /s/ Luis F. Saenz |
|                             |                         |   | Luis F. Saenz, President and Chief Executive Officer and Interim Chief Financial Officer |

| SIGNATURE           |         | TITLE    |         | DATE           |
|---------------------|--------------|----------|--------------|----------------|
|                |         |     |         |           |
| /s/ Nadine C. Smith |         | Director |         | April 12, 2011 |
| Nadine C. Smith     |         |     |         |           |
|                |         |     |         |           |
| /s/ Luis F. Saenz   |         | Director |         | April 12, 2011 |
| Luis F. Saenz       |    |     |    |           |

----

|                                                                                                                                                             |   | Page             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|
|                                                                                                                                                             |   |             |
| Report of Independent Registered Public Accounting Firm                                                                                                          |   | F-2              |
|                                                                                                                                                             |   |             |
| Consolidated Balance Sheets as of December 31, 2010 and 2009                                                                                                     |   | F-3              |
|                                                                                                                                                             |   |             |
| Consolidated Statements of Operations for the years ended December 31, 2010 and 2009 and for the period from June 28, 2006 (inception) through December 31, 2010 |   | F-4              |
|                                                                                                                                                             |   |             |
| Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the period from June 28, 2006 (inception) through December 31, 2010               |   | F-5              |
|                                                                                                                                                             |   |             |
| Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009 and for the period from June 28, 2006 (inception) through December 31, 2010 |   | F-6              |
|                                                                                                                                                             |   |             |
| Notes to Consolidated Financial Statements                                                                                                                       |   | F-7 – F-14 |

----

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|                                                                                                                                                                              |   | As of        |       |   | As of        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                                                                                                                                                                              |   | December 31, |       |   | December 31, |   |
|                                                                                                                                                                              |   | 2010              |       |   | 2009              |   |
| ASSETS                                                                                                                                                                            |   |              |       |   |              |   |
|                                                                                                                                                                              |   |              |       |   |              |   |
| Current Assets                                                                                                                                                                    |   |              |       |   |              |   |
| Cash                                                                                                                                                                              |   | $                 | 8,235      |   |              | $      | 148,013 |   |
| Prepaid expenses                                                                                                                                                                  |   |              | 40,290     |   |              |   | 61,644 |   |
| Due from related party                                                                                                                                                            |   |              | 10,712     |   |              |   | - |   |
| Total Current Assets                                                                                                                                                              |   |              | 59,237     |   |              |   | 209,657 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| Non-Current Assets                                                                                                                                                                |   |              |       |   |              |   |   |   |
| Deposits                                                                                                                                                                          |   |              | 5,952      |   |              |   | 5,628 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| TOTAL ASSETS                                                                                                                                                                      |   | $                 | 65,189     |   |              | $      | 215,285 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| LIABILITIES AND STOCKHOLDERS'  DEFICIT                                                                                                                                  |   |              |       |   |              |   |   |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| Current Liabilities                                                                                                                                                               |   |              |       |   |              |   |   |   |
| Accounts payable                                                                                                                                                                  |   | $                 | 17,912     |   |              | $      | 82,374 |   |
| Accounts payable-related party                                                                                                                                                    |   |              | -          |   |              |   | 83,332 |   |
| Insurance financing                                                                                                                                                               |   |              | 33,789     |   |              |   | 31,282 |   |
| Notes and interest payable                                                                                                                                                        |   |              | 135,458    |   |              |   | - |   |
| Notes and interest payable-related party                                                                                                                                          |   |              | 16,811     |   |              |   | - |   |
| Total Current Liabilities                                                                                                                                                         |   |              | 203,970    |   |              |   | 196,988 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| Total Liabilities                                                                                                                                                                 |   |              | 203,970    |   |              |   | 196,988 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| Stockholders' Equity (Deficit):                                                                                                                                                   |   |              |       |   |              |   |   |   |
| Preferred stock, $.001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2010 and December 31, 2009                                     |   |              | -          |   |              |   | - |   |
| Common stock, $.001 par value, 300,000,000 shares authorized; 70,298,322 and 70,100,000 shares issued and outstanding as of December 31, 2010 and December 31, 2009, respectively |   |              | 70,298     |   |              |   | 70,100 |   |
| Additional paid-in capital                                                                                                                                                        |   |              | 3,587,842  |   |              |   | 2,737,245 |   |
| Deficit accumulated during exploration stage                                                                                                                                      |   |              | (3,796,921 | )      |              |   | (2,789,048 | ) |
| Total Stockholders' Deficit                                                                                                                                                       |   |              | (138,781   | )      |              |   | 18,297 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS'  DEFICIT                                                                                                                            |   | $                 | 65,189     |   |              | $      | 215,285 |   |
|                                                                                                                                                                              |   |              |       |   |              |   |   |   |

