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 June 30,
      2010 ̈
            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)




Delaware
            88-0455809(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)




Pasaje
      Mártir Olaya 129, Oficina 1203, Centro Empresarial José Pardo Torre A,
      Miraflores, Lima, Perú(Address
      of principal executive offices)+51-1-446-6807(Registrant’s
      telephone number, including area code)_________________________________________________________________(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 has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).   ýYes ̈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 July 19, 2010Common
      Stock, $0.001 par value
            
            83,466,694






Table of Contents




cminlogo




FORM
      10-Q
              CONSTITUTION
      MINING CORP.
              JUNE
      30, 2010
              
              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.
            19Item
      4T.
            Controls and Procedures.
            19PART
      II – OTHER INFORMATIONItem
      1.
            Legal Proceedings.
            20Item
      1A.
            Risk Factors.
            20Item
      2.
            Unregistered Sales of Equity Securities and Use of
      Proceeds.
            20Item
      3.
            Defaults Upon Senior Securities.
            21Item
      4.
            (Removed and Reserved).
            21Item
      5.
            Other Information.
            21Item
      6.
            Exhibits.
            21SignaturesExhibitsCertifications






- 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 June 30, 2010.F-2
            Unaudited
      Consolidated Statements of Loss and Comprehensive Loss for the three and
      six months ended June 30, 2010 and 2009 and from inception on March 6,
      2000 to June 30, 2010.F-3
            Unaudited
      Consolidated Statements of Cash Flows for the six months ended June 30,
      2010 and 2009 and from inception on March 6, 2000 to June 30,
      2010.F-4
            Unaudited
      Consolidated Statement of Changes in Stockholders'
      Equity (Deficiency) from inception on March 6, 2000 to June 30,
      2010.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 June 30, 2010 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
      June
              2010
            
            
            As
      at
              31
      December
              2009
              (Audited)$
            
            
            
            $AssetsCurrentCash
      and cash equivalents
            
            
            272,826
            
            
            
            205,125Amounts
      receivable (Note 4)
            
            
            89,089
            
            
            
            125,352Prepaid
      expense
            
            
            48,004
            
            
            
            22,724409,919
            
            
            
            353,201Property and equipment(Note 5)
            
            
            186,193
            
            
            
            150,758Website development cost(Note 6)
            
            
            15,106
            
            
            
            25,731Mineral property costs(Note 7)
            
            
            17,028,734
            
            
            
            19,900,36817,639,952
            
            
            
            20,430,058LiabilitiesCurrentAccounts
      payable and accrued liabilities (Note 8)
            
            
            1,137,667
            
            
            
            867,027Current
      portion of convertible promissory note (Note 13)
            
            
            191,014
            
            
            
            -Loan
      payable (Note 14)
            
            
            824,000
            
            
            
            -Due
      to related parties (Note 9)
            
            
            1,141,536
            
            
            
            966,9043,294,217
            
            
            
            1,833,931Convertible promissory
      note(Note 13)
            
            
            7,000,000
            
            
            
            -Future income tax liabilities(Note 15)
            
            
            -
            
            
            
            752,22010,294,217
            
            
            
            2,586,151Stockholders’
      equityCapital stock (Note
      11)Authorized300,000,000
      common shares, par value $0.001 and50,000,000
      preferred shares, par value $0.001Issued
      and outstanding31
      December 2009 – 78,055,985 common shares, par value $0.00130
      June 2010 – 83,466,694 common shares, par value $0.001
            
            
            83,467
            
            
            
            78,056Share
      subscriptions received in advance
            
            
            1,127,000
            
            
            
            70,000Additional
      paid in capital
            
            
            25,274,412
            
            
            
            25,336,424Warrants(Note
      11)
            
            
            3,670,286
            
            
            
            3,572,255Deficit,
      accumulated during the exploration stage
            
            
            (22,809,430
            )
            
            
            (16,622,828
            )7,345,735
            
            
            
            12,433,907Non-controlling
      interest
            
            
            -
            
            
            
            5,410,0007,345,735
            
            
            
            17,843,90717,639,952
            
            
            
            20,430,058


Nature, Basis of Presentation and
Continuance of Operations(Note 1), Commitments(Note 17) and
Subsequent Events (Note
18)







F -
1
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Consolidated
Statements of Loss and Comprehensive Loss
 (Expressed
in U.S. Dollars)
 (Unaudited)




For
      the
              period
      from
              the
      date of
              inception
      on 6
              March
      2000
              to
      30 June
              2010
            
            For
      the three
              month
      period
              ended
      30
              June
      2
              2010
            
            For
      the three
              month
      period
              ended
      30
              June
              2009
            
            For
      the six
              month
      period
              ended
      30
              June
              2010
            
            For
      the six
              month
      period
              ended
      30
              June
              2009$
            
            $
            
            $
            
            $
            
            $Operating
      expensesAmortization
      expense (Notes 5 and 6)
            
            
            313,026
            
            18,770
            
            21,115
            
            37,977
            
            42,237Default
      on oil and gas deposit
            
            
            25,000
            
            -
            
            -
            
            -
            
            -Exploration
      costs
            
            
            5,517,847
            
            1,592,172
            
            394,897
            
            1,782,390
            
            877,048Interest
      (Notes 13 and 14)
            
            
            2,480,341
            
            2,315,014
            
            3,042
            
            2,315,014
            
            3,042Investor
      relations
            
            
            2,300,054
            
            111,736
            
            355,326
            
            204,957
            
            614,452Management
      fees (Note 10)
            
            
            983,790
            
            90,340
            
            86,982
            
            201,340
            
            161,058Office
      and miscellaneous
            
            
            477,158
            
            21,479
            
            83,382
            
            42,775
            
            164,150Professional
      fees
            
            
            2,599,288
            
            262,203
            
            195,585
            
            407,363
            
            357,210Rent
      (Note 10)
            
            
            174,872
            
            7,572
            
            15,243
            
            9,542
            
            42,043Stock-based
      compensation (Note 12)
            
            
            8,992,661
            
            1,060,143
            
            774,274
            
            1,872,181
            
            2,271,494Travel
      and entertainment
            
            
            532,195
            
            55,823
            
            8,284
            
            92,759
            
            61,134Write
      down of mineral property acquisition costs (Note 7)
            
            
            4,339,330
            
            -
            
            -
            
            -
            
            -Write
      down of property and equipment (Note 5)
            
            
            26,611
            
            -
            
            -
            
            -
            
            -Net
      operating loss before other items
            
            
            (28,762,173
            )
            (5,535,252
            )
            (1,938,130
            )
            (6,966,298
            )
            (4,593,868
            )Other
      itemsForeign
      exchange gain
            
            
            53,763
            
            (1,789
            )
            1,713
            
            27,476
            
            6,855Gain
      on sale of oil and gas property
            
            
            307,115
            
            -
            
            -
            
            
            
            -Interest
      income
            
            
            12,795
            
            -
            
            -
            
            
            
            -Recovery
      of project management fees
            
            
            60,000
            
            -
            
            -
            
            
            
            -Provision
      for potential legal claims (Note 8)
            
            
            (65,000
            )
            -
            
            135,000
            
            -
            
            135,000368,673
            
            (1,789
            )
            136,713
            
            27,476
            
            141,855Net
      operating loss before income tax
            
            
            (28,393,500
            )
            (5,537,041
            )
            (1,801,407
            )
            (6,938,822
            )
            (4,452,013
            )Future income tax recovery(Note 15)
            
            
            5,584,070
            
            562,653
            
            -
            
            752,220
            
            -Net
      operating loss and comprehensive loss for the period
            
            
            (22,809,430
            )
            (4,974,388
            )
            (1,801,407
            )
            (6,186,602
            )
            (4,452,013
            )Basic
      and diluted loss per
              common
      share
            
            (0.060
            )
            (0.030
            )
            (0.077
            )
            (0.074
            )Weighted
      average number of
              common
      shares used in per
              share
      calculations
            
            82,389,703
            
            59,361,763
            
            80,300,403
            
            59,918,075









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
      June 2010
              
              
              For
      the
                three
      month
                period
                ended
      30
                June
      2010
              
              
              For
      the
                three
      month
                period
                ended30
                June
      2009
              
              
              For
      the
                six
      month
                period
                ended
      30
                June
      2010
              
              
              For
      the
                six
      month
                period
                ended
      30
                June
      2009$
              
              
              
              $
              
              
              
              $
              
              
              
              $
              
              
              
              $Cash
      flows used in operating activitiesLoss
      for the period
              
              
              (22,809,430
              )
              
              
              (4,974,388
              )
              
              
              (1,801,407
              )
              
              
              (6,186,602
              )
              
              
              (4,452,013
              )Adjustments
      to reconcile loss to net cash used by operating activitiesAccrued
      interest (Notes 13 and 14)
              
              
              2,441,539
              
              
              
              2,315,014
              
              
              
              -
              
              
              
              2,315,014
              
              
              
              -Amortization
      (Notes 5 and 6)
              
              
              313,026
              
              
              
              18,770
              
              
              
              21,115
              
              
              
              37,977
              
              
              
              42,237Contributions
      to capital by related party – expenses (Notes 10 and 16)
              
              
              15,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Future
      income tax recovery (Note 15)
              
              
              (5,584,070
              )
              
              
              (562,653
              )
              
              
              -
              
              
              
              (752,220
              )
              
              
              -Common
      shares issued for services (Note 11)
              
              
              24,199
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Warrant
      issued for services
              
              
              25,252
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Gain
      on sale of oil and gas property
              
              
              (307,115
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Stock-based
      compensation (Note 12)
              
              
              8,992,661
              
              
              
              1,060,143
              
              
              
              774,274
              
              
              
              1,872,181
              
              
              
              2,271,494Write-down
      of mineral property acquisition
                costs (Note 7)
              
              
              5,761,055
              
              
              
              1,421,725
              
              
              
              -
              
              
              
              1,421,725
              
              
              
              -Write-down
      of property and equipment (Note 5)
              
              
              26,611
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Changes
      in operating assets and liabilities(Increase)
      decrease in deposit and prepaid expenses
              
              
              (48,004
              )
              
              
              (23,952
              )
              
              
              8,971
              
              
              
              (25,280
              )
              
              
              265,436(Increase)
      decrease in amounts receivable
              
              
              (54,812
              )
              
              
              (4,827
              )
              
              
              -
              
              
              
              36,263
              
              
              
              30,000Increase
      (decrease) in accounts payable and accrued liabilities
              
              
              654,620
              
              
              
              26,367
              
              
              
              (386,572
              )
              
              
              270,639
              
              
              
              160,563Increase
      (decrease) in due to related parties
              
              
              438,499
              
              
              
              (15,335
              )
              
              
              38,618
              
              
              
              174,632
              
              
              
              176,814(10,110,969
              )
              
              
              (739,136
              )
              
              
              (1,345,001
              )
              
              
              (835,671
              )
              
              
              (1,505,469
              )Cash
      flows used in investing activitiesAcquisition
      of mineral property interests (Note 7)
              
              
              (1,065,673
              )
              
              
              (301,420
              )
              
              
              -
              
              
              
              (505,091
              )
              
              
              (25,000
              )Business
      acquisition, net of cash received (Note 7)
              
              
              (2,499,908
              )
              
              
              (1,000,000
              )
              
              
              -
              
              
              
              (1,000,000
              )
              
              
              -Purchase
      of equipment (Note 5)
              
              
              (277,377
              )
              
              
              (22,144
              )
              
              
              -
              
              
              
              (62,787
              )
              
              
              (85,258
              )Website
      development costs
              
              
              (64,693
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Purchase
      of oil and gas property
              
              
              (642,006
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -(4,549,657
              )
              
              
              (1,323,564
              )
              
              
              -
              
              
              
              (1,567,878
              )
              
              
              (110,258
              )Cash
      flows from financing activitiesCommon
      shares issued for cash, net of share costs (Note 11)
              
              
              5,265,111
              
              
              
              340,251
              
              
              
              145,809
              
              
              
              614,250
              
              
              
              145,809Increase
      in due to related parties
              
              
              27,304
              
              
              
              -
              
              
              
              364
              
              
              
              -
              
              
              
              32,275Issuance
      of warrants (Note 11)
              
              
              7,049,037
              
              
              
              -
              
              
              
              14,191
              
              
              
              -
              
              
              
              14,191Convertible
      debentures
              
              
              665,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Loan
      payable (Note 14)
              
              
              800,000
              
              
              
              800,000
              
              
              
              -
              
              
              
              800,000
              
              
              
              -Share
      subscriptions received in advance (Note 11)
              
              
              1,127,000
              
              
              
              1,127,000
              
              
              
              1,266,977
              
              
              
              1,057,000
              
              
              
              1,506,97714,933,452
              
              
              
              2,267,251
              
              
              
              1,427,341
              
              
              
              2,471,250
              
              
              
              1,666,977Increase
      in cash and cash equivalents
              
              
              272,286
              
              
              
              204,551
              
              
              
              82,340
              
              
              
              67,701
              
              
              
              51,250Cash
      and cash equivalents, beginning of period
              
              
              -
              
              
              
              68,275
              
              
              
              35,490
              
              
              
              205,125
              
              
              
              66,580Cash
      and cash equivalents, end of period
              
              
              272,286
              
              
              
              272,826
              
              
              
              117,830
              
              
              
              272,826
              
              
              
              117,830
 
 Supplemental Disclosures with Respect
of Cash Flows(Note 16)







F -
3
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Consolidated
Statements of Changes in Stockholders’ Equity


(Expressed
in U.S. Dollars)


(Unaudited)




Number
      of  shares issued
              Capital
                stock
              Additional
                paid-in
                capital
              
              Share
                subscriptions
                received
      in
                advance
              
              Warrants
              Deficit,
      accumulated during the exploration stage
              Non-controlling
      interest
              Total
                tockholders’
                equity$
              
              $
              
              $
              
              $
              
              $
              
              $
              
              $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 (Notes 10 and 16)
              
              -
              
              -
              
              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 (Notes 10 and 16)
              
              -
              
              -
              
              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 7, 11 and
      16)
              3,800,000
              
              3,800
              
              4,166,200
              
              -
              
              -
              
              -
              
              -
              
              4,170,000Common
      shares issued –  cash (Note 11)
              6,016,511
              
              6,016
              
              4,706,272
              
              -
              
              -
              
              -
              
              -
              
              4,712,288Common
      shares issued –  services (Notes 11 and 16)
              
              70,645
              
              71
              
              49,380
              
              -
              
              -
              
              -
              
              -
              
              49,451Value
      assigned to warrants (Note 11)
              -
              
              -
              
              (3,739,570)
              
              -
              
              3,739,570
              
              -
              
              -
              
              -Share
      issuance costs
              
              -
              
              -
              
              (517,702)
              
              -
              
              237,293
              
              -
              
              -
              
              (280,409)Stock-based
      compensation (Note 12)
              -
              
              -
              
              2,033,607
              
              -
              
              -
              
              -
              
              -
              
              2,033,607Net
      loss for the year
              
              -
              
              -
              
              -
              
              -
              
              -
              
              (5,304,833)
              
              -
              
              (5,304,833)Balance
      at 31 December 2008
              
              58,469,456
              
              58,469
              
              7,945,496
              
              -
              
              3,976,863
              
              (6,873,664)
              
              -
              
              5,107,164




F -
4
 Table of Contents





Constitution
Mining Corp.


