UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.  20549





FORM 20-F





[ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934





OR


[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE   ACT OF 1934


For the fiscal year ended December 31, 2011





OR


[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ___________ to __________





OR





[ ]  SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Date of event requiring this shell company report: ______





Commission File Number: 000-51337





RUSH EXPLORATION INC.


(f/k/a RUSH METALS CORP.)





(Exact name of Registrant as specified in its charter)





Alberta, Canada


(Jurisdiction of incorporation or organization)





11215 Jasper Avenue, Suite 505, Edmonton, Alberta, Canada T5K 0L5


(Address of principal executive offices)





Securities to be registered pursuant to Section 12(b) of the Act:





None





Securities to be registered pursuant to Section 12(g) of the Act:





Common Stock, Fully Paid and Non-Assessable Common Shares, Without Par Value


(Title of Class)





Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None





Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: The registrant has one class of Common Stock with 266,152 shares outstanding as of December 31, 2011 and April 27, 2012.  No preferred shares issued and outstanding.





1





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act   Yes [  ]  No [X]





If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes [  ] No [X]





Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.  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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days.  Yes [X]  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). Yes [ X ]  No [   ]





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





Large accelerated filer  [  ] Accelerated filer  [  ] Non-accelerated filer [X]





Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:





U.S. GAAP [ X ]
International Financial Reporting Standards as issued by the International Accounting Standards Board [  ]
Other [  ]





If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.


Item 17 [  ] Item 18 []





If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes [  ]  No [X]





(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)





Indicate by check mark whether the Registrant has filed all documents and reports to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


Yes [  ] No [   ]


2





RUSH EXPLORATION INC.





FORM 20-F ANNUAL REPORT 2011





TABLE OF CONTENTS





Mining Glossary
4Introduction
5Part IItem 1.
Identity of Directors, Senior Management and Advisors
6Item 2.
Offer Statistics and Expected Timetable
6Item 3.
Key Information
6Item 4.
Information on the Company
16Item 4A.
Unresolved Staff Comments
21Item 5.
Operating and Financial Review and Prospects
21Item 6.
Directors, Senior Management and Employees
26Item 7.
Major Shareholders and Related Party Transactions
31Item 8.
Financial Information
33Item 9.
The Offer and Listing
34Item 10.
Additional Information
35Item 11.
Quantitative and Qualitative Disclosures About Market Risk
39Item 12.
Description of Other Securities Other Than Equity Securities
40Part IIItem 13.
Defaults, Dividend Arrearages and Delinquencies
41Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
41Item 15.
Controls and Procedures
41Item 16.
Reserved
42A
Audit Committee Financial Expert
42B
Code of Ethics
42C
Principal Accountant Fees and Services
43D
Exemptions from the Listing Standards for Audit Committees
43E
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
43F
Change In Registrants Certifying Accountant
43G
Corporate Governance
43H
Mine Health and Safety, Conflict Minerals and Government Payments
43Part IIIItem 17.
Financial Statements
44Item 18.
Financial Statements
44Item 19.
Exhibits
61Financial Statements
45Signature PageCertifications





3


Mining Glossary





Au:
GoldBreccia:
Rock composed of sharp-angled fragments embedded in a fine-grained matrix.Deposit:
A mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures. Such a deposit does not qualify as a commercially mineable ore body or as containing reserves of ore, unless final legal, technical, and economic factors are resolved.Hectare:
A unit of area in the metric system equal to 100 acres, or 10,000 square meters, and the equivalent of 2.471 acres in British Imperial and U.S. Customary measure.Mineralized material:
Tonnage and grade estimate for non-reserve materials where sampling and geologic understanding is sufficient for classification as reserves, but that may not pass the economic test.Ore:
A natural aggregate of one or more minerals which, at a specified time and place, may be mined and sold at a profit or from which some part may be profitably separated.Quartz:
A common mineral, silicon dioxide, occurring in crystals and grains.Stratigraphy:
The arrangement of rock strata, especially as to geographic position and chronological order of sequence.





4





INTRODUCTION





We were formed as a corporation under the federal laws of Canada pursuant to the Canada Business Corporations Act on August 8, 2003. We are an exploration stage Company engaged principally in the acquisition, exploration, and if warranted and feasible, development of natural resource properties in North America.  On September 13, 2011 at an annual meeting of shareholders, a majority of the Company’s shareholders approved a change in name of the Company to Rush Exploration Inc.





In this Annual Report, the “Company”, “Rush Exploration Inc.”, “Rush Metals Corp.”, “Rush”, "we", "our", and "us", refer to Rush Exploration Inc.. (unless the context otherwise requires).  Summary discussions of documents referred to in this Annual Report may not be complete, and we refer you to the actual documents for more complete information.  Our principal corporate offices are located at Suite 505, 11215 Jasper Avenue, Edmonton, Alberta T5K 0L5.





BUSINESS OF RUSH EXPLORATION INC.





Rush Exploration Inc. is principally engaged in the acquisition and exploration of mineral properties. The Company currently has entered into one property option agreement relating to a property in British Columbia, Canada.





FINANCIAL AND OTHER INFORMATION





In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).





FORWARD-LOOKING STATEMENTS





Certain of the information contained in this Form 20-F Annual Report constitutes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated by reference in this Form 20-F Annual Report, including, without limitation, current expectations and projections about future events and financial trends affecting our business are forward-looking statements.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” "should,"
“will,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “believe,” or “continue” or the negative thereof or variations thereon or similar terminology.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of our company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include those discussed in the section entitled "Risk Factors".





Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, prospective investors should not place undue reliance on forward-looking statements.  The forward-looking statements in this Form 20-F Annual Report speak only as to the date hereof.  We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated
events.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.








5


PART I





ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS





--- Not applicable ---





ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.





--- Not applicable ---





ITEM 3.  KEY INFORMATION.





3.A Selected Financial Data





Set forth in the following table is selected financial data with respect to our financial condition and results of operation for the fiscal years ended December, 31, 2011, 2010, 2009, 2008 and 2007 and was derived from the audited financial statements of the Company and  prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP).





The financial statements and summaries of financial information contained in this annual report are reported in Canadian dollars unless otherwise stated. All such financial statements have been prepared in accordance with United States generally accepted accounting principles.





The financial statements of our Company have been audited by Peterson Sullivan LLP, a registered public accounting firm, as indicated in their audit reports, included elsewhere in this Annual Report.





The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Annual Report.


6





Table No. 1


Selected Financial Data


(CDN$)








Year


Year


Year


Year


YearEnded

12/31/11


Ended

12/31/10


Ended

12/31/09


Ended

12/31/08


Ended

12/31/07Revenue

$Nil


$Nil


$Nil


$Nil


$NilExpenses

$
(41,541
)

$
(28,373
)

$
(211,589
)

$
67,942


$
(317,561
)Income (Loss) from operations

$
(41,541
)

$
(28,373
)

$
(211,589
)

$
67,942


$
(317,561
)Net Income/(Loss)

$
(41,831
)

$
(28,791
)

$
(226,149
)

$
99,506


$
(311,873
)Basic (Loss) Income Per Share

$
(0.16
)

$
(0.07
)

$
(0.54
)

$
0.24


$
(0.75
)Dividends Per Share

$Nil


$Nil


$Nil


$Nil


$NilWeighted Avg. Shares


266,152



400,715



418,235



416,139



416,139Period-end Shares


266,152



266,152



426,139



416,139



416,139Working Capital (deficiency)

$
(41,234
)

$
597


$
26,021


$
152,170


$
32,679Long-Term Debt

$Nil


$Nil


$Nil


$Nil


$NilAccumulated deficit during the exploration

stage

$
1,043,586


$
1,001,755


$
784,442


$
902,352


$
900,261Shareholders’ Equity (Capital Deficit)

$
(41,234
)

$
597


$
29,388


$
155,537


$
53,940Total Assets

$
9,228


$
20,226


$
53,024


$
177,823


$
84,334








3.A.3.  Exchange Rates





In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$), therefore, this annual report may contain conversions of certain amounts in United States dollars into Canadian dollars based upon the exchange rate in effect at the end of the month or of the fiscal year to which the amount relates, or the exchange rate on the date specified. For such purposes, the exchange rate means the noon buying rate for United States dollars from the Bank of Canada. These translations should not be construed as representations that the
Canadian dollar amounts actually represent such United States dollar amounts or that Canadian dollars could be converted into United States dollars at the rate indicated or at any other rate.





Table No. 2 sets forth the exchange rates for the Canadian Dollar at the end of each of the three fiscal years ended December 31, 2011, 2010, and 2009, 2008, 2007 and the average rates for the period and the range of high and low rates for the period.  The data for April, 2012 and for each month during the most recent six months is also provided.





7





Table No. 2


U.S. Dollar/Canadian Dollar








Period
Average
High
Low
CloseApril 2012
0.96
0.97
0.95
0.95March 2012
0.98
0.99
0.97
0.97February 2012
0.99
1.00
0.97
0.97January 2012
0.99
1.00
1.00
1.00December 2011
1.01
1.00
0.99
0.99November 2011Fiscal Year Ended December 31, 2011
1.08
0.92
1.18
1.04Fiscal Year Ended December 31, 2010
1.01
1.00
0.99
0.99Fiscal Year Ended December 31, 2009
1.14
1.03
1.30
1.05Fiscal Year Ended December 31, 2008
1.07
0.97
1.30
1.22Fiscal Year Ended December 31, 2007
1.07
0.91
1.19
0.98





3.B.  Capitalization and Indebtedness





--- Not applicable ---





3.C.  Reasons for the Offer and Use of Proceeds





--- Not applicable ---





3.D.  Risk Factors





This investment has a high degree of risk.  Before you invest you should carefully consider the risks and uncertainties described below and the other information in this prospectus.  If any of the following risks actually occur, our business, operating results and financial condition could be harmed and the value of our stock could go down.  This means you could lose all or a part of your investment.





RISKS RELATING TO OUR COMPANY





1.           Our auditors’ opinion on our December 31, 2011 financial statements includes an explanatory paragraph in respect of there being substantial doubt about our ability to continue as a going concern.





We have incurred an accumulated net loss of $1,043,586 for the periods ending December 31, 2011, since inception.  We anticipate generating losses for at least the next 12 months.  Therefore, there is substantial doubt about our ability to continue operations in the future as a going concern as described by our auditors with respect to the financial statements for the year ended December 31, 2011.  Our financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.





Our plans to deal with this uncertainty include raising additional capital or entering into a strategic arrangement with a third party. If we cannot continue as a viable entity, our shareholders may lose some or all of their investment in our company.





8





2.           As only our Director, Messr. Coale has technical training or experience in exploring for, starting, and operating a mine, we will have to hire qualified consultants. If we cannot locate qualified consultants, we may have to suspend or cease operations which will result in the loss of your investment.





Only our Director, Messr. Coale has experience with exploring for, starting, and operating a mine. Except for this individual, our Executive Officer and Directors do not have any technical training or experience in exploring for, starting, and operating a mine. As such, we will have to hire qualified consultants to perform surveying and exploration of our properties. Our other Directors have no direct training or experience in these areas and as a result may not be fully aware of many of the specific requirements related to working within the industry. Their decisions and choices may not take into account standard engineering or managerial approaches, mineral exploration companies commonly use. Consequently our
operations, earnings and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry. As a result we may have to suspend or cease operations which will result in the loss of your investment.





3.           Not all of our properties have been examined by a professional geologist or mining engineer and we have no known mineral reserves on any of our properties. Without mineral reserves we cannot generate income, and if we cannot generate income we will have to cease operations.





The Mammoth property has not been examined by a professional geologist or a mining engineer.  As such, we have no known mineral reserves on our property. Without mineral reserves, we have nothing to economically remove. If we have nothing to economically remove from our property, we cannot generate income and in such a situation, we will have to cease operations which will result in the loss of your investment.





4.           Weather interruptions in the Province of British Columbia may delay our proposed exploration operations. Such delay will extend the time when we may be able to generate revenues.





Our proposed exploration work on the Mammoth Property can only be performed approximately five to six months out of the year. This is because rain and snow cause travel to our claims to be difficult during six to seven months of the year. During the winter, we are unable to conduct exploration operations on the Mammoth Property. This could delay exploration and subsequent removal of any mineralized material, should any be discovered. As a result of the delay in removing mineralized material, no revenue will be generated by us, which will result in the loss of your investment.





5.           Since our Directors and Executive Officer have other outside business activities and will only be able to devote approximately 20% of their time to our operations, our operations may be sporadic and only occur at times which are convenient to Messrs. Diakiw, Coale, and Daems. As a result, exploration of our properties may be periodically interrupted or suspended.


Since our Directors and Executive Officer have other outside business activities and will only be devoting 20% of their time to our operations, our operations may be sporadic and only occur at times which are convenient to Messrs. Diakiw, Coale, and Daems. As a result, exploration of our properties may be periodically interrupted or suspended.





6.           If we are unable to obtain additional funding, our business operations will be harmed.  Even if we do obtain additional financing our then existing shareholders may suffer substantial dilution.





We will require additional funds to meet our obligations under our existing property option agreements and to acquire and develop interests in new properties that we want to explore for natural mineral resources in the future. We anticipate that we will require up to approximately $695,000 to fund our continued operations for the next twelve months. Additional capital will be required to effectively support the operations and to otherwise implement our overall business strategy. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations.  If we are unable to obtain additional financing, we will likely be required to
curtail our development plans which could cause the company to become dormant. Any additional equity financing may involve substantial dilution to our then existing shareholders.





7.           If we do not continue to make payments under our Property Option Agreement for our property, we will lose our interest in the properties as well as losing all monies incurred in connection with the properties.





Under our Property Option Agreement, we have currently secured the right to acquire a 100% interest in the Mammoth property.  Pursuant to the Option Agreement, we may continue to exercise the option only by making a series of annual cash payments and incurring net expenditures on the property.  See the Property option agreement description located in the section entitled “Section 4.D - Property Plant, and Equipment” of this 20-F for a more detailed description of the Option Agreement.





If we do not make the required payments or incur the required expenditures in accordance with the Option Agreement we will lose our option to purchase the respective property and may not be able to continue to execute our business objectives if we are unable to find an alternate exploration interest. As of April 30, 2012, we are in default of our property option agreement; however, the optionor of the Property Option Agreement, a related party, has agreed to not revoke our option at this time. This may change if we continue to be in default.





8.           Because our business involves numerous operating hazards, we may be subject to claims of a significant size which would cost a significant amount of funds and resources to rectify. This could force us to cease our operations, which will cause you a loss of your investment.





Our operations are subject to the usual hazards inherent in exploring for minerals, such as general accidents, explosions, chemical exposure, and craterings.  The occurrence of these or similar events could result in the suspension of operations, damage to or destruction of the equipment involved and injury or death to personnel. Operations also may be suspended because of machinery breakdowns, abnormal climatic conditions, failure of subcontractors to perform or supply goods or services or personnel shortages. The occurrence of any such contingency would require us to incur additional costs and force us to cease our operations, which will cause you a loss of your investment.





9.           Damage to the environment could also result from our operations.  If our business is involved in one or more of these hazards, we may be subject to claims of a significant size which could force us to cease our operations.





Mineral resource exploration, production and related operations are subject to extensive rules and regulations of federal, provincial, state and local agencies.  Failure to comply with these rules and regulations can result in substantial penalties.  Our cost of doing business may be affected by the regulatory burden on the mineral industry since the rules and regulations frequently are amended or interpreted.  We cannot predict the future cost or impact of complying with these laws.





