SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

[x]     Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended September 30, 2008

-OR-

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________  to________

Commission File Number             0-22965


Pinnacle Resources, Inc.
--------------------------------------------
(Exact name of registrant as specified in its charter)

Wyoming                                      84-1414869
---------------------------------------------------------------
(State or other jurisdiction                  (I.R.S. Employer
of incorporation or organization            Identification Number)

9600 E. Arapahoe Road, Suite 260
Englewood, Colorado              80112
---------------------------------------------------------------
(Address of principal executive offices,               Zip Code)

(303) 705-8600
------------------------------------------
(Registrant's telephone number, including area code)


Indicate by check mark whether the issuer (1) 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  [ ]      No [x]

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
  Large accelerated filer [  ]     Accelerated filer  [  ]
  Non-accelerated filer   [  ]     Smaller reporting company [x]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes  [ ]      No [x]

The number of outstanding shares of the registrant's common stock as of
January 31, 2009 was 21,477,550.



<PAGE>2
PART I -- FINANCIAL INFORMATION

PINNACLE RESOURCES, INC.

Item 1. Financial Statements

Condensed Balance Sheets, September 30, 2008 and June 30, 2008
Condensed Statements of Operations For Each of the Three Month Periods
ended September 30, 2008 and 2007
Condensed Statements of Cash Flows For Each of the Three Month Periods
ended September 30, 2008 and 2007
Notes to condensed financial statements


<PAGE>3
                                    Pinnacle Resources, Inc
Condensed Balance Sheets
<TABLE>
ASSETS
                                                     As of            As of
                                                  September 30,     June 30,
                                                      2008            2008
                                                   ----------    ------------

                                                    <c>             <c>
Current Assets:
  Cash                                              $   84,350        $  207,250
  Sublease rent                                         22,000            19,000
  Receivable from sale of subsidiary                 5,411,776         4,869,620
  Investments                                           13,000            13,000
  Deferred tax asset - current                       1,025,863         1,033,754
  Current assets of discontinued operations             41,000            23,706
                                                    ----------        ----------
Total current assets                                 6,597,989         6,166,320
                                                    ----------        ----------
Equipment and leasehold improvements, net of
  Accumulated depreciation and amortization of
    $10,242                                                  -                 -
                                                    ----------        ----------
Total assets                                        $6,597,989        $6,166,320
                                                    ==========        ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities          $  195,927        $  181,225
  Deferred tax liability - current                   2,203,768         1,868,563
  Current liabilities of discontinued
    operations                                         732,177           734,176
                                                    ----------        ----------
Total liabilities                                   $3,121,872        $2,783,964
                                                    ----------        ----------

Commitments and contingencies

  Stockholders' equity:
  Preferred stock, $0.01 per share par value;
    authorized 2,000,000 shares, issued and
    outstanding -0- shares at September 30,
    2008 and June 30, 2008                          $        -        $        -
  Common stock, $0.00001 par value; 875,000,000 shares
    authorized; 21,477,550 issued and outstanding
    at September 30, 2008 and June 30, 2008                215        $      215
  Additional paid-in capital                         3,620,514         3,620,514
  Other comprehensive income                          (291,490)          130,332
  Retained earnings (accumulated deficit)              136,878          (368,705)
                                                    ----------        ----------



<PAGE>4

      Total stockholders' equity                     3,476,117         3,382,356
                                                    ----------        ----------
      Total liabilities and stockholders' equity    $6,597,989        $6,166,320
                                                    ==========        ==========
</TABLE>


The accompanying notes are an integral part
of the financial statements



<PAGE>5
Pinnacle Resources, Inc.
Condensed Statements of Operations
<TABLE>
                                     For the Three Month Period
                                          Ended September 30,
                                     --------------------------
                                          2008         2007
                                       ----------   ----------

                                       <c>          <c>
Operating expenses:
  Salaries                                 48,000       90,000
  Professional fees                        18,175       14,181
  General and administrative               64,757       46,882
                                       ----------   ----------
       Total operating expenses           130,932      151,063
                                       ----------   ----------
Total operating income (loss )           (130,932)    (151,063)
                                       ----------   ----------

Other income (expense):
  Interest income                               -        6,162
  Interest expense                           (290)        (120)
  Other income                              1,620      (21,600)
  Restructuring of sale of subsidiary     963,988            -
                                       ----------   ----------
      Other income (loss)                 965,318      (15,558)
                                       ----------   ----------
Income (loss) from continuing
 operations                               834,386     (166,621)
                                       ----------   ----------
Income tax expense (benefit)              335,205     (184,654)
                                       ----------   ----------
Net income from continuing operations     499,181       18,033
Income (loss) from discontinued
  operations, net of taxes                  6,403     (264,712)
                                       ----------   ----------
Net income (loss)                      $  505,584   $ (246,679)
  Earnings per share - Basic:
  Income from continuing operations    $     0.02   $     0.00
  Discontinued operations                    0.00        (0.01)
                                       ----------   ----------
Net income                             $     0.02   $    (0.01)
                                       ==========   ==========
  Earnings per share - Diluted:
  Income from continuing operations    $     0.02   $     0.00
  Discontinued operations                    0.00        (0.01)
                                       ----------   ----------
Net income                             $     0.02   $    (0.01)
                                       ==========   ==========



<PAGE>6

Weighted average number of shares
 outstanding:
-Basic                                 21,477,550   21,477,550
                                       ==========   ==========
-Diluted                               21,477,550   21,801,946
                                       ==========   ==========
</TABLE>
The accompanying notes are an integral part
of the financial statements