(An
Exploration Stage Company)


Consolidated
Statements of Changes in Stockholders’ Equity


(Expressed
in U.S. Dollars)


(Unaudited)




Number
      of
                shares
      issued
              Capital
      stock
              Additional
                paid–in
                capital
              Share
                subscriptions
                received
      in
                advance
              Warrants
              Deficit
                accumulated
                during
      the
                exploration
                stage
              Non-controlling
      interest
              Total
                stockholders’
                equity$
              
              $
              $
              $
              
              $
              
              $
              
              $Balance
      at 31 December 2008
              
              58,469,456
              
              58,469
              
              7,945,496
              -
              3,976,863
              
              (6,873,664)
              
              -
              
              5,107,164Common
      shares issued –  mineral properties
                (Notes
      7, 11 and 16)
              
              2,300,000
              
              2,300
              
              1,676,700
              -
              -
              
              -
              
              -
              
              1,679,000Common
      shares issued –  cash (Note 11)
              12,786,529
              
              12,787
              
              6,812,536
              -
              -
              
              -
              
              -
              
              6,825,323Value
      assigned to warrants (Note 11)
              -
              
              -
              
              (3,309,467)
              -
              3,309,467
              
              
              
              -
              
              -Warrants
      expired (Note 11)
              
              -
              
              -
              
              3,739,570
              -
              (3,739,570)
              
              -
              
              -
              
              -Agent
      compensation warrants expired (Note 11)
              -
              
              -
              
              237,293
              -
              (237,293)
              
              -
              
              -
              
              -Share
      issuance costs
              -
              
              -
              
              (473,042)
              -
              262,788
              
              -
              
              -
              
              (210,254)Share
      subscription received in advance
              -
              
              -
              
              -
              70,000
              -
              
              -
              
              -
              
              70,000Business
      acquisition (Notes 7, 11 and 16)
              4,500,000
              
              4,500
              
              4,245,500
              -
              -
              
              -
              
              5,410,000
              
              9,660,000Stock-based
      compensation (Note 12)
              -
              
              -
              
              4,461,838
              -
              -
              
              -
              
              -
              
              4,461,838Net
      loss for the year
              
              -
              
              -
              
              -
              
              -
              
              -
              
              (9,749,164)
              
              -
              
              (9,749,164)Balance
      at 31 December 2009
              
              78,055,985
              
              78,056
              
              25,336,424
              
              70,000
              
              3,572,255
              
              (16,622,828)
              
              5,410,000
              
              17,843,907Common
      shares issued –  mineral properties
                (Notes
      7, 11 and 16)
              
              4,500,000
              
              4,500
              
              4,600,500
              
              -
              
              -
              
              -
              
              -
              
              4,605,000Common
      shares issued –  cash (Note 11)
              
              910,709
              
              911
              
              613,338
              
              1,057,000
              
              -
              
              -
              
              -
              
              1,671,249Value
      assigned to warrants (Note 11)
              -
              
              -
              
              (145,264)
              
              
              
              145,264
              
              
              
              
              
              -Warrants
      exercised (Note 11)
              
              -
              
              -
              
              47,233
              
              
              
              (47,233)
              
              
              
              
              
              -Business
      acquisition (Notes 7, 11 and 16)
              -
              
              -
              
              (9,150,000)
              
              -
              
              -
              
              -
              
              (5,410,000)
              
              (14,560,000)Stock-based
      compensation (Note 12)
              -
              
              -
              
              1,872,181
              
              -
              
              -
              
              -
              
              -
              
              1,872,181Intrinsic
      value of beneficial conversion
                feature
      (Note 13)
              -
              
              -
              
              2,100,000
              
              -
              
              -
              
              -
              
              -
              
              2,100,000Net
      loss for the period
              
              -
              
              -
              
              -
              
              -
              
              -
              
              (6,186,602)
              
              -
              
              (6,186,602)Balance
      at 30 June 2010
              
              83,466,694
              
              83,467
              
              25,274,412
              
              1,127,000
              
              3,670,286
              
              (22,809,430)
              
              -
              
              7,345,735












F -
5
 Table of Contents




Constitution
Mining Corp.


(An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


1. Nature,
Basis of Presentation 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 its 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. On 21 October 2009, the
Company reincorporated in the State of Delaware. The Company is in the
exploration stage as its operations principally involve the examination and
investigation of land that may contain valuable minerals, for the purpose of
discovering the presence of ore, if any, and its extent.




The
Company is an exploration stage enterprise, as defined in Accounting Standards
Codification (the “Codification” or “ASC”) 915-10, “Development Stage Entities”.
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
consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”) applicable to exploration stage enterprises, and are expressed
in U.S. dollars.  The Company’s fiscal year end is 31
December.




The
accompanying consolidated financial statements include the accounts of the
Company, its wholly-owned subsidiaries, Constitution Mining Argentina SA, a
company incorporated under the laws of Argentina, and Bacon Hill Invest Inc.
(“Bacon Hill”), a company incorporated under the laws of Panama.




The
Company’s consolidated financial statements as at 30 June 2010 and for the six
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 $6,186,602 for the six month period ended 30 June 2010 (30 June 2009 –
$4,452,103, cumulative - $22,809,430) and has working capital deficit of
$2,884,298 at 30 June 2010 (31 December 2009 - $1,480,730).




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 2010.  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.





F -
6
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


On 27
June 2006, the Company acquired a 100% interest in an oil and gas property lease
located in St. Francis County, Arkansas (the “Tombaugh Lease”) for cash payment
of $642,006.   In 2007, the Company shifted its focus from oil and gas
sector to mineral exploration.




Although
management is currently implementing its business plan, and 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. Changes
in Accounting Policies




In
February 2010, the Financial Accounting Standards Board (“ FASB”) issued
ASC No. 2010-09, “Amendments
to Certain Recognition and Disclosure Requirements”, which eliminates the
requirement for  Securities Exchange Commission (“SEC”) filers to
disclose the date through which an entity has evaluated subsequent events. 
ASC No. 2010-09 is effective for its fiscal quarter beginning after 15 December
2010.  The adoption of ASC No. 2010-06 did not have a material impact on
the Company’s consolidated financial statements.




In
February 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-11,
“Derivatives and Hedging
(Topic 815): Scope Exception Related to Embedded Credit
Derivatives”.  ASU No. 2010-11 clarifies the type of embedded
credit derivative that is exempt from embedded derivative bifurcation
requirements. Specifically, only one form of embedded credit derivative
qualifies for the exemption – one that is related only to the subordination of
one financial instrument to another. As a result, entities that have contracts
containing an embedded credit derivative feature in a form other than such
subordination may need to separately account for the embedded credit derivative
feature. The amendments in ASU No. 2010-11 are effective for each reporting
entity at the beginning of its first fiscal quarter beginning after 15 June
2010. Early adoption is permitted at the beginning of each entity’s first fiscal
quarter beginning after 5 March 2010. The adoption of ASC No. 2010-11 did not
have a material impact on the Company’s consolidated financial
statements.




In
January 2010, FASB issued ASU No. 2010-02,“Accounting and Reporting for
Decreases in Ownership of a Subsidiary- a Scope Clarification”. ASU No.
2010-2 addresses implementation issues related to the changes in ownership
provisions in the Consolidation—Overall Subtopic (Subtopic 810-10) of the FASB
ASC, originally issued as Statement of Financial Accounting Standards
(“SFAS”) No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”. Subtopic 810-10 establishes the
accounting and reporting guidance for noncontrolling interests and changes in
ownership interests of a subsidiary. An entity is required to deconsolidate a
subsidiary when the entity ceases to have a controlling financial interest in
the subsidiary. Upon deconsolidation of a subsidiary, an entity recognizes a
gain or loss on the transaction and measures any retained investment in the
subsidiary at fair value. The gain or loss includes any gain or loss associated
with the difference between the fair value of the retained investment in the
subsidiary and its carrying amount at the date the subsidiary is deconsolidated.
In contrast, an entity is required to account for a decrease in ownership
interest of a subsidiary that does not result in a change of control of the
subsidiary as an equity transaction. ASU No. 2010-02 was effective for the
Company starting 1 January 2010. The Company’s adoption of ASU No. 2010-2 did
not have a material impact on the Company's consolidated financial
statements.







F -
7
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


In
January 2010, the FASB issued ASU No. 2010-01, “Equity (ASC Topic 505): Accounting
for Distributions to Shareholders with Components of Stock and Cash”,
which clarifies that the stock portion of a distribution to shareholders that
allow them to elect to receive cash or stock with a potential limitation on the
total amount of cash that all shareholders can elect to receive in the aggregate
is considered a share issuance that is reflected prospectively in earnings per
share and is not considered a stock dividend for purposes of ASC Topic 505 and
ASC Topic 260. ASU No. 2010-2 was effective for the Company starting 1
January 2010. The adoption of the ASU No. 2010-01 did not have a material impact
on the Company’s consolidated financial statements.




In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”.  SFAS No. 167, which amends ASC 810-10, “Consolidation”, prescribes a
qualitative model for identifying whether a company has a controlling financial
interest in a variable interest entity (“VIE”) and eliminates the quantitative
model.  The new model identifies two primary characteristics of a
controlling financial interest: (1) provides a company with the power to direct
significant activities of the VIE, and (2) obligates a company to absorb losses
of and/or provides rights to receive benefits from the VIE.  SFAS No.
167 requires a company to reassess on an ongoing basis whether it holds a
controlling financial interest in a VIE.  A company that holds a
controlling financial interest is deemed to be the primary beneficiary of the
VIE and is required to consolidate the VIE.  SFAS No. 167, which is
referenced in ASC 105-10-65, has not yet been adopted into the Codification and
remains authoritative.  SFAS No. 167 was effective 1 January
2010.  The adoption of SFAS No. 167 did not have a material impact on
the Company’s consolidated financial statements.




In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfer of Financial
Assets – an amendment of FASB Statement”.  SFAS No. 166 removes
the concept of a qualifying special-purpose entity from ASC 860-10, “Transfers and Servicing”, and
removes the exception from applying ASC 810-10, “Consolidation”. This
statements also clarifies the requirements for isolation and limitations on
portions of financial assets that are eligible for sale
accounting.  SFAS No. 166, which is referenced in ASC 105-10-65, has
not yet been adopted into the Codification and remains
authoritative.  This statement was effective 1 January
2010.  The adoption of SFAS No. 166 did not have a material impact on
the Company’s consolidated financial statements.




In August
2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Fair Value Measurement and
Disclosure (Topic 820) – Measuring Liabilities at Fair Value”, which
provides valuation techniques to measure fair value in circumstances in which a
quoted price in an active market for the identical liability is not
available.  The guidance provided in this update was effective 1
January 2010.  The adoption of this guidance did not have a material
impact on the Company’s consolidated financial statements.




3. Significant
Accounting Policies




The
following is a summary of significant accounting policies used in the
preparation of these consolidated financial statements.




Principles
of consolidation




All
inter-company balances and transactions have been eliminated in these
consolidated financial statements.




Cash
and cash equivalents




Cash and
cash equivalents include highly liquid investments with original maturities of
three months or less.






F -
8
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




Financial
instruments




The
carrying value of cash and cash equivalents, amounts receivable, accounts
payable, amounts due to related parties, loan payable and convertible promissory
note approximates their fair value because of the short maturity of these
instruments.  The Company’s operations are in the U.S. and Peru 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.




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 ASC 740, “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 ASC 260, “Earnings per
Share”.  ASC 260 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




ASC 220,
“Comprehensive Income”,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements.  As at 30 June 2010, 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.






F -
9
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




Mineral
property costs




Mineral
property acquisition costs are initially capitalized as tangible assets when
purchased. 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.




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.




Equipment




Equipment
is recorded at cost and amortization is provided over its estimated economic
life at 30% or on a straight line basis over its economic life.




Website
development costs




The costs
of computer software developed or obtained for internal use, during the
preliminary project phase, as defined under ASC 350-40, “Internal-Use Software”, will
be expensed as incurred.  The costs of website development during the
planning stage, as defined under ASC 350-50, “Website 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 -
10
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Segments
of an enterprise and related information




ASC 280,
“Segment Reporting”establishes guidance 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.  ASC 280
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 Codification and does not
believe it is applicable at this time.




Start-up
expenses




ASC
720-15, “Start-Up
Costs”, 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 June 2010.




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 ASC 830, “Foreign Currency
Matters”.  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 GAAP
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 -
11
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Stock-based
compensation




Effective
1 January 2006, the Company adopted the provisions of ASC 718, “Compensation – Stock
Compensation”, which establishes accounting for equity instruments
exchanged for employee services. Under the provisions of ASC 718, 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). The
Company adopted ASC 718 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.  The adoption of ASC 718 does not change the way the Company
accounts for share-based payments to non-employees, with guidance provided by
ASC 505-50, “Equity-Based
Payments to Non-Employees”.