Failure to comply with these rules and regulations can result in substantial penalties.  Our cost of doing business may be affected by the regulatory burden on the mineral industry. We believe that compliance with the laws will not adversely affect our business operations.





Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulation could expand and have a greater impact on future mineral exploration operations.  Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the cost of which could harm our results of operations.  We cannot be sure that our proposed business operations will not violate environmental laws in the future.





9





Our operations and properties are subject to extensive federal, state, provincial and local laws and regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. These laws and regulations may do any of the following: (i) require the acquisition of a permit or other authorization before exploration commences, (ii) restrict the types, quantities and concentration of various substances that can be released into the environment in connection with exploration activities, (iii) limit or prohibit mineral exploration on certain lands lying within wilderness, wetlands and other
protected areas, (iv) require remedial measures to mitigate pollution from former operations and  (v)  impose substantial  liabilities  for  pollution  resulting  from  our  proposed operations.





The exploration of mineral reserves are subject to all of the usual hazards and risks associated with mineral exploration, which could result in damage to life or property, environmental damage, and possible legal liability for any or all damages. The exploration activities may be subject to prolonged disruptions due to the weather conditions surrounding the location of the Mammoth Property.  Difficulties, such as unusual or unexpected rock formations encountered by workers but not indicated on a map, or other conditions may be encountered in the gathering of samples and information, and could delay our exploration program.  Even though we are at liberty to obtain insurance against certain
risks in such amounts we deem adequate, the nature of those risks is such that liabilities could over exceed policy limits or be excluded from coverage.  We do not currently carry insurance to protect against these risks and we may not obtain such insurance in the future.  There are also risks against which we cannot, or may not elect to insure.  The costs, which could be associated with any liabilities, not covered by insurance or in excess of insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, thereby hurting our financial position, future earnings, and/or competitive positions.  We may not have enough capital to continue operations and you will lose your investment.





10.
Because of the speculative nature of exploration and development, there is a substantial risk that our business will fail.





The search for valuable natural resources on our properties is extremely risky as the exploration for natural resources is a speculative venture involving substantial risk. Few properties that are explored are ultimately developed into producing mines. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  Because the probability of an individual prospect ever having reserves is extremely remote, in all probability our properties do not contain any reserves, and any funds we spent on exploration will probably be lost. In such a case, we would be unable to complete our business plan.





Mineral exploration involves a high degree of risk and exploration projects are frequently unsuccessful.  To the extent that we continue to be involved in mineral exploration, the long-term success of our operations will be related to the cost and success of our exploration programs. The risks associated with mineral exploration include:





·
the identification of potential mineralization  based on superficial analysis;





·
the quality of our management and our geological and technical expertise; and





·
the capital available for exploration and development.





Substantial expenditures are required to determine if a project has economically mineable mineralization.  It may take several years to establish proven and probable reserves and to develop and construct mining and processing facilities. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.  In such a case, we would be unable to develop our business.





10





11.
We may not be able to compete with current and potential exploration companies, some of whom have greater resources and experience than we do in developing mineral reserves.





The natural resource market is intensely competitive, highly fragmented and subject to rapid change.  We may be unable to compete successfully with our existing competitors or with any new competitors.  We compete with many exploration companies which have significantly greater personnel, financial, managerial, and technical resources than we do. This competition from other companies with greater resources and reputations may result in our failure to maintain or expand our business.





12.
If we lose the services of any of our management team we may not be able to continue to operate our business and may be required to cease operations.





We are presently dependent to a great extent upon the experience, abilities and continued services of Keith Diakiw, our Director, Chairman, President, Chief Executive Officer and Operating Officer. Mr. Diakiw, who currently spends approximately 1 day per week working on the Company’s business, has an extensive background in the natural resource exploration industry and the loss of his services would negatively impact our operations. If we lost the services of this individual we would be forced to find other qualified management to assist us in location and exploration of a property. This would be costly to us in terms of both time and expenses.  We do not maintain an employment agreement with Mr.
Diakiw nor do we have key-man life insurance on him. Therefore, if we were unable to replace the services and experience of Mr. Diakiw, we may be forced to discontinue our operations.





13.
The prices of metals are highly volatile and a decrease in metals prices could result in us incurring losses.





The profitability of natural resource operations are directly related to the market prices of the underlying commodities.  The market prices of metals fluctuate significantly and are affected by a number of factors beyond our control, including, but not limited to, the rate of inflation, the exchange rate of the dollar to other currencies, interest rates, and global economic and political conditions.  Price fluctuations in the metals markets from the time development of a mine is undertaken and the time production can commence can significantly affect the profitability of a mine.  Accordingly, we may begin to develop a mineral property at a time when the price of the underlying metals
make such exploration economically feasible and, subsequently, incur losses because metals prices have decreased.  Adverse fluctuations of metals market price may force us to curtail or cease our business operations.





14.
Our principal stockholders, Officer and Directors own a controlling interest in our voting stock and investors will not have any voice in our management, which could result in decisions adverse to our general shareholders.





Our Officer and Directors, in the aggregate, beneficially own approximately, or have the right to vote, 52.6% of our outstanding common stock.  As a result, these stockholders, acting together, will have the ability to control substantially all matters submitted to our stockholders for approval including:





·
election  of  our  Board  of  Directors;


·
removal  of  any  of  our  Directors;


·
amendment  of  our  Articles of Incorporation  or  bylaws;  and


·
adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.





11





As a result of their ownership and positions, our Directors and Executive Officer collectively are able to influence all matters requiring shareholder approval, including the election of Directors and approval of significant corporate transactions. In addition, sales of significant amounts of shares held by our Directors and Executive Officer, or the prospect of these sales, could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in the Company may decrease.  Management's stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of
us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.





15.
We are an exploration stage company and the probability that commercially viable deposits or "reserves" exists in the property is extremely remote.





We are an exploration stage company with no known commercially viable deposits, or "reserves" on our properties. Therefore, determination of the existence  of  a  reserve  will  depend  on appropriate  and  sufficient  exploration  work  and the  evaluation  of  legal, economic, and environmental  factors. If we fail to find a commercially viable deposit on any of our properties our financial condition and results of operations will suffer.  If we cannot generate income from the properties we will have to cease operation which will result in the loss of
your investment.





16.
We may not have the funds to purchase all of the supplies, manpower and materials we need to begin exploration which could cause us to delay or suspend operations.





Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, manpower and certain equipment such as bulldozers and excavators that we might need to conduct exploration. If there is a shortage or scarcity, we cannot compete with larger companies in the exploration industry for supplies, manpower and equipment.  In the event that the prices for such resources rise above our affordability levels, we may have to delay or suspend operations.  In the event we are forced to limit our exploration activities, we may not find any minerals, even though our properties may contain mineralized material. Without any minerals we cannot generate
revenues and you may lose your investment.





17.
Because of the early stage of development and the nature of our business, our securities are considered highly speculative.





Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of exploring and, if warranted and feasible, developing natural resource properties.  Our current properties are in the exploration stage only and are without known reserves of natural resources.  Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term.  Any profitability in the future from our business will be dependent upon locating and developing economic
reserves of natural resources, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.





12





18.
It is possible that there may be native or aboriginal claims to our property, which could result in us incurring additional expenses to explore our properties.





Although we believe that we have the right to explore our properties, we cannot substantiate that there are no native or aboriginal claims to the properties. Native groups have made extensive land claims to large areas of land within British Columbia and various parts of the United States.  The status of such claims is uncertain, and has not been resolved despite lengthy and expensive court proceedings.  If a native or aboriginal claim is made to any of our properties, it would negatively affect our ability to explore this property as we would have to incur significant legal fees protecting our right to explore the property. We may also have to pay third parties to settle such
claims.  If it is determined that there is a legitimate claim to any of our properties then we may be forced to return this property without adequate consideration.  Even if there is no legal basis for such claim, the costs involved in resolving such matter may force us to delay or curtail our exploration completely.  When we make the application to commence our exploration activities, representatives of Native groups will have the right to participate in, or may be consulted in, review by regulatory authorities of our proposed mining operations.  If this occurs, we may have to incur additional resources and it may take longer to obtain the required permits.





RISKS RELATING TO OUR COMMON SHARES





19.
We may, in the future, issue additional common shares, which would reduce investors’ percent of ownership and may dilute our share value.





Our Articles of Incorporation authorize the issuance of an unlimited number of common shares without par value and an unlimited number of preferred shares without par value.  The future issuance of our unlimited authorized common shares may result in substantial dilution in the percentage of our common shares held by our then existing shareholders. We may value any common shares issued in the future on an arbitrary basis.  The issuance of common shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common shares.





Our common shares are subject to the "Penny Stock" Rules of the SEC and we have no established market for our securities, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.





Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated there under by the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account.  These rules may have the effect of reducing the level of trading activity in the secondary market, if and when one develops.  Potential investors in the Company’s common stock are urged to obtain and read such disclosures carefully before purchasing any shares that are deemed to be "penny
stock."  Moreover, the Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than USD $5.00 per share or with an exercise price of less than USD $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require:





•
that a broker or dealer approve a person's account for transactions in penny stocks; and


•
the broker or dealer  receives from the investor a written  agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.





In order to approve a person's account for transactions in penny stocks, the broker or dealer must:





•
obtain financial information and investment experience objectives of the person; and


•
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating  the  risks of  transactions in penny stocks.


13





The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:





•
sets  forth  the  basis on  which  the  broker  or  dealer  made the suitability  determination;  and


•
that the broker or dealer received a signed, written agreement from the  investor  prior  to  the  transaction.





Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules.  This may make it more difficult for investors to dispose of our common shares and cause a decline in the market value of our stock.





Pursuant to the Penny Stock Reform Act of 1990, broker-dealers are further obligated to provide customers with monthly account statements. Compliance with the foregoing requirements may make it more difficult for investors in the Company's stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.





20.
We have registered a significant number of common shares underlying our warrants and stock options that may be available for future sale.  The sale of these shares may depress the market price of our Common shares and shareholders could suffer a loss on their investment.





As of June 29, 2011, we had 266,152 common shares issued and warrants outstanding to purchase an aggregate of 311,634 common shares and stock options outstanding to purchase an aggregate of 250 common shares.  All of these shares and those shares underlying the warrants have been registered and may be sold without restriction.  If such warrants are exercised in full and converted to common shares, our shareholders may experience a decline in the price of our common shares as such common shares are sold into the open market.  If such decline in the price of our common shares were to materialize, shareholders could suffer a loss on their investment.





21.
There is no current trading market for our securities and if a trading market does not develop, purchasers of our securities may have difficulty selling their shares.





In April 2008 we applied to have our common stock quoted on the OTC Bulletin Board and received approval on the OTC Bulletin Board under the symbol AGRUF:OTC:BB. On January 30, 2012, our trading symbol was changed to REXEF:OTCQB to reflect the name change from Rush Metals Corp. to Rush Exploration Inc.  There is currently no established public trading market for our securities and an active trading market in our securities may not develop or, if developed, may not be sustained.    If for any reason a public trading market does not otherwise develop, purchasers of the shares may have difficulty selling their common shares should they desire to do so.





22.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the Company’s common shares.





Secondary trading in the Company’s common stock will not be possible in any state until the common shares are qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common shares in any particular state, the common shares could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common shares, the liquidity for the common shares could
be significantly impacted thus causing you to realize a loss on your investment.





14





23.
We are a “foreign private issuer”, and you may not have access to the information you could obtain about us if we were not a “foreign private issuer”.





We are considered a "foreign private issuer" under the Securities Act of 1933, as amended. As an issuer incorporated in Canada, we will be required to prepare our annual and interim financial statements in accordance with Canadian Generally Accepted Accounting Principles. For purpose of our annual disclosure obligations in the United States, we will annually file in the United States financial statements prepared in accordance with Canadian GAAP together with a reconciliation to US GAAP.  In addition, as a foreign private issuer we will not have to file quarterly reports with the SEC nor will our Directors, Officer and 10% stockholders be subject to Section 16(b) of the Exchange Act. As a foreign private
issuer we will not be subject to the proxy rules of Section 14 of the Exchange Act. Furthermore, Regulation FD does not apply to non-U.S. companies and will not apply to us. Accordingly, you may not be able to obtain information about us as you could obtain if we were not a “foreign private issuer”.





24.
Because we do not intend to pay any cash dividends on our common shares, our stockholders will not be able to receive a return on their shares unless they sell them.





We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common shares in the foreseeable future.  Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.





25.
We may become a passive foreign investment company, or PFIC, which could result in adverse U.S. tax consequences to U.S. investors.





If we are a “passive foreign investment company” or “PFIC” as defined in Section 1297 of the Code, U.S. Holders will be subject to U.S. federal income taxation under one of two alternative tax regimes at the election of each such U.S. Holder. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States and either (i) 75% or more of its gross income for the taxable year is “passive income”, which generally includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if we elect, adjusted tax basis), of its assets that produce or are held for the production of “passive income”
is 50% or more. Whether we are a PFIC in any year and the tax consequences relating to PFIC status will depend on the composition of our income and assets, including cash. U.S. Holders should be aware, however, that if we become a PFIC, it may not be able or willing to satisfy record-keeping requirements that would enable U.S. Holders to make an election to treat us as a “qualified electing fund” for purposes of one of the two alternative tax regimes applicable to a PFIC. We strongly urge U.S. holders or potential shareholders to consult their own tax advisor concerning the impact of these rules on their investment in us





26.
Because our Company and some of our Directors are located outside the United States, it may be difficult for an investor to enforce within the United States any judgments obtained against us or our Officer and Directors.





Our Company and some of our Directors are located outside of the United States and we do not maintain a permanent place of business within the United States.  In addition, some of our Directors and Officer are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States.  As a result, it may be difficult for an investor to effect service of process or enforce within the United States any judgments obtained against us or our Officer or Directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition,
there is uncertainty as to whether the courts of Canada would recognize or enforce judgments of United States courts obtained against us or our Directors and Officer predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. There is even uncertainty as to whether the Canadian courts would have jurisdiction to hear original actions brought in Canada against us or our Directors and Officer predicated upon the securities laws of the United States or any state thereof.





15





ITEM 4.  INFORMATION ON THE COMPANY





4.A. HISTORY AND CORPORATE DEVELOPMENT OF THE COMPANY





We were formed as a Corporation under the Federal laws of Canada pursuant to the Canada Business Corporations Act on August 8, 2003. We are a natural resource exploration stage Company and anticipate acquiring, exploring, and if warranted and feasible, developing natural resource properties.





We are a mineral exploration Company in the exploration stage, and cannot give assurance that commercially viable minerals exist on the property.  Extensive geological analysis of our properties will be required before we can make an evaluation as to the economic feasibility of developing or finding valuable resources on these grounds. We have not, as yet, identified any mineral resources on our properties.