<PAGE>7
Pinnacle Resources, Inc.
Condensed Statements of Cash Flows
<TABLE>
                                             For the Three Month Period
                                                 Ended September 30,
                                             --------------------------
                                                 2008         2007
                                              ----------   ----------

                                              <c>            <c>
Cash flows provided by (used in ) operating
 activities:
Net income (loss)                              $ 505,584    $(246,679)
Net income (loss) from discontinued
  operations                                       6,403     (264,712)
                                              ----------   ----------
Net income (loss) from continuing operations     499,181       18,033
  Adjustments to reconcile net income
   (loss) to net cash (used in) provided
   by operating activities:
    Impairment of investments                          -      (21,600)
    Restructuring of VanMag receivable         (963,988)           -
    Tax expense (benefit) from deferred tax
      asset - current                              7,891     (360,610)
    Tax expense (benefit) from deferred tax
      asset - long term                                -      177,417
    Tax expense (benefit) from deferred tax
      liability - current                        335,205    1,763,076
    Tax expense (benefit) from deferred tax
      liability - long term                            -   (1,947,730)
  Changes in operating assets and liabilities:
    Sublease rent receivable                      (3,000)      (3,350)
    Accounts payable                              14,701      (81,458)
                                              ----------   ----------
Net cash used in operating activities
  of continuing operations                      (525,429)    (720,934)
                                              ----------   ----------
  Net cash used in discontinued
   operations:
    Net current assets                           (17,294)    (153,833)
    Net current liabilities                       (1,999)     (64,314)
                                              ----------   ----------
Net cash used in operating activities           (544,722)    (939,081)
                                              ----------   ----------
Cash flows provided by (used in) investing
 activities:
  Purchases from investments                           -      (16,800)
  Sale of investments                                  -       45,498
                                              ----------   ----------
Net cash provided by investing activities              -       28,698
                                              ----------   ----------
Net decrease in cash                            (544,722)    (910,383)
Cash-beginning of period                         207,250    1,022,489
                                              ==========   ==========
Cash-end of period                            $ (377,472)  $  112,106
                                              ==========   ==========

<PAGE>8

Supplemental Cash Flow Information

                                             For the Three Month Period
                                                 Ended September 30,
                                                 2008         2007
                                              ----------   ----------

                                              <c>            <c>
Cash paid for:
  Interest                                     $     290    $    120
  Taxes                                        $       -    $      -

Non-Cash Items

Currency translation effect:
Other comprehensive income                     $(421,822)   $      -
Receivable of subsidiary                       $ 421,822    $      -
</TABLE>

The accompanying notes are an integral part
of the financial statements



<PAGE>9
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

1. Description of the Company's Business

Pinnacle Resources, Inc. ("we" "our" "us" or "the Company") was
incorporated under the laws of Wyoming in January 1995.  We engage in
exploring for and developing natural resources.

2. Summary of Significant Accounting Policies

Basis of presentation

Our financial statements include the accounts of the Company and our
discontinued wholly owned South African subsidiary; Diamonaire
Exploration (Pty) (Ltd) (for the three month periods ended September
30, 2008 and 2007) ("Diamonaire").  All significant intercompany
balances and transactions have been eliminated in consolidation and
combination.

In June 2008, the Company adopted a plan to discontinue the operations
of Diamonaire. This plan anticipates that the operations will be sold
with a one year period during which the activities of Diamonaire will
continue.  The Company has recorded Diamonaire's balance sheets and
statements of operations as discontinued operations as of and for the
three month periods ending September 30, 2008 and 2007 (Note 8 -
Discontinued operations).

Preparing the Company's financial statements in conformity with
accounting principles generally accepted in the Unites State of America
("GAAP") requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Significant Estimates

The financial statements include some amounts that are based on
management's best estimates and judgments.  The most significant
estimates relate to the realization of the receivable from the sale of
the subsidiary, the allowance for uncollectible sublease rent
receivable, taxes and contingencies.  These estimates may be adjusted
as more current information becomes available, and any adjustment could
be significant.

Environmental Costs

Costs related to environmental remediation are charged to expense.
Other environmental costs are also charged to expense unless they
increase the value of the property and/or provide future economic
benefits, in which event they are capitalized.  Liabilities are
recognized when the expenditures are considered probable and can be

<PAGE>10
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

reasonably estimated.  Measurement of liabilities is based on currently
enacted laws and regulations, existing technology, and undiscounted
site-specific costs in the countries that we conduct our operations.

Comprehensive Income

Comprehensive income is calculated in accordance with SFAS No. 130,
Reporting Comprehensive Income, SFAS No. 130 requires the disclosure of
all components of comprehensive income, including net income and
changes in equity during a period from transactions and other events
and circumstances generated from non-owner sources.

Cash and cash equivalents

For the purposes of the consolidated statements of cash flows, the
Company considers all highly liquid debt instruments purchased with no
original maturity of three months or less to be cash equivalents.  The
Company has no cash equivalents.

Concentration of Credit Risk

At September 30, 2008, the Company had $84,350 on deposit, of which $0
exceeded the United States FDIC federally insurance limit of $100,000
per bank.

