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hours per response   135.00   UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB  [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2006.  OR  [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  From ________________ to ________________   HuntMountain Resources (Exact name of registrant as specified in its charter)  Nevada001-0142868-0612191(State or other jurisdiction of incorporation)(Commission File  Number)(IRS Employer Identification No.)  1611 N. Molter Road, Ste. 201
Liberty Lake, Washington99019(Address of principal executive offices)(Zip Code)   (509) 892-5287 (Registrant's telephone number, including area code)   (Former name, former address & former fiscal year, if changed since last report)  Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.  Yes X  No__  State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date  31,944,132  Transitional Small Business Disclosure Format (check one); Yes _____    No X  SEC 2334 (10-04) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.   HUNTMOUNTAIN RESOURCES FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006  PART I  Item 1.   Financial Information  HuntMountain Resources and Subsidiary(A Development Stage Enterprise)Consolidated Balance SheetsJune 30,2006(Unaudited)AssetsCURRENT ASSETS:Cash and Cash Equivalents:Cash$       23,577Short-Term Cash Investments1,395,723Total Cash and Cash Equivalents1,419,300PREPAID ASSETS10,428Total Current Assets1,429,728EQUIPMENT:Office Equipment4,216Less Accumulated Depreciation1,4052,811OTHER ASSETS:Investments34,627Property Purchase Option70,000104,627TOTAL ASSETS$  1,537,166Liabilities and Stockholders EquityCURRENT LIABILITIES:Trade Accounts Payable$       35,946Accrued Wages and Related Taxes14,146Total Current Liabilities50,092STOCKHOLDERS EQUITY:Common Stock  300,000,000 Shares, $0.001 Par Value, Authorized;31,944,132 Shares Issued and Outstanding31,944Preferred Stock - 10,000,000 Shares, $0.001 Par Value, Authorized;-0- Shares Issued and Outstanding-Additional Paid-In Capital2,146,792Retained Earnings90,527Deficit Accumulated During the Development Stage(789,994)Accumulated Other Comprehensive Income7,805Total Stockholders Equity1,487,074TOTAL LIABILITIES AND STOCKHOLDERS EQUITY$   1,537,166 See accompanying notes to consolidated financial statements.    HuntMountain Resources and Subsidiary(A Development Stage Enterprise)Consolidated Statements of IncomeFrom InceptionThree MonthsSix Monthsof Development StageEnded June 30,Ended June 30,July 1, 2005 through2006200520062005June 30, 2006(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)INCOME:Dividend and Interest Income$      12,9314,522$     19,158$        6,371$      30,872EXPENSES:Professional Fees27,83838,57743,82341,683104,507Marketing38,963-41,228-52,429Exploration Expenses108,182-179,968-179,968Travel Expenses26,890-39,888-51,842Administrative and Office Expenses22,15719,49245,55719,52972,406Payroll Expenses68,536-131,966-216,157Stock Option Compensation Expense----4,000Stock Options Issued for Services6,750-138,750-139,650Depreciation Expense352-703-1,405299,66858,069621,88361,212822,364LOSS BEFORE OTHER INCOME(286,737)(53,547)(602,725)(54,841)(791,492)OTHER INCOME:Income from Partnership Interest6184006184001,498NET LOSS$   (286,119)$    (53,147)$   (602,107)$    (54,441)$   (789,994)BASIC LOSS PER SHARE, Based onWeighted-Average Shares Outstanding(0.01)NIL(0.03)NIL(0.04)WEIGHTED-AVERAGE COMMONSHARES OUTSTANDING28,040,67015,000,00022,302,21511,544,26919,176,779  See accompanying notes to consolidated financial statements.    HuntMountain Resources and Subsidiary(A Development Stage Enterprise)Consolidated Statements of Cash FlowsFrom Inceptionof Development StageSix MonthsJuly 1, 2005 throughEnded June 30,June 30,200620052006(Unaudited)(Unaudited)(Unaudited)Increase (Decrease) in Cash and Cash EquivalentsCASH FLOWS FROM OPERATING ACTIVITIES:Net Loss$   (602,107)$     (54,441)$         (789,994)Adjustments to Reconcile Net Loss to Net CashUsed in Operating ActivitiesDepreciation703-1,405Stock Option Compensation Expense--4,000Common Stock Issued for Services138,750-139,650(Increase) / Decrease in Prepaid Assets9,311-(10,428)Increase / (Decrease) in Accrued Liabilities37,61113,00037,092Net Cash Used in Operating Activities(415,732)(41,441)(618,275)CASH FLOWS FROM INVESTING ACTIVITIES:Property Purchase Option(70,000)(70,000)Acquisition of Equipment--(4,216)Net Cash Used inInvesting Activities(70,000)-(74,216)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from Sales of Common Stock1,003,870651,9341,003,870NET INCREASE (DECREASE) IN CASH ANDCASH EQUIVALENTS518,138#610,493311,379CASH AND CASH EQUIVALENTS, BEGINNINGOF PERIOD901,162497,4281,107,921CASH AND CASH EQUIVALENTS, END OF PERIOD$  1,419,300$  1,107,921$        1,419,300  See accompanying notes to consolidated financial statements.     HuntMountain Resources and Subsidiary (A Development Stage Enterprise)  Notes to Consolidated Financial Statements  BASIS OF PRESENTATION:   The unaudited financial statements have been prepared by HuntMountain Resources (the Company), pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC).  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such SEC rules and regulations. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2005, which was filed March 30, 2006. In the opinion of management of the Company, the foregoing statements contain all adjustments necessary to present fairly the financial position of the Company as of June 30, 2006, and its results of operations for the six month periods ended June 30, 2006 and 2005, and its cash flows for the six-month periods ended June 30, 2006 and 2005. The interim results reflected in the foregoing financial statements are not considered indicative of the results expected for the full fiscal year.  STOCK OPTION PLAN:  At June 30, 2006, there were 1,035,000 stock options granted to directors, employees, and consultants, of which 615,000 are vested as of June 30, 2006.  The fair value of each option is estimated on the issue date using the Black-Scholes Option Price Calculation.  The following assumptions were made in estimating fair value of the options that became vested during the quarter ended June 30, 2006: risk free interest rate of 4.87%; volatility of 75%; expected dividend rate of -0-% and expected life of two years.  An expense of $6,750 for 25,000 Non-Qualified Stock Options issued to a consultant and vested during the quarter was recorded in the second quarter of 2006.  Expenses for the remaining options will be recorded as they vest in the remainder of 2006 through 2008.  The following table summarizes the terms of the options outstanding at June 30, 2006:  Number of
OptionsWeighted Average Exercise
PriceWeighted Average
Remaining
Contractual Life
(Years)Number of
Exercisable
Options at
June 30, 200610,000$0.153.9910,00090,000$0.205.000700,000$0.254.99550,00030,000$0.285.000100,000$0.305.00020,000$0.344.3420,00010,000$0.374.0210,00050,000$0.385.00025,000$0.584.9925,000TOTALS1,035,000$0.274.70615,000    HuntMountain Resources and Subsidiary (A Development Stage Enterprise)  Notes to Consolidated Financial Statements  WARRANTS OUTSTANDING:  On April 24, 2006, and in accordance with the provisions of the private placement agreement entered into on March 23, 2005, the Hunt Family Limited Partnership exercised 15,444,132 warrants for that same number of common stock shares of HuntMountain Resources.  The transaction proceeds totaled $1,003,869. With the exercise of these warrants, there are no other warrants for shares of the Companys common stock outstanding as of June 30, 2006.   COMMITMENTS:  As of the quarter ended June 30, 2006, the Company has agreements to pay advance royalty and lease payments on exploration properties.  The commitments are as follows:  DUN GLEN PROPERTY  PERSHING COUNTY, NEVADA  The Company has a lease for the Dun Glen property with an option to purchase a 100% interest in the claims.  Lease payments are considered advance royalty payments.  The term of the lease is 10 years, renewable at the Companys option for an additional ten years.  The Company paid $30,000 in advance royalty payments during the quarter ended March 31, 2006 for this property.  Future annual advance royalty payments begin at $37,500 per year in 2007 and escalate to $72,500 per year at the end of the fifth year of the lease and for every year beyond that, until the lease is terminated or the purchase option is exercised.   The Company has also agreed to keep the claims in good standing until the lease is terminated or the purchase option is exercised.  ABITIBI PROPERTIES  QUEBEC, CANADA  During the quarter ended June 30, 2006, the Company entered into a definitive Option Agreement for the acquisition of a 100% interest in two properties in the Abitibi region of Quebec.  This Agreement followed up a letter agreement with substantially the same terms that had been entered into during the first quarter of 2006.  Pursuant to the terms of the Option Agreement, the Company paid $70,000 ($35,000 for each of the two properties) in cash to the property owner.  The Company has also agreed to explore these properties and drill at least three exploration drill holes in each.   The payments and drilling of exploration drill holes will earn the Company a 100% interest in each of these properties and give the Company the option to acquire additional properties from the same property owner at similar terms.  The Company has also agreed to keep the claims in good standing until the agreement is terminated.             Item 2.  Managements Discussion and Analysis and Plan of Operation   We had no revenues from operations during the recently completed quarter. Our only income has been derived from interest and dividends on our cash and cash investments. Interest and dividend income for the three-month period ended June 30, 2006 increased to $12,931 from $4,522 for the same period ended June 30, 2005. This increase is due to the fact that the Company had more cash on hand during the quarter ended June 30, 2006 than during the same period ended June 30, 2005 due primarily to an increase in cash from the exercise of warrants during the second quarter of 2006.  For the six-month period ended June 30, 2006, interest and dividend income increased to $19,158 from $6,371 for the same period ending June 30, 2005.  This increase is also due to the fact that the Company had more cash on hand during the six-month period ended June 30, 2006 than during the same period ended June 30, 2005.  The increase in cash is due primarily to having funds received from the exercise of warrants during the second quarter of 2006, and because the stock purchase and private placement that provided over $650,000 to the Company in 2005 was not completed until the latter part of March 2005.  