----

|                                                                     |   |              |       |   |              |   |       | June 28, 2006 |   |
|--------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|------------|-------------------------|--------|
|                                                                     |   | Year End     |       |   | Year End     |   |       | (Inception)             |   |
|                                                                     |   | Ended             |       |   | Ended             |   |       | through                 |   |
|                                                                     |   | December 31, |       |   | December 31, |   |       | December 31,       |   |
|                                                                     |   | 2010              |       |   | 2009              |   |       | 2010                    |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |
| Revenues                                                                 |   |              |       |   |              |   |       |                    |   |
| Revenues                                                                 |   | $                 | -          |   |              | $      | -          |                    |   | $ | - |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Total revenues                                                           |   |              | -          |   |              |   | -          |                    |   |   | - |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Operating costs                                                          |   |              |       |   |              |   |       |                    |   |   |   |   |
| General and administrative expenses                                      |   |              | 1,042,149  |   |              |   | 2,048,527  |                    |   |   | 3,840,291 |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Loss from operations                                                     |   |              | (1,042,149 | )      |              |   | (2,048,527 | )                       |   |   | (3,840,291 | ) |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Other income (expense):                                                  |   |              |       |   |              |   |       |                    |   |   |   |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Interest income                                                          |   |              | 63         |   |              |   | 3,781      |                    |   |   | 10,044 |   |
| Interest expense                                                         |   |              | (3,584     | )      |              |   | (887       | )                       |   |   | (4,471 | ) |
| Gain on forgiveness of debt                                              |   |              | 37,797     |   |              |   | -          |                    |   |   | 37,797 |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Total other income (expense)                                             |   |              | 34,276     |   |              |   | 2,894      |                    |   |   | 43,370 |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Net loss                                                                 |   | $                 | (1,007,873 | )      |              | $      | (2,045,633 | )                       |   | $ | (3,796,921 | ) |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Loss per share - basic and diluted                                       |   | $                 | (0.01      | )      |              | $      | (0.03      | )                       |   |   |   |   |
|                                                                     |   |              |       |   |              |   |       |                    |   |   |   |   |
| Weighted average number of common shares outstanding - basic and diluted |   | $                 | 70,127,167 |   |              | $      | 70,100,000 |                    |   |   |   |   |