Equipment and depreciation

We carry property and equipment at historical cost.  Equipment is
depreciated on a straight-line basis over its estimated useful life
(generally 5 to 7 years).  Leasehold improvements are amortized over
the shorter of the estimated useful life or lease term.  Maintenance
and repairs are expensed as incurred.  Major renewals and improvements
that extend the life of the property are capitalized.  Expenditures for
major renewals and betterments, which extend the useful lives of
existing equipment, are capitalized and depreciated.  Upon retirement
or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any
resulting gain or loss is recognized in the statements of operations.

We review long-lived assets, including property and equipment, for
impairment whenever events or changes in business circumstances
indicate that the carrying amount of the assets may not be fully
recoverable.  If impairment is indicated, we reduce the carrying value
of the asset to fair value.



<PAGE>11
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

Basic and Diluted Net Earnings per Share

Basic net earnings (loss) per common share is computed by dividing net
earnings (loss) applicable to common shareholders by the weighted-
average number of common share outstanding during the period.  Diluted
net earnings (loss) per common share is determined using the weighted-
average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents, consisting of
shares that might be issued upon exercise of common stock options.  In
periods where losses are reported, the weighted-average number of
common shares outstanding excludes common stock equivalents, because
their inclusion would be anti-dilutive.

Income taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases.  Deferred tax assets, including tax loss and
credit carryforwards, and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.  The
effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
Deferred income tax expense represents the change during the period in
the deferred tax assets and deferred tax liabilities.  The components
of the deferred tax assets and liabilities are individually classified
as current and non-current based on their characteristics.  Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized.

Fair value of financial instruments

Our financial instruments, including cash, sublease rent receivable,
receivable from the sale of subsidiaries and investments, notes
receivable, accounts payable and accrued liabilities are carried at
cost as reported in the balance sheets, are considered to approximate
fair value due to the short-term maturity of these instruments.

Investments

Fair values of long-term investments are based on management's
estimates and pricing models using prevailing financial market
information.  As there is no quoted market price at September 30, 2008,
fair value of such financial instruments is not necessarily
representative of the amount that could be realized or settled.



<PAGE>12
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

Concentrations of operations outside the home country

Substantially all of our past operations have been conducted in the
Republic of South Africa. As such, we are subject to the South African
laws and rules, including currency restrictions and tax laws.

Foreign currency adjustments

The financial position and operating results of all foreign operations
are consolidated using the local currencies of the countries in which
the Company operates as the functional currency.  Local currency assets
and liabilities are translated into U.S. dollars at the rates of
exchange on the balance sheet date, and local currency revenues and
expenses are translated at average rates of exchange during the period.
The resulting translation adjustments are recorded directly into
operating results of the foreign subsidiaries and presented in the
results of discontinued operations.

New accounting pronouncements

In September 2006, FASB Statement No. 157 Fair Value Measurements, or
SFAS 157, was issued.  This Statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting
principles, or GAAP, and expands disclosures about fair value
measurements.  The Statement is effective July 1, 2008.  This standard
will have little or no impact on our financial statements.

In February 2007, FASB Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities, including an amendment of
FASB Statement No. 115, or SFAS 159, was issued.  This Statement
permits us to choose to measure many financial instruments and certain
other items at fair value. It also establishes presentation and
disclosure requirements.  This Statement is effective July 1, 2008.
This standard will have little or no impact on our financial
statements.

In December 2007, the FASB ratified the final consensuses in Emerging
Issues Task Force, or EITF, Issue No. 07-1, "Accounting for
Collaborative Arrangements," or Issue 07-1, which requires certain
income statement presentation of transactions with third parties and of
payments between parties to the collaborative arrangement, along with
disclosure about the nature and purpose of the arrangement.  Issue 07-1
is effective for us beginning January 1, 2009.  We do not expect the
adoption of this accounting pronouncement to have a significant impact
on our financial statements.

In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations (SFAS No. 141(R)), which replaces SFAS No. 141, Business
Combinations SFAS No. 141(R), requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling

<PAGE>9
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

interest in the acquiree at the acquisition date, measured at their
fair values as of that date, with limited exceptions.  This Statement
also requires the acquirer in a business combination achieved in stages
to recognize the identifiable assets and liabilities, as well as the
noncontrolling interest in the acquiree, at the full amounts of their
fair values.  SFAS No. 141(R) makes various other amendments to
authoritative literature intended to provide additional guidance or to
confirm the guidance in that literature to that provided in this
Statement. This Statement applies prospectively to business
combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after
December 15, 2008.  We do not expect the adoption of this accounting
pronouncement to have a significant impact on our financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements (SFAS No. 160), which
amends Accounting Research Bulletin No. 51, Consolidated Financial
Statements, to improve the relevance, comparability, and transparency
of the financial information that a reporting entity provides in its
consolidated financial statements.  SFAS No. 160 establishes accounting
and reporting standards that require the ownership interests in
subsidiaries not held by the parent to be clearly identified, labeled
and presented in the consolidated statement of financial position
within equity, but separate from the parent's equity.  This statement
also requires the amount of consolidated net income attributable to the
parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income.  Changes

in a parent's ownership interest while the parent retains its
controlling financial interest must be accounted for consistently, and
when a subsidiary is deconsolidated, any retained non-controlling
equity investment in the former subsidiary must be initially measured
at fair value. T he gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any non-controlling
equity investment.  The Statement also requires entities to provide
sufficient disclosures that clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling
owners.  This Statement applies prospectively to all entities that
prepare consolidated financial statements and applies prospectively for
fiscal years, and interim periods within those fiscal years, beginning
on or after December 15, 2008.  We do not expect the adoption of this
accounting pronouncement to have a significant impact on our financial
statements.

