UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549




FORM
10-Q




(Mark
One)


x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934For
      the quarterly period ended September 30,
      2008 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
transition period from 
to




Commission
File Number:  000-49725


Constitution Mining
Corp.


(Exact
name of registrant as specified in its charter)




Nevada
            88-0455809(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification No.)





Manuela Sáenz 323,
      Suite 706, Buenos Aires, Argentina C1107BPA(Address
      of principal executive offices)+54-11-5236
      9978(Registrant’s
      telephone number, including area code)6139
      South Rural Road, Suite 103, Tempe, Arizona 85283-2929(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. ý
Yes   ̈
No




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




Large
      accelerated filer  ̈
            Accelerated
      filer  ̈Non-accelerated
      filer    ̈(Do not
      check if a smaller reporting company)
            Smaller
      reporting company ý




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


 ̈    Yes     ý No




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




Class
            
            Outstanding
      at November 12, 2008Common
      Stock, $0.001 par value
            
            58,469,456







Table of Contents










FORM
      10-Q
              CONSTITUTION
      MINING CORP.
              SEPTEMBER
      30, 2008
              
              TABLE OF CONTENTS
            PagePART I – FINANCIAL
      INFORMATIONItem
      1.
            Financial Statements.
            3Item
      2.
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations.
            4Item
      3.
            Quantitative and Qualitative Disclosures About Market
      Risk.
            15Item
      4T.
            Controls and Procedures.
            15PART II – OTHER
      INFORMATIONItem
      1.
            Legal Proceedings.
            17Item
      1A.
            Risk Factors.
            17Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds.
            17Item
      3.
            Defaults Upon Senior Securities.
            18Item
      4.
            Submission of Matters to a Vote of Security
      Holders.
            18Item
      5.
            Other Information.
            18Item
      6.
            Exhibits.
            18SignaturesExhibitsCertifications







- 2
-
 Table of Contents


PART
I - FINANCIAL INFORMATION




Item
1.         Financial
Statements.




Our
      unaudited consolidated financial statements included in this Form
      10-Q are as follows:F-1
            Unaudited
      Consolidated Balance Sheet as of September 30, 2008.F-2
            Unaudited
      Consolidated Statements of Operations for the three and nine months ended
      September 30, 2008
              and
      2007 and from inception on March 6, 2000 to September 30,
      2008.F-3
            Unaudited
      Consolidated Statements of Cash Flows for the three and nine months ended
      September 30, 2008
              and
      2007 and from inception on March 6, 2000 to September 30,
      2008.F-4
            Unaudited
      Consolidated Statement of Changes in Stockholders' Equity from
      inception on March 6, 2000
              to
      September 30, 2008.F-5
            Notes
      to Unaudited Consolidated Financial Statements.




These
unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and the SEC instructions to Form
10-Q.  In the opinion of management, all adjustments considered
necessary for a fair presentation have been included.  Operating
results for the interim period ended September 30, 2008 are not necessarily
indicative of the results that can be expected for the full year.






- 3
-
 Table of Contents
  Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Consolidated
Balance Sheets
 (Expressed
in U.S. Dollars)
 (Unaudited)
 As
      at 30
                  September
                  2008
                
                
                As
      at 31
                  December
                  2007
                  (Audited)Assets
                
                $
                
                
                
                $CurrentCash
      and cash equivalents
                
                
                1,896,874
                
                
                
                54,642Amounts
      receivable
                
                
                -
                
                
                
                4,000Prepaid
      expenses
                
                
                45,350
                
                
                
                49,7081,942,224
                
                
                
                108,350Mineral property costs
      (Note 6)
                
                
                1,640,000
                
                
                
                -Property and equipment(Note 4)
                
                
                82,755
                
                
                
                -Unproven oil and gas
      exploration property(Note 3)
                
                
                -
                
                
                
                481,504Website development cost(Note 5)
                
                
                52,686
                
                
                
                -3,717,665
                
                
                
                589,854LiabilitiesCurrentAccounts
      payable and accrued liabilities (Note 7)
                
                
                297,586
                
                
                
                62,787Convertible
      debentures (Note 8)
                
                
                -
                
                
                
                788,619Due
      to related party (Note 9)
                
                
                26,490
                
                
                
                11,388324,076
                
                
                
                862,794Stockholders’
      equity (deficiency)Capital stock (Note
      11)Authorized300,000,000
      common shares, par value $0.001 and50,000,000
      preferred shares, par value $0.001Issued
      and outstanding30
      September 2008 – 56,469,456 common shares, par value
$0.00131
      December 2007 – 48,582,300 common shares, par value $0.001
                
                
                56,469
                
                
                
                48,582Additional
      paid-in capital
                
                
                5,930,496
                
                
                
                1,247,309Warrants (Note
      11)
                
                
                3,973,863
                
                
                
                -Deficit,
      accumulated during the exploration stage
                
                
                (6,567,239
                )
                
                
                (1,568,831
                )3,393,589
                
                
                
                (272,940
                )3,717,665
                
                
                
                589,854
 
 Nature and Continuance of Operations(Note 1),Commitments(Note 15) and
Subsequent Events (Note
16)
 
 The
accompanying notes are an integral part of these financial
statements.
 
 F -
1
 Table of Contents
 
 Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Consolidated
Statements of Operations
 (Expressed
in U.S. Dollars)
 (Unaudited)
 For
      the
                    period
      from
                    the
      date
                    of
      inception on 6
                    March
      2000
                    to
      30
                    September
                    2008
                  
                  
                  For
      the three
                    month
      period
                    ended
      30
                    September
                    2008
                  
                  
                  For
      the three
                    month
      period
                    ended
      30
                    September
                    2007
                  
                  
                  For
      the nine
                    month
      period
                    ended
      30
                    September
                    2008
                  
                  
                  For
      the nine
                    month
      period
                    ended
      30
                    September
                    2007$
                  
                  
                  
                  $
                  
                  
                  
                  $
                  
                  
                  
                  $
                  
                  
                  
                  $Operating
      expensesAmortization
      expense
                  
                  
                  186,141
                  
                  
                  
                  12,620
                  
                  
                  
                  -
                  
                  
                  
                  25,639
                  
                  
                  
                  32,100Default
      on oil and gas deposit
                  
                  
                  25,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Exploration
      costs
                  
                  
                  776,536
                  
                  
                  
                  85,921
                  
                  
                  
                  -
                  
                  
                  
                  776,536
                  
                  
                  
                  1,912Interest
      on convertible debentures (Note 8)
                  
                  
                  126,525
                  
                  
                  
                  -
                  
                  
                  
                  18,839
                  
                  
                  
                  -
                  
                  
                  
                  55,536Investor
      relations
                  
                  
                  500,558
                  
                  
                  
                  128,510
                  
                  
                  
                  17,561
                  
                  
                  
                  400,400
                  
                  
                  
                  35,475Management
      fees (Note 10)
                  
                  
                  395,634
                  
                  
                  
                  77,822
                  
                  
                  
                  36,130
                  
                  
                  
                  251,134
                  
                  
                  
                  112,810Office
      and miscellaneous
                  
                  
                  140,642
                  
                  
                  
                  46,284
                  
                  
                  
                  4,073
                  
                  
                  
                  114,775
                  
                  
                  
                  3,071Professional
      fees
                  
                  
                  853,482
                  
                  
                  
                  241,518
                  
                  
                  
                  77,001
                  
                  
                  
                  557,827
                  
                  
                  
                  94,067Rent
                  
                  
                  56,229
                  
                  
                  
                  22,983
                  
                  
                  
                  1,046
                  
                  
                  
                  41,146
                  
                  
                  
                  2,730Stock-based
      compensation (Note 12)
                  
                  
                  2,658,642
                  
                  
                  
                  2,033,607
                  
                  
                  
                  625,035
                  
                  
                  
                  2,033,607
                  
                  
                  
                  625,035Travel
                  
                  
                  203,907
                  
                  
                  
                  67,064
                  
                  
                  
                  -
                  
                  
                  
                  150,022
                  
                  
                  
                  -Write-down
      of mineral property acquisition costs (Note 6)
                  
                  
                  760,260
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  760,260
                  
                  
                  
                  -(6,683,556
                  )
                  
                  
                  (2,716,329
                  )
                  
                  
                  (779,685
                  )
                  
                  
                  (5,111,346
                  )
                  
                  
                  (962,736
                  )Foreign
      exchange income (loss)
                  
                  
                  (2,905
                  )
                  
                  
                  (1,159
                  )
                  
                  
                  (510
                  )
                  
                  
                  (858
                  )
                  
                  
                  648Gain
      on sale of oil and gas property (Notes 3 and 8)
                  
                  
                  307,115
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  307,115
                  
                  
                  
                  -Interest
      income
                  
                  
                  12,107
                  
                  
                  
                  4,437
                  
                  
                  
                  1,938
                  
                  
                  
                  6,681
                  
                  
                  
                  3,932Provision
      for potential legal claims (Note 7)
                  
                  
                  (200,000
                  )
                  
                  
                  (200,000
                  )
                  
                  
                  -
                  
                  
                  
                  (200,000
                  )
                  
                  
                  -116,317
                  
                  
                  
                  (196,722
                  )
                  
                  
                  1,428
                  
                  
                  
                  112,938
                  
                  
                  
                  4,580Net
      operating loss and comprehensive loss for the period
                  
                  
                  (6,567,239
                  )
                  
                  
                  (2,913,051
                  )
                  
                  
                  (778,257
                  )
                  
                  
                  (4,998,408
                  )
                  
                  
                  (958,156
                  )Basic and diluted loss per
      common share(Note 2)
                  
                  
                  
                  
                  
                  
                  (0.055
                  )
                  
                  
                  (0.016
                  )
                  
                  
                  (0.098
                  )
                  
                  
                  (0.020
                  )Weighted
      average number of common shares used in per share
    calculations
                  
                  
                  
                  
                  
                  
                  53,227,011
                  
                  
                  
                  48,582,300
                  
                  
                  
                  50,962,812
                  
                  
                  
                  47,255,547







F -
2
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Consolidated
Statements of Cash Flows


(Expressed
in U.S. Dollars)


(Unaudited)
 For
      the
                  period
      from
                  the
      date of
                  inception
      on
                  6
      March 2000
                  to
      30
                  September
                  2008
                
                
                For
      the
                  three
                  month
                  period
                  ended
      30
                  September
                  2008
                
                
                For
      the
                  three
                  month
                  period
                  ended
      30
                  September
                  2007
                
                
                For
      thenine
                  month
      period
                  ended
      30
                  September
                  2008
                
                
                For
      the
                  nine
      month
                  period
                  ended
      30
                  September
                  2007$
                
                
                
                $
                
                
                
                $
                
                
                
                $
                
                
                
                $Cash
      flows from operating activitiesLoss
      for the period
                
                
                (6,567,239
                )
                
                
                (2,913,051
                )
                
                
                (778,257
                )
                
                
                (4,998,408
                )
                
                
                (958,156
                )Adjustments
      to reconcile loss to net cash used by operating activitiesAccrued
      interest (Note 8)
                
                
                126,525
                
                
                
                -
                
                
                
                18,839
                
                
                
                -
                
                
                
                55,536Amortization
      (Notes 4 and 5)
                
                
                186,141
                
                
                
                12,620
                
                
                
                -
                
                
                
                25,639
                
                
                
                32,100Contributions
      to capital by related party – expenses
                
                
                15,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                600Shares
      issued for services (Notes 11 and 14)
                
                
                24,199
                
                
                
                (25,253
                )
                
                
                -
                
                
                
                24,199
                
                
                
                -Warrants
      issued for services (Notes 11 and 14)
                
                
                25,253
                
                
                
                25,253
                
                
                
                -
                
                
                
                25,253
                
                
                
                -Gain
      on sale of oil & gas property (Notes 3, 8 and 14)
                
                
                (307,115
                )
                
                
                -
                
                
                
                -
                
                
                
                (307,115
                )
                
                
                -Stock-based
      compensation (Note 12)
                
                
                2,658,642
                
                
                
                2,033,607
                
                
                
                625,035
                
                
                
                2,033,607
                
                
                
                625,035Write-down
      of mineral property acquisition costs (Note 6)
                
                
                760,260
                
                
                
                -
                
                
                
                -
                
                
                
                760,260
                
                
                
