UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 20-F


|                                                   |  |                                                                                               
|-------------------------------------------------- |  | ----------------------------------------------------------------------------------------------
|o                                                  |  | 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 fiscal year ended December 31, 2009           
|OR                                                
|o                                                  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|For the transition period from ____ to ______     
|OR                                                
|o                                                  |  | 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: 000-30780     MAX RESOURCE CORP. (Exact name of Registrant as specified in its charter)  Province of Alberta, Canada (Jurisdiction of incorporation or organization)  Suite 1400  400 Burrard Street, Vancouver, British Columbia V6C 3G2 Canada (Address of principal executive offices)  Stuart Rogers, President and CEO
Max Resource Corp.
1400  400 Burrard Street Vancouver, British Columbia V6C 3G2 Canada Tel: (604) 643-1719 Facsimile: (604) 643-1789 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)  Securities registered pursuant to Section 12(b) of the Act:None  Securities registered pursuant to Section 12(g) of the Act:  Common Shares, no par value (Title of Class)  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None      2   Indicate the number of outstanding shares of each of the Registrants classes of capital or common stock as of the close of the period covered by the annual report:  21,699,230 common shares as at December 31, 2009  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes oNo 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 oNo x  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 90 days. Yes xNo o  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 oNo o  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.  (Check one)  Large accelerated filer  o  Accelerated filer  oNon-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  o International Reporting Standards as issued o Other  x by the International Accounting Standards Board  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  x  Item 18  o  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 oNo x   3    MAX Resource Corp. Form 20-F Annual Report  Table of Contents  CONTENTS Table of Contents SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS PART I  Item 1. Identity of Directors, Senior Management and Advisers Item 2. Offer Statistics and Expected Timetable Item 3. Key Information 3.A Selected Financial Data 3.B.        Capitalization and Indebtedness 3.C.        Reasons for the Offer and Use of Proceeds 3.D. Risk Factors Item 4.  Information on the Company 4.A History and Development of the Company 4.B Business Overview 4C Organizational Structure 4.D Property, Plant and Equipment Item 4.A Unresolved Staff Comments Item 5.  Operating and Financial Review and Prospects 5.A Operating Results 5.B Liquidity and Capital Resources 5.C Research and Development, Patents and Licenses, etc. 5.D Trend Information 5.E Off-balance Sheet Arrangements 5.F Tabular Disclosure of Contractual Obligations Item 6.  Directors, Senior Management and Employees 6.A Directors and Senior Management 6.B. Compensation of Directors 6.C Board Practices 6.D Employees 6.E Share Ownership Item 7. Major Shareholders and Related Party Transactions 7.A Major Shareholders 7.B Related Party Transactions 7.C Interests of Experts and Counsel Item 8. Financial Information  4    8.A Consolidated Statements and other Financial Information 8.B Significant Changes Item 9. The Offer and Listing 9.A Offer and Listing Details 9.B. Plan of Distribution 9.C. Markets Item 10. Additional Information 10.A Share Capital 10.B Memorandum and Articles of Association 10.C Material Contracts 10.D Exchange Controls 10.E Taxation 10.F     Dividends and paying agents 10.G Statement by experts 10.H Documents on Display 10.I     Subsidiary Information Item 11. Quantitative and Qualitative Disclosures About Market Risk Item 12. Description of Securities Other than Equity Securities PART II  Item 13. Defaults, Dividend Arrearages and Delinquencies Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds Item 15T. Controls and Procedures Item 16.  16A. Audit Committee Financial Expert 16.B Code of Ethics 16.C Principal Accountant Fees and Services 16.D Exemptions from the Listing Standards for Audit Committees 16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers 16.F Change in Registrants Certifying Accountant 16.G Corporate Governance PART III FINANCIAL STATEMENTS Item 17. Financial Statements CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS LIABILITIES SHAREHOLDERS EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS Item 18. Financial Statements Item 19. Exhibits  5     SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS  This Annual Report on Form 20-F and the exhibits attached hereto contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern the Companys anticipated results and developments in the Companys operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future.  These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.  Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.  Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur or be achieved,) are not statements of historical fact and may be forward-looking statements.  Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:  · risks related to our status as a passive foreign investment company for U.S. tax purposes; · risks related to our history of operating losses; · risks related to our lack of production history; · risks related to our limited financial resources; · risks related to our need for additional financing; · risks related to competition in the mining industry; · risks related to increased costs; · risks related to possible shortages in equipment; · risks related to mineral exploration activities; · risks related to our lack of insurance for certain activities; · risks related to all our properties being in the exploration stage; · risks related to uncertainty that our properties will ultimately be developed; · risks related to our managements limited experience in mineral exploration; · risks related to fluctuations in precious and base metal prices; · risks related to the possible loss of key management personnel; · risks related to possible conflicts of interest; · risks related to our mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title; · risks related to governmental and environmental regulations; · risks related to our ability to obtain necessary permits; · risks related our status as a foreign corporation; · risks related to current economic conditions; and · other risks related to our securities.  This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the sections entitled Risk Factors, Information on the Company and Operating and Financial Review and Prospects and in the exhibits attached to this Annual Report on Form 20-F.  Should one or more of these risks and uncertainties materialize, or  6   should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements.  The Companys forward-looking statements are based on beliefs, expectations and opinions of management on the date the statements are made and the Company does not assume any obligation to update forward-looking statements if circumstances or managements beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.  All references in this Report on Form 20-F to the terms we, our, us, the Company and MAX refer to MAX Resource Corp. and its subsidiary.   CAUTIONARY NOTE TO U.S. INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES  Certain disclosure in this Annual Report on Form 20-F has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of the United States securities laws.  The terms mineral reserve, proven mineral reserve and probable mineral reserve are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101  Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in United States Securities and Exchange Commission (SEC) Industry Guide 7 under the United States Securities Act of 1933, as amended (the Securities Act).  Under SEC Industry Guide 7 standards, a final or bankable feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.  In addition, the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC.  Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.  Inferred mineral resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.  Disclosure of contained ounces in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute reserves by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.  Accordingly, information contained in this Annual Report on Form 20-F and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.  7    Conversion Table In this Annual Report a combination of Imperial and metric measures are used.  Conversions from Imperial measure to metric and from metric to Imperial are provided below:


|                            |              |                        |                   
|--------------------------- | ------------ | ---------------------- | ------------------
|Imperial Measure          = | Metric Unit  | Metric Measure       = | Imperial Unit     
|2.47 acres                  | 1 hectare    | 0.4047 hectares        | 1 acre            
|3.28 feet                   | 1 meter      | 0.3048 meters          | 1 foot            
|0.62 miles                  | 1 kilometer  | 1.609 kilometers       | 1 mile            
|0.032 ounces (troy)         | 1 gram       | 31.1 grams             | 1 ounce (troy)    
|1.102 tons (short)          | 1 tonne      | 0.907 tonnes           | 1 ton             
|0.029 ounces (troy)/ton     | 1 gram/tonne | 34.28 grams/tonne      | 1 ounce (troy/ton)

CURRENCY AND EXCHANGE RATES Canadian Dollars Per U.S. Dollar  Unless otherwise indicated, all references in this annual report are to Canadian dollars.  The following table sets out the exchange rates for one United States dollar (US$) expressed in terms of one Canadian dollar (Cdn$) in effect at the end of the following periods, and the average exchange rates (based on the average of the exchange rates on the last day of each month in such periods) and the range of high and low exchange rates for such periods.


|                       |                                   |        |        |        |        |       
|---------------------- | --------------------------------- | ------ | ------ | ------ | ------ | ------
|                       | Canadian Dollars Per U.S. Dollars
|                       | 2009                              | 2008   | 2007   | 2006   | 2005   | 2004  
|Average for the period | 0.8760                            | 0.9441 | 0.9348 | 0.8820 | 0.8259 | 0.7697
|Low for the period     | 0.9755                            | 1.0289 | 1.0905 | 0.9099 | 0.8690 | 0.8493




|                    |               |              |               |               |              |               
|------------------- | ------------- | ------------ | ------------- | ------------- | ------------ | --------------
|For the Month of   
|                    | February
2010 | January
2010 | December
2009 | November
2009 | October
2009 | September
2009
|High for the period | 0.9283        | 0.9350       | 0.9304        | 0.9234        | 0.9123       | 0.9007        
|Low for the period  | 0.9642        | 0.9780       | 0.9647        | 0.9590        | 0.9755       | 0.9442        

The noon exchange rate on March 30, 2010 as reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars was US$1.00 = Cdn$0.9815.   PART I   Item 1. Identity of Directors, Senior Management and Advisers  Not applicable   Item 2. Offer Statistics and Expected Timetable  Not applicable   Item 3. Key Information  8    We were incorporated as Proven Capital Corp. on April 25, 1994 under the Business Corporations Actof Alberta (the BCA).  We changed our name to Cedar Capital Corp. on January 10, 1995 and subsequently to Vancan Capital Corp. on February 12, 2002.  On May 14, 2004, we changed our name to Max Resource Corp.  On June 27, 2007 we were registered as an extra-provincial company with the Registrar of Companies in British Columbia, pursuant to the Business Corporations Act of British Columbia (BCABC.  We are in the business of mineral property exploration and development.  The recoverability of amounts recorded for mineral properties and related deferred costs is dependent upon the discovery of economically recoverable reserves, our ability to obtain necessary financing to complete the development, and future production or proceeds from the disposition thereof.  We will depend almost exclusively on outside capital to complete the exploration and development of our mineral properties.  Such outside capital will include the sale of additional stock.  There can be no assurance that capital will be available as necessary to meet these continuing exploration and development costs or, if the capital is available, that it will be on terms acceptable to us.  The issuances of additional stock by the Company may result in a significant dilution in the equity interests of our current stockholders.  If we are unable to obtain financing in the amounts and on terms deemed acceptable, our business and future success may be adversely affected.  Our ability to continue operations as a going concern is dependent upon our ability to obtain necessary financing.  To date, we have not generated any revenues from operations and will require additional funds to meet our obligations and the costs of our operations.  As a result, significant losses are anticipated prior to the generation of any profits.  We are a reporting issuer in British Columbia and Alberta and trade in Canada on the TSX Venture Exchange under the symbol MXR.   We are quoted in the United States on the OTC Bulletin Board under the symbol MXROF.  We were listed on the Frankfurt Stock Exchange on March 2, 2006 under the symbol M1D.   3.A Selected Financial Data  This data is derived from our audited consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP) and reconciled to accounting principles generally accepted in the United States (U.S. GAAP).  The following selected financial data has been extracted from the more detailed consolidated financial statements included herein (stated in Canadian Dollars, being the foreign currency our financial statements are denominated in, see Currency and Exchange Rates) and is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto included elsewhere herein.  The following information should be read in conjunction with Item 5.  Operating and Financial Review and Prospects.  Selected Financial Data


|                                     |                     |                     |                     |                     |                     |                    
|------------------------------------ | ------------------- | ------------------- | ------------------- | ------------------- | ------------------- | -------------------
|(Cdn$ in 000, except per share data) | Year Ended 12/31/09 | Year Ended 12/31/08 | Year Ended 12/31/07 | Year Ended 12/31/06 | Year Ended 12/31/05 | Year
Ended
12/31/04
|                                     |                     |                     |                     |                     |                     |                    
|Revenue                              | Nil                 | Nil                 | Nil                 | Nil                 | Nil                 | Nil                
|Net Income(Loss)Cdn. GAAP            | ($4,660)            | ($1,149)            | ($1,094)            | ($722)              | ($464)              | ($209)             
|Earnings(Loss) Per Share Cdn GAAP    | ($0.22)             | ($0.05)             | ($0.06)             | ($0.07)             | ($0.06)             | ($0.04)            
|                                     |                     |                     |                     |                     |                     |                    
|Net Income(Loss)
US GAAP             | ($4,973)            | ($3,490)            | ($2,186)            | ($886)              | ($1,088)            | ($693)             
|Earnings (Loss) Per Share US GAAP    | ($0.23)             | ($0.16)             | ($0.13)             | ($0.08)             | ($0.14)             | ($0.13)            
|                                     |                     |                     |                     |                     |                     |                    
|Dividends Per Share Cdn GAAP         | 0                   | 0                   | 0                   | 0                   | 0                   | 0                  
|Dividends Per Share US GAAP          | 0                   | 0                   | 0                   | 0                   | 0                   | 0                  
|                                     |                     |                     |                     |                     |                     |                    
|Working Capital                      | $3,093              | $4,345              | $7,852              | $846                | $560                | ($57)              
|Mineral Properties Cdn GAAP          | $2,142              | $5,463              | $2,886              | $1,371              | $1,305              | $682               
|Mineral Properties US GAAP           | $644                | $1,424              | $1,187              | $708                | $656                | $350               
|Long Term Debt Cdn GAAP              | 0                   | 0                   | 0                   | 0                   | 0                   | 0                  
|                                     |                     |                     |                     |                     |                     |                    
|Shareholders Equity Cdn GAAP        | $5,268              | $9,836              | $10,767             | $2,218              | $1,865              | $625               
|Shareholders Equity US GAAP         | $3,762              | $5,790              | $9,061              | $1,548              | ($554)              | ($63)              
|Total Assets Cdn GAAP                | $5,325              | $9,983              | $10,801             | $2,276              | $1,895              | $687               
|Total Assets US GAAP                 | $3,826              | $5,943              | $9,103              | $1,613              | $590                | $6                 

There are several material differences between Canadian GAAP and U.S. GAAP that are applicable to the financial information disclosed or summarized herein.  Reference is made to Note 13 in the attached financial statements for an explanation of material differences between Canadian GAAP and U.S. GAAP.  See Currency and Exchange Rates for disclosure of exchange rates between Canadian dollars and United States dollars.  Unless indicated otherwise, all references to dollars in this annual report are to Canadian dollars.   3.B.        Capitalization and Indebtedness  Not Applicable   3.C.        Reasons for the Offer and Use of Proceeds  Not Applicable   3.D. Risk Factors  Any investment in our common shares involves a high degree of risk.  You should consider carefully the following information before you decide to buy our common shares.  If any of the events discussed in the following risk factors actually occurs, our business, financial condition or results of operations would likely suffer.  In this case, the market price of our common shares could decline, and you could lose all or part of your investment in our shares.  In particular, you should consider carefully the following risk factors:   We have a history of losses.  We have historically incurred losses and have no revenue from operations.  We incurred losses from operations of $4,660,805 for the fiscal year ended December 31, 2009 and losses of $1,149,013 and $1,093,554 for the fiscal years ended December 31, 2008 and 2007, respectively.   As of December 31, 2009, we had a cumulative deficit of $9,417,671 (December 31, 2008: $4,756,865).  There can be no assurance that either the Company or our subsidiary will achieve profitability in the future or at all.  We have not identified any commercially viable mineral deposits.  We have not commenced development or commercial production on any of our properties.  We have no history of earnings or cash flow from operations.  We do not have a line of credit and our only present source of funds available may be through the sale of our equity shares or assets.  Even if the results of exploration are encouraging, we may not have the ability to raise sufficient funds to conduct further explorations to determine whether a commercially mineable deposit exists on any of our properties.  While additional working capital may be generated through the issuance of equity or debt, the sale of properties or possible joint venturing of the properties, we cannot assure you that any such funds will be available for operations on acceptable terms, if at all.  9    Very few mineral properties are ultimately developed into producing mines.  At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.   The business of exploration for minerals and mining involves a high degree of risk.  Few properties that are explored are ultimately developed into producing mines.  Most exploration projects do not result in the discovery of commercially mineable deposits of ore. Substantial expenditures will be required for us to establish ore reserves through drilling, to develop metallurgical processes, to extract the metal from the ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining.  Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities to justify commercial operations or that we can obtain the funds required for development on a timely basis.  The economics of developing precious and base metal mineral properties is affected by many factors including the cost of operations, variations in the grade of ore mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection.  Additional financing may be needed for our business operations.  As at December 31, 2009, we had cash and cash equivalents on hand of $3,118,960.  We have sufficient working capital to fund our exploration activities on our mineral properties through fiscal 2010.  Our business plan calls for significant expenses in connection with the acquisition and exploration of mineral claims.  While we believe we have sufficient working capital to fund our activities through our 2010 fiscal year, we will require additional financing to sustain our business operations if we are not successful in earning revenues once we complete exploration on any mineral properties we acquire. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required.  We believe the only realistic source of future funds presently available to us is through the sale of equity capital.  Any sale of share capital will result in dilution to existing shareholders.  Mineral exploration involves a high degree of risk against which we are not currently insured.  Unusual or unexpected rock formations, formation pressures, fires, power outages, labour disruptions, flooding, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are risks involved in the operation of mines and the conduct of exploration programs.  We have relied on and will continue to rely upon consultants and others for exploration expertise.  It is not always possible to fully insure against such risks and we may decide not to take out insurance against such risks as a result of high premiums or other reasons.  Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of our common stock.  We may require permits and licenses that we may not be able to obtain.  Our operations may require licenses and permits from various governmental authorities.  There can be no assurance that we will be able to obtain all necessary licenses and permits that may be required to conduct exploration, development and mining operations at any projects we acquire.   10   Our properties may not have been examined in detail by a qualified mining engineer or geologist.  Our properties are in an exploratory stage.  As a result, they may not have been examined in detail by a qualified mining engineer or geologist who could quantify exactly what their economic potential or value, if any, is.  Metal prices fluctuate widely.  Our business activities are significantly affected by the prices of precious metals and base metals on international markets.  The price of minerals affects our ability to raise financing, the commercial feasibility of our properties, the future profitability of our properties should they be developed and our future business prospects.  The prices of precious metals and base metals fluctuate widely and are affected by numerous factors beyond our control, including expectations with respect to the rate of inflation, the strength of the U.S. dollar and of other currencies, interest rates, and global or regional political or economic crisis.  The demand for and supply of precious metals and base metals may affect precious metals and base metals prices but not necessarily in the same manner as supply and demand affect the prices of other commodities.  The resource industry is very competitive.  Significant competition exists for the limited number of property acquisition opportunities available.  As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than our Company, we may be unable to acquire attractive mining properties on terms we consider acceptable.  Competition in the precious and base metals mining industry is primarily for mineral rich properties which can be developed and exploited economically; the technical expertise to find, develop, and produce such properties; the labor to operate the properties; and the capital for the purpose of funding such properties.  Many competitors not only explore for and mine precious and base metals and minerals but conduct refining and marketing operations on a worldwide basis.  Such competition may result in our being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund our operations and develop our properties.  Our inability to compete with other mining companies for these resources may have a material adverse effect on our results of operation and business.  There can be no assurance that our exploration and acquisition programs will yield any reserves or result in any commercial mining operation.  Our operations may be adversely affected by environmental regulations.  Our operations may be subject to environmental regulations promulgated by government agencies from time to time.  Environmental legislation provides for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution.  A breach of such legislation may result in the imposition of fines and penalties.  In addition, certain types of operations require the submission and approval of environmental impact assessments.  Environmental legislation is evolving in a manner, which means that standards, enforcement, fines and penalties for non-compliance are more stringent.  Environmental assessments of proposed projects carry a heightened degree of responsibility for us and our directors, officers and consultants.  The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of our operations.  We do not maintain environmental liability insurance.  Differences in U.S. and Canadian reporting of reserves and resources  The Companys reserve and resource estimates are not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as the Company generally reports reserves and resources in accordance with Canadian practices. These practices are different from those used to report reserve and resource estimates in reports and other materials filed with the SEC.  It is Canadian practice to report measured, indicated and inferred resources, which are not permitted in disclosure filed with the SEC by United States issuers. In the United States, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made.  United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves.  Further, "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC permits issuers to report "resources" only as in-place tonnage and grade without reference to unit of metal measures.  Accordingly, information concerning descriptions of mineralization, reserves and resources contained in this Annual Report, or in the documents incorporated herein by reference, may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.  As a foreign private issuer, our shareholders may have less complete and timely data.  We are a foreign private issuer as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended (the Exchange Act).  We are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act.  Therefore, we are not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders.  The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders activities in our securities.  Recent market events and conditions  Throughout 2008 and 2009, the U.S. credit markets experienced serious disruption due to a deterioration in residential property values, defaults and delinquencies in the residential mortgage market (particularly, sub-prime and non-prime mortgages) and a decline in the credit quality of mortgage backed securities. These problems led to a slow-down in residential housing market transactions, declining housing prices, delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These conditions caused a loss of confidence in the broader U.S. and global credit and financial markets and resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, less liquidity, widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. These unprecedented disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many smaller companies. These disruptions could, among other things, make it more difficult for us to obtain, or increase its cost of obtaining, capital and financing for its operations.  The Companys access to additional capital may not be available on terms acceptable to it or at all.  General economic conditions  The recent unprecedented events in global financial markets have had a profound impact on the global economy. Many industries, including the gold mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity.  11   A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, · consumer spending, · employment rates, · business conditions, · inflation, · fuel and energy costs, · consumer debt levels, · lack of available credit, · the state of the financial markets, · interest rates, · and tax rates may adversely affect our growth and profitability.  Specifically:  The global credit/liquidity crisis could impact the cost and availability of financing and our overall liquidity; the volatility of gold prices may impact our potential revenues, profits and cash flow; volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and the devaluation and volatility of global stock markets impacts the valuation of our equity securities  These factors could have a material adverse effect on our financial condition and results of operations.  The trading market for our shares is not always liquid.  Although our shares trade on the TSX Venture Exchange, the Frankfurt Stock Exchange and the FINRA OTC Bulletin Board, the volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.  In addition, trading volumes in our common shares can be volatile and if the trading volume of our common shares experiences significant changes, the price of our common shares could be adversely affected.  The price of our common shares could also be significantly affected by factors, many of which are beyond our control.  Our securities may be subject to penny stock regulation.  Our stock is subject to penny stock rules as defined in 1934 Securities and Exchange Act Rules.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Our common shares are subject to these penny stock rules.  Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).  The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customers account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customers confirmation.  In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common shares in the United States and shareholders may find it more difficult to sell their shares.  Our Passive Foreign Investor Company (PFIC) Status Has Possible Adverse Tax Consequences for U.S. Investors   Current holders of and potential

 investors 

in our common shares 

who are U.S. taxpayers should be aware that we believe we were a passive foreign investment company (PFIC) for the year ended December 31, 2009, and may continue to be a PFIC in future years.

  

If we are a PFIC for any year during a U.S. taxpayers holding period, then such U.S. taxpayers generally will be required to treat any so-called excess distribution received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distributions or gain, unless the taxpayer makes a qualified electing fund (QEF) election or a mark-to-market election with respect to our shares.  In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer.  A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to its shareholders.  A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayers basis therein.  U.S. taxpayers are advised to seek the counsel of their professional tax advisors.

  This paragraph is qualified in its entirety by the discussion below under the heading TaxationCertain U.S. Federal Income Tax Considerations.  Each U.S. taxpayer should consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC rules and

 the acquisition, ownership, and disposition of

our common shares.  We may be affected by internal control and auditor attestation rules under the Sarbanes-Oxley Act of 2002  Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we have provided a report by management on our internal control over financial reporting in this Annual Report.  Effective December 31, 2010 we will also be required to furnish our auditors attestation on the effectiveness of our internal control over financial reporting.  Any adverse results from such attestation could result in a loss of investor confidence in our financial reports and have an adverse effect on the price of our shares of common stock.  We have evaluated our internal control over financial reporting and have concluded that our internal control over financial reporting is effective.  Our auditors have not conducted the evaluation necessary to provide an attestation report on the effectiveness of our internal control over financial reporting.  During an auditors evaluation and testing process, they may identify one or more material weaknesses in our internal control over financial reporting, and they will be unable to attest that such internal control is effective. If our auditors are unable to attest that our internal control over financial reporting is effective as of December 31, 2010, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on our stock price.  Failure to comply with the new rules may make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage and/or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors, or as executive officers.  We are a foreign corporation and most of our directors and officers are outside of the United States, which may make enforcement of civil liabilities difficult.  We are incorporated under the laws of the Province of Alberta, Canada and registered extra-provincially in the Province of British Columbia, Canada.  All of our directors and officers are residents of Canada, with the exception of Clancy Wendt (who resides in the United States), and part of our assets are located outside of the United States.  Consequently, it may be difficult for United States investors to effect service of process within the United States upon those directors or officers who are not residents of the United States, or to realize in the United States upon  judgments of United States courts predicated upon civil liabilities under the United States Securities Exchange Act of 1934, as amended.  A judgment of a US court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the US court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter.  There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or us predicated solely upon such civil liabilities.   Item 4.  Information on the Company   4.A History and Development of the Company  We were incorporated as Proven Capital Corp. on April 25, 1994 under the Business Corporations Actof Alberta.  We changed our name and consolidated our share capital as set forth below on the following dates: DateNameConsolidation (Old:New)April 25, 1994Proven Capital Corp.Not applicableJanuary 10, 1995Cedar Capital Corp.Not applicableFebruary 12, 2002Vancan Capital Corp.4:1May 14, 2002MAX Resource Corp.Not applicable  On June 27, 2007 we were registered as an extra-provincial company with the Registrar of Companies in British Columbia, pursuant to the Business Corporations Act of British Columbia.  We have an authorized capital of an unlimited number of common shares and an unlimited number of preferred shares, none of which preferred shares are issued.  The trading symbol for the Company on the TSX Venture Exchange is MXR with the symbol on the OTC Bulletin Board being MXROF.  The trading symbol on the Frankfurt Exchange is M1D.  We are a reporting issuer in the United States and our annual report and 6K filings can be found on the SECs EDGAR system at www.sec.gov .  We are a reporting issuer in certain Canadian jurisdictions and our required disclosure filings for Canada can be found at www.sedar.com.  Our head office is located at 400 Burrard Street, Suite 1400, Vancouver, British Columbia, Canada, V6C 3G2.  Our telephone number is (604) 643-1719.  We have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets.  We are engaged in the business of acquiring and exploring resource properties.    Principal Expenditures And Divestitures  Since the beginning of the last three financial years, our principal capital expenditures and divestitures have been comprised principally of the acquisition, exploration and abandonment or disposition of our mineral properties, as described below.   12   Mineral Properties Now Held  Table Top Gold Project(Nevada)  On September 1, 2009 we entered into an Option Agreement with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration, granting us an option (the Option) to acquire a 100% interest in the Table Top gold project claims (Table Top Project) in Humboldt County, Nevada for the sum of US$300,000 (the Purchase Price) and a 3% NSR Royalty, 1% of which can be repurchased for US$1 million.  The Table Top Project consists of 149 claims and is located 10 miles northwest of the town of Winnemucca, Nevada.  Under the terms of the agreement we are required to make the following rental payments (the Rental Payments) are required in order to maintain the Option in good standing:  DatePayment Amount (USD)Upon execution of the Agreement (September 1, 2009)$5,000 (paid)On the First anniversary of the Agreement (September 1, 2010)$25,000On the Second anniversary of the Agreement (September 1, 2011)$35,000Each anniversary thereafter$50,000  In December 2009 we spent a total of $9,647 in consulting fees and also filed permit applications for a 16 hole diamond drill program to be conducted on the property.  Prior to commencing the drilling program we plan to undertake a 12 trench project to expose the bed rock for sampling.  See Special Notes regarding Forward Looking Statements.  See Item 4.D, Property, Plant and Equipment  Table Top Project.  East Manhattan Wash gold project(Nye County, Nevada)  In December, 2007, we entered into an option agreement in conjunction with Max Resource, Inc., our wholly owned Nevada subsidiary, to acquire a 100 % interest in the East Manhattan Wash (EMW) claims in the Manhattan Mining District, Nye County, Nevada from MSM LLC, a Nevada corporation.   The property is comprised of 119 claims and is located 40 miles north of the town of Tonopah, Nevada. We made a cash payment of US$28,000 to MSM LLC and, in accordance with the terms of the option agreement, are required to make the following option payments: Date Payment Amount Upon execution of the option agreement $28,000 (U.S.) (paid) First anniversary of effective date (December 4, 2008 $20,000 (U.S.) (paid) Second anniversary of effective date (December 4, 2009) $25,000 (U.S.) (paid) Third anniversary of effective date (December 4, 2010) $40,000 (U.S.) Fourth anniversary of effective date (December 4, 2011) $50,000 (U.S.) Fifth anniversary of effective date (December 4, 2012) $100,000 (U.S.)  In addition we are required to make exploration expenditures totalling US$700,000 on the EMW claims in the second to fifth years, as follows: · on or before December 4, 2009, US$50,000; · on or before December 4, 2010, a furtherUS$150,000 · on or before December 4, 2011, a further US$200,000 · on or before December 4, 2012, a further US$300,000  The EMW Property is subject to a 3% NSR royalty.  The option may be exercised by making all of the above option payments and exploration expenditures.  Upon full exercise of the option, we will own 100% of the project.   13   We made the following expenditures on this property during the fiscal years ending December 31, 2008 and 2009:  20092008Drilling and assays$       12,763$        756Geological consulting35,1337,688Field expenses5,5521,214$       53,448$    9,658  See Item 4.D, Property, Plant and Equipment  East Manhattan Wash Gold Project.  Howell/Crowsnest Gold Project (British Columbia)  On June 9, 2008, we entered into anoption agreement with Eastfield Resources Ltd. (Eastfield) whereby we can earn up to a 60% interest in the Howell Gold Project located one hour south of the town of Sparwood (by gravel road) in Southeast B.C.  Eastfield has the right to earn a 100% interest in the Howell property through an amended 1999 option agreement with Teck Cominco Metals Limited (TCML) and Goldcorp Inc. (GI) whereby outstanding commitments include a final exploration expenditure totaling $423,759 and cash payments of $100,000 to each of TCML and GI due by August 31, 2010.  On July 24, 2009, we entered into an amending agreement with Eastfield, amending the June 9, 2008 Howell agreement to allow us to earn a 60% interest in the Howell Gold Project (Howell Property) and/or the Crowsnest Mineral Property (Crowsnest Property) projects over a four year period.  The Crowsnest Property is comprised of 14 claims totaling 3,163 hectares and is located approximately 10 km southeast of the Howell property.  The terms of our option agreement (as amended) with Eastfield are as follows:


|                                              |                                                   |                     |                              
|--------------------------------------------- | ------------------------------------------------- | ------------------- | -----------------------------
|Property                                      | Date                                              | Cash Payment Amount | Issuance of Shares           
|                                              |                                                   |                     |                              
|Combined Howell Property & Crowsnest Property | On signing amending agreement (July 24, 2009)     | $10,000 (paid)      |                              
|                                              | On signing amending agreement (July 24, 2009)     |                     | 50,000 common shares (Issued)
|                                              | On or before 1st anniversary date (June 30, 2010) | $20,000             | OR 50,000 common shares      
|                                              | On or before June 30, 2011                        | $30,000             |                              
|Howell Property                               | On or before August 31, 2010                      | $120,000*           |                              
|Howell Property                               | On or before June 30, 2012                        | $40,000             | 200,000 Common shares        
|Crowsnest Property                            | On or before June 30, 2012                        | $40,000             | 200,000 Common shares        
|Howell Property                               | On or before June 30, 2013                        | $50,000             | 200,000 Common shares        
|Crowsnest Property                            | On or before June 30, 2013                        | $50,000             | 200,000 Common shares        
|                                              |                                                   |                     |                              

*our portion of the $200,000 payment due to GI and TCML by August 31, 2010 pursuant to Eastfields underlying agreement with them.  In addition we are required under the agreement to make exploration expenditures as follows:  In the first and second years, $400,000 on the combined Howell and Crowsnest properties  as follows: · on or before June 30, 2010, $150,000; · on or before June 30, 2011, a further $250,000;  14    In the third and fourth years, $701,000 on the Howell Property as follows: · on or before June 30, 2012, $1.00 · on or before June 30, 2013, a further $700,000  In the third and fourth years, $1,050,000 on the Crowsnest Property as follows: · on or before June 30, 2012 $350,000 · on or before June 30, 2013, a further $700,000.  During the year ended December 31, 2008, we spent a total of $455,407 on the Howell Property as follows: drilling and assays: $238,709; geological consulting: $59,222; and field  expenses: $157,476.  During the year ended December 31, 2009, we spent a total of $3,078 for geological consulting fees on the Howell property, and we claimed a BC Mining Tax recovery in the amount of $20,684.  We also spent a total of $248,429 on exploration of the Crowsnest property, comprised of drilling and assays ($112,088), geological consulting ($52,524), and field expenses ($83,817) during 2009.  Subsequent to December 31, 2009, the Government of British Columbia announced that it intends to halt all ongoing mineral exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  The Company has been contacted by the Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.  See Item 4.D, Property, Plant and Equipment  Howell/Crowsnest Property.  Ravin Molybdenum/ Tungsten Property (Lander County, Nevada):  On September 10, 2007, we entered into an option agreement to acquire a 100 % interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the Ravin Property) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration for the sum of US$300,000 (the Purchase Price).  The following rental payments (the Rental Payments) are required in order to maintain the Option:  DatePayment AmountUpon execution of the option agreement$5,000.00 USD (paid)First anniversary of effective date (September 10, 2008)$25,000.99 USD (paid)Second anniversary of effective date (September 10, 2009)$35,000.00 USD (paid)Each anniversary thereafter$50,000.00 USD  The option may be exercised at any time by payment of the Purchase Price and grant of a 3% NSR, 1% of which can be repurchased for US$1 million (the Royalty).  During the year ended December 31, 2008 we spent a total of $479,720 on exploration of the Ravin property comprised of drilling and assay costs ($257,384), geological consulting fees ($119,206), and field expenses ($94,601).  During the year ended December 31, 2009 we spent a total of $17,930 on exploration of the Ravin property comprised of drilling and assay costs ($3,939), geological consulting fees ($12,930), and field expenses ($1,071).  See Item 4.D, Property, Plant and Equipment  Ravin Molybednum/Tungsten Property.   15   Diamond Peak Property (Nevada)  On May 9, 2006, we announced that we had entered into an Option Agreement to acquire an option (the Option) to purchase a 100% interest in the FMC claims in Eureka County, Nevada, the Diamond Peak Property for the sum of US$300,000 (the Purchase Price) plus a 3% NSR, 1% of which can be repurchased for US$1 million (the Royalty), from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration.  Under the terms of the Option Agreement, we issued 100,000 shares of the Company to the Wendt Family Trust and must make the following rental payments (the Rental Payments) in order to maintain the Option:


|                                                     |                                        
|---------------------------------------------------- | ---------------------------------------
|Date                                                 | Payment Amount (U.S funds)             
|Upon execution of the option agreement (May 9, 2006) | $25,000 (paid)                         
|First anniversary of effective date (May 9, 2007)    | $35,000 (paid)                         
|Second anniversary of effective date (May 9, 2008)   | $45,000 (paid subsequent to the period)
|Third anniversary of effective date (May 9, 2009)    | $50,000 (paid subsequent to the period)
|Each anniversary thereafter                          | $50,000 (paid May 9, 2009)             

