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, 2009
-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
December 31, 2009 was 32,477,550.



<PAGE>2
PART I -- FINANCIAL INFORMATION

PINNACLE RESOURCES, INC.

Item 1. Financial Statements

Condensed Balance Sheets, September 30, 2009 and June 30, 2009
Condensed Statements of Operations For Each of the Three Months Period
ended September 30, 2009 and 2008
Condensed Statements of Cash Flows For Each of the Three Months Period
ended September 30, 2009 and 2008
Notes to Condensed Financial Statements


<PAGE>3
                                  Pinnacle Resources, Inc
                            Balance Sheets
<TABLE>
ASSETS
                                                        As of            As of
                                                     September 30,      June 30,
                                                         2009            2009
                                                      ----------    ------------

                                                       <c>             <c>
Current Assets:
  Cash and cash equivalents                         $   78,789        $  326,136
  Restricted cash                                            -           250,000
  Sublease rent receivable                                   -            19,000
  Receivable from sale of subsidiary                     4,500             2,500
  Debt securities and notes receivable
    to affiliates, net of collectibility
    reserve of $925,000 and $675,000                         -                 -
  Interest receivable on affiliate debt securities
    and notes receivable net of collectibility
    reserve of $44,021 and $22,647                       1,525                 -
  Deposit - legal fees                                  10,000             5,549
  Advances                                             179,008                 -
                                                    ----------        ----------
Total current assets                                   273,822           584,185
                                                    ----------        ----------
Equipment and leasehold improvements, net of
  accumulated depreciation and amortization of
    $12,978 and $10,242                                  4,886             5,473
Available for sale marketable securities of affiliate        -                 -
Mining rights                                           21,000            21,000
                                                    ----------        ----------
Total assets                                        $  299,708        $  610,658
                                                    ==========        ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities          $  138,767        $  142,784
  Other current liabilities                              2,321             2,252
                                                    ----------        ----------
Total current liabilities                              141,088           145,036
                                                    ----------        ----------
Other liabilities                                        3,082             3,688
                                                    ----------        ----------
Total liabilities                                      144,170           148,724
                                                    ==========        ==========
Commitments and contingencies

  Stockholders' equity:
  Preferred stock, $0.01 per share par value;
   authorized 2,000,000 shares, issued and
   outstanding -0- shares at 2009 and 2008                   -                 -
  Common stock, $0.00001 par value; 875,000,000
   shares authorized; issued and outstanding
   32,477,550 and 32,477,550 shares issued and
   outstanding in 2009 and 2008                            325               325

<PAGE>4


 Additional paid-in capital                          3,836,704         3,816,714
  Other comprehensive loss                            (180,000)         (180,000)
  Accumulated Deficit                               (3,501,491)       (3,175,095)
                                                    ----------        ----------
      Total stockholders' equity                       155,538           461,934
                                                    ----------        ----------
      Total liabilities and stockholders' equity    $  299,708        $  610,658
                                                    ==========        ==========
</TABLE>


The accompanying notes are an integral part
of the financial statements



<PAGE>5
                       Pinnacle Resources, Inc.
                       Statements of Operations
<TABLE>
<CAPTION>
                                     For the Three Month Period
                                          Ended September 30,
                                     --------------------------
                                          2009         2008
                                       ----------   ----------

                                       <c>          <c>
Operating expenses:
  Salaries                             $   48,000   $   48,000
  Professional fees                         8,981       18,175
  General and administrative               33,704       64,757
  Bad debt expense                        250,000            -
                                       ----------   ----------
       Total operating expenses           340,685      130,932
                                       ----------   ----------
Total operating loss                     (340,685)    (130,932)
                                       ----------   ----------
Other income (expense):
  Interest income - banks                   1,623         (290)
  Interest income - affiliate
    debt securities                             -            -
  Other income                             12,666        1,620
  Restructuring of sale of subsidiary           -      963,988
                                       ----------   ----------
      Other income                         14,289      965,318
                                       ----------   ----------
Income (loss) from continuing
 operations                              (326,396)     834,386
                                       ----------   ----------
Income tax benefit                              -      335,205
                                       ----------   ----------
Net income (loss) from continuing
  operations                             (326,396)     499,181
Discontinued operations:
  Loss on discontinued
  operations, net of taxes                      -        6,403
                                       ----------   ----------
Net income (loss)                      $ (326,396)  $  505,584
Loss per share - basic and diluted
  Continuing operations                $    (0.01)  $     0.02
  Discontinued operations                    0.00         0.00
                                       ----------   ----------
   Net loss                             $   (0.01)  $     0.02
                                       ==========   ==========
Weighted average number of shares
 outstanding:
-Basic and diluted                     32,021,028   22,032,195
                                       ==========   ==========
</TABLE>
The accompanying notes are an integral part
of the financial statements