                -Provision
      for potential legal claims (Note 7)
                
                
                200,000
                
                
                
                200,000
                
                
                
                -
                
                
                
                200,000
                
                
                
                -Changes
      in operating assets and liabilities(Increase)
      decrease in deposit and prepaid expenses
                
                
                (45,350
                )
                
                
                (45,350
                )
                
                
                -
                
                
                
                8,358
                
                
                
                -Increase
      (decrease) in accounts payable and accrued liabilities
                
                
                97,586
                
                
                
                (496,824
                )
                
                
                53,523
                
                
                
                34,799
                
                
                
                49,507Increase
      (decrease) in due to related party
                
                
                26,490
                
                
                
                (382,874
                )
                
                
                (2,000
                )
                
                
                15,102
                
                
                
                (2,298
                )(2,799,608
                )
                
                
                (1,591,872
                )
                
                
                (82,860
                )
                
                
                (2,178,306
                )
                
                
                (197,676
                )Cash
      flows used in investing activitiesAcquisition
      of mineral property interests (Note 6)
                
                
                (250,260
                )
                
                
                (50,000
                )
                
                
                -
                
                
                
                (250,260
                )
                
                
                -Purchase
      of equipment (Note 4)
                
                
                (96,387
                )
                
                
                (15,478
                )
                
                
                -
                
                
                
                (96,387
                )
                
                
                -Website
      development costs (Note 5)
                
                
                (64,693
                )
                
                
                (25,000
                )
                
                
                -
                
                
                
                (64,693
                )
                
                
                -Purchase
      of oil and gas property (Note 3)
                
                
                (642,006
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -(1,053,346
                )
                
                
                (90,478
                )
                
                
                -
                
                
                
                (411,340
                )
                
                
                -Cash
      flows from financing activitiesCommon
      shares issued for cash (Note 11)
                
                
                1,370,511
                
                
                
                11,114
                
                
                
                -
                
                
                
                717,561
                
                
                
                502,950Warrants
      issued for cash (Note 11)
                
                
                3,714,317
                
                
                
                3,714,317
                
                
                
                -
                
                
                
                3,714,317
                
                
                
                -Convertible
      debentures (Note 8)
                
                
                665,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Decrease
      in share subscriptions received in advance
                
                
                -
                
                
                
                (242,315
                )
                
                
                -
                
                
                
                -
                
                
                
                -5,749,828
                
                
                
                3,483,116
                
                
                
                -
                
                
                
                4,431,878
                
                
                
                502,950Increase
      (decrease) in cash and cash equivalents
                
                
                1,896,874
                
                
                
                1,800,766
                
                
                
                (82,860
                )
                
                
                1,842,232
                
                
                
                305,274Cash
      and cash equivalents, beginning of period
                
                
                -
                
                
                
                96,108
                
                
                
                415,606
                
                
                
                54,642
                
                
                
                27,472Cash
      and cash equivalents, end of period
                
                
                1,896,874
                
                
                
                1,896,874
                
                
                
                332,746
                
                
                
                1,896,874
                
                
                
                332,746
 
 Supplemental
Disclosure with Respect to Cash Flows(Note 14)







F -
3
 Table of Contents


Constitution
Mining Corp.


(An
Exploration Stage Company)


Consolidated
Statements of Changes in Stockholders’ Equity (Deficiency)


(Expressed in U.S.
Dollars)


(Unaudited)
 Number
      of
                  shares
      issued
                
                
                Share
                  capital
                
                
                Additional
                  paid-in
      capital
                
                
                Warrants
                
                
                Share
                  subscriptions
                  received
      in advance/share receivables
                
                
                Deficit,
                  accumulated
                  during
      the
                  exploration
                  stage
                
                
                Total
                  stockholders’
                  equity
                  (deficiency)$
                
                
                
                $
                
                
                
                $
                
                
                
                $
                
                
                
                $
                
                
                
                $Balance
      at 6 March 2000 (inception)Common
      shares issued – cash
                
                
                2,000,000
                
                
                
                2,000
                
                
                
                1,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                3,000Net
      loss for the period
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,291
                )
                
                
                (2,291
                )Balance
      at 31 December 2000
                
                
                2,000,000
                
                
                
                2,000
                
                
                
                1,000
                
                
                
                -
                
                
                
                -
                
                
                
                (2,291
                )
                
                
                709Common
      shares issued – cash
                
                
                5,000,000
                
                
                
                5,000
                
                
                
                42,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                47,000Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (10,571
                )
                
                
                (10,571
                )Balance
      at 31 December 2001
                
                
                7,000,000
                
                
                
                7,000
                
                
                
                43,000
                
                
                
                -
                
                
                
                -
                
                
                
                (12,862
                )
                
                
                37,138Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (12,097
                )
                
                
                (12,097
                )Balance
      at 31 December 2002
                
                
                7,000,000
                
                
                
                7,000
                
                
                
                43,000
                
                
                
                -
                
                
                
                -
                
                
                
                (24,959
                )
                
                
                25,041Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (11,019
                )
                
                
                (11,019
                )Balance
      at 31 December 2003
                
                
                7,000,000
                
                
                
                7,000
                
                
                
                43,000
                
                
                
                -
                
                
                
                -
                
                
                
                (35,978
                )
                
                
                14,0223
      for 1 forward split
                
                
                14,000,000
                
                
                
                14,000
                
                
                
                (14,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (6,451
                )
                
                
                (6,451
                )Balance
      at 31 December 2004
                
                
                21,000,000
                
                
                
                21,000
                
                
                
                29,000
                
                
                
                -
                
                
                
                -
                
                
                
                (42,429
                )
                
                
                7,5712
      for 1 forward split
                
                
                21,000,000
                
                
                
                21,000
                
                
                
                (21,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (18,338
                )
                
                
                (18,338
                )Balance
      at 31 December 2005
                
                
                42,000,000
                
                
                
                42,000
                
                
                
                8,000
                
                
                
                -
                
                
                
                -
                
                
                
                (60,767
                )
                
                
                (10,767
                )Common
      shares issued –  cash
                
                
                4,000,000
                
                
                
                4,000
                
                
                
                76,000
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                80,000Contributions
      to capital by related party – expenses
                
                
                -
                
                
                
                -
                
                
                
                14,400
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                14,400Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (289,343
                )
                
                
                (289,343
                )Balance
      at 31 December 2006
                
                
                46,000,000
                
                
                
                46,000
                
                
                
                98,400
                
                
                
                -
                
                
                
                -
                
                
                
                (350,110
                )
                
                
                (205,710
                )Contributions
      to capital by related party – expenses
                
                
                -
                
                
                
                -
                
                
                
                600
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                600Common
      shares issued –  debt
                
                
                1,145,300
                
                
                
                1,145
                
                
                
                21,761
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                22,906Common
      shares issued –  cash
                
                
                1,437,000
                
                
                
                1,437
                
                
                
                501,513
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                502,950Stock-based
      compensation
                  (Note
      12)
                
                
                -
                
                
                
                -
                
                
                
                625,035
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                625,035Net
      loss for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (1,218,721
                )
                
                
                (1,218,721
                )Balance
      at 31 December 2007
                
                
                48,582,300
                
                
                
                48,582
                
                
                
                1,247,309
                
                
                
                -
                
                
                
                -
                
                
                
                (1,568,831
                )
                
                
                (272,940
                )Common
      shares issued –  mineral properties (Notes 6, 11 and
      14)
                
                
                1,800,000
                
                
                
                1,800
                
                
                
                2,148,200
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,150,000Common
      shares issued –  cash (Note 11)
                
                
                6,016,511
                
                
                
                6,016
                
                
                
                4,706,272
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                4,712,288Common
      shares issued –  services (Notes 11 and 14)
                
                
                70,645
                
                
                
                71
                
                
                
                49,380
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                49,451Value
      assigned to warrants (Note 11)
                
                
                -
                
                
                
                -
                
                
                
                (3,739,570
                )
                
                
                3,739,570
                
                
                
                -
                
                
                
                -
                
                
                
                -Share
      issuance costs
                
                
                -
                
                
                
                -
                
                
                
                (514,702
                )
                
                
                234,293
                
                
                
                -
                
                
                
                -
                
                
                
                (280,409
                )Stock-based
      compensation (Note 12)
                
                
                -
                
                
                
                -
                
                
                
                2,033,607
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                2,033,607Net
      loss for the period
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (4,998,408
                )
                
                
                (4,998,408
                )Balance
      at 30 September 2008
                
                
                56,469,456
                
                
                
                56,469
                
                
                
                5,930,496
                
                
                
                3,973,863
                
                
                
                -
                
                
                
                (6,567,239
                )
                
                
                3,393,589





F -
4
 Table of Contents





Constitution Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




1.
              Nature and Continuance of
      Operations
 
 Constitution
Mining Corp. (the “Company”) was incorporated in the State of Nevada under the
name “Crafty Admiral Enterprises, Ltd.” on 6 March 2000. On 9 March 2007, the
Company changed their name to “Nordic Nickel Ltd.”. The Company changed their
name pursuant to a parent/subsidiary merger between the Company (as “Crafty
Admiral Enterprises, Ltd.”) and its wholly-owned non-operating subsidiary,
Nordic Nickel Ltd., which was established for the purpose of giving effect to
this name change. On 15 November 2007, the Company changed their name to
“Constitution Mining Corp.”. The Company changed their name pursuant to a
parent/subsidiary merger between the Company (as “Nordic Nickel Ltd.”) and its
wholly-owned non-operating subsidiary, Constitution Mining Corp., which was
established for the purpose of giving effect to this name change. The Company is
in the currently in the exploration stage of its operations and no revenue has
been generated to date.
 
 The
Company is an exploration stage enterprise, as defined in Statements of
Financial Accounting Standards (“SFAS”) No. 7. The Company is devoting all of
its present efforts in securing and establishing a new business, and its planned
principle operations have not commenced, and, accordingly, no revenue has been
derived during the organization period.
 
 The
Company’s consolidated financial statements as at 30 September 2008 and for the
nine month period then ended have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business.  The Company had a loss
of $4,998,408 for nine month period ended 30 September 2008 (2007 - $958,156)
and has working capital of $1,618,148 at 30 September 2008 (31 December 2007 -
working capital deficit of $754,444).
 
 Management
cannot provide assurance that the Company will ultimately achieve profitable
operations or become cash flow positive, or raise additional debt and/or equity
capital.  Management believes that the Company’s capital resources
should be adequate to continue operating and maintaining its business strategy
during the fiscal year ending 31 December 2008.  However, if the
Company is unable to raise additional capital in the near future, due to the
Company’s liquidity problems, management expects that the Company will need to
curtail operations, liquidate assets, seek additional capital on less favorable
terms and/or pursue other remedial measures.  These consolidated
financial statements do not include any adjustments related to the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.
 
 On 27
June 2006, the Company acquired a 100% interest in a mineral, oil and gas
property lease located in St. Francis County, Arkansas (the “Tombaugh Lease”)
for cash payment of $642,006. Since acquiring our interest under the Tombaugh
Lease, the Company shifted its focus from the oil and gas sector to seeking
business opportunities in relation to nickel deposits in selected Nordic
regions. We were not successful pursuing business opportunities developing
nickel deposit in the Nordic regions, and again sought to reorganize our
operations in November 2007.  Since November 2007 our current focus is
on the acquisitition and development of our interests in mining properties
located in South America.





F -
5
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008





Although
management is currently attempting to implement its business plan, and is
seeking additional sources of equity or debt financing and or a partner there is
no assurance these activities will be successful.   This raises
substantial doubt about the ability of the Company to continue as a going
concern.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 2.
              Significant
      Accounting Policies
 
 The
following is a summary of significant accounting policies used in the
preparation of these consolidated financial statements.
 
 Basis
of presentation and consolidation
 
 The
accounting and reporting policies of the Company conform to the accounting
principles generally accepted in the United States of America applicable to
exploration stage enterprises and are expressed in U.S. dollars.  The
Company’s fiscal year-end is 31 December.
 
 These
consolidated financial statements include the accounts of the Company’s wholly
owned subsidiaries, Constitution Mining Argentina SA, a company incorporated
under the laws of Argentina, since its date of incorporation on 4 March 2008.
All inter-company balances and transactions have been eliminated on
consolidation.
 
 Cash
and cash equivalents
 
 Cash and
cash equivalents include highly liquid investments with original maturities of
three months or less.
 