The option may be exercised at any time by payment of the Purchase Price and grant of the Royalty.  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such payments being credited against the Royalty.  The Rental Payments are not credited against the Royalty or the Purchase Price, but are not payable after the Option is exercised.  We entered into a mineral property option agreement on May 15, 2006, amended effective September 30, 2009, with Kokanee Placer Ltd. (Kokanee Placer), a British Columbia company, whereby we granted to Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property in consideration of a cash payment of US$25,000 (paid) and the issuance of 100,000 common shares of Kokanee Minerals Inc. (Kokanee) (received subsequent to December 31, 2009), a public company (TSX V Symbol KOK) which exchanged its shares for Kokanee Placer in conjuction with its public listing (completed in January, 2010).  To maintain this agreement in good standing, Kokanee has agreed to make the following annual payments and share issuances to the Company:  By May 15, 2007 pay US$35,000 to the Company (received) and 200,000 Kokanee shares (received subsequent to December 31, 2009); Five days after listing of Kokanees common shares on the TSX Venture Exchange, pay US$95,000 and issue 300,000 Kokanee shares to the Company (received subsequent to December 31, 2009); On or before May 9, 2010 and on each anniversary thereof up to and including May 9, 2016, pay US$50,000 to the Company; and On commencement of commercial production, issue 1,000,000 Kokanee shares to the Company;  The Option granted to Kokanee is also subject to Kokanee completing the following yearly mineral exploration commitments on the Diamond Peak Property:  $100,000 to be spent by Kokanee in the first year of the agreement (incurred); $300,000 in the second year; and $600,000 in the third year.   16   To date, we have not made any expenditures on the Diamond Peak Property as these expenditures are the responsibility of Kokanee under the terms of our option agreement with them.  However, Kokanee completed an exploration program on the Diamond Peak Property during 2006 in order to satisfy their first year obligation of $100,000 in expenditures.   This initial exploration program included an induced polarization survey over 4 kilometers of strike length.  The results of this report have been used to identify drill targets for a drill program to be conducted in 2010.  See Item 4.D, Property, Plant and Equipment  C de Baca Project (New Mexico):  In September 2005, we announced that we had entered into an agreement with Applied Geological Services, Inc. of Denver, Colorado for the acquisition of a total of 108 uranium exploration claims (the Dat Claims) in Socorro County, New Mexico.  Consideration for the acquisition of the Dat Claims (known also as the C de Baca Project) is an immediate US$10,000 cash payment with annual payments of US$10,000 until production.  After production, a royalty of 2% of revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  The obligation to make payments to Applied Geologic Services can be terminated at anytime by us by providing notice that we are abandoning the Dat Claims and agreeing to transfer them back to the vendor.  In 2007 we conducted a 14 hole drill program to follow up on historic Occidental Minerals drilling and we were successful in confirming historic uranium grades.  In March 2008 we received a Technical Report prepared by Michael G. Bersch, Phd. PG, which recommends further exploration at C de Baca that will include diamond drilling, project and regional scale geologic mapping.  During the year ended December 31, 2008 we spent $16,360 for geological consulting and $2,001 permitting on the C de Baca project. No money was spent on the project during the year ended December 31, 2009.  See Item 4.D, Property, Plant and Equipment  C de Baca Project.  Properties Sold, Lost or Abandoned  Longtom Property (Target Claims)  By agreement dated April 16, 2003, we obtained the right to acquire a 50% interest or ownership in a mineral claim comprising 1,781.9 acres located in the Longtom Lake area of the Northwest Territories (the Target 1 Claim) by paying $15,000 and issuing 200,000 common shares at a price of $0.38 per share.  By agreement dated January 15, 2003, we entered into an agreement to acquire a 50% interest or ownership in a mineral claim located east of Hottah Lake in the Northwest Territories of Northern Canada (the Target 2 Claim).  We acquired our 50% interest in the claim by making cash payments totalling $15,000, issuing 200,000 common shares at a price of $0.20 each and agreeing to incur a minimum of $100,000 (since reduced to $50,000, which amount has already been incurred) in exploration expenditures on the Claim in stages by December 31, 2004.  Both of the Target Claims Agreements provided that we would enter into a single purpose joint venture agreement with David G. Lorne, or whoever he assigns his 50% interest to, to further explore and develop the Target Claims once we complete the exploration expenditure of our interest in each claim.  Mr. Lorne sold his 50% interest in the Target 1 and Target 2 claim to Alberta Star Development Corp., a Canadian company which trades on the TSX-Venture Exchange.  We subsequently abandoned our interest in the Target 2 claim but maintained our interest in the Target 1 claim.  During the year ended December 31, 2007, we recorded an impairment charge of $148,097 on the Target 1 Claim.  We did not spend any money on the property during 2008 or 2009.  During the fiscal year ended December 31, 2009, we elected to abandon our interest in the Target 1 claim as well. . See Item 4.D, Property, Plant and Equipment Longtom Property.   17   The Gold Hill Property (Alaska):  On May 17, 2004, we entered into an Option Agreement with Zazu Exploration, Inc. (Zazu) to acquire its option to acquire a 90% interest, or ownership, in the Gold Hill Property near Cantwell, Alaska.   Zazu Exploration, Inc. is a privately-held Texas corporation, which holds a Lease on the Gold Hill Claims from GCO Minerals Company.  Under the terms of the Option Agreement, we paid $63,691 (US$48,200) and issued 100,000 shares valued at $47,000 and 100,000 warrants exercisable at $0.47 per share for a two year period.  In order to maintain the Option, we issued an additional 200,000 shares effective December 31, 2004 (issued at a value of $74,000).  We issued a further 200,000 shares effective December 31, 2005 (issued at a value of $120,000) to exercise the option acquired Zazus right to earn a 90% interest in the Gold Hill Property under its lease with GCO Minerals, subject to a NSR of 1% and GCOs rights under the lease, and assumed all of Zazus obligations under its lease with GCO Minerals Corp. (GCO).  We also completed the following minimum work commitments and made the following Advance Royalty Payments (in U.S. funds) as required under the GCO lease:  YEARWORK COMMITMENTCUMULATIVE WORK COMMITMENTADVANCE ROYALTY2004$100,000 (incurred)$100,000$5,000 (paid)2005$150,000 (incurred)$250,000$15,000 (paid)2006Nil (deferred to 2007)$250,000$25,000 (paid)2007$250,000 (incurred)$500,000$25,000 (paid)2008$250,000 (incurred)$750,000$50,000 (paid)2009$500,000 (incurred)$1,250,000$75,000 (paid)2010$500,000 (incurred)$1,750,000$100,0002011$500,000$2,250,000$100,000  During the year ended December 31, 2008 we spent a total of $1,415,727 on exploration of the Gold Hill property.  This was comprised of drilling and assays of $916,983, field expenses of $281,726, geological and consulting costs of $196,384, licenses, permits and lease payments of $13,756 and travel costs of $6,878.  During the year ended December 31, 2009 we spent a total of $83,893 on exploration of the Gold Hill property.  This was comprised of field expenses of $11,928, geological and consulting costs of $51,570, licenses, permits and lease payments of $16,573 and travel costs of $3,822.  During the year ended December 31, 2009, we elected to abandon the Gold Hill property and wrote off $524,444 of acquisition costs and $2,593,472 of deferred exploration costs to operations during fiscal 2009.   Subsequent to the year ending December 31, 2009, we executed a Quit Claim Deed in favor of GCO relinquishing our right to all mineral claims staked by us in the area (GH 1 through GH 32),  thereby relinquishing our entire interest in the property.   See Item 4.D, Property, Plant and Equipment Gold Hill Property.  MacInnis Lake Uranium Project (Northwest Territories):  We entered into an option agreement dated April 1, 2005, as amended April 11, 2006, (the Option Agreement) with Alberta Star Development Corp. (Alberta Star) to acquire up to a 50% interest or ownership in the MacInnis Lake Uranium Property, subject to a 2% NSR royalty, by · making cash payments totaling $30,000 (paid); · issuing to Alberta Star 200,000 of our shares (issued); and · performing exploratory work commitments totaling $2,000,000 over a five year period being · $250,000 on or before October 1, 2008; · $750,000 on or before October 31, 2009; · $500,000 on or before October 1, 2010 and · $500,000 on or before April 1, 2011.  18    We did not spend any money on the property during 2008 or 2009.  During the year ended December 31, 2009, we elected to abandon the MacInnis Lake property and wrote-off the remaining $1 of acquisition costs to operations. See Item 4.D, Property, Plant and Equipment McKinnnis Lake Uranium Project.  NUSTAR Uranium Project (Colorado Plateau, Arizona):  On April 4, 2007, we entered into an agreement with NUSTAR Exploration LLC, a private Arizona limited liability corporation, for the acquisition of a 100% interest in 427 mineral claims located in the Arizona Strip of the Colorado Plateau in northwest Arizona.  Under the terms of our agreement with NUSTAR, we purchased a 100% interest in the NUSTAR Claims by making a cash payment to NUSTAR of US$128,100 and issuing 200,000 shares of our common stock, subject to a gross royalty of 4% (the Royalty) of sales revenue from commercial production of uranium from the NUSTAR Claims.  The agreement provided that we would have the right to purchase 3% of the 4% Royalty applicable to each breccia pipe identified on the NUSTAR Claims that went into commercial production, for the sum of $1,000,000.  During the year ended December 31, 2009, we incurred $1,392 of geological consulting expenses on the Nustar project.  In September 2009, we elected to abandon the Nustar project and wrote off $497,948 of acquisition costs and $5,488 of deferred exploration costs to operations during the period.  See Item 4.D, Property, Plant and Equipment Nustar Uranium Project.      Indata Gold/Copper Project (British Columbia  We acquired our interest in this property (which is located 120 kilometers north of Fort St. James, in Northern British Columbia, Canada) (the Indata Gold/Copper Property) by agreement dated for reference June 9, 2008 with Eastfield Resources Ltd. (Eastfield) which granted us an option to earn up to a 60% interest in the Indata Gold/Copper Property by making the following cash  payments, share issuances and exploration expenditures


|                         |                                   |                          |                         
|------------------------ | --------------------------------- | ------------------------ | ------------------------
|Payments/ Shares         | Due                               | Exploration Expenditures | Due                     
|$10,000                  | On signing (paid)                 | $250,000                 | June 1, 2009 (completed)
|50,000 shares            | Commencement of drilling (issued) | $250,000                 | June 1, 2010            
|$20,000 or 50,000 shares | June 1, 2009                      | $650,000                 | June 1, 2011            
|$35,000                  | June 1, 2010                      |                          |                         
|$55,000 AND 200,000      | June 1, 2011                      |                          |                         

We spent a total of $338,478 on the property in the year ended December 31, 2008 (Drilling: $172,893; Geological Consulting: $28,898; and Field Expenses: $136,687) and spent a further $5,470 on geological consulting in 2009.  We elected to abandon this property in June, 2009 and no longer hold an interest in this property.  See Item 4.D, Property, Plant and Equipment Indata Gold Copper Project.     19   4.B Business Overview  During the fiscal year ended December 31, 2009, we (i) collected 3 large soil sampling grids from the East Manhattan Wash Gold project and completed assays of these samples. (ii) entered into an amended option agreement with Eastfield to  include the Crowsnest Gold project with the Howell project, allowing us to acquire a 60% interest in both or either of the properties; (iii) Completed a 26 hole  reverse circulation drill program at the Crowsnest Project; (iv) Entered into an option agreement with Energex, LLC of Nevada, to acquire a 100% interest in the Table Top claims in Humboldt County Nevada; (v) Entered into an agreement with Kokanee Placer Ltd. to amend our agreement granting them an option to purchase 51% of the Diamond Peak Project; (vi) Elected to abandon the following projects: a. Gold Hill Project; b. MacInnis Lake Uranium Project; c. Nustar Uranium Project; d. Indata Gold/Copper Project; e. Longtom Property (Target Claims).  Subsequent to the fiscal year end, we were advised that the the Province of British Columbia intends to halt all mineral exploration work in the Flathead Valley where our Howell/Crowsnest Project is located.  We were subsequently contacted by government representatives to commence compensation discussions.  See Principal Expenditures and Divestitures.  Management & Employees  We do not have any employees other than our directors and officers.  Our President and Chief Executive Officer, Stuart Rogers devotes approximately 80% of his business time to our affairs.  We had a management agreement dated May 8, 2002 with a private company owned by Mr. Rogers whereby he provided management services to us for $5,000 per month.  For the period December 1, 2003 to March 31, 2005, Mr. Rogers reduced the monthly fee to $2,500 per month to conserve the Companys working capital.  On July 1, 2007, this amount was increased to $10,000 per month to reflect a substantial increase in the amount of time that Mr. Rogers has been required to devote to the Companys affairs since that time.  In order to more accurately reflect the time and effort spent by Mr. Rogers on the Companys behalf, a Consulting Agreement was entered into between West Oak Consulting Group, Inc. (West Oak) and us, effective October 1, 2008.  Mr. Rogers is the sole shareholder and key employee of West Oak.  Pursuant to the Agreement, West Oak, through its key employee who acts as our President and CEO, performs management services on our behalf, will receive $10,000 per month for a period of 24 months.  The Agreement calls for an automatic renewal for a second 24 month period in the absence of either West Oak or us providing written notice of termination of the agreement.  Our Vice-President of Exploration, Mr. Clarence Wendt, entered into a Consulting Agreement with us effective October 1, 2008, which agreement is in force and effect for a period of 24 months, with a fee of US$10,000 per month being paid to him for his geological consulting services and the performance of duties associated with the position of Vice President, Exploration.  The agreement calls for an automatic renewal for a second 24 month period in the absence of either Mr. Wendt or us providing written notice of termination of the agreement.  20    Office Space  We do not own our office.  We rent a portion of the office space leased by our President in Vancouver, British Columbia (about 335 square feet) as our executive office on a month to month basis for $1,100 per month plus telephones.  Looking forward to 2010, we anticipate that we will be able to fund our ongoing general operations through the next year from funds on hand.  However, due to the current volatility in capital markets and continued depressed commodity prices for molybdenum and uranium, we have taken steps to reduce our general and administrative costs, primarily through reductions in advertising and promotional expenses.  The resultant cost savings were evident during fiscal 2009 and will continue in subsequent periods.  We also plan to be selective in incurring exploration expenditures during fiscal 2010 through the balance of the fiscal year.  Due to the recent increase in the price of gold, we will focus our exploration efforts on those properties we consider highly prospective for gold.  This includes Table Top in Nevada, where a 16 hole drill program is permitted and scheduled to begin in April 2010, and East Manhattan Wash in Nevada, where we will continue initial exploration work in order to satisfy our work commitment for 2010 (US$150,000) and develop a drill program to be conducted later in the year, subject to permitting.  After reviewing all historic data as well as the results of our 2008 drill programs we decided to abandon a number of properties, which are outlined in Item 4A above.  While conditions in the resource sector have improved, access to capital is still limited for early stage exploration companies and we will continue to review our project portfolio and may elect to reduce or eliminate exploration expenditures or abandon certain of our properties should we not deem it fiscally prudent to satisfy these obligations when they come due.  As of March 31, 2010, we have funds on hand of approximately $2.8 Million which is expected to provide sufficient working capital to fund our exploration activities on our remaining properties through fiscal 2010, as outlined in Item 4D below. See Special Note Regarding Forward Looking Statements.   4C Organizational Structure  The Company has only one subsidiary, MAX Resource, Inc., a wholly owned Nevada corporation incorporated in the fiscal year ending December 31, 2005 for the purpose of holding its mineral interests in Arizona, New Mexico and Nevada and for the purpose of securing work permits on its properties in those jurisdictions.  Throughout this report on Form 20-F, MAX Resource, Inc. and its parent company, MAX Resource Corp., are collectively referred to as the Company.   4.D Property, Plant and Equipment  WE ARE AN EXPLORATION STAGE COMPANY AND HAVE NO MINERAL PRODUCING PROPERTIES AT THIS TIME.  ALL OF OUR PROPERTIES ARE EXPLORATION PROJECTS, AND WE RECEIVE NO REVENUES FROM PRODUCTION.  ALL WORK PRESENTLY PLANNED BY US IS DIRECTED AT DEFINING MINERALIZATION AND INCREASING UNDERSTANDING OF THE CHARACTERISTICS AND ECONOMICS OF THAT MINERALIZATION.  THERE IS NO ASSURANCE THAT A COMMERCIALLY VIABLE MINERAL DEPOSIT EXISTS IN ANY OF OUR PROPERTIES NOR DO WE ANTICIPATE SAME UNTIL AFTER COMPLETION OF FURTHER EXPLORATION WORK AND A COMPREHENSIVE EVALUATION BASED UPON UNIT COST, GRADE, RECOVERIES AND OTHER FACTORS CONCLUDE ECONOMIC FEASIBILITY.  THE INFORMATION CONTAINED HEREIN RESPECTING OUR MINERAL PROPERTIES IS BASED UPON INFORMATION PREPARED BY OR THE PREPARATION OF WHICH WAS SUPERVISED BY PROFESSIONAL GEOLOGIST, CLANCY J. WENDT,  OUR VICE-PRESIDENT OF EXPLORATION.   MR. WENDT IS A QUALIFIED PERSON PURSUANT TO CANADIAN SECURITIES NATIONAL INSTRUMENT 43-101 CONCERNING STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS.  21    Mineral Properties Now Held  Table Top Gold Project (Nevada)  Nature of Interest and Terms of Acquisition  This property consists of 149 claims covering 3,420 acres located in Humboldt County, Nevada 10 miles northwest of the town of Winnemucca (the Table Top Project).  We hold our interest in this Property under an Option Agreement dated for reference September 1, 2009 with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.   Under the terms of the agreement, we have an option (the Option to acquire a 100% interest in the Table Top Gold Project for the sum of US$300,000 (the Purchase Price) and a 3% NSR Royalty, 1% of which can be repurchased for US$1 million.  We are required to make the following rental payments (the Rental Payments) are required in order to maintain the Option in good standing:  DatePayment Amount (USD)Upon execution of the Agreement (September 1, 2009)$5,000 (paid)On the First anniversary of the Agreement (September 1, 2010)$25,000On the Second anniversary of the Agreement (September 1, 2011)$35,000Each anniversary thereafter$50,000  The option may be exercised at any time by payment of the Purchase Price, whereupon we will own 100% of the Property, subject to a 3% NSR royalty, 1% of which can be repurchased for US$1 million (the Royalty).  We are required to make minimum annual advance royalty payments of US$50,000 after exercise of the Option until commencement of sustained commercial production, with such payments being credited against the Royalty.  Rental Payments are not credited against the Royalty or the Purchase Price, but cease to be payable after the Option is exercised.  Description, Location and Access:  Table Top consists of 149 claims covering 3,420 acres located in Humboldt County, Nevada 10 miles northwest of the town of Winnemucca (the Table Top Project) which we hold under an Option Agreement dated for reference September 1, 2009 with Energex, Inc..  The property is comprised of the CJN 1-10 unpatented lode mining claims in section 10, T. 35 N., R. 36 E. Humboldt County, Nevada, Nevada Mining Claim BLM Numbers  NMC 0998450-0998459 inclusive.  In 2009, we staked 139 additional claims under Nevada Mining Claim BLM Numbers NMC 1017713-1017851.  The property is accessible from Interstate Highway 80 to within 1 mile of the property and by gravel road to the property itself.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.   22   The following map indicates the location of the Table Top Project in Nevada [form20ffinalconfigured001.jpg] History of Exploration and Status:  The Table Top Property is located along the Kings River Rift, a regional geologic feature that appears to control mineralization in the area and which hosts multiple high grade vein-related gold systems.  During the 1980s Gold Fields, Meridian Minerals and Sante Fe Mining conducted exploration on and around the Table Top Property.  A limited exploration program consisting of only ten reverse circulation drill holes was conducted to test anomalous, up to 1.1 g/t gold values in what was called jasperoid.  Trenches containing gold values up to 4 g/t over 5 feet were tested by the first drill hole, which contained 55 feet of 0.84 g/t Au (0.027 opt) from the surface down.  This hole was drilled vertically in a breccias zone.  The remaining nine drill holes, which were wide spaced (75  300 meters apart), contained little of significance.  A follow up analysis showed that the holes may have been drilled in the wrong direction and should have been drilled to the south instead of to the north.  Table Top is located in the Triassic rocks of the Raspberry formation which can be split into two general types: a north-western belt of sandstone, siltstone, and slate, locally calcareous but devoid of limestone; and a south-eastern belt of calcareous sandstone, siltstone and slate with prominent massive limestone beds 5 to 100 feet thick.  Bedding in these units trend northeast with steep dips to the southeast.  23   The mineralization in the Raspberry formation is generally in the form of silicification in veinlets and small pods in the limestone but in a few areas there is massive replacement of the limestone by silica.  The silica, where sampled, usually contains gold with values as high as 15.5 g/t.  Stibnite or stibnite casts can be found in the silica.  We have been issued a drill permit for a 16 hole core drill program to be commenced in April 2010, as soon as weather permits.  We believe that the Table Top area is geologically favourable for the discovery of a medium sized, high grade sedimentary style oxide gold deposit in a near surface environment.  East Manhattan Wash gold Project (Nye County, Nevada)  Nature of Interest and Terms of Acquisition  The East Manhattan Wash property (EMW) is comprised of 119 claims located 40 miles north of the town of Tonopah, Nevada in the Manhattan Mining District, Nye County, Nevada.  We acquired our interest in this property by agreement dated for reference December, 2007 with MSM LLC, a Nevada corporation granting Max Resource, Inc., our wholly owned Nevada subsidiary, an option to acquire a 100 % interest in the EMW claims.  Under the terms of the option agreement we are required to make payments to MSM LLC in order to maintain the option in good standing, as follows: DATEPAYMENT AMOUNTUpon execution of the Option Agreement$28,000 USD (paid)First anniversary of effective date (December 4, 2008)$20,000 USD (paid)Second anniversary of effective date (December 4, 2009)$25,000 USD (paid)Third anniversary of effective date (December 4, 2010)$40,000 USDFourth anniversary of effective date (December 4, 2011)$50,000 USDFifth anniversary of effective date (December 4, 2012)$100,000 USD  In addition we are required to make exploration expenditures totalling US$700,000 on the EMW claims in the second to fifth years, as follows: DateExpenditure requiredOn or before December 4, 2009$150,000 USD (fulfilled)On or before December 4, 2010Further $150,000 USDOn or before December 4, 2011Further $200,000 USDOn or before December 4, 2012Further $300,000 USD  The EMW Property is subject to a 3% NSR royalty.  Upon full exercise of the option, we will own 100% of the project.  Description, Location and Access:  On November 11, 2007 we entered into an option agreement to acquire a 100 % interest in the East Manhattan Wash (EMW) claims in the Manhattan Mining District, Nye County, Nevada from MSM LLC, a Nevada corporation.   The EMW property is comprised of 133 claims (2,660 acres) located 40 miles north of the town of Tonopah, Nevada.  The EMW claims are accessible by paved road to within 1 mile of the property and by gravel road to the property itself.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.  24   The property is comprised of the EMW 1-35, 37, 39, 41, 43-68, 75, 77, 79, 81-100, 113 and EMW 116, 118, 120, 122, 124, 126, 128, 130, 132-137, 139, 141, 143, 145, 147, 149, 151, 153, 155, 157, 159, 161, 163, 165, 169-171 unpatented lode mining claims represented by Bureau of Land Management Nevada ; Mining Claim numbers NMC 958691-958725, 977041-977093, 977094-977109, 977111, 977113, 997115, 997117, 997119, 997121, 997123, 997125, 997127, 997129, 997131, 997133, 997135,and NMC 997139-997141 inclusive. These claims were recorded on January 8, 2008.  See Principal Expenditures and Divestitures.  The following is a map of the location of the East Manhattan Wash gold project:  [form20ffinalconfigured003.gif] History of Exploration and Status:  Historically, there has been more than 1,000,000 ounces of gold produced in the Manhattan mining district.   Production has included the nearby Manhattan mine (1974-1990), an open-pit operation that produced 236,000 ounces of gold at an average grade of 0.08 ounces per ton (opt).  The Echo Bay East and West Pit deposits operated in the early 1990s, producing 260,000 ounces at an average grade of 0.06 opt.  The Round Mountain Mine (Kinross/Barrick), situated eight miles north of EMW, is a conventional open pit operation that has produced more than 12 million ounces of gold to date.  Recorded placer gold production from the district totals approximately 150,000 ounces from a major dredge operation and small-scale lode mines produced another 100,000 ounces.  The current exploration model suggests that deposits that will be found in the Manhattan District are related to the contact of the Manhattan Caldera Margin and structural intersections.  Gold is also related to the Cambrian-Ordivician Age Sedimentary rocks along the five mile long by one mile wide zone of the Caldera.  What is unique to this occurrence is that it is related to a lithic welded volcanic tuff.  More work is planned to determine how this mineralization is related to the overall normal mineralized gold system in the Manhattan District.  So far, it appears to be quite different and may be quite extensive.  In March 2009, we received the results of the first bulk sample taken from the East Manhattan property.  The sample weighed 793 pounds and was crushed to particles of less than 1 mm in size, then processed on a Wilfley Table to concentrate the heavy minerals.  A fired bead produced a gold/silver button which weighed 2.67 grams.  This button was analyzed using x-ray analyzer and contained approximately 80% gold and 20% silver.  This is equivalent to 6.1 grams per ton of gold/silver, or 4.9 g/t of gold and 1.2 g/t of silver.  In May of 2009, three large volume soil sampling grids were completed; The Gold Pit Grid, consists of 30 soil samples of 25 meter spacing over an area of approximately 800 by 200 feet.  The original bulk taken from an existing prospectors pit on this grid graded at 4.9 g/t gold and 1.2 g/t silver.  The geology of the Gold Pit area consists of lithic thyolitic and lapilli tuffs.  These tuffs are locally argillically altered with minor local silicification.  The Old Drill Hole Grid consists of 58 soil samples taken from an area covering approximately 900 feet by 400 feet which has been drilled by a previous operator.  As with the Gold Pit Grid described above, this grid  is located in a volcanic rhyolite lithic tuff  hosting coarse gold.  The Gold Shaft Grid consists of 30 soil samples on 25 meter spacing over an area of approximately 500 feet by 400 feet, with a single line running west from the main part of the grid along a ridge.  This grid is approximately 7,000 feet south of the Gold Pit grid with the geology of the area consisting of high angle, east striking altered inter-bedded phyllites, quartzites and limestones, cut by high angle, northeast striking structures.  The sediments are in contact with granite to the west.  The Gold Pit and The Old Dill Hole grid were sampled first by clearing a 1 meter by 1 meter area of surface debris, and then removing the organic (A) and root (B) soil horizon.  The sample was collected and consisted of a mixture of soils directly above the bedrock (C horizon) and a portion of the bedrock below the soil.  The sample was sieved to 1⁄4 inch minus and bagged.  The holes ranged from 12 inches to 48 inches in depth.  The Gold Shaft holes ranged from 4 inches to 12 inches in depth.  The sampling program was designed to delineate the geometry of the native gold mineralization in these areas.  Assay results from these samplings were received in July 2009.  In the Old Drill Hole grid, where 30 samples were taken, the values ranged from nil to 0.32 ppm Au.  The mineralized zone is 1200 feet long and 600 feet wide and is open in all four directions.   Further work is now planned to define the full areal extent of mineralization in this zone.  At the Gold Pit grid the area of significant mineralization was 1000 feet long and 250 feet wide.  Again values range from nil to 0.32 ppm Au. The zone is open to the north, east and west and further work is planned for this area, which contains the old prospectors pit where samplings graded an equivalent of 4.9 g/t Au. The Gold Shaft grid samples did not indicate a mineralized structure or an area of concentrated gold.  No real anomalous values of other trace elements were observed.  Outcrop samples of silicified zones will be sampled at a later date.  In November, additional assay results from a total of 138 samples were received from ALS Laboratory Group in Reno, Nevada relating to the two main areas of interest, the Gold Pit Grid  and the Old Drill Hole Grid, which samples now indicate are joined.  The sample holes ranged from 12 inches to 48 inches in depth.  Significant values ranging from 0.05 ppm to 1.5 ppm Au were identified.  Results of samples taken from historic prospector pits to the southeast of the Old Drill Hole grid returned high gold values (0.96 g/t) which indicates that the mineralized zone continues and may be linked to another mineralized zone sampled by us further south.  25   Examination of the mineralized samples from these areas superimposed on air photo images has enabled us to identify structural features, and coupled with argillic alteration seen in the sample pits, has helped to define where significant gold values may be found.  We are planning a further work program of trenching and bulk sampling in 2010 prior to commencing a drilling program on the Property.  See Special Note on Forward Looking Statements.  Howell Gold/Crowsnest Project (British Columbia):  Nature of Interest and Terms of Acquisition  The Howell/Crowsnest project is comprised of the Howell property, located one hour south of the town of Sparwood (by gravel road) in Southeast B.C., and the Crowsnest Property, which is  located approximately 10 km southeast of the Howell property.  We acquired our interest in the Howell/Crowsnest Project pursuant to an option agreement dated for reference June 9, 2008, as amended July 24, 2009.  Under the terms of the agreement, as amended, we have the right to earn a 60% interest in the Howell Gold Project (Howell Property) and/or the Crowsnest Mineral Property (Crowsnest Property) projects over a four year period. Eastfield has the right to earn a 100% interest in the Howell property through an amended 1999 option agreement with Teck Cominco Metals Limited (TCML) and Goldcorp Inc. (GI) by completing outstanding commitments include a final exploration expenditure totaling $423,759 and cash payments of $100,000 to each of TCML and GI due by August 31, 2010.  Eastfield holds the Crowsnest Property directly.  Under the terms of our option agreement (as amended), we are required to make the following payments and share issuances to Eastfield in order to keep the Option in good standing:


|                                              |                                                   |                     |                              
|--------------------------------------------- | ------------------------------------------------- | ------------------- | -----------------------------
|Property                                      | Date                                              | Cash Payment Amount | Issuance of Shares           
|                                              |                                                   |                     |                              
|Combined Howell Property & Crowsnest Property | On signing amending agreement (July 24, 2009)     | $10,000 (paid)      |                              
|                                              | On signing amending agreement (July 24, 2009)     |                     | 50,000 common shares (Issued)
|                                              | On or before 1st anniversary date (June 30, 2010) | $20,000             | OR 50,000 common shares      
|                                              | On or before June 30, 2011                        | $30,000             |                              
|Howell Property                               | On or before August 31, 2010                      | $120,000*           |                              
|Howell Property                               | On or before June 30, 2012                        | $40,000             | 200,000 Common shares        
|Crowsnest Property                            | On or before June 30, 2012                        | $40,000             | 200,000 Common shares        
|Howell Property                               | On or before June 30, 2013                        | $50,000             | 200,000 Common shares        
|Crowsnest Property                            | On or before June 30, 2013                        | $50,000             | 200,000 Common shares        
|                                              |                                                   |                     |                              

*our portion of the $200,000 payment due to GI and TCML by August 31, 2010 pursuant to Eastfields underlying agreement with them.  In addition we are required under the agreement to make exploration expenditures as follows:  In the first and second years, $400,000 on the combined Howell and Crowsnest properties  as follows: · on or before June 30, 2010, $150,000; (completed) · on or before June 30, 2011, a further $250,000;  In the third and fourth years, $701,000 on the Howell Property as follows: · on or before June 30, 2012, $1.00 · on or before June 30, 2013, a further $700,000  26    In the third and fourth years, $1,050,000 on the Crowsnest Property as follows: · on or before June 30, 2012 $350,000 · on or before June 30, 2013, a further $700,000.  Howell Property  The Howell Gold Project is comprised of 4,760 hectares in Southeast B.C. located one hour by gravel road south of the town of Sparwood, straddling the drainages of Twenty-Nine Mile Creek and Howell Creek.   The property is 40 kilometers south of the Elk Valley Coal Mine and can be accessed via all-weather logging haul roads and secondary logging roads that cut through the middle of the property.  There is no electricity available at the property site, with surface water abundant within the property boundaries.  The following map indicates the location of the Howell Gold project in Southeastern British Columbia: [form20ffinalconfigured005.gif]   27    All Howell claims are in the Fort Steele Mining Division of British Columbia.  The claim numbers are as follows:     Claim NameRecord #Area (Hectares)Expiry MonthExpiry YearHowell 12099815001-Nov2011Howell 22099825001-Nov2011Howell 32099835001-Nov2011Howell 42100115001-Nov2010Howell 52100122001-Nov2010Ysoo3667554501-Nov2010Ysoo 253747552820-Jul2010Ysoo 353748812720-Jul2010Howell 653046752724-Mar2010Howell 753047352724-Mar2010Howell 953749340120-Jul20104,760  Maintaining the claims in good standing in British Columbia:  The Province of British Columbia requires that exploration work in the amount of $4.00 per hectare per year be completed on a claim in the first three years of a claims existence.  The amount of assessment work required to keep the claims in good stead increases to $8.00 per hectare per year after the third anniversary. An equal amount of cash may be paid in substitution to exploration expenditures (cash in lieu).  Excess expenditures incurred in any year can be filed up to an amount that moves the expiry date ten years into the future.  A filing fee of $0.40 per hectare per year is also required.  The majority of the Howell claims are now past their 3rd anniversary and the amount of exploration required to advance the expiry dates of all the Howell claims by one year is $38,080 plus a filing fee of $1,904.   The Howell claims currently have assessment work credits filed on them which satisfy British Columbia requirements for varying expiry dates by claim during2010 and 2011 in accordance with the expiry dates listed in the preceding table.  History of Exploration and Status:  The Howell Creek property is underlain by a thick sequence of Paleozoic limestones and sedimentary rocks and older Proterozoic sediments.  Mid-Cretaceous intrusions occurring as sills, dykes, plugs and diatremes intrude these units.  Gold mineralization occurs disseminated in limestone and with quartz stockworks in syenite intrusives and Proterozoic sediments.  Prior drilling has included 1.23 g/t gold over 58 metres, 0.95 g/t gold over 39 metres, 0.65 g/t gold over 82 metres, and 0.57 g/t gold over 149 metres.  A diamond drill hole from 2006, collared to the west of the surface expression of the important Palaeozoic limestone, penetrated a near surface fault and intersected 43 metres grading 0.42 g/t gold to the bottom of the hole at 66 metres.  Hole HW-606 effectively expands the prospective area for the target model.  The last sample in this hole graded 0.44 g/t gold indicating a need to drill deeper and test the target along strike; the first hole of the 2008 drill program will deepen this hole to approximately 200 metres.  Prior exploration at Howell has included 6,197 metres of drilling in 49 holes.  Several holes have also intersected significant manto style silver-lead-zinc intercepts in limestone.  These include 15.3 g/t silver , 0.40% lead and 2.40% zinc over 7.5 metres and 51.5 g/t silver, 1.98% lead, 1.87% zinc, and 0.32 g/t gold  over 7.6  metres.  An important additional target which will be tested during the 2008 drill program is Carbonate Replacement Deposit (CRD) style mineralization in the general vicinity of hole HRC-15 (located 1,100metres to the west of the first hole of the current program), drilled by Placer Dome Inc. in 1988, which intersected 7.6 metres grading 51.5 g/t silver, 1.98% lead, 1.87% zinc, and 0.32 g/t gold.   This CRD style mineralization has not been actively explored at Howell during past exploration efforts.  Drilling commenced at the Howell project on July 21, 2008.  Twelve diamond drill holes were completed totaling 1,312 metres of NQ core and two new soil grids were established.  Two distinct styles of mineralization were targeted; carbonate hosted gold and CRD.  The highlights of the 2008 drill program were as follows:  HoleFrom (m)To (m)Width (m)Gold g/tHW-08-06 ext23.7204.0180.70.26Including23.774.050.70.47HW-08-0788.192.03.90.65and132.0138.06.00.53HW-08-098.5129.0120.50.30including8.530.522.00.78HW-08-108.010.02.00.79HW-08-1523.368.044.70.41including23.344.020.70.53  No CRD mineralization was identified in drill core during the 2008 drill program although one of the soil grids (the southeastern grid) is believed to indicate such mineralization with a number of samples collected in 2008 returning very anomalous values in gold, silver, zinc and lead including values to 130 g/t silver and 1.4% lead in soil.  Holes HW-08-12 and HW-08-13 were drilled during the current program to test for CRD mineralization in the area where reverse circulation hole HRC-15, drilled by Placer Dome in 1988, had intersected 7.6 metres of apparent CRD mineralized dolomite grading 1.5% zinc, 1.4% lead, and 53.2 g/t silver.  Holes HW-08-12 and HW-08-13 were lost at 35 and 86 metres respectively, which was well short of the target depth, due to drilling difficulties.  A number of additional targets exist at Howell including a stockwork quartz system in limestone that has returned up to 3 grams gold in previous sampling and will be considered for further work in 2009.  Of the 119 samples collected in 2008 on the southeastern grid, which is 1.5 kilometres to the south of the 2008 CRD drill targets, 16 exceeded 100 ppm gold (maximum 714 ppb), 27 exceeded 500 ppm zinc (maximum 9,527 ppm) and 9 exceeded 400 ppm lead (maximum 14,000 ppm).  The southeastern grid was established in 2008 to fill in an area to the north of manto style zinc, lead, silver mineralization which was identified during reverse circulation drilling completed by Placer Dome in 1988 (HRC-2 with 7.5 metres grading 2.4% Zn, 0.40% Pb and 15.3 g/t Ag).  Reconnaissance prospecting in this area, completed by Eastfield in 1999, sampled a 300 metre northeast trending syenite intrusive that returned a value of 2.75 grams gold from the single sample collected.  Review of a subsequent airborne geophysical survey completed in 2004 highlighted this feature.  Crowsnest Property  The Crowsnest Gold Project is comprised of 3,269 hectares in Southeast B.C. located one and one half hours by gravel road south of the town of Sparwood, and is located approximately 10 km southeast of the Howell Property.   The property can be accessed via all-weather logging haul roads and secondary logging roads that cut through the middle of the property.  There is no electricity available at the property site, with surface water abundant within the property boundaries.   28   The following map indicates the location of the Crowsnest Gold project in Southeastern British Columbia: [form20ffinalconfigured006.jpg] All Crowsnest claims are in the Fort Steele Mining Division of British Columbia.  The claim numbers are as follows: Claim NameRecord #Area (Hectares)Expiry MonthExpiry YearAubyrd 4406552375October 312012Aubyrd 5406551500October 312012Aubyrd 6406550500October 312012Aubyrd 7406553250October 312012Aubyrd 8406554150October 312012Aubyrd 9406555500October 312012Crowsnest Lookout504310317January 192012Crowsnest Revenge50429785January 192012Connector517530127July 122012Lower Connector52083863October 62010Connector631166275September 92012Crowhop596987105.7January 52012Hole In One60179521.1March 282012TOTAL AREA3,269 hectares   29   Maintaining the claims in good standing in British Columbia:  The Crowsnest property consists of thirteen claims totaling 3,269 hectares. All claims have sufficient assessment work filed to cover the claims until 2012.  The Province of British Columbia requires that exploration work in the amount of $4.00 per hectare per year be completed on a claim in the first three years of a claims existence.  The amount of assessment work required to keep the claims in good stead increases to $8.00 per hectare per year after the third anniversary. An equal amount of cash may be paid in substitution to exploration expenditures (cash in lieu).  Excess expenditures incurred in any year can be filed up to an amount that moves the expiry date ten years into the future.  A filing fee of $0.40 per hectare per year is also required.  Most of the Crowsnest claims are past their third year and consequently an exploration expenditure of $12,152 plus a filing fee of $1,307.60 is required to advance the dates for each year beyond 2012.  History of Exploration and Status:  Gold mineralization of the Crowsnest Gold property occurs in limestone, siltstone or syenite.  The property is underlain by a thick sequence of Pennsylvanian and Mississippian carbonate and clastic rocks, of which the Mississippian Rundle Group shows the greatest exposure.  Mid-Cretaceous syenite and trachyte intrusions as sills, dykes, plugs and possible diatremes intrude these units.  Prior exploration at Crowsnest has included many samples of float and rubble on the B Grid which has returned extraordinarily high gold analysis.  This includes a float sample collected in 1989 by Placer Dome Inc. in, which is described as an intrusive breccias that returned a gold assay of 524.41 g/t gold ≈ 15.2 ounces per ton.  Other high grade float samples have returned assays to 620.0 g/t gold ≈ 18.0 ounces per ton.  We conducted a due diligence site visit at the Crowsnest property to review previous field work and to assess the potential of the property in June 2009.  An exploration permit was issued in August 2009 which allowed us to move forward with our 2009 drill program at Crowsnest.  This drill program included a total of 26 reverse circulation drill holes and two new trenches.  The trenches were sampled and drilled to the west of the original Discovery Trench area.  Significant gold assays returned from the 2009 drill program are as follows:  HoleAngleFrom (m)To (m)Width (m)Gold g/tRC 09-2-6003.03.03.52Including01.51.56.67RC 09-5Vertical03.03.03.55Including1.53.01.56.40RC 09-6-6006.56.56.34Including1.53.01.516.52RC 09-7Vertical06.16.119.03Including01.51.550.26Including1.53.01.523.60RC 09-9Vertical01.51.52.49RC 09-14Vertical01.51.52.07RC 09-16Vertical03.03.05.42Including01.51.56.65RC 09-21-6016.818.31.53.42RC 09-25Vertical03.03.02.51Including1.53.01.53.14   30   In December we received the results of the Metallic Screen assays conducted by Acme on all samples from our reverse circulation drill program at the Crowsnest Project.  Our previously reported findings were verified by this assay, including those from hole RC 09-7 (19.03 g/t Au over 6.1 m., including 1.5 m. of 50.26 g/t Au).  Significant gold assays (over 2 g/t Au) are listed below:  HoleAngleFrom (m)To (m)Width (m)Gold g/tRC 09-2-60 degrees03.03.03.52Including01.51.56.67RC 09-5vertical03.03.03.55Including1.53.01.56.40RC 09-6-60 degrees06.56.56.34Including1.53.01.516.52RC 09-7vertical06.16.119.03Including01.51.550.26Including1.53.01.523.60RC 09-9vertical01.51.52.49RC 09-14vertical01.51.52.07RC 09-16vertical03.03.05.42Including01.51.56.65RC 09-21-60 degrees16.818.31.53.42RC 09-25vertical03.03.02.51Including1.53.01.53.14  An additional 6 drill holes returned values ranging from 0.5 g/t to 1.86 g/t Au over minimum 1.5 meter intervals.  In addition, we had planned to conduct an extensive exploration program during 2010, to extend the area of high grade mineralization at Crowsnest Project with new targets identified and a review of historic data, however, on February 9, 2010 the Government of the Province of British Columbia announced that it intended to halt all ongoing exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  Accordingly, we will not be able to conduct any further exploration or development work on the property nor will we be able to sell our interest in the property to third parties.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.  No prospective compensation has been quantified or agreed to at this time.  Ravin Molybdenum/ Tungsten Property (Lander County, Nevada)  Nature of Interest and Terms of Acquisition  The Ravin molybdenum/tungsten property in Lander County, Nevada (the Ravin Property) is comprised of 140 claims located 20 miles north of the town of Austin in Central Nevada.  We acquired our interest in this property by agreement dated for reference September 10, 2007, with Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration granting us an option to acquire a 100 % interest in the Ravin Property for the sum of US$300,000.  The following rental payments (the Rental Payments) are required in order to maintain the Option:  DatePayment AmountUpon execution of the option agreement$5,000.00 USD (paid)First anniversary of effective date (September 10, 2008)$25,000.99 USD (paid)Second anniversary of effective date (September 10, 2009)$35,000.00 USD (paid)Each anniversary thereafter$50,000.00 USD  The option may be exercised at any time by payment of the Purchase Price and grant of a 3% NSR, 1% of which can be repurchased for US$1 million (the Royalty).  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such  31   payments being credited against the Royalty.  The Rental Payments are not credited against the Royalty or the Purchase Price, but are not payable after the Option is exercised.  Description, Location and Access:  The Ravin Property is a historic Freeport/Huston Oil and Minerals Metal property that was explored during the late 1970s and early 1980s.  The property is comprised of the MOLY 7-30, 32, 34, 49-162 unpatented lode mining claims represented by Bureau of Land Management Nevada Mining Claim numbers NMC 964196-964219, 964221, 964223 and NMC 964238-964351 inclusive. These claims were recorded on September 7, 2007.  The Ravin Property is located 20 miles north of the town of Austin, Nevada and is accessible by paved road to within 5 miles of the property and by gravel road to the property itself.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.  See Principal Expenditures and Divestitures.  Our 2008/2009 drilling program at the Ravin Molybdenum/Tungsten property commenced on July 10, 2009.  Due to a serious lack of water in the area and a loss of circulation during drilling due to silicified and broken quartz breccia the core results for the first three diamond drill holes were poor, and we encountered drilling delays and additional costs.  An additional 5 drill holes were completed at Ravin using a reverse circulation drill. Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  Due to the ongoing water problems lost circulation and poor recoveries encountered, the high grade mineralization of Molybdenum reported at a depth of 790 feet by a previous operator was not tested, and we terminated drill hole DDH-08-04 early.  32    The following is a map of the location of the Ravin molybdenum/tungsten project: [form20ffinalconfigured008.gif] History of Exploration and Status:  Strong surface molybdenum and tungsten mineralization occurs within Cambrian sediments which have been intruded by two separate Cretaceous granitic to quartz monzonite plutons.  The Raven Pluton is the largest and crops out over an area of about 2 square miles.  The smaller Cadro Pluton crops out over a 1⁄2 square mile area in the northwest part of the project.  The Cadro Pluton appears to be responsible for a majority of the hydrothermal alteration and molybdenum mineralization seen on the project.  Historically, the property had been explored by Union Carbide, Houston Oil and Minerals and Freeport Exploration.  Union Carbide drilled three core holes with the deepest hole drilled to a depth of 500 feet.   Houston Oil subsequently acquired the property in 1978 and drilled six core holes in the Reward tungsten pit.  As part of a regional rock and soil geochemistry program, Houston Oil identified a coherent molybdenum soil anomaly.  They drilled two diamond drill holes and the best intercept encountered was 40 feet of 0.66% Mo.  33    Freeport optioned the property in 1981 and drilled 17 rotary and core drill holes to test a molybdenum-copper-fluorine anomaly found within the Cambrian sedimentary units.  The anomalous zone showed strong structural control and is thought to be associated with the contact zone of the Cadro Pluton.  Some of the historic drill holes exist in the form of reports and summaries of the drilling, exploration, drill logs and assays but none of the original assay sheets are available.  All but 4 drill holes encountered molybdenum mineralization and highlights included:  Drill Hole Interval Width Grade  Rw 80-2, 81-2c 600-650 feet 50 feet 0.053% MoS2 800-900 feet 100 feet 0.047% MoS2 Rw 80-7 100-350 feet 250 feet 0.105% MoS2 Rw 81-11c 150-350 feet 200 feet 0.052% MoS2 Rw 81-13c 550-800 feet 250 feet 0.052% MoS2 1650-1700 feet 50 feet 0.055% MoS2 Rw 81-14c 600-650 feet 50 feet 0.051% MoS2  The above historic information provided is for reference only and the reader should not infer or assert that the information is correct, reliable, relevant or accurate and should not be relied upon.  Diamond drilling commenced in July, 2008 at Ravin and was hampered by lack of water in the area and loss of circulation during drilling due to drilling through silicified and broken quartz breccia, resulting in poor core results for the first three diamond drill holes, drilling delays and additional costs.  An additional 5 drill holes were completed at Ravin in October 2008 using a reverse circulation drill.  Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  Results of 2008 Diamond Drill Holes


|                  |                                                                                                                                           |                                                |                                                                                    
|----------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | -----------------------------------------------------------------------------------
|Drill Hole Number | From/To
(Feet)                                                                                                                            | Interval
(Feet)                                | Mo%                                                                                
|DDH 08-04         | 109.6  146.4
146.4-156.3
156.3-174.6
210.0-213.2
275.4-276.6
292.0-295.0
320.0-341.5
405.0-421.4
441.6-451.2
471.0-477.0
484.1-502.1     | 36.8
9.9
18.3
3.2
1.2
3
21.5
16.4
9.6
6
18     | 0.0983
0.0489
0.2133
0.1046
1.397
0.7368
0.0884
0.0832
0.0713
0.0616
0.0466        
|DDH 08-8
Includes | 565-575.8
699.0-709.4                                                                                                                     | 10
10                                          | 0.0945
0.1024                                                                      
|DDH 08-11         | 36.8-47.0
51.8-57.0
90.0-93.5
167.3-188.6
226.8-230.8
274.4-281.9
317.4-331.1
344.8-350.6
387.5-392.7
407.7-411,4
476.3-479.0
494.7-498.0 | 10.2
5.2
3.5
21.3
4
7.5
13.7
5.8
5.2
4.3
3
3.3 | 0.0476
0.0571
0.0653
0.0549
0.1848
0.0766
0.0336
0.0622
0.0850
0.1265
0.2059
0.1875

