**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549 

 

**FORM 10-Q**

(Mark One) 

x** QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**

 

For the quarterly period endedSeptember 30, 2008 

 

o** TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT**

For the transition period from___________ to _____________ 

*Commission file number 333-146407*

 

ORO VOLCANICO CORP.

 (Exact name of small business issueras specified in its charter) 

 

|                                                            |   |                              |
|-----------------------------------------------------------------|--------|-----------------------------------|
| Delaware                                                        |   | 98-0494816                        |
| (State or other jurisdiction of incorporation or  organization) |   | (IRS Employer Identification No.) |

 

|                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------|
|      1 Place Ville Marie -Suite 2821

Montreal, Quebec H3B 4R4, Canada

 (Address  of principal executive offices) |

 

|                         |
|------------------------------|
| (514)  286-1999              |
| (Issuer's  telephone number) |

 

| Not Applicable                                                                       |
|--------------------------------------------------------------------------------------|
|                                                                                 |
| (Former  name, former address and former fiscal year,

if changed since last report) |

 

Check whether the registrant (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter 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 x****    No o

  

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State the number of shares outstanding of each of the issuer’s classes ofcommon equity, as of the latest practicable date: 5,116,320 shares of CommonStock, as of August 13, 2008.  

          Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, a non-accelerated filer, or asmaller reporting company. See definitions of “large accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the ExchangeAct.

 

                                     

Large accelerated filer      o           Accelerated filer     o

                                     

Non-accelerated filer       o    (Do not check if a smallerreporting company)   

Smaller reporting companyx**** 

 

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Indicate by check mark whether the Registrant is a shell company (as definedin Rule 12b-2 of the Securities Exchange Act of 1934) (check one): Yes x****   No   o

Transitional Small BusinessDisclosure Format (check one): Yes o   No x****  

 

 

 

**PART I – FINANCIAL INFORMATION**

**Item 1.  Financial Information**

ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

INTERIM FINANCIAL STATEMENTS

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007

(UNAUDITED)

CONTENTS

| Interim Balance Sheets                                   |   | **1**    |
|----------------------------------------------------------|--------|----------|
| Interim Statements of Operations and Comprehensive  Loss |   | **2-3**  |
| Interim Statements of Stockholders' Deficit              |   | **4**    |
| Interim Statements of Cash Flows                         |   | **5**    |
| Notes to Interim Financial Statements                    |   | **6-17** |

 

 

 

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Interim Balance Sheets

As of September 30, 2008 and December 31, 2007

(Unaudited)

            
|                                                      |   | **September 30,** |          | December 31**,** |
|-----------------------------------------------------------|--------|-------------------|---------------|------------------|
|                                                      |   | **2008**          |          | 2007             |
| **ASSETS**                                                |
| **Current Assets**                                        |   |              |          |             |   |   |
| Cash                                                      |   | **$**             | **138**       |             | $ | 37 |
| Prepaid expense                                           |   |              | **-**         |             |   | 773 |
|                                                      |   |              |          |             |   |   |
| **Total Current Assets**                                  |   |              | **138**       |             |   | 810 |
| **Mineral Rights** (note 6)                               |   |              | **22,165**    |             |   | 23,588 |
|                                                      |   |              |          |             |   |   |
| **Total Assets**                                          |   | **$**             | **22,303**    |             | $ | 24,398 |
|                                                      |   |              |          |             |   |   |
| **LIABILITIES**                                           |   |              |          |             |   |   |
| **Current Liabilities**                                   |   |              |          |             |   |   |
| Accounts payable                                     |   | **$**             | **8,151**     |             | $ | - |
| Accrued liabilities                                       |   |              | **5,107**     |             |   | 23,659 |
| Loans from related parties (note 7)                       |   |              | **53,464**    |             |   | 22,761 |
|                                                      |   |              |          |             |   |   |
| **Total Liabilities**                                     |   |              | **66,722**    |             |   | 46,420 |
|                                                      |   |              |          |             |   |   |
| **Contingencies**  (note 10)                              |   |              |          |             |   |   |
| **STOCKHOLDERS' DEFICIT**                                 |
| **Capital Stock**(note 8)                                 |   |              |          |             |   |   |
| Authorized                                                |   |              |          |             |   |   |
| 10,000,000 preferred shares, par  value $0.0001 per share |   |              |          |             |   |   |
| 50,000,000 common shares, par value $0.0001 per  share    |   |              |          |             |   |   |
| Issued and outstanding                                    |   |              |          |             |   |   |
| 5116320 common shares                                     |   |              | **512**       |             |   | 512 |
| **Additional Paid-in Capital**                            |   |              | **59,214**    |             |   | 59,214 |
| **Accumulated Other Comprehensive Income**                |   |              | **6,457**     |             |   | 3,638 |
| **Deficit Accumulated During the Exploration Stage**      |   |              | **(110,602)** |             |   | (85,386) |
|                                                      |   |              |          |             |   |   |
| **Total Stockholders' Deficit**                           |   |              | **(44,419)**  |             |   | (22,022) |
|                                                      |   |              |          |             |   |   |
| **Total Liabilities and Stockholders' Deficit**           |   | **$**             | **22,303**    |             | $ | 24,398 |