 Financial
instruments
 
 The
carrying value of cash and cash equivalents, prepaid expenses, accounts payable
and accrued liabilities and due to related party approximates their fair value
because of the short maturity of these instruments.  The Company’s
operations are in Canada and virtually all of its assets and liabilities are
giving rise to significant exposure to market risks from changes in foreign
currency rates.  The Company’s financial risk is the risk that arises
from fluctuations in foreign exchange rates and the degree of volatility of
these rates.  Currently, the Company does not use derivative
instruments to reduce its exposure to foreign currency risk.
 
 Derivative
financial instruments
 
 The
Company has not, to the date of these consolidated financial statements, entered
into derivative instruments to offset the impact of foreign currency
fluctuations.





F -
6
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




Income
taxes
 
 Deferred
income taxes are reported for timing differences between items of income or
expense reported in the financial statements and those reported for income tax
purposes in accordance with SFAS No. 109, “Accounting for Income Taxes”,
which requires the use of the asset/liability method of accounting for income
taxes.  Deferred income taxes and tax benefits are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and for tax losses and credit
carry-forwards.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled.  The Company provides for deferred taxes for the estimated
future tax effects attributable to temporary differences and carry-forwards when
realization is more likely than not.
 
 Basic
and diluted net loss per share
 
 The
Company computes net income (loss) per share in accordance with SFAS No.128,
“Earnings per
Share”.  SFAS No. 128 requires presentation of both basic and
diluted earnings per share (“EPS”) on the face of the income
statement.  Basic EPS is computed by dividing net income (loss)
available to common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period.  Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method.  In computing diluted EPS, the average stock
price for the period is used in determining the number of shares assumed to be
purchased from the exercise of stock options or warrants.  Diluted EPS
excluded all dilutive potential shares if their effect is
anti-dilutive.
 
 Comprehensive
loss
 
 SFAS No.
130, “Reporting Comprehensive
Income”, establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements.  As
at 30 September 2008, the Company has no items that represent a comprehensive
loss and, therefore, has not included a schedule of comprehensive loss in the
consolidated financial statements.
 
 Mineral
property costs
 
 Mineral
property acquisition costs are initially capitalized as tangible assets when
purchased in accordance with EITF 04-2. At the end of each fiscal quarter end,
the Company assesses the carrying costs for impairment.  If proven and
probable reserves are established for a property and it has been determined that
a mineral property can be economically developed, costs will be amortized using
the units-of-production method over the estimated life of the probable
reserve.
 
 Mineral
property exploration costs are expensed as incurred.
 
 Estimated
future removal and site restoration costs, when determinable are provided over
the life of proven reserves on a units-of-production basis.  Costs,
which include production equipment removal and environmental remediation, are
estimated each period by management based on current regulations, actual
expenses incurred, and technology and industry standards.  Any charge
is included in exploration expense or the provision for depletion and
depreciation during the period and the actual restoration expenditures are
charged to the accumulated provision amounts as incurred.





F -
7
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008





As of the
date of these consolidated financial statements, the Company has not established
any proven or probable reserves on its mineral properties and incurred only
acquisition and exploration costs.
 
 Although
the Company has taken steps to verify title to mineral properties in which it
has an interest, according to the usual industry standards for the stage of
exploration of such properties, these procedures do not guarantee the Company’s
title.  Such properties may be subject to prior agreements or
transfers and title may be affected by undetected defects.
 
 Oil
and gas property
 
 The
Company accounts for its oil and gas exploration and development costs using the
successful efforts method.  Leasehold acquisition costs are
capitalized.  If proved reserves are found on an undeveloped property,
leasehold cost is transferred to proved properties.  Significant
undeveloped leases are reviewed periodically and a valuation allowance is
provided for any estimated decline in value.  Cost of other
undeveloped leases is expensed over the estimated average life of the
leases.  Cost of exploratory drilling is initially
capitalized.  In the absence of a determination that proved reserves
are found, the costs of drilling such exploratory wells are charged to
expense.  The Company makes this determination within one year
following the completion of drilling.  Other exploratory costs are
charged to expense as incurred.  Development costs, including
unsuccessful development wells, are capitalized.  Depletion,
depreciation and amortization of oil and gas producing properties are computed
on an aggregate basis using the units-of-production method.
 
 The
Financial Accounting Standards Board (the “FASB”) issued SFAS No.144 “Accounting for the Impairment or
Disposal of Long-Lived Assets” that requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.  It
establishes guidelines for determining recoverability based on future net cash
flows from the use of the asset and for the measurement of the impairment
loss.  Impairment loss under SFAS No. 144 is calculated as the
difference between the carrying amount of the asset and its fair
value.  Any impairment loss is recorded in the current period in which
recognition criteria are first applied and met.  Under the successful
efforts method of accounting for oil and gas operations, the Company must
periodically assess it proved properties for impairments by comparing the
aggregate net book carrying amount of all proved properties with their aggregate
future net cash flows.  The statement requires that the impairment
review be performed on the lowest level of asset groupings for which there are
identifiable cash flows.
 
 Website development costs
 
 The costs
of computer software developed or obtained for internal use, during the
preliminary project phase, as defined under AICPA Statement of Position 98-1
“Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use”, will be
expensed as incurred.  The costs of website development during the
planning stage, as defined under Emerging Issued Task Force (“EITF”) No. 00-2
“Accounting for Web Site
Development Costs”, will also be expensed as incurred.
 
 Computer
software, website development incurred during the application and infrastructure
development stage, including external direct costs of materials and services
consumed in developing the software and creating graphics and website content,
will be capitalized and amortized over the estimated useful life, beginning when
the software is ready for use and after all substantial testing is completed and
the website is operational.





F -
8
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008





Segments
of an enterprise and related information
 
 SFAS No.
131, “Disclosures about
Segments of an Enterprise and Related Information”, supersedes SFAS No. 14,
“Financial Reporting for
Segments of a Business Enterprise.”  SFAS No. 131 establishes
standards for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued to
the public.  It also establishes standards for disclosures regarding
products and services, geographic areas and major customers.  SFAS No.
131 defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance.  The Company has evaluated this SFAS and does not believe
it is applicable at this time.
 
 Start-up
expenses
 
 The
Company has adopted Statement of Position No. 98-5, “Reporting the Costs of Start-up
Activities”, which requires that costs associated with start-up
activities be expensed as incurred.  Accordingly, start-up costs associated
with the Company's formation have been included in the Company’s expenses for
the period from the date of inception on 6 March 2000 to 30 September
2008.
 
 Foreign
currency translation
 
 The
Company’s functional and reporting currency is U.S. dollars.  The
consolidated financial statements of the Company are translated to U.S. dollars
in accordance with SFAS No. 52, “Foreign Currency
Translation.”  Monetary assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at the
balance sheet date.  Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income.  The Company has not, to the date of
these consolidated financial statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.
 
 Use
of estimates
 
 The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues
and expenditures during the reporting period.  Actual results could
differ from these estimates.
 
 Comparative
figures
 
 Certain
comparative figures have been adjusted to conform to the current period’s
presentation.





F -
9
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008





Stock-Based
Compensation
 
 Effective
1 January 2006, the Company adopted the provisions of SFAS No. 123(R), “Share-Based Payment”, which
establishes accounting for equity instruments exchanged for employee services.
Under the provisions of SFAS No.123(R), stock-based compensation cost is
measured at the grant date, based on the calculated fair value of the award, and
is recognized as an expense over the employees’ requisite service period
(generally the vesting period of the equity grant). Before 1 January 2006, the
Company accounted for stock-based compensation to employees in accordance with
Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees,” and complied with the disclosure requirements of SFAS No.
123, “Accounting for
Stock-Based Compensation”.  The Company adopted SFAS No. 23(R) using
the modified prospective method, which requires the Company to record
compensation expense over the vesting period for all awards granted after the
date of adoption, and for the unvested portion of previously granted awards that
remain outstanding at the date of adoption.  Accordingly, financial
statements for the periods prior to 1 January 2006 have not been restated to
reflect the fair value method of expensing share-based compensation.
 Adoption of SFAS No. 123(R) does not change the way the Company accounts
for share-based payments to non-employees, with guidance provided by SFAS No.
123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18,
“Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services”.
 
 Recent
accounting pronouncements
 
 In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60” (“SFAS
163”).  SFAS No. 163 provides enhanced guidance on the recognition and
measurement to be used to account for premium revenue and claim liabilities and
related disclosures and is limited to financial guarantee insurance (and
reinsurance) contracts, issued by enterprises included within the scope of FASB
Statement No. 60, Accounting and Reporting by Insurance
Enterprises.  SFAS 163 also requires that an insurance enterprise
recognize a claim liability prior to an event of default when there is evidence
that credit deterioration has occurred in an insured financial
obligation.  SFAS 163 is effective for financial statements issued for
fiscal years and interim periods beginning after 15 December 2008, with early
application not permitted.  The Company does not expect SFAS 163 to
have an impact on its consolidated financial statements.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  SFAS No. 162 is intended
to improve financial reporting by identifying a consistent framework, or
hierarchy, for selecting accounting principles to be used in preparing financial
statements that are presented in conformity with U.S. Generally Accepted
Accounting Principles (“GAAP”) for nongovernmental entities.  Prior to
the issuance of SFAS 162, GAAP hierarchy was defined in the American Institute
of Certified Public Accountants (“AICPA”) Statement on Auditing Standards No.
69, “The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles” (“SAS
69”).  SAS 69 has been criticized because it is directed to the
auditor rather than the entity.  SFAS 162 addresses these issues by
establishing that the GAAP hierarchy should be directed to entities because it
is the entity, not its auditor, that is responsible for selecting accounting
principles for financial statements that are presented in conformity with
GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board Auditing amendments to AU Section
411, The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles.  The Company does not expect SFAS 162 to have a
material effect on its consolidated financial statements.





F -
10
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No.
133” (“SFAS 161”).  SFAS 161 is intended to improve
transparency in financial reporting by requiring enhanced disclosures of an
entity’s derivative instruments and hedging activities and their effects on the
entity’s financial position, financial performance, and cash
flows.  SFAS 161 applies to all derivate instruments within the scope
of SFAS No. 133, “Accounting
for Derivative Instruments and Hedging Activities” (“SFAS
133”).  It also applies to non-derivative hedging instruments and all
hedged items designated and qualifying as hedges under SFAS 133.  SFAS
161 is effective prospectively for financial statements issued for fiscal years
beginning after 15 November 2008, with early application
encouraged.  The adoption of SFAS 161 is not expected to have a
material impact on the Company’s consolidated  financial position,
results of operations or cash flows.
 
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”
(“SFAS No. 141(R)”). SFAS No. 141(R) establishes principles and requirements for
how an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any noncontrolling
interest in the acquiree and the goodwill acquired. SFAS No. 141(R) also
establishes disclosure requirements to enable the evaluation of the nature and
financial effects of the business combination. SFAS No. 141(R) is effective for
fiscal years beginning after 15 December 2008.  The Company is
currently evaluating the potential impact, if any, of the adoption of SFAS No.
141(R) on its consolidated results of operation and financial
condition.
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51” (“SFAS 160”).  SFAS 160 establishes accounting and
reporting standards for ownership interests in subsidiaries held by parties
other than the parent, the amount of consolidated net income attributable and to
the noncontrolling interest, changes in a parent’s ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated.  SFAS 160 also establishes disclosure requirements
that clearly identify and distinguish between the interests of the parent and
the interests of the noncontrolling owners.  SFAS 160 is effective for
fiscal years beginning after 15 December 2008.  The adoption of
SFAS 160 is not expected to have a material impact on the Company’s
consolidated financial position, results of operations or cash
flows.
 
 In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement”
(“SFAS 157”). The Statement provides guidance for using fair value to measure
assets and liabilities. The Statement also expands disclosures about the extent
to which companies measure assets and liabilities at fair value, the information
used to measure fair value, and the effect of fair value measurement on
earnings. This Statement applies under other accounting pronouncements that
require or permit fair value measurements. This Statement does not expand the
use of fair value measurements in any new circumstances. Under this Statement,
fair value refers to the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants in
the market in which the entity transacts. SFAS 157 is effective for the Company
for fair value measurements and disclosures made by the Company in its fiscal
year beginning on 1 May 2008. The adoption of SFAS 157 is not expected to
have a material impact on the Company’s consolidated financial position, results
of operations or cash flows.