34   Results from Reverse Circulation Drilling


|                  |                                                |                         |                                         |                            
|----------------- | ---------------------------------------------- | ----------------------- | --------------------------------------- | ---------------------------
|Drill Hole Number | From/To
(feet)                                 | Interval
(feet)         | Mo%                                     | Cu%                        
|RC 08-02
Includes | 0-500
10-20
0-50
400-450
0-100
350-500
375-385 | 500
10
50
50
100
150
10 | 0.022
0.09
0.045
0.066
0.031
0.034
0.14 | 0.039

0.06
0.04
0.097
0.07
|RC 08-03
Includes | 0-200
50-100
250-300                           | 200
50
50               | 0.055
0.061
0.026                       | 0.062                      
|RC 08-05          | 0-540                                          |                         | 0.02                                    | 0.03                       
|RC 08-07
Includes | 0-300
50-100
250-300                           | 300                     | 0.016
0.023
0.03                        |                            
|RC 08-09
Includes | 0-350
0-50
50-150                              | 50
100                  | 0.025
0.032
0.042                       | 0.019
0.029                

Our 2009 drilling program at the Ravin Molybdenum/Tungsten property commenced on July 10, 2009.  Due to a serious lack of water in the area and a loss of circulation during drilling due to silicified and broken quartz breccia the core results for the first three diamond drill holes were poor, and we encountered drilling delays and additional costs.  An additional 5 drill holes were completed at Ravin using a reverse circulation drill. Assay results are broken into 2 separate tables.  Those results from the diamond drill holes have been reported only for those intervals for which coherent core samples are available.  Due to the ongoing water problems lost circulation and poor recoveries encountered, the high grade mineralization of Molybdenum reported at a depth of 790 feet by a previous operator was not tested, and we terminated drill hole DDH-08-04 early.  The water problems encountered during the 2007 and 2008 drilling seasons have been resolved and with a program of loss circulation to increase recoveries, further work, which may include drilling, is being considered for fiscal 2010.. See Special Note on Forward Looking Statements.  Diamond Peak Property (Nevada)  Nature of Interest and Terms of Acquisition  We acquired our interest in this property pursuant to an Option Agreement dated for reference May 9, 2006 and amended September 30, 2009, with the Wendt Family Trust of Reno, Nevada granting us an option (the Option) to purchase a 100% interest in the FMC claims in Eureka County, Nevada, (the Diamond Peak Property) for the sum of US$300,000 (the Purchase Price) plus a 3% NSR, 1% of which can be repurchased for US$1 million (the Royalty).   The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration.  Under the terms of the agreement, we are required to issue 100,000 common shares of the Company (which have been issued) and make the following rental payments (the Rental Payments) to the Wendt Family Trust in order to maintain the Option:  DatePayment Amount (U.S funds)Upon execution of the option agreement (May 9, 2006)$25,000 (paid)First anniversary of effective date (May 9, 2007)$35,000 (paid)Second anniversary of effective date (May 9, 2008)$45,000 (paid subsequent to the period)Each anniversary thereafter$50,000 (paid subsequent to the period)   35    The option may be exercised at any time by payment of the Purchase Price and grant of the Royalty.  We are required to make minimum annual advance royalty payments of US$50,000 after exercise until commencement of sustained commercial production, with such payments being credited against the Royalty.  The Rental Payments are not credited against the Royalty or the Purchase Price, but are not payable after the Option is exercised.  We entered into a mineral property option agreement on May 15, 2006 with Kokanee Placer Ltd. (Kokanee Placer), a private British Columbia company, which subsequently exchanged its shares for shares of a company, Kokanee Minerals Inc. (TSX V Symbol KOK) (Kokanee) on January 19, 2010.  Under the terms of the agreement we granted to Kokanee Placer the right to acquire up to a 51% interest in the Diamond Peak Property (subject to the existing 3% NSR) in consideration of a cash payment of US$25,000 (paid) and the issuance of 100,000 shares of Kokanee to the Company upon completion of Kokanees public listing (received subsequent to December 31, 2009) (the Kokanee Agreement).  To maintain this agreement in good standing, Kokanee has agreed to make the following annual payments and share issuances to the Company:  · By May 15, 2007 pay US$35,000 to the Company (received) and 200,000 Kokanee shares (received subsequent to December 31, 2009); · Five days after listing of Kokanees common shares on the TSX Venture Exchange, pay US$95,000 and issue 300,000 Kokanee shares to the Company (received subsequent to December 31, 2009); · On or before May 9, 2010 an don each anniversary thereof up to and including May 9, 2016, pay US$50,000 to the Company; and · On commencement of commercial production, issue 1,000,000 Kokanee shares to the Company  The Option granted to Kokanee is for a term of three (3) years from the date of the Kokanee Agreement (expiring May 15, 2009), subject to Kokanee completing the following yearly mineral exploration commitments on the Diamond Peak Property:  i) $100,000 to be spent by Kokanee in the first year of the agreement (incurred); ii) $300,000 in the second year; and iii) $600,000 in the third year.  Description, Location and Access:  The property comprises 38 inclusive, unpatented lode mining claims located 32 miles north of the town of Eureka, Nevada and the Archimedes gold deposit owned by Barrick Gold Corporation.  It is accessible by 50 miles of improved dirt road and partial pavement north from Eureka, Nevada, and from Elko south by 40 miles of pavement and 22 miles of dirt road.  The area supports a strong horse population; many trails crisscross the project area.  There is no water or electricity available at the property site.  Some surface water is available, as streams flow year round through canyons which traverse the property in the center and southern portions of the claim block.  The property is comprised the FMC 3149, and 57-75 unpatented lode mining claims represented by Bureau of Land Management Nevada Mining Claim numbers NMC 887137-887155 and NMC 887156-887174 inclusive.  These claims were recorded on December 30, 2004.  See Principal Expenditures and Divestitures.   36    The following map shows the location of the Diamond Peak Project: [form20ffinalconfigured009.jpg]  History of Exploration and Status  The Diamond Peak Property is a historic MK Gold Gold/Base Metal property that was explored during the late 1990s and is located at the southern end of the prolific Carlin trend, which contains numerous gold deposits.  The property comprises 38 claims located 32 miles north of the town of Eureka, Nevada.  Strong surface mineralization occurs in a 2 mile long band of intensely clay altered rocks, 200 to 300 feet wide, on the hanging wall side of a major north striking normal fault, called the West Fault.  During the work done by MK Gold in 1999, which included 17 holes and 10,085 feet of drilling, MK Gold encountered significant values of gold and base metals that included:  5 feet of 0.067 oz/st Au in hole DV 99-4 ; 5 feet of 0.062 oz/st Au in hole DV 99-5; and 11.6 % of Zinc over 5 feet within 60 feet of surface along the West Fault in the Chainman formation in hole DV 99-15.  37     The above historic information provided is for reference only and the reader should not infer or assert that the information is correct, reliable, relevant or accurate and should not be relied upon.  Although no extensive intervals of mineralization were encountered, the drilling did indicate that more work was needed to find an economic mineralized system.  The recommendations by MK Gold were to continue exploration and drill deep (>2,000 foot) diamond drill holes to the Web and Joana formations.  At the time, the base metal values were not considered as important and were not part of further considerations.  Current prices of zinc, silver, and lead make this a very important target for further exploration.  There are three intrusives that contain significant base and precious metal signatures along their edges.  These have not been drilled and could contain skarn mineralization that may be economic.  Future exploration would include conducting geophysical surveys to better define the intrusive contacts and define drill targets for future work.  We entered into a mineral property option agreement on May 15, 2006, which was subsequently amended as of September 30, 2009 with Kokanee Placer Ltd. (Kokanee), particulars of which are described above under the heading Nature of Interest and Terms of acquisition, whereby we granted to Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property.  To date, we have not made any expenditures on the Diamond Peak Property.  However, Kokanee completed a program of exploration on the Diamond Peak Property in 2006 in order to satisfy their first year obligation of $100,000 in expenditures.   This initial exploration program included an induced polarization survey over 4 kilometers of strike length.  The results of this survey were used to identify drill targets for a drill program to be undertaken on completion of Kokanees listing on the TSX-Venture Exchange in January 2010, and they have advised they intend to undertake this drill program as early as possible in 2010.  Maintaining the claims in good standing in Nevada:  Under Bureau of Land Management rules for the State of Nevada, all holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 in each calendar year.   These amounts were paid when due to on August 31, 2009  C de Baca Project (New Mexico)  Nature of Interest and Terms of Acquisition  We acquired our initial interest in the C de Baca Project by agreement dated for reference September 2005 with Applied Geological Services, Inc. of Denver, Colorado for the acquisition of a total of 108 uranium exploration claims (the Dat Claims) in Socorro County, New Mexico.  Consideration for the acquisition of the Dat Claims (known also as the C de Baca Project) was an immediate US$10,000 cash payment with annual payments of US$10,000 until production.  After production, a royalty of 2% of revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  The obligation to make payments to Applied Geologic Services can be terminated at anytime by us by providing notice that we are abandoning the Dat Claims and agreeing to transfer them back to the vendor.  Description, Location and Access:  The C de Baca Project is located approximately 14 miles north of the town of Magdalena and 100 miles south of the town of Albuquerque, New Mexico.  The claims have excellent road access by both gravel and cross county roads.  All of the claims are located on U.S. Forest Service Lands.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.  38    The C de Baca Project was originally comprised of 108 unpatented lode mining claims, the DAT 1 to DAT 108 claims, represented by Bureau of Land Management New Mexico Mining Claim numbers NMMC 172161-172268 and NMMC 887156-887174 inclusive.  These claims were recorded on October 6, 2005.  The project size was expanded in 2008 through our staking of an additional 83 unpatented lode mining mineral claims along the northern and southern boundaries of our current claim block at C de Baca, bringing our total holdings to 191 claims.  The additional 83 claims, the DAT 109 to 191, were recorded on March 18, 2008 and are represented by Bureau of Land Management New Mexico Mining Claim numbers NMMC184704 to NMMC184786 inclusive. In 2009, the number of claims was reduced to include only the DAT 1-108 claims See Principal Expenditures and Divestitures.  The following map shows the location of the C de Baca Project:  [form20ffinalconfigured010.jpg]  Maintaining the claims in good standing in New Mexico:  Under Bureau of Land Management rules for the State of New Mexico Office, all locators and holders of State mining locations must pay an annual maintenance fee of US$140 per claim or site by August 31 of each calendar year.   This amount was paid in August, 2009.  History of Exploration and Status:  The C de Baca Project was explored during the early 1980s by OxyMin, a wholly-owned subsidiary of Occidental Petroleum.  The uranium host is a 3500+ foot wide south-trending sequence of strongly reduced braided stream deposits grading into a system of alluvial fan and flood plain sediments.  This geochemically well-defined depositional trend favors uranium deposition along the margins of the system where the reduced (altered) sands range in thickness from 150-200 feet.  During the exploration, 216 drill holes were drilled in specific areas of the claim block and roughly defined the eastern limits of the favourable system.  39   The best drill hole had 7.5 feet of 0.20 U3O8 at a depth of 291 feet.  Due to the geological formations in the area, OxyMin felt that the property may be amenable to in-situ leaching (ISL), subject to further exploration.  On May 21, 2007, we commenced a 14 hole rotary drill program at C de Baca project and, on June 5, 2007, we announced the results from the first drill hole, CDB-1.  These results confirmed a historic drill result achieved by Oxymin of 5.5 feet of 0.043% eU308 at 300 feet and a second mineralized zone of 4 feet of 0.024% eU3O8 at 317 feet down hole.  The results reported by us at CDB-1 were through gamma ray probe readings by Jet West Geophysical Services LLC of Farmington, New Mexico and include:  Hole # Total Depth Interval Mineralization  CDB-1 378.0 feet 300-305.5 0.043% eU3O8 Containing 301.0-301.5 0.06% eU3O8 Containing 301.5-302.0 0.10% eU3O8 Containing 302.0-302.5 0.09% eU3O8 Containing 302.5-303.0 0.05% eU3O8  Second Zone 317.5-321.5 0.024% eU3O8  On June 19, 2007, we announced the results from a further six drill holes, CDB-2 to CDB-7, of which Hole CDB-6 returned 6.5 feet of 0.136% eU3O8 beginning at a depth of 155.5 feet (including 0.368% eU3O8 from 157.5-159.0 feet) and 5 feet of 0.167% eU3O8 from 170 -175 feet.  Results include the following:  Hole # Total Depth Interval Mineralization  CDB-2 347 feet 270.0-282.0 0.0226 % eU308 CDB-3 347 feet 261.5-264.5 0.031 % eU308 293.0-297.0 0.014 % eU308 CDB-4 181 feet 160.5-164.0 0.036% eU308 Including 162.0-162.5 0.07% eU308 CDB-5 210 feet 180-182.0 0.019% eU308 184.5-190.0 0.074% eU308 Including 186.5-189.0 0.173% eU308 CDB-6 200 feet 155.5-162.0 0.136% eU308 170.0-175.0 0.167% eU308 Including 157.5-159.0 0.368% eU308 Including 173.0-173.5 0.76% eU308 CDB-7 235 feet 201.0-208.0 0.052% eU308 Including 205.0-207.0 0.094% eU308  On July 9, 2007, we announced the results from the final seven drill holes at C de Baca.  Highlights included drill hole CDB-10A, which contained 2.0 feet of 0.065% eU308 at a depth of 295.5 feet.  Results from these drill holes at C de Baca, CDB 8 to CDB-14, along with the first seven holes announced earlier, continue to confirm historic drill results reported by Oxymin in the early 1980s.  Results are tabulated as follows:  Hole #Total DepthIntervalMineralizationCDB-8248 feet184.5  194.50.0159% eU308CDB-9346 feet306.5-310.00.034 % eU308328.5-330.00.015% eU308CDB-10311 feetAnomalousCDB-10A209 feet295.5-297.50.065% eU308CDB-11319 feet286.5-294.00.037% eU308CDB-12336 feet202.0  203.50.0.012% eU308CDB-13229 feet176.5  180.50.0162% eU3080.015% eU308CDB-14238 feet199.5-200.00.026% eU308217.0  217.50.025% eU308  This initial 14 hole mud rotary drill program was designed to confirm historic drill results reported by Oxymin during exploration of the C de Baca Uranium property during the 1980s.  While the results of these drill holes were within expectations, the results from drill hole CDB-10 were affected by the intersection of an unknown basaltic dike.  We drilled an offset hole, CDB-10a, to avoid intersecting the basaltic dike and to better test the main zone of uranium mineralization.  This hole successfully encountered 2.0 feet of 0.065% eU308 at a depth of 295.5 feet.  Gamma, Spontaneous Potential (SP), and Resistivity values were logged by Jet West Geophysical Services LLC of Farmington, New Mexico.  The Gamma portion of the down-hole logging tool was calibrated by uranium-industry standard values located in mines at Grants, New Mexico.  In situ uranium grades, expressed as equivalent U3O8 (eU3O8) are calculated using the digital gamma ray values acquired by the down-hole logging tool and uranium industry standard techniques for gamma log interpretation.  Down-hole gamma log interpretation has historically been found to be an accurate representation of in situ grades for uranium mineralization in the Magdelana District.  Chemical assays of samples will be done and used to determine relative trace element concentrations as a guide to future drilling.  .In 2008, Michael Bersch, PhD, PG, completed a National Instrument 43-101 Technical Report on the C de Baca project. This report has been filed on SEDAR and is available on our website at www.maxresource.com.  Dr. Berschs report recommends further exploration at C de Baca that will include diamond drilling, project and regional scale geologic mapping and sampling.  Geologic mapping has already begun and MAX has received a drill permit for five close-spaced diamond drill holes designed to evaluate the nature of the uranium mineralization and alteration around the mineralization, investigate possible stratigraphic controls on mineralization, evaluate the chemical equilibrium factor, and determine the porosity and permeability of the Baca Formation in the mineralized section.  Properties Sold, Lost or Abandoned  The Longtom Property (Target Claims)  Nature of Interest and Terms of Acquisition  During the fiscal year ended December 31, 2009, we elected to abandon our interest in the Longtom Property and accordingly, the following description is provided as a matter of historical record only..  By agreement dated April 16, 2003, we obtained the right to acquire a 50% interest or ownership in a mineral claim comprising 1,781.9 acres located in the Longtom Lake area of the Northwest Territories (the Target 1 Claim).  We acquired our 50% interest by paying $15,000 and issuing 200,000 common shares at a price of $0.38 per share.  By agreement dated January 15, 2003, we entered into an agreement to acquire a 50% interest or ownership in a mineral claim located east of Hottah Lake in the Northwest Territories of Northern Canada (the Target 2 Claim).  We acquired our 50% interest in the claim by making cash payments totalling $15,000, issuing 200,000 common shares at a price of $0.20 each and agreeing to incur a minimum of $100,000 (since reduced to $50,000, which amount has already been incurred) in exploration expenditures on the Claim in stages by December 31, 2004.  Both of the Target Claims Agreements provided that we would enter into a single purpose joint venture agreement with David G. Lorne, or whoever he assigns his 50% interest to, to further explore and develop the Target Claims once we complete the exploration expenditure of our interest in each claim.  Mr. Lorne sold his 50% interest in the Target 1 and Target 2 claim to Alberta Star Development Corp., a Canadian company which trades on the TSX-Venture Exchange.  We subsequently abandoned our interest in the Target 2 claim but intend to maintain our interest in the Target 1 claim.  Description, Location and Access:  The Target 1 claim is located on the east side of Longtom Lake and covers 1,781.9 acres.  The Target 2 claim is located at the north end of Longtom Lake and covers 2,530.8 acres.  The area is known as the Great Bear Magmatic Zone, a north-trending belt measuring 350 kilometres long and 120 kilometres wide.  The Claims have not been prospected in detail and have no known mineralization.  The claims have no known mineral zones, mineral resources or mineral reserves.  The climate in the vicinity of the Longtom Lake area is severe with long, cold winters and short, warm summers.  Exploration is best conducted during the summer or in late winter.  Access to the Target Claims is entirely by aircraft: by float airplane in summer and ski-equipped airplanes in winter.  The sufficiency of surface rights for mining operations, and the availability of power, water, tailings storage areas, waste disposal areas, heap leach pad sites and potential processing plant sites has not been addressed.  Territorial mining operations rely to a large extent upon the nearby city of Yellowknife, which lies 350 km southeast of the claim area, and southern Canada as a source of skilled miners, tradespersons and labour.  There is no electricity available at the property site, with surface water abundant within the property boundaries.  The following map shows the location of the Longtom Project:  [form20ffinalconfigured011.jpg]   40     The following is a map of the Longtom Property claim blocks and their location:  [form20ffinalconfigured012.jpg]  41   The claim numbers are as follows:  Claim NameDate RecordedRecord No.AcreageTarget 1October 28, 2002F710131,756.10  Maintaining the claims in good standing in the Canadian Northwest Territories:  Title to mineral claims in the Northwest Territories conveys conditional mineral rights without surface rights.  The claims are valid until the second anniversary after the date they are recorded in the Office of the Mining Recorder and may be extended thereafter on a year to year basis, subject to completing and filing prescribed minimum annual work commitments and paying the prescribed annual fee.  To maintain a mineral claim in good standing, the holder of the claim must complete annual work expenditures of at least $4.00 per acre on the claim (or make a cash payment in lieu) plus pay an annual fee -currently $0.10/acre . A report of this work must be submitted (in the prescribed form), along with applicable fees, each year to the Office of the Mining Recorder, prior to the anniversary of the recording date.  Representative work and/or cash payments in lieu can be applied to maintain the claim only until its tenth anniversary by which time the claim must be surveyed by a legal surveyor and the survey submitted for registration as a mining lease in accordance with Canada Mining Regulations.  Work in excess of the minimum requirement was completed during the summer of 2003 and reported to the Mining Recorder on March 22, 2005. We abandoned the Target 2 Claim in our fiscal year ended December 31, 2007, and abandoned the Target 1 claim during fiscal 2009 as we do not intend to do any further work on the property due to the remote location and difficult access.  History of Exploration and Status:  The potential of the Target Claims is based upon significant exploration work that Alberta Star Development Corp. (TSX-V:ASX; OTC BB: ASXSF) (Alberta Star) has completed on adjacent claims up to 2004.   In October 2002, Alberta Star conducted a gravity survey of the Longtom property to detect potential anomalies caused by the presence of iron oxide, copper and gold mineralization. The ground-helicopter supported gravity survey was conducted over selected portions of the 19,642-acre Longtom claim-block.  The data obtained from the survey is complimented by gravity data collected for Hudsons Bay Exploration and Development Co. Ltd. in 2000 along the shores of Longtom Lake, and by a comprehensive regional gravity survey completed by the Geological Survey of Canada. The objective of the survey was to map the distribution of large masses of variable density.  A total of 243 detailed gravity stations were recorded at 500-meter intervals with some detail infill stations at 250 meters. The gravity survey confirmed the extent of what may be economic mineralization along a large structurally controlled faulting system.  The results show two significant 2.5-3.0 milligal gravity anomalies.  These two gravity anomalies are coincident with the strong magnetic anomalies. The gravity anomalies occur along a 7.5 kilometre long trend and are up to 1.5 kilometres in width.  Combined gravity, magnetic and radiometric anomalies are a common targeting criterion for iron-oxide/copper/gold mineralization and necessary in identifying an economic ore body.  Alberta Star conducted a 20-hole drill program on these adjoining claims during 2003.  The terrain of the Longtom claim block appears to have an abundance of outcropping bedrock exposures and is known to comprise crystalline plutons with compositions apparently ranging from granitic to monzonitic.  Volcanic rocks of rhyodacitic, andesitic and basaltic compositions have been mapped in the northeast most part of the claims.  In mid-September 2004, we were advised by Alberta Star that Fronteer Development Group (TSX:FRG) (Fronteer), as operator, had intersected high-grade uranium mineralization on Alberta Stars Longtom Lake property during drilling that it had conducted during the summer of 2004.  The Longtom Lake property is immediately adjacent to our Target 1 Claim jointly held with Alberta Star.  42   Drilling conducted by Fronteer intersected 1.68 per cent U3O8 over one metre at a downhole depth of 80 metres, which was part of a broader interval that returned 0.56 per cent U3O8 over three metres, and 0.16 per cent U3O8 over one metre that was intersected at a depth of 51 metres in the same hole.  Drill programs conducted by other operators on the Longtom Lake property had previously intersected anomalous to high-grade uranium.  Within a 300-metre radius of the new discovery, eight historic drill holes had intersected uranium mineralization with indicated values ranging between 0.21 per cent U3O8 over 0.6 metre at a down-hole depth of 44.5 metres, and 0.48 per cent U3O8 over 1.5 metres at a down-hole depth of 59 metres.  We elected to abandon the Target 2 claim during the year ended December 31, 2005 and this resulted in a write down of $55,000 in acquisition costs and $2,000 in deferred exploration costs.  During the year ended December 31, 2007, we recorded an impairment charge of $148,097 on the Target 1 Claim.   During the fiscal year ended December 31, 2009, we elected to abandon our interest in the Target 1 claims as well and no longer hold any interest in the property.  Gold Hill Property:  Nature of Interest and Terms of Acquisition  During the fiscal year ended December 31, 2009, we decided to abandon the Gold Hill Property and no longer hold any interest in this property.  Accordingly, the following description is provided as a matter of record for information purposes only.  We acquired our interest in the Gold Hill Property under an Option Agreement dated for reference May 17, 2004, entered into with Zazu Exploration, Inc. (Zazu) which provided us with an option to acquire a 90% interest, or ownership, in the Gold Hill Property near Cantwell, Alaska.  Zazu Exploration, Inc. is a privately-held Texas corporation, which held a Lease, as amended effective November 23, 2006, on the Gold Hill Claims from GCO Minerals Company (GCO).  Under the terms of the Option Agreement, we paid $63,691 (US$48,200) and issued 100,000 shares valued at $47,000 and 100,000 warrants exercisable at $0.47 per share for a two year period.  In order to maintain the Option, we issued an additional 200,000 shares effective December 31, 2004 (issued at a value of $74,000).  We issued a further 200,000 shares effective December 31, 2005 (issued at a value of $120,000) to exercised the option acquired Zazus right to earn a 90% interest in the Gold Hill Property under its lease with GCO Minerals, subject to a NSR of 1% and GCOs rights under the lease, including a back-in right allowing GCO to buy back up to a 30% interest in the Gold Hill claims by paying us the lesser of US$5,000,000 or 300% of all costs incurred to completion of a Feasibility Report and an NSR payable to GCO which fluctuated from 1.5% to 4.0% depending on the price of gold  As a result, we assumed all of Zazus obligations under its lease with GCO Minerals Corp. (GCO) include the obligation to make the following minimum work commitments and Advance Royalty Payments (in U.S. funds), and were required to deliver a full feasibility report by December 31, 2010:  YearWork CommitmentCumulative Work CommitmentAdvance Royalty2004$100,000 (incurred)$100,000$5,000 (paid)2005$150,000 (incurred)$250,000$15,000 (paid)2006Nil (deferred to 2007)$250,000$25,000 (paid)2007$250,000 (incurred)$500,000$25,000 (paid)2008$250,000 (incurred)$750,000$50,000 (paid)2009$500,000 (incurred)$1,250,000$75,000 (paid)2010$500,000 (incurred)$1,750,000$100,0002011$500,000$2,250,000$100,000   43   Description, Location and Access:  The Gold Hill property is located near Cantwell, Alaska in the Valdez Creek mining district.  Cantwell is approximately 212 miles north northeast of Anchorage by paved highway.   The property is accessible to within five air miles of the property by the all-weather unpaved Denali Highway (State Highway 8) approximately 53 miles from Cantwell.  This road is not normally plowed during the winter months but is accessible by tracked vehicles during the winter.  An unimproved dirt road heads westerly from the highway at milepost 80 for approximately 11 miles to the camp site at the Gold Hill property.  Access is by All Terrain Vehicle or tracked vehicles along this unimproved dirt road.  Electricity is not available at the property site, with surface water abundant within the property boundaries.  See Principal Expenditures and Divestitures.  A map of the location of the Gold Hill property follows:  [form20ffinalconfigured013.jpg]   44   The claim numbers and particulars of the Gold Hill Property, as recorded in the Talkeetna Recording District, are as follows:


|         |            |                  |                                 |      |         |                   |              |      |      |  |  |  |  |  |  |  |  |  |  | 
|-------- | ---------- | ---------------- | ------------------------------- | ---- | ------- | ----------------- | ------------ | ---- | ---- |  |  |  |  |  |  |  |  |  |  | 
|         | Claim Name | Date of Location | Date of Certificate of Location | Book | Page(s) | ADL Serial Number | Location Sec | T.   | R.  
|         | SUS 447    | 7/24/1988        | 10/13/1988                      | 123  | 201-202 | 525675            | 19           | 21 S | 1 W.
|         | SUS 448    | 7/24/1988        | 10/13/1988                      | 123  | 203     | 525676            | 19,20        | 21 S | 1 W.
|         | SUS 449    | 7/24/1988        | 10/13/1988                      | 123  | 204     | 525677            | 20           | 21 S | 1 W.
|         | SUS 450    | 7/24/1988        | 10/13/1988                      | 123  | 205     | 525678            | 20           | 21 S | 1 W.
|         | SUS 451    | 8/21/1994        | 11/2/1994                       | 150  | 155-156 | 538433            | 20           | 21 S | 1 W.
|         | SUS 452    | 8/21/1994        | 11/2/1994                       | 150  | 157     | 538434            | 20,21        | 21 S | 1 W.
|         | SUS 453    | 8/21/1994        | 11/2/1994                       | 150  | 158     | 538435            | 21           | 21 S | 1 W.
|         | SUS 454    | 8/21/1994        | 11/2/1994                       | 150  | 159     | 538436            | 21           | 21 S | 1 W.
|         | SUS 547    | 7/24/1988        | 10/13/1988                      | 123  | 206     | 525679            | 18,19        | 21 S | 1 W.
|         | SUS 548    | 7/24/1988        | 10/13/1988                      | 123  | 207     | 525680            | 17-20        | 21 S | 1 W.
|         | SUS 549    | 7/24/1988        | 10/13/1988                      | 123  | 208     | 525681            | 17,20        | 21 S | 1 W.
|         | SUS 550    | 7/24/1988        | 10/13/1988                      | 123  | 209     | 525682            | 17,21        | 21 S | 1 W.
|         | SUS 551    | 8/21/1994        | 11/2/1994                       | 150  | 160     | 538437            | 17,22        | 21 S | 1 W.
|         | SUS 552    | 8/21/1994        | 11/2/1994                       | 150  | 161     | 538438            | 16,17,20,21  | 21 S | 1 W.
|         | SUS 553    | 8/21/1994        | 11/2/1994                       | 150  | 162     | 538439            | 16,21        | 21 S | 1 W.
|         | SUS 554    | 8/21/1994        | 11/2/1994                       | 150  | 163     | 538440            | 16,22        | 21 S | 1 W.
|         | SUS 555    | 8/21/1994        | 11/2/1994                       | 150  | 164     | 538441            | 16,23        | 21 S | 1 W.
|         | SUS 556    | 8/21/1994        | 11/2/1994                       | 150  | 165     | 538442            | 15,16,21,22  | 21 S | 1 W.
|         | SUS 647    | 7/23/1988        | 10/13/1988                      | 123  | 210     | 525683            | 18           | 21 S | 1 W.
|         | SUS 648    | 7/24/1988        | 10/13/1988                      | 123  | 211     | 525684            | 17-20        | 21 S | 1 W.
|         | SUS 649    | 7/24/1988        | 10/13/1988                      | 123  | 212     | 525685            | 17           | 21 S | 1 W.
|         | SUS 650    | 7/24/1988        | 10/13/1988                      | 123  | 213     | 525686            | 17           | 21 S | 1 W.
|         | SUS 651    | 8/18/1994        | 11/2/1994                       | 150  | 166     | 538443            | 17           | 21 S | 1 W.
|         | SUS 652    | 8/18/1994        | 11/2/1994                       | 150  | 167     | 538444            | 16,17        | 21 S | 1 W.
|         | SUS 653    | 8/18/1994        | 11/2/1994                       | 150  | 168     | 538445            | 16           | 21 S | 1 W.
|         | SUS 654    | 8/18/1994        | 11/2/1994                       | 150  | 169     | 538446            | 16           | 21 S | 1 W.
|         | SUS 655    | 8/18/1994        | 11/2/1994                       | 150  | 170     | 538447            | 16           | 21 S | 1 W.
|         | SUS 656    | 8/18/1994        | 11/2/1994                       | 150  | 171     | 538448            | 15,16        | 21 S | 1 W.
|         | SUS 657    | 8/18/1994        | 11/2/1994                       | 150  | 172     | 538449            | 15           | 21 S | 1 W.
|         | SUS 658    | 8/19/1994        | 11/2/1994                       | 150  | 173     | 538450            | 15           | 21 S | 1 W.
|         | SUS 747    | 7/23/1988        | 10/13/1988                      | 123  | 214     | 525687            | 18           | 21 S | 1 W.
|         | SUS 748    | 7/25/1988        | 10/13/1988                      | 123  | 215     | 525688            | 17,18        | 21 S | 1 W.
|         | SUS 749    | 8/18/1994        | 11/2/1994                       | 150  | 174     | 538451            | 17           | 21 S | 1 W.
|         | SUS 750    | 8/18/1994        | 11/2/1994                       | 150  | 175     | 538452            | 17           | 21 S | 1 W.
|         | SUS 751    | 8/19/1994        | 11/2/1994                       | 150  | 176     | 538453            | 17           | 21 S | 1 W.
|         | SUS 752    | 8/19/1994        | 11/2/1994                       | 150  | 177     | 538454            | 16,17        | 21 S | 1 W.
|         | SUS 753    | 8/19/1994        | 11/2/1994                       | 150  | 178     | 538455            | 16           | 21 S | 1 W.
|         | SUS 754    | 8/19/1994        | 11/2/1994                       | 150  | 179     | 538456            | 16           | 21 S | 1 W.
|         | SUS 755    | 8/19/1994        | 11/2/1994                       | 150  | 180     | 538457            | 16           | 21 S | 1 W.
|         | SUS 756    | 8/19/1994        | 11/2/1994                       | 150  | 181     | 538458            | 15,16        | 21 S | 1 W.
|         | SUS 757    | 8/19/1994        | 11/2/1994                       | 150  | 182     | 538459            | 15           | 21 S | 1 W.
|         | SUS 758    | 8/19/1994        | 11/2/1994                       | 150  | 183     | 538460            | 15           | 21 S | 1 W.
|         | SUS 759    | 8/19/1994        | 11/2/1994                       | 150  | 184     | 538461            | 15           | 21 S | 1 W.
|         | SUS 845    | 7/25/1988        | 10/13/1988                      | 123  | 217     | 525690            | 18           | 21 S | 1 W.
|         | SUS 846    | 7/25/1988        | 10/13/1988                      | 123  | 218     | 525691            | 18           | 21 S | 1 W.
|         | SUS 847    | 7/23/1988        | 10/13/1988                      | 123  | 219     | 525692            | 18           | 21 S | 1 W.
|         | SUS 848    | 8/19/1994        | 11/2/1994                       | 150  | 185     | 538462            | 17,18        | 21 S | 1 W.
|         | SUS 849    | 8/18/1994        | 11/2/1994                       | 150  | 186     | 538463            | 17           | 21 S | 1 W.
|         | SUS 850    | 8/18/1994        | 11/2/1994                       | 150  | 187     | 538464            | 17           | 21 S | 1 W.
|         | SUS 851    | 8/19/1994        | 11/2/1994                       | 150  | 188     | 538465            | 17           | 21 S | 1 W.
|         | SUS 852    | 8/19/1994        | 11/2/1994                       | 150  | 189     | 538466            | 16,17        | 21 S | 1 W.
|         | SUS 853    | 8/19/1994        | 11/2/1994                       | 150  | 190     | 538467            | 16           | 21 S | 1 W.
|         | SUS 854    | 8/19/1994        | 11/2/1994                       | 150  | 191     | 538468            | 16           | 21 S | 1 W.
|         | SUS 855    | 8/19/1994        | 11/2/1994                       | 150  | 192     | 538469            | 16           | 21 S | 1 W.
|         | SUS 856    | 8/19/1994        | 11/2/1994                       | 150  | 193     | 538470            | 15,16        | 21 S | 1 W.
|         | SUS 857    | 8/19/1994        | 11/2/1994                       | 150  | 194     | 538471            | 15           | 21 S | 1 W.
|         | SUS 858    | 8/19/1994        | 11/2/1994                       | 150  | 195     | 538472            | 15           | 21 S | 1 W.
|         | SUS 859    | 8/19/1994        | 11/2/1994                       | 150  | 196     | 538473            | 15           | 21 S | 1 W.
|         | SUS 860    | 8/19/1994        | 11/2/1994                       | 150  | 197     | 538474            | 14,15        | 21 S | 1 W.
|         | SUS 945    | 7/25/1988        | 10/13/1988                      | 123  | 221     | 525694            | 7,18         | 21 S | 1 W.
|         | SUS 946    | 7/25/1988        | 10/13/1988                      | 123  | 222     | 525695            | 7,18         | 21 S | 1 W.
|         | SUS 947    | 7/23/1988        | 10/13/1988                      | 123  | 223     | 525696            | 7,18         | 21 S | 1 W.
|         | SUS 948    | 8/19/1994        | 11/2/1994                       | 150  | 198     | 538475            | 7,8,17,18    | 21 S | 1 W.
|         | SUS 949    | 8/18/1994        | 11/2/1994                       | 150  | 199     | 538476            | 8,17         | 21 S | 1 W.
|         | SUS 950    | 8/18/1994        | 11/2/1994                       | 150  | 200     | 538477            | 8,17         | 21 S | 1 W.
|         | SUS 951    | 8/20/1994        | 11/2/1994                       | 150  | 201     | 538478            | 8,17         | 21 S | 1 W.
|         | SUS 952    | 8/20/1994        | 11/2/1994                       | 150  | 202     | 538479            | 8,9,16,17    | 21 S | 1 W.
|         | SUS 953    | 8/20/1994        | 11/2/1994                       | 150  | 203     | 538480            | 9,16         | 21 S | 1 W.
|         | SUS 954    | 8/20/1994        | 11/2/1994                       | 150  | 204     | 538481            | 9,16         | 21 S | 1 W.
|         | SUS 955    | 8/20/1994        | 11/2/1994                       | 150  | 205     | 538482            | 9,16         | 21 S | 1 W.
|         | SUS 956    | 8/20/1994        | 11/2/1994                       | 150  | 206     | 538483            | 9,10,15,16   | 21 S | 1 W.
|         | SUS 957    | 8/20/1994        | 11/2/1994                       | 150  | 207     | 538484            | 10,15        | 21 S | 1 W.
|         | SUS 958    | 8/20/1994        | 11/2/1994                       | 150  | 208     | 538485            | 10,15        | 21 S | 1 W.
|         | SUS 959    | 8/20/1994        | 11/2/1994                       | 150  | 209     | 538486            | 10,15        | 21 S | 1 W.
|         | SUS 960    | 8/20/1994        | 11/2/1994                       | 150  | 210     | 538487            | 10,11,14,15  | 21 S | 1 W.
|         | SUS 1045   | 7/25/1988        | 10/13/1988                      | 123  | 225     | 525698            | 7            | 21 S | 1 W.
|         | SUS 1046   | 7/25/1988        | 10/13/1988                      | 123  | 226     | 525699            | 7            | 21 S | 1 W.
|         | SUS 1047   | 7/23/1988        | 10/13/1988                      | 123  | 227     | 525700            | 7            | 21 S | 1 W.
|         | SUS 1048   | 7/26/1988        | 10/13/1988                      | 123  | 228     | 525701            | 7,8          | 21 S | 1 W.
|         | SUS 1049   | 8/18/1994        | 11/2/1994                       | 150  | 211     | 538488            | 8            | 21 S | 1 W.
|         | SUS 1050   | 8/18/1994        | 11/2/1994                       | 150  | 212     | 538489            | 8            | 21 S | 1 W.
|SUS 1051 | 8/20/1994  | 11/2/1994        | 150                             | 213  | 538490  | 8                 | 21 S         | 1 W.
|SUS 1052 | 8/20/1994  | 11/2/1994        | 150                             | 214  | 538491  | 8,9               | 21 S         | 1 W.
|SUS 1053 | 8/20/1994  | 11/2/1994        | 150                             | 215  | 538492  | 9                 | 21 S         | 1 W.
|SUS 1054 | 8/20/1994  | 11/2/1994        | 150                             | 216  | 538493  | 9                 | 21 S         | 1 W.
|SUS 1055 | 8/20/1994  | 11/2/1994        | 150                             | 217  | 538494  | 9                 | 21 S         | 1 W.
|SUS 1056 | 8/20/1994  | 11/2/1994        | 150                             | 218  | 538495  | 9,10              | 21 S         | 1 W.
|SUS 1057 | 8/20/1994  | 11/2/1994        | 150                             | 219  | 538496  | 10                | 21 S         | 1 W.
|SUS 1058 | 8/20/1994  | 11/2/1994        | 150                             | 220  | 538497  | 10                | 21 S         | 1 W.
|SUS 1059 | 8/20/1994  | 11/2/1994        | 150                             | 221  | 538498  | 10                | 21 S         | 1 W.
|SUS 1145 | 7/23/1988  | 10/13/1988       | 123                             | 229  | 525702  | 7                 | 21 S         | 1 W.
|SUS 1146 | 7/23/1988  | 10/13/1988       | 123                             | 230  | 525703  | 7                 | 21 S         | 1 W.
|SUS 1147 | 7/23/1988  | 10/13/1988       | 123                             | 231  | 525704  | 7                 | 21 S         | 1 W.
|SUS 1148 | 7/23/1988  | 10/13/1988       | 123                             | 232  | 525705  | 7,8               | 21 S         | 1 W.
|SUS 1149 | 7/23/1988  | 10/13/1988       | 123                             | 233  | 525706  | 8                 | 21 S         | 1 W.
|SUS 1150 | 7/23/1988  | 10/13/1988       | 123                             | 234  | 525707  | 8                 | 21 S         | 1 W.
|SUS 1151 | 7/23/1988  | 10/13/1988       | 123                             | 235  | 525708  | 8                 | 21 S         | 1 W.
|SUS 1152 | 7/23/1988  | 10/13/1988       | 123                             | 236  | 525709  | 8,9               | 21 S         | 1 W.
|SUS 1153 | 7/23/1988  | 10/13/1988       | 123                             | 237  | 525710  | 9                 | 21 S         | 1 W.
|SUS 1154 | 8/20/1994  | 11/2/1994        | 150                             | 222  | 538499  | 9                 | 21 S         | 1 W.
|SUS 1155 | 8/20/1994  | 11/2/1994        | 150                             | 223  | 538500  | 9                 | 21 S         | 1 W.
|SUS 1156 | 8/20/1994  | 11/2/1994        | 150                             | 224  | 538501  | 9,10              | 21 S         | 1 W.
|SUS 1157 | 8/20/1994  | 11/2/1994        | 150                             | 225  | 538502  | 10                | 21 S         | 1 W.
|SUS 1158 | 8/20/1994  | 11/2/1994        | 150                             | 226  | 538503  | 10                | 21 S         | 1 W.
|SUS 1159 | 8/20/1994  | 11/2/1994        | 150                             | 227  | 538504  | 10                | 21 S         | 1 W.
|SUS 1249 | 7/26/1988  | 10/13/1988       | 123                             | 238  | 525711  | 8                 | 21 S         | 1 W.
|SUS 1250 | 7/26/1988  | 10/13/1988       | 123                             | 239  | 525712  | 8                 | 21 S         | 1 W.
|SUS 1251 | 7/26/1988  | 10/13/1988       | 123                             | 240  | 525713  | 8                 | 21 S         | 1 W.
|SUS 1252 | 7/26/1988  | 10/13/1988       | 123                             | 241  | 525714  | 8,9               | 21 S         | 1 W.
|SUS 1253 | 7/26/1988  | 10/13/1988       | 123                             | 242  | 525715  | 9                 | 21 S         | 1 W.
|SUS 1254 | 7/26/1988  | 10/13/1988       | 123                             | 243  | 525716  | 9                 | 21 S         | 1 W.
|SUS 1255 | 8/20/1994  | 11/2/1994        | 150                             | 228  | 538505  | 9                 | 21 S         | 1 W.
|SUS 1256 | 8/20/1994  | 11/2/1994        | 150                             | 229  | 538506  | 9,10              | 21 S         | 1 W.
|SUS 1257 | 8/20/1994  | 11/2/1994        | 150                             | 230  | 538507  | 10                | 21 S         | 1 W.
|SUS 1258 | 8/20/1994  | 11/2/1994        | 150                             | 231  | 538508  | 10                | 21 S         | 1 W.
|SUS 1350 | 7/26/1988  | 10/13/1988       | 123                             | 244  | 525717  | 8                 | 21 S         | 1 W.
|SUS 1351 | 7/26/1988  | 10/13/1988       | 123                             | 245  | 525718  | 8                 | 21 S         | 1 W.
|SUS 1352 | 7/26/1988  | 10/13/1988       | 123                             | 246  | 525719  | 8,9               | 21 S         | 1 W.
|SUS 1353 | 7/26/1988  | 10/13/1988       | 123                             | 247  | 525720  | 9                 | 21 S         | 1 W.
|SUS 1354 | 7/26/1988  | 10/13/1988       | 123                             | 248  | 525721  | 9                 | 21 S         | 1 W.
|SUS 1355 | 7/26/1988  | 10/13/1988       | 123                             | 249  | 525722  | 9                 | 21 S         | 1 W.
|SUS 1356 | 8/21/1994  | 11/2/1994        | 150                             | 232  | 538509  | 9,10              | 21 S         | 1 W.
|SUS 1357 | 8/21/1994  | 11/2/1994        | 150                             | 233  | 538510  | 10                | 21 S         | 1 W.
|SUS 1358 | 8/21/1994  | 11/2/1994        | 150                             | 234  | 538511  | 10                | 21 S         | 1 W.

45


|           |                  |                              |                    |        |                   |              |      |    | 
|---------- | ---------------- | ---------------------------- | ------------------ | ------ | ----------------- | ------------ | ---- | -- | 
|           |                  | State of Alaska MTRSC Claims |                    |        |                   |             
|           |                  |                              |                    |        |                   |             
|Claim Name | Date of Location |                              | Claim Size (Acres) |        | ADL Serial Number | Location Sec | T.   | R.
|           |                  |                              |                    |        |                   |              |      |   
|GH 01      | 6/11/04          | 160                          |                    | 645098 | 23                | 21 S         | 2 W.
|GH 02      | 6/11/04          | 160                          |                    | 645099 | 24                | 21 S         | 2 W.
|GH 03      | 6/11/04          | 160                          |                    | 645100 | 24                | 21 S         | 2 W.
|GH 04      | 6/11/04          | 160                          |                    | 645101 | 19                | 21 S         | 1 W 
|GH 05      | 6/11/04          | 40                           |                    | 645102 | 19                | 21 S         | 1 W 
|GH 06      | 6/11/04          | 40                           |                    | 645103 | 19                | 21 S         | 1 W 
|GH 07      | 6/11/04          | 40                           |                    | 645104 | 18                | 21 S         | 1 W 
|GH 08      | 6/11/04          | 40                           |                    | 645105 | 18                | 21 S         | 1 W 
|GH 09      | 6/11/04          | 160                          |                    | 645106 | 18                | 21 S         | 1 W 
|GH 10      | 6/11/04          | 160                          |                    | 645107 | 13                | 21 S         | 2 W.
|GH 11      | 6/11/04          | 160                          |                    | 645108 | 13                | 21 S         | 2 W.
|GH 12      | 6/11/04          | 160                          |                    | 645109 | 14                | 21 S         | 2 W.
|GH 13      | 6/11/04          | 160                          |                    | 645110 | 14                | 21 S         | 2 W.
|GH 14      | 6/11/04          | 160                          |                    | 645111 | 13                | 21 S         | 2 W.
|GH 15      | 6/11/04          | 160                          |                    | 645112 | 14                | 21 S         | 2 W.
|GH 16      | 6/11/04          | 40                           |                    | 645113 | 18                | 21 S         | 1 W 
|GH 17      | 6/11/04          | 40                           |                    | 645114 | 18                | 21 S         | 1 W 
|GH 18      | 6/11/04          | 40                           |                    | 645115 | 18                | 21 S         | 1 W 
|GH 19      | 6/11/04          | 40                           |                    | 645116 | 18                | 21 S         | 1 W 
|GH 20      | 6/11/04          | 40                           |                    | 645117 | 7                 | 21 S         | 1 W 
|GH 21      | 6/11/04          | 40                           |                    | 645118 | 7                 | 21 S         | 1 W 
|GH 22      | 6/11/04          | 160                          |                    | 645119 | 12                | 21 S         | 2 W.
|GH 23      | 6/11/04          | 160                          |                    | 645120 | 7                 | 21 S         | 1 W 
|GH 24      | 6/11/04          | 160                          |                    | 645121 | 7                 | 21 S         | 1 W 
|GH 25      | 6/11/04          | 40                           |                    | 645122 | 8                 | 21 S         | 1 W 
|GH 26      | 6/11/04          | 40                           |                    | 645123 | 8                 | 21 S         | 1 W 
|GH 27      | 6/11/04          | 40                           |                    | 645124 | 8                 | 21 S         | 1 W 
|GH 28      | 6/11/04          | 160                          |                    | 645125 | 33                | 20 S.        | 1 W 
|GH 29      | 6/11/04          | 160                          |                    | 645126 | 32                | 20 S.        | 1 W 
|GH 30      | 6/11/04          | 160                          |                    | 645127 | 32                | 20 S.        | 1 W 
|GH 31      | 6/11/04          | 160                          |                    | 645128 | 31                | 20 S.        | 1 W 
|GH 32      | 6/11/04          | 160                          |                    | 645129 | 31                | 20 S.        | 1W  

The original Gold Hill claims optioned from Zazu encompass 124 state select mining claims (4,960 acres).  An additional 32 claims totaling 3,560 acres were staked in June, 2004.  The claims, both in the GH and the SUS series, are state, not federal, unpatented lode claims. The claims are unpatented and, as a result, an annual maintenance fee is required to be paid to maintain them.  Maintaining the claims in good standing in the State of Alaska:  Under the State of Alaskas Annual Rental Law (Alaska Statute 38.05.211, enacted 1989) all locators and holders of State mining locations must pay to the state an annual cash rental in order to keep the claims in good standing.  For all traditional mining claims, which are a 1⁄4 section in size (about 40 acres) the annual rental amount is $25/year for the first five years, $55/year for the second five years and $130/year thereafter.  For all section locations (about 160 acres), the annual rental amount is $100/year for the first five years, $220/year for the second five years and $520/year thereafter.  The dates of our claims are disclosed in the claims table above.  They vary from 1988 to 2004 and are primarily either 40 acres or 160 acres.   46   The payment for each rental year is due September 1 of any given year and is payable no later than November 30 in that year.  For 2009, we were required to pay approximately US$16,573 in lease payments to maintain our Alaska claims in good standing.  The claims do not have an expiration date so long as these annual rent payments are made.  History of Exploration and Status:  The property was first drilled as a joint venture between Dome Exploration and Cities Service Company in 1972. They were exploring for molybdenum and did not find an economic deposit so they left the property. General Crude Oil (GCO) acquired the property in 1983 and explored the property for gold.  They did geologic mapping, soil geochemistry, a VLF-EM survey and drilled five diamond drill holes. The best intersection from this drilling was 11.5 feet which averaged 0.668 ounces per ton  In 1988, Amax Gold entered into a joint venture with GCO.  They completed geologic mapping, rock sampling, soil geochemical surveys and VLF-EM geophysical surveys, select metallic screen fire assays and preliminary cyanide bottle roll metallurgical tests and 5,885 feet of reverse circulation drilling in 21 drill holes.  The target was to find a bulk tonnage open pittable deposit.  Amax did not find significant thick intervals of low grade mineralization and dropped the property.  High grade gold intervals were encountered in drill holes AUH 7, 16, and 17.  Hole 7 contained five feet of 0.18 opt Au,  Hole 16 contained five feet of 0.46 opt Au, five feet of 0.23 opt Au and five feet of 0.66 opt Au, and Hole 17 contained five feet of 0.19 opt Au.  These holes are open along strike and, since they were drilled with a reverse circulation drill rig which encountered large quantities of water, they should be re-examined to see if loss of gold might have occurred during drilling.  Gold Hill is an intrusion related gold system which has many of the characteristics of a Tintina Gold Belt system. The dominant rock types consist of argillite, metasiltstone, greywacke, carbonaceous schist and a small wedge-shaped fault block of tuffaceous metasedimentay and metavolcaniclastic rocks. Early to mid-Teritary monzonite and diorite stocks, plugs and dikes intrude the metasiltstone units on Gold Hill and the tuffaceous metasedimentary sequences on West Hill located in the western part of the property.  Hydrothermal alteration is pervasive throughout the property.  Quartz-sericite-pyrite alteration is particularly evident around the summit of Gold Hill and to a lesser extent in the vicinity of the Swale area, a low saddle located just east of West Hill.  The gold mineralization is thought to be related to the intrusions and pyrite, arsenopyrite, pyrrhotite, chalcopyrite, molybdenum, and gold are found in veins and as disseminations in the host rocks. The mineralization occurs as disseminations and on fractures and appears to be structurally-controlled. The alteration and mineralization occur over an area of at least two square miles.  All of the creeks contain placer gold and have been worked in the past.  Interpretation of the geophysics indicates that there are a number of buried intrusives present on the property which have not been explored.  Our interest in the Gold Hill Property is held under an option agreement dated May 17, 2004 with Zazu Exploration Inc. (the Gold Hill Option).  See Item 4 Information on the Company  The Gold Hill Property (Alaska).  On acceptance for filing of this Option Agreement by the TSX Venture Exchange on June 23, 2004, the two principals of Zazu joined our team, with Gil Atzmon joining our Board of Directors and Clarence J. Wendt agreeing to oversee our exploration as well as search for additional properties.  On June 29, 2004 we announced that drilling had begun on the Gold Hill project, with the initial phase of the diamond drilling designed to test previous high grade mineralization encountered in prior drilling by Amax and General Crude Oil.  The program consisted of 7 diamond drill holes planned to intersect previously found values that included 1.5 meters of 15.0 grams per ton (gpt), 1.5 meters of 8 gpt, 1.5 meters of 22.9 gpt, 1.2 meters of 15.6 gpt, and 1.10 meters of 54.3 gpt.  Values of 8.6 ppm were found by the United States Bureau of Mines in a regional sampling program of the surface.  47     In addition, we staked a 1,659 hectare area west of the Gold Hill property.  This encompasses areas of high grade outcrops that were explored during the drill program.  Significant values of gold (2.5 feet of 0.25 ounces per ton) were found in a sample from the Gold Creek Area. This sample also contained 0.57% copper.  Within the same creek, values of tungsten (0.19% WO3) were also found.  In addition, confirmation assays to verify the previous work done by Amax Exploration were completed. Drill holes 7, 13, and 16 contained significant values of gold.  The assays confirm the previous assays and show the variation in gold numbers within the same sample.  Prior Sample No./ Hole + FootageTypeAmax AssayExamination Sample No.Check AssayAu ppmAu oz/tAu ppmAu oz/tAUH-7 100-105Pulp6.350.18421060273.9990.117AUG-7 200-205Pulp2.4730.07171060282.3960.070AUH-13 250-255Pulp3.9280.11391060293.4630.101AUH-13 255-260Pulp2.7380.07941060302.5350.074AUH-16 35-40Pulp15.940.46231060319.8640.288AUH-16 170-175Pulp22.900.664110603218.8130.549  The original assay sheets of the work done by AMAX are not available.  We believe that our review of the original pulps from AMAX shows that AMAXs work was done to industry standards.  The drilling at Gold Hill was completed by July 21, 2004, with the core being split at Alaskan Earth Sciences in Anchorage, Alaska and then shipped to American Assay Laboratories of Reno, Nevada for analysis.  The results of this first phase drilling were released on September 14, 2004.  The results are as follows:  HQ Core
Drill hole #FromToIntersection
True Width (ft)AU g/tCu %O4-1293561.8712513055.2417917550.3371518051.60.4704-2No significant gold values04-318018551.0204-4No  significant gold values04-5505551.3404-6909551.09130145152.88Includes13013555.28Includes14014551.7504-7404552.47808551.66  Because of the disseminated nature of the mineralization found in the drill core, a standard 5 foot sampling interval was chosen for sampling.  After logging the core, the core was marked and split using a standard hydraulic core splitter.  The core was then split, half of the sample was put into the core box for future work and the other half was put into a bag and sent to the geochemical laboratory.   48   Assays were completed by American Assay Labs of Reno Nevada.  The new zones identified include a major structure with approximately one meter of mineralization grading 14.4 g/t gold and 0.18% copper, and a sheeted zone where values of 7.9 g/t gold and 1.1% copper were found in the fractures.  Petrographic work indicated that the drill core is almost all diorite to intermediate composition intrusive rocks.  Polished section work showed that gold is found in a free state and is related to the intrusions. Pyrite, arsenopyrite, pyrrhotite, chalcopyrite, molybdenum, native copper, and gold are found in veins and as disseminations in the host rocks.  On July 30th 2007, we began a five hole diamond drill program to test molybdenum exploration targets at Gold Hill in Alaska.  The drill campaign was designed to test a broad Molybdenum/Copper/Gold geochemistry and geophysical magnetic anomaly covering a 700m by 800m area.  We planned this drill program to confirm the reliability and relevance of original data collected and contained in internal reports by Dome Mines Ltd., Cities Services Minerals, GCO Minerals of Houston, Texas, Amax Exploration Inc. and Hemlo Gold Mines (USA).  At least 2,550 soil samples, 239 rock samples, 1,905 drill samples and an unknown number of channel samples from 2,900 feet of trenches have been taken on the property.  Ground and airborne geophysical surveys have been conducted over the property which had identified magnetic highs which were then targeted for base metal and molybdenum mineralization.  On August 29, 2007, we announced assays received from the top half of drill hole DH-07-1 on the Gold Hill Molybdenum Property in Alaska.  Assays for the top 540 feet returned 0.054% MoS2and included a 250 foot intercept of 0.08% MoS2.  This hole was drilled to a depth of 965 feet, with the results form the remainder of the hole available in early October and returning 0.041% MoS2 over a core length of 425 feet.  Together with the previously reported intersection, Hole DH-07-01 assayed a total of 0.048% MoS2 over the entire core length of 965 feet.  The best interval occurs as 250 feet of 0.080% MoS2 beginning at 260 feet down hole.  Further, Hole DH-07-01 ended in molybdenum mineralization grading 0.054% MoS2.  Anomalous and dispersed values in copper were also reported. Copper mineralization occurs in core as chalcopyrite. These intervals are located at various areas throughout the drill hole, as indicated in the following table:  In February 2009 we received the assays results from a ten hole diamond drill program completed at the Gold Hill property during 2008, following up on a five hole drill program conducted in 2007.  The 2007 drill program tested a broad Molybdenum/Copper/Gold geochemistry and geophysical magnetic anomaly covering an exposed outcrop area of at least 700 by 800 meters.  During the 2008 drill program, it was shown that mineralization continued under covered areas that did not contain a molybdenum geochemistry signature.  The 2008 program has expanded the identified mineralized system to the north and northeast and has lead to a better understanding of the mineralized system.  Drilling through overburden has also showed that molybdenum mineralization previously not observed at the surface exists under Gold Hill.  Drill holes 08-05,-6,-7,-8 and 10 show the vector of mineralization, and targets still exist in large areas between drill holes and at a depth beneath current drilling.  49     Drill HoleDepth (feet)Interval (feet)MineralizationMolybdenum ResultsDH 07-10-965 feet965 feet0.029% MoIncluding540-965425 feet0.025% MoIncluding0-540540 feet0.033% MoIncluding260-510250 feet0.048% MoIncluding855-91560 feet0.035% MoCopper Results0-250 feet250 feet0.0266 % CuIncluding130-20070 feet0.043% Cu755-81560 feet0.026% Cu845-965120 feet0.028% Cu  Assays from a further two drill holes were announced in October, 2007. Drill hole DH-07-03 returned 0.035% Mo over a core length of 1,000 feet, which included a higher grade intercept of 0.107% Mo over 45 feet. The results for DH 07-03 are as follows: Drill HoleDepth (feet)Interval (feet)MineralizationMolybdenum ResultsDH 07-030-10001000 feet0.035% MoIncluding0-750750 feet0.044% MoIncluding135-18045 feet0.107% MoIncluding445-48540 feet0.081% MoCopper Results0-320320 feet0.0226 % Cu500-1000500 feet0.045% Cu Drill Hole DH-07-02 also had moderately lower molybdenum values over the entire length of the drill hole but slightly better copper values, which is indicative of a typical zoning pattern usually found in a porphyry system. The results for DH 07-02 are as follows: Drill HoleDepth (feet)Interval (feet)MineralizationMolybdenum ResultsDH 07-020-10001000 feet0.0167% MoCopper Results0-430430 feet0.054% Cu430-605175 feet0.0215% Cu  The assays from the final two diamond drill holes at Gold Hill were received in November 2007. Drill hole DH-07-05 returned 0.0279% Mo over a core length of 822 feet, which included a higher grade intercept of 352 feet of .0423% Mo
Drill hole DH-07-05 was an angled drill hole designed to test across the mineralization that was intersected in drill holes DH-07-02 and DH-07-03. The drill hole did not cut the entire interval and mineralization was visibly increasing at the bottom of the drill hole as it neared the projection of the main zone.  50   Drill Hole DH-07-04 was a vertical hole. This hole reports good molybdenum values over the entire core length of 1000 feet, which included a 250 foot interval of 0.0362% Mo. This hole also reported better copper values. Again, this is a typical zoning pattern usually found in many porphyry style systems.  Drill HoleDepth (feet)Interval (feet)MineralizationMolybdenum ResultsDH-07-0515-837822 feet0.0279% Mo15-465450 feet0.0170% Mo485-837352 feet0.0423% MoIncludes560-63070 feet0.0512% Mo780-83757 feet0.0546% MoDH 07-040-10001000 feet0.0244% MoIncluding450-700250 feet0.0362% MoIncluding900-1000100 feet0.0334% MoCopper Results0-10001000 feet0.0416 % CuIncluding0-200200 feet0.0809% Cu Core material was collected at the drill site and placed in core boxes under the supervision of an experienced geologist.  It was logged for rock type, alteration, structure, and recorded with detailed descriptions.  Core was split using a hydraulic core splitter and one-half was sent to the Alaska Assay Laboratories.  The other half is kept at our core storage facility in Anchorage.  Drill holes were sampled at five foot sample intervals.  Samples were delivered in sealed bags to the Alaska Assay Labs facility in Fairbanks, Alaska for sample preparation and analysis using a 2 acid digestion and a 30 Element AES ICP Scan.  In August 2008, we completed a ten hold diamond drill program at Gold Hill totalling 7,664 feet.   The 2008 drill program has expanded the identified mineralized system to the north and northeast and lead to a better understanding of the mineralized system.  It has also drilled through overburden, showing that molybdenum mineralization previously not observed at the surface exists under Gold Hill.  The system appears to continue to depth and to the north and northeast.  Drill holes 08-05,06,07,08 and 10 show the vector of mineralization.  Targets still exist in large areas between drill holes and at depth beneath current drilling.  Results from MAXs 2008 drill program are summarized in the following table:  Drill Hole Depth (feet) Interval Mo% Cu%  DDH-08-1 0-605 feet 605 feet 0.026% including 190-350 feet 160 feet 0.043% 0-1020 feet 1020 feet 0.04% including 500-815 feet 315 feet 0.064%  DDH-08-2 0-500 feet 500 feet 0.013% 0-650 feet 650 feet 0.039% including 0-300 feet 300 feet 0.059%  DDH-08-3 0-575 feet 575 feet 0.013% Including 300-450 feet 150 feet 0.021% 0-550 feet 550 feet 0.042%  DH-08-4 0-500 feet 500 feet 0.0027% 0-485 feet 485 feet 0.037%  DDH-08-5 0-670 feet 670 feet 0.03219% Including 385-560 feet 185 feet 0.0533% 0-670 feet 670 feet 0.0425%  DDH-08-6 0-1000 feet 1000 feet 0.0429% Including 150-250 feet  100 feet 0.0712% 750-850 feet  100 feet 0.058% 0-850 feet 850 feet 0.0266%  DDH-08-7 15-525 feet 510 feet 0.0506% 0-675 feet 675 feet 0.0124%  DDH-08-8 0-900 feet 900 feet 0.0316% Including 850-900 feet  50 feet 0.1212% 600-925 feet 325 feet 0.0365% DDH-08-09 0-100 feet 00 feet 0.0233% 0-100 feet 100 feet 0.009%  DDH-08-10 0-240 feet 240 feet 0.0306% 0-200 feet 200 feet 0.0199%  Gold targets outlined by previous exploration (including drilling we conducted in 2004) were not tested during the 2007 or 2008 exploration seasons.  These include four additional zones and structures we identified in 2004, including a major structure with approximately one meter of mineralization grading 14.4 g/t gold and 0.18% copper, and a sheeted zone where values of 7.9 g/t gold and 1.1% copper were found in the fractures.  Under the terms of our agreement, we were entitled to earn up to a 90% interest in the Gold Hill Claims from GCO Minerals Company by completing US$2.25 Million in exploration work by December 31, 2011 of which US $2.05 Million has been spent to date, with US$200,00 of further exploration expenditures remaining.  During the year ended December 31, 2009 the Company spent $83,893 on exploration of the Gold Hill property.  Due to continued low prices for molybdenum, as well as the isolated location and limited infrastructure which resulted in continuing high exploration costs, the Company elected not to make the US$100,000 advance royalty due to GCO in January, 2010 and abandoned the property.  This resulted in a write-off of $524,444 of acquisition costs and $2,593,472 of deferred exploration costs during the period.  MacInnis Lake Uranium Project  Nature of Interest and Terms of Acquisition  We have abandoned our interest in this property and therefore the following description is provided as a matter of historical record only.  We acquired our interest pursuant to an option agreement dated for reference April 1, 2005, as amended April 11, 2006, (the Option Agreement) with Alberta Star Development Corp. (Alberta Star) granting us the right to acquire up to a 50% interest or ownership in the MacInnis Lake Uranium Property by: · making cash payments totaling $30,000 (paid); · issuing to Alberta Star 200,000 of our shares (issued); and · performing exploratory work commitments totaling $2,000,000 over a five year period as follows: $250,000 on or before October 1, 2008; $750,000 on or before October 31, 2009; $500,000 on or before October 1, 2010 and $500,000 on or before April 1, 2011).  51   The terms of the Option Agreement also granted us the right to earn a 25% interest in the MacInnis Lake project upon making the payments in (i) and (ii) above together with the first $1,000,000 in work commitments, with a right to earn a further 25% interest when we completed the $2,000,000 in work commitments.  The agreement also provided that the property would be subject to a 2% NSR royalty and further provided that, upon full exercise of the Option, the parties would enter into a joint venture agreement with Alberta Star acting as operator on the MacInnis Lake project.  Description, Location and Access:  The MacInnis Lake uranium claim block is comprised of 15 mineral claims totaling 26,204.15 acres and is located in the Nonacho Basin 150 km northeast of Fort Smith, Northwest Territories and 275 km southeast of the city of Yellowknife, Northwest Territories.  The claim block is located south of the Great Slave Lake, immediately east of the Taltson River, in an area of subdued terrain, poorly developed drainages and poor quality timber resources.  Access for the purpose of mineral exploration is entirely dependent upon aircraft, float equipped in summer and ski-equipped in winter, or by helicopter all year round, particularly during the freeze-up and break-up periods.   The climate of the MacInnis Lake Uranium Project is similar to that of the Longtom Lake / Target claims described above.  See Principal Expenditures and Divestitures  52     There is no electricity available at the property site.  Surface water is abundant within the property boundaries.  The following is a map of the location of the MacInnis Lake uranium claim block: [form20ffinalconfigured014.jpg]   53    The claim numbers of the MacInnis Lake uranium claim block are as follows:


|           |                   |               |          |                 
|---------- | ----------------- | ------------- | -------- | ----------------
|Claim Name | Date Recorded (1) | Record Number | Acreage  | Anniversary Date
|KULT 2     | March 10, 2005    | F90257        | 2,582.50 | 10/02/2010      
|KULT 3     | March 10, 2005    | F90258        | 2,582.50 | 10/02/2010      
|KULT 4     | March 10, 2005    | F70809        | 2,066.00 | 11/02/2010      
|KULT 5     | April 1, 2005     | F90260        | 2,582.50 | 11/02/2010      
|INN 2      | May 27, 2005      | F79832        | 413.20   | 11/02/2010      
|INN 3      | May 27, 2005      | F79833        | 619.60   | 11/02/2010      
|INN 4      | May 27, 2005      | F79834        | 2,324.50 | 11/02/2010      
|INN 5      | July 5, 2005      | F79810        | 2,324.25 | 20/06/2010      
|INN 6      | May 27, 2005      | F79836        | 1,613.55 | 11/02/2010      
|INN 7      | May 27, 2005      | F79837        | 2,530.85 | 11/02/2010      
|INN 8      | May 27, 2005      | F79838        | 2,479.20 | 11/02/2010      
|INN 9      | May 27, 2005      | F79839        | 104.28   | 11/02/2010      
|INN 10     | May 27, 2005      | F79840        | 581.75   | 11/02/2010      
|INN 11     | May 27, 2005      | F79808        | 2,530.85 | 11/02/2010      
|INN 12     | May 27, 2005      | F79809        | 849.36   | 11/02/2010      