<PAGE>6
                      Pinnacle Resources, Inc.
                      Statements of Cash Flows
<TABLE>
                                             For the Three Month Period
                                                Ended September 30,
                                                 2009         2008
                                              ----------   ----------

                                              <c>            <c>
Cash flows provided by (used in) operating
 activities:
Net income (loss)                              $(326,396)    $ 505,584
Less:
   Net income (loss) from discontinued
     operations                                        -         6,403
                                              ----------    ----------
Net income (loss) from continuing operations    (326,396)      499,181
  Adjustments to reconcile net income
  (loss) to net cash (used in) provided
   by operating activities:
    Reserve for uncollectible debt securities,
      note receivable and related accrued
      interest                                   271,375             -
    Restructuring on Van Mag receivable                -      (963,988)
    Depreciation expense                             587             -
    Tax expense (benefit) from deferred tax
      asset-current                                    -         7,891
    Tax expense (benefit) from deferred tax
      liability - current                              -       335,205
  Changes in operating assets and liabilities:
    Sublease rent receivable                      (2,000)       (3,000)
    Deposits                                         549             -
    Interest receivable from notes               (22,900)            -
    Advances                                    (184,008)            -
    Accounts payable                              (4,017)       14,701
                                              ----------    ----------
Net cash used in operating activities
  of continuing operations                      (266,810)     (103,607)
                                              ----------    ----------
  Net cash provided by (used in) discontinued
   operations:
    Net current assets                                 -       (17,294)
    Net current liabilities                            -        (1,999)
                                              ----------    ----------
Net cash provided by (used in) operating
 activities                                     (266,810)     (122,900)
                                              ----------    ----------
Cash flows used in investing activities:
  Restricted cash                                250,000             -
  Issuance of notes                             (250,000)            -
                                              ----------    ----------



<PAGE>7

Net cash provided by investing activities              -             -
                                              ----------    ----------
Cash flows provided by (used in) financing
  Activities:
  Proceeds from exercise of stock options         20,000             -
  Payments on capital lease                         (537)            -
                                              ----------    ----------
Net cash used in financing activities             19,463             -
                                              ----------    ----------
Net increase (decrease) in cash                 (247,347)     (122,900)
Cash-beginning of period                         326,136       207,250
                                              ==========    ==========
Cash-end of period                            $   78,789    $   84,350
                                              ==========    ==========

Supplemental Cash Flow Information

                                             For the Three Month Period
                                                Ended September 30,
                                                 2009         2008
                                              ----------   ----------
Cash paid for:
  Interest                                     $     173    $    290
  Taxes                                        $       -    $      -

Non-Cash Items
Currency translation effect:
  Receivable of subsidiary                     $       -    $421,822
</TABLE>





The accompanying notes are an integral part
of the financial statements



<PAGE>8

                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

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 previously included the accounts of the
Company and our discontinued South African subsidiary; wholly owned
Diamonaire Exploration (Pty) (Ltd) (for the year ended June 30, 2008)
("Diamonaire").  All past significant intercompany balances and
transactions were eliminated.

In June 2008, the Company adopted a plan to discontinue the operations
of Diamonaire. The plan anticipated that the operations would be sold
within a one year period during which the subsidiary's operations were
to be continued.  The Company abandoned Diamonaire in April 2009 due to
the costs of continuing the operations and the lack of potential
buyers.  Diamonaire's statement of operations for the three month
period ended September 30, 2008 is recorded as discontinued operations
(Note 7 - Discontinued operations).

Preparing the Company's financial statements in conformity with
accounting principles generally accepted in the United States 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.

Cash, Cash Equivalents, and Marketable Securities

We have adopted FAS No. 157, "Fair Value Measurements" (ASC 820-10) and
utilize the market approach to measure fair value of our financial
assets. The market approach uses prices and other relevant information
generated by market transactions involving identical or comparable

<PAGE>9
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

assets. The standard describes a fair value hierarchy based on three
levels of inputs, of which the first two are considered observable and
the last unobservable, that may be used to measure fair value which are
the following:

  Level 1:    Quoted prices (unadjusted) in active markets that are
accessible at the measurement date for assets or liabilities. The fair
value hierarchy gives the highest priority to Level 1 inputs.
  Level 2:    Observable prices that are based on inputs not quoted on
active markets, but corroborated by market data.
  Level 3:    Unobservable inputs are used when little or no market
data is available. The fair value hierarchy gives the lowest priority
to Level 3 inputs.

In determining fair value, we utilize valuation techniques that
maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible.