In May 2008, the FASB issued SFAS No. 162 "The Hierarchy of Generally
Accepted Accounting Principles" ("SFAS 162"), which is effective 90
days following the SEC's approval of the Public Company Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.  SFAS 162

<PAGE>14
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007


identifies the sources of accounting principles and the framework for
selecting the principles to be used in the preparation of financial
statements of nongovernmental entities that are presented in conformity
with generally accepted accounting principles (GAAP) in the United
States (the GAAP hierarchy).  We do not expect the adoption of this
accounting pronouncement to have a significant impact on our financial
statements.

3. Related party transactions

Consulting Services

During the three months ended September 30, 2008 and 2007, we paid
affiliated companies $5,000 and $58,000, respectively, for consulting
services.  Our CEO and CFO are executives with the affiliated
companies.  These amounts are included in the loss from discontinued
operations.


4.  Sale of Subsidiary - VanMag

In November 2006, the Company entered into an agreement with Golden
Falls Trading 565 LTD ("Golden Falls") (the "Buyer") to sell its 66.7%
share of the Vanadium and Magnetite Exploration & Development Co. (PTY)
(LTD) ("VanMag") (the Initial "Agreement").  The initial Agreement
called for a purchase price of $9,000,000, in U.S. dollars with
payments as follows:

   -   $100,000 paid as a deposit in November 2006 to be applied as
part of the Agreement price
   -   $500,000 payable upon notice of acceptance of due diligence -
anticipated in December 2006
   -   $4,350,000 payable in February 2007
   -   $4,050,000 payable in May 2009 (when new mining rights were to
be issued)

The initial $100,000 payment was made in accordance with the Agreement
in November 2006.  In January 2007, the Buyer had not made the required
$500,000 payment according to the Initial Agreement.  As a result, the
initial Agreement was revised as follows:

The $100,000 deposit made in November 2006 was converted to a
forbearance fee and recognized as income by the Company in 2007.  The
Buyer remitted a new initial payment of $200,000 upon the signing of
the revised Initial Agreement.



<PAGE>9
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

   -   $4,800,000 was payable by the Buyer in April 2007 or upon notice
of acceptance of the due diligence work that was still being performed.
   -   $4,000,000 was payable by the Buyer in April 2008.

In May 2007, after the Buyer failed to make its April 2007 agreed upon
payment of $4,800,000, the Company and the Buyer entered into a First
Addendum to the Agreement (the "First Addendum").   The First Addendum
established a payment schedule as follows:

   -   the initial $200,000 as previously paid
   -   $4,800,000 due immediately upon the signing of the First
Addendum, with $3,200,000 paid to the Company and $1,600,000 held in an
escrow account until resolution of an unrelated dispute in the other
33.3% shareholder group of VanMag.
   -   $4,000,000 was to be paid in May 2008, upon the issuance of new
mining rights were to be issued

If these First Addendum payments were not made as described, the
document provided for the termination of the transaction and the
Buyer's loss of all rights and claims to the property and prior
payments.  The Buyer made the $3,200,000 payment to the Company; but
the $1,600,000 was never deposited into the escrow account.  The
Company has not exercised its right to terminate the First Addendum
agreement.

In May 2008, when the Buyer failed to make the required $4,000,000
First Addendum  payment, another modification to the agreement was
enter into (the Second Addendum ).  The Second Addendum reduced the
total sales price to $8,400,000, with a revised payment schedule as
follows:

   -   the $200,000 previously paid
   -   the $3,200,000 previously paid
   -   $2,000,000 to be paid upon signing of the Second Addendum
   -   $3,000,000 to be paid in July 2008

The Buyer paid the Company $50,000 as a forbearance fee in order to
enter into the Second Addendum and not void the underlying terms of the
agreement and forfeit all previous payments.  This payment was recorded
by the Company as other income from restructuring the sales agreement.
The Company also recorded other expense of $600,000 to reflect the
reduction in the total sales price.

In June 2008, after the Buyer failed to make the $2,000,000 immediate
payment as stipulated in the Second Addendum, the Company and Golden
Falls agreed to a Revised Second Addendum.  The Revised Second Addendum
called for the following payment schedule that converted the remaining
unpaid agreed upon amount to be satisfied in South African Rand at a
fixed conversion rate of 1 U.S. dollar to 8 South African Rand:

<PAGE>16
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

   -   the $200,000 previously paid
   -   the $3,200,000 previously paid
   -   $375,000 to be paid upon signing of the Revised Second Addendum
in the form of 3,000,000 South African Rand at a fixed conversion rate
of 8:1
   -   $1,500,000 to be paid 10 days following the signing of the
Revised Second Addendum in the form of 12,000,000 South African Rand at
a fixed conversion rate of 8:1
   -   $3,125,000 to be paid in July 2008 in the form of 25,000,000
South African Rand at a fixed conversion rate of 8:1

The Buyer paid 2,000,000 South African Rand ($250,000 at 8:1 conversion
rate) upon signing of the Revised Second Addendum.  This resulted in
the Company recognizing a gain on currency conversion of $546, which
was recognized as other comprehensive income.  As a result of the
Revised Second Addendum converting the unpaid agreement amount to South
African Rand, the Company recognized a restructuring expense of $10,723
based on the conversion rate at the signing date of the Revised Second
Addendum.  The Company recognized other comprehensive income on the
gain on currency conversion of $129,787 at June 30, 2008.