The dates given for recording represent the dates the claims were transferred to the registered name of Alberta Star Development Corp.  Original staking dates are not available.  Maintaining the claims in good standing in the Canadian Northwest Territories:  Title to mineral claims in the Northwest Territories conveys conditional mineral rights without surface rights.  The claims are valid until the second anniversary after the date they are recorded in the Office of the Mining Recorder and may be extended thereafter on a year to year basis, subject to completing and filing prescribed minimum annual work commitments and paying the prescribed annual fee.  To maintain a mineral claim in good standing, the holder of the claim must complete annual work expenditures of at least $4.00 per acre on the claim (or make a cash payment in lieu) plus pay an annual fee -currently $0.10/acre . A report of this work must be submitted (in the prescribed form), along with applicable fees, each year to the Office of the Mining Recorder, prior to the anniversary of the recording date.  Representation work and/or cash payments in lieu can be applied to maintain the claim only until its tenth anniversary by which time the claim must be surveyed by a legal surveyor and the survey submitted for registration as a mining lease in accordance with Canada Mining Regulations.  Sufficient work was completed and reported to the Office of the Mining Recorder when due in 2008 to keep the claims in good standing until 2010, in accordance with the anniversary dates listed in the table above.  History of Exploration and Status:  The MacInnis Lake area is known to have widespread surface uranium mineralization, and contains 28 known high grade uranium showings that were discovered between 1954 and 1988.  Uranium exploration on the MacInnis Lake properties was commenced in 1954 with the discovery of large uranium outcrops and widespread surface uranium mineralization.  Exploration continued extensively until 1988 and the results have been reported by the Geological Survey of Canada.  Uranium exploration involved companies such as Cominco, Shell, PNC, and Uranerz.  The MacIinnis Lake uranium properties are located in the Nonacho Basin, a sandstone terrane of Proterozoic age that rests unconformably on Archean basement formations.   This setting is geologically analogous to the Athabasca Sandstone Basin of Northern Saskatchewan.  The MacInnis Lake uranium occurrences are characterized as an Unconformity Type Uranium system.  The MacInnis lake area is situated 280 km north of Saskatchewans Athabasca Uranium Basin, and is considered one of the Northwest Territories most prospective uranium bearing regions.  Alberta Star has commenced plans to explore and expand uranium drill targets at MacInnis Lake, with preparations underway for a spring and summer exploration season consisting of regional mapping, trenching, reviewing archived drill data and completing a comprehensive regional airborne magnetic and radiometric survey.  Drill targeting will focus on expanding known uranium showings.  An airborne Time Domain EM and Magnetic survey was completed at MacInnis Lake in June 2005 with processing of the data expected to be completed by early August.  The airborne survey was conducted by Fugro Airborne Surveys using a Fugros MEGATEM and GEOTEM systems.  This survey was focused on the search for uranium deposits with emphasis on unconformity related deposits like in the Athabasca basin of Saskatchewan.  The deposits in the Athabasca basin are associated with graphitic shear zones in the basement, which display themselves as good to strong conductors.  The surveys covered a total of approximately 950 line kilometers along east-west oriented lines, with 200 meter spacings.  Results from the geophysical survey will be combined with archived historical drill results to assist us in our drill targeting during subsequent exploration.  In September, 2007, we were advised that a High Resolution Aeromagnetic Gradiometer-Radiometric Survey (the Survey) had been completed on the MacInnis Lake uranium project.  The Survey consisted of 2,093 line-kilometers at 100 meter line spacings and was flown by Fugro Airborne Surveys.  The MacInnis Lake Uranium Project and claim-block is known to have widespread surface uranium mineralization, and contains 28 high grade uranium outcrops that were drilled extensively by Shell Oil, Uranerz and PNC Exploration between 1954 and 1988.  All uranium exploration and drilling datasets have been archived and recorded by the Geological Survey of Canada and include;  1. the DUSSAULT, which has a non-compliant drill indicated inferred resource of 37,000 tons grading 0.17% U308 (the occurrence appears to be open down dip and along strike), values of 0.84% U308intersected over 2 feet and high-grade samples recovered up to 28% U308.  2. the COLE, with numerous trench samples with U308 values reported as high as 3.16%, 5.13% and 20%; and  3. the KULT, which has a surface showing 300m x 500m wide with surface  uranium and copper mineralization that returned grades up to 3.5% Copper and 3.3% U308.  Due to the remote location and continuing permitting difficulties, we notified Alberta Star in January 2010 that we intend to abandon our option on this property and we no longer hold any interest in the MacInnis Lake property.  NUSTAR Uranium Project (Colorado Plateau, Arizona)  Nature of Interest and Terms of Acquisition  We have abandoned our interest in this property and therefore the following description is provided as a matter of historical record only.  We acquired our interest in this property by agreement dated for reference April 4, 2007, with NUSTAR Exploration LLC, a private Arizona limited liability corporation, which provided for the acquisition of a 100% interest in 427 mineral claims located in the Arizona Strip of the Colorado Plateau in northwest Arizona known as the Nustar Claims.  Consideration for the Property was a cash payment to NUSTAR of US$128,100 and issuing 200,000 shares of our common stock.  The Property was subject to a gross royalty of 4% (the Royalty) of sales revenue from commercial production of uranium from the NUSTAR Claims.   For each breccia pipe identified on the NUSTAR Claims that goes into commercial production, we would have the right to purchase 3% of the 4% Royalty on that breccia pipe by payment to NUSTAR of $1,000,000.  54   Description, Location and Access:  The NUSTAR uranium claim block was comprised of 427 mineral claims totaling 8,540 acres and is located in the Arizona Strip in Mohave County, Arizona.  The targets are uranium-bearing solution-collapse breccia pipes that were mined during the early 1980s.  The NuStar Project is accessible by 15 miles of improved dirt road and partial pavement north from Colorado City, Arizona.  The claims have excellent road access by both gravel and cross county roads.  There is no water or electricity available at the property site, with no surface water available within the property boundaries.  The property is comprised of the ANT 1-170, ANT 171-185, ANT 192-335, ANT 340-367, ANT 369, and ANT 371-439 unpatented lode mining claims represented by Bureau of Land Management Arizona Mining Claim numbers AMC 382332-382502, AMC 382502-382516, AMC 382517-382660, AMC 382661-382668, AMC 382689, and AMC 382690-382758 inclusive. These claims were recorded on May 2, 2007.  See Principal Expenditures and Divestitures.  The following is a map of the location of the Nustar Uranium Project: [form20ffinalconfigured015.jpg]  55    History of Exploration and Status:  The claims in the NUSTAR prospect area are located on the northwestern trend of uranium deposits in this area of Arizona.  This trend contains the high-grade past producing Hacks Canyon mines, the Arizona 1 mine (currently on standby) and the EZ-1 and EZ-2 breccia pipes recently purchased by Denison Mines Corp. (DML:TSX) from Pathfinder Mines.  The average grade of the uranium ore that has been mined in the Arizona Strip is high compared to the other deposits in the Colorado Plateau and ranges from 0.40% to 0.80% U3O8.   The size of the deposits has historically varied from 400,000 kg (880,000 lbs) to 2,000,000 kg (4,400,000 lbs) of recovered U3O8.  Uranium exploration on the Arizona Strip started in the 1950s with the discovery of uranium outcrops and surface uranium mineralization.  Exploration continued periodically, depending on the price of uranium, until the middle 1980s when essentially all uranium exploration in the U.S. stopped.  Results on much of the work done on this area of the Colorado Plateau are reported in various publications by the USGS and State agencies in Arizona.  Uranium exploration involved companies such as Energy Fuels, Pathfinder Mines, Western Mines (a division of Phelps Dodge), Uranerz, and others.  The NUSTAR uranium occurrences are characterized as a breccia pipe which is thought to be caused by the movement of water through strata creating rubble zones and solution collapses.  The uranium is precipitated within these zones at a reduction/oxidation interface due to changes of the ground water chemistry and/or pressure gradients.  The mineralogy of the breccia pipes is, generally, pyrite, copper, molybdenum, lead, zinc and pitchblende.  The NUSTAR project area is located about 8-10 miles from the EZ pipes and about 20 miles from the Hacks Canyon Mines.   To date, thirty-four circular or collapsed structures indicative of breccia pipes had been identified on the NUSTAR claims.  On July 20, 2009 the United Stares Department of the Interior (DOI) announced that no new mineral claims are to be granted on 1 million acres of federal lands on the Arizona Strip for a two year period while the DOI considers whether these lands should be made unavailable for mineral exploration for a 20 year period.  While the news release indicates that this decision would not affect future extractive operations on pre-existing mineral claims, there is sufficient uncertainty involved that discourages us from making a further significant investment in this area.   As such, the Company elected not the make the annual Bureau of Land Management payments (approximately US$60,000) when due in August and abandoned the property.  As a result, the Company wrote off $497,948 of acquisition costs and $5,488 of deferred exploration costs to operations during the year ended December 31, 2009.                                                                                            Indata Gold/Copper Project (British Columbia)  Nature of Interest and Terms of Acquisition  We elected to abandon this property in June, 2009 and no longer hold an interest in this property.  The following description is provided as a matter of historical record only.  We acquired our interest in this property (the Indata Gold/Copper Property) by agreement dated for reference June 9, 2008 with Eastfield Resources Ltd. (Eastfield) which granted us an option to earn up to a 60% interest in the Indata Gold/Copper Property by making the following cash  payments, share issuances and exploration expenditures  Payments/ SharesDueExploration ExpendituresDue$10,000On signing (paid)$250,000June 1, 2009 (completed)50,000 sharesCommencement of drilling (issued)$250,000June 1, 2010$20,000 or 50,000 sharesJune 1, 2009$650,000June 1, 2011$35,000June 1, 2010$55,000 AND 200,000June 1, 2011   Description, Location and Access:  The Indata  Property is comprised of 15 claim blocks totaling 3,060 hectares located 130 kilometers (1 1⁄2 hours by truck) north of the Town of Fort St. James in Northern Central BC.  There is no electricity available at the property site, with surface water abundant within the property boundaries.  The following is a map of the location of the Indata Gold/Copper project:  [form20ffinalconfigured016.jpg]   56   All Indata claims are in the Omineca Mining Division of British Columbia.  The claim numbers are as follows:  Indata Claim StatusClaim NameRecord #Area (Hectares)Expiry DateIndata 223937937518-Oct-10Indata 324019250018-Oct-10Schnapps 123872250018-Oct-10Schnapps 223872350014-Nov-10Schnapps 323885920020-Oct-10Schnapps 423886025018-Oct-10Schnapps 523889310018-Oct-10Schnapps 63625752520-Oct-10IN-63625762520-Oct-10IN-73625772520-Oct-10IN-83625782520-Oct-10IN-93625792520-Oct-10IN-103625822520-Oct-10IN-113625832520-Oct-10Limestone53048446018-Apr-10Total Area3060  Maintaining the claims in good standing in British Columbia:  The Province of British Columbia requires that exploration work in the amount of $4.00 per hectare per year be completed on a claim in the first three years of a claims existence.  The amount of assessment work required to keep the claims in good stead increases to $8.00 per hectare per year after the third anniversary. An equal amount of cash may be paid in substitution to exploration expenditures (cash in lieu).  A filing fee of $0.40 per hectare per year is also required.   The majority of the Indata claims are now past their 3rd anniversary and the amount of exploration required to advance the expiry dates of all the Indata claims by one year is $22,640. Excess expenditures incurred in any year can be filed up to an amount that moves the expiry date ten years into the future.  The Indata claims currently have assessment work credits filed on them which satisfy British Columbia requirements until 2010, in accordance with the expiry dates listed in the table above.  History of Exploration and Status:  Mineralization of the Indata property was discovered in 1984 following regional exploration along the Pinchi Fault system.  At that time initial work was undertaken to define the zone of copper mineralization adjacent to Albert Lake in the western part of the property.  The polymetallic veins remained undetected until a zone of limonitic soil to the east of the copper zone was sampled and found to be extremely anomalous in arsenic.  Subsequent trenching and diamond drilling in 1987 resulted in the recognition of the polymetallic vein system.  From 1984 to 2007, approximately 3,000 metres of trenching (±50 trenches) and7,220 metres of diamond drilling (70 holes) have been completed at Indata.  In addition, approximately 53 line kilometres of induced polarization, ground magnetic and electromagnetic surveying, 4,317 soil samples collected and analysed, geological mapping of about 10 km2 and prospecting have been carried out.  Total exploration expenditures to 2007 were approximately $2 Million.  Imperial Metals Corporation (Imperial Metals) began exploration of the Indata property in 1984 after staking part of the area during regional exploration of the Pinchi Fault zone.  Following initial soil sampling and the staking of additional claims, a four-hole diamond drilling program was completed in 1985 by Imperial to explore copper mineralization observed in outcrop near the northeast side of Albert Lake.  This program resulted in the discovery of low grade chalcopyrite  pyrite mineralization (0.1%-0. 2% copper) to depths of less than 100 metres from the surface.  In 1986, Eastfield entered into a joint venture with Imperial Metals and undertook a program of grid establishment, soil sampling and hand trenching and geophysical surveying, followed by diamond drilling in 1987, 1988 and 1989 and trenching with a bulldozer-mounted backhoe in 1989. The drilling programs resulted in the discovery of polymetallic quartz and quartz-carbonate veins with elevated precious metal values (commonly in the range of several hundred parts per billion gold to 6 grams/tonne with the most significant intercept being 47 grams/tonne gold over 4 metres).  These polymetallic veins, which generally strike north and dip to the east, are commonly enveloped by a zone of silicification in volcanic rocks and a thickening-downwards zone of talc-magnesite alteration in ultramafic rocks.  In 1995, after construction of a road through the southern part of the Indata property, a trenching program was completed adjacent to the northeastern part of Albert Lake (over the copper zone previously defined by soil sampling). One of these trenches returned 0.36% copper over a length of 75 metres.  In 1996, Clear Creek Resources Limited (Clear Creek) took an option o the Indata property and carried out a small diamond drilling program in the area of anomalous copper in soils adjacent to the northeastern part of Albert Lake.  Results of this program confirmed the existence of subsurface copper mineralization indicated by the results of Imperials 1985 drilling but, in this area, the low grade (0.1% - 0.2%) extends over down-hole lengths of up to 100 metres.  A 1998 drilling program by Clear Creek confirmed and exceeded the 1996 drilling results and also established the presence of an unexposed altered granodiorite stock with copper mineralization adjacent to the eastern edge of Albert Lake.  During road construction at that time silicified volcanic rocks were exposed in a road cut in the southern part of the existing grid.  Grab samples showed the presence of copper sulfides along with enriched gold.  A program of linecutting, soil sampling and induced polarization surveying was completed in 2003 (funded by Castillian Resource Corp) with 11.2 line kilometres of induced polarization survey completed and 16 line kilometers of soil grid expansions established. The bulk of the 2003 work, which entailed collecting and analyzing an additional 304 soil samples, was completed in the northwestern side of the currently explored area. New anomalies consisting of anomalous arsenic and/or antimony soil values associated with a moderate induced polarization chargeability response were defined.  In 2005, two diamond drill holes totaling 262 metres were completed in a program funded by Aberdeen International Inc.   The first hole of the 2005 program, hole 2005-01, was designed to test below the level reached in a 1998 drill hole which had returned 145.4 metres grading 0.20% copper including 24.1 metres grading 0.37% (1998-04).  Unfortunately, significant drilling difficulties were encountered and this hole was abandoned at a depth of 99.1 metres, approximately 50 metres short of the top of the target.The second hole, located approximately 1400 metres to the south, encountered narrow intervals of anomalous copper mineralization in a dioritic intrusive.  In 2007, Redzone Resources Ltd. (Redzone) optioned an interest on the property and completed a program of line cutting soil sampling, mechanical trenching and the construction of 1600 metres of new access road into the northwest quadrant of the property. A number of excavator trenches were dug along the route of the new access road with most failing to expose bedrock.  The highlight of the 2007 program was the discovery of a 10 centimetre wide quartz vein (with arsenopyrite and chalcopyrite) in trench 900A (centred approximately at L9+00N, 2+00W). Although discontinuous the vein was mapped trending at 150° and was observed on the bottom and north side of the trench. Two samples of the vein material, one grading 17.16 g/t gold and the other 7.84 g/t gold were sampled. The vein material was also found to be highly anomalous in arsenic, bismuth, antimony, mercury, selenium and tellurium providing a signature for gold mineralization of this type.  A significant new soil anomaly was discovered approximately one kilometer west of the new end of the access road.  57     In October 2008 we completed drilling 5 holes totaling 1,035 metres (3,400 feet) at the Indata gold/copper property.  Our drill was designed to test two exploration targets on the Indata property, a porphyry copper target and a structurally controlled precious metal vein target.  The 2008 exploration program consisted of one drill hole (08-I-01) in the porphyry copper target and four holes (08-1-02 to 08-1-05) in the precious metal vein target.  The precious metal target was tested over a distance of 1,500 metres following the uphill trace of a soil arsenic anomaly believed to define a structural feature which has previously returned a number of golf-silver intercepts, including a 4.0 metre intercept grading 46.20 g/t gold (arsenic, antimony and bismuth have historically accompanied gold mineralization) from a 1988 drill program by Imperial metals Corp.  Significant results from our 2008 drilling program are summarized as follows:


|          |       |       |        |          |          |           
|--------- | ----- | ----- | ------ | -------- | -------- | ----------
|HOLE      | From  | To    | Metres | Copper % | Gold g/t | Silver g/t
|08-1-01   | 18.3  | 181.7 | 163.4  | 0.14     | -        | -         
|Including | 123.0 | 150.0 | 27.0   | 0.27     | -        | -         
|08-1-02   | 76.5  | 76.8  | 0.3    | 0.18     | 8.20     | 4.4       
|08-I-03   | 36.7  | 38.3  | 1.6    | 0.14     | 0.42     | 79.9      
|INCLUDING | 37.2  | 37.7  | 0.5    | 0.13     | 0.40     | 209.0     

Drill core samples returned values exceeding 10,000 parts per million arsenic with correspondingly high values in antimony and bismuth along with a number of narrow gold and/or silver intercepts.  During the year ended December 31, 2009, after review of the results of the 2008 drill program at the Indata gold project, we determined not to proceed with the option on this property and wrote off $22,500 in acquisition costs and $343,948 in deferred exploration costs.   Item 4.A Unresolved Staff Comments  Not applicable.   Item 5.  Operating and Financial Review and Prospects  The following discussion of our operating results explains material changes in our consolidated results of operations for the fiscal year ended December 31, 2009 compared to the prior fiscal years ended December 31, 2008 and 2007.  The discussion should be read in conjunction with the consolidated financial statements to December 31, 2009 and the related notes included in Item 17 of this report.  Managements discussion and analysis of our operating results in this section is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto.  This discussion contains forward-looking statements, the accuracy of which involves risks and uncertainties and our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, those risk factors described elsewhere in this report.  Our consolidated financial statements have been prepared in Canadian dollars and in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"), which differ in significant respects from accounting principles generally accepted in the United States ("U.S. GAAP").  As such, this discussion of our financial condition and results of operations is based on the results prepared in accordance with Canadian GAAP.  The significant differences between Canadian GAAP and U.S. GAAP as applicable to our financial statements are summarized in Note 13 to our consolidated financial statements for the fiscal year ended December 31, 2009.   58   Overview  Our business is exploration for minerals.  We do not have any properties that are in development or production. We have no earnings and, therefore, finance these exploration activities by the sale of our equity securities or through joint ventures with other mineral exploration companies.  The key determinants of our operating results include the following: · Our ability to identify quality mineral exploration properties and acquire them on favorable terms; · The cost of our exploration activities; · our ability to finance our exploration activities and general operations; · our ability to identify and exploit commercial deposits of mineralization; and · the write-down and abandonment of mineral properties as exploration results provide further information relating to the underlying value of such properties  These determinates are affected by a number of factors, most of which are largely out of our control, including the following: · The competitive demand for quality mineral exploration properties; · Political and regulatory climate in countries where properties of interest are located; · Regulatory and other costs associated with maintaining our operations as a public company; · the costs associated with exploration activities; and · the cost of acquiring and maintaining our mineral properties.  Our primary capital and liquidity requirements relate to our ability to secure funds, principally through the sale of our securities, to raise sufficient capital to maintain our operations and fund our efforts to acquire mineral properties with attractive exploration targets and conduct successful exploration programs on them.  We anticipate this requirement will continue until such time as we have either discovered sufficient mineralization on one or more properties with sufficient grade, tonnage and type of mineralization to support the commencement of sustained profitable mining operations and are thereafter able to place such property or properties into commercial production or until we have obtained sufficient positive exploration results on one or more of our properties to enable us to successfully negotiate a joint venture with a mining company with greater financial resources than us or some other suitable arrangement sufficient to fund our operations.  Our success in raising equity capital is dependant upon factors which are largely out of our control including: · market prices for gold and other precious and base metals; · the market for our securities; and · the results from our exploration activities.  The poor conditions in the U.S. housing market and the credit quality of mortgage backed securities continued during 2009, causing a loss of confidence in the broader U.S. and global credit and financial markets.  This resulted in government intervention in, and the collapse of, major banks, financial institutions and insurers worldwide, creating a climate of greater volatility, less liquidity, and tighter credit conditions.  These disruptions in the credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies.  These disruptions could, among other things, make it more difficult for us to obtain capital and financing for our operations in the future as well as increase our costs of obtaining such capital.  Access to additional capital when required, may not be available to us on acceptable terms or at all.  59    The most significant factors affecting our operations during the past year were related to reduction in the demand for, and in the prices of, uranium and base metals and a corresponding collapse in the market for shares of junior exploration companies.  These factors are expected to have a significant effect on our operations during the next fiscal year and thereafter so long as we continue in our present business of mineral exploration.  During 2009, the prices of gold and other metals have experienced significant price volatility, with gold maintaining prices substantially higher than the previous five years, as a result of global economic uncertainty.  While the price of gold is significantly higher due to its risk premium, this has not had a commensurate impact on the share prices for junior gold exploration companies, and the general market for the shares of junior exploration companies, in all commodities remains uncertain.  In prior years, there has been a significant increase in general mineral exploration activity, resulting in greater competition for mineral properties and the resources employed in mineral exploration, and a corresponding increase in the prices demanded for suitable exploration properties and the costs associated with mineral exploration.  We anticipate the market for precious and other metals will continue to be depressed in the short and medium term, resulting in a negative outlook for our ability to raise equity capital, but also providing a reduction in exploration costs and the costs for acquiring new exploration properties due to an overall lack of capital in the sector.  Accordingly, while we anticipate our operating results will be most significantly affected by the results of our exploration activities on our existing properties, we anticipate we may see opportunities to acquire additional properties on more favourable terms than would have been the case in the past..  See Special Note Regarding Forward Looking Statements and Risk Factors.  Accounting Policies  We have adopted a number of accounting policies and made a number of assumptions and estimates in preparing our financial reporting, which are described in Note 2 to the attached audited consolidated financial statements.  These policies, assumptions and estimates significantly affect how our historical financial performance is reported and also your ability to assess our future financial results.  In addition, there are a number of factors which may indicate our historical financial results will not be predictive of anticipated future results.  You should carefully review the following disclosure, together with the attached consolidated financial statements and the notes thereto, including, in particular, the statement of significant accounting policies set out in Note 2 to such statements.  Going Concern Assumptions  As described in Note 1 to our consolidated financial statements, our financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue in operation for the foreseeable future and will be able to realize assets and discharge our liabilities in the ordinary course of operations.  We do not have any mineral properties in production, and have not yet generated any revenues and have a history of losses.   Our continuation as a going concern is uncertain and dependent on our ability to discover commercial mineral deposits on our properties and place them into profitable commercial production and our ability to sustain our operations until such time.  This, in turn depends on our ability to continue to fund our operations by the sale of our securities and other factors which are largely out of our control.  Although we have been successful in the past in obtaining financing, it cannot be assured that adequate financing or financing on acceptable terms can be obtained in the future.  In the event we cannot obtain the necessary funds, it will be necessary to delay, curtail or cancel further exploration on our properties.  Our consolidated financial statements do not reflect adjustments to the carrying values and classifications of assets and liabilities that might be necessary should we not be able to continue in our operations, and the amounts recorded for such items may be at amounts significantly different from those contained in our consolidated financial statements.  60    Treatment of Mineral Property Costs  As we are at the exploration stage, we capitalize the acquisition and exploration costs of our mineral properties under Canadian GAAP.  Should any of these properties be placed into production, such costs would be amortized over the life of the properties on a unit-of-production basis.  Should exploration results of any of our properties prove unsatisfactory, we would then abandon such property or properties, and write off costs incurred up to that time.  The impact on our net loss for the fiscal period would be dependent upon the amount of costs deferred up to the time of the write-off.  Use of Estimates  The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from these estimates.  Significant areas requiring the use of management estimates relate to the determination of impairment of mineral property interests and the determination of fair value for stock based transactions.  Where estimates have been used financial results as determined by actual events could differ from those estimates.  Stock-Based Compensation  We have granted stock options to directors and employees as described in Note 6 to the attached audited consolidated financial statements.  We adopted the accounting standards of the Canadian Institute of Chartered  Accountants (CICA) regarding stock-based compensation and other stock-based payments.  The standard requires that all stock-based awards be measured and recognized using a fair value based method.   Fair values are determined using the Black-Scholes option pricing model.  Any consideration paid by employees on the exercise of the options is credited to share capital.   5.A Operating Results  Fiscal Year Ended December 31, 2009 compared to the Fiscal Year Ended December 31, 2008  During the year ended December 31, 2009, we incurred operating expenses of $768,473 as compared to operating expenses of $1,202,346 for the year ended December 31, 2008.  The significant changes during the current fiscal year compared to the same period a year prior are as follows:  Consulting expense decreased to $55,394 during the year ended December 31, 2009 from the $86,762 incurred during the same period a year prior due to reduced expenditures on geological consulting for project review.  Stock-based compensation expense totaling $86,256 (a non-cash expense) was incurred during the year ended December 31, 2009, a decrease from the $451,965 incurred during the same period a year prior.  The decrease during the year ended December 31, 2009 was due to a decrease in the number of stock option grants and reduced amounts estimated for stock-based compensation expense as a result of lower interest rates and a reduced volatility in the trading price of our shares during the current period, key inputs in the Black-Scholes option pricing model used to calculate this expense amount.  Investor relations expenses decreased to $320,843 during the year ended December 31, 2009 from the $366,870 incurred during the same period a year prior.  This was primarily due to decreased expenditures on investor relations consultants and advertising during the current fiscal period.  61     Management fees remained at $120,000 during the year ended December 31, 2009 pursuant to a contract with our President, entered into and effective July 1, 2007.  During the year ended December 31, 2009 office and general expenses increased to $25,285 from the $24,439 incurred during the same period a year prior due to additional staff levels during the current period.  Professional fees increased to $96,697 during the year ended December 31, 2009 from the $82,757 incurred during the same period a year prior due to an increase in consulting fees paid for additional accounting staff.  Transfer agent and filing fees expense were reduced to $16,181 during the year ended December 31, 2009 from the $18,840 incurred during the same period a year prior.  This was primarily due to a reduction in financing and share issuance activity during the current fiscal period as compared to prior fiscal years when we completed large financings  During the year ended December 31, 2009 we incurred travel costs of $22,808 for attendance at trade shows, broker presentations and project review.  This represents a decrease from the $50,713 incurred for travel expenses during the same period a year prior.  Interest income decreased to $95,470 during the year ended December 31, 2009 from the $273,890 earned during the same period a year prior when we maintained a higher average daily cash balance.  Our loss for the year ended December 31, 2009 was $4,660,805 as compared to a loss for the year ended December 31, 2008 of $1,149,014, reflecting a write down of our mineral properties of $3,987,802 (as compared to $484,306 for the year ended December 31, 2008).  Fiscal Year Ended December 31, 2008 compared to the Fiscal Year Ended December 31, 2007  During the year ended December 31, 2008, we incurred operating expenses of $1,202,346 as compared to operating expenses of $1,167,747 for the year ended December 31, 2007.  The significant changes during the current fiscal year compared to the same period a year prior are as follows:  Consulting expense increased to $86,762 during the year ended December 31, 2008 from the $52,033 incurred during the same period a year prior due to additional expenditures on geological consulting for project review.  Stock-based compensation expense totaling $451,965 (a non-cash expense) was incurred during the year ended December 31, 2008, a decrease from the $570,388 incurred during the same period a year prior.  The decrease during the year ended December 31, 2008 was due to reduced amounts estimated for stock-based compensation expense as a result of lower interest rates and a reduced volatility in the trading price of our shares during the current period, key inputs in the Black-Scholes option pricing model used to calculate this expense amount.  Investor relations expenses increased to $366,870 during the year ended December 31, 2008 from the $339,034 incurred during the same period a year prior.  This was primarily due to increased expenditures on investor relations consultants and advertising during the current fiscal period.   Due to current market conditions, these expenditures have been reduced dramatically, effective during the first quarter of fiscal 2009.  Management fees increased to $120,000 during the year ended December 31, 2008 from the $90,000 incurred during the same period a year prior due to an increase in the monthly fee paid to our President, effective July 1, 2007.  62     During the year ended December 31, 2008 office and general expenses increased to $24,439 from the $10,778 incurred during the same period a year prior due to additional staff levels during the current period.  Professional fees increased to $82,757 during the year ended December 31, 2008 from the $51,093 incurred during the same period a year prior due to an increase in consulting fees paid for additional accounting staff.  Transfer agent and filing fees expense were reduced to $18,840 during the year ended December 31, 2008 from the $25,581 incurred during the same period a year prior.  This was primarily due to a reduction in financing and share issuance activity during the current fiscal period as compared to the prior fiscal year when we completed two large financings.  During the year ended December 31, 2008 we incurred travel costs of $50,713 for attendance at trade shows, broker presentations and project review.  This represents an increase from the $28,370 incurred for travel expenses during the same period a year prior.  Interest income increased to $273,890 during the year ended December 31, 2008 from the $222,290 earned during the same period a year prior when we maintained a lower average daily cash balance.  During the year ended December 31, 2008 we recognized a future income tax recovery of $263,748 on the renunciation, for Canadian income tax purposes, of certain amounts qualifying as Canadian Exploration Expenses to the holders of flow-through shares.  We did not renounce any such expenditures in the comparative period a year prior.  As a result of the foregoing, our loss for the year ended December 31, 2008 was $1,149,014 as compared to a loss for the year ended December 31, 2007 of $1,093,554.    5.B Liquidity and Capital Resources  Since our incorporation, we have financed our operations almost exclusively through the sale of our common shares to investors.  We expect to finance operations through the sale of equity in the foreseeable future as we have no source of revenue from our business operations. There is no guarantee that we will be successful in arranging financing on acceptable terms.  As it is uncertain when we will generate revenues sufficient to fund our operating activities, if ever, we are dependent on raising additional equity or debt capital.  At December 31, 2009, we had working capital of $3,093,457 made up of cash and cash equivalents on hand.  This compares to working capital of $4,344,567 at December 31, 2008, inclusive of cash and cash equivalents on hand. We have no exposure to any asset-backed commercial paper (ABCP) investments.  We have two properties that we need to satisfy certain minimum work commitments on during 2010 in order to maintain our interests.  These properties are EMW in Nevada and Howell/Crowsnest in British Columbia.   See Tabular Disclosure of Contractual Obligations. In order to maintain our interest in the EMW property, we are required to undertake US$150,000 in exploration work on this property during 2010.  At the Howell/Crowsnest properties, we must spend $150,000 by June 30, 2010 in order to maintain our interest in the properties, however, due to a government moratorium on exploration actives in the location of these properties, we will not be able to make any of these expenditures and believe we will not be legally obligated to do so under the terms of our agreements.  See Item 4D Howell/Crowsnest Gold Project.  63     During 2010, we have budgeted for an exploration program at EMW in Nevada of US$150,000 which will satisfy our work obligation for fiscal 2010.    We also intend to conduct a drill program budgeted at US$250,000 at Table Top in Nevada in early 2010.  See Special Note Regarding Forward Looking Statements.  Current Economic Conditions  During 2009, particularly in the first three quarters, the ongoing global credit crisis and economic weakness have made for extremely volatile capital markets characterized by plunging equity and commodity prices and an environment in which few opportunities exist to raise additional capital.  MAX has taken precautions and implemented initiatives to preserve its cash requirements.  We have reviewed our mineral properties and have written down or abandoned a number of properties described in detail above.  We have several commitments in the future (this coming year and beyond) on its mineral properties and we may be forced to abandon and write-off other properties if we do not have the means to meet these commitments, or if we do not feel it is fiscally prudent to do so.  However, we currently have sufficient cash to meet all obligations during fiscal 2010 and do not believe that any additional write-down of our mineral properties are required at this time.  We will be reviewing our mineral property commitments as well as our capital position on an ongoing basis during fiscal 2010 and may abandon additional properties when obligations become due if management deems it necessary in order to maintain the long-term viability of the Company.  We intend to pursue both the acquisition of mineral properties which we consider to be highly prospective for gold, uranium and other metals and to maintain and explore our current properties while conserving capital during these difficult economic times.  We will require substantial additional capital to achieve our goal of discovering significant economic mineralization on one or more of our properties.  Until such time as we are able to make such a discovery and thereafter place one or more of our properties into commercial production or negotiate one or more joint venture agreements, we will be largely dependent upon our ability to raise capital from the sale of our securities to fund our operations.  We believe that our current capital resources will be sufficient to fund our general operations through 2011.  We do not anticipate being able to obtain revenue from commercial operations in the short term and anticipate we will be required to raise additional financing in the future to meet our working capital and on-going cash requirements.  We intend to raise such financing through sales of our equity securities by way of private placements, and/or the exercise of warrants.  We may also secure additional exploration funding through option or joint venture agreements on our mineral properties; or through the sale of our mineral properties, royalty interests or capital assets, or borrow to meet our working capital requirements.  While we have in the past been able to raise sufficient funds to sustain our exploration programs, there is no assurance that we will continue to be able to do so.  If, for any reason, we are not able to access the capital market, our resources during this period will be limited to cash on hand and any revenues we are able to generate from joint venture or similar arrangements we may hereafter enter into. If we are unable to secure sufficient funds to pursue such proposed acquisitions and exploration to the level desired, we will adjust our proposed activities to reflect the amount of capital available to us after providing for sufficient working capital to maintain our existing operations.  At present, none of our properties have a known body of ore and all our proposed exploration programs are an exploratory search for ore.  See Special Note Regarding Forward Looking Statements and Risk Factors.   5.C Research and Development, Patents and Licenses, etc.  We are a mineral exploration company and we do not carry on any research and development activities.  64     5.D Trend Information  Ravin property is primarily prospective for molybdenum, C de Baca is prospective for uranium, our Tabletop and EMW properties are prospective for gold and our Diamond Peak Project is prospective for gold and zinc.  The overall trend for the price of gold has been upward during the past year due to the uncertainty in the financial sector, while the price of other minerals, such as uranium, molybdenum and other base metals have remained depressed due to lack of demand as a result of the current global recession.  We anticipate that the continuing weakness in the price of minerals, with the exception of gold, as well as a lack of new capital for the mineral exploration sector in general, will  make the acquisition of quality gold exploration prospects less expensive, as well as decreasing the costs of exploration generally.  Metal prices cannot be predicted with accuracy and our plans will be largely dependent upon the timing and outcome of metal markets, particularly the price of gold, uranium, zinc and molybdenum which is entirely outside of our control.  See Special Note Regarding Forward Looking Statements.  The market for gold is homogeneous, integrated commodities markets with a large number of both suppliers and buyers.  These markets are not ones which are particularly susceptible to the influence of one or more large suppliers or buyers.  As at March 30, 2010 gold traded at US$1,106.5 per ounce.  There are a smaller number of producers of molybdenum than there are for commodities such as gold.  Molybdenum prices have increased from US$7.60/lb in 2000 to over US$35/lb in 2007.  The price of molybdenum was holding steady in 2008 until October when it collapsed to approximately US$11/lb.  At March 16, 2010 the most recent date for which we could find a quote for the sale of molybdenum oxide, the price was US$16.25 /lb.  Our C de Baca mineral property is prospective for uranium. There are fewer producers of uranium in the world than there are for some other commodities such as copper and gold.  The market for uranium is a homogeneous, integrated commodities market.  The market is not one which is particularly susceptible to the influence of one or more large suppliers or buyers.  The world average grade from producing uranium mines is 0.15 per cent U3O8, with spot uranium prices having risen from a cyclical low of US$7.10 per pound in late 2000 to a high of US$138.00 per pound on June 1, 2007.  At March 15, 2010, the most recent date for which we could find a quote for the sale of uranium, the spot price was US$41.25/lb.   5.E Off-balance Sheet Arrangements  We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.    65   5.F Tabular Disclosure of Contractual Obligations  The following table summarizes our contractual obligations at December 31, 2009 and the effect these obligations are expected to have on our liquidity and cash flows in future periods.


|                                                                                                             |                       |                     |                       |            |              
|------------------------------------------------------------------------------------------------------------ | --------------------- | ------------------- | --------------------- | ---------- | -------------
|Contractual Obligations                                                                                      | Payment Due By Period
|                                                                                                             | Total Remaining       | Less than a year    | 1-3 Years             | 4-5 Years  | After 5 Years
|Diamond Peak (1)
Option Payments                                                                             | US$450,000            | US$50,000           | US$100,000            | US$100,000 | US$200,000   
|C de Baca Option (2)
Option Payments                                                                         | US$450,000            | US$10,000           | US$20,000             | US$20,000  | US$400,000   
|East Manhattan Wash (3) Option Payments
Work Commitment                                                      | US$190,000
$650,000   | US$40000
US$150,000 | US$150,000
US$500,000 | NilNil     | Nil
Nil      
|Ravin Project (4)
Option Payments                                                                            | US$400,000            | US$50,000           | US$100,000            | US$100,000 | US$150,000   
|Howell Project (5)
Option Payments
Share issuances
Work Commitment                                           |                       | Force majeure       |                       |            |              
|Crowsnest Project(6)
Option Payments
Share Issuance
Work Commitment                                          |                       | Force majeure       |                       |            |              
|Howell Project & Crowsnest Project combined (2010 & 2011)(7)
Option Payments
Share Issuances
Work Commitment |                       | Force majeure       |                       |            |              
|Table Top Project(8)
Option Payment                                                                          | $460,000              | US$25,000           | US$85,000             | US$100,000 | US$250,000   
|Capital  (Finances)
Lease Obligations                                                                        | NIL                   |                     |                       |            |              
|Operating Lease
Obligations                                                                                  | NIL                   |                     |                       |            |              
|Purchase Obligations
Equipment                                                                               | NIL                   |                     |                       |            |              
|Other Long-term
Liabilities                                                                                  | NIL                   |                     |                       |            |              
|Total Contractual
Obligations and
Commitments                                                                | US$2,600,000          | US$325,000          | US$955,000            | US$320,000 | US$1,000,000 

(1) These are option payments pursuant to an option agreement dated May 9, 2006, as amended, between us and The Wendt Family Trust of Reno, Nevada.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 Information on the Company  Description of Property - Diamond Peak Property) (2) These are option payments pursuant to an option agreement dated September, 2005 between us and Applied Geological Services, Inc.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 Information on the Company  Description of Property - C de Baca Project) (3) These are option payments pursuant to an option agreement dated November 11, 2007 between us and MSM L.L.C.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 Information on the Company  Description of Property - East Manhattan Wash) (4) These are option payments pursuant to an option agreement dated September 10, 2007 between us and The Wendt Family Trust.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  (See Item 4 Information on the Company  Description of Property - Ravin Molybdenum/Tungsten Property) (5) These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property.  In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 Information on the Company  Description of Property - Howell Gold Property)  66    (6) These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property. In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 Information on the Company  Description of Property Crowsnest  Gold Property (7) These are option payments pursuant to an amended option agreement dated July 24, 2009 between us and Eastfield Resources Ltd. that affect both Howell and Crowsnest Properties.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in the Properties. In February 2010 the Province of British Columbia announced that it intended to prohibit any future mine development in the Flathead Valley where the Howell and Crowsnest properties are located.  We have been contacted by representatives of the British Columbia Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation.(See Item 4 Information on the Company  Description of Property  Howell/Crowsnest Property) (8) These are option payments pursuant to an option agreement dated September 1, 2009 between us and  Energex, LLC.  While we are not obliged to make these payments, it will be necessary to do so if we wish to preserve our interest in this portion of the property. (See Item 4 Information on the Company  Description of Property  Table Top Gold Property.   Item 6.  Directors, Senior Management and Employees   6.A Directors and Senior Management  The following is a list of the current directors and senior officers of the Company, their municipalities of residence, their current position with the Company and their principal occupations:


|                                  |     |                                                                   |                                              
|--------------------------------- | --- | ----------------------------------------------------------------- | ---------------------------------------------
|Name of Director                  | Age | Principal Occupation                                              | Position with  Company                       
|                                  |     |                                                                   |                                              
|STUART ROGERS, Vancouver, BC      | 53  | President of the Company
President of West Oak Capital Group Inc. | President, Chief Executive Officer & Director
|PAUL JOHN, Penticton, BC          | 62  | General Manager Franchises
Marks Work Warehouse Ltd.             | Director                                     
|DAVID PEARCE, West Vancouver, BC  | 55  | President of Palmer Beach Properties Inc.                         | Secretary & Director                         
|TIM COUPLAND, Delta, BC           | 51  | President and CEO of Alberta Star Development Corp.               | Director                                     
|DANIEL T. MACINNIS, Vancouver, BC | 58  | President, MAG Silver Corp.                                       | Director                                     
|CHRISTOPHER CHERRY, Vancouver, BC | 31  | Chartered Accountant                                              | Chief Financial Officer                      
|CLARENCE J. WENDT
Reno, Nevada    | 71  | Independent professional geologist                                | Vice President Exploration                   