----

|                                                                             |   |   |        |   |   |   |    |       |   |   | Deficit     |   |   |   |       |
|---------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|---------|------------|--------|--------|-------------|--------|--------|--------|------------|
|                                                                             |   |   |        |   |   |   |    |       |   |   | Accumulated |   |   |   |       |
|                                                                             |   |   |        |   | Common |   |    | Additional |   |   | During      |   |   |   |       |
|                                                                             |   | Common |        |   | Stock  |   |    | Paid-in    |   |   | Exploration |   |   |   |       |
|                                                                             |   | Stock  |        |   | Amount |   |    | Capital    |   |   | Stage       |   |   | Total  |       |
| Balance, June 28, 2006                                                                |   |   | -           |   |   | $      | -       |       |   | $      | -           |   |   | $      | -          |   |   | $ | - |   |
| Stock issued for cash on October 3, 2006 at $0.00025 per share                        |   |   | 40,000,000  |   |   |   | 40,000  |       |   |   | (30,000     | )      |   |   | -          |   |   |   | 10,000 |   |
| Net loss, December 31, 2006                                                           |   |   | -           |   |   |   | -       |       |   |   | -           |   |   |   | (877       | ) |   |   | (877 | ) |
| Balance, December 31, 2006                                                            |   |   | 40,000,000  |   |   |   | 40,000  |       |   |   | (30,000     | )      |   |   | (877       | ) |   |   | 9,123 |   |
|                                                                                  |   |   |        |   |   |   |    |       |   |   |        |   |   |   |       |   |   |   |   |   |
| Stock issued for cash on February 23, 2007 at $0.0005 per share                       |   |   | 36,000,000  |   |   |   | 36,000  |       |   |   | (18,000     | )      |   |   | -          |   |   |   | 18,000 |   |
| Stock issued for services on July 2, 2007 at $0.0001875 per share                     |   |   | 24,000,000  |   |   |   | 24,000  |       |   |   | (19,500     | )      |   |   | -          |   |   |   | 4,500 |   |
| Net loss, December 31, 2007                                                      |   |   | -           |   |   |   | -       |       |   |   | -           |   |   |   | (43,518    | ) |   |   | (43,518 | ) |
| Balance, December 31, 2007                                                            |   |   | 100,000,000 |   |   |   | 100,000 |       |   |   | (67,500     | )      |   |   | (44,395    | ) |   |   | (11,895 | ) |
|                                                                                  |   |   |        |   |   |   |    |       |   |   |        |   |   |   |       |   |   |   |   |   |
| Stock issued for cash on February 7, 2008 at $0.025 per share                         |   |   | 2,000,000   |   |   |   | 2,000   |       |   |   | 48,000      |   |   |   | -          |   |   |   | 50,000 |   |
| Debt forgiveness from related party on June 30, 2008                                  |   |   | -           |   |   |   | -       |       |   |   | 13,200      |   |   |   | -          |   |   |   | 13,200 |   |
| Restricted stock cancelled on July 18, 2008                                           |   |   | (40,000,000 | )      |   |   | (40,000 | )          |   |   | 40,000      |   |   |   | -          |   |   |   | - |   |
| Stock based-compensation on July 21, 2008                                             |   |   | -           |   |   |   | -       |       |   |   | 181,612     |   |   |   | -          |   |   |   | 181,612 |   |
| Stock issued for cash on September 17, 2008 at $0.25 per share, net of offering costs |   |   | 8,100,000   |   |   |   | 8,100   |       |   |   | 1,972,213   |   |   |   | -          |   |   |   | 1,980,313 |   |
| Net loss, December 31, 2008                                                      |   |   | -           |   |   |   | -       |       |   |   | -           |   |   |   | (699,020   | ) |   |   | (699,020 | ) |
| Balance, December 31, 2008                                                            |   |   | 70,100,000  |   |   |   | 70,100  |       |   |   | 2,187,525   |   |   |   | (743,415   | ) |   |   | 1,514,210 |   |
|                                                                                  |   |   |        |   |   |   |    |       |   |   |        |   |   |   |       |   |   |   |   |   |
| Stock-based compensation                                                              |   |   | -           |   |   |   | -       |       |   |   | 549,720     |   |   |   | -          |   |   |   | 549,720 |   |
| Net loss, December 31, 2009                                                           |   |   | -           |   |   |   | -       |       |   |   | -           |   |   |   | (2,045,633 | ) |   |   | (2,045,633 | ) |
| Balance, December 31, 2009                                                            |   |   | 70,100,000  |   |   |   | 70,100  |       |   |   | 2,737,245   |   |   |   | (2,789,048 | ) |   |   | 18,297 |   |
| Stock-based compensation                                                              |   |   | -           |   |   |   | -       |       |   |   | 640,826     |   |   |   | -          |   |   |   | 640,826 |   |
| Related party forgiveness of accounts payable & accrued payroll                   |   |   | -           |   |   |   | -       |       |   |   | 160,389     |   |   |   | -          |   |   |   | 160,389 |   |
| Stock issued for settlement of accounts payable November 11, 2010 at $0.25 per share  |   |   | 198,322     |   |   |   | 198     |       |   |   | 49,382      |   |   |   | -          |   |   |   | 49,580 |   |
| Net loss, December 31, 2010                                                           |   |   | -           |   |   |   | -       |       |   |   | -           |   |   |   | (1,007,873 | ) |   |   | (1,007,873 | ) |
| Balance, December 31, 2010                                                            |   |   | 70,298,322  |   |   | $      | 70,298  |       |   | $      | 3,587,842   |   |   | $      | (3,796,921 | ) |   | $ | (138,781 | ) |