Convertible
debt




In May
2008, the FASB issued new guidance for accounting for convertible debt
instruments that may be settled in cash.  The new guidance, which is
now part of ASC 470-20, “Debt
with Conversion and Other Options” requires the liability and equity
components to be separately accounted for in a manner that will reflect the
entity’s nonconvertible debt borrowing rate.  The Company will
allocate a portion of the proceeds received from the issuance of convertible
notes between a liability and equity component by determining the fair value of
the liability component using the Company’s nonconvertible debt borrowing
rate.  The difference between the proceeds of the notes and the fair
value of the liability component will be recorded as a discount on the debt with
a corresponding offset to paid-in capital.  The resulting discount
will be accreted by recording additional non-cash interest expense over the
expected life of the convertible notes using the effective interest rate
method.  The new guidance was to be applied retrospectively to all
periods presented upon those fiscal years.  The adoption of this
guidance did not have a material impact on the Company’s consolidated financial
statements.




Recent
accounting pronouncements




In
February 2010, the  FASB issued ASC No. 2010-09, “Amendments to Certain Recognition
and Disclosure Requirements”, which eliminates the requirement for SEC
filers to disclose the date through which an entity has evaluated subsequent
events.  ASC No. 2010-09 is effective for its fiscal quarter beginning
after 15 December 2010.  The adoption of ASC No. 2010-06 is not expected to
have a material impact on the Company’s consolidated financial
statements





F -
12
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


In
January 2010, the FASB issued ASC No. 2010-06, “Fair Value Measurement and
Disclosures (Topic 820): Improving Disclosure and Fair Value
Measurements”, which requires that purchases, sales, issuances, and
settlements for Level 3 measurements be disclosed.  ASC No. 2010-06 is
effective for its fiscal quarter beginning after 15 December 2010.  The
adoption of ASC No. 2010-06 is not expected to have a material impact on the
Company’s consolidated financial statements.




4. Amounts
Receivable




Amounts
receivable are non-interest bearing, unsecured and have settlement dates within
one year.




5. Property
and Equipment




Net
      Book ValueCost
            
            Accumulated
              amortization
            
            30
      June
              2010
            
            31
      December
              2009
              (Audited)$
            
            $
            
            $
            
            
            $Equipment
            
            
            279,120
            
            
            92,927
            
            
            186,193
            
            
            150,758




During
the six month period ended 30 June 2010, total additions to property and
equipment were $62,787 (30 June 2009 - $85,258).




6. Website
Development Cost




Net
      Book ValueCost
            
            Accumulated
              amortization
            
            30
      June
              2010
            
            31
      December 2009
              (Audited)$
            
            $
            
            $
            
            
            $Website
      development
            
            
            64,693
            
            
            49,587
            
            
            15,106
            
            
            25,731




During
the six month period ended 30 June 2010, total additions to website development
were $Nil (30 June 2009 - $Nil).




7. Mineral
Property Costs




Seabridge
Gold Claims




Effective
2 December 2009, the Company entered into a written Letter of Intent with
Seabridge Gold Inc. (“Seabridge”) for the exclusive option to acquire a 100%
interest in certain mining claims and leasehold interests in Nevada (the
“Seabridge Claims”). The Company has until 15 March 2010 to conduct its due
diligence (completed) and then, to proceed to enter into a more formal option
agreement with Seabridge. Until then, the Letter of Intent remains binding
between the parties (Notes 17 and 18).






F -
13
 Table of Contents




Constitution
Mining Corp.


(An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




Under the
terms of the Letter of Intent, in order to exercise the Seabridge Claims, the
Company, upon signing of the Letter of Intent, must pay Seabridge $200,000
(paid), which will be credited against the $1,000,000 payable as defined
below.




Upon
completion of the transfer of title to the Seabridge Claims scheduled for 31
March 2010 (the “Closing Date”) or as soon as possible thereafter, the Company
must:




a. Pay
$1,000,000, against which the $200,000 (paid) delivered upon signing the Letter
of Intent will be credited, and the remaining
 $800,000 will be paid;
 b . Issue
1,000,000 restricted common shares of the Company;
 c. Issue a
secured promissory note  in the principal amount of $1,000,000 bearing
interest at 8% per annum, payable in full on or before
 the first anniversary of the Closing Date and secured the Seabridge Claims;
and
 d. Issue a
transferable convertible secured debenture in the principal amount of $1,000,000
maturing on the second anniversary of the
 Closing Date and bearing interest at a rate of 8% per year, payable quarterly,
with principal and accrued interest convertible by Seabridge
 within 30 days of maturity into one share of common stock at $1.00 per share,
redeemable in full, not in part, by the Company at any time upon
 payment of 125% of the principal and accrued interest outstanding at the time of
security redemption.




Further,
under the terms of the Letter of Intent, the Company must pay $1,000,000 and
issue 2,000,000 restricted common shares, which will be held in escrow and
released 36 months following issuance on or before 30 April 2010.




If the
payment of $1,000,000 and the issuance of 2,000,000 restricted common shares of
the Company, required on or before 30 April 2010, is not completed by 1 May
2010, the Company will then have to transfer all the Seabridge Claims back to
Seabridge.




On 1
April 2010, the Company entered into an asset purchase agreement with Seabridge
(the “Seabridge Agreement”). This Seabridge Agreement replaces the Letter of
Intent. The completion is expected to close on 20 May
2010.  Subsequent to the period ended 30 June 2010, the Company
entered into an amending asset purchase agreement with Seabridge (the “Seabridge
Amendment Agreement”) to the Seabridge Agreement dated 1 April 2010. Pursuant to
the Seabridge Amendment Agreement, the Company agreed to pay Seabridge $302,260
for Bureau of Land Management fees and to reimburse Seabridge all costs of
maintaining the mineral properties until the closing date of the Seabridge
Agreement.  The transaction is now scheduled to close on or before 30
September 2010 (Note 18).




The
Company has not conducted exploration activities during the six month period
then ended on this property.







F -
14
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Peruvian
Gold Sands – Minera Maranon S.A.C




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 “Peruvian Agreement”).  Pursuant to this
Peruvian Agreement, the Company acquired four separate options from Temasek,
each providing for the acquisition of a 25% interest in certain mining
properties (the “Peruvian Gold Sands”).  The Peruvian Gold Sands are
owned by Minera Maranon S.A.C (“Maranon”).  Bacon Hill, a wholly-owned
subsidiary of Temasek, owns 999 shares of 1,000 shares of Maranon that are
issued and outstanding.  Temasek owns the single remaining share of
Maranon.  The acquisition of each 25% interest in the Peruvian Gold
Sands will occur through the transfer to the Company of 25% of the outstanding
shares of Bacon Hill.




The
Company may exercise the initial 25% option by fulfilling the following
conditions:




a. Pay a
non-refundable $375,000 on the date the Peruvian Agreement is executed
(paid);
 b. Issue
2,000,000 common shares within 5 business days (issued and valued at $1.01 per
common share)
 (Notes 11 and 16); and
 c. Pay an
additional $375,000 prior to 28 December 2008 (paid).




The
Company entered into an amending agreement dated 12 May 2009 (the “Peruvian
Amendment”) and a second amending agreement dated 29 October 2009 (the “Second
Peruvian Amendment”) with Temasek.  Under the Second Peruvian
Amendment, the Company may now exercise the second 25% option resulting in the
acquisition of a 50% interest in the Mineral Rights by fulfilling the following
conditions as set out in the Second Peruvian Amendment:




a. Exercise
and complete the initial 25% option by 29 March 2009 (completed);
 b. Issue an
additional 2,000,000 common shares by 29 March 2009 (issued and valued at $0.65
per common share)
 (Notes 11 and 16);
 c. Pay an
additional $750,000 by 29 October 2009 or as soon as practicable thereafter
(paid); and
 d. Issue an
additional 500,000 common shares by 29 October 2009 or as soon as practicable
thereafter (issued
 and valued at $1.18 per common share) (Notes 11 and 16).




The
Company entered into a third amending agreement dated 8 April 2010 (the “Third
Peruvian Amendment”) with Temasek.  Under the Third Peruvian
Amendment, the Company may now exercise the third and fourth 25% options
resulting in the acquisition of a 100% interest in the Mineral Rights by
fulfilling the following conditions as set out in the Third Peruvian
Amendment:




a. Pay
$1,000,000 (paid on 22 April 2010);


b. Issue an
additional 6,000,000 common shares (2,000,000 issued and valued at $1.18 per
common share and 4,000,000


issued
and valued at $1.05 per common share (Notes 11 and 16)); and


c. Issue a
convertible note in the principal amount of $7,000,000 maturing on 8 April 2013
and bearing  interest at a


rate of 12% per annum, payable annually, with principal payable upon maturity
(the “Convertible Note”).  Any interest


and principal due under the Convertible Note is convertible (at Temasek's
option) into units which consist of one share


of the Company's common stock and one warrant to purchase one share of the
Company's common stock at an exercise


price of $1.10 per share.  The conversion price per unit is fixed at $0.80
per unit (issued 8 April 2010) (Notes 13 and 16).






F -
15
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


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 17).




During
the six month period ended 30 June 2010, the Company expensed mineral
property expenditures in the amount of $1,421,725 related to the Minera Maranon
property.




Peruvian
Gold Sands – Minera Saramiriza




On 25
January 2010 (the “Effective Date”), the Company entered into an assignment
agreement with Temasek (the “Minera Saramiriza Agreement”), to acquire a 100%
interest in the mineral rights that are the property and title of Minera
Saramiriza S.A.C. In order for the Company to keep its interest in good standing
and to exercise the option to acquire a 100% interest in the property, the
Company must issue, within 30 business days from the Effective Date, 500,000
common shares of the Company (issued and valued at $0.81 per common share) to
the order and direction of Temasek, which will be included in the initial 33%
option payment as defined below (Notes 11 and 16).




The
Company may exercise the initial 33% option by fulfilling the following
conditions within 12 months of the Effective Date:




a.          Issue
the initial 500,000 common shares (issued);


b.          Pay
$250,000; and


c.          Issue
an additional 1,000,000 common shares.




The
Company may exercise the second 33% option by fulfilling the following
conditions within 24 months of the Effective Date:




a.          Exercise
and complete the initial 33% option;


b.          Pay
an additional $1,000,000; and


c.          Issue
an additional 1,000,000 common shares.




The
Company may exercise the final 34% option by fulfilling the following conditions
within 36 months of the Effective Date:




a.          Exercise
and complete the initial and second 33% options;


b.          Pay
an additional $2,000,000; and


c.          Issue
an additional 2,000,000 common 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 34% option (Note 17).







F -
16
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Atena
Gold Project




On 12
December 2007, the Company entered into an assignment agreement (the “Atena
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 Atena Agreement, the Company was
required to issue 500,000 common shares (issued and valued at $0.70 per common
share) and pay $60,000 (paid). The Company could have acquired 100% of the
option if it incurred a minimum of $3,740,000 in work commitment expenditures on
the property and issue 7,000,000 common shares according to the following
schedule (Notes 11 and 16):




a. $240,000
in expenditures (incurred) plus a further issuance of 1,000,000 common shares
(issued and valued at $1.59
 per common share) on or before 15 March 2008;
 b. a further
$500,000 in expenditures plus a further issuance of 2,000,000
common  shares on or before 15 March 2009
 (issued and valued at $0.73 per common share);
 c. a further
$1,000,000 in expenditures plus a further issuance of 4,000,000 common shares on
or before 15 March 2010; and
 d. a further
$2,000,000 in expenditures on or before 15 March 2011.




The
Company entered into an amending agreement dated 5 May 2009 (the “Atena
Amendment”) with Proyectos Mineros S.A. (“PMSA”).  Under the Atena
Amendment, the $500,000 in expenditures originally required to be made by the
Company on the Atena Gold Project property by 15 March 2009 was waived upon the
issuance of the 2,000,000 common shares (issued) of the Company as required
under the Atena Agreement. The option is subject to a 1% net smelter returns
royalty.




During
the year ended 31 December 2009, the Company announced that it was terminating
its exploration program on the Atena Gold Project and would allocate its
resources exclusively to pursue the exploration and development of their
property interests in Northeastern Peru, the Peruvian Agreement.




During
the year ended 31 December 2009, the Company recorded a provision for write-down
of mineral property costs of $3,530,260 related to the Atena property (Note
16).




Cerro
Amarillo Property




On 8
January 2008, the Company entered into an assignment agreement
with  PMSA.  Under the assignment agreement,  PMSA
assigned to the Company PMSA’s right to explore and option to purchase a 100%
interest in Cerro Amarillo Property located in the Province of Mendoza,
Argentina.  Pursuant to the terms of the assignment agreement, the
Company issued 300,000 common shares (issued and valued at $0.70 per common
share) and pay $10,000 (paid).  The Company could have acquired a 100%
of the option if it incurred a minimum of $450,000 in work commitment
expenditures on the property and issue 2,100,000 common shares according to the
following schedule (Notes 11 and 16):




a. $200,000
in expenditures plus a further issuance of 300,000 common shares on or before 8
January 2009
 (issued and valued at $0.73 per common share);
 b. a further
$250,000 in expenditures plus a further issuance of 600,000 common shares on or
before 8 January 2010;
 c. a further
issuance of 600,000 common shares on or before 8 January 2011; and
 d. a further
issuance of 600,000 common shares on or before 8 January
2012.







F -
17
 Table of Contents





Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010





The
Company entered into an amending agreement dated 5 May 2009 (the “Cerro Amarillo
Amendment”) with PMSA.  Under the Cerro Amarillo Amendment, the
$200,000 in expenditures originally required to be made by the Company on the
Cerro Amarillo property by 8 January 2009 was waived upon the issuance of the
300,000 common shares (issued and valued at $0.73 per common share) of the
Company as required under the Cerro Amarillo Agreement.




To
exercise the option the Company was required to issue a further 3,000,000 common
shares.  The option was subject to a 1% net smelter returns
royalty.