67   The following describes the business experience of our directors and executive officers, including other directorships held in reporting companies:  Stuart Rogers  Mr. Rogers has been involved in the venture capital community since 1987.  He is currently the President of West Oak Capital Group, Inc., a privately held investment banking firm specializing in the early stage finance of technology projects through the junior capital markets in Canada and the United States, and has served as a director of client companies listed on the TSX Venture Exchange, the Toronto Stock Exchange, NASDAQ Small Capital Market and FINRA OTC Bulletin Board.  Currently, Mr. Rogers acts as a director or officer of Prophecy Resource Corp. and Alberta Star Development Corp., both reporting issuers on the TSX Venture Exchange in Canada.  Paul John  Mr. John graduated from the University of Victoria, B.C. with a Bachelor of Arts degree, majoring in Economics and Political Science.  From 1971 to 1979, he worked with the Hudson Bay Company, a national Canadian department store chain, rising to the senior executive level.  In 1980, he acquired a Work Wear World franchise in the interior of British Columbia, developing this initial location into 19 stores in B.C. and the Yukon Territories, with annual sales of $18 million in 1999.  In 1999, Mr. John sold his chain of Work Wear World stores to Marks Work Warehouse, a publicly traded company listed on the Toronto Stock Exchange, and was appointed as General Manager for Western Canada for their Work World franchised locations.  He held this position until 2001, when he was appointed and continues to serve as General Manager, Franchises for Work World.  David Pearce  Mr. Pearce is President of Palmer Beach Properties Inc., a private real estate development and investment company with real estate, retail and equity holdings in Canada. Since June 1995, Mr. Pearce has been President of Function Gate Hardware Ltd., which owns and operates a Home Hardware store in Whistler, British Columbia, and Function Gate Holdings Ltd., a real estate development company operating in Whistler and Pemberton, British Columbia.  Mr. Pearce is also a director of Kruger Capital Corp. since December 1992, which is listed on the TSX Venture Exchange, and was a director of MAG Silver Corp. from its inception in June 2003 to October of 2007.  Tim Coupland  Mr. Coupland is currently the President and CEO of Alberta Star Development Corp. (TSX-V: ASX; OTC BB: ASXSF), our joint venture partner on the Target 1 and MacInnis Lake uranium properties in the Northwest Territories.  Mr. Coupland holds a bachelors degree from Simon Fraser University and is an accomplished mineral landman and explorer, with over 20 years experience with both public and private companies working in the mineral exploration field in Canada.  Mr. Coupland was the lead negotiator who secured drill permits and the access and benefits agreement with the Sahtu Dene First Nations on their traditional territories in the Northwest Territories, where Alberta Star was focused on the development of the Eldorado and Contact Lake iron oxide, copper, gold and uranium projects.  Over the past ten years, Mr. Coupland has successfully developed long term business relationships with many Canadian First Nations & Metis Groups living in Canadas Northwest Territories. Tim Coupland is currently serving as a director and/or officer of  Alberta Star Development Corp, Arctic Hunter Uranium Inc. both reporting issuers on the TSX Venture Exchange in Canada,  and Dynamic Gold Corp an OTC BB company.  68    Daniel T. MacInnis  Mr. MacInnis is currently the President and CEO of MAG Silver Corp.  MAG Silver is listed on the TSX Venture Exchange in Canada and on the AMEX in the United States. He has over 30 years of experience in mineral exploration and experience with mineral property acquisitions and joint venture negotiations.  Mr. MacInnis is a registered Professional Geologist (P.Geo.) in British Columbia and obtained a B.Sc. in Geology from Saint Francis Xavier University (Nova Scotia) in 1974.  Christopher Cherry, CA, CGA  Mr. Cherry has over eight years experience as an accountant and auditor, with KPMG and Davidson and Company in Vancouver.  He achieved the Certified General Accountant designation in August 2004 and the Chartered Accountant designation in February 2009.  Mr. Cherry is a financial controller with iO Corporate Services Ltd., a private company that provides administrative services to several public companies. In addition to serving as our CFO,  Mr. Cherry currently serves as Chief Financial Officer to Reva Resources Corp., Chelsea Minerals Corp. (formerly Consolidated Global Cable Services, Inc.), Black Isle Resources Corp. (formerly Luzon Minerals Ltd.), Mexivada Mining Corp.,  andTeslin River Resources Corp. (formerly Wind River Resources Ltd.)  Clarence (Clancy) J. Wendt, P. Geo  Clancy Wendt received his B.S. degree from San Diego State University in 1967.  He began his career at Stauffer Chemical and worked at various companies until returning to the University of Arizona where he obtained his M.S. degree in 1978.  After this he worked at Duval Corporation and other companies until becoming District Manager for Westmont Mining.  He is credited with the Mt. Hamilton gold/molybdenum discovery in Nevada and managed the programs which led to the discovery of other deposits in the Carlin Trend.  Mr. Wendt is currently a director of Santa Fe Minerals Corp. and Goldex Resource Corp., a reporting issuer on the TSX Venture Exchange.  Mr. Wendt has been a consulting geologist since 1992, specializing in exploration and evaluation of mineral deposits.  He is a registered geologist in Arizona, British Columbia, Canada, and a Chartered Professional Geologist in Australia and is writes reports for various exchanges.  He is a member of SME, SEG, FAusIMM(CP), PDAC, a former Trustee of the NWMA and Member of the Board of Directors of the Mining Club of the Southwest. In addition, Mr. Wendt is the recipient of the Presidents Award from the NWMA, the Ben F. Dickerson Award, and is a past President of the Geological Society of Nevada. Mr. Wendt has prior experience in gold, base metal and uranium exploration with such notable exploration companies as Phillips Uranium, Teton Exploration, Duval and Westmont.  He has conducted all phases of uranium, gold and base metal exploration, from conceptual targeting to drilling and evaluation, with extensive experience in the United States and Mexico as well as Central and South America.   There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which the foregoing individuals were selected to be a director or executive officer, nor are there any family relationships among any of our directors and officers.    69   6.B. Compensation of Directors  The following fairly reflects all material information regarding compensation paid to our directors and officers in our fiscal year ended December 31, 2009.  Summary Compensation Table


|                                                               |                                      |                           |                        |                |                        |         |     |    
|-------------------------------------------------------------- | ------------------------------------ | ------------------------- | ---------------------- | -------------- | ---------------------- | ------- | --- | ---
|NAME AND PRINCIPAL POSITION                                    | YEAR                                 | ANNUAL COMPENSATION       | LONG-TERM COMPENSATION
|Salary                                                         | Bonus                                | Other Annual Compensation | Awards                 | LTIP payouts   | All Other Compensation
|Restricted Stock Awards                                        | Securities Underlying Options/ SARs
|Stuart Rogers
President, Chief Executive Officer  and Director | 2009                                 | Nil                       | Nil                    | $120,000(1)    | Nil                    | 250,000 | Nil | Nil
|Paul John
Director                                             | 2009                                 | Nil                       | Nil                    | Nil            | Nil                    | 200,000 | Nil | Nil
|David Pearce
Secretary and Director                            | 2009                                 | Nil                       | Nil                    | Nil            | Nil                    | 200,000 | Nil | Nil
|Tim Coupland
Director                                          | 2009                                 | Nil                       | Nil                    | Nil            | Nil                    | 200,000 | Nil | Nil
|Daniel T. MacInnis
Director                                    | 2009                                 | Nil                       | Nil                    | Nil            | Nil                    | 200,000 | Nil | Nil
|Christopher Cherry
Chief Financial Officer                     | 2009                                 | Nil                       | Nil                    | $42,000        | Nil                    | 200,000 | Nil | Nil
|Clarence J. Wendt
Vice President Exploration                   | 2009                                 | Nil                       | Nil                    | US$120,000 (2) | Nil                    | 250,000 | Nil | Nil

(1) the $120,000 represents a management fee paid to a company controlled by Stuart Rogers.  In addition to management services, this company provides office space to the Company. (2) this compensation is paid to Mr. Wendt pursuant to a consulting agreement entered into by Mr. Wendt for provision of geological consulting services, and for performance of duties normally associated with the position of VP Exploration.  We are required, under applicable securities legislation in Canada, to disclose to our shareholders details of compensation paid to our directors and members of our administrative, supervisory or management bodies.  We have no formal plan for compensating our directors for their services in their capacity as directors.  The board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. Other than indicated above, no director received any compensation for his or her services as a director, including committee participation and/or special assignments.   6.C Board Practices  Stuart Rogers, Paul John, David Pearce, Tim Coupland and Daniel T. MacInnis have acted as our directors since May 8, 2002, June 18, 2002, December 15, 2003, September 5, 2006 and December 7, 2005, respectively.  The directors will, unless they choose to resign, hold office until the next annual general meeting of the shareholders at which time they may stand for re-election.  We are required to hold an annual general meeting once in every calendar year and not longer than fifteen months from the last annual general meeting.   70   We are party to a consulting agreement with West Oak Capital Group, Inc., a private company owned by Stuart Rogers, whereby it is entitled to be paid $10,000 per month for management services.  We are also party to a consulting agreement with Clarence Wendt,  whereby he is entitled to be paid USD$10,000 per month for provision of geological consulting services and duties normally associated with the position of Vice President, Exploration.  No other directors have service contracts with us, nor are they entitled to any termination benefits.  There are no service contracts with the Company for the directors providing for benefits upon termination of their service save and except for Mr. Rogers, as set out in the Consulting Agreements referred to above.  Under the terms of that Agreement, in the event of termination.  By the Company upon an Event of Default by the Consultant (as defined in Agreement) or by the Consultant for any reason other than an Event of Default by Company, the Company shall pay to the Consultant all amounts accruing hereunder up to and including the effective date of Termination.  By the Consultant due to an Event of Default by the Company or by the Company for any reason other than an Event of Default by the Consultant (as defined in the Agreement), the Company shall pay the Consultant: · The full amount of monthly Fees multiplied by the number of months remaining in the Term of the Agreement; · The full amount of any Bonus then due and owing, provided that, in the absence of any bona fide award by the Compensation Committee made more than 60 days prior to the effective date of Termination, the amount of such Bonus shall be deemed to be equal to 50% of the total amount of Fees and Bonuses paid to the Consultant and the Key Employee within the 24 months prior to the effective date of Termination; · The full amount of any Expenses incurred up to the effective date of Termination; · Any Options then outstanding shall be deemed to be extended and exercisable for 90 days following the expiry of the Term. · Reference is made to the full text of the Consulting Agreements which are attached as exhibits to this Report. See Item 19 Exhibits.  Other than the foregoing, we do not currently have any retirement, pension, bonus, profit-sharing or similar plans and none are proposed at this time.  The Company does not have an executive committee or a remuneration committee.  Audit Committee  Our audit committee is comprised of Tim Coupland, Paul John and Stuart Rogers .  The specific functions and responsibilities of the audit committee are set forth in our audit committee charter.  Tim Coupland and Paul John are Independent directors.  We have determined that Stuart Rogers qualifies as an audit committee financial expert, pursuant to SEC regulations.  Each of Tim Coupland and Paul John satisfy the independence and financial literacy requirements for audit committee members under the SEC rules and regulations and Rule 803 of the NYSE AMEX Company guide.  Since Stuart Rogers is not independent, the Audit Committee does not satisfy the requirements of Rule 10A-3 of the US Securities Exchange Act of 1934.  The Audit Committees primary function is to review the annual audited financial statements with our external auditor (the Auditor) prior to presentation to the Board and to make recommendations thereon, together with recommendations to the Board with respect to such financial statements and compensation payable to the Auditor.  The audit committee also reviews our interim un-audited quarterly financial statements prior to finalization and publication.  The Audit Committee also provides review oversight with respect to pre-approval of all non-audit services to be provided by the Auditor to the Company and a number of other related matters including issues related to a change of auditors and establishing procedures for treatment of complaints regarding accounting, internal accounting controls or auditing matters.  Our audit committee also establishes procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters; and establishes procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.  The specific functions and responsibilities of the audit committee are set forth in our audit committee charter. See, Audit Committee Financial Expert for information related to audit committee independence and financial expert.  The Audit Committee meets as a separate committee of the board as and when needed to carry out its functions and keeps formal minutes of its proceedings.    6.D Employees  We do not have any employees other than our directors and officers.   6.E Share Ownership  The following table sets forth the shareholdings, to the best of our knowledge, owned beneficially, directly or indirectly, by our directors and officers as of March 31, 2010.  There were 21,699,230 common shares issued and outstanding as of March 31, 2010.


|                   |                        |                                        
|------------------ | ---------------------- | ---------------------------------------
|Name               | Number of Shares Owned | Percentage of Outstanding
Common Shares
|Stuart Rogers      | 455,105                | 2.10%                                  
|Paul John          | 413,750                | 1.91%                                  
|David Pearce       | 602,500                | 2.78%                                  
|Tim Coupland       | 125,000                | 0.58%                                  
|Daniel MacInnis    | Nil                    | Nil                                    
|Christopher Cherry | Nil                    | Nil                                    
|Clancy Wendt       | 490,000                | 2.26%                                  

Statements as to securities beneficially owned by directors and officers, or as to securities over which they exercise control or direction, are based upon information obtained from such directors and officers and from records available to the Company.  The following incentive stock options are outstanding to our directors and officers as at March 31, 2010:


|                                 |                                                      |                |                                
|-------------------------------- | ---------------------------------------------------- | -------------- | -------------------------------
|Name                             | Shares that may be Purchased Upon Exercise of Option | Exercise Price | Expiry Date                    
|Stuart Rogers
(West Oak Capital) | 100,000
150,000                                      | $0.17
$0.35    | October 31, 2011
August 1, 2011
|Paul John                        | 175,000
25,000                                       | $0.35
$0.17    | August 1, 2011
October 31, 2011
|David Pearce                     | 150,000
50,000                                       | $0.35
$0.17    | August 1, 2011
October 31, 2011
|Tim Coupland                     | 50,000
150,000                                       | $0.35
$0.17    | August 1, 2011
October 31, 2011
|Daniel MacInnis                  | 200,000                                              | $0.35          | August 1, 2011                 
|Christopher Cherry               | 200,000                                              | $0.17          | October 31, 2011               
|Clancy Wendt                     | 200,000
50,000                                       | $0.35
$0.17    | August 1, 2011
October 31, 2011

71   We have an incentive stock option plan which was approved by the shareholders of the Company at the last Annual General Meeting of Shareholders on September 21, 2009.  This Stock Option Plan provides for equity participation in the Company by our directors, officers, employees and consultants through the acquisition of common shares pursuant to the grant of options to purchase common shares.  The exercise price for options granted under the Stock Option Plan is determined by the closing trading price on the day immediately preceding the date of grant, less any discounts permitted by the TSX Venture Exchange or such other stock exchange on which the common shares are listed.  We have reserved and authorized up to 20% (4,339,846) of our issued treasury shares for issuance under the Stock Option Plan to our directors and key employees.  Under the stock option plan, the aggregate number of optioned common shares granted to any one optionee in a 12-month period must not exceed 5% of the issued and outstanding common shares.  The number of optioned common shares granted to any one consultant in a 12-month period must not exceed 2% of the issued and outstanding common shares.  The aggregate number of optioned common shares granted to an optionee who is employed to provide investor relations activities must not exceed 2% of our issued and outstanding common shares in any 12-month period.  Options will be exercisable for a term of up to ten years, subject to earlier termination in the event of death or the optionees cessation of services to the Company; and options granted under the stock option plan are non-assignable, except by will or the laws of descent and distribution.  The policies of the TSX-Venture Exchange limited the granting of stock options to our directors, officers, employees and consultants and provided limits on the length, number and exercise price of such options. We are required to file our Stock Option Plan on an annual basis with the TSX-Venture Exchange for review of its terms.  On August 1, 2008, we granted incentive stock options to directors, officers and consultants totaling 1,150,000 common shares at an exercise price of $0.35 per share for a period of three years.  We also, by agreement of the optionees, cancelled 875,000 options that were granted in July 2007.  On October 31, 2008, we granted a further 575,000 options to directors and officers at an exercise price of $0.17 per share for a period of three years.  As at December 31, 2009, there were 1,850,000 stock options outstanding and exercisable.    Item 7. Major Shareholders and Related Party Transactions   7.A Major Shareholders  As used in this section, the term "beneficial ownership" with respect to a security is defined as: (1) any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares voting power (which includes the power to vote, or to direct the voting of such security) or investment power (which includes the power to dispose, or to direct the disposition of, such security); and (2) any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling  arrangement  or  any  other  contract,  arrangement  or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such  beneficial ownership.  As of the date of this annual report, there are 21,699,230 common shares issued and outstanding in our capital stock.  We are authorized to issue an unlimited number of common shares and preferred shares.  We have not issued any preferred shares since our incorporation.  As of the date of this annual report, no persons known to us were the beneficial owner of more than five percent of our outstanding common shares.   72   Of our 41 registered shareholders at March 31 2010, 20 are Canadian residents representing   common shares or % of our issued and outstanding common shares.  We have 19 registered US shareholders holding 2,140,758 common shareholders or 9.89% of our issued and outstanding common shares.  There are 2 registered shareholders from places other than the US and Canada holding a total of 70,000 common shares or 0.32% of our common stock.  The remaining common shares of the Company are held by brokerages and other intermediaries and the Company cannot determine the residency of the beneficial holders of those shares.  Each of our issued common shares entitles the holder to one vote in general meeting.  There are no disproportionate or weighted voting privileges.  We are not controlled directly or indirectly by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.  There are no arrangements the operation of which at a subsequent date may result in a change in our control.  Our registrar and transfer agent is Computershare Trust Company of Canada, which is located at 3rd Floor, 510 Burrard Street, Vancouver, British Columbia, Canada Tel: (604) 661-9400.    7.B Related Party Transactions  Three month period ended March 31, 2010:  During the three month period ended March 31, 2010, we have not entered into transactions or loans with any (a) enterprises that directly or indirectly control, are controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting rights which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a substantial interest in the voting power is owned by any of the foregoing individuals (a Related Party) or over which such a person is able to exercise significant influence, except as follows:


|  |                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------
|§ | We paid $30,000 to a private company controlled by Stuart Rogers, our President, for management fees pursuant to an agreement with Mr. Rogers.

Fiscal Year ended December 31, 2009:  In the fiscal year ended December 31, 2009, we have not entered into transactions or loans with any (a) enterprises that directly or indirectly control, are controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting rights which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a substantial interest in the voting power is owned by any of the foregoing individuals (a Related Party) or over which such a person is able to exercise significant influence, except as follows:


|  |                                                                                                                                                                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|§ | We entered into an Option Agreement to acquire a 100% interest in the Table Top claims in Humbolt Country, Nevada from Energex LLC, a private Nevada corporation wholly owned by Clancy J. Wendt, our Vice President of Exploration.                                                                                                                       
|§ | We paid CD$120,000 to a private company controlled by Stuart Rogers, our President, for management fees;                                                                                                                                                                                                                                                   
|§ | We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the Ravin Property) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.             
|§ | We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the Diamond Peak Property, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration

73    Fiscal Year ended December 31, 2008:  In the fiscal year ended December 31, 2008, we have not entered into transactions or loans with any (a) enterprises that directly or indirectly control, are controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting rights which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a substantial interest in the voting power is owned by any of the foregoing individuals (a Related Party) or over which such a person is able to exercise significant influence, except as follows:


|  |                                                                                                                                                                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|§ | We paid CD$120,000 to a private company controlled by Stuart Rogers, our President, for management fees;                                                                                                                                                                                                                                                   
|§ | We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the Ravin Property) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.             
|§ | We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the Diamond Peak Property, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration

Fiscal Year ended December 31, 2007:  In the fiscal year ended December 31, 2007, we have not entered into transactions or loans with any (a) enterprises that directly or indirectly control, are controlled by or under common control with us; (b) our associates; (c) individuals directly or indirectly owning voting right which give them significant influence over us or close members of their respective families, (d) our directors, senior management or close members of their respective families or (e) enterprises in which a substantial interest in the voting power is owned by any of the foregoing individuals (a Related Party) or over which such a person is able to exercise significant influence, except as follows:


|  |                                                                                                                                                                                                                                                                                                                                                            
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|§ | We paid CD$90,000 to a private company controlled by Stuart Rogers, our President, for management fees;                                                                                                                                                                                                                                                    
|§ | We continued to hold rights under an option agreement that was entered into during 2007 granting us the right to acquire a 100% interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (the Ravin Property) from Energex, LLC, a Nevada corporation wholly-owned by Clancy J. Wendt, our Vice President of Exploration.             
|§ | We continued to hold rights under an option agreement that was entered into during 2006 granting us the right to acquire a 100 % interest in the FMC claims in Eureka County, Nevada, the Diamond Peak Property, from The Wendt Family Trust of Reno, Nevada.  The Wendt Family Trust is controlled by Clancy J. Wendt, our Vice President of Exploration

Our directors or officers must disclose in writing to us the nature and extent of any interest they have in a material contract, or proposed material contract, with us.  Such disclosure must be made immediately after the director or officer becomes aware of the contract or proposed contract.  A director who is required to disclose an interest in a material contract or proposed material contract may not vote on any resolution to approve the contract except in very limited circumstances.  Stock option compensation to our directors and officers is disclosed elsewhere in this Form 20F.  See Item 6.E Share Ownership.  74       7.C Interests of Experts and Counsel  Not Applicable.   Item 8. Financial Information   8.A Consolidated Statements and other Financial Information  The following financial statements for the year ended December 31, 2009 have been audited by an independent auditor and are accompanied by an audit report, are attached and incorporated herein: (a) Consolidated Balance Sheets; (b) Consolidated Statements of Operations, Comprehensive loss and Deficit; (d) Consolidated Cash Flow Statements; (e) related notes and schedules required by the comprehensive body of accounting standards pursuant to which the financial statements are prepared; and (f) a note analyzing the changes in each caption of shareholders equity presented in the balance sheet.  Incorporated herewith are the comparative financial statements covering the latest three financial years, audited in accordance with a comprehensive body of auditing standards.  Export Sales  The Company had no export sales in its latest financial year ended December 31, 2009 and, as a result, the percentage of export sales for the Company was zero.  Legal Proceedings  To the best of our knowledge, there are no currently pending or threatened legal proceedings that could have a material effect on our business, results of operations or financial condition.  Dividend Policy  We have never declared or paid any cash dividends on our common shares.  As we do not have any earnings, we do not anticipate paying cash dividends on the common shares for the foreseeable future.  Future dividends on the commons shares will be determined by the Board of Directors in light of circumstances existing at the time, including our earnings and financial condition.  There is no assurance that dividends will ever be paid.  See Special Note Regarding Forward Looking Statements.   8.B Significant Changes  There have been no significant changes since the date of the audited financial statements included herein.    Item 9. The Offer and Listing    9.A Offer and Listing Details  Our common shares trade on the TSX Venture Exchange under symbol MXR and on the FINRA Over The Counter Bulletin Board under symbol MXROF.   On March 2, 2006, our shares were listed with the Frankfurt Stock Exchange under the trading symbol M1D.  75     Our principal trading market in volume is the TSX Venture Exchange.  The closing price of our common shares on the TSX Venture Exchange on March 31, 2010 was .$0.22  The following table sets forth the high and low closing prices in Canadian funds of our common shares traded on this Canadian exchange:  Annual Periods High Low  January 1, 2003 to December 31, 2003 $0.68 $0.23 January 1, 2004 to December 31, 2004 $0.55 $0.22 January 1, 2005 to December 31, 2005 $0.70 $0.265 January 1, 2006 to December 31, 2006 $0.98 $0.325 January 1, 2007 to December 31, 2007 $1.65 $0.55 January 1, 2008 to December 31, 2008 $0.75 $0.065 January 1, 2009 to December 31, 2009 $0.66 $0.09  Quarterly Periods High Low  January 1, 2006 to March 31, 2006 $0.98 $0.65 April 1, 2006 to June 30, 2006 $0.83 $0.46 July 1, 2006 to September 30, 2006 $0.57 $0.325 October 1, 2006 to December 31, 2006 $0.65 $0.33 January 1, 2007 to March 31, 2007 $1.59 $0.60 April 1, 2007 to June 30, 2007 $1.35 $1.00 July 1, 2007 to September 30, 2007 $1.19 $0.55 October 1, 2007 to December 31, 2007 $1.07 $0.60 January 1, 2008 to March 31, 2008 $0.72 $0.355 April 1, 2008 to June 30, 2008 $0.455 $0.335 July 1, 2008 to September 30, 2008 $0.38 $0.215 October 1, 2008 to December 31, 2008 $0.215 $0.065 January 1, 2009 to March 31, 2009 $.018 $0.09 April 1, 2009 to June 30, 2009 $0.26 $0.10 July 1, 2009 to September 30, 2009 $0.40 $0.12 October 1, 2009 to December 31, 2009 $0.66 $0.26 January 1, 2010 to March 31, 2010 $0.45 $0.175  Monthly Periods High Low  January 2008 $0.75 $0.375 February 2008 $0.50 $0.335 March 2008 $0.42 $0.37 April 2008 $0.41 $0.34 May 2008 $0.45 $0.34 June 2008 $0.455 $0.335 July 2008 $0.41 $0.32 August 2008 $0.38 $0.27 September 2008 $0.30 $0.20 October 2008 $0.215 $0.13 November 2008 $0.15 $0.125 December 2008 $0.14 $0.065 January 2009 $0.175 $0.09 February 2009 $0.18 $0.11 March 2009 $0.13 $0.10 April 2009 $0.12 $0.10 May 2009 $0.16 $0.105 June 2009 $0.26 $0.14 July 2009 $0.15 $0.12 August 2009 $0.28 $0.12 September 2009 $0.40 $0.19 October 2009 $0.41 $0.26 November 2009 $0.66 $0.30 December 2009 $0.48 $0.335 January 2010 $0.45 $0.31 February 2010 $0.38 $0.21 March 2010 $0.28 $0.175  76     9.B. Plan of Distribution  Not Applicable.   9.C. Markets  The common shares of the Company were listed for trading on the TSX-Venture Exchange on the 15th day of June, 1994.  Our common shares have been quoted for trading on the FINRA OTC Bulletin Board since November 8, 2000.  Our common shares were listed on the Frankfurt Stock Exchange on March 2, 2006 with the symbol M1D.    Item 10. Additional Information    10.A Share Capital  Not applicable.   10.B Memorandum and Articles of Association  We were incorporated under the Business Corporations Act of Alberta by registration of our articles of incorporation and bylaws.  Pursuant to the provisions of the BCA, a company may conduct any business that it is not restricted by the terms of its articles or bylaws from conducting.  Our articles and bylaws contain no such restrictions.  On June 27, 2007, we were registered under the Business Corporations Act of British Columbia as an extra-provincial company in British Columbia.  Our directors are required to disclose to the board of directors the nature and extent of their interest in any proposed transaction or contract and must thereafter refrain from voting in respect thereof.  An interested director may be counted in the quorum when a determination as to such directors remuneration is being considered but may not vote in respect thereof.  The directors have an unlimited power to borrow money, issue debt obligations and mortgage or charge our assets provided such actions are conducted bona fide and in our best interests.  There are no mandatory retirement ages for directors or any required shareholdings.  All holders of common shares are entitled to receive dividends out of assets legally available therefore at such times and in such amounts as the board of directors may from time to time determine.  All holders of common shares will share equally on a per share basis in any dividend declared by the board of directors.  The dividend entitlement time limit will be fixed by the board of directors at the time any such dividend is declared.  Each outstanding common share is entitled to one vote on all matters submitted to a vote of our shareholders in general meeting.  There are no cumulative voting rights attached to any of our shares and, accordingly, the holders of more than half of the shares represented at a general meeting can elect all of the directors to be elected in a general meeting.  All directors stand for re-election annually.  Upon any liquidation, dissolution or winding up, all common shareholders are entitled to share ratably in all net assets available for distribution after payment to creditors.  The common shares are not convertible or redeemable and have no preemptive, subscription or conversion rights.  In the event of a merger or consolidation, all common shareholders will be entitled to receive the same per share consideration.  77     The rights of shareholders may only be altered by the shareholders passing a special resolution at a general meeting.  A special resolution may only be passed when it has been circulated to all shareholders by way of information circular and then must be passed by seventy-five percent of the votes cast at the general meeting.  The board of directors may call annual and extraordinary general meetings when required.  One or more shareholders holding in aggregate five percent or more of our issued shares may requisition an extraordinary meeting and the directors are required to hold such meeting within four months of such requisition.  Only registered shareholders or persons duly appointed by proxy may be admitted to meetings unless otherwise permitted by the chairman of the meeting.  There are no federal Canadian limitations or restrictions on the right to own our common shares.  Some regulatory restrictions, and disclosure obligations, would apply to persons purchasing 5% or more of our issued and outstanding common shares.  Persons resident outside of Canada might be subject to foreign investment review regulations if they were to purchase a controlling interest in the Company.  There are no provisions in our bylaws or articles of incorporation that would have the effect of delaying, deferring or preventing a change in control.  There are no provisions in our bylaws or articles of incorporation that establish any threshold for disclosure of ownership.  However, the Alberta and British Columbia Securities Commission requires that persons that are the registered owners of, and/or have voting control over 10% or more of our common shares must file insider reports disclosing securities holdings and must disclose any plans to acquire additional securities above that 10%.    10.C Material Contracts  The following are the material contracts which we, or any of our subsidiaries, have entered into in the last two years immediately prior to date of this report.  See Principal Expenditures and Divestitures:


|  |                                                                                                                                                                                                                                                                                         
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|§ | Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated May 23, 2008 to acquire a 60% interest in the Indata project located in North Central B.C.                                                                                                               
|§ | Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated  June 9, 2008 to acquire a 60% interest in the Howell property in southeastern B.C  amended on July 24, 2009 to include the option of a 60% interest in the Crowsnest Mineral property adjacent thereto.
|§ | Consulting Agreement between us and West Oak, dated October 1, 2008, for provision of management services.                                                                                                                                                                              
|§ | Consulting Agreement between us and Clarence Wendt dated October 1, 2008 for provision of geological consulting services.                                                                                                                                                               
|§ | Mineral Property Option Agreement between Energex LLC and us dated September 1, 2009, for the acquisition of a 100% interest in 32 claims known as the Table Top claims, located in Humboldt County, 10 miles northwest of the town of Winnemucca, Nevada.                              
|§ | Amending Agreement dated for reference September 30, 2009 between us and Kokanee Placer Ltd. amending our option agreement dated May 15, 2006 granting Kokanee an option to purchase a 51% interest in our Diamond Peak Property                                                        

We have not entered into any other material agreements other than in the ordinary course of its business.  We have excluded management and public relations agreements, geological data access agreements, geological consulting agreements, professional services and other generic agreements as being in the ordinary course of our business.   78   10.D Exchange Controls  There are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital (including, without limitation, foreign exchange controls), or that affect the remittance of dividends, interest or other payments to non-resident holders of our Common Shares.  However, any such remittance to a resident of the United States may be subject to a withholding tax pursuant to the reciprocal tax treaty between Canada and the United States.  For further information concerning such withholding tax, see Item 10.E Taxation  There are no limitations under the laws of Canada, the Province of Alberta, or in our charter or other constituent documents with respect to the right of non-resident or foreign owners to hold and/or vote our common shares.  However, the Investment Canada Act (the Act), enacted on June 20, 1985, as amended, requires the prior notification 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 Act.  For the purposes of the Act, control can be acquired through the acquisition of all or substantially all of the assets used in the Canadian business, or the direct or indirect acquisition of interests in an entity that carries on a Canadian business or which controls the entity which carries on the Canadian business.  Under the Act, control of a corporation is deemed to be acquired through the acquisition of a majority of the voting shares of a corporation, and is presumed to be acquired where more than one-third, but less than a majority, of the voting shares of a corporation are acquired, unless it can be established that the corporation is not controlled in fact through the ownership of voting shares.  Other rules apply with respect to the acquisition of non-corporate entities.  Investments requiring review and approval include direct acquisition of Canadian businesses with assets with a gross book value of $5,000,000 or more; indirect acquisitions of Canadian businesses with assets of $50,000,000 or more; and indirect acquisitions of Canadian businesses where the value of assets of the entity or entities carrying on business in Canada, control of which is indirectly being acquired, is greater than $5,000,000 and represents greater than 50% of the total value of the assets of all of the entities, control of which is being acquired.  Pursuant to the World Trade Organization Agreement Implementation Act, the Act was amended to provide that the value of the business acquisition threshold (the Threshold) above described is increased from those levels outlined where the acquisition is by a World Trade Organization Investor or by a non-Canadian other than a World Trade Organization Investor where the Canadian business that is the subject of the investment is immediately before the investment controlled by a World Trade Organization Investor.  The Threshold is to be determined yearly in accordance with a formula set forth in the Act.  For 2009, the Threshold was determined to be $312,000,000.  A World Trade Organization Investor includes an individual, other than a Canadian, who is a national of a World Trade Organization Member, or who has the right of permanent residence in relation to that World Trade Organization Member. Different provisions and considerations apply with respect to investment to acquire control of a Canadian business that, as defined in the Act or regulations: · engages in production of uranium and owns an interest in a producing uranium property in Canada; · provides financial services; · provides transportation services; · is a cultural business. If an investment is reviewable, an application for review in the form prescribed by regulation is normally required to be filed with the Ministry of Industry, Director of Investment prior to the investment taking place and the investment may not be consummated until the review has been completed and ministerial approval obtained.  Applications for review concerning indirect acquisitions may be filed up to 30 days after the investment is consummated.  Applications concerning reviewable investments in culturally  79   sensitive and other specified activities referred to in the preceding paragraph are required upon receipt of a notice for review.  There is, moreover, provision for the Minister (a person designated as such under the Act) to permit an investment to be consummated prior to completion of review if he is satisfied that delay would cause undue hardship to the acquirer or jeopardize the operation of the Canadian business that is being acquired.   10.E Taxation  Certain United States Federal Income Tax Consideration  The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares.  This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares.  In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty.  Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.  Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.  No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the IRS) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.  This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary.  In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.  Scope of this Summary  Authorities  This summary is based on the Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, U.S. court decisions, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the Canada-U.S. Tax Convention), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document.  Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary.  This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.  80    U.S. Holders  For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes: · an individual who is a citizen or resident of the U.S.; · a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia; · an estate whose income is subject to U.S. federal income taxation regardless of its source; or · a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.  Non-U.S. Holders  For purposes of this summary, a non-U.S. Holder is a beneficial owner of common shares that is not a U.S. Holder.  This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common shares.  Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.  U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed  This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders:  (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are dealers in securities or currencies or U.S. Holders that are traders in securities that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a functional currency other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) partnerships and other pass-through entities (and investors in such partnerships and entities); or (j) U.S. Holders that own or have owned  (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company.  This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are (a) U.S. expatriates or former long-term residents of the U.S. subject to Section 877 of the Code, (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Tax Act; (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute taxable Canadian property under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention.  U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.  81     If an entity that is classified as a partnership for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such partnership and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners.  Partners of entities that are classified as partnerships for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.  Tax Consequences Not Addressed  This summary does not address the U.S. state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax or foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares.  Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax and foreign tax consequences of the acquisition, ownership, and disposition of common shares.  Passive Foreign Investment Company Rules  If the Company is considered a passive foreign investment company under the meaning of Section 1297 of the Code (a PFIC) at any time during a U.S. Holders holding period, the following sections will generally describe the U.S. federal income tax consequences to the U.S. Holder of the acquisition, ownership, and disposition of common shares.  PFIC Status of the Company   The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income or (b) 50% or more of the value of the Companys assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets.  Gross income generally means all revenues less the cost of goods sold, and passive income generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.  Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporations commodities are (a) stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business, (b) property used in the trade or business of such foreign corporation that would be subject to the allowance for depreciation under Section 167 of the Code, or (c) supplies of a type regularly used or consumed by such foreign corporation in the ordinary course of its trade or business.    For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation.  In addition, for purposes of the PFIC income test and asset test described above, passive income does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a related person (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.    In addition, under certain attribution rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company which is also a PFIC (a Subsidiary PFIC), and will be subject to U.S. federal income tax on their proportionate share of (i) a distribution on the  82    shares of a Subsidiary PFIC and (ii) a disposition or deemed disposition  of shares of a Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC.  The Company believes that it qualified as a PFIC for the taxable year ended December 31, 2009, and based on current business plans and financial projections, the Company anticipates that it may qualify as a PFIC for the current taxable year and subsequent taxable years.  The determination of whether a corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations.  In addition, whether a corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document.  Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or a Subsidiary PFIC) concerning its PFIC status or that the Company (and each Subsidiary PFIC) was not, or will not be, a PFIC for any tax year.  Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the Company and each Subsidiary PFIC.  Default PFIC Rules Under Section 1291 of the Code If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether such U.S. Holder makes an election to treat the Company as a qualified electing fund or QEF under Section 1295 of the Code (a QEF Election) or a mark-to-market election under Section 1296 of the Code (a Mark-to-Market Election).  A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a Non-Electing U.S. Holder.  A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and (b) any excess distribution received on the common shares.  A distribution generally will be an excess distribution to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holders holding period for the common shares, if shorter).  Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares, and any excess distribution received on common shares, must be ratably allocated to each day in a Non-Electing U.S. Holders holding period for the respective common shares.  The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income.  The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year.  A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as personal interest, which is not deductible.  If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years.  A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold on the last day of the last tax year for which the Company was a PFIC.  QEF Election A U.S. Holder that makes a QEF Election for the first tax year in which its holding period of its common shares begins, generally, will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares.  However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holders pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) and the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder.  Generally, net capital gain is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and ordinary earnings are the excess of (a) earnings and profits over (b) net capital gain.  A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company.  However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election.  If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge.  If such U.S. Holder is not a corporation, any such interest paid will be treated as personal interest, which is not deductible. A U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents earnings and profits of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holders tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election.  In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares. The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely.  A QEF Election will be treated as timely if such QEF Election is made for the first year in the U.S. Holders holding period for the common shares in which the Company was a PFIC.  A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. A QEF Election will apply to the tax year for which such QEF Election is made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election.  If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC.  Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC. U.S. Holders should be aware that there can be no assurance that we will satisfy record keeping requirements that apply to a QEF, or that we will supply U.S. Holders with information that such U.S. Holders require to report under the QEF rules, in event that we are a PFIC and a U.S. Holder wishes to make a QEF Election.  Each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the availability of, and procedure for making, a QEF Election.  Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares. Mark-to-Market Election A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock.  The common shares generally will be marketable stock if the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange ensure active trading of listed stocks.  83   If such stock is traded on such a qualified exchange or other market, such stock generally will be regularly traded for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares.  However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holders holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares. A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holders tax basis in such common shares.  A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (i) such U.S. Holders adjusted tax basis in the common shares, over (ii) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years). A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holders tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election.  In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be marketable stock or the IRS consents to revocation of such election.  Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election. Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable.  Hence, the Mark-to-Market Election will not be effective to eliminate the interest charge described above with respect to deemed dispositions of Subsidiary PFIC stock or distributions from a Subsidiary PFIC. Other PFIC Rules Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations).  However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred. Certain additional adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election.  For example under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares. Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC.  Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit.  84   The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with their own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC. In addition, a U.S. Holder who acquires common shares from a decedent will not receive a step up in tax basis of such common shares to fair market value. The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares. U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares   If either (a) the Company is not treated as a PFIC with respect to a U.S. Holder; (b) the Company is no longer a PFIC in the current taxable year and a U.S. Holder has recognized unrealized gain as of the last day of the taxable year in which the Company was a PFIC; or (c) a U.S. Holder has made a timely QEF Election and the Company is no longer a PFIC in the current taxable year, then a U.S. Holder generally will not be subject to the rules described above under the heading Passive Foreign Investment Company Rules.  Instead, the U.S. Holder will have the tax consequences described below.  General Taxation of Distributions  Subject to the PFIC rules discussed above, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated earnings and profits of the Company, as computed for U.S. federal income tax purposes.  A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates.  To the extent that a distribution exceeds the current and accumulated earnings and profits of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares.  (See  Sale or Other Taxable Disposition of common shares below).  However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income.  Dividends received on common shares generally will not be eligible for the dividends received deduction.  In addition, the Company does not anticipate that its distributions will be eligible for the preferential tax rates applicable to long-term capital gains.  The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.  Sale or Other Taxable Disposition of Common Shares  Subject to the PFIC rules discussed above, upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of.  Subject to the PFIC rules discussed above, gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.   Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of common shares generally will be treated as U.S. source for purposes of applying the U.S. foreign tax credit rules unless the gain is subject to tax in Canada and is resourced as foreign source under the Canada-U.S. Tax Convention and such U.S. Holder elects to treat such gain or loss as foreign source.  85     Preferential tax rates apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust.  There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation.  Deductions for capital losses are subject to significant limitations under the Code.  Receipt of Foreign Currency    The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time).  If the foreign currency received is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes.  Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.  Foreign Tax Credit  Subject to the PFIC rules discussed above, a U.S. Holder who pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid.  Generally, a credit will reduce a U.S. Holders U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holders income subject to U.S. federal income tax.  This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.  Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holders U.S. federal income tax liability that such U.S. Holders foreign source taxable income bears to such U.S. Holders worldwide taxable income.  In applying this limitation, a U.S. Holders various items of income and deduction must be classified, under complex rules, as either foreign source or U.S. source.  In addition, this limitation is calculated separately with respect to specific categories of income.  Dividends paid by the Company generally will constitute foreign source income and generally will be categorized as passive category income.  The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.  Backup Withholding and Information Reporting  Under U.S. federal income tax law and Treasury regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation.  Penalties for failure to file certain of these information returns are substantial.  U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, and, if applicable mark-to-market and QEF elections.   86   Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares generally may be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S.  Holders correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.  However, certain exempt persons, such as corporations, generally are excluded from these information reporting and backup withholding rules.  Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holders U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner.  Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.    Certain Canadian Federal Income Tax Consequences  The following discussion summarizes the principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the Company (the "Shareholder"), and who at all material times for the purposes of the Income Tax Act (Canada) (the "Canadian Act") deals at arm's length with the Company,  holds all common shares solely as capital property, is a non-resident of Canada, and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada.  It is assumed that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian Act.  This summary is based on the current provisions of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the  "Treaty") as amended.  This summary takes into account all specific proposals to amend the Canadian Act and the  regulations thereunder  publicly announced  by the government of Canada to the date hereof and the Company's understanding of the current published administrative and assessing practices of Canada Customs and Revenue  Agency.  It is assumed that all such amendments will be enacted substantially as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any provincial, territorial or foreign income tax law or treaty.  This summary is not, and is not to be construed as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.  A Shareholder generally will not be subject to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the Common share constitutes "taxable Canadian property" to the Shareholder for purposes of the Canadian Act and the Shareholder is not eligible for relief pursuant to an applicable bilateral tax treaty.  A Common share that is disposed of by a Shareholder will not constitute taxable Canadian property of the  Shareholder provided that the Common share is listed on a stock  exchange that is  prescribed for the purposes of the Canadian Act (the Toronto  Stock Exchange is so prescribed), and that neither the Shareholder, nor one or more persons with whom the Shareholder did not deal at arm's length, alone or together at any time in the five years immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the capital stock of the Company.  87   In addition, the Treaty generally will  exempt a Shareholder who is a resident of the United  States for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not derived  principally from real  property (including resource property) situated in Canada or that the Shareholder does not have, and has not had within the 12-month period preceding the  disposition, a "permanent establishment" or "fixed  base," as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada.  The Treaty may not be available to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S.  Any dividend on a Common share, including a stock dividend, paid or credited, or deemed to be paid or credited,  by the Company to a Shareholder  will be subject to Canadian withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable income tax treaty.  Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross amount of the dividend.  It is Canada Customs and Revenue Agencys position that the Treaty reductions are not available to a Shareholder that is a "limited liability company" resident in the United States. The Company will be required to withhold any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.  ALL PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.   10.F     Dividends and paying agents  Not Applicable.   10.G Statement by experts  Not Applicable.   10.H Documents on Display  We have filed with the Securities and Exchange Commission this annual report on Form 20-F, including exhibits, under the Securities and Exchange Act of 1934.  We are subject to the informational requirements of the Securities Exchange Act of 1934 and file reports and other information with the Securities and Exchange Commission.  Reports and other information which we file with the Securities and Exchange Commission, including this Annual Report on Form 20-F, may be inspected and copied at the public reference facilities of the Securities and Exchange Commission at:  100 F Street, NE Washington D.C.  20549  You can also obtain copies of this material by mail from the Public Reference Section of the Securities and Exchange Commission, 100 F Street, NE, Washington, D.C. 20549, at prescribed rates.  Additionally, copies of this material may also be obtained from the Securities and Exchange Commission's internet site at http://www.sec.gov.  The Commission's telephone number is 1-800-SEC-0330.  Copies of the above material contracts may be inspected at our principal executive office at the address on the face page of this Report during normal business hours.   10.I     Subsidiary Information  As of March 31, 2010, we have one subsidiary, MAX Resources, Inc., a wholly owned Nevada corporation.    Item 11. Quantitative and Qualitative Disclosures About Market Risk We were incorporated under the laws of Alberta, Canada and our financial results are quantified in Canadian dollars.  We raise equity funding through the sale of securities denominated in Canadian dollars, whereas the majority of our obligations and expenditures with respect to our properties will be incurred in US Dollars.  Variations in the exchange rate may give rise to foreign exchange gains or losses that may be significant.  Market risks relating to our operations, if we begin production, are anticipated to result primarily from changes in interest rates, foreign exchange rates and commodity prices, as well as credit risk concentrations.  We do not use financial instruments for trading purposes and are not parties to any leverage derivatives.  We do not currently engage in hedging transactions.  See Currency and Exchange Rates and Item 4  Information on the Company.    Item 12. Description of Securities Other than Equity Securities  The required disclosure is not applicable.    PART II    Item 13. Defaults, Dividend Arrearages and Delinquencies  We have had no material defaults in payment of principal, interest or sinking or purchase fund installments or other material defaults relating to indebtedness.    Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds  The required disclosure is not applicable.   Item 15T. Controls and Procedures  (a) Disclosure Controls and Procedures  At the end of the period covered by this annual report for the fiscal year ended December 31, 2009, an evaluation was carried out under the supervision of, and the with the participation of, the Companys management, including its Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act).  Based upon that evaluation, the Companys CEO and CFO have concluded that the disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and (ii) accumulated and communicated to management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  88    (b) Managements Annual Report on Internal Control Over Financial Reporting  Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting, as defined in Rules 13a-15(f) of the Exchange Act of 1934, as amended.  Our internal control over financial reporting is a process 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.  Internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and asset dispositions; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our financial statements in accordance with generally accepted accounting principles; (iii) provide reasonable assurance that receipts and expenditures are made only in accordance with authorizations of our management and board of directors (as appropriate); and (iv) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.  Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of fiscal year ended December 31, 2009 based on the framework in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (the Framework).  Based on this evaluation, our management concluded that, as of fiscal year ended December 31, 2009, there were  no deficiencies they considered to be material weaknesses.  This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.  Our managements report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only managements report in this annual report.  These temporary rules permits a non-accelerated filer to provide only managements report on internal control over financial reporting in an annual report and omit an attestation report of the issuers registered public accounting firm regarding managements report on internal control over financial reporting until it is required to file an annual report for its first fiscal year ending after June 30, 2010.  (c) Changes in Internal Control Over Financial Reporting  Based upon their evaluation of our controls, our CEO and CFO have concluded that, there were no significant changes in our internal control over financial reporting or in other factors during our last fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.    89   Item 16.    16A. Audit Committee Financial Expert  We have determined that Stuart Rogers qualifies as an audit committee financial expert, pursuant to SEC regulations and the other members of the audit committee ( Tim Coupland and Paul John) satisfy the financial literacy requirements for audit committee members and are independent members of the Audit Committee as determined in accordance with rulesection 803 of the NYSE  Company Guide and Rule 10A-3 of the Securities Exchange Act of 1934.  Mr. Rogers does not qualify as independent under Rule 10A-3 of the Securities Exchange Act of 1934 or Section 803 of the NYSE-AMEX Company Guide.   16.B Code of Ethics  We have not adopted a formal code of ethics.  We have concluded that a written code of ethics would serve little practical purpose for us in deterring wrongdoing and promoting ethical conduct and full, fair and accurate public disclosure and compliance with applicable laws and regulatory requirements.  Since our operations are currently relatively small, most of our important activities are conducted directly by or under the direct supervision of our directors and senior officers.  All of our current directors and officers have held their positions for a number of years and are familiar with our operations and our informal requirements for conduct.  In light of the lack of perceived benefit from adopting a formal code considered against the time and cost for management to consider and implement a code, we have decided not to do so at the present time.  We will continue to monitor the possible benefits of adopting a formal code of ethics, particularly as our operations expand and will consider whether we should adopt a formal code of ethics at a future date.   16.C Principal Accountant Fees and Services  (a) Audit Fees  The aggregate fees billed for each of the last two fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements, together with services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $28,392 for the year ending December 31, 2009 and $29,932 for the year ending December 31, 2008.  (b) Audit-Related Fees  The aggregate fees billed for each of the last two fiscal years for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of our financial statements but are not reported under paragraph (a) of this Item were approximately $nil for the year ending December 31, 2009, and  $nil for the year ending December 31, 2008.  (c) Tax Fees  The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were approximately $6,000 for the year ending December 31, 2009 and $5,000 for the year ending December 31, 2008.  (d) All Other Fees  The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant other than services disclosed in paragraphs (a) through (c) of this Item were $ nil for the year ending December 31, 2009 and $ nil in the year ending December 31, 2008.  90     (e) Pre-Approval Policies  Our Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audits, audit-related services, tax services and other services provided by the auditor.  Any services provided by our independent auditor that are not specifically included within the scope of the audit must be pre-approved by our audit committee prior to any engagement.  Our audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimusexception before the completion of the engagement.   16.D Exemptions from the Listing Standards for Audit Committees  Not applicable.   16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers  There were no repurchases by or on behalf of the Company or any affiliated purchaser, including any repurchases made pursuant to a publicly announced plan or program or made pursuant to a plan or program that was not announced publicly, in the last fiscal year.  We made no open market repurchases.   16.F Change in Registrants Certifying Accountant  Not Applicable   16.G Corporate Governance  Not Applicable  91      PART III FINANCIAL STATEMENTS    Item 17. Financial Statements  We are furnishing the following financial statements and reports:  Auditors Report dated Feburary 10, 2010 Consolidated Balance Sheets at December 31, 2009 and 2008 Consolidated Statements of Operations, Comprehensive Loss and Deficit for the years ended December 31, 2009, 2008, and 2007 Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007 Notes to the Consolidated Financial Statements  All financial statements herein, unless otherwise stated, have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP).  These principles, as they pertain to our consolidated financial statements, differ from United States generally accepted accounting principles (U.S. GAAP) in a number of material respects, which are set out elsewhere herein.  See Note 13 to the attached consolidated financial statements.   92                MAX RESOURCE CORP.  (An Exploration Stage Company)    CONSOLIDATED FINANCIAL STATEMENTS  DECEMBER 31, 2009  (Expressed in Canadian Dollars)                      93   [form20ffinalconfigured017.jpg]     INDEPENDENT AUDITORS REPORT  To the Shareholders of Max Resource Corp.  We have audited the consolidated balance sheets of Max Resource Corp. as at December 31, 2009 and 2008 and the consolidated statements of operations, comprehensive loss and deficit and cash flows for the years ended December 31, 2009, 2008 and 2007.  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 Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  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.  In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2009 and 2008 and the results of its operations and its cash flows for the years ended December 31, 2009, 2008 and 2007 in accordance with Canadian generally accepted accounting principles.  DMCL  Dale Matheson Carr-Hilton Labonte LLP CHARTERED ACCOUNTANTS Vancouver, Canada February 10, 2010   COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA -UNITED STATES REPORTING DIFFERENCES  In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Companys ability to continue as a going concern, such as those described in Note 1 to the financial statements.  Our report to the shareholders dated February 10, 2010 is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditors report when these are adequately disclosed in the financial statements. DMCL  DALE MATHESON CARR-HILTON LABONTE LLP CHARTERED ACCOUNTANTS Vancouver, Canada February 10, 2010   [form20ffinalconfigured018.jpg]  94