The carrying values of our cash, cash equivalents, marketable
securities of affiliate, and financing proceeds receivables carried at
fair value as of September 30, 2009, are classified in the table below
into one of the three category levels described above:
<TABLE>
		 	               Level      Level 2      Level 3      Total

                               <c>        <c>            <c>         <c>
Cash & equivalents              $ 78,789    $      -      $      -    $ 78,789
Marketable securities of
  affiliate		                     -           -           -0-           -
                                --------    --------      --------    --------
Cash, cash equivalents,
  and marketable securities	  $ 78,789    $	   -      $      -    $ 78,789
                                ========    ========      ========    ========
</TABLE>
As of September 30, 2009, our cash and cash equivalents were held at
major financial institutions.  To a limited degree, these investments
are insured by the Federal Deposit Insurance Corporation; however, they
are not insured against the possibility of a complete loss of earnings
or principal and are inherently subject to the credit risk related to
the continued credit worthiness of the underlying issuer and general
credit market risks.

In a June 2009 transaction, the Company issued 9,000,000 shares (Note 9
- Equity) of its common stock in exchange for 180,000 common shares of
The Saint James Company (ticker: STJC.OB) ("Saint James"), a publicly
traded company that trades on the over-the-counter bulletin board.  The



<PAGE>10
                        Pinnacle Resources, Inc.

                    Notes to the Financial Statements

             As of September 30, 2009 and June 30, 2009 and
 For Each of the Three Month Periods Ended September 30, 2009 and 2008

shares acquired had a fair value of $0 at September 30, 2009.  The
securities obtained are currently traded in an inactive market.  The
value of the shares was based on Level 3 inputs.

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
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" (ASC 220-10).  ASC 220-10 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

Cash and cash equivalents include all cash balances and highly liquid
investments with an initial maturity of three months or less. The
Company places its temporary cash investments with high credit quality
financial institutions. At times such investments may be in excess of
the Federal Deposit Insurance Corporation (FDIC) insurance limit.

Concentration of Credit Risk

At September 30, 2009, the Company had $78,789 on deposit, of which we
did not exceed the United States FDIC federally insured limit of
$250,000 per bank.

Restricted Cash

At June 30, 2009, the Company had restricted cash of $250,000
identified to support a debenture credit facility in which it was the
lender.  In July 2009, the debtor drew down the $250,000.  There is no
restricted cash at September 30, 2009.



<PAGE>11
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

Debt and Marketable Equity Securities

The Company classifies its debt and marketable equity securities into
held-to-maturity, trading, or available-for-sale categories. Debt
securities are classified as held-to-maturity when the Company has the
positive intent and ability to hold the securities to maturity. Debt
securities for which the Company does not have the intent or ability to
hold to maturity are classified as available for sale. Held-to-maturity
securities are recorded as either short-term or long-term on the
balance sheet based on contractual maturity date and are stated at
amortized cost. Marketable securities that are bought and held
principally for the purpose of selling them in the near term are
classified as trading securities and are reported at fair value, with
unrealized gains and losses recognized in earnings. Debt and marketable
equity securities not classified as held-to-maturity or as trading are
classified as available-for-sale and are carried at fair market value,
with the unrealized gains and losses, net of tax, included in the
determination of comprehensive income and reported in shareholders'
equity.

Notes and Other Receivables

Management evaluates notes receivable for collectability and records an
allowance, if appropriate, based on management's best estimate of
probable losses, including specific allowances for known troubled
notes.
Notes receivables are reviewed at least quarterly, and those notes with
amounts that are judged to be uncollectible are reduced to their
estimated realizable value.

When a note receivable secured with collateral is determined to be
impaired, the note is reduced to its fair value and the allowance for
doubtful accounts is charged less the estimated fair value of the
collateral.

For other receivables, the allowance for doubtful accounts is based on
management's assessment of the collectability of the specific account.
Management has determined that it is necessary to record an allowance
for doubtful accounts on notes receivable and related accrued interest
of $969,021 at September 30, 2009.

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

<PAGE>12
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

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.

Basic and Diluted Loss per Share

Basic net loss per common share is computed by dividing net loss
applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net 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.



<PAGE>13
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

Fair value of financial instruments

The Company's financial instruments are cash and cash equivalents,
notes receivable, corporate debenture, other receivable, accounts
payable, accrued liabilities and liabilities of discontinued
operations.   These financial instruments are carried at their recorded
values which approximate their fair values based on their short-term
nature.

Investments

Fair values of 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, 2009 and 2008, the fair
value of such financial instruments is not necessarily representative
of the amount that could be realized or settled.

Concentrations of Operations Outside Our 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 regulations, including currency restrictions and tax laws.  At
September 30, 2009, all foreign operations have been abandoned.

Foreign currency adjustments

The U.S. dollar is the functional currency of the Company's worldwide
continuing operations. All foreign currency asset and liability amounts
are remeasured into U.S. dollars at end-of-period exchange rates,
except for inventories, prepaid expenses and property, plant and
equipment, which are remeasured at historical rates. Foreign currency
income and expenses are remeasured at average exchange rates in effect
during the year, except for expenses related to balance sheet amounts
remeasured at historical exchange rates. Exchange gains and losses
arising from remeasurement of foreign currency denominated monetary
assets and liabilities are included in income in the period in which
they occur.  In fiscal year 2008 and prior years the resulting
translation adjustments were recorded directly into operating results
of the foreign subsidiaries and presented in the results of
discontinued operations.