In July 2008, the Buyer had failed to make the payments as stated in
the Revised Second Addendum, and a Third Addendum to the agreement was
entered into.  The Third Addendum superceded and cancelled all previous
agreements and understandings, increased the sales price to $9,275,000,
and re-modified the satisfaction of the unpaid balance payable as
follows:
   -   $200,000 previously paid
   -   $3,200,000 previously paid
   -   $250,000 previously paid (as 2,000,000 SA Rand at 8:1)
   -   $5,625,000 to be paid to the Trust Account of Brink, Bonsma & De
Bruyn, within 3 days following the signing of the Third Addendum in the
form of 45,000,000 South African Rand at a fixed conversion rate of 8:1

The Third Addendum resulted in the Company recognizing an immediate
restructuring gain in other income of $963,988 and realizing a gain on
currency conversion of $363,469 in other comprehensive income.   Golden
Falls failed to put any of the 45,000,000 South African Rand into the
trust account.  At September 30, 2008, the Company realized a loss on
currency conversion of $785,291 which is presented in other
comprehensive income.

In October 2008, Golden Falls made a payment to the Company of
15,000,000 South African Rand (at the agreed upon conversion rate of
8:1).  The Company realized a loss on currency translation of $290,260,
shown as other comprehensive income.



<PAGE>17
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

In November 2008, after Golden Falls had failed to pay the remaining
30,000,000 South African Rand at the stipulated conversion rate of 8:1,
the Company and Golden Falls informally agreed that the remaining
amount payable of 30,000,000 Rand would be due and payable in the
amount of $3,750,000 (US$).

As of January 31, 2009, this amount is still due and payable and shown
as a receivable from sale of subsidiary on the face of the Company's
balance sheet.


5. Investments

The Company has investments consisting of the following:
                                             As of September 30,
                                                     2008
                                             -------------------
Investments                                      $  13,000
                                                 =========

The Company assesses all investments for impairment on an annual basis.
Impairment losses related to these investments was $0 and $21,600 for
the three months ended September 30, 2008 and 2007, respectively.


6. Property and equipment

Our office equipment and furniture, with a cost basis of $10,242, was
fully depreciated prior to the periods that are being reported upon.
As the office equipment and furniture is still being used by the
Company, its fully depreciated costs are carried on its books at
September 30, 2008.

Accordingly, there was no depreciation expense recognized during the
three month periods ended September 30, 2008.


7.   Commitments and Contingencies

Legal actions

Certain conditions may exist as of the date the combined financial
statements are issued, which may result in a loss to the Company, but
which will only be resolved when one or more future events occur or
fail to occur.  The Company's management and its legal counsel assess
such contingent liabilities, and such assessment inherently involves an
exercise of judgment. In assessing loss contingencies related to legal
proceedings that are pending against the Company or unasserted claims
that may result in such proceedings, the Company's legal counsel



<PAGE>18
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

evaluates the perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a
material loss has been incurred and the amount of the liability can be
estimated, then the estimated liability would be accrued in the
Company's combined financial statements.  If the assessment indicates
that a potentially material loss contingency is not probable but is
reasonably possible, or is probable but cannot be estimated, then the
nature of the contingent liability, together with an estimate of the
range of possible loss if determinable and material, would be
disclosed.

Loss contingencies considered remote are generally not disclosed unless
they involve guarantees, in which case the guarantees would be
disclosed.

On July 29, 2005, Riyadh Mining Company Limited filed a lawsuit against
us in the Ghana Superior Court to rescind a 10% royalty interest in the
undeveloped Orovi Ghana gold property. They were awarded $22,145 in
legal fees as resolution to the matter.

Going Concern and Management's Plan

The Company has historically relied on its ability to raise money
through debt and the sales of investment equity interests to meet its
cash flow requirements.  The Company has cash available in the amount
of approximately $84,350 as of September 30, 2008.  However, the
Company has discontinued all of its operating subsidiaries as of June
30, 2008.  As a result, the Company will need additional funds to meet
the development and exploratory opportunities until sufficient cash
flows are generated to sustain the pursuit of operations.  While the
Company believes that it will collect its outstanding receivable from
the sale of a subsidiary, there is no guarantee that this will be
collected or that it will be adequate to meet future contractual
obligations of the Company without any revenue sustaining operations.

Historically, the Company has conducted the majority of its operations
outside the United States in the Republic of South Africa.  As of June
30, 2008, the Company has discontinued all of its remaining South
African operations.  There can be no assurance that the Company will be
able to successfully conduct future operations in South Africa or
elsewhere, and a failure to do so would have a material adverse effect
on the Company's financial position, results of operations, and cash
flows.  Also, the success of any of the Company's future overseas
operations would be subject to numerous contingencies, some of which
are beyond management's control.  These contingencies include general
and regional economic conditions, prices for the Company's products,

<PAGE>19
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

competition, and changes in regulation.  If the Company is dependent on
international operations, the Company will be subject to various
additional political, economic, and other uncertainties.  Among other
risks, the Company's operations will be subject to the risks of
restrictions on transfer of funds, export duties, quotas and embargoes,
domestic and international customers and tariffs, changing taxation
policies, foreign exchange restrictions, and political conditions and
governmental regulations.
Operating Leases

We lease office space and equipment under noncancelable operating
leases with terms of three years. The following is a schedule by years
of future minimum rentals under the leases for the 12 month periods
ending September 30:

  Year                                         Amount
  ----                                         ------
  2009                                       $ 21,068
  2010                                         20,349
  2011                                         20,870
  2012                                          4,776
  2013 and thereafter                               -
                                             --------
  Total                                      $ 67,063
                                             ========

The Company recognized rental expense of $10,073 and $11,187 for the
three months ended September 30, 2008 and 2007, respectively.  The
Company occupies its Englewood, Colorado facility under a rental
agreement that has a lease term that expires in December 2008.  On
October 1, 2008, the Company entered into an agreement to extend the
lease term for an additional 36 months ending December 2011.  On August
15, 2008, the Company entered into an operating lease agreement to
lease a copier for 39 months ending October 2011.