|                                                  |                                                            |              |             |              |             |           |  |  |  | 
|------------------------------------------------- | ---------------------------------------------------------- | ------------ | ----------- | ------------ | ----------- | --------- |  |  |  | 
|MAX RESOURCE CORP.
(An Exploration Stage Company)
|CONSOLIDATED BALANCE SHEETS                      
|(Expressed In Canadian Dollars)                  
|                                                  |                                                            |              |             |             
|                                                  |                                                            | December 31, |             | December 31,
|                                                  |                                                            |              |             | 2009         |             | 2008     
|                                                  |                                                            |              |             |             
|ASSETS                                           
|                                                 
|CURRENT                                           |                                                            |              |             |              |             |          
|Cash and cash equivalents                         |                                                            |              | $           | 3,118,960    | $           | 4,377,361
|Receivables and pre-paids                         |                                                            |              |             | 22,203       |             | 99,545   
|Taxes recoverable                                 |                                                            |              |             | 9,753        |             | 13,932   
|                                                  |                                                            |              |             | 3,150,916    |             | 4,490,838
|                                                  |                                                            |              |             |              |             |          
|EQUIPMENT (Note 3)                                |                                                            | 3,218        |             | -           
|RECLAMATION BONDS                                 |                                                            | 28,356       |             | 28,356      
|MINERAL PROPERTIES (Note 4)                       |                                                            | 2,142,513    |             | 5,462,920   
|                                                  |                                                            |              |             |              |             |          
|                                                  |                                                            |              | $           | 5,325,003    | $           | 9,982,114
|                                                 
|LIABILITIES                                      
|                                                 
|CURRENT                                           |                                                            |              |             |              |             |          
|Accounts payable and accrued liabilities          |                                                            |              | $           | 57,459       | $           | 146,271  
|                                                 
|SHAREHOLDERS EQUITY                             
|                                                 
|SHARE CAPITAL (Note 6)                            |                                                            |              |             |             
|Authorized:                                       | Unlimited number of voting common shares without par value |              |             |              |            
|                                                  | Unlimited number of preferred shares without par value     |              |             |              |            
|Issued and outstanding:                           | 21,699,230 common shares (2008: 21,649,230)                | 13,003,168   |             | 12,996,918  
|SHARE PURCHASE WARRANTS (Note 6)                  |                                                            |              | 288,562     |              | 288,562    
|CONTRIBUTED SURPLUS (Note 6)                      |                                                            |              | 1,393,485   |              | 1,307,229  
|DEFICIT                                           |                                                            |              | (9,417,671) |              | (4,756,866)
|                                                  |                                                            |              |             |              |            
|                                                  |                                                            |              | 5,267,544   |              | 9,835,843  
|                                                  |                                                            |              |             |              |            
|                                                  |                                                            | $            | 5,325,003   | $            | 9,982,114  

NATURE OF OPERATIONS (Note 1) COMMITMENTS (Note 4) SUBSEQUENT EVENT (Note 12)  APPROVED BY THE DIRECTORS:


|                     |  |                         
|-------------------- |  | ------------------------
|PAUL JOHN          |  | STUART ROGERS         
|Paul John  Director |  | Stuart Rogers  Director

The accompanying notes are an integral part of these consolidated financial statements.  95


|                                                                         |            |             |                       |                  
|------------------------------------------------------------------------ | ---------- | ----------- | --------------------- | -----------------
|MAX RESOURCE CORP.
(An Exploration Stage Company)                       
|CONSOLIDATED STATEMENTS OF OPERATIONS, COMPREHENSIVE LOSS AND DEFICIT   
|YEAR ENDED DECEMBER 31,
(Expressed In Canadian Dollars)                 
|                                                                         |            | 2009        | 2008                  | 2007             
|                                                                         |            |             |                       |                  
|EXPENSES                                                                 |            |             |                       |                  
|Amortization                                                             | $          | 1,930       | $                   - | $             470
|Consulting                                                               |            | 55,394      | 86,762                | 52,033           
|Consulting  stock-based compensation (Note 6)                           |            | 86,256      | 66,794                | 154,591          
|Investor relations                                                       |            | 320,843     | 366,870               | 339,034          
|Investor relations  stock-based compensation (Note 6)                   |            | -           | 142,172               | 70,388           
|Management fees (Note 5)                                                 |            | 120,000     | 120,000               | 90,000           
|Management and directors fees  stock-based compensation (Note 6)        |            | -           | 242,999               | 345,409          
|Office and general                                                       |            | 25,285      | 24,439                | 10,778           
|Part XII.6 tax                                                           |            | 23,079      | -                     | -                
|Professional fees                                                        |            | 96,697      | 82,757                | 51,093           
|Transfer agent and filing fees                                           |            | 16,181      | 18,840                | 25,581           
|Travel and promotion                                                     |            | 22,808      | 50,713                | 28,370           
|                                                                         |            |             |                       |                  
|LOSS BEFORE OTHER ITEMS AND INCOME TAXES                                 |            | (768,473)   | (1,202,346)           | (1,167,747)      
|                                                                         |            |             |                       |                  
|OTHER ITEMS                                                              |            |             |                       |                  
|Interest income                                                          |            | 95,470      | 273,890               | 222,290          
|Impairment of mineral properties (Note 4)                                |            | (3,987,802) | (484,306)             | (148,097)        
|                                                                         |            |             |                       |                  
|LOSS BEFORE INCOME TAXES                                                 |            | (4,660,805) | (1,412,762)           | (1,093,554)      
|                                                                         |            |             |                       |                  
|Future income tax recovery (Note 7)                                      |            | -           | 263,748               | -                
|                                                                         |            |             |                       |                  
|NET LOSS AND COMPREHENSIVE LOSS FOR THE YEAR                             |            | (4,660,805) | (1,149,014)           | (1,093,554)      
|                                                                         |            |             |                       |                  
|DEFICIT, BEGINNING OF YEAR                                               |            | (4,756,866) | (3,607,852)           | (2,514,298)      
|                                                                         |            |             |                       |                  
|DEFICIT, ENDING OF YEAR                                                  | $          | (9,417,671) | $ (4,756,866)         | $ (3,607,852)    
|                                                                         |            |             |                       |                  
|BASIC AND DILUTED LOSS PER COMMON SHARE                                  | $          | (0.22)      | $          (0.05)     | $          (0.06)
|                                                                         |            |             |                       |                  
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING  basic and diluted | 21,670,736 | 21,584,202  | 17,549,381           

The accompanying notes are an integral part of these consolidated financial statements.  96


|                                                                                 |   |             |                 |                | 
|-------------------------------------------------------------------------------- | - | ----------- | --------------- | -------------- | 
|MAX RESOURCE CORP.
(An Exploration Stage Company)                               
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
|YEAR ENDED DECEMBER 31,
(Expressed In Canadian Dollars)                         
|                                                                                 |   |             |                 |               
|                                                                                 |   | 2009        | 2008            | 2007          
|                                                                                 |   |             |                 |               
|CASH PROVIDED BY (USED IN):                                                      |   |             |                 |               
|                                                                                 |   |             |                 |               
|OPERATING ACTIVITIES                                                             |   |             |                 |               
|Net loss for the year                                                            | $ | (4,660,805) | $   (1,149,014) | $  (1,093,554)
|Adjustments for items not involving cash:                                        |   |             |                 |               
|Amortization                                                                     |   | 1,930       | -               | 470           
|Stock-based compensation - consulting, management
and investor relations expense |   | 86,256      | 451,965         | 570,388       
|Impairment of mineral properties                                                 |   | 3,987,802   | 484,306         | 148,097       
|Future income tax recovery                                                       |   | -           | (263,748)       | -             
|                                                                                 |   |             |                 |               
|Changes in non-cash working capital items:                                       |   |             |                 |               
|Decrease (increase) in receivables and prepaids                                  |   | 77,342      | 108,501         | (186,151)     
|Decrease (increase) in taxes recoverable                                         |   | 4,179       | 3,207           | (14,822)      
|Decrease in accounts payable and accrued
liabilities                             |   | (117,212)   | (4,934)         | (24,009)      
|                                                                                 |   |             |                 |               
|CASH USED IN OPERATING ACTIVITIES                                                |   | (620,508)   | (369,717)       | (599,581)     
|                                                                                 |   |             |                 |               
|FINANCING ACTIVITY                                                               |   |             |                 |               
|Issuance of common shares                                                        |   | -           | -               | 8,829,677     
|                                                                                 |   |             |                 |               
|CASH PROVIDED BY FINANCING ACTIVITY                                              |   | -           | -               | 8,829,677     
|                                                                                 |   |             |                 |               
|INVESTING ACTIVITIES                                                             |   |             |                 |               
|Reclamation bonds                                                                |   | -           | 88              | (28,444)      
|Purchase of equipment                                                            |   | (5,148)     | -               | -             
|Mineral property acquisition and exploration costs                               |   | (632,745)   | (2,914,138)     | (1,420,725)   
|                                                                                 |   |             |                 |               
|CASH USED IN INVESTING ACTIVITIES                                                |   | (637,893)   | (2,914,050)     | (1,449,169)   
|                                                                                 |   |             |                 |               
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                 |   | (1,258,401) | (3,283,767)     | 6,780,927     
|                                                                                 |   |             |                 |               
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                     |   | 4,377,361   | 7,661,128       | 880,201       
|                                                                                 |   |             |                 |               
|CASH AND CASH EQUIVALENTS, ENDING OF YEAR                                        | $ | 3,118,960   | $    4,377,361  | $    7,661,128




|                                       |   |           |                   |               
|-------------------------------------- | - | --------- | ----------------- | --------------
|CASH AND CASH EQUIVALENTS CONSISTS OF: |   |           |                   |               
|Cash                                   | $ | 118,960   | $         207,693 | $   21,128    
|Term deposits                          |   | 3,000,000 | 4,169,668         | 7,640,000     
|                                       |   |           |                   |               
|                                       | $ | 3,118,960 | $    4,377,361    | $    7,661,128

SUPPLEMENTARY CASH FLOW DISCLOSURE (Note 8)  The accompanying notes are an integral part of these consolidated financial statements.  97   MAX RESOURCE CORP. (An Exploration Stage Company) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2009 (Expressed In Canadian Dollars)   NOTE 1. NATURE OF OPERATIONS  The Company was incorporated under the Business Corporations Act (Alberta) on April 25, 1994 as Proven Capital Corp.  By Articles of Amendment dated January 10, 1995, the Companys name was changed to Cedar Capital Corp. and then to Vancan Capital Corp. on February 12, 2002 concurrent with the consolidation of outstanding common share capital on a four for one basis. The Companys name was changed to Max Resource Corp. (Max or the Company) on May 14, 2004.  The Company is in the business of mineral property exploration and development.  The recoverability of amounts recorded for mineral properties and related deferred costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development, and future production or proceeds from the disposition thereof.  To date, the Company has not generated any revenues from operations and will require additional funds to meet its obligations and the costs of its operations.  As a result, further losses are anticipated prior to the generation of any profits.  The Company's future capital requirements will depend on many factors, including costs of exploration of its properties, cash flow from operations, and competition and global market conditions. The Company's anticipated recurring operating losses and growing working capital needs will require that it obtain additional capital to operate its business.  The Company has sufficient funds on hand to cover anticipated operating expenses and the costs of budgeted exploration programs for the next year.  The Companys ability to continue as a going concern will depend almost exclusively on outside capital to complete the exploration and development of its mineral properties. Such outside capital will include the sale of additional stock.  There can be no assurance that capital will be available as necessary to meet these continuing exploration and development costs or, if the capital is available, that it will be on terms acceptable to the Company.  The issuances of additional stock by the Company may result in a significant dilution in the equity interests of its current stockholders.  Obtaining commercial loans, assuming those loans would be available, will increase the Company's liabilities and future cash commitments. If the Company is unable to obtain financing in the amounts and on terms deemed acceptable, its business and future success may be adversely affected.  Given the Company's limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability.  NOTE 2. SIGNIFICANT ACCOUNTING POLICIES  These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada for financial statements.  Except as indicated in Note 13, they also comply, in all material respects, with accounting principles generally accepted in the United States.  Adoption of New Accounting Standards and Accounting Pronouncements  Goodwill and intangible assets Effective January 1, 2009, the Company adopted the Canadian Institute of Chartered Accountants (CICA) Section 3064 Goodwill and Intangible Assets, which replaced CICA Handbook sections 3062, Goodwill and Other Intangible Assets and 3450, Research and Development Costs, as well as EIC-27, Revenues and Expenditures During the Pre-operating Period, and part of Accounting Guideline 11, Enterprises in the development stage.  Under previous Canadian standards, a greater number of items were recognized as assets than are recognized under International Financial Reporting Standards (IFRS).  The provisions relating to the definition and initial recognition of intangible assets reduce the differences with IFRS in the accounting for intangible assets.  The objectives of CICA 3064 are: 1) to reinforce the principle-based approach to the recognition of assets; 2) to establish the criteria for asset recognition, and; 3) to clarify the application of the concept of matching revenues and expenses such that the current practice of recognizing asset items that do not meet the recognition criteria is eliminated.  The new standard also provides guidance for the recognition of internally developed intangible assets (including research and development activities), ensuring consistent treatment of all intangible assets.  The portions in the new standard relating to goodwill remain unchanged.  The adoption of this standard had no impact on the Companys presentation of its financial position or results of operations as at December 31, 2009.    98     Credit risk and the fair value of financial assets and financial liabilities In January 2009, the Emerging Issues Committee (EIC) of the CICA issued EIC-173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities which applies to interim and annual financial statements for periods ending on or after January 20, 2009.  The adoption of this standard had no impact on the Companys presentation of its financial position or results of operations as at December 31, 2009.  Mining exploration costs On March 27, 2009, the Emerging Issues Committee of the CICA approved an abstract EIC-174, Mining Exploration Costs, which provides guidance on capitalization of exploration costs related to mining properties in particular, and on impairment of long-lived assets in general.  The adoption of this abstract had no impact on the Companys presentation of its financial position or results of operations as at December 31, 2009.  Basis of consolidation These interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Max Resource, Inc., a Nevada company, which was incorporated on August 24, 2005.  All inter-company balances and transactions have been eliminated upon consolidation.  Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from these estimates.  Significant areas requiring the use of management estimates relate to useful lives of assets for depreciation and amortization, the recoverability of mineral property interests, the determination of future income taxes, asset retirement obligations, and the determination of fair value for stock based transactions.  Where estimates have been used financial results as determined by actual events could differ from those estimates.  Cash and cash equivalents Cash and cash equivalents include highly liquid Canadian dollar denominated guaranteed investment certificates which are readily convertible to contracted amounts of cash without penalty.  Cash equivalents are classified as held-for-trading and are recorded at fair value with realized and unrealized gains and losses reported in net income (loss).  At December 31, 2009, the Company had cash equivalents comprised of term deposits issued by major financial institutions in the aggregate amount of $3,000,000 (December 31, 2008 - $4,169,668) and bearing interest at a rate of 1.00% per annum until maturity in 2010.  Equipment Equipment is recorded at cost with amortization being provided using the declining balance basis at 30% per annum .  Mineral properties The Company records its interests in mineral properties at the lower of cost or estimated recoverable value.  Where specific exploration programs are planned and budgeted by management, the cost of mineral properties and related exploration expenditures are capitalized until the properties are placed into commercial production, sold, abandoned or determined by management to be impaired in value.  These costs will be amortized over the estimated useful lives of the properties following the commencement of production or written off if the properties are sold or abandoned.  The costs include the cash or other consideration and the assigned value of shares issued, if any, on the acquisition of mineral properties.  Costs related to properties acquired under option agreements or joint ventures, whereby payments are made at the sole discretion of the Company, are recorded in the accounts at such time as the payments are made.  For properties held jointly with other parties the Company only records its proportionate share of acquisition and exploration costs.  The proceeds from options granted are deducted from the cost of the related property and any excess is deducted from other remaining capitalized property costs.  The Company does not accrue estimated future costs of maintaining its mineral properties in good standing.  Capitalized costs as reported on the balance sheet represent costs incurred to date and may not reflect actual, present, or future values.  Recovery of carrying value is dependent upon future commercial success or proceeds from disposition of the mineral interests.    99   NOTE 2 . SIGNIFICANT ACCOUNTING POLICIES (Continued)  Mineral properties (Continued)  Management evaluates each mineral interest on a reporting period basis or as events and circumstances warrant, and makes a determination based on exploration activity and results, estimated future cash flows and availability of funding as to whether costs are capitalized or charged to operations.  Mineral property interests, where future cash flows are not reasonably determinable, are evaluated for impairment based on managements intentions and determination of the extent to which future exploration programs are warranted and likely to be funded.  General exploration costs not related to specific properties and general administrative expenses are charged to operations in the year in which they are incurred.  The Company does not have any producing mineral properties and all of its efforts to date have been exploratory in nature.  Upon the establishment of commercial production, carrying values of deferred acquisition and exploration costs will be amortized over the estimated life of the mine using the units of production method.  Asset retirement obligations The Company reviews and recognizes legal obligations associated with the retirement of tangible long-lived assets, including rights to explore or exploit natural resources. When such obligations are identified and measurable, the estimated fair values of the obligations are recognized on a systematic basis over the remaining period until the obligations are expected to be settled.  Resource property related retirement obligations are capitalized as part of carrying values and are accounted for in the same manner as all other capitalized costs.  Future site restoration costs The Company records future site restoration costs based on estimates in accordance with current legislation and industry practices.  Actual removal and site restoration expenditures are charged to the accumulated provision account as incurred.  Impairment of long-lived assets The Company follows the recommendations of the CICA Handbook section 3063, Impairment of Long-Lived Assets. Section 3063 establishes standards for recognizing, measuring and disclosing impairment of long-lived assets held for use. The Company conducts its impairment test on long-lived assets when events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is recognized when the carrying amount of an asset to be held and used exceeds the undiscounted future net cash flows expected from its use and disposal. If there is impairment, the impairment amount is measured as the amount by which the carrying amount of the asset exceeds its fair value, calculated using discounted cash flows when quoted market prices are not available.  Stock-based compensation The Company follows CICA Handbook Section 3870, which establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services.  The standard requires that all stock-based awards be measured using a fair value method.  Under the standard all awards are measured and expensed or allocated to specific asset accounts, as applicable, in the period of grant or modification. The fair value of options and other stock-based awards issued or altered in the period, are determined using the Black-Scholes option pricing model.  Upon the exercise of stock options or agents warrants, the fair value of the share based award is allocated to share capital.  Flow-through shares The resource expenditure deductions for income tax purposes related to exploration activities funded by flow-through share arrangements are renounced to investors in accordance with Canadian tax legislation. Under the recommendations of the EIC 146, future income tax liabilities resulting from the renunciation of qualified mineral expenditures by the Company is recorded as a reduction in share capital. Any corresponding realization of future income tax benefits resulting from the utilization of prior year losses available to the Company not previously recorded, as the Company did not meet the criteria for recognition, will be reflected as part of the Companys operating results as a recovery of future income taxes in the same period of filing the renunciations with the Canada Revenue Agency.    100   NOTE 2 . SIGNIFICANT ACCOUNTING POLICIES (Continued)  Income taxes Income taxes are accounted for using the liability method, which requires the recognition of taxes payable or refundable for the current period and future tax liabilities and assets for future tax consequences of events that have been recognized in the Companys financial statements or tax returns. The measurement of current and future tax liabilities and assets is based on provisions of enacted tax laws and the effects of future changes in tax laws or rates. The measurement of future tax assets is reduced, if necessary, by a valuation allowance, where, based on available evidence, the probability of realization of the future tax asset does not meet a more likely than not criterion. The Company has not recognized potential future benefit amounts as the criteria for recognition under GAAP have not been met.  Loss per share The Company is using the treasury stock method to determine the dilutive effect of stock options and other dilutive instruments.  The treasury stock method assumes that proceeds received from in-the-money stock options are used to repurchase common shares at the prevailing market rate.  Basic loss per share figures have been calculated using the weighted average number of shares outstanding during the respective periods.  Diluted loss per share figures are equal to those of basic loss per share for each year since the effects of the share purchase warrants and stock options have been excluded as they are anti-dilutive.  Comprehensive income The Company adopted CICA Handbook Section 1530, Comprehensive Income on January 1, 2008.  Section 1530 establishes standards for the reporting and presenting of comprehensive income which is defined as the change in equity from transaction and other events from non-owner sources.  Other comprehensive income refers to items recognized in comprehensive income that are excluded from net loss. At September 30, 2009 and 2008, the Company had no items that caused other comprehensive loss to be different than net loss.  Financial instruments The Companys financial instruments consist of cash and cash equivalents, receivables, and accounts payable. The value of the Companys arms length short term financial instruments is estimated by management to approximate their carrying values due to their immediate or short-term maturity.  Cash and cash equivalents are classified as held for trading; receivables are classified as loans and receivables; accounts payable are classified as other financial liabilities.  Net Smelter Royalties (NSR) are a form of derivative financial instrument.  The fair value of the Companys right to purchase the NSR is not determinable at the current stage of the Companys exploration program.  No value has been assigned by management. The Company does not engage in any form of derivative or hedging instruments.  Translation of foreign currency The financial statements of the Company's integrated foreign subsidiary is translated into Canadian dollar equivalents using the temporal method whereby all monetary assets and liabilities are translated at the rate of exchange at the balance sheet date. Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date.  Income and expenses are translated at rates which approximate those in effect on transaction dates. Gains and losses arising from translation of foreign currency monetary assets and liabilities at each period end are included in earnings.  Transaction amounts denominated in foreign currencies are translated into their Canadian dollar equivalents at exchange rates prevailing at the transaction date. Gains and losses arising from translation of foreign currency monetary assets and liabilities and transactions are included in earnings.  New accounting pronouncements not yet adopted  International financial reporting standards In 2006, the Canadian Accounting Standards Board (AcSB) published a strategic plan that will significantly affect financial reporting requirements for Canadian companies.  The AcSB strategic plan outlines the convergence of Canadian generally accepted accounting principles with IFRS over an expected five year transitional period.  In February 2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canadas own generally accepted accounting principles.  The date is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010.    101     The Company is currently evaluating the impact of adopting IFRS on its consolidated financial statements.  The Company is in the first phase of its transition program, which includes scoping to identify the significant accounting policy differences and their related areas of impact in terms of systems, procedures and financial statement presentation.  The Company also is in the assessment phase of the design and work plan to calculate the differences between IFRS and Canadian GAAP, and the impact on its financial statements, disclosures and operations.  The Company will address the design, planning, solution development and implementation of the conversion in 2010.  Business combinations  section 1582, consolidated financial statements  section 1601 and non-controlling interests  section 1602 The CICA issued three new accounting standards in January 2009:  Section 1582, Business Combinations, Section 1601, Consolidated Financial Statements and Section 1602, Non-Controlling Interests.  These new standards will be effective for fiscal years beginning on or after January 1, 2011.  Section 1582 replaces section 1581 and establishes standards for the accounting for a business combination.  It provides the Canadian equivalent to IFRS 3, Business Combinations.  Section 1601 and 1602 together replace section 1600, Consolidated Financial Statements.  Section 1601 establishes standards for the preparation of consolidated financial statements.  Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination.  It is equivalent to the corresponding provisions of IFRS IAS-27, Consolidated and Separate Financial Statements.  The Company is in the process of evaluating the requirements of the new standards.  NOTE 3 . EQUIPMENT


|          |         |                          |                |  |      |                          |               
|--------- | ------- | ------------------------ | -------------- |  | ---- | ------------------------ | --------------
|          |         | December 31,
2009        |                |  |      | December 31,
2008        |               
|          | Cost    | Accumulated
Amortization | Net Book
Value |  | Cost | Accumulated
Amortization | Net Book
Value
|          |         |                          |                |  |      |                          |               
|Equipment | $
5,148 | $
1,930                  | $
3,218        |  | $
-  | $
-                      | $
-           

102    NOTE 4. MINERAL PROPERTIES


|                   |                           |                   |                   |                           |                        |                   |                          
|------------------ | ------------------------- | ----------------- | ----------------- | ------------------------- | ---------------------- | ----------------- | -------------------------
|                   | Balance
December 31, 2007 | Additions         | Write-down        | Balance
December
31, 2008 | Additions (Recoveries) | Write-off         | Balance
December 31, 2009
|Acquisition costs: |                           |                   |                   |                           |                        |                   |                          
|Target Claims, NWT | $               1         | $               - | $               - | $                  1      | $            -         | $             (1) | $               -        
|Gold Hill, Alaska  | 382,897                   | 50,047            | -                 | 432,944                   | 91,500                 | (524,444)         | -                        
|MacInnis Lake, NWT | 110,000                   | -                 | (109,999)         | 1                         | -                      | (1)               | -                        
|C de Baca, NM      | 106,982                   | 65,581            | -                 | 172,563                   | 16,339                 | -                 | 188,902                  
|Diamond Peak, NV   | 43,187                    | 5,550             | -                 | 48,737                    | 1,370                  | -                 | 50,107                   
|Nustar Claims, AZ  | 440,453                   | 57,495            | -                 | 497,948                   | -                      | (497,948)         | -                        
|Ravin, NV          | 65,677                    | 50,366            | -                 | 116,043                   | 60,560                 | -                 | 176,603                  
|East Manhattan, NV | 38,073                    | 67,378            | -                 | 105,451                   | 45,888                 | -                 | 151,339                  
|Howell, BC         | -                         | 27,500            | -                 | 27,500                    | 10,000                 | -                 | 37,500                   
|Crowsnest, BC      | -                         | -                 | -                 | -                         | 8,817                  | -                 | 8,817                    
|Indata, BC         | -                         | 22,500            | -                 | 22,500                    | -                      | (22,500)          | -                        
|Table Top, NV      | -                         | -                 | -                 | -                         | 30,318                 | -                 | 30,318                   
|                   | 1,187,270                 | 346,417           | (109,999)         | 1,423,688                 | 264,792                | (1,044,894)       | 643,586                  
|                   |                           |                   |                   |                           |                        |                   |                          
|Exploration costs: |                           |                   |                   |                           |                        |                   |                          
|Gold Hill, Alaska  | 1,093,852                 | 1,415,727         | -                 | 2,509,579                 | 83,893                 | (2,593,472)       | -                        
|MacInnis Lake, NWT | 374,307                   | -                 | (374,307)         | -                         | -                      | -                 | -                        
|C de Baca,  NM     | 217,235                   | 18,361            | -                 | 235,596                   | -                      | -                 | 235,596                  
|Nustar Claims, AZ  | 1,963                     | 2,133             | -                 | 4,096                     | 1,392                  | (5,488)           | -                        
|Ravin, NV          | 11,698                    | 474,720           | -                 | 486,418                   | 17,930                 | -                 | 504,348                  
|East Manhattan, NV | -                         | 9,658             | -                 | 9,658                     | 53,448                 | -                 | 63,106                   
|Howell, BC         | -                         | 455,407           | -                 | 455,407                   | (17,606)               | -                 | 437,801                  
|Crowsnest, BC      | -                         | -                 | -                 | -                         | 248,429                | -                 | 248,429                  
|Indata, BC         | -                         | 338,478           | -                 | 338,478                   | 5,470                  | (343,948)         | -                        
|Table Top, NV      | -                         | -                 | -                 | -                         | 9,647                  | -                 | 9,647                    
|                   | 1,699,055                 | 2,714,484         | (374,307)         | 4,039,232                 | 402,603                | (2,942,908)       | 1,498,927                
|                   |                           |                   |                   |                           |                        |                   |                          
|                   | $   2,886,325             | $  3,060,901      | $  (484,306)      | $    5,462,920            | $667,395               | $(3,987,802)      | $  2,142,513             