New accounting pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued a
standard that established the FASB Accounting Standards Codification
(ASC) and amended the hierarchy of generally accepted accounting
principles (GAAP) such that the ASC became the single source of
authoritative nongovernmental U.S. GAAP. The ASC did not change current
U.S. GAAP, but was intended to simplify user access to all

<PAGE>14
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

authoritative U.S. GAAP by providing all the authoritative literature
related to a particular topic in one place. All previously existing
accounting standard documents were superseded and all other accounting
literature not included in the ASC is considered non-authoritative. New
accounting standards issued subsequent to June 30, 2009 are
communicated by the FASB through Accounting Standards Updates (ASUs).
As it relates to the Company, the Codification is effective July 1,
2009.  This standard did not have an impact on the Company's results of
operations or financial condition. Throughout the notes to the
financial statements, references that were previously made to various
former authoritative U.S. GAAP pronouncements have been changed to also
include the appropriate section of the ASC.

In December 2007, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standard (FAS) No. 141
(Revised 2007) (ASC 805), Business Combinations, which replaced
FAS-141, Business Combinations. The new Statement has significantly
changed the accounting for business combinations and the impact on
financial statements both as of the acquisition date and in subsequent
periods. Under ASC 805, an acquiring entity is required to recognize
the assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree, measured at their fair values as of the
acquisition date, with limited exceptions. ASC 805 also includes a
substantial number of new disclosure requirements. ASC 805 applies to
business combinations for which the acquisition date is on or after
July 1, 2009.  The Company has determined there will be minimal if any
impact caused by the provisions of ASC 805 on its financial position,
results of operations, and cash flows.

In February 2007, the FASB issued FAS No. 159, The Fair Value Option
for Financial Assets and Financial Liabilities (ASC 825-10). ASC 825-10
provides entities with an irrevocable option to report selected
financial assets and financial liabilities at fair value. It also
establishes presentation and disclosure requirements that are designed
to facilitate comparisons between entities that choose different
measurement attributes for similar types of assets and liabilities. The
provisions of ASC 825-10 became effective for the Company as of the
July 1, 2008. The Company has determined there is no impact impact of
the provisions of ASC 825-10 on its financial position, results of
operations, and cash flows.

In December 2007, the FASB issued FAS No. 160, Noncontrolling Interests
in Consolidated Financial Statements (ASC 810-10). This statement
established new accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of
a subsidiary. Among other matters, it also requires the recognition of
a noncontrolling interest (sometimes called "minority interest") as
equity in the consolidated financial statements and separate from the

<PAGE>15
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

parent's equity. The amount of net income (loss) attributable to the
noncontrolling interest will be included in consolidated net income
(loss) on the face of the income statement. ASC 810-10 is effective as
of the Company's fiscal year beginning July 1, 2009.  The Company does
not anticipate this accounting pronouncement to have a significant
impact on its financial position, results of operations, and cash
flows.

In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" (ASC
855-10). This standard incorporates into authoritative accounting
literature certain guidance that already existed within generally
accepted auditing standards, with the requirements concerning
recognition and disclosure of subsequent events remaining essentially
unchanged. This guidance addresses events which occur after the balance
sheet date but before the issuance of financial statements. This
standard added an additional required disclosure relative to the date
through which subsequent events have been evaluated and whether that is
the date on which the financial statements were issued. ASC 855-10 was
effective as of the Company's fiscal quarter beginning April 1, 2009.
The adoption of this accounting pronouncement does not have a
significant impact on our financial statements.

In June 2009, the FASB issued FAS No. 167, "Amendments to FASB
Interpretation No. 46(R)".  This standard is not yet codified in the
ASC.  This standard requires the Company to perform an analysis to
determine whether the enterprise's variable interest or interests give
it a controlling financial interest in a variable interest entity. This
analysis identifies the primary beneficiary of a variable interest
entity as the enterprise that has both of the following
characteristics:

a. The power to direct the activities of a variable interest
entity that most significantly impact the entity's economic
performance, and

b. The obligation to absorb losses of the entity that could
potentially be significant to the variable interest entity or the
right to receive benefits from the entity that could potentially
be significant to the variable interest entity.

Additionally, an enterprise is required to assess whether it has an
implicit financial responsibility to ensure that a variable interest
entity operates as designed when determining whether it has the power
to direct the activities of the variable interest entity that most
significantly impact the entity's economic performance.  This
pronouncement will be effective for the Company as of July 1, 2010.
The Company is assessing the impact that this pronouncement will have
on its balance sheet and its statements of operations and cash flows.