4.B. BUSINESS OVERVIEW





We are an exploration stage Company incorporated under the Canada Business Corporations Act in British Columbia, Canada on August 8, 2003 under the name “American Goldrush Corporation”.  On August 20, 2009 at an Annual General Meeting of the Shareholders of the Corporation, a majority of the Company’s shareholders granted the Board of Directors the authority to amend the Company’s Articles of Incorporation in connection with a name change of the Company to one of the following: Goldrush Metals Corp., Rush Exploration Corp., Rush Metals Corp., or such other name as may be approved by the Board of Directors and Corporations Canada.  On August 31, 2009 the Board of
Directors approved a name change of the Company to Rush Metals Corp. effective September 2, 2009. On September 13, 2011, at an Annual General Meeting of the Shareholders of the Corporation, a majority of the Company’s shareholders granted the Board of Directors the authority to amend the Company’s Articles of Incorporation in connection with a name change of the Company to one of the following: Rush Exploration Inc., Goldrush Metals Inc., or such other name as may be approved by the Board of Directors and Corporations Canada. The majority shareholders also granted the board authority to implement a reverse stock split of the Company’s Common Stock at a reverse split ratio of 100-for-1.  On September 22, 2011,  the Board of Directors approved a name change of the Company to Rush Metals Corp and to implement a 100-for-1 reverse split ratio on the
Company’s Common Stock effective October 31, 2011. The new name Rush Exploration Inc. was effective October 31, 2011.  Our registered office, head office and principal place of business located at 11215 Jasper Avenue, Suite 505, Edmonton, Alberta T5K 0L5.  Our telephone number is (780) 498-2907.





MATERIAL EFFECTS OF GOVERNMENT REGULATIONS





Mineral resource exploration, production and related operations are subject to extensive rules and regulations of federal, state and local agencies.  We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws.  While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out exploration program.





Failure to comply with these rules and regulations can result in substantial penalties.  Our cost of doing business may be affected by the regulatory burden on the mineral industry. We believe that compliance with the laws will not adversely affect our business operations.





Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulation could expand and have a greater impact on future mineral exploration operations.  Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the cost of which could harm our results of operations.  We cannot be sure that our proposed business operations will not violate environmental laws in the future.


16







ANTICIPATED CHANGES TO FACILITIES AND EMPLOYEES





Management of the Company anticipates no changes to either facilities or employees in the near future.







SEASONALITY, DEPENDENCY UPON PATENTS, LICENSES, CONTRACTS, PROCESSES, SOURCES AND AVAILIBILTY OF RAW MATERIALS





Certain of the Company’s properties are in remote locations and subject to significant temperature variations and changes in working conditions.  It is not possible to actively explore the Company’s property in British Columbia throughout the year because seasonal changes in the weather.  If exploration is pursued at the wrong time of year, the Company may incur additional costs to address issues relating to the weather.





If we commence drilling, shortages or an increase in cost of drilling rigs, equipment, supplies or personnel could delay or interrupt our operations, which could impact our financial condition and results of operations.  Drilling activity in the geographic areas in which we conduct drilling activities may increase, which would lead to increases in associated costs, including those related to drilling rigs, equipment, supplies and personnel and the services and products of other vendors to the industry. Increased drilling activity in these areas may also decrease the availability of rigs.  We do not have any contracts with providers of drilling rigs and, consequently we may not be able to obtain
drilling rigs when we need them.  Therefore, our drilling and other costs may increase further and necessary equipment and services may not be available to us at economical prices.





COMPETITION





The mineral exploration industry is intensely competitive, highly fragmented and subject to rapid change.  We may be unable to compete successfully with our existing competitors or with any new competitors.  We compete with many exploration companies which have significantly greater personnel, financial, managerial, and technical resources than we do.  This competition from other companies with greater resources and reputations may result in our failure to maintain or expand our business.





4.C. ORGANIZATIONAL STRUCTURE





The Company is not part of a group and has no subsidiaries.





4.D. PROPERTY, PLANT AND EQUIPMENT





CORPORATE OFFICES





The Company does not own any real property. The Company currently rents its corporate headquarters on a month to month basis at 11215 Jasper Avenue, Suite 505, Edmonton, Alberta T5K 0L5.  The Company believes that its rented properties are adequate for our current and immediately foreseeable operating needs.  The Company does not have any policies regarding its investments in real estate, securities or other forms of property.





A detailed description of the Company’s exploration properties with additional information for the properties of major significance to the Company is outlined below:





17





MAMMOTH PROPERTY





Acquisition of Interest





On July 15, 2009, the Company entered into a Property Option Agreement giving the Company the exclusive right and option to acquire a 100% interest in a mineral exploration permit covering the Mammoth property located in Prince George, BC.  The property, known as the Mammoth Property, consists of 102 mineral tenure claims and covers approximately 47,000 hectares.  In addition, the Company is subject to a 2% net smelter return royalty to the optioner upon production.





The Company paid the initial CDN $60,000 upon signing the agreement and has incurred $70,000 in exploration expenses by December 31, 2011.  At April 30, 2012 the Company had a shortfall in property expenditures of $530,000 and cash expenditures of $30,000 and is currently in default.  The Company is at risk of losing its interest in the property by not making the indicated option payments and incurring the exploration expenditures, when demanded. Subsequent to year end, the Company did not fulfill its commitments under the option agreement. However, the optioner, a related party subsequent to year end, agreed not to revoke the option agreement at this time.






18





Location











The Mammoth Property covers a large area northwest of Prince George, British Columbia, Canada. The property overlies favourable bedrock geology within the Quesnel Trough, a 1000 km long, north-northwesterly trending belt of rocks hosting many copper ± gold ± molybdenum porphyry and copper ± gold skarn deposits, including several past and presently producing mines. The belt has been described as one of the most prospective geological areas in Canada.  Access to the property is via a system of logging roads extending from provincial highways 27, 16 and 97, connecting the nearby communities of Prince George to the southeast (population 77,000), Vanderhoof to the southwest (population 4800)
and Fort St. James to the west (population 1976). Prince George is serviced regularly by commercial rail and aircraft.





19





Claim Status





The Mammoth Property consists of 102 mineral tenure claims with the Province of British Columbia covering approximately 47,000 hectares in the Caribou Mining Division.  The mining claims give the holder the right to surface rights necessary for the prospecting and exploration for minerals.





Previous Work





New discoveries in the Lac La Hache, Kwanika-Mount Milligan and North Kemess areas, and new deeper mineralization at Afton and Mount Polley mines, continue to support interest in the Quesnel Trough. Exploration and discovery within the Prince George portion of the belt, however, has historically been almost non-existent, inhibited by a thick cover of unconsolidated Quaternary gravels and related sediments.





The Mammoth property overlies a variety of bedrock geological units. Based on very limited outcrops exposures, float and rare drill holes, combined with interpretation of regional geophysical information (primarily aeromagnetic data) bedrock mappers from various organizations have extended the known bedrock units from thin drift covered areas into thick drift areas.





Mineral exploration within these thick overburden areas has been almost completely absent because conventional exploration methods were considered inadequate and extraction of any subsequently discovered ores deemed expensive due to costs of removal of waste materials. New technology, methodology and improved metal prices, together with the new geoscientific focus on this area, have advanced the economic mineral potential of the area significantly.





The existing gravity map is contoured from very sparse ground data, but formed the basis for positioning the Mammoth Property.  Earlier staking by other companies was positioned over magnetic total field anomalies. Some of these claims may relate to younger, Chilcotin volcanic cover rocks, rather than targets with economic potential. This data can be presented in alternate ways to enhance trends and contrasts, as calculated magnetic vertical gradient and shaded relief maps. New gravity The QUEST project (funded by the Province of British Columbia) will collect new geophysical and geochemical data over a large area, including the entire Mammoth property.  This survey data will greatly improve
resolution of density contrasts in the area.





Data from these new surveys will provide the first “deeper” geophysical views of the Mammoth property area, offering ability to measure conductivity and density contrasts in bedrock below the overburden. The gravity patterns will be delineated with much greater resolution by the new survey. In combination with the existing regional aeromagnetic data, they will support reinterpretation of regional bedrock geology, and may locate specific anomalies associated with mineral deposits, such as those associated with Mount Milligan, Mount Polley and many other porphyry deposits throughout the Quesnel Trough.





In late 2009 the Company acquired the services of Rob Shives from Gam-X Inc. and Warner Gruenwald from Geoquest Consulting Ltd. to assess and conducted a small grass roots exploration program.  The program consisted of geophysical interpretation, targeting, grid design for mobile metal ion (MMI) sampling, 186 MMI samples collected and analyzed, as well as 189 meters of open hole RC drilling and 73 meters of cased RC drilling completed to test the thickness of the overburden.  MMI samples were sent to SGS Minerals for analysis and drill samples were sent to Assayers Canada for analysis.  The results were inclusive further exploration is warranted.  The Company continues to
seek the necessary funding to further develop and implement its exploration plan.





Planned Work by the Company for 2012





We anticipate that we will incur through the end of our next fiscal year in connection with our current exploration plan for 2012:





•
$530,000 in connection with exploration expenditures and $30,000 for property option payments for the Mammoth Property.


20


As of April 30, 2012 the Company does not have the necessary funding to participate in its exploration plan for 2012. If funding was to be obtained, the Company would move forward with an exploration budget based on the results and recommendations of our independent analysis.





ITEM 4A.  UNRESOLVED STAFF COMMENTS





Not applicable.





ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS





The following discussion for the fiscal years ended December 31, 2011, 2010, and 2009, should be read in conjunction with the financial statements of the Company and the notes thereto.





Certain statements contained in the foregoing MD&A and elsewhere in this 20-F constitute forward-looking statements.  Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the financial statements were made, and readers are advised to consider such forward-looking statements in light of the risks set forth
in section 3.D. above.




OVERALL PERFORMANCE





The following table sets forth the audited statement of operations data for Rush Exploration Inc. for the fiscal years indicated:





Table No. 3


2011


2010


2009Revenue

$Nil


$Nil


$NilExpenses

$
41,541


$
28,373


$
211,589Loss from operations

$
(41,831
)

$
(28,373
)

$
(211,589
)Net loss

$
(41,831
)

$
(28,791
)

$
(226,149
)Net income/(loss) per share:Basic

$
(0.16
)

$
(0.07
)

$
(0.54
)Weighted average number ofcommon shares outstanding


266,152



400,715



418,235





Results of Operations of Fiscal 2011 vs. Fiscal 2010


We are a natural resource exploration Company in the exploration stage with an objective of acquiring, exploring, and, if warranted and feasible, developing natural resource properties.  Natural resource exploration and development requires significant capital and our assets and resources are limited. Therefore, we participate in the natural resource industry through the optioning of natural resource exploration and development projects.





Revenue - Cost of Revenue





We did not earn any revenues during the years ended December 31, 2011 or 2010.  We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.





21





General and Administrative Expenses





The net loss in 2011 was $41,831 compared to $28,791 in 2010.  The increase in the loss of $13,040 in 2011 compared to 2010 is primarily related to the increase in professional fees for the year ended December 31, 2011. Professional fees increases as a result of an increase in legal and accounting fees related to the Company’s reverse stock split and a change in Directors during the year.





Results of Operations of Fiscal 2010 vs. Fiscal 2009





We are a natural resource exploration Company in the exploration stage with an objective of acquiring, exploring, and, if warranted and feasible, developing natural resource properties. Natural resource exploration and development requires significant capital and our assets and resources are limited. Therefore, we participate in the natural resource industry through the optioning of natural resource exploration and development projects.





Revenue - Cost of Revenue





We did not earn any revenues during the years ended December 31, 2010 or 2009. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.





General and Administrative Expenses





The net loss in 2010 was $28,791 compared to $226,149 in 2009. The decrease in the loss of $197,358 in 2010 compared to 2009 is primarily related to the decrease of mineral property acquisition and exploration expenditures. In 2010, the mineral property acquisition and exploration expenditures were $Nil compared to $176,895 in 2009. General and administrative expenses decreased to $4,291 in 2010 from $6,193 in 2009. Professional fees also decreased in 2010 to $24,004 from $28,112. All decreases relate to the reduced activity of the Company’s operations.





5.B.  Liquidity and Capital Resources





Liquidity





We are a natural resource exploration Company with an objective of acquiring, exploring, and if warranted and feasible, developing natural resource properties.  Our primary focus in the natural resource sector is gold.





We have members on our Board of Directors who have complimentary experience in the natural resource industry. However, exploration activities of properties without any proven reserves require a considerable amount of time and money, and the subsequent return on investment for our shareholders would be very long term indeed.  Should we make a finding of minerals on any of our properties we would consider our alternatives to such finding, including the possibility of selling any findings to a major mining company. By selling its findings to another mining company, it would provide an immediate return to our shareholders without the long time frame and cost of putting a mine into operation ourselves, and it
would also provide future capital for the company to continue operations.





The funding of our operations since inception has come from the following sources:





22





On October 30, 2003, we closed a private placement with six investors for the sale of 95,000 units, which generated gross proceeds to us of CDN $95,000. On January 28, 2004, we closed a private placement with thirty-eight Canadian investors for the sale of 574 Common shares, for total gross proceeds of CDN $5,735. Between March and August 2005 we received a total of $71,139 in proceeds from three separate bridge loans from three minority shareholders.   On June 16, 2006 we completed a sale of units of the Company for total proceeds of CDN $550,000 and during 2006 we received CDN $56,250 from the exercise of 2,250 stock options.





On October 9, 2009 we received $50,000 CDN in proceeds from the exercise of warrants.





On October 22, 2009 we received $50,000 CDN in proceeds from the exercise of warrants.





On May 9, 2011, the Company entered into a $20,000 loan agreement with a related party by common directors.  The loan bears interest at the Bank of Canada Prime Rate plus 1%.  The borrower may repay the entire loan including the outstanding interest at anytime by advising the lender of such intent to repay 15 days prior to the anticipated date of repayment.





During 2011 our operations were funded from the proceeds of a loan from a related party.  We do not have sufficient cash to fund our minimum obligations for the next twelve months.  We expect to continue to finance operations through the sale of equity, however, there is no guarantee that we will be successful in arranging financing on acceptable terms.





During 2011 cash used in operating activities was $30,759 compared to cash used in operating activities of $26,170 in 2010, a change of $4,589.  We had a net loss of $41,831 in 2011 compared to a loss of $28,791 in 2010 primarily due to the increase in professional fees associated with the reverse stock split and change of Directors. The non-cash effects of share-based and stock-based compensation were $Nil in both 2011 and 2010.  In 2011 we had cash inflow from accounts payable and accrued liabilities of $10,578 compared to a cash outflow of $4,009 in 2010.





In 2011, we had no cash activity from investing activities compared to a cash inflow of $3,367 in 2010 related to a return in the reclamation deposit for the South Vulture Property.





In 2011, we had a cash inflow of $20,000 from financing activities as a result of the loan compared to no cash activity from financing activities in 2010.





During 2010 cash used in operating activities was $26,170 compared with $226,613 in 2009, a change of $220,443.  We had a net loss of $28,791 in 2010 compared to a loss of $226,149 in 2009, which was primarily due to the decrease in mineral property acquisition and exploration expenditures.  The non-cash effects of share-based and stock-based compensation was $nil for both 2010 and 2009. In 2010 we had a cash outflow from accounts payable and accrued liabilities of $4,009 compared to cash inflow of $1,350 in 2009.





In 2010, we had a cash inflow of $3,367 from investing activities related to receipt of reclamation deposit on the South Vulture Property, and in 2009, we had no cash transactions for investing activities.





We had cash and cash equivalents of $8,097 as of December 31, 2011.  We anticipate that we will incur through the end of our next fiscal year:





·
$530,000 and $50,000 in connection with exploration expenditures and $30,000 for property option payments for the Mammoth Property;








·
$85,000 for operating expenses, including working capital and general, administrative and professional legal and accounting expenses associated with being a reporting issuer under the Securities Exchange Act of 1934.