----

|                                                                   |   |              |       |   |              |   |       | June 28, 2006 |   |
|-----------------------------------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|------------|-------------------------|--------|
|                                                                   |   | Year              |       |   | Year              |   |       | (Inception)             |   |
|                                                                   |   | Ended             |       |   | Ended             |   |       | through                 |   |
|                                                                   |   | December 31, |       |   | December 31, |   |       | December 31,       |   |
|                                                                   |   | 2010              |       |   | 2009              |   |       | 2010                    |   |
| Cash Flows from Operating Activities                                        |   |              |       |   |              |   |       |                    |   |
| Net loss                                                                    |   | $                 | (1,007,873 | )      |              | $      | (2,045,633 | )                       |   | $ | (3,796,921 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |              |       |   |              |   |       |                    |   |   |   |   |
| Stock option expense                                                        |   |              | 640,826    |   |              |   | 549,720    |                    |   |   | 1,372,158 |   |
| Common stock issued for services                                            |   |              | -          |   |              |   | -          |                    |   |   | 4,500 |   |
| Gain on forgiveness of debt                                                 |   |              | (37,797    | )      |              |   | -          |                    |   |   | (37,797 | ) |
| Changes in operating assets and liabilities:                                |   |              |       |   |              |   |       |                    |   |   |   |   |
| Prepaid expenses and deposits                                               |   |              | 65,171     |   |              |   | 34,691     |                    |   |   | 43,492 |   |
| Accounts payable                                                            |   |              | 22,915     |   |              |   | 22,945     |                    |   |   | 105,289 |   |
| Accounts payable-related party                                              |   |              | 77,057     |   |              |   | 83,332     |                    |   |   | 160,389 |   |
| Interest accrued on notes payable                                           |   |              | 2,041      |   |              |   | -          |                    |   |   | 2.041 |   |
| Interest accrued on notes payable from related party                        |   |              | 268        |   |              |   | -          |                    |   |   | 268 |   |
| Due from related party                                                      |   |              | (10,712    | )      |              |   |       |                    |   |   | (10,712 | ) |
| Net cash provided by (used in) operating activities                         |   |              | (248,104   | )      |              |   | (1,354,945 | )                       |   |   | (2,157,293 | ) |
|                                                                        |   |              |       |   |              |   |       |                    |   |   |   |   |
| Cash Flows from Financing Activities                                        |   |              |       |   |              |   |       |                    |   |   |   |   |
| Loan from stockholder                                                       |   |              | -          |   |              |   | -          |                    |   |   | 13,200 |   |
| Issuance of common stock, net of offering costs                             |   |              | -          |   |              |   | -          |                    |   |   | 2,058,313 |   |
| Repayment of insurance financing                                            |   |              | (41,634    | )      |              |   | (14,311    | )                       |   |   | (55,945 | ) |
| Proceeds from notes payable                                                 |   |              | 133,417    |   |              |   | -          |                    |   |   | 133,417 |   |
| Proceeds from notes payable-related party                                   |   |              | 16,543     |   |              |   | -          |                    |   |   | 16,543 |   |
| Net cash provided by (used in) financing activities                         |   |              | 108,326    |   |              |   | (14,311    | )                       |   |   | 2,165,528 |   |
|                                                                        |   |              |       |   |              |   |       |                    |   |   |   |   |
| Net Increase (Decrease) in Cash                                             |   |              | (139,778   | )      |              |   | (1,369,256 | )                       |   |   | 8,235 |   |
| Cash at Beginning of Period                                                 |   |              | 148,013    |   |              |   | 1,517,269  |                    |   |   | - |   |
| Cash at End of Period                                                       |   | $                 | 8,235      |   |              | $      | 148,013    |                    |   | $ | 8,235 |   |
|                                                                        |   |              |       |   |              |   |       |                    |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information                           |   |              |       |   |              |   |       |                    |   |   |   |   |
| Cash paid during year for:                                                  |   |              |       |   |              |   |       |                    |   |   |   |   |
| Interest                                                                    |   | $                 | 1,275      |   |              | $      | -          |                    |   | $ | 1,275 |   |
| Income taxes                                                                |   | $                 | -          |   |              | $      | -          |                    |   | $ | - |   |
|                                                                        |   |              |       |   |              |   |       |                    |   |   |   |   |
| Non-Cash Investing and Financing Activities                                 |   |              |       |   |              |   |       |                    |   |   |   |   |
| Debt forgiveness by related party                                           |   | $                 | 160,389    |   |              | $      | -          |                    |   | $ | 173,589 |   |
| Insurance financing                                                         |   | $                 | 44,141     |   |              | $      |       |                    |   | $ | 44,141 |   |
| Stock issued for settlement of accounts payable                             |   | $                 | 49,580     |   |              | $      | -          |                    |   | $ | 49,580 |   |