F -
11
 Table of Contents





Constitution Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008





3.
                Unproven
      Oil and Gas Exploration Property
 
 Tombaugh
Farms Property – St. Francis County, Arkansas
 
 On 27
June 2006, the Company acquired a 100% interest in a mineral, oil and gas
property lease located in St. Francis County, Arkansas (the “Tombaugh Lease”)
for an up front cash payment of $642,006.  The lease is for a period
of five years and is subject to a 19% royalty on oil and other liquid
hydrocarbons produced, saved and sold, and can be extended at the option of the
Company for an additional five years on the same terms.  By agreements
effective 18 January 2008, the Company assigned all of its rights, title and
interest in the Tombaugh Lease with a book value of $481,504 to a purchaser in
consideration for the purchaser assuming the Company’s outstanding payment
obligations of $788,619 related to its convertible debentures. The Company
recorded a gain of $307,115 upon completion of the transaction. (Notes 8 and
14)
 
 Balance
      at 30
                  September
                  2008
                
                
                Balance
      at 31
                  December
      2007
                  (Audited)$
                
                
                
                $Unproven
      oil and gas properties consist of the following:Undeveloped
      properties
                
                
                -
                
                
                
                481,504-
                
                
                
                481,504
 
 The
following sets forth costs incurred for oil and gas property acquisition and
development activities, whether capitalized or expensed.
 
 During
      the nine
                  month
      period
                  ended
      30
                  September
                  2008
                
                
                During
      the year
                  ended
      31
                  December
                  2007
                  (Audited)$
                
                
                
                $Acquisition
      – unproved
                
                
                481,504
                
                
                
                513,604Disposal
      through assignment of rights
                
                
                (481,504
                )
                
                
                -Amortization
                
                
                -
                
                
                
                (32,100
                )-
                
                
                
                481,504





F -
12
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008


4.
              Property
      and Equipment
  During
the nine month period ended 30 September 2008, total additions to property and
equipment were $96,387 (30 September 2007 - $Nil).
  Cost
                
                
                Accumulated
                  amortization
                
                
                Net
      book
                  value
                  as
      at 30
                  September
                  2008$
                
                
                
                $
                
                
                
                $Equipment
                
                
                96,387
                
                
                
                13,632
                
                
                
                82,75596,387
                
                
                
                13,632
                
                
                
                82,755
 5.
              Website
      Development Cost
 
 Cost
              
              
              Accumulated
                amortization
              
              
              Net
      book
                value
                as
      at 30 September 2008$
              
              
              
              $
              
              
              
              $Website
      development
              
              
              64,693
              
              
              
              12,007
              
              
              
              52,68664,693
              
              
              
              12,007
              
              
              
              52,686
 
 During
the nine month period ended 30 September 2008, total additions to website
development were $64,693 (30 September 2007 - $Nil).
 
 6.
              Mineral
      Property Costs
 
 Atena
Gold Project
 
 On 12
December 2007, the Company entered into an assignment agreement to acquire the
right to explore and option to purchase the 3,676 hectare Atena Gold Project
located in the Salta Province of Argentina.   Pursuant to the
assignment agreement, the Company is required to issue 500,000 shares (issued
and valued at $0.70 per share) and pay $60,000 (paid). The Company will acquire
100% of the option if it incurs a minimum of $3,740,000 in work commitment
expenditures on the property and issue 7,000,000 shares according to the
following schedule (Notes 11, 14 and 15):
 
 a.
              $240,000
      in expenditures plus a further issuance of 1,000,000 shares (issued and
      valued at $1.59 per share) on or before 15 March
  2008;
 b.
              a
      further $500,000 in expenditures plus a further issuance of 2,000,000
      shares on or before 15 March
2009;







F -
13
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008
 
  c.
                a
      further $1,000,000 in expenditures plus a further issuance of 4,000,000
      shares on or before 15 March 2010;
and
 d.
                a
      further $2,000,000 in expenditures on or before 15 March
    2011.
 
 The
option is subject to a 1% net smelter returns royalty.
 
 During
the nine month period ended 30 September 2008, the Company recorded a write-down
of mineral property acquisition costs of $480,260 related to the Atena Gold
Project.
 
 Cerro
Amarillo Property
 
 On 8
January 2008, the Company entered into an assignment agreement to explore and
option the 14,221 hectare Cerro Amarillo Property located in the Province of
Mendoza, Argentina with a company related to the Company by way of a director
and shareholder in common.  Pursuant to the terms of the assignment
agreement, the Company issued 300,000 shares (issued and valued at $0.70 per
share) and pay $10,000 (paid ).  The Company is to acquire a 100% of
the option if it incurs a minimum of $450,000 in work commitment expenditures on
the property and issues 2,100,000 shares according to the following schedule
(Notes 10, 11, 14 and 15):
 
 a.
                $200,000
      in expenditures plus a further issuance of 300,000 shares on or before 8
      January 2009;
 b.
                a
      further $250,000 in expenditures plus a further issuance of 600,000 shares
      on or before 8 January 2010;
 c.
                a
      further issuance of 600,000 shares on or before 8 January 2011;
      and
 d.
                a
      further issuance of 600,000 shares on or before 8 January
      2012.
 
 To
exercise the option the company is required to issue a further 3,000,000
shares.  The option is subject to a 1% net smelter returns
royalty.
 
 During
the nine month period ended 30 September 2008, the Company recorded a write-down
of mineral property acquisition costs of $280,000 related to the Cerro Amarillo
Property.
 
 Amira,
Amira Norte and Esparta II
 
 On 17
March 2008, the Company entered into an assignment agreement with Proyectos
Mineros S.A. (“PMSA”), a company related to the Company by way of a director and
shareholder in common. Under the assigned agreement, PMSA assigned to the
Company PMSA’s right to explore and option to purchase a 90% interest in three
mining properties referred to as “Amira”, “Amira Norte” and “Esparta II”
(collectively, the "Properties"), which are located in the Province of Salta,
Argentina. In order for the Company to keep its interest in good standing and to
exercise the option to acquire a 90% interest in the Properties, the Company
must make the following payments to the Titleholder, as set forth in the
Underlying Option Agreement (Notes 10 and 15):
 
 a.         US$75,000
by 19 January 2009;
 b.         a
further US$150,000 by 19 January 2010;
 c.         a
further US$200,000 by 19 January 2011; and
 d. a
further US$1,000,000 by 19 January 2012, by means of which final payment the
Option to acquire a
 90% interest in the Properties will have been automatically
exercised.





F -
14
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




Peruvian
Gold Sands
 
 On 29
September 2008, the Company entered into a Mineral Right Option Agreement with
Temasek Investments Inc. (Temasek) to acquire mining properties totalling 382
km2
in Northeastern Peru (the “Agreement”).  Pursuant to this Agreement,
the company acquired four separate options from Temasek, each providing for the
acquisition of a 25% interest in certain mining properties.
 
 The
Company may exercise the initial 25% option by fulfilling the following
conditions:
 
 a.
              Pay
      a non-refundable $375,000 on the date the Agreement is executed (paid 8
      October 2008) (Note 16);
 b.
              Issue
      2,000,000 shares within 5 business days (issued 9 October 2008) (Note 16);
      and
 c.
              Pay
      an additional $375,000 prior to 28 December
  2008.
 
 The
Company may exercise the second 25% option by fulfilling the following
conditions by 29 March 2009:
 
 a.
              Exercise
      and complete the initial 25%
option;
 b.
              Pay
      an additional $1,250,000; and
 c.
              Issue
      an additional 2,000,000 shares.
 
 The
Company may exercise the third 25% option by fulfilling the following conditions
by 29 September 2009:
 
 a.
              Exercise
      and complete the initial and second 25%
options;
 b.
              Pay
      an additional $3,000,000; and
 c.
              Issue
      an additional 2,000,000 shares.
 
 The
Company may exercise the final 25% option by fulfilling the following conditions
by 29 March 2010:
 
 a.
              Exercise
      and complete the initial, second and third 25%
  options;
 b.
              Pay
      an additional $5,000,000; and
 c.
              Issue
      an additional 4,000,000 shares.
 
 The
property is subject to a 2.5% net returns royalty that the Company can reduce to
1.0% upon payment of a further $2,000,000 within 90 days of the exercise and
completion of the final 25% option (Note 15).
 
 7.
              Accounts Payable and Accrued
      Liabilities
 
 Accounts
payable and accrued liabilities are non-interest bearing, unsecured and have
settlement dates within one year. Accounts payable and accrued liabilities at 30
September 2008 include a provision for potential legal claims related to mineral
property interests of $200,000 (31 December 2007 - $Nil).







F -
15
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




8.
              Convertible
      Debentures
 
 Balance
      at
                30
      September
                2008
              Balance
      at 31
                December
      2007
                (Audited)$
              
              $Issued
      in April 2006, the convertible debenture bears interest at a rate of 10%
      per annum on any unpaid principle balance, is secured by a general charge
      on the assets of the Company, and has no fixed terms of
      repayment.  The holder of the convertible debenture has the
      right to convert any portion of the unpaid principle and/or accrued
      interest at any time within thirty-six months for the issue date, on the
      basis of $1.00 per unit where a unit consists of one common share and one
      warrant to purchase one common share of the Company for $1.75 for a period
      of twenty-four months from the date of conversion.  On 21 August
      2006 the company repaid $250,000 of the balance owing. On 18 January 2008
      the payment obligations were assumed by the purchaser of the Tombaugh
      Lease (Note 3).
              
              Nil
              
              306,378Issued
      in June 2006, the convertible debenture bears interest at a rate of 10%
      per annum on any unpaid principle balance, is secured by a general charge
      on the assets of the Company, and has repayment terms wherein the
      principle and accrued interest shall be due the later of (i) sixty days
      after the date the convertible debenture was issued or (ii) upon the
      lenders written demand for repayment.  The holder of the
      convertible debenture has the right to convert any portion of the unpaid
      principle and/or accrued interest into common shares of the Company at any
      time and from time to time prior to the maturity date on the basis of
      $0.70 per share for each dollar of principle and interest due and payable.
      On 18 January 2008 the payment obligations were assumed by the purchaser
      of the Tombaugh Lease (Note 3).
              
              Nil
              
              482,241Nil
              
              788,619
 
 By
agreements effective 18 January 2008, the Company assigned all of its rights,
title and interest in the Tombaugh Lease with a book value of $481,504 to a
purchaser in consideration for the purchaser assuming the Company’s outstanding
payment obligations of $788,619 related to its convertible debentures. The
Company recorded a gain of $307,115 upon completion of the transaction (Notes 3
and 14).
 
 9.
              Due
      to Related Party
 
 As at 30
September 2008, the amount in due to related party consists of $26,490 (31
December 2007 - $11,388) payable to directors, officers and shareholders of the
Company.  This balance is non-interest bearing, unsecured and has no
fixed terms of repayment.
 
 10.
              Related
      Party Transactions
 
 During
the nine month period ended 30 September 2008, the Company paid or accrued
management and consulting fees of $251,134 to directors and officers of the
Company or company’s controlled by directors and officers (30 September 2007 -
$112,810).







F -
16
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




The
Company’s transactions related to its Cerro Amarillo and Amira, Amira Norte and
Esparta II mineral properties were completed with a company related to the
Company by way of a director and shareholder in common (Note 6).
 
 11.
              Capital
      Stock
 
 Authorized
 
 The total
authorized capital consists of:
 
 ·
              300,000,000
      of common shares with par value of $0.001;
and
 ·
              50,000,000
      of preferred shares with par value of
$0.001.
 
 Issued
and outstanding
 
 As at 30
September 2008, the total issued and outstanding capital stock is 56,469,456
common shares with a par value of $0.001 per share.
 
 On 25
January 2008, the Company issued 500,000 common shares valued at $0.70 per share
in pursuant to the Atena Gold Project assignment agreement (Notes 6 and
14).
 
 On 25
January 2008, the Company issued 300,000 common shares valued at $0.70 per share
pursuant to the Cerro Amarillo assignment agreement (Notes 6 and
14).
 
 On 9
April 2008, the Company issued 1,009,211 Units at a price of $0.70 per
Unit.  Each unit consists of one common share and one Share Purchase
Warrant.  Each share purchase warrant entitles the holder to purchase
an additional common share at a price of $1.40 up to 7 April 2009, commencing 7
October 2008.
 