The
Company was also responsible for certain payments under the agreement between
the underlying titleholder of the mineral property rights and  PMSA
(the “Cerro Amarillo Agreement”).  In order for the Company to keep
its interest in good standing and to exercise the option to acquire a 100%
interest in the Cerro Amarillo property, the Company had to make the following
payments to the underlying titleholder and incur a minimum of $250,000 in work
commitment expenditures on the property, as set forth in the Cerro Amarillo
Agreement:




a. Pay
$20,000 by 28 February 2008 (paid);
 b.       
P ay
additional $40,000 by 1 June 2008 (paid);
 c. Pay
additional $50,000 by 1 December 2008 (paid $25,000; $25,000 accrued as at 31
December 2009);
 d. Pay
additional $60,000 by 1 June 2009 (accrued as at 31 December 2009);
 e. Pay
additional $100,000 by 1 December 2009;
 f. Pay
additional $150,000 by 1 December 2010;
 g. Pay
additional $200,000 by 1 December 2011;
 h. Pay
additional $250,000 by 1 June 2012;
 i. Incur
$50,000 in exploration expenditures on or before 1 December 2008 (incurred);
and
 j. Incur
additional $200,000 in exploration expenditures on or before 1 December 2009
(incurred;
 $125,070 included in accounts payable).




During
the year ended 31 December 2009, the Company announced that it was terminating
their exploration program on the Cerro Amarillo property and would allocate its
resources exclusively to pursue the exploration and development of its property
interests in northeastern Peru, the Peruvian Agreement.




During
the year ended 31 December 2009, the Company recorded a provision for write-down
of mineral property costs of $734,070 related to the Cerro Amarillo property
(Note 16).




Amira,
Amira Norte and Esparta II




On 17
March 2008, the Company entered into an assignment agreement with PMSA (the
“Amira Agreement”), a company related to the Company by way of a director and
shareholder in common. Under the assignment 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 had
to make the following payments to the underlying titleholder, as set forth in
the Amira Agreement:







F -
18
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


a.         $75,000
by 19 January 2009;


b.         a
further $150,000 by 19 January 2010;


c.         a
further $200,000 by 19 January 2011; and


d. 
       a further $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.




The
Company entered into an amending  assignment agreement dated 5 May
2009 (the “Amira Amendment”)  with the owner of the Properties,
whereby the payment originally due on 19 January 2009 under the Amira Agreement
was due as follows:




a.  $25,000
on or by the end on 30 June 2009 (accrued as at 31 December 2009);
and


b. $50,000
on or before by the end of 30 September 2009 (accrued as at 31 December
2009).




During
the year ended 31 December 2009, the Company announced that it was terminating
its exploration program on the Properties and would allocate its resources
exclusively to pursue the exploration and development of its property interests
in Northeastern Peru, the Peruvian Agreement.





During
the year ended 31 December 2009, the Company recorded a provision for write-down
of mineral property costs of $75,000 related to the Amira
Agreement.




8. Accounts
Payable and Accrued Liabilities




Accounts
payable and accrued liabilities are non-interest bearing, unsecured and have
settlement dates within one year.




Included
in accounts payable and accrued liabilities at 30 June 2010 are $45,000 and
$20,000 (31 December 2009 - $45,000 and $20,000) related to settlement of
potential legal claims on incidents arising from the mineral property interests
and the related legal fees, respectively.




9. Due
to Related Parties




As at 30
June 2010, the amount due to related parties consists of $168,860 (31 December
2009 - $27,304) payable to directors and former directors of the Company and
$972,676 (31 December 2009 - $939,600) payable to companies controlled by
shareholders and directors of Maranon.  This balance is non-interest
bearing, unsecured and has no fixed terms of repayment.




10. Related
Party Transactions




During
the six month period ended 30 June 2010, the Company paid or accrued management
and consulting fees of $201,340 (30 June 2009 - $154,958, cumulative – $980,450)
to directors and officers of the Company and companies controlled by directors
and officer.




During
the six month period ended 30 June 2010, director and shareholder of the Company
made contributions to capital for management fees and rent of $Nil (30 June 2009
- $Nil, cumulative - $12,000) and $Nil (30 June 2009 - $Nil, cumulative -
$3,000), respectively.  These amounts have been recorded as an
increase in expenditures and an increase in additional paid-in capital (Note
16).






F -
19
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




11. Capital
Stock




Authorized




The total
authorized capital consists of:




·
            300,000,000
      of common shares with par value of
$0.001


·
            50,000,000
      of preferred shares with par value of
$0.001




Issued
and outstanding




As at 30
June 2010, the total issued and outstanding capital stock is 83,466,694 common
shares with a par value of $0.001 per common share.




On 21
June 2010, the Company issued 464,997 units at a price of $0.65 per unit for
total proceeds of $302,250. Each unit consist of one common share and one share
purchase warrant. Each share purchase warrant entitles the holder to purchase an
additional common share at the price of $0.80 up to 21 June 2011, commencing 21
December 2010. As at 30 June 2010, all share purchase warrants in this series
remain outstanding.




On 7 June
2010, the Company issued 54,285 common shares at a price of $0.70 per unit for
total proceeds of $38,000 pursuant to warrants issued on 9 July
2009.




On 17
April 2010, a total of 200,000 previously outstanding share purchase warrants
expired.




On 13
April 2010, the Company issued 4,000,000 common shares valued at $1.05 per
common share pursuant to the Minera Maranon Agreement (Notes 7 and
16).




On 19
March 2010, the Company issued 500,000 common shares valued at $0.81 per common
share pursuant to the Minera Saramiriza Agreement (Notes 7 and 16).




On 16
March 2010, the Company issued 391,427 common shares at a price of $0.70 per
unit for total proceeds of $273,999 pursuant to warrants issued on 9 July
2009.




On 1
December 2009, the Company issued 7,533,462 units at a price of $0.65 per unit
for total proceeds of $4,686,496, net of issue costs of $210,254. Each unit
consist of one common share and one share purchase warrant. Each share purchase
warrant entitles the holder to purchase an additional common share at the price
of $1.00 up to 1 December 2010, commencing 1 June 2010. As at 30 June 2010, all
share purchase warrants in this series remain outstanding.




On 1
December 2009, the Company issued 315,775 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 $1.00 up
to 1 December 2010, commencing 1 June 2010. As at 30 June 2010, all share
purchase warrants in this series remain outstanding (Note 16).




On 2
November 2009, the Company issued 2,500,000 common shares valued at $1.18 per
common share pursuant to the Peruvian Agreement (Notes 7 and 16).




F -
20
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




On 2
September 2009, the Company issued 923,428 units at a price of $0.35 per unit
for total proceeds of $323,200. Each unit consist of one common share and one
share purchase warrant. Each share purchase warrant entitles the holder to
purchase an additional common share at the price of $0.70 up to 2 September
2011, commencing 2 March 2010. As at 30 June 2010, all share purchase warrants
in this series remain outstanding.




On 14
August 2009, a total of 5,007,300 previously outstanding share purchase warrants
expired.




On 14
August 2009, a total of 350,511 previously outstanding agent compensation
warrants expired.




On 9 July
2009, the Company issued 4,129,639 units at a price of $0.35 per unit for total
proceeds of $1,445,373. Each unit consist of one common share and one share
purchase warrant. Each share purchase warrant entitles the holder to purchase an
additional common share at the price of $0.70 up to 9 July 2011, commencing 9
January 2010. As at 30 June 2010, 3,683,927 share purchase warrants in this
series remain outstanding.




On 29
June 2009, the Company issued 2,000,000 common shares valued at $0.65 per common
share pursuant to the Peruvian Agreement (Notes 7 and 16).




On 2 June
2009, the Company issued 2,000,000 common shares valued at $0.73 per common
share pursuant to the Atena Agreement (Notes 7 and 16).




On 2 June
2009, the Company issued 300,000 common shares valued at $0.73 per common share
pursuant to the Cerro Amarillo Agreement (Notes 7 and 16).




On 17
April 2009, the Company issued 200,000 units at a price of $0.80 per unit for
proceeds of $160,000. 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 $0.70 up to 17 April 2010, commencing 17
October 2009.  As at 30 June 2010, none of the share purchase warrants
in this series remain outstanding.




On 7
April 2009, a total of 1,009,211 previously outstanding share purchase warrants
were cancelled.




On 7
April 2009, a total of 70,645 previously outstanding agent compensation warrants
were cancelled.




During
the year ended 31 December 2008, the company issued 2,000,000 common shares
valued at $1.01 per common share in pursuant to the Peruvian Gold Sands
assignment agreement (Notes 7 and 16).




During
the year ended 31 December 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
16).




During
the year ended 31 December 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.




During
the year ended 31 December 2008, the Company issued 1,000,000 common shares
valued at $1.59 per common share pursuant to the Atena Agreement (Notes 7 and
16).






F -
21
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


During
the year ended 31 December 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
16).




During
the year ended 31 December 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.




During
the year ended 31 December 2008, the Company issued 300,000 common shares valued
at $0.70 per common share pursuant to the Cerro Amarillo Agreement (Notes 7 and
16).




During
the year ended 31 December 2008, the Company issued 500,000 common shares valued
at $0.70 per common share pursuant to the Atena Agreement (Notes 7 and
16).




Share
Purchase Warrants




The
following share purchase warrants were outstanding at 30 June 2010:




Exercise
      price
            
            
            Number
              of
      warrants
            
            
            Remaining
              contractual
      life (years)$Agent
      compensation warrants
            
            
            1.00
            
            
            
            315,775
            
            
            
            0.42Warrants
            
            
            1.00
            
            
            
            7,533,462
            
            
            
            0.42Warrants
            
            
            0.80
            
            
            
            464,997
            
            
            
            0.98Warrants
            
            
            0.70
            
            
            
            3,683,927
            
            
            
            1.02Warrants
            
            
            0.70
            
            
            
            923,428
            
            
            
            1.1712,921,589











F -
22
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


The
following is a summary of warrant activities during the year ended 31 December
2009 and the six month period ended 30 June 2010:




Number
      of warrants
            
            
            Weighted
              average
              exercise
              price$Outstanding
      and exercisable at 1 January 2009
            
            
            6,437,667
            
            
            
            1.40Granted
            
            
            13,102,304
            
            
            
            0.88Exercised
            
            
            -
            
            
            
            -Cancelled
            
            
            (1,079,856
            )
            
            
            1.40Expired
            
            
            (5,357,811
            )
            
            
            1.40Outstanding
      and exercisable at 31 December 2009
            
            
            13,102,304
            
            
            
            0.88Weighted
      average fair value of warrants granted during the year
            
            
            
            
            
            
            0.55Outstanding
      and exercisable at 1 January 2010
            
            
            13,102,304
            
            
            
            0.88Granted
            
            
            464,997
            
            
            
            0.80Exercised
            
            
            (445,712
            )
            
            
            0.70Cancelled
            
            
            -
            
            
            
            -Expired
            
            
            (200,000
            )
            
            
            0.70Outstanding
      and exercisable at 30 June 2010
            
            
            12,291,589
            
            
            
            0.89Weighted
      average fair value of warrants granted during the period
            
            
            
            
            
            
            0.54




The
weighted average grant date fair value of warrants issued during the six month
period ended 30 June 2010, amounted to $0.54 per warrant (31 December 2009 -
$0.55). The fair value of each warrant granted was determined using the
Black-Scholes warrant pricing model and the following weighted average
assumptions:




2010
            
            
            2009Risk
      free interest rate
            
            
            0.29
            %
            
            
            0.52
            %Expected
      life
            
            1.00
      years
            
            
            1.40
      yearsAnnualized
      volatility
            
            
            99.43
            %
            
            
            107.96
            %Expected
      dividends
            
            
            -
            
            
            
            -







F -
23
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Stock
Options




The following incentive stock options
were outstanding at 30 June 2010:




Exercise
      price
            
            
            Number
              of
      options
            
            
            Remaining
              contractual
      life (years)$Options
            
            
            1.00
            
            
            
            910,000
            
            
            
            7.60Options
            
            
            1.05
            
            
            
            1,425,000
            
            
            
            8.36Options
            
            
            0.70
            
            
            
            2,790,000
            
            
            
            8.89Options
            
            
            1.10
            
            
            
            2,890,000
            
            
            
            9.578,015,000




The
following is a summary of stock option activities during the year ended 31
December 2009 and the six month period ended 30 June 2010:




Number
      of options
            
            
            Weighted
      average exercise price$Outstanding
      and exercisable at 1 January 2009
            
            
            4,835,000
            
            
            
            1.02Granted
            
            
            5,440,000
            
            
            
            0.70Exercised
            
            
            -
            
            
            
            -Cancelled
            
            
            (4,200,000
            )
            
            
            0.84Outstanding
      and exercisable at 31 December 2009
            
            
            6,075,000
            
            
            
            0.85Weighted
      average fair value of options vested during the year
            
            
            
            
            
            
            0.73Outstanding
      and exercisable at 1 January 2010
            
            
            6,075,000
            
            
            
            0.85Granted
            
            
            3,240,000
            
            
            
            1.10Exercised
            
            
            -
            
            
            
            -Cancelled
            
            
            (1,300,000
            )
            
            
            0.89Outstanding
      and exercisable at 30 June 2010
            
            
            8,015,000
            
            
            
            0.94Weighted
      average fair value of options vested during the period
            
            
            
            
            
            
            0.63







F -
24
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


Share
Subscriptions Received in Advance




Share
subscriptions received in advance consists of $1,127,000 (31 December 2009 -
$70,000) cash received by the Company for 1,593,460 common shares (31 December
2009 – 200,000) that have not yet been issued as at 30 June 2010.




12. Stock-Based
Compensation




During
the six month period ended 30 June 2010, the Company granted 3,240,000 stock
options to employees directors and consultants of the Company, entitling the
holders to purchase common shares of the Company for proceeds of $1.10 per
common share expiring 22 January 2020, of which 2,490,000 were granted to
employees and 750,000 were granted to non-employees of the
Company.  The fair value of the portion of the options which vested in
the period, estimated using Black-Scholes model, was $1,088,041.  This
amount has been expensed as stock-based compensation.




During
the year ended 31 December 2009, the Company granted 5,440,000 stock options to
employees, directors and consultants of the Company entitling the holders to
purchase common shares of the Company for proceeds of $0.70 per common share
expiring 20 May 2019 of which 3,240,000 were granted to employees and 2,200,000
were granted to non-employees of the Company.  The fair value of the
portion of the options which vested in the period, estimated using Black-Scholes
model, was $784,140.  This amount has been expensed as stock-based
compensation.