23





At December 31, 2011, we had a working capital deficit of $41,234.  The resulting increase in cash commitments related to the Mammoth Property will not allow us to fund a minimum level of operations for the next twelve months without additional funding.





We anticipate that our cash requirements to carry out planned exploration of our property and to cover administrative costs will be approximately $695,000 through December 31, 2012. We shall require additional funding for our minimum obligations under existing property agreements, and to expand our operations.  We anticipate that such funding will be in the form of equity financing from the sale of our common stock.  However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund additional phases of the exploration programs, should we decide to proceed.  We believe that debt financing will not be an
alternative for funding any further phases in our exploration program.  The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated.  We do not have any arrangements in place for any future equity financing.





Critical Accounting Estimates





The preparation of the Company's financial statements requires management to make estimates and assumptions regarding future events. These estimates and assumptions affect the reported amounts of certain assets and liabilities, and disclosure of contingent liabilities.





Significant areas requiring the use of management estimates include the variables used in determining stock-based compensation and the loss on the settlement of the loans. These estimates are based on management's best judgment. Factors that could affect these estimates include option term and expected volatility.





Management has made significant assumptions and estimates determining the fair market value of stock-based compensation granted to employees and non-employees as well as determining the fair market value of the share purchase warrants issued upon the settlement of the loans.  These estimates have an effect on the stock-based compensation and the loss on loan conversion expenses recognized and the additional paid-in capital balance on the Company’s Balance Sheet.  The value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of
the option award and stock price volatility. The expected term of options granted for the purposes of the Black-Scholes calculation is the term of the award. Because our common stock has not yet traded, the expected volatility is based on comparable junior mining companies who granted similar term options.  In addition, determining the fair value of our shares requires management to consider factors that require other than share price since a public quotation of our shares is not available.  These estimates involve inherent uncertainties and the application of management judgment. An expected forfeiture rate of nil was used in the recognition of the compensation and loss expenses for those options and warrants not yet vested. There were no unvested options or warrants at December 31, 2011.





5.C.  Research and Development, Patents and Licenses, etc.





--- Not applicable ---





5.D.  Trends.





--- No Disclosure Necessary ---





5.E.  Off-Balance Sheet Arrangements.





We do not have any off balance sheet arrangements as of December 31, 2011 and December 31, 2010 or as of the date of this report.


24





5.F.  Contractual Obligations.





We have no contractual obligations at December 31, 2011 as expressed in CDN dollars:





At December 31, 2011, the Company also had $30,207 in trade accounts payable.  The balance is unsecured.





Recent Accounting Pronouncements Applicable to US GAAP





Recently issued United States accounting pronouncements have been outlined below.





ASU No. 2010-06





In January, 2010, the FASB issued ASU No. 2010-06 on codification, Fair Value Measurements and Disclosures (Topic 820-10), improving disclosures about fair value measurements.  This update provides amendments to Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in Level 3 fair value measurements, and (4) the transfers between Level 1, 2, and 3.  The standard adds new disclosure and clarifies existing disclosure requirements.  The new standard requires disclosures of the fair value of financial instruments for interim reporting periods of
publicly traded companies in addition to the annual disclosure required at year-end.  The provisions of the new standard are effective for the interim periods ending after June 15, 2009.  The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.





ASU No. 2010-09





In February, 2010, the FASB issued ASU No. 2010-09, Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements.  The amendments removed the requirement for an SEC filer to disclose a date in both issued and revised financial statements.  Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP.  Additionally, the Board has clarified that if the financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial
statements were issued or available to be issued.  Those amendments remove potential conflicts with the SEC’s literature.  All of the amendments in this Update are effective upon issuance of the final Update, except for the use of the issued date for conduit debt obligors.  That adoption of ASU 2010-09 has been reflected in the Company’s financial statements.





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ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES





6.A.  Directors and Senior Management





Table No. 4


Directors and Senior Management


April 27, 2012








Name
Position
Age
Date of

First Election

Or AppointmentPaul Noland(1)
Director, Chairman, President, Chief Executive and Operating Officer and Secretary
64
September 13, 2008Keith Diakiw(2)
Chairman, President, Chief Executive and Operating Officer and Secretary
39
February 12, 2011Keith Diakiw
Director
39
September 9, 2008Robert Coale
Director
72
September 12, 2008Ron Daems(3)
Director
44
February 11, 2011





(1)
Mr. Noland resigned as Director, Chairman, President, Chief Executive and Operating Officer and Secretary effective February 12, 2011.


(2)
Mr. Diakiw was appointed as Chairman, President, Chief Executive and Operating Officer and Secretary effective February 12, 2011.


(3)
Mr. Daems was appointed as Director on February 11, 2011.





The business address of our Officer and Directors is c/o American Goldrush Corporation, Suite 505 – 11215 Jasper Avenue, Edmonton, Alberta T5K 0L5.





Our Directors hold office until the next annual meeting of our shareholders or until their successors are duly elected and qualified.  Set forth below is a summary description of the principal occupation and business experience of each of our directors and executive officers for at least the last five years.





Paul D. Noland, age 64, was a Director and our Chairman, President, Chief Executive and Operating Officer and Secretary from September, 2008 through February 12, 2011.  Mr. Noland graduated from Lamar University with a B.S. in Geology in 1971, and has over 35 years experience as a professional geologist, primarily in the western US.   He has held senior positions at Inspiration, Noranda, Independence Mining, Placer Dome and Barrick.  His most recent corporate position was with Barrick at the Cortez, Nevada Mines, where he was involved with both the Pipeline and newly discovered Cortez Hills deposits.





Mr. Noland has interspersed corporate positions with extended periods as a consultant, primarily focused on exploration and property evaluation.  Through his long and successful career in mining, Mr. Noland has been involved in several mineral discoveries.  His experience has spanned grass-roots exploration and evaluation of prospects to development and enhancement of multi-million ounce gold deposits. Though the majority of Mr. Noland’s expertise lies in precious metals deposits, he has also been involved with exploration and discovery of copper, molybdenum and tungsten.





Keith Diakiw, age 39, has served as a Director of the Company since September, 2008 and was elected as Chairman, Chief Executive and Operating Officer, President and Secretary on February 12, 2011.  Mr. Diakiw is a professional geologist who has field experience in Canada and Brazil.  Mr. Diakiw is currently working as a Production Geologist for Canadian Natural Resources Ltd. in Fort McMurray, Alberta, Canada. ) and is currently the President and Director of Power Resource Exploration Inc.





26





From 2005 to 2006 he was employed by Wellsite Masters Ltd. as a Well Site Geologist for an oil sands exploration drilling.  From 2003 to 2004, he worked as a Field Engineer for Schlumberger’s Measurements While Drilling division in Brazil on offshore platforms, while in 2003; he was employed by EnCana Corporation as a Contract Geologist and successfully completed his NW Alberta shallow gas play project.  Prior to 2003, Mr. Diakiw was attending the University of Alberta where he successfully earned a Bachelor of Science with Specialization (Geology) in 2003 and a Bachelor of Arts (anthropology/archaeology) in 2002.  In 2001, Mr. Diakiw joined the Canadian Navy and became a
qualified MARS Officer by the summer of 2005.  As a naval officer, he continues to serve Canada and is currently the Deck Officer for his naval reserve unit.  Furthermore, Lieutenant (Navy) Keith Diakiw was recently selected as an Aide-de-Camp for the new Lieutenant Governor of Alberta, a volunteer position until 2015.  Lastly, Mr. Diakiw began his university career at the University of Lethbridge and successfully earned a Bachelor of Science (Physical Geography) in 1996 and was U of L’s first Arts & Science CO-OP degree graduate.  Mr. Diakiw is a member of several professional organizations including the Association of Professional Engineers, Geologists, and Geophysicists of Alberta (APEGGA), the Canadian Institute of Mining, Metallurgy, and Petroleum (CIM), the Canadian Society of Petroleum Geologists (CSPG) and the Alberta
Palaeontological Society (APS).  Mr. Diakiw is currently the President and Director of Power Resource Exploration Inc.





Robert Coale, age 72, has been a Director of Rush Exploration Inc. since September 2008.  Currently Mr. Coale is the President and Director of Patriot Gold Corporation, President and Director of Tuffnell Ltd, as well as Director of Giant Oil and Gas Inc.; all of which are publicly traded exploration companies.  He is also technical advisor to Premium Exploration, Inc. and a past Director of American Goldfields Inc. and Franciso Gold Corporation.  He is a Professional Engineer with two engineering degrees (1963 - MetE. - Colorado School of Mines, 1971 - MSc. - University of the Witwatersrand in South Africa) and an MBA from the
University of Minnesota (1982) and has over 45 years of resource related business and management experience.   Mr. Coale is currently an independent consulting engineer specializing in mineral processing and natural gas fueling systems including development of projects for converting low-grade or stranded natural gas sources into liquefied natural gas.





Ron Daems, age 44, brings extensive financial and resource industry experience to Rush Exploration Inc.  In the span of his career, he has focused primarily on business development, strategic planning and financial analysis, while serving as project manager for numerous capital ventures.  From 2000 through 2003, Mr. Daems founded and became the CEO of Emerging Business Solutions Inc., a privately held business development company focused primarily on assisting startup companies in the resource sector to develop their land acquisition strategies and their operational and administrative systems.  Mr. Daems is currently the
President and Director of Strata Oil & Gas Inc., a Director of Power Oil & Gas Inc., and Giant Oil & Gas Inc.





We are not aware of any material legal proceedings that have occurred within the past five years concerning any director, director nominee, or control person which involved a criminal conviction, a pending criminal proceeding, a pending or concluded administrative or civil proceeding limiting one's participation in the securities or banking industries, or a finding of securities or commodities law violations.





There are no family relationships between any two or more Directors or Senior Management.





There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.





6.B.  Compensation





Cash Compensation





Our Officer or Directors have not received or earned any compensation or bonus for services rendered in the 2011 or 2010.


27





We do not maintain key-man life insurance for our Executive Officer or Directors.





Table No. 5


Outstanding Equity Awards as at December 31, 2011








Name
Number of Options Granted
Exercise Price per Option
Grant Date
Expiration Date
Mkt. Value of Securities Underlying Options on Date of Grant
Number of Securities Underlying Unexercised Options, Exercisable
Number of Securities Underlying Unexercised Options, Unexercisable
Grant Date Fair Value of Stock Options(1)Paul Noland
Nil
-
-
-
-
-
-
-Robert Coale(2)
250
$25.00
11/1/05
11/28/15
$.025
250
-
$1,775Keith Diakiw
Nil
-
-
-
-
-
-
-Ron Daems
Nil
-
-
-
-
-
-
-





(1) The figures in this column represent the grant date fair value of stock option grants as determined using the Black-Scholes model. For more information regarding the assumptions used to value stock option grants, please refer to note 7(b) of the Company’s audited financial statements for the fiscal year ended December 31, 2011 filed with this Form 20-F.





(2) Mr. Coale was granted 1,000 options November 1, 2005.  500 options vested immediately and 500 vested November 1, 2006.  On July 1, 2006 750 options were canceled. Mr. Coale was appointed to the Board of Directors on September 12, 2008.





No stock options were granted to our Officer or Directors in 2011 or 2010.  No Officer or Director has ever exercised stock options granted to them by the Company.





Change of Control Remuneration.





The Company had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2011 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control.





6.C.  Board Practices








6.C.1.  Terms of Office.





Refer to ITEM 6.A.1.





6.C.2.  Directors’ Service Contracts.





There are no Directors with service contracts.





6.C.3.  Board of Director Committees.





The Audit Committee oversees the accounting and financial reporting processes of the Company and all audits and external reviews of the financial statements of the Company on behalf of the Board, and has general responsibility for oversight of internal controls, accounting and auditing activities of the Company.





28





The board of directors is empowered to appoint an Audit Committee for the Corporation. Currently the Board of Directors functions as the Audit Committee. The Committee reviews, on a continuous basis, any reports prepared by the Company's external auditors relating to the Company's accounting policies and procedures, as well as internal control procedures and systems. The Committee is also responsible for examining all financial information, including annual financial statements, prepared for securities commissions and similar regulatory bodies prior to filing or delivery of the same. The Audit Committee also oversees the annual audit process, the Company's internal accounting controls, any complaints and concerns
regarding accounting, internal controls or auditing matters and the resolution of issues identified by the Company's external auditors. The Audit Committee recommends to the Board the firm of independent auditors to be nominated for appointment by the shareholders and the compensation of the auditors. The Audit Committee meets on an as needed basis.





6.D.  Employees





We have no employees at this time. We utilize outside contractors where possible, and rely on the industry expertise of management and our Board of Directors. These contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material. No member of our management team is presently employed by us.  We do not foresee any significant changes in the number of employees or consultants we will have over the next twelve months, unless the growth of our business demands it.





6.E.  Share Ownership





Table No. 6 lists, as of April 27, 2012, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.





Table No. 6


Shareholdings of Directors and Senior Management








Title of Class
Name of Beneficial Owner
Amount and Nature of Beneficial Ownership
Percent of Class(2)Common
Keith Diakiw
-
*Common
Robert Coale
-
*Common
Ron Daems (1)
140,000
52.6%Common
Total Directors / Senior Management
140,000
52.6%





* Represents less than 1%.





(1)
140,000 of the shares owned by Mr. Daems are subject to our option to purchase all or any portion of these shares at a purchase price of CDN 1.00 per share.





(2)          Based on 266,152 shares outstanding as of April 26, 2012.





Stock Options.





The terms of options grantable by the Company are done at the discretion of the Board of Directors of the Company or a committee established by the Board of Directors, including the number of common shares under option, the exercise price and expiry date of such options and any amendments thereto.  The Company adopted a formal written stock option plan (the "Plan") on June 24, 2005.





Such “terms and conditions”, including the pricing of the options, expiry and the eligibility of personnel for such stock options; and are described below.


29





The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors, employees and consultants of the Company, (b) retain and attract the qualified officers, directors, employees and consultants the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.





The Plan provides that stock options may be granted to Officers, Directors, employees, consultants and agents of the  Corporation  (whether or not  employees  of the Company) .  Subject to the foregoing, the Board of Directors or Committee, as applicable, shall have full and final authority to determine the persons who are to be granted options under the Plan and the number of shares subject to each option.





The Plan shall be administered by the Board of Directors of the Company or a committee established by the Board of Directors for that purpose.  Subject to approval of the granting of options by the Board of Directors or Committee, as applicable, the Company shall grant options under the Plan.





The Plan provides that the aggregate number of shares of the Company, which may be issued and sold under the Plan, will not exceed 50,000.  The Company shall not, upon the exercise of any option, be required to issue or deliver any shares prior to (a) the admission of such shares to listing on any stock exchange on which the Company’s shares may them be listed, and (b) the completion of such registration or other qualification of such shares under any law, rules or regulation as the Company shall determine to be necessary or advisable.  If any shares cannot be issued to any optionee for whatever reason, the obligation of the Company to issue such shares shall terminate and any option
exercise price paid to the Company shall be returned to the optionee.