<PAGE>16
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

EITF Issue 08-05: "Issuer's Accounting for Liabilities Measured at Fair
Value with a Third-Party Credit Enhancement" (ASC 820-10) applies to
liabilities issued with an inseparable third-party credit enhancement
(for example, debt that is issued with a contractual third-party
guarantee) when they are measured or disclosed at fair value on a
recurring basis. The issuer of a liability with a third-party credit
enhancement that is inseparable from the liability shall not include
the effect of the credit enhancement in the fair value measurement of
the liability and shall disclose the existence of the third-party
credit enhancement on its issued liability. This issue became effective
as of January 1, 2009.

EITF Issue No. 08-6, "Equity Method Investment Accounting
Considerations" (ASC 323-10) concluded that an entity shall measure its
equity method investment initially at cost and then recognize
other-than-temporary impairments of the equity method investment based
on the change in the assets it holds that gave rise to the investee's
impairment charge.  Additionally, the equity method investor shall
account for a share issuance by an investee as if the investor had sold
a proportionate share of its investment. Any gain or loss to the
investor resulting from an investee's share issuance shall be
recognized in earnings.  This issue became effective for the Company on
July 1, 2009.

3.	Related party transactions

Consulting Services
During the three month periods ended September 30, 2009 and 2008, we
paid affiliated companies $1,000 and $5,000, respectively, for
consulting services.  Our CEO and CFO are executives with the
affiliated companies.  A portion of these amounts are included in the
loss from discontinued operations.

Debt Securities and Notes Receivable
<TABLE>
                                                       As of                 As of
                                                   September 30, 2009    June 30, 2009
                                                     ------------         -----------

                                                     <c>                    <c>
Corporate notes receivable to affiliates
  - held to maturity                                 $  425,000            $  425,000
Corporate debenture to affiliate - held to maturity     500,000               250,000
Debt securities - held to maturity, before impairment   925,000               675,000
                                                     ----------            ----------
Collectability reserve for temporary impairment		 (925,000)             (675,000)
                                                     ----------            ----------
Debt securities to affiliates - held to maturity     $        -            $        -
                                                     ==========            ==========
</TABLE>

<PAGE>17
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

Collateralized

In November 2008, the Company loaned $250,000 to two entities that had
pledged as collateral certain financial assets.  The note receivable
had an interest rate with an APR of 6.82%.  The principal and interest
was due in one year.  The two entities are 10% shareholders of the
Company. In October 2009, the note receivable was satisfied through the
issuance of 265,500 shares of the common stock of The Saint James
Company. (Note 10 - Subsequent Events)

Uncollateralized

In November 2008, the Company loaned Saint James $150,000. The note
bears interest at a rate of 10.00% per annum, is without collateral,
and has principal and interest due in November 2009.  The Company is a
related party of Saint James because we own or can convert notes
receivable into more than 10% of Saint James' outstanding stock.

In December 2008, the Company loaned Saint James $25,000.  The note
bears interest at a rate of 10% per annum, is without collateral, and
has principal and interest due upon demand.

Modification of the Uncollateralized Notes Receivable

Concurrent with entering into the straight convertible debenture
agreement, the Company's then existing $150,000 and $25,000 notes
receivable were modified to provide for the notes' outstanding balances
to in whole or in part be converted at the Company's option into shares
of the common stock of Saint James at $0.50 per share.  On January 6,
2010, these notes receivable were converted into Saint James stock
(Note 10, Subsequent Events).

Straight Convertible Debenture Agreement

In June 2009, the Company entered into a $500,000 straight convertible
debenture agreement with Saint James.  The debenture agreement is
without collateral and bears an annual interest rate of the Wall Street
Journal prime rate plus 8% (11.5% at September 30, 2009).  All
principal and accrued interest is due June 30, 2010 and is convertible
at the option of the Company into shares of the common stock of Saint
James at $0.50 per share.  At September 30, 2009, the Company had
advanced the entire $500,000 of the debenture agreement.  On January 6,
2010, the $500,000 debenture was converted into Saint James stock (Note
10, Subsequent Events).

All held to maturity debt securities are due within one year as of
September 30, 2009.

<PAGE>18
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

Available for Sale Marketable Securities of Affiliate

At September 30, 2009, the Company held 180,000 shares of Saint James
common stock for investment purposes.  The fair value of the marketable
securities is $0 at September 30, 2009.

4.	Sale of Subsidiary - VanMag

In 2006, the Company entered into an agreement with an Australian
entity to sell its 66.67% interest in its subsidiary VanMag.  After a
series of breached agreements by the buyer; a Third Addendum to the
Initial Agreement (the Third Addendum) was entered into in July 2008
with all pervious related agreements and understandings being cancelled
with a transaction price of $9,275,000.  The Third Addendum resulted in
the Company in fiscal 2009 recognizing a $963,988 restructuring gain in
other income and a $363,469 gain on foreign currency conversion in
other comprehensive income.