----

----

----

----

----

|                             |   | Number ofShares |      |   | Weighted-averageExercisePrice |   |    | Weighted-averageRemainingContractualTerm (years) |   |   | AggregateIntrinsicValue |   |
|----------------------------------|--------|----------------------|-----------|--------|-------------------------------|--------|---------|-------------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding at December 31, 2008 |   |                 | 6,320,000 |   |                          | $      | 0.25    |                                                  |   |   | 8.56                    |   |   | $ | — |   |
| Granted                          |   |                 | 640,000   |   |                          |   | 0.25    |                                                  |   |   | 9.28                    |   |   |   | — |   |
| Exercised                        |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |
| Expired / Forfeited         |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |
| Outstanding at December 31, 2009 |   |                 | 6,960,000 |   |                          | $      | 0.25    |                                                  |   |   | 8.63                    |   |   | $ | — |   |
| Granted                          |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |
| Exercised                        |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |
| Expired / Forfeited         |   |                 | 6,960,000 |   |                          |   | 0.25    |                                                  |   |   | —                 |   |   |   | — |   |
| Outstanding at December 31, 2010 |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |
| Exercisable at December 31, 2010 |   |                 | —   |   |                          |   | — |                                                  |   |   | —                 |   |   |   | — |   |

----

| Market value of stock on grant date |   | $              | 0.25           | (1)    |
|-------------------------------------|--------|----------------|----------------|--------|
| Risk-free interest rate             |   |           | 1.87%-3.28     | %      |
| Dividend yield                      |   |           | 0.00           | %      |
| Volatility factor                   |   |           | 118.98%-129.45 | %      |
| Weighted average expected life      |   | 5.5 years | (2)            |
|                                |   |           |           |   |
| Expected forfeiture rate            |   |           | 5              | %      |

| (1) | The market value of the stock was calculated based on the July 25, 2008 private placement that sold 8,100,000 shares at $0.25 per share. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | Due to a lack of stock option exercise history, the Company used the simplified method under SAB 107 to estimate expected term. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------|

|                               |   | December 31, |   |
|------------------------------------|--------|-------------------|--------|
|                               |   | 2010              |   |   | 2009 |   |
|                               |   |              |   |   |   |   |
| Administrative salaries            |   | $                 | 2,380  |   |   | $ | - |   |
| Utilities and maintenance expenses |   |              | 8,332  |   |   |   | - |   |
|                               |   | $                 | 10,712 |   |   | $ | - |   |

----

|        |   | 2010   |      |   | 2009   |   |
|-------------|--------|--------|-----------|--------|--------|--------|
|        |   |   |      |   |   |   |
| U.S.        |   | $      | 973,288   |   |   | $      | 912,375 |   |
| Non-U.S.    |   |   | 70,585    |   |   |   | 583,537 |   |
|  Total |   |   | 1,007,873 |   |   |   | 1,495,912 |   |

|                                 |   | 2010   |     |   | 2009   |   |
|--------------------------------------|--------|--------|----------|--------|--------|--------|
|                                 |   |   |     |   |   |   |
| Deferred tax assets and liabilities: |   |   |     |   |   |   |
| Loss carry-forwards                  |   | $      | 342,677  |   |   | $      | 508,610 |   |
| Stock-based compensation             |   |   | 217,881  |   |   |   | 186,904 |   |
| Total deferred tax assets            |   |   | 560,558  |   |   |   | 695,515 |   |
| Valuation allowance                  |   |   | (560,558 | )      |   |   | (695,515 | ) |

----

|                                                 |   | 2010   |      |   | 2009   |   |
|------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Compensation                                         |   | $      | 722,610   |   |   | $      | 892,362 |   |
| Professional Fees (accounting, legal and consulting) |   |   | 203,069   |   |   |   | 766,318 |   |
| Other general and administrative expenses            |   |   | 116,470   |   |   |   | 389,847 |   |
|                                                 |   | $      | 1,042,149 |   |   | $      | 2,048,527 |   |

----