If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Plan.  The Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:





(a)           options will be non-assignable and non-transferable;


(b)           options may be exercisable for a maximum of ten years from grant date;


(c) options to acquire no more than 5% of the issued shares of the Company under the Plan together with any other options for services may be granted to any one individual in any 12-month period;


(d)           options to acquire no more than 10% of the issued shares of the Company may be granted to anyinsiders in any 12-month period;


(e) the issuance of shares to insiders of the Company may not exceed 10% of the issued and outstanding shares within a one year period;


(f) the issuance of shares to an insider of the Company and his or her associates under the Plan and all other compensation arrangements, within a one year period, may not exceed 5% of the issued and outstanding shares;


(g) unless otherwise determined by the Board of Directors of the Company or a committee established by the Board of Directors , all vested options expire immediately, provided that the Board of Directors of the Company or a committee established by the Board of Directors may, in  its  sole  and  absolute discretion,   within   thirty   (30)   days  of  such termination or voluntary
termination,  waive  the  expiration  of  any  Option awarded under the Plan, by giving  written  notice of such waiver to the Optionee at such  Optionee's  last known  address;


(h) if an Option Holder ceases to be employed by, or ceases to have a relationship with, the Company by reason of disability or death, any Option granted which remains unexercised at the time of termination  shall become fully vested and  exercisable  and shall expire not later than one (1) year thereafter;


30





(i) If the Option Holder ceases to be employed by, or ceases to have a relationship with the Company by  reason  of  Retirement,   any  Option  granted which remains unexercised at the time of such Retirement shall become fully vested and exercisable and shall  expire  not later  than three (3) months thereafter. During such  period  and  prior  to the expiration  of the Option by its terms, such  Option may
be  exercised by the Option Holder, and except as so exercised,  shall expire at the end of such  relevant period unless such Option by its terms expires before such date.  The decision as to whether a termination is by reason of Retirement shall be made by the Board of Directors of the Company or a committee established by the Board of Directors, whose decision shall be final and conclusive.





The Plan provides that other terms and conditions may be attached to a particular stock option, such terms and conditions to be referred to in a schedule attached to the option certificate.  Stock options granted to directors, senior officers, employees or consultants will vest as may be determined by the Board of Directors of the Company or a committee established by the Board of Directors.





The price at which an option holder may purchase a common share upon the exercise of a stock option will be as set forth in the option certificate issued in respect of such option and in default of any specific determination,  will not be less than the market price of the Company’s common shares as of the date of the grant of the stock option (the “Award Date”).  The market price of the Company’s common shares for a particular Award Date will typically be the closing trading price of the Company’s common shares on the day immediately preceding the Award Date, or otherwise in accordance with the terms of the Plan.  Where there is no such closing price or
trade on the prior trading day “market price” shall mean the average of the most recent bid and ask of the shares of the Company on any stock exchange on which the shares are listed or dealing network on which the shares of the Company trade.





In no case will a stock option be exercisable at a price less than the minimum prescribed by each of the organized trading facilities or the applicable regulatory authorities that would apply to the award of the stock option in question.





Common shares will not be issued pursuant to stock options granted under the Plan until they have been fully paid for by the option holder, if applicable.





The names and titles of the Directors/Executive Officer of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in Table No. 5 as of December 31, 2011.





ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





7.A.  Major Shareholders.





7.A.1.a.  Holdings By Major Shareholders.





The table below indicates as of April 26, 2012, the share ownership of any persons or entity that is the beneficial owner of more than 5% of our outstanding common stock.





Major Shareholders
Number of Shares

Beneficial Ownership (%)Joseph Abbinante
17,500

6.6%Mary Coombes
20,000

7.5%Ron Daems
140,000

52.6%Igman Consulting
16,070

6.0%Kelly McEwan
19,000

7.1%





31





7.A.1.b.  Significant Changes in Major Shareholders’ Holdings.





No significant change has occurred since the date of the financial statements included in this Annual Report.





7.A.1.c.  Different Voting Rights.





The Company’s major shareholders do not have different voting rights.





7.A.2.  Canadian Share Ownership.





As of the record date of April 25, 2012, the Company’s shareholders’ list showed 266,152 common shares outstanding and 46 shareholders.  The Company’s shares are listed on a public exchange but have not yet traded.  Of the 266,152 common shares outstanding, there were 231,677 registered shares held by individuals with Canadian addresses, equivalent to 87.0% of the total and outstanding common shares of the Company.





7.A.4.  Change of Control of Company Arrangements.





There are no arrangements, known to the Company, the operation of which may at a subsequent date result in a change in control of the Company.





7.B.  Related Party Transactions








On June 30, 2009, 160,000 shares of the common stock of the Company held by Robert Coale were gifted by Mr. Coale to Paul Uppal, pursuant to an assignment, dated June 30, 2009, among, Mr. Coale, Mr. Uppal and the Company.  No consideration was paid by Mr. Uppal for the gifting of such shares.





On July 15, 2009, the Company entered into a Property Option Agreement giving the Company the exclusive right and option to acquire a 100% interest in a mineral exploration permit covering the Mammoth property located in Prince George, BC.  The Company paid the initial CDN $60,000 upon signing the agreement and has incurred $70,000 in exploration expenses by December 31, 2010.  At December 31, 2011 the Company had a shortfall in property expenditures of $330,000 and cash expenditures of $20,000 and is currently in default.  The Company is at risk of losing its interest in the property by not making the indicated option payments and incurring the exploration expenditures, when
demanded.  However, the optioner, a related party subsequent to year end, agreed not to revoke the option agreement at this time.





On November 3, 2010, 160,000 shares of the common stock of the Company held by Paul Uppal were surrendered by Mr. Uppal as a gift, for cancellation, pursuant to a Share Surrender Certificate effective November 3, 2010.  No consideration was paid by the Company for the gifting of such shares. Such assignment was made subsequent to Mr. Uppal resigning as Director and terminating his relationship with the Company.





On February 11, 2011, 140,000 shares of the common stock of the Company held by Paul Noland were gifted by Mr. Noland to Ron Daems, pursuant to an assignment, among, Mr. Noland, Mr. Daems and the Company.  No consideration was paid by Mr. Daems for the gifting of such shares.  Such assignment was made subsequent to Mr. Noland resigning as President and terminating his relationship with the Company.The common shares beneficially owned by Ron Daems are subject to the right, exercisable at any time for the Company , to purchase any or all of these shares from Mr. Daems and at a purchase price of CDN$0.01 per share until the Board of Directors, in their sole discretion, decide to terminate the
Agreement.





32





On May 11, 2011, the Company entered into a $20,000 Note Agreement with a related party by common directors. The loan bears interest at the Bank of Canada Prime Rate plus 1%. The Company may repay the entire loan including the outstanding interest at anytime by advising the lender of such intent to repay 15 days prior to the anticipated date of repayment.





Shareholder Loans





There are no loans to shareholders as of December 31, 2011 and 2010, respectively.





Amounts Owing to Senior Management/Directors





At December 31, 2011 and 2010 no amounts were owed to senior management or Directors.  There have been no transactions since inception, or proposed transactions, which have materially affected or will materially affect the Company in which any Director, Executive Officer, or beneficial holder of more than 5% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest.  Management believes the transactions referenced above were on terms at least as favorable to the Company as the Company could have obtained from unaffiliated parties.





7.C.  Interests of Experts and Counsel





--- Not applicable ---





ITEM 8.  FINANCIAL INFORMATION





8.A.  Statements and Other Financial Information





The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with US GAAP. For the year ended December 31, 2011 the Company converted from accounting Principles Generally Accepted in Canada (Canadian GAAP) to Accounting Principals Generally Accepted in the United States (US GAAP). Effective January 1, 2011 Canadian filers were required to transition from Canadian GAAP to International Financial Reporting Standards (IFRS) or US GAAP. The Company chose to report their financial statements under US GAAP.





The financial statements as required under ITEM 18 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Peterson Sullivan LLP are included herein immediately preceding the financial statements.





Audited Financial Statements:





Fiscal years ended December 31, 2011 and 2010, and the period from August 8, 2003, (date of inception) to December 31, 2011.





8.A.7.  Legal/Arbitration Proceedings





The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.





The Directors and the management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.





8.A.8.  Policy on dividend distributions





The Company has never declared or paid a dividend to its shareholders.  The Company does not have any policy on dividend distributions.





33





8.B.  Significant Changes





On July 15, 2009, the Company entered into a Property Option giving the Company the exclusive right and option to acquire a 100% interest in a mineral exploration permit covering the Mammoth property located in Prince George, BC.  The property, known as the Mammoth Property, consists of 102 mineral tenure claims and covers approximately 47,000 hectares.  In addition, the Company is subject to a 2% net smelter return royalty to the optioner upon production.  The Company may exercise the option by making a cash payment of $60,000 upon signing the Agreement, plus additional cash payments of $40,000, and incurring net expenditures on the property of at least CDN$ 1,000,000 by April 1,
2013.  The Company paid the initial CDN $60,000 upon signing the agreement and has incurred $70,000 in exploration expenses by December 31, 2010.  At April 30, 2012 the Company had a shortfall in property expenditures of $530,000 and cash expenditures of $30,000 and is currently in default.  The Company is at risk of losing its interest in the property by not making the indicated option payments and incurring the exploration expenditures, when demanded.





On September 13, 2011, at an Annual General Meeting of the Shareholders of the Corporation, a majority of the Company’s shareholders granted the Board of Directors the authority to amend the Company’s Articles of Incorporation in connection with a name change of the Company to one of the following: Rush Exploration Inc., Goldrush Metals Inc. or such other name as may be approved by the Board of Directors and Corporations Canada.  On September 13, 2011 the Board of Directors approved a name change of the Company to Rush Exploration Inc.





On October 31, 2011, the Company affected a reverse stock split of the Company’s Common Stock at a reverse split ratio of 1-for-100, pursuant to a plan approved by the Company’s Board of Directors.  As a result of the reverse stock split, every one hundred pre-split shares of the Company's common stock issued by the Company as Rush Metals Corp., issued and outstanding immediately prior to October 31, 2011 were automatically exchanged for one post-split share of common stock without par value, with any fractional shares resulting from the exchange being rounded up to the nearest whole share (the “Stock Split”).  Accordingly, the number of shares of the Company's common
stock issued and outstanding has been decreased from 26,613,920 shares to approximately 266,139 shares, without accounting for fractional shares.





The Company has elected to treat the Stock Split as a non-mandatory exchange. As a result, there will be no letter of transmittal sent to the Company’s shareholders directing them to exchange their existing stock certificates. Rather, shareholders will retain their existing pre-split stock certificates until such time as they are submitted to the Company.





ITEM 9.  THE OFFER AND LISTING





9.C.  Markets





Admission to Quotation on the OTC Markets





In April 2008 we applied to the NASD to have our common stock be quoted on the OTC Bulletin Board and as of October 2008 we have received approval for our shares to trade on the OTC Bulletin Board under the symbol AGRUF:OTC:BB. On January 30, 2012, our trading symbol was changed to REXEF:OTC.QB to reflect the name change from Rush Metals Corp. to Rush Exploration Inc.





The OTC Bulletin Board differs from national and regional stock exchanges in that it:





(1) is not situated in a single location but operates through communication of bids, offers andconfirmations between broker-dealers, and





(2) securities admitted to quotation are offered by one or more Broker-dealers rather than the"specialist" common to stock exchanges.


34


To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing.





In 2010, the new “OTC Markets” quotation tiers began replacing the former OTCBB.  The OTC Markets launched the OTCQB marketplace to help investors easily identify SEC reporting companies and regulated banks that are current with their disclosure obligations.  Issuers on the OTCQB must be fully reporting and current in their reporting obligations with the SEC.  Although, the entire Over the Counter is regulated by the SEC and FINRA, the OTC Markets and the OTCBB are both now privately owned and merely serve as quotation mediums.  The OTC Markets is more user friendly, factually up-to-date and accurate than the website for the OTCBB.  Over the Counter
quotes can be found at www.otcmarkets.com and the companies trading on the OTCQB have the exact same standards as the OTCBB.  Effective March 26, 2010, through the progressive changes of the OTC Markets platform, the Company’s stock is now quoted on the OTC:QB.





ITEM 10.  ADDITIONAL INFORMATION





10.A.  Share Capital





--- Not applicable ---





10.B.  Memorandum and Articles of Association





Securities Register





We maintain at Holladay Stock Transfer (“transfer agent”) a securities register in which we record the securities issued by us in registered form, showing with respect to each class or series of securities:





a.
the names, alphabetically arranged and the latest known address of each person who is or has been a security holder;


b.
the number of securities held by each security holder; and


c.
the date and particulars of the issue and transfer of each security.





The transfer agent keeps information relating to a security holder that is entered in the securities register for at least seven years after the security holder ceases to be a security holder.





Registration





The Company’s Articles of Incorporation were filed with the Director under the Canada Business Corporations Act on August 12, 2003. The Company, having a primary place of business in the Province of British Columbia, was also issued a Certificate of Registration as an extra-provincial company under the Company Act, British Columbia on November 7, 2003.  Pursuant to Section 4 of the Statement on Registration Extra-provincial Company filed on November 7, 2003, the Company’s objects and purposes was described as “mineral exploration and development”.  In September 2008 the Company filed a Form 42 Notice of Ceasing to Carry on Business in British Columbia and filed with
Industry Canada to change its jurisdiction and primary place of business to Alberta.





On August 20, 2009, at an Annual General Meeting of the Shareholders of the Corporation, a majority of the Company’s shareholders granted the Board of Directors the authority to amend the Company’s Articles of Incorporation in connection with a name change of the Company to one of the following: Goldrush Metals Corp., Rush Exploration Corp., Rush Metals Corp., or such other name as may be approved by the Board of Directors and Corporations Canada.  On August 31, 2009, the Board of Directors approved a name change of the Company to Rush Metals Corp.





35





On September 13, 2011, at an Annual General Meeting of the Shareholders of the Corporation, a majority of the Company’s shareholders granted the Board of Directors the authority to amend the Company’s Articles of Incorporation in connection with a name change of the Company to one of the following: Rush Exploration Inc., Goldrush Metals Inc. or such other name as may be approved by the Board of Directors and Corporations Canada.  On September 13, 2011, the Board of Directors approved a name change of the Company to Rush Exploration Inc.





Powers of Directors





The Directors of the Company are empowered under Schedule C to the Articles of Incorporation to (1) borrow money upon the credit of the Company; (2) issue, reissue, sell or pledge the debt obligations of the Company; (3) give a guarantee on behalf of the Company to secure performance of an obligation of any person; and (4) charge, mortgage, hypothecate, pledge or otherwise create a security interest in all or any of the currently owned or subsequently acquired property and assets of the Company, including, without limitation, real and personal property, movable and immovable property, tangible and intangible assets, book debts, right, powers, franchises and undertakings, to secure any obligation of the
Company.  The Company’s Articles of Incorporation and By-Laws do not place any restrictions on the voting powers of interested directors.  With respect to the Directors of the Company, Section 3 of the By-Laws of the Company provides that, as long as an interested director has complied with the applicable provisions of the Canada Business Corporations Act, any director shall not be disqualified by his office from contracting with the Company, nor shall any contract or arrangement entered into by or on behalf of the Company with any director or in which any director is in any way interested be liable to be voided, nor shall any director so contracting or interested be liable to account to the Company for any profit realized from such contract or arrangement by reason of that director or officer holding that office or of the fiduciary relationship thereby
established provided that such officer or director shall have complied with the provisions of the Canada Business Corporations Act.