A total
of 1,300,000 of the previously granted outstanding stock options of the Company
were cancelled during the six month period ended 30 June 2010 (31 December 2009
– 4,200,000) (Note 11).




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.




The
following assumptions were used for the Black-Scholes valuation of stock options
granted/vested:




2010
            
            
            2009Risk
      free interest rate
            
            
            3.40
            %
            
            
            3.21
            %Expected
      life
            
            9.73
      years
            
            
            9.9
      yearsAnnualized
      volatility
            
            
            118.76
            %
            
            
            120
            %Expected
      dividends
            
            
            -
            
            
            
            -







F -
25
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


13. Convertible
Promissory Note




On 8
April 2010, the Company entered into a convertible promissory note agreement
(the “Convertible Promissory Note Agreement”) with Temasek valued at $7,000,000
pursuant to the Minera Maranon Agreement.  The principal balance bears
interest at a rate of 12% per annum payable annually, with principal payable
upon maturity.  All unpaid principal, together with any unpaid and
accrued interest is due and payable on the date of maturity of 8 April 2013. Any
interest and principal due under the Convertible Note is convertible (at
Temasek's option) into units which consist of one share of the Company's common
stock and one warrant to purchase one share of the Company's common stock at an
exercise price of $1.10 per share.  The conversion price per unit is fixed
at $0.80 per unit (Notes 7 and 16).




During
the six month period ended 30 June 2010, the Company accrued $2,291,014 (30 June
2009 - $Nil) of which $2,100,000 is related to amortization of debt
discount.  The balance as at 30 June 2010 consists of principal and
accrued interest of $7,000,000 (31 December 2009 - $Nil) and $191,014 (30 June
2009 - $Nil), respectively.




14. Loan
payable




On 1
April 2010 (the “Execution Date”), the Company entered into a loan agreement
(the “Loan Agreement”) with St. Lawrence Alluvial Services and Logistics Corp.
for $800,000 cash.  The principal balance bears interest at a rate of
12% per annum, with interest and principal payable 90 days after the Execution
Date. The Company is in the process of renegotiating the terms of terms Loan
Agreement.




The
balance as at 30 June 2010 consists of principal and accrued interest of
$800,000 (31 December 2009 - $Nil) and $24,000 (30 June 2009 - $Nil),
respectively.




15. Income
Taxes




The
Company has losses carried forward for income tax purposes to 30 June
2010.  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:





F -
26
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




For
      the six month period ended 30 June 2010
            
            
            For
      the six month period ended 30 June 2009$
            
            
            
            $Deferred
      tax asset attributable to:Current
      operations
            
            
            2,254,516
            
            
            
            1,515,810Amortization
            
            
            (12,826
            )
            
            
            (14,473
            )Stock
      based compensation
            
            
            (636,541
            )
            
            
            (772,308
            )Provision
      for potential legal claims
            
            
            -
            
            
            
            45,900Change
      in valuation allowance
            
            
            (852,929
            )
            
            
            (774,929
            )Future
      income tax recovery
            
            
            752,220
            
            
            
            -




The
composition of the Company’s deferred tax assets as at 30 June 2010and 31 December 2009 is as
follows:




As
      at 30
              June
              2010
            
            
            As
      at 31 December
              2009
              (Audited)$
            
            
            
            $Net
      income tax operating loss carryforward
            
            
            19,218,064
            
            
            
            14,189,400Statutory
      federal income tax rate
            
            
            33.50
            %
            
            
            34.05
            %Effective
      income tax rate
            
            
            0.00
            %
            
            
            0.00
            %Future
      income tax assets (liabilities)Tax
      loss carryforward
            
            
            6,436,999
            
            
            
            4,831,850Mineral
      property costs
            
            
            (5,584,070
            )
            
            
            (5,584,070
            )Less:
      Valuation allowance
            
            
            (852,929
            )
            
            
            -Future
      income tax assets (liabilities)
            
            
            -
            
            
            
            (752,220
            )




The
potential income tax benefit of these losses has been offset by a full valuation
allowance.




As at 30
June 2010, the Company has an unused net operating loss carryforward balance of
approximately $19,218,064 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 2030.







F -
27
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


16. Supplemental
Disclosures with Respect to Cash Flows




For
      the period from the date of inception on 6 March 2000 to 30 June
      2010
            
            
            For
              the
      three month period ended 30 June
              2010
            
            
            For
              the
      three
              month
      period ended 30 June
              2009
            
            
            For
              the
      six month period ended
              30
      June
              2010
            
            
            For
              the
      six month period ended
              30
      June
              2009$
            
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Supplemental
      cash flows informationInterest
      expense
            
            
            38,802
            
            
            
            -
            
            
            
            3,042
            
            
            
            -
            
            
            
            3,042Foreign
      exchange (gain) loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -




On 13
April 2010, the Company issued 4,000,000 common shares valued at $1.05 per
common share pursuant to the Minera Maranon Agreement (Notes 7 and
11).




On 8
April 2010, the Company issued a convertible promissory note valued at
$7,000,000 pursuant to the Minera Maranon Agreement.   During the
six month period ended 30 June 2010, the Company accrued $2,291,014 (30 June
2009 - $Nil) of which $2,100,000 is related to amortization of debt discount
(Notes 7 and 13).




On 19
March 2010, the Company issued 500,000 common shares valued at $0.81 per common
share pursuant to the Minera Saramiriza Agreement (Notes 7 and 11).




During
the year ended 31 December 2009, the Company recorded a total write-down of
mineral property expenditures in the amount of $4,339,330 related to the Atena,
Cerro Amarillo and Amira properties (Note 7).




During
the year ended 31 December 2009, the Company recorded a total write-down of
property and equipment in the amount of $26,611 (Note 5).




During
the year ended 31 December 2009, the Company issued 315,775 agent compensation
warrants valued at $262,788 for agent services rendered (Note 11).




During
the year ended 31 December 2009, the Company issued 2,500,000 common shares
valued at $1.18 per common share pursuant to the Peruvian Gold Sands assignment
agreement (Notes 7 and 11).




During
the year ended 31 December 2009, the Company issued 2,000,000 common shares
valued at $0.65 per common share pursuant to the Peruvian Gold Sands assignment
agreement (Notes 7 and 11).




During
the year ended 31 December 2009, the Company issued 2,000,000 common shares
valued at $0.73 per common share pursuant to the Atena Agreement (Notes 7 and
11).




During
the year ended 31 December 2009, the Company issued 300,000 common shares valued
at $0.73 per common share pursuant to the Cerro Amarillo Agreement (Notes 7 and
11).






F -
28
 Table of Contents




Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010




During
the year ended 31 December 2009, director and shareholder of the Company made
contributions to capital for management fees and rent of $Nil (31 December 2008
- $Nil, cumulative - $12,000) and $Nil (31 December 2008 - $Nil, cumulative -
$3,000) respectively.  This amount has been recorded as an increase in
expenditures and an increase in additional paid-in capital (Note
10).




During
the year ended 31 December 2008, the Company issued 500,000 common shares valued
at $0.70 per common share in pursuant to the Atena Agreement (Notes 7 and
11).




During
the year ended 31 December 2008, the Company issued 2,000,000 common shares
valued at $1.01 per common share in pursuant to the Peruvian Agreement (Notes 7
and 11).




During
the year ended 31 December 2008, the Company issued 300,000 common shares valued
at $0.70 per common share pursuant to the Cerro Agreement (Notes 7 and
11).




During the year ended 31 December
2008, the Company issued 70,645 common shares valued at $49,252 and 70,645
warrants valued at $25,252 for agent services rendered (Note 11).




During
the year ended 31 December 2008, the Company issued 1,000,000 common shares
valued at $1.59 per common share pursuant to the Atena Agreement (Notes 7 and
11).




During
the year ended 31 December 2008, the Company issued 350,511 agent compensation
warrants valued at $237,293 for agent services rendered (Note 11).


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.




During
the year ended 31 December 2008, the Company issued $Nil common shares (31
December 2007 – 1,145,300) for convertible debentures of $Nil (31 December 2007
- $22,906).




During
the year ended 31 December 2008 the Company accrued interest of $Nil (31
December 2007 - $74,770, cumulative – $126,525) on convertible
debentures.




17. Commitments




The Company is subject to certain
outstanding and future commitments related to its mineral property interests
(Note 7).




18. Subsequent
Events




Subsequent
to the six month period ended 30 June 2010 to the date the consolidated
financial statements were available to be issued on 16 August 2010, the
following events occurred:




1. On 7 July
2010, the Company granted 160,000 stock options to consultants of the
Company.







F -
29
 Table of Contents


Constitution
Mining Corp.
 (An
Exploration Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 30
June 2010


2. On 9 July
2010, the Company entered into a loan agreement with St. Lawrence Alluvial
Services and Logistics Corp. for $320,000 cash.  The principal balance
bears interest at a rate of 12% per annum, with interest and principal payable
within 90 days.
  3. On 13
July 2010, the Company entered into the Seabridge Amendment Agreement with
Seabridge amending the Seabridge Agreement dated 1 April 2010. Pursuant to the
Seabridge Amendment Agreement, the Company agreed to pay Seabridge $302,260 for
Bureau of Land Management fees and to reimburse Seabridge all costs of
maintaining the mineral properties until the closing date of the Seabridge
Agreement.  The transaction is now scheduled to close on or before 30
September 2010   (Note 7).
  On
6 August 2010, the Company issued 2,650,344 units at a price of $0.65 per unit
for total proceeds of $1,722,724. Each unit consist of one common share and one
share purchase warrant. Each share purchase warrant entitles the holder to
purchase an additional common share at the price of $0.80 up to 6 February 2012,
commencing 6 February 2011.













F -
30
 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 within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.  The words “believe,”
“expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,”
“plan,” “future,” “continue,” and other expressions that are predictions of or
indicate future events and trends and that do not relate to historical matters
identify forward-looking statements.  These forward-looking statements
are based largely on our expectations or forecasts of future events, can be
affected by inaccurate assumptions, and are subject to various business risks
and known and unknown uncertainties, a number of which are beyond our
control.  Therefore, actual results could differ materially from the
forward-looking statements contained in this document, and readers are cautioned
not to place undue reliance on such forward-looking statements.  We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.  A wide variety of factors could cause or contribute to
such differences and could adversely impact revenues, profitability, cash flows
and capital needs.  There can be no assurance that the forward-looking
statements contained in this document will, in fact, transpire or prove to be
accurate.




Important factors that may cause the
actual results to differ from the forward-looking statements, projections or
other expectations include, but are not limited to, the following:




·
            risk
      that we fail to fulfill the payment obligations set forth in the agreement
      we entered into with Temasek Investments Inc. (“Temasek”), a company
      incorporated under the laws of Panama, under which we
      acquired  three separate options, each providing for the
      acquisition of an approximately one-third interest in certain mineral
      rights to certain properties in Peru that abut the other property
      interests we acquired, which could result in the loss of our right to
      exercise the options to acquire the mineral and mining rights underlying
      these properties;




·
            risk
      that we will not be able to close the transaction to acquire certain
      mineral claims and other related assets pursuant to the asset purchase
      agreement we entered into on April 1, 2010 with Seabridge Gold
      Corporation, a Nevada corporation, Pacific Intermountain Gold Corporation,
      a Nevada corporation, and Seabridge Gold Inc., a Canadian
      corporation;




·
            risk
      that we cannot attract, retain and motivate qualified personnel,
      particularly employees, consultants and contractors for our operations in
      Peru;




·
            risks
      and uncertainties relating to the interpretation of drill results, the
      geology, grade and continuity of mineral
  deposits;




·
            results
      of initial feasibility, pre-feasibility and feasibility studies, and the
      possibility that future exploration, development or mining results will
      not be consistent with our
expectations;




·
            mining
      and development risks, including risks related to accidents, equipment
      breakdowns, labor disputes or other unanticipated difficulties with or
      interruptions in production;




·
            the
      potential for delays in exploration or development activities or the
      completion of feasibility studies;




·
            risks
      related to the inherent uncertainty of production and cost estimates and
      the potential for unexpected costs and
expenses;




·
            risks
      related to commodity price
fluctuations;




·
            the
      uncertainty of profitability based upon our history of
    losses;




·
            risks
      related to failure to obtain adequate financing on a timely basis and on
      acceptable terms for our planned exploration and development
      projects;




·
            risks
      related to environmental regulation and
  liability;






- 4
-
 Table of Contents






·
            risks
      that the amounts reserved or allocated for environmental compliance,
      reclamation, post-closure control measures, monitoring and on-going
      maintenance may not be sufficient to cover such
  costs;




·
            risks
      related to tax assessments;




·
            political
      and regulatory risks associated with mining development and exploration;
      and




·
            other
      risks and uncertainties related to our prospects, properties and business
      strategy.




The
forgoing list is not an exhaustive list of the factors that may affect any of
our forward-looking statements.  These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.




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
and 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 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 changed our name to
“Constitution Mining Corp.” to better reflect our current focus which is the
acquisition, exploration, and potential development of mining
properties.  Since November 2007, we entered into agreements to secure
options to acquire the mineral and mining rights underlying properties located
in the Salta and Mendoza provinces of Argentina (the "Argentinean Properties")
and in northeastern Peru.  In 2009, we determined that it was in our
best interest to no longer pursue the exploration and development of the
Argentinean Properties and terminated our option agreements to acquire the
mineral and mining rights underlying these properties.  We are now
exclusively pursuing the exploration and development of our property interests
in Peru.




On
October 21, 2009, we completed a reincorporation merger from the State of Nevada
to the State of Delaware.







- 5
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We are
considered an exploration or exploratory stage company because we are involved
in the examination and investigation of land that we believe may contain
valuable minerals, for the purpose of discovering the presence of ore, if any,
and its extent.  There is no assurance that a commercially viable
mineral deposit exists on any of the properties underlying our mineral property
interests, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined.  We have no known reserves of any type of
mineral.  To date, we have not discovered an economically viable
mineral deposit on any of the properties underlying our mineral property
interests, and there is no assurance that we will discover one.  If we
cannot acquire or locate mineral deposits, or if it is not economical to recover
any mineral deposits that we do find, 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, if any, 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 in the future
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
Peru Property




Our
property interests located in Peru are in the exploration stage and we refer to
these properties as the "Peru Property".  These properties are without
known reserves and the proposed plan of exploration detailed below is
exploratory in nature.  These properties are described
below.