 On 11
April 2008, the Company issued an additional 70,645 units at a price of $ 0.70
per unit for services rendered by a private placement agent. Each unit consists
of one common share and one Share Purchase Warrant.  Each share
purchase warrant entitles the holder to purchase an additional common share at a
price of $1.40 up to 7 April 2009, commencing 7 October 2008 (Note
14).
 
 On 6
August 2008 the Company issued 1,000,000 common shares valued at $1.59 per share
pursuant to the Atena Gold Project assignment agreement (Notes 6 and
14).
 
 On 19
August 2008, the Company issued 5,007,300 Units at a price of $0.80 per Unit for
proceeds of $3,725,431 net of issue costs of $280,409.  Each unit
consists of one common share and one Share Purchase Warrant.  Each
share purchase warrant entitles the holder to purchase an additional common
share at a price of $1.40 up to 19 August 2009, commencing 19 February
2009.
 
 On 19
August 2008, the Company issued 350,511 agent compensation warrants for services
rendered by a private placement agent.  Each share purchase warrant
entitles the holder to purchase one common share at a price of $1.40 up to 19
August 2009, commencing 19 February 2009 (Note 14).





F -
17
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




Share
Purchase Warrants
 
 The
following share purchase warrants and agent compensation warrants were
outstanding at 30 September 2008:
 
 Exercise
      price
              
              
              Number
                of
      warrants
              
              
              Remaining
                contractual
      life (years)$Warrants
              
              
              1.40
              
              
              
              1,009,211
              
              
              
              0.52Warrants
              
              
              1.40
              
              
              
              70,645
              
              
              
              0.52Warrants
              
              
              1.40
              
              
              
              5,007,300
              
              
              
              0.55Agent
      compensation warrants
              
              
              1.40
              
              
              
              350,511
              
              
              
              0.556,437,667
 
 The
following is a summary of warrant activities during the period ended 30
September 2008:
 
 Number
      of
                warrants
              
              
              Weighted
                average
                exercise
                price$Outstanding
      and exercisable at 1 January 2008
              
              
              -
              
              
              
              -Granted
              
              
              6,437,667
              
              
              
              1.40Exercised
              
              
              -
              
              
              
              -Cancelled
              
              
              -
              
              
              
              -Outstanding
      and exercisable at 30 September 2008
              
              
              6,437,667
              
              
              
              1.40Weighted
      average fair value of warrants granted during the period
              
              
              
              
              
              
              0.62
 
 The
weighted average grant date fair value of warrants issued during the period
ended 30 September 2008, amounted to $0.62 per warrant. The fair value of each
warrant granted was determined using the Black-Scholes option pricing model and
the following weighted average assumptions:
 
 2008
              
              
              2007Risk
      free interest rate
              
              
              2.02
              %
              
              
              -Expected
      life
              
              1
      year
              
              
              
              -Annualized
      volatility
              
              
              120.80
              %
              
              
              -Expected
      dividends
              
              
              -
              
              
              
              -




F -
18
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




Stock
options
 
 During
the nine month period ended 30 September 2008, the Company granted 6,880,000
stock options entitling the holders to purchase up to 6,880,000 common shares of
the Company for proceeds of $1.00 per common share expiring 4 February 2018. A
total of 3,020,000 of these stock options were cancelled during the nine month
period ended 30 September 2008.
 
 A total
of 2,180,000 of these stock options vested on 4 August 2008.  A total
of 1,680,000 stock options vest on 4 February 2009.
 
 The following incentive stock options
were outstanding at 30 September 2008:
 
 Exercise
      price
              
              
              Number
                of
      options
              
              
              Remaining
                contractual
      life (years)$Options
              
              
              1.00
              
              
              
              3,860,000
              
              
              
              9.35
 
 12.
              Stock-Based
      Compensation
 
 The
following is a summary of stock based compensation activities during the period
ended 30 September 2008:
 
 Number
      of shares
              
              
              Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2008
              
              
              3,200,000
              
              
              
              0.30Granted
              
              
              6,880,000
              
              
              
              1.00Exercised
              
              
              -Cancelled
              
              
              (6,220,000
              )
              
              
              0.67Outstanding
      and exercisable at 30 September 2008
              
              
              3,860,000
              
              
              
              1.00Weighted
      average fair value of options granted during the period
              
              
              
              
              
              
              0.93
 
 During
the nine month period ended 30 September 2008, the Company cancelled 6,220,000
options that were issued. A total of 2,400,000 of these options vested during
the year ended 31 December 2007 and the Company recorded stock-based
compensation of $625,035 during the year ended 31 December 2007 related to these
vested options.
 
 The fair
value of each option was estimated on the date of grant using Black-Scholes
option-pricing model. The assumptions about stock-price volatility have been
based exclusively on the implied volatilities of publicly traded options to buy
the Company’s stock with contractual terms closest to the expected life of
options granted to employees, directors or consultants applying the guidance
provided by SAB 107.





F -
19
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




The
following assumptions were used for the Black-Scholes valuation of stock options
granted:
 
 2008
              
              
              2007Risk
      free interest rate
              
              
              3.68
              %
              
              
              4.87
              %Expected
      life
              
              10
      years
              
              
              10
      yearsAnnualized
      volatility
              
              
              110
              %
              
              
              73
              %Expected
      dividends
              
              
              -
              
              
              
              -
 
 The total
estimated fair value of the 6,880,000 stock options granted during the nine
month period ended 30 September 2008 was $6,417,988 ($0.93 per
option).  During the period ended 30 September 2008, stock-based
compensation of $2,033,607 has been recorded in the consolidated statement of
operations with a corresponding amount recorded as contributed surplus in
stockholders’ equity (Note 11).
 
 13.
              Income
      Taxes
 
 The
Company has losses carried forward for income tax purposes to 30 September
2008.  There are no current or deferred tax expenses for the period
ended 30 September 2008 due to the Company’s loss position. The Company has
fully reserved for any benefits of these losses.  The deferred tax
consequences of temporary differences in reporting items for consolidated
financial statement and income tax purposes are recognized, as appropriate.
Realization of the future tax benefits related to the deferred tax assets is
dependent on many factors, including the Company’s ability to generate taxable
income within the net operating loss carryforward period.  Management
has considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes.
 
 The provision for refundable federal
income tax consists of the following:
 
 For
      the nine
                month
      period
                ended
      30
                September
                2008
              
              
              For
      the nine
                month
      period
                ended
      30
                September
                2007$
              
              
              
              $Deferred
      tax asset attributable to:Current
      operations
              
              
              1,699,458
              
              
              
              52,095Amortization
              
              
              (8,717
              )
              
              
              -Contributions
      to capital by related party – expenses
              
              
              -
              
              
              
              -Stock-based
      compensation
              
              
              (691,426
              )
              
              
              -Less:
      Change in valuation allowance
              
              
              (999,315
              )
              
              
              (52,095
              )Net
      refundable amount
              
              
              -
              
              
              
              -





F -
20
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




The
composition of the Company’s deferred tax assets as at 30 September 2008and 31 December 2007 is as
follows:
 
 As
      at 30
                September
                2008
              
              
              As
      at 31
                December
                2007$
              
              
              
              $Net
      income tax operating loss carryforward
              
              
              (3,707,456
              )
              
              
              (768,293
              )Statutory
      federal income tax rate
              
              
              34
              %
              
              
              34
              %Effective
      income tax rate
              
              
              0
              %
              
              
              0
              %Deferred
      tax assetsTax
      loss carryforward
              
              
              1,260,535
              
              
              
              261,220Less:
      Valuation allowance
              
              
              (1,260,535
              )
              
              
              (261,220
              )Net
      deferred tax asset
              
              
              -
              
              
              
              -
 
 The
potential income tax benefit of these losses has been offset by a full valuation
allowance.
 
 As at 30
September 2008, the Company has an unused net operating loss carryforward
balance of approximately $3,700,000 that is available to offset future taxable
income.  This unused net operating loss carryforward balance for
income tax purposes expires between the years 2020 to 2028.
 
 14.
              Supplemental
      Disclosure with Respect to Cash
Flows
 
 For
      the
                period
      from
                the
      date of
                inception
      on 6
                March
      2000
                to
      30
                September
                2008
              
              
              For
      the
                nine
      month
                period
                ended
                30
                September
                2008
              
              
              For
      the
                nine
      month
                period
                ended
                30
                September
                2007$
              
              
              
              $
              
              
              
              $Cash
      paid during the year for interest
              
              
              -
              
              
              
              -
              
              
              
              -Cash
      paid during the year for income taxes
              
              
              -
              
              
              
              -
              
              
              
              -
 
 During
the nine month period ended 30 September 2008, the Company issued 500,000 common
shares valued at $0.70 per share in pursuant to the Atena Gold Project
assignment agreement (Notes 6 and 11).
 
 During
the nine month period ended 30 September 2008, the Company issued 300,000 common
shares valued at $0.70 per share pursuant to the Cerro Amarillo assignment
agreement (Notes 6 and 11).


F -
21
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Notes to
Consolidated Financial Statements


(Expressed
in U.S. Dollars)


30
September 2008




By
agreements effective 18 January 2008, the Company assigned all of its rights,
title and interest in the Tombaugh Lease with a book value of $481,504 to a
purchaser in consideration for the purchaser assuming the Company’s outstanding
payment obligations of $788,619 related to its convertible debentures. The
Company recorded a gain of $307,115 upon completion of the transaction (Notes 3
and 8).
 
 During the nine month period ended 30
September 2008, the Company issued an additional 70,645 units at a price of $
0.70 per unit for services rendered by a private placement agent. Each unit
consists of one common share and one Share Purchase Warrant.  Each
share purchase warrant entitles the holder to purchase an additional common
share at a price of $1.40 up to 7 April 2009, commencing 7 October 2008 (Note
11).
 
 During
the nine month period ended 30 September 2008, the Company issued 1,000,000
common shares valued at $1.59 per share pursuant to the Atena Gold Project
assignment agreement (Notes 6 and 11).
 
 During
the nine month period ended 30 September 2008, the Company issued 350,511 agent
compensation warrants for services rendered by a private placement
agent.  Each share purchase warrant entitles the holder to purchase
one common share at a price of $1.40 up to 19 August 2009, commencing 19
February 2009 (Note 11).
 
 15.
              Commitments
 
 The Company is subject to certain
commitments related to its of the mineral property interest (Note
6).
 
 16.
              Subsequent
      Events
 
 Subsequent
to 30 September 2008, the following events occurred:
 
 a)
              On
      8 October 2008, the Company paid $375,000 pursuant to the Peruvian Gold
      Sands Mineral Right Option agreement (Note
6).
 
 b)
              On
      9 October 2008, the Company issued 2,000,000 shares pursuant to the
      Peruvian Gold Sand Mineral Right Option agreement (Note
  6).


F -
22
 Table of Contents





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




This
Quarterly Report on Form 10-Q contains forward-looking statements regarding our
capital needs, business plans and expectations.  Words such as
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates”
and similar expressions or variations of such words are intended to identify
forward-looking statements, but are not deemed to represent an all-inclusive
means of identifying forward-looking statements as denoted in this Quarterly
Report on Form 10-Q.  Additionally, statements concerning future
matters are forward-looking statements.




Although
forward-looking statements in this Quarterly Report on Form 10-Q reflect the
good faith judgment of our management, such statements can only be based on
facts and factors currently known by us.  Consequently,
forward-looking statements are inherently subject to risks and uncertainties and
actual results and outcomes may differ materially from the results and outcomes
discussed in or anticipated by the forward-looking statements.  We
caution the reader that numerous important factors, including those factors
discussed in our Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2007, which are incorporated herein by reference, could affect
our actual results and could cause our actual consolidated results to differ
materially from those expressed in any forward-looking statement made by, or on
behalf of, Constitution Mining.  Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this Quarterly Report on Form 10-Q.  We file reports with the
Securities and Exchange Commission (the “SEC” or “Commission”).  You
can also read and copy any materials we file with the SEC at the SEC’s Public
Reference Room at 450 Fifth Street, NW, Washington, DC 20549.  You can
obtain additional information about the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330.  In addition, the SEC maintains
an internet site (www.sec.gov) that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC, including us.