Description of Securities





The holders of the Company’s Common shares are entitled to receive notice of, and attend and vote at all, meetings of shareholders.   Currently, there are no specific rights, preferences and restrictions attaching to each of the Company’s preferred shares.  The Company may issue preferred shares in one or more series and, pursuant to Schedule A to the Company’s Articles of Incorporation, the directors may, by majority resolution, alter the Articles of Incorporation to create, define and attach rights and restrictions to the shares of each series.





Pursuant to section 12 of the Company’s By-Laws, the quorum at meetings of the Company’s shareholders shall be constituted by the presence of two shareholders entitled to vote at any such meeting holding or representing by proxy not less than one-twentieth of the shares entitled to be voted at such meeting.





There are no limitations on the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities of the Company imposed by foreign law or by the Articles of Incorporation or any other constituent document of the Company.





10.C.  Material Contracts





During the year ended December 31, 2011 and subsequent to that date we entered into the following material contracts:  None.





36





10.D.  Exchange Controls





There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or, subject to the following sentence, which affect the remittance of dividends or other payments to nonresident holders of our common shares. However, any such remittance to a resident of the United States is generally subject to non-resident tax pursuant to Article X of the 1980 Canada-United States Income Tax Convention. See “Material Income Tax Considerations” above for additional discussion on tax matters.





There are currently no limitations of general application imposed by Canadian federal or provincial laws on the rights of non-residents of Canada to hold or vote our common shares. There are also no such limitations imposed by the articles of incorporation with respect to our common shares. There are, however, certain requirements on the acquisition of control of our securities by non-residents of Canada. The Investment Canada Act requires notification to and, in certain cases, advance review and approval by, the Government of Canada, of the acquisition by a “non-Canadian” of “control” of a “Canadian business”, all as defined in the Investment Canada Act. Generally speaking, in
order for an acquisition to be subject to advance review and approval, the asset value of the Canadian business being acquired must meet or exceed certain monetary thresholds.





10.E.  Taxation





NOTHING HEREIN SHOULD BE INTERPRETED AS LEGAL OR TAX ADVICE AND SHAREHOLDERS SHOULD CONSULT WITH HIS OR HER OWN ATTORNEY, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS ABOUT THE TAX CONSEQUENCES.  THE DISCUSSION IS PRESENTED FOR INFORMATION PURPOSES ONLY AND IS INTENDED TO BE A DISCUSSION PRIMARILY OF THE CANADIAN AND UNITED STATES INCOME TAX CONSEQUENCES.  EACH SHAREHOLDER IS URGED TO CONSULT WITH HIS PROFESSIONAL TAX ADVISER WITH RESPECT TO ALL FEDERAL, PROVINCIAL, STATE AND LOCAL INCOME TAXES, GIFT, ESTATE AND OTHER TAX CONSEQUENCES IN THE UNITED STATES AND CANADA.  THE TAX AND OTHER MATTERS DESCRIBED HEREIN DO NOT CONSTITUTE, AND
SHOULD NOT BE CONSIDERED AS LEGAL OR TAX ADVICE TO SHAREHOLDERS.





Canadian Federal Income Tax Considerations





The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of common shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the Canada – United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in
Canada and elsewhere.





Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares. The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.





37





In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder, persons with whom the U.S. holder did not deal at arm's length, or the U.S holder, together with such persons and (ii) the value of the common shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada. For this purpose, the Treaty defines real
property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.





A U.S. Holder who is subject to Canadian income tax in respect of a capital gain realized on a disposition of a common share must include one-half of the capital gain (taxable capital gain) in computing the Holder's taxable income earned in Canada.  The Holder may, subject to certain limitations, deduct one-half of any capital loss (allowable capital loss) arising on a disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect of taxable Canadian property and, to the extent not so deductible, from such taxable capital gains realized in any of the three preceding years or any subsequent year.





United States Taxation





For federal income tax purposes, an individual who is a citizen or resident of the United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain or loss on the sale of the Company's common shares equal to the difference between the proceeds from such sale and the adjusted tax basis of the common shares.  The gain or loss will be a capital gain or capital loss if the Company's common shares are a capital asset in U.S. Taxpayer's hands.





For federal income tax purposes, a U.S. Taxpayer will be required to include in gross income dividends received on the Company's common shares.  A U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be entitled, subject to certain limitations, to a credit (or alternatively, a deduction) against federal income tax liability.  A domestic corporation that owns at least 10% of the voting shares should consult its tax advisor as to applicability of the deemed paid foreign tax credit with respect to dividends paid on the Company's common shares.





Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255.  In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return.  Other filing requirements may apply and United States Investors should consult their own tax advisors concerning these requirements.





The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.  The Company believes that it may be a passive foreign investment company for the taxable year ended December 31,
2011.  Individual investors should consult with there own tax advisors regarding the tax implications in their own situation.





10.F.  Dividends and Paying Agents





--- Not applicable ---





38





10.G.  Statement by Experts





--- Not applicable ---





10.H. Documents on Display





We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F annual report no later than four months after the close of each fiscal year, which is December 31. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.





The Company is not required to file reports and other information with any securities commissions in Canada.





I. Subsidiary Information





Not applicable.





ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





FOREIGN CURRENCY EXCHANGE RATE SENSITIVITY





The Company's operating expenses and liabilities are primarily incurred in Canadian dollars.





To the extent the Company engages in transactions in US dollars, the results of the Company’s operations are subject to currency transaction risk and currency translation risk. The operating results and financial position of the Company are reported in Canadian dollars in the Company’s financial statements. The fluctuation of the US dollar in relation to the Canadian dollar will consequently have an impact upon the operations of the Company and may also affect the value of the Company’s assets and the amount of shareholders’ equity.





The Company’s functional currency is the Canadian dollar and its expenses are predominantly incurred in Canadian dollars. The Company incurs a relatively small portion of its expenses in U.S. dollars.





The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.





INTEREST RATE SENSITIVITY





The Company currently has no significant long-term or short-term debt requiring interest payments. Thus, the Company has not entered into any agreement or purchased any instrument to hedge against possible interest rate risks at this time.





The Company's interest earning investments are primarily short-term, or can be held to maturity, and thus, any reductions in carrying values due to future interest rate declines are believed to be immaterial. However, as the Company has a significant cash or near-cash position, which is invested in such instruments, reductions in interest rates will reduce the interest income from these investments.


39





ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





12.A. Debt Securities





The Company has no debt securities outstanding.








12.B. Warrants and Rights





We have warrants outstanding to purchase an aggregate of 311,634 common shares.  The following table lists the warrants outstanding at December 31, 2011.  Each warrant is exchangeable for one common share.  The warrants are non-transferable and provide for a cashless exercise option.





Class
Number Outstanding
Number Vested
Exercise Price
Original Expiry Date
New Expiry Date (Note 7(a))A
85,000
85,000
$10.00
Oct 30, 2010
Oct 30, 2012B
95,000
95,000
$146.00
Oct 30, 2011
Oct 30, 2013C
95,000
95,000
$152.00
Oct 30, 2012
Oct 30, 2014A
7,317
7,317
$25.00
Jan 27, 2011
Jan 27, 2013B
7,317
7,317
$50.00
Jan 27, 2012
Jan 27, 2014A
11,000
11,000
$100.00
Jun 16, 2011
Jun 16, 2014B
11,000
11,000
$150.00
Jun 16, 2012
Jun 16, 2015311,634
311,634


(1)
On May 13, 2010 vesting dates and expiration dates for some classes of warrants were extended.





We have the right, in our sole and absolute discretion, to (i) accelerate the exercise date of the warrants to a date which is prior to the date the warrants can be exercised and /or (ii) reduce the exercise price. If we exercise our right to do so, we shall provide notice thereof to the warrant holder.





On May 13, 2010, pursuant to new letter agreements with certain warrant holders, the warrant vesting dates was further extended from April 30, 2010 to April 30, 2011 with respect to the Class B Warrants and from October 30, 2010 to October 30, 2011 with respect to the Class C Warrants.  In addition, the warrant expiration date has been extended from October 30, 2010 to October 30, 2012 with respect to the Class A Warrants, from October 30, 2011 to October 30, 2013 with respect to the Class B Warrants and from October 30, 2012 to October 30, 2014 with respect to the Class C Warrants.





On May 13, 2010, pursuant to new letter agreements with certain warrant holders, the warrant vesting date was extended from June 16, 2011 to June 16, 2014 with respect to the Class A Warrants and from June 16, 2012 to June 16, 2015 with respect to the Class B Warrants.








On May 12, 2011, pursuant to new letter agreements with certain warrant holders, the warrant vesting date was extended from January 27, 2011 to January 27, 2013 with respect to the Class A Warrants and from January 27, 2012 to January 27, 2014 with respect to the Class B Warrants.





12.C. Other Securities





--- Not applicable ---





12.D. American Depository Shares





--- Not applicable ---


40





PART II





ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES





There have been no defaults, dividend arrearages or delinquencies.





ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS





There have been no modifications to securities of any class of the Company.





ITEM 15.  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





Our management, under supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2011, our disclosure controls and procedures were 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 Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’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 our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.





Management’s Report on Internal Controls over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.





All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.





Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of December 31, 2011, the Company’s internal control over financial reporting was effective.





41





As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management concluded the Company does not have control deficiencies that represent material weaknesses as of December 31, 2011.





Attestation Report of Registered Public Accounting Firm





This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to permanent rules of the SEC that permit the Company to provide only management’s report in this annual report.





Changes in Internal Controls over Financial Reporting





As of December 31, 2011, management assessed the effectiveness of our internal control over financial reporting and based on that evaluation, they concluded that from January 1, 2011 through December 31, 2011 and to date, the internal controls and procedures were effective. During the course of their evaluation, we did not discover any fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures or internal controls over financial reporting.





We believe that our financial statements contained in our Form 20-F for the twelve months ended December 31, 2011, fairly present our financial position, results of operations and cash flows for the years covered thereby in all material respects.  We are committed to improving our financial organization. We will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements as necessary.





This transition report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.





ITEM 16.  RESERVED





ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT





There are no current audit committee members and our Board of Directors has determined that it does not have a member of the audit committee that qualifies as an “audit committee financial expert” as defined in Item 401(e) of Regulation S-K.  We believe that the Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the
fact that we have not generated revenues to date.





ITEM 16B.  CODE OF ETHICS





The Company has adopted a Code of Ethics that applies to the Company's Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or Controller, persons performing similar functions and other officers of the Company. This Code of Ethics is filed as an exhibit to this Form 20-F.  A copy of the Code of Ethics can be obtained from the Company by making a request in writing addressed to the Corporate Secretary and mailing such request to 11215 Jasper Avenue, Suite 505, Edmonton, Alberta T5K 0L5.


42





The Code of Ethics was adopted on March 6, 2006.





Item 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES





The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.





The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy / procedure.  The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.





Fees, including reimbursements for expenses, for professional services rendered by BDO Canada and Peterson Sullivan LLP in 2011 and 2010 were:





Fiscal Year ended December 31

Fiscal year


Fiscal yearPrincipal Accountant Fees and Services

2011


2010Audit Fees

$
15,000


$
18,328Audit related fees

Nil


NilTax Fees

Nil


NilAll other fees

Nil


NilTotal

$
15,000


$
18,328





ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





--- Not applicable ---





ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS





There have been no purchases of the Company's common shares by the Company or affiliated purchasers during the period covered by this report.





ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT





Previously reported by the Company in a Form 6-K filed with the Commission on March 28, 2012.





Item 16G. Corporate Governance





We are subject to a variety of corporate governance guidelines and requirements enacted by the SEC under its rules and those mandated by the U.S. Sarbanes Oxley Act of 2002. Today, we are in compliance with the corporate governance legal requirements in the United States. We are listed on the NASDAQ and, although we are not required to comply with all of the Exchange’s corporate governance requirements to which we would be subject if we were a U.S. corporation, our governance practices comply with the NASDAQ’s requirements as if we were a U.S. domestic issuer.





Item 16H. Mine Health and Safety, Conflict Minerals and Government Payments





Not applicable.








43





PART III





ITEM 17.  FINANCIAL STATEMENTS





See Item 18 for a list of our financial statements included elsewhere in this annual report.





ITEM 18.  FINANCIAL STATEMENTS







The following statements are filed as part of this annual report, together with the report of the independent registered public accounting firm:




Report of Independent Registered Public Accounting Firm





44





RUSH EXPLORATION INC.


(formerly RUSH METALS CORP.)


(An Exploration Stage Company)


Financial Statements


December 31, 2011 and 2010





Contents


Report of Independent Registered Public Accounting Firm




Financial Statements




Balance Sheets




Statements of Loss




Statements of Cash Flows




Statements of Changes in Stockholders’ Equity (Deficiency)




Notes to the Financial Statements


45










REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 To the Board of Directors and Stockholders
 Rush Exploration Inc.
 (formerly Rush Metals Corp.)
 
 
 We have audited the accompanying balance sheets of Rush Exploration Inc. (an exploration stage company) ("the Company") as of December 31, 2011 and 2010, and the related statements of loss, changes in stockholders' equity (deficiency), and cash flows for the years ended December 31, 2011, 2010, and 2009, and for the period from August 8, 2003 (date of inception) to December 31, 2011.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rush Exploration Inc. (an exploration stage company) as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years ended December 31, 2011, 2010 and 2009, and for the period from August 8, 2003 (date of inception) to December 31, 2011, in conformity with accounting principles generally accepted in the United States.
  46
  The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has incurred operating losses since inception, has not been able to generate any operating revenues to date, and has incurred cumulative losses of $1,043,586 through December 31, 2011.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans regarding those matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /S/ PETERSON SULLIVAN LLP
 
 
 Seattle, Washington
 April 27, 2012


47
 RUSH EXPLORATION INC.
 (FORMERLY RUSH METALS CORP.)
 (An Exploration Stage Company)
 
 BALANCE SHEETS
 (Stated in Canadian Dollars)





December 31

2011


2010ASSETSCurrentCash and cash equivalents

$
8,097


$
18,856GST Receivable


1,131



1,3709,228



20,226$
9,228


$
20,226LIABILITIESCurrentAccounts payable and accrued liabilities

$
30,207


$
19,629Bridge loan payable to related party


20,255



-50,462



19,629Commitment and Contingencies (None)Stockholders’ equityShare CapitalAuthorized:Unlimited common shares without par valueUnlimited preferred shares without par valueIssued: 266,152 (2010 – 266,139) common shares (Note 7)


-



-Additional paid-in capital


1,002,352



1,002,352Deficit accumulated during the exploration stage


(1,043,586
)


(1,001,755
)(41,234
)


597$
9,228


$
20,226


Nature of Operations and Going Concern (note 1)





The accompanying notes are an integral part of these financial statements


48
 RUSH EXPLORATION INC.
 (FORMERLY RUSH METALS CORP.)
 (An Exploration Stage Company)
 
 STATEMENTS OF LOSS
 (Stated in Canadian Dollars)


AUGUST 8, 2003YEARS ENDED DECEMBER 31,


(INCEPTION)TODecember 31,2011


2010


2009


2011

(cumulative)ExpensesMineral property acquisition andexploration expenditures (Note 3)

$
-


$
-


$
176,895


$
473,324Office and sundry


5,948



4,291



6,193



94,016Rent


-



-



-



13,480Professional fees


34,425



24,004



28,112



334,453Transfer agent fees


1,168



78



389



5,921Directors’ fees (Note 6)


-



-



-



20,087Loss on bridge loan conversion (Note 5)


-



-



-



51,210Stock-based compensation (Note 7)