Target Claims, Northwest Territories, Canada  During 2003, the Company acquired a 50% interest in a mineral claim comprising 1,781.9 acres located in the Longtom Lake area of the Northwest Territories (the Target 1 Claim).  During the year ended December 31, 2007, the Company recorded an impairment charge of $148,097 on the Target 1 Claim and during the year ended December 31, 2009, the Company elected to abandon the Target Claims and wrote-off the remaining $1 of acquisition costs to operations.  Gold Hill Property, Alaska, United States  During 2004, the Company entered into an option agreement to acquire an interest in the Gold Hill claims near Cantwell, Alaska.  Under the terms of the option agreement, the Company paid $45,173 (US$33,200) in acquisition costs and a further $18,518 (US$15,000) in advance royalties and issued 100,000 common shares with a fair value of $47,000 and 100,000 warrants with a fair value of$19,724 exercisable at $0.47 per share for a two year period.  In order to maintain the Option, the Company issued an additional 200,000 common shares effective December 31, 2004 with a fair value of $74,000 and a further 200,000 common shares during the year ended December 31, 2005 at a value of $120,000.  Gold Hill Property, Alaska, United States (continued)  The Company assumed all of the optionors obligations under their lease with GCO Minerals Corp. (GCO) which included the following minimum work commitments and advance royalty payments (in U.S. funds): NOTE 4. MINERAL PROPERTIES (continued)  Year               Work Commitment                      Advance Royalty 2004               $100,000 (incurred)                   $    5,000 (paid) 2005                 150,000 (incurred)                       15,000 (paid) 2006                 deferred to 2007 25,000 (paid) 2007                 250,000 (incurred)                        25,000 (paid) 2008                 250,000 (incurred)                        50,000 (paid) 2009                 500,000 (incurred)                        75,000 (paid) 2010                 500,000 (incurred)                      100,000 2011 500,000                                       100,000  Upon exercise of the option, the Company could earn up to a 90% interest in the Gold Hill claims, subject to a net smelter return (NSR) and back-in rights to GCO that would allow GCO to buy back up to a 30% interest in the Gold Hill claims by paying the Company the lesser of US$5,000,000 or 300% of all costs incurred to completion of a Feasibility Report.  The NSR royalty will fluctuate from 1.5% to 4.0% depending on the price of gold.  In addition, the Company will pay to the optionor an additional 1% NSR royalty.  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the Gold Hill Property: 20092008Drilling and assays$                  -$     916,983Field expenses11,928281,726Geological consulting51,570196,384Licenses, permits and lease
payments16,57313,756Travel3,8226,878$        83,893$  1,415,727  During the year ended December 31, 2009, the Company elected to abandon the Gold Hill property and wrote off $524,444 of acquisition costs and $2,593,472 of deferred exploration costs to operations during fiscal 2009.  MacInnis Lake, Northwest Territories, Canada  The Company entered into an option agreement dated April 1, 2005, as amended April 11, 2006 and September 29, 2008, with Alberta Star Development Corp. (Alberta Star), which commencing September 5, 2006 has a director in common, whereby the Company can earn an interest in the MacInnis Lake Uranium Project in the Northwest Territories.  The terms of the option agreement, as amended, call for payments as follows:  (i) cash payments totalling $30,000 (paid); (ii) the issuance to Alberta Star of 200,000 common shares of the Company (issued); and (iii) work commitments totalling $2,000,000 over a five year period ($250,000 on or before October 1, 2008 (incurred); $750,000 on or before October 31, 2009; $500,000 on or before October 1, 2010 and $500,000 on or before April 1, 2011).  The terms of the option agreement call for the Company to earn a 25% interest in the MacInnis Lake Project upon making the payments in (i) and (ii) above together with the first $1,000,000 in work commitments.  The Company may earn a further 25% interest when it completes the $2,000,000 in work commitments.  The MacInnis Lake property is subject to a 2% NSR royalty.  Upon full exercise of the option, the parties agree to enter into a joint venture agreement.  Alberta Star will act as operator on the MacInnis Lake project for the term of the option agreement.  During the year ended December 31, 2008, the Company recorded an impairment charge of $484,306 on the MacInnis Lake property and during the year ended December 31, 2009, the Company elected to abandon the MacInnis Lake property and wrote-off the remaining $1 of acquisition costs to operations.  C de Baca, New Mexico (NM), United States  On September 22, 2005, the Company entered into an agreement to acquire a total of 108 claims (the Dat Claims) in Socorro County, New Mexico, pursuant to an agreement with Applied Geologic Services, Inc. of Denver, Colorado.  Consideration for the acquisition of the Claims was US$10,000 cash payment (paid), with annual payments of US$10,000    103   NOTE 4. MINERAL PROPERTIES (continued)  until production.  After production, a royalty of 2% of gross revenues is payable until such time as a total of US$500,000 (including the initial cash payment and annual payments) has been paid.  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the C de Baca project: 20092008Drilling and assays$               -$               -Geological consulting-16,360Licenses, permits and lease payments-2,001$               -$    18,361  As at December 31, 2009, the BLM of New Mexico holds a $18,888 reclamation bond (2008 - $18,888) from the Company to guarantee reclamation of the environment on the C de Baca property.  Diamond Peak, Nevada, United States  On May 9, 2006, the Company entered into an Option Agreement to acquire a 100% interest in the FMC claims in Eureka County, Nevada, the Diamond Peak Property, from The Wendt Family Trust.  The Wendt Family Trust is controlled by Clancy J. Wendt, the Vice President of Exploration for the Company.  The terms of the Option Agreement require the issuance to the Wendt Family Trust of 100,000 escrowed shares (issued) of the Company with a fair value of $40,000 and the following rental payments:  Date Payment Amount Upon execution of the Agreement $ 25,000 (U.S.) (paid) May 9, 2007 35,000 (U.S.) (paid) May 9, 2008 45,000 (U.S.) (paid subsequent to December 31, 2009) Each anniversary thereafter for 10 years 50,000 (U.S.) (paid subsequent to December 31, 2009)  The Company may purchase the property for US$300,000.   If the option to purchase the property is exercised during the term of the rental payments, no further property rental payments will be due.  The Diamond Peak property will be subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the property.  On May 15, 2006, as amended September 30, 2009 the Company entered into a mineral property Option Agreement with Kokanee Placer Ltd. (Kokanee), a British Columbia company, whereby it granted Kokanee the right to acquire up to a 51% interest in the Diamond Peak Property in consideration of a cash payment of US$25,000 (received) and the issuance of 100,000 common shares (received subsequent to December 31, 2009) of Kokanee to the Company upon completion of Kokanees public listing (completed in January, 2010).  In addition, the following annual payments and share issuances are due from Kokanee to the Company:  a) By May 15, 2007:  pay US$35,000 to the Company (received) and issue 200,000 common shares (received subsequent to December 31, 2009); b) Five days after the listing of Kokanees common shares on the TSX Venture Exchange (TSX-V):   issue 300,000 common shares and pay $95,000 to the Company (received subsequent to December 31, 2009); c) On or before May 9, 2010 and on each anniversary thereof up to and including May 9, 2016, pay US$50,000 to the Company;and d) On commencement of commercial production, issue 1,000,000 shares of Kokanee to the Company.  The option granted to Kokanee is for a term of three years from the date of the agreement, subject to the following annual mineral exploration commitments: a) $100,000 to be spent by Kokanee in the first year of the agreement (incurred); b) $300,000 in the second year, and c) $600,000 in the third year.  The Company did not incur any exploration expenses on the Diamond Peak project during the year ended December 31, 2009 or 2008.    104   NOTE 4. MINERAL PROPERTIES (continued)  Nustar Claims, Arizona, United States  On April 4, 2007, the Company entered into an agreement with Nustar Exploration LLC, a private Arizona limited liability corporation, for the acquisition of a 100% interest in 427 mineral claims located in northwest Arizona.  Under the terms of the agreement, the Company acquired a 100% interest in the claims by making a cash payment of $142,126 (US$128,100) (paid) and issuing 200,000 shares of common stock with a fair value of $1.21 per share totalling $242,000, subject to a gross royalty of 4% (the Royalty) of sales revenue from commercial production of uranium from the claims.   For each breccia pipe identified on the claims that goes into commercial production, the Company shall have the right to purchase 3% of the 4% Royalty on that breccia pipe by payment of US$1,000,000.  The Company has also paid filing fees of $113,822, which have been capitalized as acquisition costs.  During the year ended December 31, 2009, the Company incurred $1,392 of geological consulting expenses on the Nustar project.  In September 2009, the Company elected to abandon the Nustar project and wrote off $497,948 of acquisition costs and $5,488 of deferred exploration costs to operations during the period.  Ravin Claims, Nevada. United States  On September 10, 2007, the Company entered into an Option Agreement with Energex LLC (Energex), a Nevada corporation, for the acquisition of a 100% interest in the Ravin molybdenum/tungsten property, 162 mineral claims located in Lander County, Nevada.  Energex is wholly-owned by Clancy J. Wendt, the Vice President of Exploration for the Company.  The terms of the Option Agreement with Energex call for the payment of $4,996 (US$5,000) on execution of the agreement (paid), $26,722 (US$25,000) by September 10, 2008 (paid), $38,700 (US$35,000) by September 10, 2009 (paid) and US$50,000 on each anniversary thereafter.  The Ravin Property is subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the project.  In addition, the Company has paid filing fees of $106,185, which have been included in acquisition costs.  Ravin Claims, Nevada. United States (continued)  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the Ravin Claims:  20092008Drilling and assays$       3,929$    257,384Geological consulting12,930119,206Field expenses1,07194,601Licenses, permits and lease payments-3,529$    17,930$    474,720  As at December 31, 2009, the BLM of Nevada holds a $8,046 reclamation bond (2008 - $8,046) from the Company to guarantee reclamation of the environment on the Ravin property.  East Manhattan, Nevada, United States  On December 4, 2007, the Company entered into an Option Agreement with MSM LLC (MSM), a Nevada corporation, for the acquisition of a 100 % interest in the East Manhattan Wash mineral claims located in Nye County, Nevada.  The terms of the Option Agreement with MSM call for the payment of $27,874 (US$28,000) on execution of the agreement (paid), $25,029 (US$20,000) by December 4, 2008 (paid), US$25,000 by December 4, 2009 (paid), US$40,000 by December 4, 2010, US$50,000 by December 4, 2011 and US$100,000 by December 12, 2012.  The East Manhattan Property is subject to a 3% NSR royalty.  Upon full exercise of the option, the Company will own 100% of the project.     105   NOTE 4. MINERAL PROPERTIES (continued)  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the East Manhattan Project: 20092008Drilling and assays$       12,763$        756Geological consulting35,1337,688Field expenses5,5521,214$       53,448$    9,658  Howell and Crowsnest, British Columbia, Canada  On June 9, 2008, the Company entered into an Option Agreement with Eastfield Resources Ltd. (Eastfield), whereby the Company may acquire a 60% interest in the Howell Gold Project in Southeast British Columbia.  The terms of the Option Agreement with Eastfield call for the payment of $10,000 (paid) and the issuance of 50,000 common shares of the Company on commencement of drilling (issued - Note 6), the payment of $20,000 or the issuance of a further 50,000 common shares by June 1, 2009, the payment of $35,000 by June 1, 2010 and the payment of $55,000 and a further 200,000 common shares of the Company by June 1, 2011.  The Company also agreed to incur $1,250,000 of exploration expenditures within the following timeframe; $350,000 of exploration expenditures on the property by June 1, 2009 (completed), a further $250,000 by June 1, 2010 and a further $650,000 by June 1, 2011.  On July 23 2009, the Company agreed with Eastfield to amend the Howell property agreement to allow the Company to earn a 60% interest in either the Howell or the Crowsnest projects over a four year period by making cash payments totalling $60,000 to Eastfield (of which $10,000 was paid on signing of the amended agreement), issuing 100,000 shares (of which 50,000 shares were issued on signing of the amended agreement at $0.125 per share for a total of $6,250, Note 6) and by completing aggregate exploration expenditures on both properties of $400,000 by the second anniversary date (June 30, 2011).  Following that date, the Company can earn its 60% interest in Howell by making further cash payments totalling $90,000, issuing 400,000 shares and spending a further $700,000 on exploration prior to June 30, 2013.  The Company will also be responsible for its portion of the $200,000 payment due to Goldcorp Inc. and Teck Cominco Metals Limited by August 31, 2010 pursuant to Eastfields underlying option agreement with them.  To earn its 60% interest in Crowsnest, the Company must make further cash payments to Eastfield of $90,000, issue 400,000 shares and spend a further $1,050,000 on exploration at Crowsnest prior to June 30, 2013.  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the Howell property:  20092008Drilling and assays$                 -$     238,709Geological consulting3,07859,222Field expenses-157,476BC mining tax recovery(20,684)-$     (17,606)$    455,407  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the Crowsnest property:  20092008Drilling and assays$     112,088$                 -Geological consulting52,524-Field expenses83,817-$     248,429$                 -  Subsequent to December 31, 2009, the Government of British Columbia announced that it intends to halt all ongoing mineral exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Howell and Crowsnest properties are located.  The Company has been contacted by the Ministry of Energy , Mines and Petroleum Resources to initiate discussions with respect to compensation.     106   NOTE 4. MINERAL PROPERTIES (continued)  Indata, British Columbia, Canada  On June 9, 2008, the Company entered into an Option Agreement with Eastfield for the acquisition of a 60% interest in the Indata Gold and Copper Project in North Central British Columbia.  The terms of the Option Agreement with Eastfield call for the payment of $10,000 (paid) and the issuance of 50,000 common shares (issued) of the Company on commencement of drilling, the payment of $20,000 or the issuance of a further 50,000 common shares by June 1, 2009, the payment of $35,000 by June 1, 2010 and the payment of $55,000 and the issuance of a further 200,000 common shares of the Company by June 1, 2011.  The Company has also agreed to incur $1,150,000 of exploration expenditures within the following timeframe; $250,000 of exploration expenditures on the property by June 1, 2009 (completed), a further $250,000 by June 1, 2010 and a further $650,000 by June 1, 2011.  During the years ended December 31, 2009 and 2008, the Company incurred the following exploration costs on the Indata property:  20092008Drilling and assays$                 -$     172,893Geological consulting5,47028,898Field expenses-136,687$         5,470$    338,478  In June 2009, the Company elected to abandon the Indata property and wrote off $22,500 of acquisition costs and $343,948 of deferred exploration costs to operations.  Table Top, Nevada, United States  On August 31, 2009, the Company entered into an Option Agreement with Energex to acquire a 100% interest in the Table Top claims in Humboldt County Nevada.  The terms of the Option Agreement with Energex require the payment of $5,400 (US$5,000) upon execution of the Agreement (paid), US$25,000 on the first anniversary of the Agreement, US$35,000 on the second anniversary of the Agreement and US$50,000 on each anniversary thereafter.  The Table Top property is subject to a 3% NSR royalty.  Upon full exercise of the Option Agreement, the Company will own 100% of the project.  During the year ended December 31, 2009, the Company incurred $9,647 for consulting fees on Table Top.   NOTE 5. RELATED PARTY TRANSACTIONS  During the year ended December 31, 2009, management fees of $120,000 (2008 - $120,000; 2007 - $90,000) were paid or accrued to a private company controlled by a director.  This transaction was measured at the exchange amount as agreed to by the related parties.      107   NOTE 6. SHARE CAPITAL  Authorized: Unlimited number of voting common shares without par value Unlimited number of preferred shares without par value


|                                              |                  |                 |                         |                    
|--------------------------------------------- | ---------------- | --------------- | ----------------------- | -------------------
|                                              | Number of Shares | Share Capital   | Share Purchase Warrants | Contributed Surplus
|Common Shares Issued:                         |                  |                 |                         |                    
|Balance at December 31, 2007                  | 21,549,230       | $    13,230,666 | $     288,562           | $     855,264      
|Renunciation of flow-through shares           | -                | (263,748)       | -                       | -                  
|Shares issued for mineral properties (Note 4) | 100,000          | 30,000          | -                       | -                  
|Stock-based compensation                      | -                | -               | -                       | 451,965            
|                                              |                  |                 |                         |                    
|Balance at December 31, 2008                  | 21,649,230       | 12,996,918      | 288,562                 | 1,307,229          
|Shares issued for mineral property (Note 4)   | 50,000           | 6,250           | -                       | -                  
|Stock-based compensation                      | -                | -               | -                       | 86,256             
|                                              |                  |                 |                         |                    
|Balance at December 31, 2009                  | 21,699,230       | $    13,003,168 | $   288,562             | $   1,393,485      

Stock Options  The Company has a stock option plan where the directors are authorized to grant options to executive officers and directors, employees and consultants enabling them to acquire up to 20% of the issued and outstanding common stock of the Company to a maximum of 4,309,846.  Under the plan, the exercise price of each option shall not be less than the closing price of the Companys shares on the date of grant less any discount permitted by the TSX-V and vesting terms are at the discretion of the board of directors.  The options can be granted up to a maximum term of 5 years as long as the Company is classified as a Tier 2 issuer under the policies of the TSX -V.  On April 5, 2007, the Company granted stock options to a consultant entitling him to purchase 50,000 common shares at a price of $1.09 per share to April 5, 2009.  These options vested immediately.  The granting of these options resulted in a stock based compensation expense of $23,645 being recorded, representing the fair value of the options.  The total fair value was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 4.10% and an expected volatility of 76%.  On July 27, 2007, the Company granted stock options to directors, officers and consultants entitling them to purchase 875,000 common shares at a price of $1.05 per share to July 27, 2010.  These options vested immediately.  The granting of these options resulted in a stock based compensation expense of $447,752 being recorded, representing the fair value of the options.  The total fair value was estimated using the Black-Scholes option pricing model assuming an expected life of 3 years, a risk-free interest rate of 4.61% and an expected volatility of 77%.  A further 200,000 options exercisable at $1.05 per share until July 27, 2009 were granted to consultants at this same time, with these options vesting over a one-year period.  The total fair value of $84,240 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 4.64% and an expected volatility of 77%.  The granting of these options resulted in a stock based compensation expense of $42,120 being recorded, representing the fair value of the options vested during the period.  The remainder of $42,120 was expensed on vesting in 2008.  These options were cancelled during the third quarter of fiscal 2008.  On August 30, 2007, the Company granted stock options to a consultant entitling him to purchase 225,000 common shares at a price of $0.81 per share to August 30, 2009.  These options vest over a one-year period.   The total fair value of $69,810 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 4.21% and an expected volatility of 79%.  The granting of these options resulted in a stock based compensation expense of $23,268 being recorded, representing the fair value of the options vested during the period.   An amount of $17,451 was expensed on vesting in 2008.  These options were cancelled during the second quarter of fiscal 2008.  The fair value of the cancelled and unvested options was $29,091.  On October 5, 2007, the Company granted stock options to consultants entitling them to purchase 75,000 common shares at a price of $0.85 per share to October 5, 2009.  These options vested immediately.  The granting of these options resulted in a stock based compensation expense of $28,603 being recorded, representing the fair value of the options vested during the period.  The total fair value was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 4.36% and an expected volatility of 79%.  On December 4, 2007, the Company granted stock options to a consultant entitling him to purchase 200,000 common shares at a price of $0.80 per share to December 4, 2009.  These options vest over a one-year period.    108   NOTE 6. SHARE CAPITAL (Continued)  Stock Options (continued)  The total fair value of $59,991 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 3.78% and an expected volatility of 82%.  The granting of these options resulted in a stock based compensation expense of $5,000 being recorded in 2007 and $54,991 being recorded in 2008, representing the fair value of the options vested during the year.  These options were cancelled during the fourth quarter of fiscal 2008, after they had fully vested.  On April 2, 2008, the Company granted stock options to a consultant entitling the optionee to purchase 200,000 common shares at a price of $0.41 per share to April 2, 2010.  These options were to vest over a one-year period.  The total fair value of $41,414 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 2.90% and an expected volatility of 90%.  The granting of these options resulted in a stock-based compensation expense of $27,609 being recorded in fiscal 2008, representing the fair value of the options vested.  These options were cancelled during the fourth quarter of fiscal 2008.  The fair value of the cancelled and unvested options was $13,805.  On August 1, 2008, the Company granted stock options to directors, officers and consultants entitling them to purchase 1,150,000 common shares at a price of $0.35 per share to August 1, 2011.  These options vested immediately.  The total fair value of $219,996 was estimated using the Black-Scholes option pricing model assuming an expected life of 3 years, a risk-free interest rate of 3.03% and an expected volatility of 96.7%.  The granting of these options resulted in a stock-based compensation expense of $219,996 being recorded in fiscal 2008.  On October 31, 2008, the Company granted stock options to directors, officers and consultants entitling them to purchase 575,000 common shares at a price of $0.17 per share to October 31, 2011.  These options vested immediately.  The total fair value of $66,046 was estimated using the Black-Scholes option pricing model assuming an expected life of 3 years, a risk-free interest rate of 2.33% and an expected volatility of 117%.  The granting of these options resulted in a stock based compensation expense of $66,046 being recorded in fiscal 2008.  On July 3, 2009, the Company granted stock options to a consultant entitling them to purchase 250,000 common shares at a price of $0.17 per share to July 3, 2011.  These options vested immediately.  The total fair value of $23,720 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.16% and an expected volatility of 140%.  The granting of these options resulted in a stock based compensation expense of $23,720 being recorded in fiscal 2009.  On October 19, 2009, the Company granted stock options to two consultants entitling them to purchase 250,000 common shares at a price of $0.40 per share to October 19, 2011.  Of these options, 200,000 vested immediately, and 50,000 options vest over a 1 year period.  The total fair value of $73,572 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 1.52% and an expected volatility of 123.5%.  The granting of these options resulted in a stock based compensation expense of $62,536 being recorded in fiscal 2009.  Subsequent to December 31, 2009, the 50,000 stock options were cancelled and the remaining $11,036 will never be recorded as the consultant ceased to provide services as of January 1, 2010.     109   NOTE 6. SHARE CAPITAL (Continued)  Stock options (continued)  The following table summarizes information about stock option transactions:  Outstanding
OptionsWeighted
Average
Exercise PriceWeighted
Average Remaining
Contractual LifeWeighted average grant
date fair valueBalance, December 31, 20072,150,000$  0.861.75 yearsOptions granted1,925,0000.302.90 years$ 0.17Options cancelled and expired(2,225,000)0.82-Balance, December 31, 20081,850,0000.342.33 yearsOptions granted500,0000.292.00 years$ 0.19Options cancelled and expired(125,000)0.95-Balance, December 31, 20092,225,000$  0.291.67 years  Exercisable at December 31, 20092,187,500$  0.291.67 years  As at December 31, 2008, the Company had no unvested stock options.  During the year ended December 31, 2009, the Company granted 500,000 stock options of which 50,000 had vesting provisions.  As at December 31, 2009, 12,500 of these options had vested and the Company had 37,500 stock options remaining to be vested during fiscal 2010.  The following incentive stock options were outstanding at December 31, 2009:  Number of options outstandingExercise PriceExpiry Date250,000$0.17July 3, 20111,150,0000.35August 1, 2011250,0000.40October 19, 2011575,0000.17October 31, 20112,225,000  Warrants  The following table summarizes information about warrant transactions:  Outstanding
WarrantsWeighted
Average
Exercise PriceWeighted
Average Remaining
Contractual LifeBalance, December 31, 20076,163,095$   0.820.97 yearsWarrants issued250,0001.292.00 yearsWarrants cancelled and expired(6,163,095)0.70-Balance, December 31, 2008250,0001.230.79 yearsWarrants cancelled and expired(250,000)1.23-Balance, December 31, 2009-$         --  On June 15, 2008, the Company issued warrants to a consultant for investment banking and other services for a term of one year, entitling them to purchase 250,000 common shares at a price of $0.40 per share to June 16, 2010.  These warrants vested on a monthly basis over a one year period.  The total fair value of $40,718 was estimated using the Black-Scholes option pricing model assuming an expected life of 2 years, a risk-free interest rate of 3.40% and an expected volatility of 87%.  The issuance of these warrants resulted in a stock based compensation expense of $23,752 being recorded in the year ended December 31, 2008, representing the fair value of the warrants vested.  The remaining $16,966 will never be recorded as the consultant ceased to provide services as of January 1, 2009.  There were no warrants outstanding as at December 31, 2009.     110    NOTE 7. INCOME TAXES  The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Companys loss before income taxes.  The components of these differences are as follows: 200920082007Loss before taxes for the year$ (4,660,805)$ (1,412,762)$  (1,093,554)Expected income tax recovery at blended rate34%31%34%(1,582,176)(437,956)(371,808)Non-deductible items25,877140,109244,445Items deductible for tax purposes--(66,600)Other261,129280,234-Change in valuation allowance1,295,170(246,135)193,963Future income tax recovery$                  -$    (263,748)$                   -  The significant components of the Companys tax effected future income tax assets are as follows:  20092008Non-capital losses$
970,682$
552,237Equipment1,5031,548Resource properties1,074,772149,031Share issuance costs95,078144,0492,142,035846,865Valuation allowance(2,142,035)(846,865)Net future tax assets$
-$
-  The Company has non-capital losses of approximately $2,670,000 (2008: $2,072,000) which may be available to offset future income for Canadian income tax purposes which expire over the next twenty years.  In addition, there are resource-related expenditures of approximately $1,121,000 (2008: $866,000) which may be used to offset future taxable Canadian resource income indefinitely, subject to annual rates prescribed by the Canadian Income Tax Act.  The Company also has foreign tax losses totalling approximately US$825,000 (2008: US$453,000) which may be available to reduce future years taxable income and which will expire, if not utilized, commencing in 2027. In addition, there are foreign resource-related expenditures of approximately US$3,745,000 (2008: US$3,705,000) available to reduce taxable income in future years.  Due to the uncertainty of realization of these loss carryforwards and resource pools, the benefits have not been reflected in the financial statements as the Company has provided a full valuation allowance for the potential future tax assets resulting from these loss carryforwards and resource pools.    111    NOTE 8. SUPPLEMENTARY CASH FLOW DISCLOSURE  20092008Cash paid for:
Interest$-$               -Income taxes$-$                -  During the year ended December 31, 2009, the Company issued 50,000 common shares with a fair value of $6,250 for the acquisition of the Crowsnest property (Note 4).  During the year ended December 31, 2009, the Company incurred mineral property expenditures of $28,400 (2008 - $32,693) included in accounts payable and accrued liabilities.  During the year ended December 31, 2008, the Company issued 100,000 common shares with a fair value of $30,000 for the acquisition of mineral properties (Note 4).  NOTE 9. SEGMENTED INFORMATION  The Company's income, loss and assets are located in the following geographic locations:  CanadaUnited StatesConsolidatedDecember 31, 2009Interest income$95,470$-$95,470Amortization$-$1,930$1,930Stock-based compensation$86,256$-$86,256Net loss$(982,129)$(3,678,676)$(4,660,805)Additions to long-lived assets$255,110$417,433$672,543Identifiable assets$3,883,462$1,441,541$5,325,003December 31, 2008Interest income$273,890$-$273,890Amortization$-$-$-Stock-based compensation$451,965$-$451,965Net loss$(1,084,476)$(64,538)$(1,149,014)Additions to long-lived assets$843,885$2,217,016$3,060,901Identifiable assets$5,331,055$4,651,059$9,982,114December 31, 2007Interest income$222,290$-$222,290Amortization$-$-$-Stock-based compensation$570,388$-$570,388Net loss$(1,043,158)$(50,396)$(1,093,554)Additions to long-lived assets$130,792$1,531,933$1,662,725Identifiable assets$8,345,733$2,455,349$10,801,082   NOTE 10. CAPITAL MANAGEMENT  The capital structure of the Company consists of common shares and working capital. The Companys objectives when managing capital are to: (i) preserve capital, (ii) obtain the best available net return, and (iii) maintain liquidity.  The Company manages the capital structure and makes adjustments to it in light of changes in economic condition and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash and cash equivalents and investments.  The Companys policy is to invest its excess cash in highly liquid, fully guaranteed, bank-sponsored instruments.  This strategy is unchanged from 2008.  The Company is not subject to externally imposed capital restrictions.  There were no changes to its capital management approach in the year.    112     NOTE 11. RISK MANAGEMENT  Management of Industry Risk The Company is engaged primarily in mineral exploration and manages related industry risk issues directly.  The Company may be at risk for environmental issues and fluctuations in commodity pricing.  Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations.  Management of Financial Risk The Companys financial instruments are exposed to certain financial risks, which include credit risk, liquidity risk, and market risk.  Credit Risk Credit risk is the risk that one party to a financial instrument will fail to fulfil an obligation causing the other party to incur a financial loss.  The Company is exposed to credit risks arising from its cash holdings.  The Company manages credit risk by placing cash with reputable Canadian financial institutions and management believes the risk of loss to be remote. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.  Liquidity Risk Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due.  To manage liquidity risk, the Company reviews additional sources of capital to continue its operations and discharge its commitments as they become due.  Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.  Market risk comprises three types of risk: currency risk, interest rate risk and price risk.  Currency Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.  The Companys functional currency is the Canadian dollar.  There is moderate currency risk to the Company as some mineral property interests are located in the United States.  The Company manages its exposure to this risk by operating in a manner that minimizes its exposure to the extent practical.  The Company does not engage in any form of derivative or hedging instruments to reduce its foreign currency risk.  Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.  The Company is not exposed to significant interest rate risk.   NOTE 12. SUBSEQUENT EVENTS  Subsequent to December 31, 2009, the Government of British Columbia announced that it intends to halt all ongoing mineral exploration work and prohibit any future mine development in the Flathead Valley in southeastern British Columbia where the Companys Howell and Crowsnest properties are located.  The Company has been contacted by the Ministry of Energy, Mines and Petroleum Resources to initiate discussions with respect to compensation (Note 4).  Subsequent to December 31, 2009 the Company received option payments of $95,000 and 600,000 shares from Kokanee, and paid $95,000 in options payments on the Diamond Peak Property (Note 4).     113    NOTE 13. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES  These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP) which differ in certain respects with accounting principles generally accepted in the United States and from practices prescribed by the Securities and Exchange Commission (collectively US GAAP).  Material differences to these financial statements are as follows:  a) Exploration stage enterprise: Under US accounting standards, the Company is considered to be an enterprise in the exploration stage as substantially all of its efforts have been directed towards the investigation of business opportunities and exploration of resource properties.  Accounting principles for exploration stage enterprises require the specific disclosure of this fact and the presentation of certain cumulative information from the inception of the exploration stage.  However, it does not require any changes in the measurement of assets, liabilities, revenues or expenses from that set out in the financial statements prepared in accordance with Canadian GAAP.  b) Statement of stockholders equity: US accounting standards require a separate Statement of Stockholders Equity disclosing historical transactions from inception.  The information required in this statement is otherwise presented in the current and prior years notes to the financial statements.  c) Mineral property costs: Under Canadian GAAP, mineral property acquisition, exploration and development costs may be deferred and amortized as disclosed in Note 2.  Under US GAAP, pursuant to EITF 04-2, mineral rights are classified as tangible assets and accordingly acquisition costs are capitalized as mineral property costs.  Under US GAAP mineral property exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized.  As of the date of these financial statements, the Company has determined that all exploration costs should be expensed under US GAAP as the Company has not established any proven or probable reserves on its mineral properties.  d) Stock-based compensation: The Company has previously granted stock options to certain directors, employees and consultants.  Under Canadian GAAP, prior to 2003, no compensation expense was recorded in connection with the granting of stock options.  Under previous US GAAP, the Company accounted for stock-based compensation in respect of stock options granted to directors and employees using the intrinsic value based method in accordance with APB Opinion No. 25.  Stock options granted to non-employees were accounted for by applying the fair value method using the Black-Scholes option pricing model in accordance with Statement of Financial Accounting Standards No. 123 (SFAS 123).  Commencing January 1, 2003, under Canadian GAAP the Company expenses the fair value of all stock options granted and under US GAAP has elected to prospectively change its accounting policy to account for all stock options granted in accordance with SFAS 123.  On December 16, 2004, the FASB issued SFAS 123(R), Share-Based Payment, which is a revision of SFAS 123.  SFAS 123(R) supersedes APB Opinion 25, and amends SFAS 95, Statement of Cash Flows.  SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values at the date of grant.  As a result, effective January 1, 2003, there was no material difference between the Companys accounting for stock options under US GAAP versus Canadian GAAP.     114   NOTE 13. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)   e) Summary of financial statement information The effect of the accounting differences for mineral property costs and stock-based compensation are as follows:


|                                   |                         |                                            |                      |                 
|---------------------------------- | ----------------------- | ------------------------------------------ | -------------------- | ----------------
|Consolidated Balance Sheets        | Year ended December 31, | Cumulative from April 25, 1994 (inception)
|2009                               | 2008                    | 2007                                       | to December 31, 2009
|Total assets, Canadian GAAP        | $    5,325,003          | $   9,982,114                              |                      |                 
|Mineral property exploration costs | (1,498,927)             | (4,039,232)                                |                      |                 
|Total assets, US GAAP              | $    3,826,076          | $   5,942,882                              |                      |                 
|                                   |                         |                                            |                      |                 
|Deficit, Canadian GAAP             | $   (9,417,671)         | $  (4,756,866)                             | $  (3,607,852)       | $    (9,417,671)
|Mineral property exploration costs | (1,498,927)             | (4,039,232)                                | (1,699,055)          | (1,498,927)     
|Stock-based compensation           | (6,611)                 | (6,611)                                    | (6,611)              | (6,611)         
|Deficit, US GAAP                   | $ (10,923,209)          | $  (8,802,709)                             | $  (5,313,518)       | $  (10,923,209) 




|                                      |                 |                |                |                 
|------------------------------------- | --------------- | -------------- | -------------- | ----------------
|Consolidated Statements of Operations |                 |                |                |                 
|Net loss, Canadian GAAP               | $   (4,660,805) | $  (1,149,014) | $  (1,093,554) | $    (9,417,671)
|Mineral property exploration costs    | (311,848)       | (2,340,177)    | (1,092,362)    | (4,351,080)     
|Stock-based compensation              | -               | -              | -              | (6,611)         
|Net loss, US GAAP                     | $   (4,972,653) | $  (3,489,191) | $  (2,185,916) | $  (13,775,362) 
|                                      |                 |                |                |                 
|Basic net loss per share, US GAAP     | $  (0.23)       | $  (0.16)      | $  (0.13)      |                 




|                                                                     |                 |                |                |                
|-------------------------------------------------------------------- | --------------- | -------------- | -------------- | ---------------
|Consolidated Statements of Cash Flows                                |                 |                |                |                
|Cash used in operating activities, Canadian GAAP                     | $   (620,508)   | $   (369,717)  | (599,581)      | (3,097,998)    
|Interest in unproven mineral properties                              | (402,603)       | (2,340,177)    | (1,092,3662)   | (5,535,202)    
|Cash used in operating activities, US GAAP                           | $   (1,023,111) | $ (2,709,894)  | $  (1,691,943) | $  (8, 633,200)
|                                                                     |                 |                |                |                
|Cash used in investing activities, Canadian GAAP                     | $   (637,892)   | $ (2,914,050)  | $  (1,449,169) | $  (6,270,180) 
|Interest in unproven mineral properties                              | 402,603         | 2,340,177      | 1,092,362      | 5,428,319      
|Cash used in investing activities, US GAAP                           | $   (235,290)   | $    (573,873) | $    (356,807) | $    (841,861) 
|                                                                     |                 |                |                |                
|Net cash provided by financing activities, Canadian GAAP and US GAAP | $   -           | $   -          | $ 8,829,677    | $ 4,931,208    

Recent accounting pronouncements adopted:  During 2009, the Company adopted the Financial Accounting Standards Board ("FASB") Accounting Standards Update No. 2009-01, "Amendments based on Statement of Financial Accounting Standards No. 168  The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles" (the "Codification").  The Codification became the single source of authoritative GAAP in the United States, other than rules and interpretive releases issued by the United States Securities and Exchange Commission ("SEC"). The Codification reorganized GAAP into a topical format that eliminates the previous GAAP hierarchy and instead established two levels of guidance  authoritative and non-authoritative.  All non-grandfathered, non-SEC accounting literature that was not included in the Codification became non-authoritative. The adoption of the Codification did not change previous GAAP, but rather simplified user access to all authoritative literature related to a particular accounting topic in one place.  Accordingly, the adoption had no impact on the Companys consolidated financial position or results of operations.  All prior references to previous GAAP in the Companys consolidated financial statements were updated for the new references under the Codification  On July 1, 2009, the Company adopted authoritative guidance issued by the FASB on business combinations. The guidance retains the fundamental requirements that the acquisition method of accounting (previously referred to as the purchase method of accounting) be used for all business combinations, but requires a number of changes, including changes in the way assets and liabilities are recognized and measured as a result of business combinations. It also requires the capitalization of in-process research and development at fair value and requires the expensing of acquisition-related costs as incurred. Adoption of the new guidance had no material impact on the Companys financial statements.  On July 1, 2009, the Company adopted the authoritative guidance issued by the FASB that changes the accounting and reporting for non-controlling interests. Non-controlling interests are to be reported as a component of equity separate from the parents equity, and purchases or sales of equity interests that do not result in a change in control are to be accounted for as equity transactions. In addition, net income attributable to a non-controlling interest is to be included in net income and,    115   NOTE 13. UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)  upon a loss of control, the interest sold, as well as any interest retained, is to be recorded at fair value with any gain or loss recognized in net income. Adoption of the new guidance had no material impact on the Companys financial statements..  On July 1, 2009, the Company adopted the authoritative guidance on fair value measurement for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Adoption of the new guidance had no material impact on the Companys financial statements.  Recent Accounting Guidance Not Yet Adopted  In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for the Company beginning July 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. The Company believes adoption of this new guidance will have no impact on the Companys financial statements.    116      Item 18. Financial Statements  Not applicable as our consolidated financial statements have been prepared in accordance with Item 17.    Item 19. Exhibits  The following exhibits are filed as part of this Annual Report:  1. Certificate of Incorporation and Certificate of Amendment and Registration of Restated Articles and Bylaws (1) 4.  Material Contracts 4.1 Management Agreement dated May 8, 2002 between Vancan Capital Corp. and West Oak Capital Group Ltd.(2) 4.2 Option Agreement dated May 17, 2004 between MAX Resource Corp. and Zazu Exploration, Inc. to acquire an interest in the Gold Hill Project near Cantwell, Alaska.(3) 4.3 Mineral Property Option Agreement with Alberta Star Development Corp. to acquire up to a 50% interest in the MacInnis Lake Uranium Property dated April 1, 2005.(3) 4.4 Mineral Property Option Agreement between the Wendt Family Trust and the Company dated May 9, 2006 optioning 100% of the Diamond Peak Property to the Company. (4) 4.5 Mineral Property Option Agreement between Kokanee Placer Ltd. and the Company dated May 15, 2006 granting Kokanee Place Ltd. the right to acquire up to a 51% interest in the Diamond Peak Property. (4) 4.6 Agreement dated September 22, 2005 between the Company and Applied Geological Services, Inc. regarding the acquisition by the Company of the C de Baca Project claims. (4) 4.7 Agreement dated April 4, 2007 between NUSTAR Exploration LLC and the Company for the acquisition of the mineral claims in Colorado Plateau, Arizona. (5) 4.8 Mineral Property Option Agreement dated September 10, 2007 between Energex LLC and us to acquire a 100% interest in the Ravin molybdenum/tungsten property in Lander County, Nevada (6) 4.9 Mineral Property Option Agreement between MSM LLC and us dated December, 2007 to acquire a 100% interest in the East Manhattan Wash claims in the Manhattan Mining District, Nye County, Nevada.(6) 4.10 Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated June 9, 2008 to acquire a 60% interest in and to the Indata project located in North Central B.C.(6) 4.11 Mineral Property Option Agreement between Eastfield Resource Ltd. and us dated June 9, 2008 to acquire a 60% interest in and to the Howell property in southeastern B.C.(6) 4.12 Consulting Agreement dated October 1, 2008 between MAX Resource Corp. and West Oak Capital Group, Inc.(7) 4.13 Consulting Agreement dated October 1, 2008 between MAX Resource Corp. and Clarence Wendt;(7) 4.14 Mineral Property Option Amending Agreement between Eastfield Resource Ltd. And us dated July 24,   2009 to acquire up to a 60% interest in and to either the Howell property or the Crowsnestproperty in   southeastern BC 4.15 Mineral Property Lease and Option to Purchase Agreement between Energex, LLC and us, and dated   September 1, 2009 to acquire the Table Top property in Humboldt County, Nevada.  8.1 Subsidiary of the Company  12.1 Section 302 Certification of CEO  12.2 Section 302 Certification of CFO  13.1 Section 906 Certification of CEO and CFO  (1) incorporated by reference from our Form 20-F that was originally filed with the commission on June 8, 2001. (2) incorporated by reference from our Form 20-F that was originally filed with the commission on June 27, 2003. (3) incorporated by reference from our Form 20-F that was originally filed with the commission on June 29, 2005. (4) incorporated by reference from our Form 20-F that was originally filed with the commission on June 30, 2006. (5) incorporated by reference from our Form 20-F that was originally filed with the commission on July 2, 2007. (6) incorporated by reference from our Form 20-F that was originally filed with the commission on June 25, 2008. (7) incorporated by referencefrom our Form 20-F that was originally filed with the commission on April 22, 2009.    117    SIGNATURES  The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.  MAX RESOURCE CORP.  Dated:  April 1, 2010  Stuart Rogers  By:  Stuart Rogers, Chief Executive Officer  Christopher Cherry  By:  Chris Cherry , Chief Financial Officer