The Company subleases space in its office to two tenants.  Sublease
income for the three months ended September 30, 2008 and 2007 were
$10,226 and $11,187, respectively.  All sublease income is treated as a
reduction in rent expense.


9. Discontinued operations

The following foreign subsidiaries have been abandoned or sold and are
classified as discontinued operations under the provisions of Statement
of Financial Accounting Standards No. 144, Accounting for the
Impairment or Disposal of Long-lived Assets as of September 30, 2007.


<PAGE>20
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

Diamonaire Exploration (Pty)(Ltd)
As of June 30, 2008, the Company adopted a plan to discontinue the
operations of Diamonaire.  This plan anticipates that the operations
will be sold within a one year period during which the activities of
Diamonaire will continue.  Diamonaire's pretax loss, reported in
discontinued operations, for the three months ended September 30, 2008
and 2007 was $14,294 and $(264,712), respectively.  The entity has been
classified as discontinued operations for the three months ended
September 30, 2008 and 2007.

The assets and liabilities of the discontinued operations are presented
separately under the captions "Assets of discontinued operations" and
"Liabilities of discontinued operations" in the accompanying Balance
Sheets.

                                               As of September 30, 2007
                                               ------------------------
                                                       Diamonaire
                                               ------------------------
Assets of discontinued operations:
Current assets                                         $  41,000
Long term assets                                               -
                                                       =========
Total assets                                           $  41,000
Liabilities of discontinued division:
Current liabilities                                    $ 732,177
Long term liabilities                                          -
                                                       ---------
Total liabilities                                      $ 732,177
                                                       =========

The accompanying table illustrates the reporting of the discontinued
operations on the face of the Statements of Operations for the three
months periods ended September 30, 2008 and 2007.

                                             For the Three Month Period
                                               Ended September 30, 2008
                                             --------------------------
                                                     Diamonaire
                                               ------------------------
Discontinued operations:
Loss from operations of discontinued operations          $14,294
Income tax benefit                                        (7,891)
                                                         -------
Loss on discontinued operations                          $ 6,403
                                                         -------



<PAGE>21
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

                                             For the Three Month Period
                                               Ended September 30, 2007
                                             --------------------------
                                                       Diamonaire
                                               ------------------------
Discontinued operations:
Loss from operations of discontinued operations        $ (447,905)
Income tax benefit                                        183,193
                                                       ----------
Loss on discontinued operations                        $ (264,712)
                                                       -----------

10.  Income (Loss) Per Share

Basic earnings per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period.
Diluted earnings per share is computed by dividing net income by the
weighted-average number of common shares and dilutive potential common
shares outstanding during the period.  The computation of basic
earnings per share and diluted earnings per share for "Income from
continuing operations" is as follows:
<TABLE>
                                            For the Three Month Periods,
                                                Ended September 30,
                                            ---------------------------
                                               2008          2007
                                               ----          ----

                                             <c>           <c>
  Income (loss) from continuing
   operations                               $  499,181    $   18,033
                                            ==========    ==========
  Weighted-average number of common
   shares outstanding - Basic               21,477,550    21,477,550
  Effect of dilutive securities-Stock
   options                 -                         -       324,396
                                            ----------    ----------
  Weighted-average number of common
   shares outstanding - Diluted             21,477,550    21,801,946
                                            ==========    ==========

  Net earnings per share from continuing
   operations
    Basic                                   $     0.02   $     0.00
                                            ==========   ==========
    Diluted$                                $     0.02   $     0.00
                                            ==========   ==========
</TABLE>



<PAGE>22
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

11. Equity

Stock options

In May 2004, we granted a Director an option to purchase 1,000,000
shares of our common stock at $0.13 per share.  The options vest
immediately and expire five years from the grant date.  The fair value
of the options was estimated at $22,000.  The fair value for these
options was estimated at the date of grant using the Black-Scholes
option-pricing model with the following assumptions:

Risk free interest rate               2.50%
Volatility                             101%
Dividend                               -0-
Weighted average expected life        5 years

The following schedule summarizes our stock option activity:
<TABLE>
                                             Weighted     Weighted
                                              Average      Average    Aggregate
                                             Exercise     Remaining   Intrinsic
                                   Options     Price        Term         Value
                                   -------   --------     ---------   ---------