In October 2008, the buyer made a payment to the Company of 15,000,000
South African Rand (at the agreed upon conversion rate of eight South
African Rand to one US Dollar).  The Company realized a loss on
currency translation of $290,260 reported as other comprehensive
income.  7,000,000 Rand (US $739,545) was sent to South Africa to
satisfy remaining VanMag liabilities and other Company liabilities.

In November 2008, the buyer failed to pay the remaining 30,000,000
South African Rand payment.  The Company and buyer informally agreed
that the remaining amount payable of 30,000,000 Rand would be due and
payable in the amount of $3,750,000 (US$).  This amendment resulted in
a restructuring gain of $787,037.  In May 2009, a settlement agreement
was reached whereby the Company would receive $1,000,000 and 1,000,000
South African Rand in full satisfaction of the outstanding receivable.
In addition, the Company received a royalty agreement on future sales
based on a rate of $0.50 per ton, not to exceed $3,000,000 over the
total agreement.  The Company does not anticipate receiving any
royalties arising from this agreement.  The 1,000,000 South African
Rand was paid directly to Titan Processors (Pty) Ltd of South Africa
and the Company received the $1,000,000.   As a result of the
completion of the informal settlement to the Third Addendum the Company
recognized a loss of $2,750,000.

5.	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, 2009.


<PAGE>19
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

In August 2008, the Company entered a lease agreement for a copier for
39 months which is classified as a capital lease.  Accordingly, the
Company capitalized the capital lease and the capital lease obligation.
The Company recognized depreciation expense of $586 and $0 for the
three month periods ended September 30, 2009 and 2008, respectively.

6.	Commitments and Contingencies

Legal actions

Certain conditions may exist as of the date the 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 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 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.

The Company was party to an ongoing lawsuit in the High Court of South
Africa related to the sale of the Company's ownership of the VanMag
subsidiary.  The buyer of the Company's ownership interest has released
the Company from any liability in the matter.  As such, the Company
does not expect to incur any future expenses related to this matter as
the litigation was resolved between the parties and the settlement was
filed and accepted by the High Court of South Africa.

Going Concern and Management's Plan

The Company has incurred net losses from continuing operations for the
three month periods ended September 30, 2009 and 2008 of $326,396 and
$(499,181), respectively and has an accumulated deficit of $3,501,491



<PAGE>20
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

at September 30, 2009. The Company has cash available in the amount of
approximately $78,789 at of September 30, 2009.  The Company has
discontinued all of its operations as of September 30, 2009 (Note 7).

The Company has historically relied on its ability to raise money
through debt and the sale of stock to meet its cash flow requirements.
The preceding factors raise substantial doubt about the Company's
ability to continue as a going concern.  As a result, the Company will
need additional funds to sustain the pursuit of operations and meet
current corporate obligations.

Lease commitments

The Company leases office space and equipment under noncancelable
leases.  The following is a schedule by years of future minimum rentals
under the leases for the 12 month periods ending June 30:

Year		            Amount
2010                  $ 15,230
2011                    20,739
2012                    10,026
2013                         -
2014 and thereafter          -
                      --------
Total                 $	45,995
                      ========

The Company recognized rental expense of $8,458 and $11,400 for the
three month periods ended September 30, 2009 and 2008, respectively.
The Company occupies its Englewood, Colorado facility under a rental
agreement that has a lease term that expired 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 a capital lease agreement for a
copier for 39 months ending October 2011.

The Company subleases space in its office to two tenants.  Sublease
income for the three month periods ended September 30, 2009 and 2008
was $2,000 and $9,000, respectively.  All sublease income is treated as
a reduction in rent expense.

7.	Discontinued operations

The following foreign subsidiary has been abandoned and is 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" (ASC 360) for the three month period
ended September 30, 2008.

<PAGE>21
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

Diamonaire Exploration (Pty) (Ltd)

In June 2008, the Company adopted a plan to discontinue the operations
of Diamonaire.  This plan anticipated that the operations would be sold
or abandoned within a one year period during which the activities of
Diamonaire were to continue.  The Company was unable to sell Diamonaire
and the entity was abandoned in April 2009.  Diamonaire's pretax loss,
reported in discontinued operations, for the three month period ended
September 30, 2008 was $1,460,879. The entity has been classified as
discontinued operations for the three month period ended September 30,
2008.  The balance sheet was written off upon the abandonment in April
2009.