We
entered into a Mineral Right Option Agreement with Temasek Investments Inc.
(“Temasek”), a company incorporated under the laws of Panama, on
September 29, 2008 (the “Effective Date”), as amended and supplemented by
Amendment No. 1, dated May 12, 2009 (“Amendment No. 1”), Amendment No. 2, dated
October 29, 2009 (“Amendment No. 2”), and Amendment No. 3, dated April 8, 2010
(“Amendment No. 3” and collectively, the “Option Agreement”), in order to
acquire four separate options from Temasek, each providing for the acquisition
of a twenty-five percent interest in certain mineral rights (the “Mineral
Rights”) in certain properties in Peru, that after each of the options were
exercised would result in our acquisition of an aggregate one hundred percent of
the Mineral Rights.




A
description of the Mineral Rights is set forth below:




Name
              Area
                (hectares)
              Dept.
              Province
              District
              ObservationAixa
      2
              1000
              Loreto
              Datem
      del Marañon
              MansericheAlana
      10
              900
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      11
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      12
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      13
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      14
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      15
              800
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      16
              800
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      17
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANP
   - 6
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 Table of Contents
   Alana
      18
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      19
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      4
              900
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      5
              700
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      6
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      7
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      8
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPAlana
      9
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Fully
      overlap Zona de Amortiguamiento ANPBianka
      5
              1000
              Loreto
              Datem
      del Marañon
              MansericheCastalia
      1
              1000
              Loreto
              Datem
      del Marañon
              MansericheCastalia
      2
              1000
              Loreto
              Datem
      del Marañon
              MansericheCastalia
      3
              500
              Loreto
              Datem
      del Marañon
              MansericheDelfina
      1
              900
              Amazonas
              Condorcanqui
              Nieva
              Partially
      overlap Zona de Amortiguamiento ANPDelfina
      2
              900
              Amazonas
              Condorcanqui
              Nieva
              Partially
      overlap Zona de Amortiguamiento ANPDelfina
      3
              1000
              Amazonas
              Condorcanqui
              Nieva
              Partially
      overlap Zona de Amortiguamiento ANPDelfina
      4
              700
              Amazonas
              Condorcanqui
              Nieva
              Partially
      overlap Zona de Amortiguamiento ANPDelfina
      5
              1000
              Amazonas
              Condorcanqui
              Nieva
              Partially
      overlap Zona de Amortiguamiento ANPMika
      1
              600
              Loreto
              Datem
      del Marañon
              MansericheMika
      10
              900
              Loreto
              Datem
      del Marañon
              Manseriche
              Partially
      overlap Zona de Amortiguamiento ANPMika
      2
              1000
              Loreto
              Datem
      del Marañon
              MansericheMika
      3
              900
              Loreto
              Datem
      del Marañon
              MansericheMika
      4
              1000
              Loreto
              Datem
      del Marañon
              MansericheMika
      5
              1000
              Loreto
              Datem
      del Marañon
              MansericheMika
      6
              1000
              Loreto
              Datem
      del Marañon
              MansericheMika
      7
              900
              Loreto
              Datem
      del Marañon
              MansericheMika
      8
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
              Partially
      overlap Zona de Amortiguamiento ANPMika
      9
              1000
              Loreto
              Datem
      del Marañon
              MansericheRosalba
      1
              900
              Loreto
              Datem
      del Marañon
              MansericheRosalba
      2
              900
              Loreto
              Datem
      del Marañon
              MansericheRosalba
      3
              1000
              Loreto
              Datem
      del Marañon
              MansericheRosalba
      4
              1000
              Loreto
              Datem
      del Marañon
              MansericheRosalba
      5
              1000
              Loreto
              Datem
      del Marañon
              Manseriche
      - Barranca




We
exercised the initial twenty-five percent option, which provided for the
acquisition of a twenty-five percent interest in the Mineral Rights, by paying
Temasek a total of $750,000 and issuing 2,000,000 shares of our common stock to
Temasek, on or about October 23, 2008 in accordance with the terms of the Option
Agreement.




We
exercised the second twenty-five percent option, resulting in our acquisition of
an aggregate of a fifty percent interest in the Mineral Rights, by paying
Temasek an additional $750,000 and issuing an additional 2,500,000 shares of our
common stock to Temasek, on or about November 2, 2009 in accordance with the
terms of the Option Agreement.




On April
23, 2010, we announced that we completed the exercise of the third and fourth
twenty-five percent options, resulting in our acquisition of an aggregate 100%
interest in the Mineral Rights, by fulfilling the following
conditions:




·
            Payment
      to Temasek of US$1,000,000;




·
            Issuance
      to Temasek of a total of 6,000,000 shares of our common stock (of which
      Temasek acknowledged that 2,000,000 shares were previously issued to
      Temasek in November 2009); and




·
            Issuance
      of a convertible note for US$7,000,000 (the “Convertible Note”) payable to
      the order and the direction of
Temasek.






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The
Convertible Note has a term of three years and accrues interest at a rate of 12%
per annum.  Interest under the Convertible Note is payable annually
and the principal is payable upon maturity.  Any interest and
principal due under the Convertible Note is convertible (at Temasek's option)
into units which consist of one (1) share of our common stock and one (1)
warrant to purchase one (1) share of our common stock at an exercise price of
$1.10 per share.  The conversion price per unit is fixed at $0.80 per
unit.




In
connection with our acquisition of an aggregate 100% interest in the Mineral
Rights, Temasek is entitled to an annual 2.5% net returns royalty related to 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, owns 999 shares of the 1,000 shares of
Minera Marañón that are issued and outstanding.  The single remaining
share of Minera Marañón by Temasek as nominee and on trust for our exclusive and
sole benefit and interest.  Temasek is obligated at all times to
exercise all rights in respect of the share of Minera Marañón it holds strictly
in accordance with our instructions.  The acquisition of 100% interest
in the Mineral Rights occurred through the transfer by Temasek to us of all of
the outstanding shares of Bacon Hill.




Expansion
of Peru Property




On
January 25, 2010 (the “Effective Date”), we entered into a Mineral Rights Option
Agreement (the “Option Agreement”) with Temasek.  Pursuant to the
Option Agreement, we acquired three separate options from Temasek, each
providing for the acquisition of an approximately one-third interest in certain
mineral rights (the “Mineral Rights”), in certain properties in Peru that abut
the other property interests we own in Peru described above.  Pursuant
to the Option Agreement, the exercise of all three options would result in our
acquisition of one hundred percent of the Mineral Rights.  The Mineral
Rights are currently owned by Minera Saramiriza S.A.C. (“Minera Saramiriza”), a
corporation incorporated under the laws of Peru.  Woodburn
Investments, Inc. (“Woodburn”), a wholly-owned subsidiary of Temasek, owns 999
shares of the 1,000 shares of Minera Saramiriza that are issued and
outstanding.  Temasek owns the single remaining share of
Woodburn.  Our acquisition of each thirty-three percent interest in
the Mineral Rights is structured to occur through the transfer to us of
thirty-three percent of the outstanding shares of Woodburn upon the exercise of
each of the three options.




A
description of the Mineral Rights is set forth below:




Name
            Area
      (ha)
            Department
            Province
            District
            ObservationAixa
      1
            1000
            Loreto
            Datem
      del Marañon
            MansericheAlana
      1
            600
            Loreto
            Datem
      del Marañon
            Manseriche-Morona
            Overlaps
              010188704,
      010188604, 010188504Alana
      2
            600
            Loreto
            Datem
      del Marañon
            Manseriche-
      MoronaAlana
      3
            800
            Loreto
            Datem
      del Marañon
            Manseriche
            Overlaps
      010045107Casandra
      1
            1000
            Loreto
            Datem
      del Marañon
            Barranca-MansericheCasandra
      2
            1000
            Loreto
            Datem
      del Marañon
            Barranca-
      MoronaCasandra
      3
            900
            Loreto
            Datem
      del Marañon
            Barranca-
      MoronaCasandra
      4
            1000
            Loreto
            Datem
      del Marañon
            BarrancaCasandra
      5
            1000
            Loreto
            Datem
      del Marañon
            Barranca








- 8
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We may
exercise the initial option to acquire a thirty-three percent interest in the
Mineral Rights by fulfilling the following conditions:




· Issuance
of 500,000 shares of our common stock to Temasek within thirty (30) days from
the Effective Date (issued March 19, 2010);
  · Payment
of $250,000 to Temasek within twelve months of the Effective Date;
and
  · Issuance
of 1,000,000 shares of our common stock to Temasek or its designee within twelve
months of the Effective Date.




We may
exercise the second option to acquire the second, thirty-three percent interest
in the Mineral Rights, resulting in the acquisition of a sixty-six percent
interest in the Mineral Rights, by fulfilling the following
conditions:




· Exercise
of the initial option to acquire a thirty-three percent interest in the Mineral
Rights;
  · Payment
of an additional $1,000,000 to Temasek within twenty-four months of the
Effective Date; and
  · Issuance
of an additional 1,000,000 shares of our common stock to Temasek or its designee
within twenty-four months
 from
the Effective Date.




We may
exercise the third option to acquire the final, thirty-four percent interest in
the Mineral Rights, resulting in the acquisition of a one-hundred percent
interest in the Mineral Rights, by fulfilling the following
conditions:




· Exercise
of the first and  second options to acquire an aggregate sixty-six
percent interest in the Mineral Rights;
  · Payment
of an additional $2,000,000 to Temasek within thirty-six months of the Effective
Date; and
  · Issuance
of an additional 2,000,000 shares of our common stock to Temasek or its designee
within thirty-six months from the Effective Date.




Upon our
acquisition of a 100% interest in the Mineral Rights, Temasek is entitled to an
annual 2.5% net returns royalty.  However, if we pay Temasek an
additional $2,000,000 within ninety (90) days of its acquisition of a 100%
interest in the Mineral Rights, Temasek will only be entitled to an annual 1.0%
net returns royalty from us.




If we
exercise the second, thirty-three percent option, resulting in the acquisition
of a sixty-six percent interest in the Mineral Rights, but fail to exercise the
final option and 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 required to pay Temasek an advance minimum mining royalty of $500,000
per year, which will be deducted from Temasek's net return royalty.




Exploration
Program




Shortly
after our initial acquisition of property interests in Peru in September 2008,
we commenced the initial stages of our exploration and development program and
carried out the following activities:




· Completed
an initial social base line study to document all surface rights owners and
people resident in the project area;






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· Implemented
a community relations program to inform local communities of the project and
what potential opportunities that may exist for community involvement in the
implementation phases of the development program;
  · Submitted
a Declaración de Impacto
Ambiental to the Ministry of Mines and Energy in Peru and received
approval to start the exploration;
  · Completed
the field work for the Evaluación de Impacto Ambiental
semidetallado which, if approved by the Peruvian Ministry of Mines &
Energy, will allow us to undertake extensive drilling and bulk sampling
programs;
  · Acquired
churn drilling equipment for further evaluation and development of
resources;
  · Set-up an
operational base in the project area in the town of Saramiriza to continuously
review the exploration program and prior experiences gained operating in this
difficult terrain;
  · Contracted
various consulting firms and experienced and knowledgeable individuals with
specific skills in the exploration of alluvial deposits to assist us with the
exploration and development of the Peru property; and
  · Commissioned
and subsequently received a preliminary master plan which indicated the size and
scope of our projected operations and areas where more information is
required.




The
principle objective of our planned exploration and development program is to
bring a dredge and appropriately matched floating plant onto the property to
assist us in conducting trial mining tests which requires that we undertake the
following actions:




· Drill an
area on the property where known mineralization exists at closely-spaced centers
in accordance with mining industry standards;
  · Extend
the resource though a wider-spaced program of reconnaissance drilling so as to
indicate the potential size of the deposit;
  · Perform
additional geotechnical and metallurgical studies to complement existing
information in order to prepare the optimum processing route to be adopted in
the exploitation phase; and
  · Prepare
scoping, prefeasibility, and full feasibility studies.




In the
first quarter of 2009, a churn drill and ancillary equipment were purchased in
the United States and shipped to Peru.  The equipment cost
approximately $85,000 and we acquired such funds through the issuance of
securities in private equity offerings.  After the process of
importation and transport to site, the initial phase of the drilling program on
the project commenced in late July 2009.  Drilling capabilities were
increased by the purchase of a second-hand bangka drilling rig at a cost of
$15,000.




Gold
bearing gravels were intersected in virtually all of the twenty six (26) holes
drilled as part of this initial drilling program with the better mineralized
horizons returning values in the 60 to 200 mg/m3range
(generally, grades in excess of 60 mg/m3 are
considered economically viable) with reconnaissance holes up to 15 km apart
indicating the widespread distribution of gold throughout the Marañón
basin.




Concurrent
with the drilling, pitting was carried out at locations where significant gold
mineralization was encountered in drilling.  Pitting on the same site
as one of the bangka holes gave comparable gold values for the bulk sample from
the pit and the bangka drill sample, 213 mg/m3 and
208 mg/m3
respectively, indicating that bangka drilling appears to be an effective
evaluation method.  In addition, river bank gravel outcrops and
artisanal mine workings have been channel sampled and sedimentological studies
have been carried out.  Again, virtually all samples taken in these
programs have contained some level of gold.  Channel sampling of
exposures in artisanal workings in paleo channels indicate average grades in the
range of 120 to 350 mg/m3with
local accumulations of gold up to 550 mg/m3.






- 10
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Significant
additional drilling is required to better quantify the boundaries of the
alluvial gold mineralization and identify concentrations associated with paleo
channels.  We caution that results we received in the initial phase of
the drilling program described above do not in any way indicate the presence of
a commercially viable mineral deposit.  There is no assurance that a
commercially viable mineral deposit exists on the properties underlying our
mineral property interests in Perú and a great deal of further exploration is
required before a final evaluation as to the economic and legal feasibility of
future exploration is determined.