                                  <c>        <c>           <c>         <c>
Outstanding at June 30, 2006      1,230,000    $0.13         2.55       $    -
                                  =========    =====         ====       ======
Options granted                           -        -            -            -
Options exercised                         -        -            -            -
Options expired                           -        -            -            -
                                  ---------    -----         ----       ------
Outstanding at September 30, 2006 1,230,000    $0.13         2.30       $    -
                                  =========    =====         ====       ======
Options granted                           -        -            -            -
Options exercised                         -        -            -            -
Options expired                           -        -            -            -
                                  ---------    -----         ----       ------
Outstanding at September 30, 2007 1,230,000    $0.13         1.30       $    -
                                  =========    =====         ====       ======
Options granted                           -        -            -            -
Options exercised                         -        -            -            -
Options expired                           -        -            -            -
                                  ---------    -----         ----       ------
Outstanding at September 30, 2008 1,230,000    $0.13         0.60       $    -
                                  =========    =====         ====       ======
</TABLE>



<PAGE>23
Pinnacle Resources, Inc.
Notes to the Condensed Financial Statements

As of September 30, 2008 and June 30, 2008 and
For the Three Month Periods Ended September 30, 2008 and 2007

12. Subsequent events

Collection of Receivable from Sale of Subsidiary
In October 2008, the Company collected 15,000,000 Rand (US $1,584,740)
of its outstanding receivable from sale of subsidiary.  7,000,000 Rand
(US$739,545) was sent to South Africa to satisfy the liabilities and
closing expenses of Diamonaire, which was discontinued as of June 30,
2008.

VanMag addendum
In November 2008, the Company entered into an agreement with the
purchaser of the VanMag subsidiary in which the purchaser agreed to pay
$3,750,000 (US$) in place of the outstanding balance of 30,000,000
South African Rand.  This amendment resulted in a restructuring gain of
$787,037.

Loans
In November 2008, the Company made loans to two companies totaling
$400,000.  One note is in the principal amount of $250,000, has certain
financial assets as collateral, bears interest at 6.87% per annum, and
has principal and interest due in one year.  The second loan bears
interest at 10% per annum, is without collateral, and is due in one
year.  The two companies are assisting the Company in connection with
additional business opportunities.




<PAGE>24

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following presentation of our management's discussion and analysis
should be read in conjunction with the financial statements and other
financial information included elsewhere in this report.

Basis of Presentation of the Financial Statements

Our financial statements include those of our parent company and our
wholly owned South African subsidiary Diamonaire Exploration (Pty) Ltd)
(Diamonaire) and our 66 2/3% owned subsidiary Vanadium and Magnetite
Exploration & Development Co. (Pty) Ltd) (VanMag).  We sold our
interest in VanMag in December 2006.  In June 2008, we adopted a plan
to discontinue the operations of Diamonaire.  This plan anticipates
that the operations will be sold within a one year period during which
the activities of Diamonaire will continue.

Industry Outlook

The current global economic and financial crisis has severely hampered
our ability to obtain additional funds with which to seek additional
natural resource, or other types of business opportunities.  We are
uncertain what potential business ventures will be available to us in
the near future, or whether, if they are available, we will be able to
obtain debt or equity financing necessary to take advantage of those
opportunities.

Results of Operations

At September 30, 2008, we had sold or adopted a plan to discontinue all
of our natural resource operations.  Our activities during fiscal 2009
have been limited to the activities of our Diamonaire subsidiary,
searching for new business opportunities and collecting the remaining
receivable related to the sale of our VanMag subsidiary.  In October
2008 we collected $1,584,740 of this receivable and amended the terms
to provide for the balance of the note to increase to $3.75 million and
to be paid in US dollars.  We expect to collect the $3.75 million
balance of the sales price during fiscal 2009, although the uncertain
economic conditions may delay some or all of amounts that we collect
into future years.

Three month period ended September 30, 2008 compared to three month
period ended September 30, 2007
Net income for three month period in 2008 totaled $505,584 compared to
net loss of( $246,679) in the same period in 2007.  Net income during
the 2008 period resulted from the gain of 963,988 on the restructuring
of the VanMag receivable. Additionally, we restructured the sale of
VanMag in October 2008 which resulted in an additional gain of $53,297.
The income (loss) from our discontinued operations $6,403 in the three
month period in 2008 and ($264,712) in the same period in 2007.



<PAGE>25

Operating expenses for the three month period ended September 30, 2008
were $130,932 compared to $151,063 for the three month period ended
September 30, 2007.  Salaries decreased from $90,000 in 2007 to $48,000
in 2008 due to bonuses given to executive management in the 2007 three
month period

General and Administrative expense in 2008 was $64,757compared to
$46,882 in 2007.  This increase was a result of an increase in public
and investor relations activities in 2008,.  We increased our investor
and public relations activities after we received a portion of the
proceeds of the sale of VanMag.

Interest income decreased from $6,162in 2007 to -0- in 2008 as a result
of the decrease in our cash deposits between the two periods.

We had minimal Interest expense, either to related and third parties in
2008 as we repaid our third and related parties debts in fiscal 2007.

For the three month period ended September 30, 2008, we incurred
related party expenses of $5,000 compared to $58,000 for the same
period in 2007.  These amounts were paid to affiliated companies for
consulting services.  Our CEO and CFO are executives with the
affiliated companies.  The decrease in related party expenses was due
to the sale of VanMag and decrease in the need for consulting services
relating to its business.  These amounts are included in the loss from
discontinued operations.

Inflation has not affected our operation.