8.	Earnings (loss) Per Share

Earnings (loss) per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period.
Diluted earnings (loss)) per share is computed by dividing net loss by
the weighted-average number of common shares and dilutive potential
common shares outstanding during the period. The computation of basic
earnings (loss) per share and diluted earnings (loss) per share for
"Earnings (loss) from continuing operations" is as follows:

                                           For the Three Month Period
                                                Ended September 30,
                                           2009                  2008
                                           ----                  ----
Income (loss) from continuing operations  $(326,396)	        $ 499,181
                                          =========           =========
Weighted-average number of common shares
  outstanding - Basic 		           32,021,028          22,032,195
Effect of dilutive securities
  - Stock options                                 -                   -
                                         ----------          ----------
Weighted-average number of common shares
  outstanding - Basic and Diluted        32,021,028          22,032,195
                                         ==========          ==========
Net earnings per share from continuing
  operations:
Basic and Diluted                        $    (0.01)         $     0.02
                                         ==========          ==========



<PAGE>22
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

The following securities were not included in the computation of
diluted net loss per share as their effect would have been
anti-dilutive:
                                             As of          As of
                                         September 30,     June 30,
                                             2009           2009
                                             ----           ----
Options to purchase common stock                 -       1,000,000

9.	Equity

In December 2007, the Company issued 1,000,000 shares in a private
placement for $80,000.  Transaction costs were $80,000, resulting in no
increase to equity.

In June 2009, we issued 9,000,000 common shares to affiliated entities
in exchange for 180,000 common shares of The Saint James Company
(STJC.OB) ("Saint James").  The fair value of the shares at the time of
acquisition was $180,000, based on level 3 fair value inputs.  Events
occurring after the transaction resulted in the shares temporarily
losing all value.  At June 30, 2009, the fair value of the shares
acquired was $0.  The temporary loss is shown as other comprehensive
income.  The Saint James shares are restricted for one year and the
Company is prohibited from owning more than 4.99% of the outstanding
shares of Saint James at any time.

In August 2009, 1,000,000 common shares were issued in a stock option
exercise transaction.  The exercise price of each option was $0.02,
resulting in a total transaction amount of $20,000.

Stock options

In May 2004, we granted a Director an option to purchase 1,000,000
shares of our common stock at $.13 per share.  The options vest
immediately and expire five years from the grant date. The fair value
of the options were estimated at $22,000.  In November 2008, we
modified the terms of the options to extend the expiration date to
November 2010 and to reduce the strike price to $0.02 per share.  The
fair value for these options was estimated at $16,300 at the date of
modification using the Black-Scholes option-pricing model with the
following assumptions:

Risk free interest rate              1.19%
Volatility                            101%
Dividend                              -0-
Weighted average expected life       2 years



<PAGE>23
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

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, 2008   1,000,000    $      -                -             -
                               =========    ========         ========      ========
Options granted                        -           -                -             -
Options exercised                      -           -                -             -
Options expired                        -           -                -             -
                               ---------    --------         --------      --------
Outstanding at June 30, 2009   1,000,000    $   0.02             1.35      $ 25,000
Options granted                        -           -                -             -
Options exercised              1,000,000           -                -             -
Options expired                        -    $      -                -             -
                               ---------    --------         --------      --------
Outstanding at September
  30, 2009                             -    $      -                -             -
                               =========    ========         ========      ========
</TABLE>
10.	Subsequent Events

In October 2009, we accepted 265,500 restricted common shares of The
Saint James Company in satisfaction of a $250,000 note receivable and
the related accrued interest.  The fair value of the Saint James shares
at December 31, 2009 was $0.

On January 6, 2010, the Company converted notes receivable to The Saint
James Company totaling $675,000 into 1,350,000 common shares of The
Saint James Company at the conversion price of $0.50 per share.  As
incentive for the conversion, Saint James agreed to pay the accrued
interest on these notes, totaling $47,248 as of December 31, 20-09, in
two installments, a $27,248 immediate payment and a $20,000 payment on
February 15, 2010.  The fair value of the Saint James shares at the
time of conversion was $0.

Business Combination

On January 8, 2010, the Company entered into a share exchange agreement
(The "Agreement") with Iron Eagle Group, a Nevada corporation 9"Iron
Eagle").  Pursuant to the Agreement, the Company issued an aggregate of
373,491,825 shares of its common stock (the "Agreement Shares") to the
Iron Eagle shareholders in exchange for all of the issued and
outstanding Iron Eagle capital stock.  As a result of the Agreement,
Iron Eagle became a wholly-owned subsidiary of the Company.  There has



<PAGE>24
                          Pinnacle Resources, Inc.

                      Notes to the Financial Statements

               As of September 30, 2009 and June 30, 2009 and
  For Each of the Three Month Periods Ended September 30, 2009 and 2008

been a change in the ownership control of the Company as of January 8,
2010 as the Iron Eagle shareholders own 92% of the Company's
outstanding common shares.