In the
fourth quarter of 2009, we retained the services of an internationally
recognized alluvial expert to direct and monitor the on-going exploration
program, review results and ensure procedures conform to industry
standards.




Detailed
processing of the heavy mineral concentrates from the samples indicated a
relationship between gold values and magnetite content, the two minerals being
deposited together in “alluvial traps” (paleo channels) within the Marañón’s
immense braided river system.  The association of the gold with
magnetic minerals provides a potential means of locating concentrations of
mineralization.  During the first quarter of 2010, we completed ground
magnetic surveys over areas where mineralized gravels have been identified in
order to obtain a “magnetic fingerprint”.




Based on
the results from the initial phase of the drilling program and the ground
magnetic surveys, we planned a Phase II drilling campaign that commenced in
April 2010 and we anticipate will last for a duration of approximately 18
months.  If we are unable to secure additional financing in the near
future, we will be unable to sustain drilling activity for the contemplated 18
month period and be forced to cease our exploration and development
program.  In preparation for commencing this second phase of drilling
activity, we further increased our drilling capabilities by purchasing of two
additional bangka drills that were manufactured and delivered to the property
site in April 2010.  The objective of this drilling is to determine if
we can define resources of sufficient size to sustain a fleet of high capacity
dredges and floating plants in the future.  The Phase II drilling
campaign will initially consist of an aggressive five month 100-hole drill
program that will cost an estimated US$300,000.  The Phase II 100-hole
program consists of definition drilling within a 2.5 square kilometer grid
“GSDG1” situated over a large paleo channel that was successfully drilled during
the 26-hole initial phase of the drilling program referenced
above.  The grid is comprised of 4 lines, equally spaced at 250 meters
apart.  Along each line, holes are being drilled every 100 meters to
depths of up to 15 meters.  Bulk samples collected by excavating small
pits and shafts are being used for metallurgical testing as well as to confirm
drill results.  Our  plans are to expand the Phase II drill
program beyond the initial 2.5 square kilometer exploration area to other areas
of suspected high mineralization within the Peru Property that consists of a
total of 461 square kilometers.




As of late July, we had completed 53 of
the 100 holes planned in our Phase II drilling campaign.  As a result
of our progress in the Phase II drilling campaign, we have been able to identify
two large, variable-grade systems of mineralization returning values as high as
212.95 milligrams of gold per cubic meter over widths of 4.20 meters (13.77
feet).  Both systems lie near the surface.  The first system
of gold mineralization, which we refer to as “HBD-33”, was discovered near the
mid-point of GSDG1. Five holes were drilled using hand Banka drills at 20-meter
spacing. The drilling yielded average gold grades of 159.3mg/cubic meter (within
a range of 101.1 to 216.0 mg/cubic meter).  The width of the potential
pay horizons averages 3.07 meters (10.07 feet) with a range of 2.2 meters to
4.70 meters. The gold is contained in volcanic-quartz type fluvial gravels
beneath an average of only 2.73 meters (8.95 feet) of sandy
overburden.  The second system of gold mineralization, which we refer
to as “HBD-XX” trends northeast-southwest through GSDG1. Drilling, at 30-meter
spacing, during the current Phase II program outlined an average grade of 86
mg/cubic meter along a linear 110 meter (361 feet) channel with an average width
of 40 meters (131 feet).






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Based on
these results, we are working on structuring a feasibility plan to determine
whether it is economic viable at this stage to implement a pilot dredging and
processing operation as a preliminary step towards full-scale
production.  We caution that results we received as this stage of the
Phase II drilling campaign do not in any way indicate the presence of a
commercially viable mineral deposit.  Our exploration program is
building data in order to compile an estimate of probable reserves and make a
later determination as to whether a commercially viable mineral deposit exists
on the properties underlying our mineral property interests in
Perú.  A great deal of further exploration is required before a final
evaluation as to the economic and legal feasibility of future exploration is
determined.




In
addition to the foregoing, we intend to carry out the geophysical evaluation of
the property and plan to continue drilling and test pitting for a period of at
least 18 months.  We are also conducting mine development planning,
process design, and other engineering studies with a view toward completing a
feasibility study within a twenty-four month period.  Permitting is
anticipated to be initiated as early in the exploration and development cycle as
possible, so that trial or pilot dredging can be started as soon as feasibility
has been established.




In May
2010, we initiated the process for expanding our drill permits and also are
concluding the Environmental Impact permit, which will allow us to explore the
entire area that comprises the Peru Property and allow for drilling of up to 428
additional holes.




Our
current cash on hand is insufficient to complete any of the activities set forth
in our planned exploration program.  While we have commenced our
planned exploration program, we must secure additional financing in the near
future in order to be able to sustain any drilling activity or we will be forced
to cease our exploration and development program.  Provided that we
are able to secure additional financing, we anticipate that we will incur the
following costs for the next twelve months:




Activity
            
            $USDPROJECT
      COSTS:Property-related
      costs
            
            
            148,800Environmental/Social
      permits
            
            
            593,100Exploration
            
            
            1,015,094Field
      costs
            
            
            263,708Travel
      expenses
            
            
            154,160Community
      Relations
            
            
            211,429Administration
      on site
            
            
            69,857Personnel
            
            
            439,674ADMINISTRATION
            
            
            268,480EQUIPMENT
      PURCHASE
            
            
            334,000TOTAL
            
            $
            3,498,302







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Possible
Acquisition of Nevada Mineral Claims and Leasehold Interests




On April
1, 2010, we entered into a Purchase Agreement with Seabridge to acquire all of
Seabridge’s interests in certain mining claims and leasehold interests for
exploration properties located in Nevada.  The properties subject to
this transaction comprise interests in approximately 2,141 claims in Nevada
covering more than 30 exploration projects with known gold
occurrences.  Most of the claims are situated in Nevada's Walker Lane
gold belt.  Pursuant to the Purchase Agreement, the consideration to
purchase these assets from Seabridge will consist of the following: US$2,000,000
in cash (US$200,000 of which was paid to Seabridge upon execution of a letter of
intent), 3,000,000 shares of our common stock, a one-year promissory note in the
principal amount of US$1,000,000 and a two-year convertible debenture in the
principal amount of US$1,000,000.  The promissory note and debenture
each accrue interest at 8% per year.  The debenture is redeemable by
us at any time prior to maturity upon payment of $1,250,000.  If not
redeemed, the debenture and any accrued interest are convertible by Seabridge
into common shares of our common stock at $1.00 per share.  The
promissory note and the convertible debenture will be entered into by the
parties upon the closing and the shares of common stock will be delivered at
closing, along with the final cash payment of
$1,800,000.




Closing
of the transaction, was initially contemplated to occur on May 20, 2010, is
subject to Seabridge correcting or resolving to our reasonable satisfaction
certain discrepancies and deficiencies in title to certain mineral claims being
purchased, Seabridge obtaining certain authorizations, approvals and consents
necessary to transfer the assets to us, the accuracy of the parties’
representations and warranties and material performance of all of the agreements
and obligations of the parties under the terms of the asset purchase
agreement.  We can give you no assurance that these and other
conditions will ever be satisfied to allow us to close the
transaction.




The
Purchase Agreement contains certain termination rights, including the right of
either party to terminate the Purchase Agreement if the closing has not occurred
by June 20, 2010 (as long as the terminating party has performed its obligations
under the Purchase Agreement) and to terminate upon a material misrepresentation
or breach by the other party; the Purchase Agreement may also be terminated upon
mutual written consent of the parties.




On July
13, 2010, we entered into Amendment No. 1 (the "Amendment"), dated as of April
1, 2010, to the Purchase Agreement.  The Amendment, among other
things, (i) updated the list of Seabridge's interests in certain exploration
properties located in Nevada and certain contracts related thereto, which we
intend to purchase pursuant to the Purchase Agreement, and (ii) revised the
termination rights so that under the Purchase Agreement either party may
terminate the Purchase Agreement if the closing has not occurred by September
30, 2010 (as long as the terminating party has performed its obligations under
the Purchase Agreement).




In
addition, under the terms of the Amendment, we agreed to (i) pay to Seabridge
US $302,260, which amount represents the property fees due to the Bureau of
Land Management in July 2010 (the "BLM Fees") related to certain of the assets
we intend to acquire, and (ii) agreed to reimburse Seabridge for all costs (the
"Additional Holding Costs") of maintaining Seabridge's interests in the
purchased properties, including amounts paid by Seabridge under contracts
related to those properties.  The BLM fees and the reimbursement of
the Additional Holding Costs will not be credited against the purchase price to
be paid under the Purchase Agreement and are not refundable in the event that
the transactions contemplated by the Purchase Agreement are not
consummated.  In addition, in the event that the BLM Fees or the
Additional Holding Costs are not timely delivered to Seabridge, Seabridge will
have a right to terminate the Purchase Agreement.  The BLM Fees were
paid to Seabridge timely following execution of the Amendment.







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Results
of Operations for the Three and Six Months Ended June 30, 2010 and
2009




Revenues




We have
not generated any revenues from operations since our inception.




Operating
Expenses




We
incurred operating expenses in the amount of $5,535,252 for the three months
ended June 30, 2010, as compared to operating expenses of $1,938,130 for the
three months ended June 30, 2009.  We incurred operating expenses in
the amount of $6,966,298 for the six months ended June 30, 2010, as compared to
operating expenses of $4,593,868 for the six months ended June 30,
2009.  A substantial portion of our operating expenses was
attributable to an interest expenditure of $2,315,014 incurred during the three
months ended June 30, 2010, which included a charge of $2,100,000 related to
amortization of debt discount that was attributable to the beneficial conversion
feature included in the $7,000,000 convertible note issued to Temasek in
connection with our acquisition of 100% of the interest in certain properties in
Peru.  The increase in our operating expenses for the three and six
months ended June 30, 2010, as compared to the three and six months ended June
30, 2009, is primarily attributable to the aforementioned interest incurred
during the reporting period.




We
incurred exploration costs of $1,592,172 for the three months ended June 30,
2010, and exploration costs of $394,897 during the three months ended June 30,
2009.  We incurred exploration costs of $1,782,390 for the six months
ended June 30, 2010, and exploration costs of $877,048 during the six months
ended June 30, 2009.  The substantial increase in our exploration
costs for the three and six months ended June 30, 2010, as compared to the three
and six months ended June 30, 2009, is primarily attributable to the
100-hole drill program being conducted on our Peruvian Gold Sands
project.We also incurred exploration costs during the three
and six months ended June 30, 2009 relating to property interests that we were
pursuing in Argentina that were not incurred during the three and six months
ended June 30, 2010 resulting from our decision to terminate these option
agreements and exclusively pursuing the exploration and development of our
property interests in Peru.




We
reported stock-based compensation of $1,060,143 for the three months ended June
30, 2010, compared to $774,274 for the three months ended June 30, 2009. This
increase is attributable to a increase in the value of options vested during the
three months ended June 30, 2010.  We reported stock-based
compensation of $1,872,181 for the six months ended June 30, 2010, compared to
$2,271,494 for the six months ended June 30, 2009.  This decrease is
attributable to a decrease in stock-based compensation vested during the six
months ended June 30, 2010, as compared to the prior year.




We
incurred investor relations expenses of $111,736 for the three months ended June
30, 2010, compared to $355,326 for the three months ended June 30,
2009.  We incurred investor relations expenses of $204,957 for the six
months ended June 30, 2010, compared to $614,452 for the six months ended June
30, 2009.  This decrease in investor relations costs is attributable
to the utilization of more cost effective investor communication during the
three and six months ended June 30, 2010, as compared to the prior
year.




Other
Items




We
reported other losses of $1,789 for the three months ended June 30, 2010, as
compared to other income of $136,713 for the three months ended June 30,
2009.  Other losses reported during the three months ended June 30,
2010 related to foreign exchange loss.  We reported other income of
$27,476 during the six months ended June 30, 2010, as compared to other income
of $141,855 for the six months ended June 30, 2009.  Other income
reported during the six months ended June 30, 2010 relates to a foreign exchange
gain.  The substantial decrease in other income for the three and six
months ended June 30, 2010, as compared to the three and six months ended June
30, 2009, is attributable to us entering into a settlement agreement of
potential legal claims in an amount which was $135,000 less than the provision
amount for potential legal claims of $200,000 which we recorded during the three
and six months ended June 30, 2009.






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Net
Loss




As a
result of the above, for the three months ended June 30, 2010 we reported a net
loss of $4,974,388, as compared to a net loss of $1,801,407 for the three months
ended June 30, 2009.  We reported a net loss of $6,186,602 for the six
months ended June 30, 2010, as compared to a net loss of $4,452,013 for the six
months ended June 30, 2009.  This increase in our net loss was
primarily attributable increased operating expenses resulting from an interest
expenditure of $2,315,014 incurred during the three and six months ended June
30, 2010, which included a charge of $2,100,000 related to amortization of debt
discount that was attributable to the beneficial conversion feature included in
the $7,000,000 convertible note issued to Temasek in connection with our
acquisition of 100% of the interest in certain properties in Peru .However,
this increase was partially offset by a lower exploration costs and future
income tax recovery of $562,653 for the three months ended June 30, 2010 and
$752,220 for the six months ended June 30, 2010.The
future income tax recovery resulted from recognizing the benefit of tax losses
to offset the future income tax liability.




Basic
and Diluted Loss per Share




As a
result of the above, the basic and diluted loss per common share was $0.060 and
$0.030 for the three months ended June 30, 2010 and 2009,
respectively.  The basic and diluted loss per common share was $0.077
and $0.074 for the six months ended June 30, 2010 and 2009,
respectively.




Liquidity
and Capital Resources




At June
30, 2010, we had cash and cash equivalents of $272,826 (December 31, 2009 -
$205,125) and a working capital deficit of $2,884,298 (December 31, 2009 -
$1,480,730).