We
undertake no obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
Quarterly Report on Form 10-Q.  Readers are urged to carefully review
and consider the various disclosures made throughout the entirety of this
Quarterly Report, which attempt to advise interested parties of the risks and
factors that may affect our business, financial condition, results of operations
and prospects.




As used
in this Quarterly Report, the terms “we,” “us,” “our,” and “Constitution Mining”
mean Constitution Mining Corp. and our subsidiaries, unless otherwise
indicated.




Overview




We were
incorporated in the state of Nevada under the name Crafty Admiral Enterprises,
Ltd. on March 6, 2000.  Our original business plan was to sell classic
auto parts to classic auto owners all over the world through an Internet
site/online store; however, we were unsuccessful in implementing the online
store and were unable to afford the cost of purchasing, warehousing and shipping
the initial inventory required to get the business started.  As a
result, we ceased operations in approximately July 2002.




During
our fiscal year ended December 31, 2006, we reorganized our operations to pursue
the exploration, development, acquisition and operation of oil and gas
properties.  On June 27, 2006, we acquired a leasehold interest in a
mineral, oil and gas property located in St. Francis County, Arkansas for a cash
payment of $642,006, pursuant to an oil and gas agreement we entered into on
April 29, 2006 (the “Tombaugh Lease”).  Shortly after acquiring the
Tombaugh Lease, we suspended our exploration efforts on the property covered by
the Tombaugh Lease in order to pursue business opportunities developing nickel
deposits in Finland, Norway and Western Russia.  On January 18, 2008,
we assigned all of our right, title and interest in and to the Tombaugh Lease to
Fayetteville Oil and Gas, Inc., which agreed to assume all of our outstanding
payment obligations on the Tombaugh Lease as consideration for the
assignment.  On March 9, 2007, we changed our name to better reflect
our business to “Nordic Nickel Ltd.” pursuant to a parent/subsidiary merger with
our wholly-owned non-operating subsidiary, Nordic




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Nickel
Ltd., which was established for the purpose of giving effect to this name
change.  We were not successful pursuing business opportunities
developing nickel deposits in Finland, Norway and Western Russia and again
sought to reorganize our operations in November 2007.




In
November 2007, we reorganized our operations and our current focus is on the
acquisition and development of our interests in mining properties located in the
Salta and Mendoza provinces of Argentina.  Effective November 14,
2007, we merged with our wholly-owned subsidiary, Constitution Mining Corp.,
pursuant to Articles of Merger that we filed with the Nevada Secretary of State
on November 6, 2007.  We decided to change our name to “Constitution
Mining Corp.” to better reflect our current focus on the acquisition and
development of mining properties.  We are an exploration stage company
and there is no assurance that commercially exploitable reserves of gold or
other minerals exist on any of our property interests.  In the event
that commercially exploitable reserves of gold or other minerals exist on any of
our property interests, we cannot guarantee that we will make a
profit.  If we cannot acquire or locate mineral deposits, or if it is
not economical to recover the mineral deposits, our business and operations will
be materially and adversely affected.




Our
current business plan calls for investing any surplus operating capital
resulting from retained earnings into bullion accounts and does not include
holding retained earnings, if any, in cash or cash equivalents.  In
the event that commercially exploitable reserves of minerals exist on any of our
property interests and we are able to make a profit, our business plan is to
sell enough mineral reserves to satisfy all of our expenses and invest all
retained mineral reserves in bullion accounts established in Zurich,
Switzerland.  The price of precious and base metals such as gold and
silver has fluctuated widely in recent years, and is affected by numerous
factors beyond our control, including international, economic and political
trends, expectations of inflation, currency exchange fluctuations, interest
rates, global or regional consumptive patterns, speculative activities and
increased production due to new extraction developments and improved extraction
and production methods.  The effect of these factors on the price of
base and precious metals, and, therefore, the change in the value of our
retained earnings held in bullion accounts cannot accurately be predicted and is
subject to significant fluctuation.  There can be no assurance that
the value of any bullion accounts established by us to hold retained mineral
reserves, if any, will not be adversely impacted by fluctuations in the price of
base and precious metals resulting in significant losses.




The
disclosure that follows is a summary of each of our property
interests.




Atena
Property




On
December 12, 2007, we entered into an Assignment Agreement with Proyectos
Mineros S.A. (“PMSA”) (formerly Recursos Maricunga S.A.) to acquire PMSA’s right
to explore and an option (the “Atena Option”) to purchase certain mineral rights
on properties known as the Atena Gold Project (“Atena”) located in the Salta
Province of Argentina (the “Atena Property”).  The Atena Property
consists of an aggregate 3,676 hectares.  PMSA acquired its right to
explore and the Atena Option to purchase the mineral rights to these properties
from Rio Tinto Mining & Exploration Ltd., Argentine Branch.




Pursuant
to the terms of the Assignment Agreement, we have issued to PMSA 1,500,000
shares of our common stock and paid PMSA $60,000.  We will acquire
100% of this Atena Option if we incur a minimum of an additional $3,500,000 in
work commitment expenditures on the Atena Property (the “Atena Expenditures”)
and issue 6,000,000 shares of our common stock to PMSA in accordance with the
following schedule:




·
            $500,000
      in Atena Expenditures, plus an additional issuance of 2,000,000 shares of
      our common stock on or before March 15,
2009;




·
            an
      additional $1,000,000 payment in Atena Expenditures, plus a further
      issuance of 4,000,000 shares of our common stock on or before March 15,
      2010; and




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·
            a
      final $2,000,000 payment in Atena Expenditures on or before March 15,
      2011.




We will
acquire 100% of the Atena Option once we have completed our commitments under
the Atena Expenditures, as set forth above, on or before March 15,
2011.  Following the completion of this acquisition and payment of the
consideration set forth above, we will grant to PMSA a 1% net smelter returns
royalty.  The Atena Option grants us the exclusive possession of the
properties for mineral exploration, together with the right to purchase the
minerals rights to these properties upon exercise of the Atena
Option.




Proposed
Exploration Program




A Phase 1
exploration program was completed on the Atena Property in February
2008.  During this phase, field geologists collected composite samples
approximately every 50 metres along the entire-36 kilometre vein system on the
project area.  The samples were sent to ALS Chemex, the South American
division of the ALS Laboratory Group, for analysis.  Results of these
samples indicated an anomalous area of approximately 5 kilometres by 3
kilometres,  which is the subject of follow-up exploration in a Phase 2
program.  The Phase 2 program comprises of trenching and detailed sampling,
as well as detailed geological mapping.  These activities are expected
to outline the shape and tenor of pay shoots which can then be tested in the
subsurface by diamond drilling in a Phase 3 program.  While the
project area lies at 3900m above sea level in the altiplano or puna of northwest
Argentina, fieldwork can be conducted all year-round.  The Phase 2
program has commenced and a trenching contract has been granted to a Salta-based
operator to undertake the work.  Phase 2 is expected to be completed by
March 2009, after which the Phase 3 drilling program is anticipated to
commence.




Our
anticipated exploration expenses at the Atena Project for the following 180 days
are as follows:




Activity
            USD
      000sPHASE
      2 - FOLLOW-UP EXPLORATION:
              Mineral
      Property Maintenance
              Permitting
              Geological
      Mapping
              Trenching
              Analytical
      Costs
              Field
      Expenses
              Personnel
              Consultants
              Transport
              Travel
            4
              1
              5
              35
              30
              15
              35
              15
              20
              5Subtotal
            165PHASE
      3 - 1st STAGE DRILLING (TARGET TESTING)
              Mineral
      Property Maintenance
              Permitting
              Drilling
      (2000m)
              Drilling
      Support
              Analytical
      Costs
              Field
      expenses
              Personnel
              Transport
              Travel
            4
              1
              200
              30
              30
              15
              35
              15
              20
              5Subtotal
            355TOTAL
            520




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Amira,
Amira Norte and Esparta II Properties




Effective
March 17, 2008, we entered into an assignment agreement, dated March 17, 2008,
with PMSA, whereby PMSA assigned to us PMSA’s right to explore and an option
(the “Amira-Esparta Option”) to purchase a 90% interest in the mineral rights of
three mining properties referred to as “Amira”, “Amira Norte” and “Esparta II”,
located in the Province of Salta, Argentina (the “Amira-Esparta
Properties”).  Pursuant to the terms of our agreement with PMSA, PMSA
has assigned to us all of PMSA’s rights and obligations under an option
agreement by and between PMSA and the registered titleholder to the
Amira-Esparta Properties, Ms. Silvia Rene Rodriguez, in consideration of our
recognizing to PMSA a 1% net smelter returns royalty on the Amira-Esparta
Properties.  In order for us to keep our interest in good standing and
to exercise the Amira-Esparta Option, we must make the following payments to Ms.
Rodriguez, as set forth in the underlying option agreement:




·
            $75,000
      on or before January 19, 2009;




·
            an
      additional payment of $150,000 on or before January 19,
    2010;




·
            an
      additional payment of $200,000 on or before January 19, 2011;
      and




·
            a
      final payment of $1,000,000 on or before January 19, 2012, which shall
      also be the final payment required and such payment will cause the
      Amira-Esparta Option to have been automatically
  exercised.




Proposed
Exploration Program




The
Amira-Esparta Properties located in the Province of Salta, Argentina, are
located in close proximity to our interests discussed above under the subheading
“Atena Property” and together these properties form a part of a mining project
referred to as the “Atena Project.”  The location and scope of our
exploration program activities on the Atena Property will be extended to also
include the Amira-Esparta Properties.




Cerro
Amarillo Property




On
January 8, 2008, we entered into an Assignment Agreement with Proyectos Mineros
S.A. (“PMSA”) (formerly Recursos Maricunga S.A.) to acquire PMSA’s right to
explore and option (the “Cero Amarillo Option”) to purchase certain mineral
rights on properties known as the Cerro Amarillo Property located in the
Departamento Malargue, Province of Mendoza, Argentina (the “Cerro Amarillo
Property”).  The Cerro Amarillo Property consists of an aggregate
14,221.7 hectares.




Pursuant
to the terms of the Assignment Agreement, we issued to PMSA 300,000 shares of
our common stock and paid PMSA $10,000 in July 2008.  We will acquire
100% of the Cerro Amarillo Option if we incur a minimum of $450,000 in work
commitment expenditures on this property (the “Cerro Amarillo Expenditures”) and
issue 2,100,000 shares of our common stock to PMSA in accordance with the
following schedule:




·
            $200,000
      in Cerro Amarillo Expenditures, plus a further issuance of 300,000 shares
      of our common stock on or before January 8,
  2009;




·
            an
      additional $250,000 payment of Cerro Amarillo Expenditures, plus a further
      issuance of 600,000 shares of our common stock on or before January 8,
      2010;




·
            an
      additional issuance of 600,000 shares of our common stock on or before
      January 8, 2011; and




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·
            a
      final issuance of 600,000 shares of our common stock on or before January
      8, 2012.




If we
exercise the Cerro Amarillo Option to acquire 100% of the Cerro Amarillo
Property, then we must issue an additional 3,000,000 shares of our common stock
to PMSA.  The Cerro Amarillo Option is subject to a 1% net smelter
returns royalty on the Cerro Amarillo Property in favor of the underlying
titleholder.  The Cerro Amarillo Option contains certain work
expenditure obligations, which are intended to be satisfied by the Cerro
Amarillo Expenditures.




Proposed
Exploration Program




The Cerro
Amarillo Property is untested property that has drill targets indicated by
geophysics, as well as a number of other unexplored prospective areas. 
Although a number of drill targets have been outlined by
previous work, our proposed program will involve additional
exploration by detailed mapping and sampling on the whole of the Cerro
Amarillo Property, as well as the region with a view to identifying additional
drill targets before undertaking a 1st stage
drill program.  In addition, some 10km of access road will be constructed
in anticipation of the drill program.




With
respect to the timeframe, fieldwork can be conducted for approximately nine
months of each year at the Cerro Amarillo Property, which lies in a snow
belt.  Because of the onset of the austral winter and the occurrence
of significant snow, the drilling can only commence in the spring and summer
seasons.