Liquidity

September 30, 2008 compared to June 30, 2008
In the three month period ended September 30, 2008, our ability to
generate adequate amounts of cash to meet our needs came from the sale
of our subsidiary, VanMag.  During fiscal year 2009, we relied on cash
reserves related to the sale of VanMag in 2007.  Our cash position
decreased from $207,250 at June 30, 2008 to $84,350 at September 30,
2008, primarily due to cash used in both our continuing and
discontinued operations of $122,900 during 2008.  We will rely on our
cash reserves, the collection of our receivable from the sale of
VanMag, our bank line of credit and advances from principal
shareholders to fund operations.

In October 2008, we collected $1,584,740 of the receivable related to
the sale of VanMag and restructured the balance to be paid in US
dollars.  We used $739,545 of this amount to satisfy the liabilities of
Diamonaire, which we elected to discontinue at June 30, 2008.  In
addition, we made loans to two companies totaling $400,000.  One note
is in the principal amount of $250,000, has certain financial assets as
collateral, bears interest at 6.87% per annum, and has principal and
interest due in one year.  The second loan bears interest at 10% per
annum, is without collateral, and is due in one year.  The two
companies are assisting the Company in connection with additional
business opportunities.

<PAGE>26

Discontinued operations

Vanadium and Magnetite Exploration & Development Co. (Pty) (Ltd)

In January, 2007, we concluded a written share sale agreement with
Golden Fall. Trading 565 Ltd to sell our 662/3% interest in the VanMag
consolidated entity to an unrelated third party.  We decided to sell
the subsidiary as we were able to realize a substantial gain on the
original investment.  The original selling price was $9,000,000, which
was subsequently revised through a number of addendums.  The assets
sold consist primarily of prepaid royalties, and the buyer also assumed
intercompany loans, including accrued interest.

Diamonaire Exploration (Pty) (Ltd)

As of June 2008, we adopted a plan to discontinue the operations of
Diamonaire.  . This plan anticipates that the operations will be sold
within a one year period during which the activities of Diamonaire will
continue Diamonaire's pretax (loss) , reported in discontinued
operations, for the three month periods ended September 30, 2008, and
2007 was $(14,294)  and $(447,905), respectively.  The entity has been
consolidated but classified as discontinued operations for the three
month periods ending September 30, 2008, and 2007.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Certain information set forth in this report contains "forward-looking
statements" within the meaning of federal securities laws.  Forward
looking statements include statements concerning our plans, objectives,
goals, strategies, future events, future revenues or performance,
capital expenditures, and financing needs and other information that is
not historical information. When used in this report, the words
"estimates," "expects," "anticipates," "forecasts," "plans," "intends,"
"believes" and variations of such words or similar expressions are
intended to identify forward-looking statements.  Additional forward-
looking statements may be made by us from time to time.  All such
subsequent forward-looking statements, whether written or oral and
whether made by us or on our behalf, are also expressly qualified by
these cautionary statements.

Our forward-looking statements are based upon our current expectations
and various assumptions.  Our expectations, beliefs and projections are
expressed in good faith and are believed by us to have a reasonable
basis, including without limitation, our examination of historical
operating trends, data contained in our records and other data
available from third parties, but there can be no assurance that our
expectations, beliefs and projections will result or be achieved or
accomplished.  Our forward-looking statements apply only as of the date
made.  We undertake no obligation to publicly update or revise forward-



<PAGE>27

looking statements which may be made to reflect events or circumstances
after the date made or to reflect the occurrence of unanticipated
events.

There are a number of risks and uncertainties that could cause actual
results to differ materially from those set forth in, contemplated by
or underlying the forward-looking statements contained in this report.
Those risks and uncertainties include, but are not limited to, our
history of operating losses, lack of liquidity in our common stock, our
dependence on key personnel, the expression by our auditors of
uncertainty as to our ability to continue as a going concern, and the
fact that we face substantial competition.  Those risks and certain
other uncertainties are discussed in more detail in our 2007 Annual
Report on Form 10-K and our subsequent filings with the SEC.  There may
also be other factors, including those discussed elsewhere in this
report that may cause our actual results to differ from the forward-
looking statements.  Any forward-looking statements made by us or on
our behalf should be considered in light of these factors.


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

We do not consider the effects of interest rate movements to be a
material risk to our financial condition.  We do not hold any
derivative instruments and do not engage in any hedging activities.


Item 4T.  Controls and Procedures.

During the three months ended September 30, 2008, there were no changes
in our internal controls over financial reporting (as defined in Rule
13a-15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of September 30, 2008.  Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures effective as of September 30, 2008 to ensure
that information required to be disclosed by the issuer in the reports
that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.

<PAGE>28
PART II - OTHER INFORMATION

Item 1. Legal Proceedings. The registrant is party to an action before
the High Court of South Africa brought by Corridor Mining Resources.
Corridor asserts that the registrant unlawfully reduced Corridor's
share of the ownership of VanMag to 7 1/3 percent when it made 26
percent Corridor's interest available to a qualified Black Economic
Empowerment partner, as required by the law of the land.  The
registrant's attorneys are confident that the registrant will prevail
at an eventual trial.  The registrant's management is of the opinion
that the dispute will be settled amicably out of court.  In the pending
share sale agreement of the VanMag asset, the buyer has agreed to hold
the registrant harmless.

Item 2. Unregistered Sale of Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities. None

Item 4. Submission of Matters to a Vote of Security Holders.
         None.

Item 5. Other Information.  None.

Item 6. Exhibits.

        Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
        Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002




<PAGE>19

SIGNATURES

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

Dated:  February 13, 2009

Pinnacle Resources, Inc.

By  /s/Glen R. Gamble
    ------------------------
    Glen R. Gamble
    President and Director