The Agreement provides for the Agreement Shares to be held in escrow
and their release subject to future performance by Iron Eagle before
October 8, 2010:
  (i)  Iron Eagle shall enter into one or more agreements to acquire
construction, infrastructure or related companies with aggregate fiscal
2009 or last twelve (12) months audited EBITDA, adjusted for non-
recurring expenses, of at least One Million Eight Hundred Thousand
Dollars ($1,800,000); or
  (ii)  The Company's Board of Directors unanimously votes to authorize
the release of the Agreement Shares when the minimum requirement has
been fulfilled.

Iron Eagle advanced a $10,000 loan to the Company on the execution of
the Agreement.  In the event that Iron Eagle fails to complete its
future performance obligations described in (i) and (ii) above, the
escrow agent is instructed to return all 373,491,825 shares of the
Company's common stock held in the escrow to the Company and the
Company would be released from its obligation to repay the $10,000 loan
received from Iron Eagle as part of the Agreement.

Iron Eagle was formed in November 2009 and as of December 31, 2009 had
assets of $10,000, liabilities of $270,000 and an accumulated deficit
of $260,000.  Iron Eagle's loss for the two month period ended December
31, 2009 was $260,020.




<PAGE>25

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 Pinnacle Resources, Inc., the
parent company and our South African subsidiary; our wholly owned
subsidiary, Diamonaire Exploration (Pty) Ltd. In June 2008, we adopted
a plan to discontinue the operations of Diamonaire.  This plan
anticipated that the operations would be sold within a one year period
during which the activities of Diamonaire would continue. We abandoned
Diamonaire in April 2009 due to the costs of continuing the operations
and the lack of potential buyers.  Diamonaire's statement of operations
for the three month period ended September 30, 2008 is recorded as
discontinued operation.

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 South African 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.  In November
2008, the buyer failed to pay the remaining 30,000,000 South African
Rand payment.  The Company and buyer informally agreed that the
remaining amount payable of 30,000,000 Rand would be due and payable in
the amount of $3,750,000 (US$).  This amendment resulted in a
restructuring gain of $787,037.  In May 2009, a settlement agreement
was reached whereby the Company would receive $1,000,000 and 1,000,000
South African Rand in full satisfaction of the outstanding receivable.
In addition, the Company received a royalty agreement on future sales
based on a rate of $0.50 per ton, not to exceed $3,000,000 over the
total agreement.  The Company does not anticipate receiving any
royalties arising from this agreement.  The 1,000,000 South African
Rand was paid directly to Titan Processors (Pty) Ltd of South Africa


<PAGE>26

and the Company received the $1,000,000.   As a result of the
completion of the informal settlement to the Third Addendum, the
Company recognized a loss of $2,750,000.

Three month periods ended September 30, 2009 compared to three month
period ended September 30, 2008

Net (loss) for the three month period in 2009 totaled $(326,396)
compared to net income of $505,584 in the same period in 2008.  The
loss from our discontinued operations was $0 in the three month period
in 2009 and $6,403 in the same period in 2008.

Operating expenses for the three month period ended September 30, 2009
were $349,685 compared to $139,932 for the three month period ended
September 30, 2008. We recorded a bad debt expense of $250,000 during
the three month period in 2009.  Our professional fee costs and other
administrative costs decreased in the three month period in 2009
compared to the same period in 2008 due to the reduction of our
operations.

Bad debt expense for the three month period ended September 30, 2009
was $250,000 compared to $0 in the prior period.  The bad debt expense
relates to our loan to St. James Company, a related party.  The current
financial condition of St. James indicates that it is unlikely that we
will be able to recover our receivable.

Restructuring of sale of subsidiary was $0 for the three month period
ended September 30, 2009 compared to $963,988 for the three month
period ended September 2008.

Interest income - banks was $1,623 during the three month period in
2009 compared to $(290) for the three month ended September 30, 2009 as
a result of the increase in our cash deposits between the two periods.

For the three month period ended September 30, 2009, we received other
income of $12,666 compared to $1,620 for the three month period ended
September 30, 2008.

Liquidity

September 30, 2009 compared to June 30, 2009

During the three month period in 2009, we relied on cash reserves
related to the sale of VanMag in 2007.  Our cash position decreased
from $326,136 at June 30, 2009 to $78,789 at September 30, 2009,
primarily due to loans we made that we now believe to be uncollectible.
We have no current sources of cash and we will not be able to continue
in existence if further cash resources are not obtained.




<PAGE>27

Discontinued operations


Diamonaire Exploration (Pty) (Ltd)

As of June 2008, we adopted a plan to discontinue the operations of
Diamonaire.  This plan anticipated that the operations would be sold
within a one year period during which the activities of Diamonaire
would continue. We abandoned Diamonaire in April 2009 due to the costs
of continuing the operations and the lack of potential buyers.

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-
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

<PAGE>28

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, 2009, 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, 2009.  Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of September 30, 2009 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>29
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>31

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:  January 20, 2010

Pinnacle Resources, Inc.

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