In
February 2008, we commenced exploration on the Cerro Amarillo Property in
Mendoza, Argentina.  The Phase 1 program, designed to further identify
trench and drill targets, comprises detailed mapping and sampling together with
ground magnetic surveying.   We have established a camp on the
Cerro Amarillo Property from which exploration activities will be
conducted.  An international geological consultant, supported by local
geologists and field technicians, leads this project, which was completed in
eight weeks.




The
detailed mapping confirmed that the Cerro Amarillo Property occurrences contain
a classical porphyry-style mineralized system that includes stockwork,
disseminated, breccias, skarn, and vein-types of mineralization.  These
types of mineralization are zoned with a central porphyry plug containing vein
stockworks together with disseminated mineralization  This plug is
surrounded by mineralized hydrothermal breccias (shattered rock) with abundant
pyrite that may result in an excellent supergene trap for leached copper and
gold.  Skarn replacement mineralization occurs in almost a perfect ring at
the intersection of the vertical cylinder of breccias and the shallow-dipping
calcareous sedimentary sequence.  At the current level of erosion, almost
the entire ring is exposed.  Sparse peripheral veins occur out to a radius
of approximately one kilometer.  The unique level of exposure of this
system could potentially allow the core stockwork-disseminated mineralization,
the supergene breccias, and the skarns to be extracted in a single open-pit with
a very low stripping ratio.




The
second phase is expected to commence in November this year upon granting of a
permit for the construction of a drill road up to the prospect.




Our
anticipated exploration expenses at the Cerro Amarillo Project for the following
180 days are as follows:


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Activity
            USD
      000sACCESS
      ROAD:
              Contractor
      Costs
              Field
      Expenses
              Personnel
              Transport
              Travel
            55
              5
              15
              5
              5Subtotal
            85CAMP
      ESTABLISHMENT:
              Equipment
              Logistics
              Field
      expenses
              Personnel
              Transport
              Travel
            15
              5
              5
              5
              3
              2Subtotal
            35





1ST
      STAGE DRILLING (TARGET TESTING):
              Property
      Maintenance Costs
              Permitting
              Drill
      Pad Construction
              Drilling
      (1000m of 3000m program)
              Drilling
      Support
              Analytical
      Costs
              Field
      Expenses
              Personnel
              Consultants
              Transport
              Travel
            4
              1
              20
              110
              20
              20
              15
              20
              35
              5
              5Subtotal
            255TOTAL
            375





Peru
Property




On
September 29, 2008 (the “Effective Date”), we entered into a Mineral Right
Option Agreement (the “Option Agreement”) with Temasek Investments Inc.
(“Temasek”), a company incorporated under the laws of Panama in relation to the
Peru property.  Pursuant to the Option Agreement, we acquired four
separate options from Temasek, each providing for the acquisition of a
twenty-five percent (25%) interest in certain mineral rights in Peru described
in Annex 1 of the Option Agreement (the “Mineral Rights”) pursuant to which we
could potentially acquire 100% of the Mineral Rights.  The Mineral
Rights are owned by Compañía Minera Marañón S.A.C. (“Minera
Marañón”).  Bacon Hill Invest Inc. (“Bacon Hill”), a corporation
incorporated under the laws of Panama and a wholly-owned subsidiary of Temasek,
owns 999 shares of the 1,000 shares of Minera Marañón that are issued and
outstanding.  Temasek owns the single remaining share of Minera
Marañón.  The acquisition of each 25% interest in the Mineral Rights
will occur through the transfer to us of 25% of the outstanding shares of Bacon
Hill.




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We may
exercise the initial twenty-five percent (25%) option, which provided for the
acquisition of a 25% interest in the Mineral Rights, after fulfilling the
following conditions:




·
            payment
      of $375,000 to Temasek upon execution of the Option
    Agreement;




·
            issuance
      of 2,000,000 shares of our common stock to Temasek within five business
      days from the Effective Date; and




·
            payment
      of an additional $375,000 to Temasek within ninety days of the Effective
      Date.




Following
the execution of the Option Agreement, we paid $375,000 and issued 2,000,000
shares of our common stock to Temasek in accordance with the terms of the Option
Agreement.




We may
exercise the second twenty-five percent (25%) option, resulting in our
acquisition of a 50% interest in the Mineral Rights, after fulfilling the
following conditions within six months of the Effective Date:




·
            payment
      of an additional $1,250,000 to Temasek,
and




·
            issuance
      of 2,000,000 additional shares of our common stock to
    Temasek.




We may
exercise the third twenty-five percent (25%) option, resulting in our
acquisition of a 75% interest in the Mineral Rights, after fulfilling the
following conditions within twelve months of the Effective Date:




·
            payment
      of an additional $3,000,000 to Temasek,
and




·
            issuance
      of 2,000,000 additional shares of our common stock to
    Temasek.




We may
exercise the fourth twenty-five percent (25%) option, resulting in our
acquisition of a 100% interest in the Mineral Rights, after fulfilling the
following conditions within eighteen months of the Effective Date:




·
            payment
      of an additional $5,000,000 to Temasek,
and




·
            issuance
      of 4,000,000 additional shares of our common stock to
    Temasek.




Upon our
acquisition of a 100% interest in the Mineral Rights, Temasek will hold its
single share of Minera Marañón in trust for our sole benefit and shall hold the
share strictly in accordance with our instructions.




Upon our
acquisition of a 100% interest in the Mineral Rights, Temasek is entitled to an
annual 2.5% net returns royalty related to the Mineral
Rights.  However, if we pay Temasek $2,000,000 within ninety days of
our acquisition of a 100% interest in the Mineral Rights, Temasek will only be
entitled to an annual 1.0% net returns royalty related to the Mineral
Rights.




If we
exercise the second twenty-five percent (25%) option, resulting in our
acquisition of a 50% interest in the Mineral Rights, and we fail to acquire a
100% interest in the Mineral Rights, we and Temasek will form a joint venture in
which we will be wholly responsible for developing a feasible mining project and
all necessary facilities and Temasek shall retain a carried free interest in the
mining rights.  If we do not develop a feasible mining project within
three years of the Effective Date, we will be responsible pay Temasek an advance
minimum mining royalty of $500,000 per year, which will be deducted from
Temasek’s net return royalty on the Mineral Rights.




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We are
currently developing our plan of exploration for the development of our
interests in the Mineral Rights on properties located in Peru.




If we do
not fulfill the terms of any of the option agreements described herein, then our
ability to commence or continue operations could be materially
limited.  In addition, substantially all of our assets will be put
into commercializing our rights to the areas covered by these option
agreements.  Accordingly, any adverse circumstances that affect the
areas covered by these option agreements and our rights thereto would results in
an adverse affect to us.  If any of these situations were to arise, we
would need to consider alternatives, both in terms of our prospective operations
and for the financing of our activities. Management cannot provide assurance
that we will ultimately achieve profitable operations or become cash-flow
positive, or raise additional debt and/or equity capital.  If we are
unable to raise additional capital in the near future, we will experience
liquidity problems and management expects that we will need to curtail
operations, liquidate assets, seek additional capital on less favorable terms
and/or pursue other remedial measures.




We are
also focusing on seeking additional mining opportunities, some of which may be
mineral deposits that are fully defined and have already gone through the
feasibility stage of development and are ready to produce.  In other
cases, the mineral deposits we seek to acquire may have a significant amount of
proven and probable resources with what we believe to be excellent potential for
expansion.  We may also seek to acquire other drill-ready exploration
projects that contain little or no proven resources, as with the options we
currently hold to acquire existing mining projects in Argentina, but that are
strategically positioned to offer what we perceive as exceptional potential at a
comparatively minimal expense.




Due to
the extensive and expensive development programs required to prove mineral
resources and reserves, as is typical in the mining business, companies such as
ours are able to acquire deposits at significant discounts of the known
in-the-ground value of the gold, silver, or other minerals.  In the
event that we do locate a commercially exploitable mineral deposits, we may
determine that it is commercially advantageous to sell our property interests
rather than enter into production of any commercially mineral deposits on the
property ourselves.




Plan
of Operations




Our plan
of operations within the next twelve months is to complete the following
objectives within the time periods specified:




1.
            In
      accordance with the terms of the assignment agreements pursuant to which
      we acquired our mineral property interests, we plan to incur the following
      exploration costs with respect to our mineral property interests over the
      next twelve months:




·
            $375,000
      by December 28, 2008 with respect to the Peru
  Property;




·
            $210,000
      by January 8, 2009 with respect to the Cerro Amarillo
      Property;




·
            $75,000
      by January 19, 2009 with respect to the Amira - Esparta
      Properties;




·
            $560,000
      in expenditures by March 15, 2009 with respect to the Atena Property;
      and




·
            $1,275,000
      by March 29, 2009 with respect to the Peru
  Property.




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2.
            We
      anticipate spending approximately $50,000 in ongoing general and
      administrative expenses per month for the next twelve months, for a total
      anticipated expenditure of $600,000 over the next twelve
      months.  The general and administrative expenses for the year
      will consist primarily of professional fees for the audit and legal work
      relating to our regulatory filings throughout the year, as well as
      transfer agent fees and general office
expenses.




Thus, we
estimate that our expenditures over the next twelve months will be approximately
$3,095,000.  During the twelve month period following the date of this
quarterly report, we anticipate that we will not generate any
revenue.  As at September 30, 2008, we had cash and cash equivalents
of $1,896,874 and a had working capital of $1,618,148.  As such, our
management anticipates that current cash on hand is insufficient to be able to
make our planned exploration expenditures and to pay for our general
administrative expenses over the next twelve months.




Results
of Operations




We have
not generated any revenues from our operations in either of the past two fiscal
years.




We
incurred operating expenses in the amount of $2,716,329 for the three months
ended September 30, 2008, compared to operating expenses of $779,685 for the
same reporting period in the prior year.  We incurred operating
expenses in the amount of $5,111,346 for the nine months ended September 30,
2008, compared to operating expenses of $962,736 for the same reporting period
in the prior year.  The substantial increase in our operating expenses
for the three and nine months ended September 30, 2008, as compared to the same
reporting periods in the prior year, relates to the reorganization of our
operations in November 2007 to focus our operations on the acquisition and
development of mineral rights interests in mining properties located in
Argentina.  Specifically, we have incurred substantial expenses in
connection with the exploration costs incurred on the properties for which we
acquired options to purchase certain mineral rights, increased professional fees
and stock-based compensation incurred during the reporting period.




We
incurred exploration costs of $85,921 during the three months ended September
30, 2008 and $776,536 during the nine months ended September 30, 2008, compared
to exploration costs of $0 during the three months ended September 30, 2007 and
$1,912 during the nine months ended September 30, 2007.  We incurred
professional fees of $241,518 during the three months ended September 30, 2008
and $557,827 during the nine months ended September 30, 2008, compared to
professional fees of $77,001 during the three months ended September 30, 2007
and $94,067 during the nine months ended September 30, 2007.  We
reported  stock based compensation of $2,033,607 for the three and
nine months ended September 30, 2008, compared to$625,035 for the three and nine
months ended September 30, 2007.




We had a
net loss of $2,913,051 for the three months ended September 30, 2008 as compared
to a net loss of $778,257 for the three months ended September 30,
2007.  We had a net loss of $4,998,408 for the nine months ended
September 30, 2008, as compared to a net loss of $958,156 for the nine months
ended September 30, 2007.  The increasein our net loss was
primarily attributable additional operating expenses incurred in connection with
the acquisition mineral property rights and the related exploration expenditures
incurred during the reporting period.




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Liquidity
and Capital Resources




At
September 30, 2008, we had cash and cash equivalents of $1,896,874 (December 31,
2007 - $54,642) and working capital of $1,618,148 (December 31, 2007 -
$754,444).  During the reporting period, we received gross proceeds of
$4,005,840 in connection with a private equity offering.




Our
management anticipates that current cash on hand is insufficient to be able to
make our planned exploration expenditures and to pay for our general
administrative expenses over the next twelve months.




Additional
capital is required to effectively maintain our operations and continue to
implement our proposed exploration program after the next twelve month
period.  It is uncertain whether we will be able to obtain financing
when sought.  If we are unable to obtain additional financing, the
full implementation of our ability to expand our operations will be
impaired.  We believe that debt financing will not be an alternative
for funding additional phases of exploration as we do not have tangible assets
to secure any debt financing.  We anticipate that additional funding
will be in the form of equity financing from the sale of our common
stock.  However, we do not have any financing arranged and we cannot
provide investors with any assurance that we will be able to raise sufficient
additional funding from the sale of our common stock to fund our complete
exploration program. In the absence of such financing, we will not be able to
pursue our exploration program to completion, we will be forced to abandon our
mineral property interests and our business will fail.