For the quarter ended June 30, 2006, the Company incurred non-cash expenses for stock options granted to a consultant of $6,750.  There was no stock option expense for the second quarter of 2005.  We had a net loss of $286,119 during the three-month period ended June 30, 2006.  This compares to net loss of $53,147 during the three-month period ended June 30, 2005. The increase in our net loss was due to the significantly increased level of exploration and marketing activity in the company.  During this most recently completed quarter, the Company made required property payments, including $70,000 for our properties in Quebec, and continued our exploration programs on properties in the Santa Cruz province of Argentina, Nevada, and Quebec, Canada.  Due to these acquisitions and exploration programs, during the three-month period ended June 30, 2006 we had significantly higher expenses than during the three-month period ended June 30, 2005.  Administrative expenses such as marketing, travel and payroll-related expenses were also higher during the quarter ended June 30, 2006 than during the quarter ended June 30, 2005.  We had a net loss of $602,107 during the six-month period ended June 30, 2006.  This compares to a net loss of $54,441 during the six-month period ended June 30, 2005. The increase in our net loss was due to the significantly increased level of exploration activity in the company.  During this six-month period in 2006, the Company made required property payments of $70,000 for our properties in Quebec, and continued our exploration programs on properties in the Santa Cruz province of Argentina, Nevada, and in Canada.  Other administrative expenses such as marketing expenses, travel, and payroll-related expenses were also higher during the quarter ended June 30, 2006 than during the quarter ended June 30, 2005.  For the six-month period ended June 30, 2006, the Company incurred non-cash expenses for stock options granted to members of the Board of Directors and to a consultant of $138,750.  There were no such expenses in the comparable period in 2005.  This non-cash expense represents approximately 20% of the Companys net loss for the first half of 2006.  We anticipate continuing net losses until such time as we sufficiently develop properties for production or subsequent acquisition by another company. Our ongoing expenses consist of payroll, accounting, legal, and consulting expenses related to complying with reporting requirements of the Securities Exchange Act of 1934, the expenses incurred in the search for exploration properties that meet our acquisition criteria, and exploration expenses on the properties that we have acquired.    Plan of Operation  The Company intends to continue the exploration, development, and if warranted, the mining of properties containing silver, gold, and associated based metals and other opportunities within the mineral industry throughout North and South America. At this time, the Company has interests in the Dun Glen Gold Project in Pershing County Nevada, three exploration properties in the Santa Cruz province of Argentina, and two exploration properties in the Abitibi region of Quebec Canada.  The Company intends to conduct mineral exploration on each of these properties.  In addition, the Company is actively evaluating properties in order to identify additional projects that meet the Companys acquisition criteria.  The Company has engaged the services of consultants to assist in our exploration programs and in the identification of mineral properties for possible acquisition.  The Company currently has three full-time employees. In addition to the services provided by those employees, we anticipate utilizing the services of consultants to accomplish our plans of operation in the near term.  Dun Glen Gold Project - Nevada  The Dun Glen Gold Project consists of 94 contiguous unpatented lode mining claims covering approximately 1,700 acres within the Sierra Mining District, an area with historic published production of at least 250,000 ounces of gold from both lode and placer sources.  From 1862 to1880, and throughout the early 20th century, gold production occurred within the project area at a number of small underground mines.  The Company has engaged the services of a senior geologist with extensive experience in the Great Basin to implement the Dun Glen field exploration program that may include surface geochemical sampling, geophysical surveys and detailed geologic mapping aimed at delineating drill targets by summer 2006.  A ground magnetic survey will take place in July 2006, and exploratory core drilling is planned to take place during the third and fourth quarters of 2006.  Santa Cruz - Argentina  The Company owns the mineral exploration rights to three property positions in the highly prospective Santa Cruz Province of Argentina totaling approximately 74,000 acres (300 sq. km). The properties, El Alazan, El Overo, and El Gateado, are located within the same geological setting as the Cerro Vanguardia gold mine operated by AngloGold Ashanti and Coeur dAlene Mines Mina Martha silver project. The region also hosts several other advanced stage precious metal deposits including San Jose, Manantial Espejo, and La Josefina.   The Company has engaged the services of an Argentine senior geologist with extensive experience in Santa Cruz to implement the field exploration program that includes detailed geologic mapping, trenching, and geochemical sampling.  