-



-



-



71,000Total expenses


(41,541
)


(28,373
)


(211,589
)


(1,063,491
)Interest income


-



-



85



12,476Interest expense


(255
)


-



-



(2,018
)Foreign exchange gain (loss)


(35
)


(418
)


(14,645
)


9,447Net loss for the year

$
(41,831
)

$
(28,791
)

$
(226,149
)

$
(1,043,586
)Loss per share – basic and diluted

$
(0.16
)

$
(0.07
)

$
(0.54
)Weighted average shares outstanding


266,152



400,715



418,235








The accompanying notes are an integral part of these financial statements





49
 RUSH EXPLORATION INC.
 (FORMERLY RUSH METALS CORP.)
 (An Exploration Stage Company)
 
 STATEMENTS OF CASH FLOWS
 (Stated in Canadian Dollars)





AUGUST 8, 2003YEARS ENDED DECEMBER 31,


(INCEPTION)TODECEMBER 31,2011


2010


2009


2011 (cumulative)Cash flows from operating activitiesNet loss for the year

$
(41,831
)

$
(28,791
)

$
(226,149
)

$
(1,043,586
)Adjustments to reconcile net loss to net cash used in operating activitiesLoss on bridge loan conversion (Note 5)


-



-



-



51,210Stock-based compensation (Note 7)


-



-



-



71,000Change in GST receivables


239



5,628



(1,814
)


(1,131
)Change in prepaid expenses


-



1,000



-



-Change in accounts payable and accrued liabilities


10,578



(4,009
)


1,350



30,207Interest on bridge loan


255



-



-



2,273Net cash provided by (used in) operating activities


(30,759
)


(26,170
)


(226,613
)


(890,027
)Cash flow from investing activityReclamation deposit


-



3,367



-



-Cash flows from financing activitiesIssuances of common stock and units


-



-



100,000



806,985Proceeds from bridge loans (Note 5)


20,000



-



-



91,139Net cash provided by financing activities


20,000



-



100,000



898,124Increase (decrease) in cash and cash equivalents


(10,759
)


(22,803
)


(126,613
)


8,097Cash and cash equivalents, beginning of year


18,856



41,659



168,272



-Cash and cash equivalents, end of year

$
8,097


$
18,856


$
41,659


$
8,097





Supplemental informationInterest paid

$
-


$
-


$
-


$
-Income taxes paid

$
-


$
-


$
-


$
-Non-cash investing and financing activitiesConversion of bridge loan principal and interest to equity (Note 5)

$
-


$
-


$
-


$
73,157











The accompanying notes are an integral part of these financial statements


50
 RUSH EXPLORATION INC.
 (FORMERLY RUSH METALS CORP.)
 (An Exploration Stage Company)
 
 STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY (DEFICIENCY)
 (Stated in Canadian Dollars)


DEFICITCOMMON


ACCUMULATED


ADDITIONALSTOCK


EXPLORATION


PAID-INSHARES


STAGE


CAPITAL


TOTALShares issued to founders on inception


300,000


$
-


$
-


$
-Private placement, common share issuances for cash at $1.00 per unit in October, 2003 (Note 7)


95,000



-



95,000



95,000Net loss for the period


-



(14,261
)


-



(14,261
)Balance, December 31, 2003


395,000



(14,261
)


95,000



80,739Private placement, common share issuances for cash at $10.00 per share in January, 2004 (Note 7)


574



-



5,735



5,735Net loss for the year


-



(88,541
)


-



(88,541
)Balance, December 31, 2004


395,574



(102,802
)


100,735



(2,067
)Stock-based compensation (Note 7)


-



-



35,145



35,145Net loss for the year


-



(102,996
)


-



(102,996
)Balance, December 31, 2005


395,574



(205,798
)


135,880



(69,918
)Conversion of bridge loans to equity in January 2007 (Note 5)


7,316



-



124,367



124,367Private placement, common share issuances for cash at $50.00 per unit   in June, 2006 (Note 7)


11,000



-



550,000



550,000Issuance of shares upon the exercise of stock options in February and   June, 2006


2,250



-



56,250



56,250Stock-based compensation (Note 7)


-



-



27,039



27,039Net loss for the year


-



(328,650
)


-



(328,650
)Balance, December 31, 2006


416,139



(534,448
)


893,536



359,088Stock-based compensation (Note 7)


-



-



6,725



6,725Net loss for the year


-



(311,873
)


-



(311,873
)Balance, December 31, 2007


416,139



(846,321
)


900,261



53,940Stock-based compensation (Note 7)


-



-



2,091



2,091Net loss for the year


-



99,506



-



99,506Balance, December 31, 2008


416,139



(746,815
)


902,352



155,537Issuance of shares upon the exercise of warrants in October, 2009


10,000



-



100,000



100,000Net loss for the year


-



(226,149
)


-



(268,316
)Balance, December 31, 2009


426,139



(972,964
)


1,002,352



29,388Share cancellation (Note 7)


(160,000
)


-



-



-Net loss for the year


-



(28,791
)


-



(28,791
)Balance, December 31, 2010


266,139



(1,001,755
)


1,002,352



597Shares issued in reverse split (Note 7 )


13



-



-



-Net loss for the year


-



(41,831
)


-



(41,831
)Balance, December 21, 2011


266,152


$
(1,043,586
)

$
1,002,352


$
(41,234
)





The accompanying notes are an integral part of these financial statements


51


1.      OPERATIONS





Organization





The Company was incorporated in Canada under the laws of the Canadian Business Corporations Act on August 8, 2003.





Exploration Stage Activities (Note 3)





The Company has been in the exploration stage since its formation and has not yet commenced its planned operations (mineral extraction).  The Company is primarily engaged in the acquisition and exploration of mining properties in North America.  In February, 2004, the Company entered into a Property Option Agreement to acquire an option on a mineral exploration property in British Columbia, Canada (Taylor Claims).  The Property Option Agreement was amended in November, 2004, and on November 23, 2005 the Company chose to terminate the Property Option Agreement.  During 2006, the Company entered into three separate Property Option Agreements to acquire an option on two
properties in Arizona (Margarita and South Vulture) and one in British Columbia, Canada (GQ).  On January 29, 2008, the Margarita property was assigned to a third party and on February 24, 2009, the Company chose to terminate the South Vulture Property Option Agreement. During 2009, the Company entered into a Property Option Agreement to acquire an option to purchase a property in British Columbia, Canada (Mammoth). On April 23, 2010, the Company chose to terminate the GQ Property Option Agreement.





Ability to Continue as a Going Concern





The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  This contemplates that assets will be realized and liabilities and commitments satisfied in the normal course of business.





As shown in the accompanying financial statements, the Company has incurred cumulative losses of $1,043,586 for the period from August 8, 2003 (inception) to December 31, 2011 and has no source of revenue.  The future of the Company is dependent upon its ability to obtain financing and upon future acquisition, exploration and development of profitable operations from mineral properties.  Management has plans to seek additional capital through a private placement and public offering of its common stock.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern. We anticipate that we will require up to approximately $695,000 to fund
exploration activities for the next twelve months. We expect to continue to finance exploration costs through the sale of equity. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.





2.      SIGNIFICANT ACCOUNTING POLICIES





The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles of the United States. All figures are reported in Canadian dollars. The significant accounting policies are summarized as follows:





a) Cash and Cash Equivalents





The Company considers all highly liquid investments purchased with a maturity of 90 days or less to be cash equivalents. As at December 31, 2011 and 2010, the Company did not have any cash equivalent balances.





52


2.      SIGNIFICANT ACCOUNTING POLICIES – Continued





b) GST Receivable





The Company’s receivables arise from the general sales tax (“GST”) receivable due from Canadian government taxation authorities. GST receivable represents tax credits available to the Company when it pays GST tax on expenditures for normal operations. As of December 31, 2011, the Company had a GST tax receivable of $1,131 ($1,370 – 2010)





c)      Mineral Property Payments and Exploration Costs





Exploration costs are expensed as incurred. Development costs are charged to the statement of loss until it has been established that a mineral deposit is commercially mineable and a production decision has been made by the Company to formulate a mining plan and develop a mine, at which point the costs subsequently incurred to develop the mine on the property prior to the start of mining operations are capitalized.





Mineral property acquisition costs are charged to the statement of loss until the viability of the mineral interest is determined. Reductions in the carrying value of a property would be recorded to the extent that the total carrying value of the mineral property exceeds its estimated fair value.





Where the Company has entered into option agreements for the acquisition of an interest in mineral properties which provides for periodic payments, amounts unpaid are not recorded as a liability since they are paid entirely at the Company’s option.





To December 31, 2011, all exploration and option payments have been charged to the statement of loss in accordance with the Company’s accounting policies.





d)      Use of Estimates





The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period.  Actual results could differ from these estimates.





e)      Foreign Currency Transactions





The Company’s functional currency is the Canadian dollar.  Transactions in foreign currency are translated into Canadian dollars as follows:





·  Monetary items at the rate prevailing at the balance sheet date;


·  Non-monetary items at the historical exchange rate;


·  Revenue and expenses at the transaction date exchange rate.





Gains and losses on foreign exchange are included in the Statement of Loss.





f) Stock-based compensation





The Company maintains a stock option plan described in Note 7 under which it may grant stock options to employees, non-employee directors and consultants.  The Company measures compensation cost for stock options issued under the plan at fair value and (recognizes it as compensation expense over the service period for awards expected to vest.)  Share-based compensation expense is recognized for all share-based payment awards, net of an estimated forfeiture rate.  Compensation cost is only recognized for those shares expected to vest on a straight-line basis over the requisite service period of the award.





53





2. SIGNIFICANT ACCOUNTING POLICIES - Continued





Determining the appropriate fair value model and calculating the fair value of share-based payment awards


requires subjective assumptions, including the expected life of the share-based payment awards and stock price volatility.  The Company utilizes the Black-Scholes options pricing model to value stock options granted under its stock option plan.  In this model, the assumptions utilized relate to stock price volatility, stock option term, dividend yield rate, and forfeiture rates that are based on historical factors as well as management's judgment.





g)      Loss per Share





The basic loss per share is calculated by dividing income available to common stockholders by the weighted average aggregate number of common shares outstanding during each period. The calculation of loss per share includes the 100:1 reverse stock split (Note 7). The Company follows the “Treasury Stock Method” in calculating the diluted loss per common share.  Under this method, any proceeds from the exercise of options and warrants are assumed to be used to purchase common shares at the average market price during the period.  Common equivalent shares (consisting of shares issuable on the exercise of common stock options and warrants) totaling 311,884 for 2011 and 312,381 in 2010
and 2009 respectively were not included in the computation of loss per share because the effect was anti-dilutive.





h)      Income Taxes




Future income taxes relate to the expected future tax consequences of differences between the carrying amount of balance sheet items and their corresponding tax values.  Future tax assets are recognized only to the extent that, in the opinion of management, it is more likely than not that the net future income tax assets will be realized.  Future income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment or substantive enactment.





The Company evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in an income tax return.  Estimated interest and penalties related to unrecognized tax benefits, if any, are recorded as a component of income tax expense on the statements of loss.  No liability has been recorded for uncertain tax positions, or related interest or penalties as of December 31, 2011 and 2010.  The Company's Canadian tax returns are open to examination by taxing authorities for the last
four years





i) Fair value of financial instruments and risks







The carrying value of cash and cash equivalents, GST receivables, accounts payable and accrued expenses approximates fair value due to the short-term nature of these financial instruments.  The recorded value of bridge loan payable to related party also approximates fair value based on the terms of the debt.





Liquidity Risk





Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due.  The Company manages liquidity by maintaining its cash and cash equivalent balances available to meet its anticipated operational needs.  At December 31, 2011, the Company had a cash and cash equivalent balance of $8,097 (2010 – $18,856) and current liabilities of $30,207 (2010 – $19,629) and a bridge loan from a related party for $20,255, which includes accrued interest.  The Company believes that these sources will not be sufficient to cover the expected short- term cash requirements.Additionally,  management anticipates that it will require up to approximately $385,000 to fund our continued operations for the next twelve months. We expect to continue to finance operations through the sale of equity.





54





2.      SIGNIFICANT ACCOUNTING POLICIES - Continued





Foreign Currency Risk





Financial assets and liabilities denominated in currencies other than the Canadian dollar are as follows:








Financial


FinancialAssets


Liabilities2011


2010


2011


2010U.S. dollar

$
770


$
4,482


$
-


$
1,012





j) Reclassification
 
 Certain reclassifications have been made to conform prior periods’ data to the current presentation. These reclassifications have no effect on the results of reported operations or stockholders’ equity (deficit).





k)      Recently Released Accounting Pronouncements





In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2011-05, which, among other things, amended Subtopic 220 with respect to the presentation of other comprehensive income and its components in the financial statements. The update amended Subtopic 220 so that a Securities and Exchange Commission filer may present other comprehensive income either in a single continuous statement or in two separate but consecutive statements. The filer is also required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statements where the components of net income
and the components of other comprehensive income are presented. The amendments in this update apply to both annual and interim periods beginning after December 15, 2011, with the exception of the amendment regarding presentation of reclassification adjustments, which has been deferred to a later date. Adoption of this guidance is not anticipated to have a material impact on our consolidated financial statements.





In May 2011, the FASB issued ASU 2011-04, which amends Subtopic 820 to clarify the application of


existing common fair value measurement and disclosure requirements. ASU 2011-04 provides clarification for the following:





1. The application of the highest and best use of valuation premise concepts;


2. Measuring the fair value of an instrument classified in shareholders' equity; and


3. Disclosures about fair value measurements.





The amendments in this update become effective for interim and annual periods beginning after December 15, 2011. Adoption of this guidance is not anticipated to have a material impact on our consolidated financial statements.





3.       CONVERSION FROM CANADIAN GAAP TO US GAAP





For the year ended December 31, 2011 the Company converted from Accounting Principles Generally Accepted in Canada (Canadian GAAP) to Accounting Principles Generally Accepted in the United States (US GAAP). Effective January 1, 2011 Canadian filers were required to transition from Canadian GAAP to International Financial Reporting Standards (IFRS) or US GAAP. The Company chose to report their financial statements under US GAAP.





55





3.      CONVERSION FROM CANADIAN GAAP TO US GAAP – Continued





Under Canadian GAAP stock options granted to Directors and employees are expensed based on the fair value of the options when they vest. Under US GAAP stock options granted to Directors and employees are valued at the date of grant and then expensed over the vesting period. The difference between Canadian GAAP and US GAAP resulted in a $162,542 decrease in additional paid-in capital and a commensurate decrease in deficit accumulated in the exploration stage.





The Company also recognized expense totaling $1.65 million in prior years for the transfer of common


stock between Directors of the company under Canadian GAAP. The share transfer is a direct assignment of shares from one director to another. Under US GAAP the transfer of shares between directors does not have a financial statement impact. The difference between Canadian GAAP and US GAAP was a reduction in both additional paid-in capital and deficit accumulated in the exploration stage of $1,654,297. For the year ended December 31, 2009 the Company recognized a decrease in compensation on exchange of shares between directors totaling $42,167, which resulted in a commensurate decrease in net loss for the year to $226,149, from $268,316.





4.      MINERAL PROPERTY INTERESTS





In accordance with the Company’s accounting policy, all mineral acquisition and exploration expenditures were expensed as incurred. The following table lists the cumulative mineral property acquisition and exploration expenditures incurred on the Company’s properties to December 31, 2011.