During
the three month period following the date of this report, we anticipate that we
will not generate any revenue.  Our proposed plan of exploration
anticipates that we will incur exploration related expenditures of approximately
$3,500,000 over the next twelve months.  We anticipate spending
approximately $200,000 in ongoing general and administrative expenses per month
for the next twelve months, for a total anticipated expenditure of $2,400,000
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.  Over the next twelve months,
we anticipate paying $250,000 in acquisition costs relating to our options on
certain properties in Peru and a final cash payment of $1,800,000 in connection
with the purchase of certain
mining claims and leasehold interests for exploration properties located in
Nevada from Seabridge.Despite our receipt of gross proceeds
of $302,250 during the reporting period and  $1,722,724 subsequent to
the reporting period from sales of our equity securities in a private placement,
we believe that our current cash on hand is insufficient to be able to make our
planned exploration expenditures, acquisition expenditures and to pay for our
general administrative expenses over the next twelve
months.  Accordingly, we must obtain additional financing in order to
continue our plan of operations during and beyond the next twelve
months.  In order to provide us with cash to meet our short-term
obligations, we entered into two loan agreements with St. Lawrence Alluvial
Services and Logistics Corp. (the “Lender”).  Under the terms of the
First Loan Agreement, dated April 1, 2010,  the Lender loaned us eight
hundred thousand dollars ($800,000) (the “First Loan”).  Under the
terms of the Second Loan Agreement, dated June 30, 2010, the Lender loaned us
three hundred twenty thousand dollars ($320,000) (the "Second Loan" and,
collectively with the First Loan, the "Loans").  The Loans will be
used to finance expenditures on mining pediments in Peru.  We agreed
to repay the First Loan within a maximum term of ninety days from the execution
of the First Loan Agreement together with interest at a rate of twelve percent
per year.  We agreed to repay the Second Loan within a maximum term of
ninety days from the execution of the Second Loan Agreement together with
interest at a rate of twelve percent per year.




Subsequent
to the reporting period, we repaid the $800,000 principal amount of the First
Loan together with interest of $32,000 and have no further obligations under the
First Loan.






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We
believe that long-term debt financing will not be an alternative for funding
additional phases of exploration as we do not have limited 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.  We are currently seeking additional funding in the form of
equity financing from the sale of our common stock, but cannot provide investors
with any assurance that we will be able to raise sufficient funding from the
sale of our common stock to fund our complete exploration program.  In
the absence of such financing, we will default on the Second Loan Agreement with
Lender and not be able to pursue our exploration program and/or maintain our
mineral property interests in good standing.  We also may be forced to
abandon our mineral property interests.   If we are unable to
raise additional capital in the near future, we will continue to 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 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




Cash
flows used in operating activities for the six months ended June 30, 2010 were
$835,671, as compared to cash flows used in operating activities of $1,505,469
for the six months ended June 30, 2009.  Our net loss of $6,186,602
for six months ended June 30, 2010 was the primary reason for our negative
operating cash flow, as compared to our net loss of $4,452,013 for the six
months ended June 30, 2009.




Cash
Used in Investing Activities




For the
six months ended June 30, 2010, we used $1,567,878 in investing activities, as
compared to $110,258 used in investing activities for the six months ended June
30, 2009.  For the six months ended June 30, 2010, we purchased
$62,787 in equipment, expended $505,091 in connection with the acquisition of
mineral property interests and paid $1,000,000 in connection with our
acquisition of 100% of the interest in certain properties in Peru, as compared
to the six months ended June 30, 2009, in which we purchased $85,258 in
equipment and expended $25,000 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 for the six
months ended June 30, 2010 was $2,471,250, as compared to $1,666,977 for the six
months ended June 30, 2009.




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.






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Going
Concern




We have
incurred net losses for the period from inception on March 6, 2000 to June 30,
2010 of $22,809,430 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 the following critical accounting estimates
affect our more significant judgments and estimates used in the preparation of
our consolidated financial statements:




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 interim consolidated financial statements, we have not established
any proven or probable reserves on its mineral properties and incurred only
acquisition and exploration costs.




Although
we have taken steps to verify title to mineral properties in which we have 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.




Equipment




Equipment
is recorded at cost and amortization is provided over its estimated economic
life at 30% or on a straight line basis over its economic life.




Website
development costs




The costs
of computer software developed or obtained for internal use, during the
preliminary project phase, as defined under ASC 350-40, "Internal-Use Software",
will be expensed as incurred.  The costs of website development during
the planning stage, as defined under ASC 350-50, "Website Development Costs",
will also be expensed as incurred.






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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.




Segments
of an enterprise and related information




ASC 280,
"Segment Reporting" establishes guidance 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.  ASC 280 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.  We have evaluated
this Codification and do not believe it is applicable at this time.




Start-up
expenses




We have
adopted ASC 720-15, "Start-Up Costs", which requires that costs associated with
start-up activities be expensed as incurred.  Accordingly, start-up
costs associated with our formation have been included in our expenses for the
period from the date of inception on March 6, 2000 to June 30,
2010.




Stock-Based
Compensation




Effective
January 1, 2006, we adopted the provisions of ASC 718, "Compensation - Stock
Compensation", which establishes accounting for equity instruments exchanged for
employee services. Under the provisions of ASC 718, 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).  We adopted
ASC 718 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 January 1, 2006 have not been restated to
reflect the fair value method of expensing share-based
compensation.  Adoption of ASC 718 does not change the way we account
for share-based payments to non-employees, with guidance provided by ASC 505-50,
"Equity-Based Payments to Non-Employees".




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 ASC 830,
"Foreign Currency Matters".  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.




Use
of Estimates




The
preparation of consolidated financial statements in conformity with GAAP
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.









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Comparative
figures




Certain
comparative figures have been adjusted to conform to the current year's
presentation.




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 June 30, 2010.  This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer, Dr. Michael Stocker, and our former Chief Financial Officer,
Mr. Kenneth Phillippe.  Based upon that evaluation, our Chief
Executive Officer and former Chief Financial Officer concluded that, as of June
30, 2010, 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 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 June 30, 2010 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.




During
the three months ended June 30, 2009, there have been no material developments
in the legal proceedings discussed in our Quarterly Report on Form 10-Q for the
period ended March 31, 2010.




Item 1A.    Risk Factors.




Not
Applicable.




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




On April
13, 2010, we issued to Temasek a convertible note for $7,000,000 (the
Convertible Note") and issued 4,000,000 shares of common stock to Temasek and
its designees, as part of the final consideration required for the exercise of
the third and fourth twenty-five percent options pursuant to the Mineral Rights
Option Agreement, dated September 29, 2008, which was amended and supplemented
by Amendment No. 1, dated May 12, 2009, Amendment No. 2, dated October 29, 2009,
and Amendment No. 3, dated April 8, 2010, resulting in our acquisition of an
aggregate 100% interest in certain mineral rights in certain properties in
Peru.  The Convertible Note has a term of three years and will accrue
interest at a rate of twelve percent per annum.  Interest under the
Convertible Note is payable annually and the principal is payable upon
maturity.  Any interest and principal due under the Convertible Note
is convertible (at Temasek's option) into units which consist of one (1) share
of our common stock and one (1) warrant to purchase one (1) share of the our
common stock at an exercise price of $1.10 per share.  The conversion price
per unit is fixed at $0.80 per unit. These securities were issued in a private
transaction and issued in reliance on the exemption provided by Section 4(2) of
the Securities Act.  We did not engage in any general solicitation or
advertising in relation to the issuance of these securities to
Temasek.  The stock certificate and Convertible Note was issued with
the appropriate legends affixed.




On
June 18, 2010, we entered into a Subscription Agreement (the “Subscription
Agreement”) with 9 accredited investors (the “Investors”), pursuant to which we
sold to the Investors an aggregate of 464,997 units (the “Units”) at a purchase
price of $0.65 per Unit (the “Unit Price”) in an initial closing of a private
placement (the “Private Placement”).  The aggregate purchase price we
received from the sale of these Units was $302,250.  Subsequent to the
reporting period on August 6, 2010, we also entered into a Subscription
Agreement with 46 accredited Investors, pursuant to which we sold to the
Investors an aggregate of 2,650,344 at the Unit Price in a second closing of the
Private Placement. The aggregate purchase price we received from the sale of
these Units was $1,722,724.  Each unit is comprised 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 our common stock, exercisable
commencing six months from the closing date of the offering and terminating one
year from the closing date of the offering.  The exercise price for the
Warrant is priced at $0.80 per share.  No registration rights were
granted to any of the investors who purchased Units.




As a
result, we sold in the Private Placement during the reporting period a total of
464,997 shares of common stock and warrants to purchase 464,997 shares of common
stock and we sold in the Private Placement subsequent to the reporting period a
total of 2,650,344 shares of common stock and warrants to purchase 2,650,344
shares of common stock.




In
consideration for services rendered by R. F. Lafferty & Co., Inc., as the
placement agent (the “Placement Agent”) in the Private Placement, we paid the
Placement Agent on June 21, 2010 cash commissions of $18,135, which represents
6% of the gross proceeds of the initial closing of the Private Placement,
expenses of $5,000 and issued to the placement agent Warrants to purchase
27,899 shares of the our common stock, which is equal to 6% of the Units
sold in the initial closing of the Private Placement.  In
consideration for services rendered as the placement agent in the Private
Placement, we paid the Placement Agent on August 9, 2010 cash commissions of
$103,363, which represents 6% of the gross proceeds of the second closing of the
Private Placement and issued to the Placement Agent Warrants to purchase
159,020 shares of the our common stock, which is equal to 6% of the Units
sold in the second closing of the Private Placement.  The Warrants
issued to the Placement Agent have the same terms and conditions as the Warrants
sold to Investors in the Private Placement.






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The Units
offered and sold in connection with this Private Placement were in reliance on
the exemption provided by Section 4(2) of the Securities Act of 1933, as
amended (the “Securities Act”), or Regulation D promulgated thereunder.  In
connection with this Private Placement, we relied on each Investors’ written
representations.  Sales were made only to Investors who represented
that they were “accredited investors” as that term is defined in Rule 501(a)
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. 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.




During
the reporting period, we issued 54,285 shares of our common stock to 5
accredited investors who exercised warrants to purchase shares of our common
stock that were issued in a prior private placement.  These warrants
had an exercise price of $0.70 and the aggregate purchase price we received from
the exercise of these warrants and the sale of the underlying shares of common
stock was $38,000. These shares were offered and sold in a private transaction
and issued in reliance on the exemption provided by Section 4(2) of the
Securities Act.  We did not engage in any general solicitation or
advertising in relation to the issuance of these
shares.




Item 3.   Defaults upon
Senior Securities.




None.




Item 4.    (Removed and
Reserved).




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:
            August
      16, 2010By: /s/  Michael
      Stocker
              Michael
      Stocker
              Title:Chief
      Executive Officer and DirectorDate:
            August
      16, 2010By: /s/  Peter
      Wiget
              Peter
      Wiget
              Title:Chief
      Financial Officer and Director















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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 June 30, 2010




Exhibit
              No.
            Description
            Incorporated
      Herein
              by
      Reference to
            Filed
              Herewith3.1
            Certificate
      of Incorporation
            Exhibit
      2.1 of Form 8-K filed on October 23, 20093.2
            Bylaws
            Exhibit
      2.1 of Form 8-K filed on October 23, 200910.1
            Mineral
      Right Option Agreement, dated September 29, 2008, between Temasek
      Investments Inc.
              and
      Constitution Mining Corp.
            Exhibit
      10.1 of Form 8-K filed on September 29, 200810.2
            Amendment
      No. 1 to Mineral Right Option Agreement, dated September 29, 2008,
              between
      Temasek Investments Inc. and Constitution Mining Corp.
            Exhibit
      10.1 of Form 10-Q filed on May 15, 200910.3
            Second
      Amendment to Mineral Right Option Agreement, dated September 29, 2008,
              between
      Temasek Investments Inc. and Constitution Mining Corp.
            Exhibit
      10.1 of Form 8-K filed on November 3, 200910.4
            Third
      Amendment to Mineral Right Option Agreement, dated September 29, 2008,
              between
      Temasek Investments Inc. and Constitution Mining Corp.
            Exhibit
      10.4 of Form 8-K filed on April 13, 201010.5
            Mineral
      Right Option Agreement with Temasek Investments, Inc., dated January 25,
      2010.
            Exhibit
      10.1 of Form 8-K filed January 27, 2010.10.6
            Purchase
      Agreement, dated April 1, 2010, made among Seabridge Gold Corporation,
              Pacific
      Intermountain Gold Corporation, Seabridge Gold Inc., and
      Registrant
            Exhibit
      10.1 of Form 8-K filed on April 5, 201010.7
            Loan
      Agreement between Registrant and St. Lawrence Alluvial Services
              and
      Logistics Corp., dated April 1, 2010.
            Exhibit
      10.1 of Form 8-K filed on April 7, 201010.8
            Third
      Amendment to Mineral Right Option Agreement, dated April 8,
      2010.
            Exhibit
      10.4 of Form 8-K filed on April 13, 201010.9
            Consulting
      Agreement between Michael Stocker and Constitution Mining Corp.,
              dated
      January 29, 2010
            Exhibit
      10.9 of Form 10-Q filed on May 17, 201010.10
            Consulting
      Agreement between Kenneth Phillippe and Constitution Mining Corp.,
              dated
      January 29, 2010
            Exhibit
      10.10 of Form 10-Q filed on May 17, 201010.11
            Consulting
      Agreement between Gary Artmont and Constitution Mining Corp.,
              dated
      January 29, 2010
            Exhibit
      10.11 of Form 10-Q filed on May 17, 201010.12
            Consulting
      Agreement between Vittoria Finance Ltd. and Constitution Mining Corp.,
              dated
      January 29, 2010
            Exhibit
      10.12 of Form 10-Q filed on May 17, 201010.13
            Amendment
      No. 1, dated as of July 13, 2010, to Asset Purchase Agreement
              between
      Seabridge Gold Corporation, Pacific Intermountain Gold Corporation,
              Seabridge
      Gold Inc., and Constitutions Mining Corp., dated April 1,
    2010
            Exhibit
      10.2 of Form 8-K filed on July 14, 201010.14
            Loan
      Agreement between St. Lawrence Alluvial Services and Logistics Corp.
              and
      Constitution Mining Corp., dated June 30, 2010
            Exhibit
      10.1 of From 8-K filed on July 15, 201031.1
            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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