Channel samples taken from the El Gateado property have indicated sufficient mineralization to merit further exploration.  Additional sampling and drill target identification will take place in the fall of 2006 leading up to a drilling program planned for late 2006 or early 2007.  Quebec - Canada  During the quarter ended June 30, 2006, the Company finalized a definitive agreement and made the initial property payments for an option to acquire a 100 percent interest in two prospective gold properties in the prominent Chibougamau and Abitibi regions of northwestern Quebec.  The Lac à   lEau Jaune property is 35 kilometers south of Chibougamau, and the Malartic Surimau property is 40 kilometers west of Val dOr.  Together, these projects consist of 44 claims covering approximately 6,100 acres of terrain known to host high-grade gold mineralization within regions that have collectively produced approximately 180 million ounces of gold.  The Company expects to be conducting exploration mapping, sampling, and drilling within each project area.  The current owner of the properties will assist the Company in preliminary target identification through the use of its comprehensive Artificial Intelligence software application, CARDS.  Liquidity  It is anticipated that expenditures will continue to increase as we move forward with our exploration programs on our current properties and seek additional opportunities with other properties.  We currently have sufficient resources to meet our financial obligations for the next twelve months.  Forward Looking Statements  Some information contained in or incorporated by reference into this report may contain forward looking statements.  The use of any of the words development, anticipate, continue, estimate, expect, may, project, believe, and similar expressions are intended to identify uncertainties.  We believe the expectations reflected in those forward looking statements are reasonable.  However, we cannot assure that the expectations will prove to be correct.  Actual results could differ dramatically from those anticipated in these forward looking statements as a result of the factors set forth below and other factors set forth and incorporated by reference into this report:  · Worldwide economic and political events affecting the supply of and demand for gold, silver, copper, and other base and precious metals · Volatility in the market price for gold, silver, copper, and other base and precious metals · Financial market conditions and the availability of financing on terms acceptable to the Company · Uncertainties associated with the development of exploration properties in certain geographical locations · Geological, technical, permitting, mining, and processing problems · The availability, terms, conditions, and timing of require governmental permits and approvals · Uncertainty regarding future changes in applicable law or implementation of existing law · The availability of experienced employees · The factors discussed under Risk Factors in our Form 10KSB for the period ending December 31, 2005  Item 3. Controls and Procedures  Within the 90 days prior to the date of this report, the company carried out an evaluation, under the supervision and with the participation of the companys management, including the companys principal executive officer and principal financial officer, of the effectiveness of the design and operation of the companys disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon that evaluation, the principal executive officer and principal financial officer concluded that the companys disclosure controls and procedures are effective in timely alerting them to material information relating to the company required to be included in the companys periodic SEC filings.     Item 4. Quantitative and Qualitative Disclosures About Market Risk and Hedging Activities  All of our cash balances are held in U.S. dollars in local and national banking institutions.  We manage the timing of our cash requirements for exploration and general corporate purposes by maintaining liquidity in our money market account.    PART II OTHER INFORMATION  Items deleted are not applicable.  Item 5.  Other Information  On June 27, 2006, the Company held it Annual Meeting of Shareholders at which Tim Hunt, Dr. William R. Green, and Dr. Eberhard A. Schmidt were elected to serve as directors of the Company until the subsequent annual meeting of shareholders.  On July 12, 2006, the Companys number of Directors was increased to four (4) following the appointment of Mr. Alastair H. Summers to the Board.  Mr. Summers has over 45 years experience in mine development and production in North and South America.  His current term as a director will expire at the Companys subsequent annual meeting of shareholders.   Item 6.  Exhibits  31.1--Certification required by Rule 13a-14(a) or Rule 15d-14(a). Tim Hunt 31.2--Certification required by Rule 13a-14(a) or Rule 15d-14(a). Randal Hardy 32.1--Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002,  18 U.S.C. Section 1350, Tim Hunt 32.2--Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002,  18 U.S.C. Section 1350, Randal Hardy   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.    HUNTMOUNTAIN RESOURCES  /s/ Tim Hunt  BY: DATE:  August 10, 2006 TIM HUNT, PRESIDENT  /s/ Randal L. Hardy BY: DATE: August 10, 2006 RANDAL L. HARDY, CHIEF FINANCIAL OFFICER