GQ Property





On June 1, 2006 the Company entered into a Property Option Agreement giving the Company the exclusive right and option to acquire a 100% interest in a property known as the GQ Property located in the Kamloops Mining District in the Province of British Columbia.   The Company made the $20,000 property payments on June 1, 2008 and met its obligations with respect to the minimum exploration expenditures for 2008 and 2009.





After further review and consideration of all findings and relevant information regarding the GQ Property, the Company chose to terminate the Property Option Agreement by giving notice of our election to terminate on April 23, 2010.  The Company does not maintain any further rights, interests, or obligations in the property.





Mammoth Property





On July 15, 2009, the Company entered into a Property Option Agreement  giving the Company the exclusive right and option to acquire a 100% interest in a mineral exploration permit covering the Mammoth property located in Prince George, BC.  In addition, the Company is subject to a 2% net smelter return royalty to the optioner upon production.  The Company paid the initial CDN $60,000 upon signing the agreement and may exercise its option by making further cash payments and incurring net expenditures as follows:





Date
Cash Payments
ExpendituresCDN
CDNOn or before April 01, 2010
$10,000
$200,000On or before April 01, 2011
$10,000
$200,000On or before April 01, 2012
$10,000
$200,000On or before April 01, 2013
$10,000
$400,000





56





4.      MINERAL PROPERTY INTERESTS - CONTINUED





Mammoth Property - Continued





To December 31, 2011, the Company had made the initial option payment of $60,000 due on signing.  In addition, the Company has incurred approximately $70,000 in exploration expenditures on the property.  At December 31, 2011, the Company had a shortfall in property expenditures of $330,000 and cash expenditures of $20,000.  The Company is at risk of losing its interest in the property by not making the indicated option payments and incurring the exploration expenditures, when demanded.





5.      BRIDGE LOAN PAYABLE TO RELATED PARTY





On May 9, 2011, the Company entered into a $20,000 Note Agreement with a related party by a common director.  The loan bears interest at the Bank of Canada Prime Rate plus 1%.  The Company may repay the entire loan including the outstanding interest at any time by advising the lender of such intent to repay 15 days prior to the anticipated date of repayment. The Company recognized $255 in interest expense on the loan for the year ended December 31, 2011.





6.      RELATED PARTY TRANSACTIONS





Please refer to 7.B for a complete description of Related Party Transactions.





7.      SHARE CAPITAL





a)      Common Shares





During the period from inception (August 8, 2003) to December 31, 2011, the Company had the following transactions:





On inception date, the Company issued 300,000 shares to the Company’s founders for nil consideration.  The Company holds an irrevocable right to repurchase all or a portion of these shares for a price of $1.00 per share.





In October 2003, the Company issued 95,000 units at $1.00 per unit.  Each unit consisted of one common share and three stock purchase warrants. There was one Class A warrant exercisable at $10.00 per share until October 30, 2008, one Class B warrant exercisable at $146.00 per share until October 30, 2009 and one Class C warrant exercisable at $152.00 per share until October 30, 2010.  Originally, all of the warrants were to have vested on October 30, 2006.  By way of letter agreements with each individual warrant holder the Company and each respective warrant holder agreed to extend the vesting dates of these warrants.  The warrant vesting provisions were extended from
October 30, 2006 to October 30, 2007 with respect to the Class A Warrants, to April 30, 2008 with respect to the Class B Warrants and to October 30, 2008 with respect to the Class C Warrants.  All other terms of the Warrant agreements remained unchanged.





Pursuant to new letter agreements dated February 28, 2008 with each respective warrant holder, the warrant vesting dates were further extended from April 30, 2008 to April 30, 2009 with respect to the Class B Warrants and from October 30, 2008 to October 30, 2009 with respect to the Class C Warrants.  In addition, the warrant expiration dates were extended from October 30, 2009 to October 30, 2010 with respect to the Class B Warrants and from October 30, 2010 to October 30, 2011 with respect to the Class C Warrants.  The terms of the Class A Warrants were not changed and all other terms remain unchanged.





Pursuant to new letter agreements dated September 30, 2008 with each respective warrant holder, the warrant vesting dates were further extended from April 30, 2009 to April 30, 2010 with respect to the Class B Warrants and from October 30, 2009 to October 30, 2010 with respect to the Class C Warrants.  In addition,


the warrant expiration dates were further extended from October 30, 2008 to October 30, 2010 with respect to the Class A Warrants and from October 30, 2010 to October 30, 2011 with respect to the Class B Warrants and from October 30, 2011 to October 30, 2012 with respect to the Class C Warrants.


57





7.      SHARE CAPITAL- Continued





On May 13, 2010 pursuant to new letter agreements with certain warrant holders, the warrant vesting date was further extended for Class B Warrants from April 30, 2010 to April 30, 2011 and Class C Warrants were extended from October 30, 2010 to October 30, 2011.  In addition, the warrant expiration date has been extended for Class A Warrants from October 30, 2010 to October 30, 2012; for Class B Warrants from October 30, 2011 to October 30, 2013; and Class C Warrants from  October 30, 2012.





On May 13, 2010 pursuant to new letter agreements with certain warrant holders, the warrant expiration date was extended from January 27, 2011 to January 27, 2013 with respect to the Class A Warrants and from January 27, 2012 to January 27, 2014 with respect to the Class B Warrants.





In January 2004, the Company issued 574 common shares in a private placement for gross proceeds of $5,735.





In June 2006, the Company issued 110,000 units at $50.00 per unit for a total offering price of $550,000.  Each unit consisted of one common share, one Class A warrant exercisable at $100.00 per share until June 16, 2014, and one Class B Warrant exercisable at $150.00 per share until June 16, 2015.   All of the warrants vest June 16, 2008.





On May 12, 2011 by way of new letter agreements with certain respective Warrant holders, the time of the warrant commencement date were extended from June 16, 2011 to June 16, 2014 with respect to the Class A Warrants; and from June 16, 2012 to June 16, 2015 with respect to the Class B Warrants. The Company did not record any additional expense associated with the extension as the warrants, when issued, were originally classified as equity. The Company determined there was no material financial statement impact of the extension. Accordingly, no additional warrant expense has been recorded for the year ended December 31, 2011.





The Company calculated and allocated the fair values of $40,370 and $55,330 to Class A and Class B warrants respectively using the Black-Scholes option pricing model with the following weighted average assumptions:





Risk-free interest rate
4.26 to 4.29%Dividend yield
NilExpected volatility
95 to 107%Expected life of the warrants (in years)
5 to 6





In October 2009, 10,000 common shares were issued on the exercise of warrants for proceeds of $100,000.





In September 2011, shareholders approved a 100:1 reverse split. Fractional shares were rounded up to the next whole share, which resulted in 13 additional shares being issued as part of the reverse split. Pre-split the Company had approximately 26,613,920 shares outstanding compared to 266,152 share outstanding post-split.





b)      Stock Options





On June 16, 2005, the stockholders of the Company approved the Company’s 2005 stock option plan whereby the Company may grant options to its directors, consultants, and employees for up to 50,000 shares of common stock.  The exercise price of each option equals the market price of the Company’s stock on the date of grant.  Options vest over a three-year period, unless otherwise specified by the Board of Directors.  All options have a 10-year term.





No options were granted during 2011, 2010 or 2009, while 12,000 options were granted to employees in 2005.  The stock-based compensation expense is amortized over the vesting period.  For the year ended December 31, 2011, the Company has recognized $ Nil (2010 and 2009 - $Nil) in stock-based compensation for stock options granted in 2005.


58





7.      SHARE CAPITAL- Continued





In January and August 2009, 4,250 stock options were canceled and returned to the 2005 Stock Options Plan for future issuance. On March 21, 2011, 500 common stock purchase options were cancelled and returned to the 2005 Stock Option Plan for future issuance. All options had previously vested and been expensed, no additional compensation expense was recorded upon cancelation.





Because the Company’s common stock has not yet traded in a public market, the expected volatility is based on comparable junior mining companies who granted similar term options.  No options were granted in 2011,  2010 or 2009 and the weighted average fair value of options granted during 2005 was $7.00 per option.





The following table sets forth a summary of options granted:





Options Outstanding


Weighted Average Exercise PriceBalance, December 31, 2008


5,000


$
25.00Options canceled – 2009


(4,250
)

$
25.00Balance, December 31, 2009


750


$
25.00Options cancelled – 2010


-


$
25.00Balance, December 31, 2010


750


$
25.00Options cancelled – 2011


(500
)

$
25.00Balance, December 31, 2011


250


$
25.00





The following table summarizes information concerning outstanding and exercisable common stock options under the 2005 Plan at December 31, 2011:


Exercise

Price
Options

Outstanding
Remaining

Contractual

Life

(in years)
Weighted

Average

Exercise

Price
Number of Options Exercisable$ 25.00
250
4.8
$ 25.00
250





Management believes the aggregate intrinsic value of the stock options is negligible as the common shares have been sparsely traded.





As of December 31, 2011, there was $ Nil (2010 and 2009 - $ Nil) unrecognized compensation cost related to the outstanding options. None of the Company’s stock options outstanding were unvested as of December 31, 2011, 2010 or 2009 respectively.





c) Warrants





Warrants


Weighted Average Exercise PriceBalance, December 31, 2008


321,634


$
100.00Warrants exercised


(10,000
)

$
10.00Balance, December 31, 2009


311,634


$
104.00Warrants exercised


-



-Balance, December 31, 2010


311,634


$
104.00Warrants exercised


-



-Balance, December 31, 2011


311,634


$
104.00





59





7.      SHARE CAPITAL- Continued





The following table lists the warrants outstanding at December 31, 2011.  Each warrant is exchangeable for one common share.





Class
Number Outstanding
Number Vested
Exercise Price
Original Expiry Date
New Expiry Date (Note 7(a))A
85,000
85,000
$10.00
Oct 30, 2010
Oct 30, 2012B
95,000
95,000
$146.00
Oct 30, 2011
Oct 30, 2013C
95,000
95,000
$152.00
Oct 30, 2012
Oct 30, 2014A
7,317
7,317
$25.00
Jan 27, 2011
Jan 27, 2013B
7,317
7,317
$50.00
Jan 27, 2012
Jan 27, 2014A
11,000
11,000
$100.00
Jun 16, 2011
Jun 16, 2014B
11,000
11,000
$150.00
Jun 16, 2012
Jun 16, 2015311,634
311,634





8.      INCOME TAXES





The tax effects of temporary differences that give rise to the Company’s future income tax assets are as follows:





December 31,2011


2010


2009Tax loss carry-forwards

$
136,000



126,000



122,000Exploration expenditures


90,000



90,000



90,000Valuation allowance


(226,000
)


(216,000
)


(212,000
)Future income tax asset (liability)

$
-


$
-


$
-





The provision for income taxes differs from the amount estimated using the Canadian federal and provincial statutory income tax rates as follows:




December 31,2011


2010


2009Benefit at Canadian statutory rates

$
(10,900
)


(8,100
)

$
(80,500
)Effect of reduction in rate


800



900



10,800Non-deductible stock compensation


-



-



12,700Expiry of loss carry forwards


-



3,000



-Increase (decrease) in valuation allowance


10,100



4,200



57,000$
-


$
-


$
-





The Company evaluates its valuation allowance requirements based on projected future operations.  When circumstances change and this causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income.





The Company has non-capital losses of approximately $500,000 expiring in various amounts from 2014 to 2030.  The Company also has cumulative deferred exploration expenses of approximately $360,000 (2010 -$360,000 and 2009 –$360,000) to offset future taxable income.




9.  SUBSEQUENT EVENTS





None.





60





ITEM 19.  EXHIBITS





Exhibit

Numbers
Description of Document1.1(1)
Articles of  Incorporation of  the Company1.2(1)
Articles of Amendment1.3(1)
By-Laws  of  the  Company2.1(1)
Specimen  Common  Stock  Certificate2.2(1)
Form of Class A Warrant – October 20032.3(1)
Form of Class B Warrant – October 20032.4(1)
Form of Class C Warrant – October 20032.5(2)
Form of Class A Warrant – January 20062.6(2)
Form of Class B Warrant – January 20062.7(3)
Form of Subscription Agreement – June 20062.8(3)
Form of Class A Warrant – June 20062.9(3)
Form of Class B Warrant – June 20062.10(12)
Form of Warrant Extension letter agreement dated February 28, 20084.1(1)
Agreement between the Company and Ronald Blomkamp dated September 30, 20034.2(1)
Agreement between the Company and Scott Praill dated September 30, 20034.3(1)
Property Option Agreement with Randy Polischuk4.4(4)
Amendment No. 1 to the Polischuk Property Option Agreement4.5(5)
Assignment Agreement dated January 23, 2006, among the Company, Scott Praill, and Ronald C. Blomkamp4.6(6)
Bridge Loan Conversion Agreement dated January 27, 2006 between the Company and Igman Consulting4.6(6)
Bridge Loan Conversion Agreement dated January 27, 2006 between the Company and Fred Coombes4.6(6)
Bridge Loan Conversion Agreement dated January 27, 2006 between the Company and Trevor Newton4.7(7)
Property Option Agreement dated March 24, 2006, between the Company and Fred Brost4.8(8)
Property Option Agreement dated as of June 1, 2006, between the Company and Warner Gruenwald4.9(9)
Property Option Agreement dated as of July 14, 2006, between the Company and James Sorrell4.10(9)
Finder’s Fee Agreement dated July 14, 2006 between the Company and Fred Brost4.11(11)
Assignment and Assumption Agreements, dated January 29, 2008, by and between Rush Metals Corp. and Patriot Gold Corp.11.1(10)
Code of Ethics12.1*
Certification of Principal Executive and Financial Officer13.1*
Section 1350 Certification





1. Previously filed with the Company’s registration statement on Form F-1, Registration No. 333-120722, submitted to the SEC on November 22, 2004.


2. Previously filed with the Company’s form 6-K submitted to the SEC on January 27, 2006.


3. Previously filed with the Company’s form 6-K submitted to the SEC on June 16, 2006.


4. Previously filed with the Company’s amendment to the registration statement on Form F-1, Registration No. 333-120722, submitted to the SEC on January 25, 2005.


5. Previously filed with Mr. Praill’s Schedule 13D submitted to the SEC on January 23, 2006.


6. Previously filed with the Company’s form 6-K submitted to the SEC on January 27, 2006.


7. Previously filed with the Company’s form 6-K submitted to the SEC on March 24, 2006.


8. Previously filed with the Company’s form 6-K submitted to the SEC on June 1, 2006.


9. Previously filed with the Company’s form 6-K submitted to the SEC on July 14, 2006.


10. Previously filed with the Company’s form 20-F submitted to the SEC on May 25, 2006.


11. Previously filed with the Company’s form 6-K submitted to the SEC on February 1, 2008.


12. Previously filed with the Company’s form 6-K submitted to the SEC on March 6, 2008.


* Filed herewith.


61





Signature Page





Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.








Rush Exploration Inc. SEC File No. 000-51337 Registrant





Dated: April 30, 2012
Signed: /s/  Keith DiakiwKeith DiakiwDirector, Chairman, President,Chief Executive and Operating Officerand Secretary








Dated: April 30, 2012
Signed: /s/  Robert CoaleRobert CoaleDirector








Dated: April 30, 2012
Signed: /s/  Ron DaemsRon DaemsDirector