We may
consider entering into a joint venture arrangement to provide the required
funding to explore the properties underlying our mineral property
interests.  We have not undertaken any efforts to locate a joint
venture participant.  Even if we determine to pursue a joint venture
participant, there is no assurance that any third party would enter into a joint
venture agreement with us in order to fund exploration of the properties
underlying our mineral property interests.  If we enter into a joint
venture arrangement, we would likely have to assign a percentage of our interest
in our mineral property interests to the joint venture participant.




Cash
Used in Operating Activities




Operating
activities in the nine month periods ended September 30, 2008 and 2007 used cash
of $2,178,306 and $197,676 respectively, which reflect our recurring operating
losses.  Our net loss of $4,998,408 for the nine months ended
September 30, 2008 was the primary reason for our negative operating cash
flow.




Cash
Used in Investing Activities




In the
nine month period ended September 30, 2008, we used $411,340 in investing
activities, as compared to $0 used in investing activities during the nine month
period ended September 30, 2007.  In the nine months ended September
30, 2008, we purchased $96,387 in equipment, expended $64,693 for website
development costs and expended $250,260 in connection with the acquisition of
mineral property interests.




Cash
from Financing Activities




As we
have had no revenues since inception, we have financed our operations primarily
by using existing capital reserves and through private placements of our common
stock.  Net cash flows provided by financing activities during the
nine months ended September 30, 2008 was $4,431,878 primarily due to $4,431,878
we received as net proceeds from the issuance of common stock during the
reporting period.




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Off
Balance Sheet Arrangements




We do not
have any off-balance sheet debt nor did we have any transactions, arrangements,
obligations (including contingent obligations) or other relationships with any
unconsolidated entities or other persons that may have material current or
future effect on financial conditions, changes in the financial conditions,
results of operations, liquidity, capital expenditures, capital resources, or
significant components of revenue or expenses.




Going
Concern




We have
incurred net losses for the period from inception on March 6, 2000 to September
30, 2008 of $6,567,239 and have no source of revenue.  The continuity
of our future operations is dependent on our ability to obtain financing and
upon future acquisition, exploration and development of profitable operations
from our mineral properties.  These conditions raise substantial doubt
about our ability to continue as a going concern.




Critical
Accounting Policies




In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis.  The
SEC indicated that a “critical accounting policy” is one which is both important
to the portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.  We believe that the following accounting policies fit this
definition.




Mineral
Property Costs




Mineral
property acquisition costs are initially capitalized as tangible assets when
purchased.  At the end of each fiscal quarter end, we assess the
carrying costs for impairment.  If proven and probable reserves are
established for a property and it has been determined that a mineral property
can be economically developed, costs will be amortized using the
units-of-production method over the estimated life of the probable
reserve.




Mineral
property exploration costs are expensed as incurred.




Estimated
future removal and site restoration costs, when determinable are provided over
the life of proven reserves on a units-of-production basis.  Costs,
which include production equipment removal and environmental remediation, are
estimated each period by management based on current regulations, actual
expenses incurred, and technology and industry standards.  Any charge
is included in exploration expense or the provision for depletion and
depreciation during the period and the actual restoration expenditures are
charged to the accumulated provision amounts as incurred.




As of the
date of these financial statements, we have not established any proven or
probable reserves on our mineral properties and incurred only acquisition and
exploration costs.




Although
we have taken steps to verify title to mineral properties in which it has an
interest, according to the usual industry standards for the stage of exploration
of such properties, these procedures do not guarantee our title.  Such
properties may be subject to prior agreements or transfers and title may be
affected by undetected defects.




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Stock-Based
Compensation




Effective
January 1, 2006, we adopted the provisions of SFAS No. 123(R), “Share-Based Payment”, which
establishes accounting for equity instruments exchanged for employee services.
Under the provisions of SFAS No.123(R), stock-based compensation cost is
measured at the grant date, based on the calculated fair value of the award, and
is recognized as an expense over the employees’ requisite service period
(generally the vesting period of the equity grant).  Before January 1,
2006, we accounted for stock-based compensation to employees in accordance with
Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees,” and complied with the disclosure requirements of SFAS No.
123, “Accounting for
Stock-Based Compensation”.  We adopted SFAS No. 23(R) using the
modified prospective method, which requires us to record compensation expense
over the vesting period for all awards granted after the date of adoption, and
for the unvested portion of previously granted awards that remain outstanding at
the date of adoption.  Accordingly, financial statements for the periods
prior to 1 January 2006 have not been restated to reflect the fair value method
of expensing share-based compensation.  Adoption of SFAS No. 123(R) does
not change the way we account for share-based payments to non-employees, with
guidance provided by SFAS No. 123 (as originally issued) and Emerging Issues
Task Force Issue No. 96-18, “Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.




Foreign
Currency Translation




Our
functional and reporting currency is U.S. dollars.  Our consolidated
financial statements are translated to U.S. dollars in accordance with SFAS No.
52, “Foreign Currency
Translation.”  Monetary assets and liabilities denominated in
foreign currencies are translated using the exchange rate prevailing at the
balance sheet date.  Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income.  We have not, to the date of these
consolidated financial statements, entered into derivative instruments to offset
the impact of foreign currency fluctuations.




Item 3.      Quantitative and
Qualitative Disclosures About Market Risk




Not
Applicable.




Item 4T.    Controls and Procedures




Evaluation
of Disclosure Controls and Procedures




We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of September 30, 2008.  This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer, Mr. Willem Fuchter, and our Chief Financial Officer, Mr.
Peter Wiget.  Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that, as of September 30, 2008, our
disclosure controls and procedures are effective.




Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC’s rules and
forms.  Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is




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accumulated
and communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required
disclosure.




Limitations
on the Effectiveness of Internal Controls




Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error.  Our disclosure controls and procedures are designed
to provide reasonable assurance of achieving our objectives and our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective at that reasonable assurance
level.  Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs.  Because of the inherent
limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within our company have been detected.  These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or
mistake.  Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the internal control.  The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future
conditions.  Over time, control may become inadequate because of
changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate.




Changes in Internal Control
Over Financial Reporting




There
have been no changes in our internal controls over financial reporting during
the quarter ended September 30, 2008 that have materially affected or are
reasonably likely to materially affect such controls.




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PART
II – OTHER INFORMATION




Item 1.   Legal
Proceedings




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




In
January 2008, a contractor was critically injured in an automobile accident
while working for us in the area referred to as the Atena Project located in
northwestern Argentina.  The contractor’s family has filed a claim in
the Argentina court system seeking monetary damages in the amount of $300,000
from the driver of the automobile, who is considered an employee under
Argentinean labor law.  Although we have not been named as a party in
this action, we anticipate that we may be named as a defendant in this
action.




Item 1A.    Risk Factors




Not
Applicable.




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




We did
not issue securities without registration under the Securities Act during the
reporting period which were not previously included in a Current Report on Form
8-K.




During
the reporting period, we completed a private equity offering of 5,007,300 Units
at $0.80 per Unit (the “Units”) to a total of sixty-three (63) investors. 
Each Unit consists of one (1) share of Common Stock, par value $0.001, and one
(1) Common Stock Purchase Warrant (the “ Warrant”) to purchase one (1) share of
common stock, exercisable commencing nine months from the closing date of the
offering and terminating one year from the closing date of the offering. 
As a result, we issued a total of 5,007,300 shares of common stock and warrants
to purchase 5,007,300 shares of our common stock in connection with this private
equity offering.  The exercise price for the Warrant is priced at
$1.40.  The gross proceeds we received from this private equity offering
was $4,005,840.




In
connection with this private equity offering, we
paid European-based agents fees totaling $280,409 and issued such
agents a fee of 350,511 Warrants.  These warrants have the same
terms as the Warrants issued to investors and included in the
Units.




The
securities offered and sold in connection with this private equity offering were
in reliance on the following exemptions from registration under the Securities
Act of 1933, as amended (the “Securities Act”): (a) in the case of U.S.
persons, Section 4(2) of the Securities Act or Regulation D promulgated
thereunder, and (b) in the case of non-U.S. persons, Regulation S
promulgated under the Securities Act.  In connection with this private
equity offering, we relied on each of the investors’ written
representations.  With respect to the securities sold to U.S. persons,
sales were made to persons who represented that they were “accredited investors”
as that term is defined in Rule 501(a) under the Securities Act and to no more
than 35 unaccredited investors.   With respect to the securities
sold to non-U.S. persons, sales were made to persons who represented that they
were not a “U.S. person” as that term is defined in Rule 902(k) of Regulation S
under the Securities Act.  Each investor represented that they were
acquiring the securities for investment only and not with a view toward resale
or distribution. We requested our stock transfer agent to affix appropriate
restricted legends to the stock certificate issued to each investor.  Each
investor was given adequate access to sufficient information about us to make an
informed investment decision.  Neither we nor anyone acting on our
behalf offered or sold these Units by any form of general solicitation or
general advertising.






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During
the reporting period, we issued 1,000,000 shares of our common stock as part of
the consideration paid for the assignment to us of certain mining and mineral
rights to properties which we refer to as the Atena Gold
Project.  These shares were issuable to Proyectos Mineros S.A.
(“PMSA”), but at PMSA’s direction we had issued these shares to Hieronymus
Management Services Ltd.  These shares were issued pursuant to Section
4(2). We did not engage in any general solicitation or
advertising.  The stock certificate was issued with the appropriate
legends affixed to the restricted stock.




Subsequent
to the reporting period, we issued 2,000,000 shares of our common stock to
Temasek Investments Inc. as partial consideration for the exercise of the
initial twenty-five percent (25%) option to acquire a 25% interest in the
certain mineral rights located in Peru.  These shares were issued
pursuant to Section 4(2). We did not engage in any general solicitation or
advertising.  The stock certificate was issued with the appropriate
legends affixed to the restricted stock.




Item 3.  Defaults upon Senior
Securities




None.




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




No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended
September 30, 2008.




Item 5. Other Information




None.




Item 6.   Exhibits




See the
Exhibit Index following the signatures page of this report, which is
incorporated herein by reference.




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SIGNATURES




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




Constitution
      Mining Corp.Date:
            November
      12, 2008By: /s/  Willem
      Fuchter
              Willem
      Fuchter
              Title:Chief
      Executive Officer and DirectorDate:
            November
      12, 2008By: /s/  Peter
      Wiget
              Peter
      Wiget
              Title:Chief
      Financial Officer








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CONSTITUTION
MINING CORP.


(the
“Registrant”)


(Commission
File No. 000-49725)


Exhibit Index


to


Quarterly
Report on Form 10-Q


for
the Quarter Ended September 30, 2008





Exhibit
              No.
            Description
            Incorporated
      Herein by
              Reference
      to
            Filed
      Herewith10.1
            Assignment
      Agreement, dated effective December 12, 2007, between Proyectos Mineros
      S.A. and Constitution Mining Corp. regarding Atena Gold
      Property
            Exhibit
      10.1 to the Registrant’s Current Report on Form 8-K filed December 18,
      200710.2
            Assignment
      Agreement, dated effective January 8, 2008, between Proyectos Mineros S.A.
      and Constitution Mining Corp. regarding Cerro Amarillo
      Property
            Exhibit
      10.1 to the Registrant’s Current Report on Form 8-K filed January 10,
      200810.3
            Assignment
      and Assumption of Lease and Debt Agreement, dated effective January 18,
      2008
            Exhibit
      10.1 to the Registrant’s Current Report on Form 8-K filed January 24,
      200810.4
            Assignment
      Agreement, dated effective March 17, 2008, between Proyectos Mineros S.A.
      and Constitution Mining Corp., regarding the Amira, Amira Norte and
      Esparta II Properties
            Exhibit
      10.1 to the Registrant’s Current Report on Form 8-K filed March 21,
      200810.5
            Mineral
      Right Option Agreement, dated September 29, 2008, between Temasek
      Investments Inc. and Constitution Mining Corp.
            Exhibit
      10.1 to the Registrant’s Current Report on Form 8-K filed September 29,
      200831.1
            Certification of Chief Executive Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            X31.2
            Certification of Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            X32.1
            Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002
            
            X





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