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(The accompaniednotes are an integral part of these interim financial statements.)

 

1

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Interim Statements of Operations and ComprehensiveLoss

Three Months and Nine Months Ended September 30, 2008and 2007, and the Period from Date of Inception (May 9, 2006) Through September30, 2008

(Unaudited)

      
|                                    |   | **Three Months**  |          | Three Months  |
|-----------------------------------------|--------|-------------------|---------------|---------------|
|                                    |   | **Ended**         |          | Ended         |
|                                    |   | **September 30,** |          | September 30, |
|                                    |   | **2008**          |          | 2007          |
| **Revenues**                            |   | **$**             | **-**         |          | $ | - |
|                                    |   |              |          |          |   |   |
| **Expenses**                            |   |              |          |          |   |   |
| Professional fees                       |   |              | **8,054**     |          |   | 11,434 |
| Bank charges** **                  |   |              | **84**        |          |   | 111 |
| Office and general                      |   |              | **-**         |          |   | 500 |
|                                    |   |              |          |          |   |   |
| **Total Expenses**                      |   |              | **19,289**    |          |   | 12,045 |
|                                    |   |              |          |          |   |   |
| **Loss from Operations**                |   |              | **(19,289)**  |          |   | (12,045) |
| **Other**                               |   |              |          |          |   |   |
| Foreign exchange gain                   |   |              | -             |          |   | 161 |
|                                    |   |              |          |          |   |   |
| **Loss Before Income Taxes**            |   |              | **(19,289)**  |          |   | (11,884) |
| Provision for income taxes****(note 9)  |   |              | **-**         |          |   | - |
|                                    |   |              |          |          |   |   |
| **Net Loss**                            |   |              | **(19,289)**  |          |   | (11,884) |
| Foreign currency translation adjustment |   |              | **1,163**     |          |   | (1,675) |
|                                    |   |              |          |          |   |   |
| **Comprehensive Loss**                  |   | **$**             | **(18,126)**  |          | $ | (13,559) |
|                                    |   |              |          |          |   |   |
| **Basic and Diluted Loss per Share**    |   | **$**             | **(0.00)**    |          | $ | (0.00) |
|                                    |   |              |          |          |   |   |
| **Basic and Diluted Weighted Average**  |   |              |          |          |   |   |
| Number of Shares Outstanding During     |   |              |          |          |   |   |
| the Period                              |   |              | **5,116,320** |          |   | 5,116,320 |

 

 

(The accompaniednotes are an integral part of these interim financial statements.)

 

2

----

 

 

 

 

ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Interim Statements of Operations and ComprehensiveLoss (cont'd)

Three Months and Nine Months Ended September 30, 2008and 2007, and the Period from Date of Inception (May 9, 2006) Through September30, 2008

(Unaudited)

                                                                                                                   
|                                    |       |                                 |          |          |   |          |   | Period from |
|-----------------------------------------|------------|--------------------------------------|---------------|---------------|--------|---------------|--------|-------------|
|                                    |       |                                 |          |          |   |          |   | Date of     |
|                                    |       |                                 |          |          |   |          |   | Inception   |
|                                    |       | **Nine Months**                      |          | Nine Months   |   | (May 9, 2006) |
|                                    |       | **Ended**                            |          | Ended         |   | Through       |
|                                    |       | **September 30,**                    |          | September 30, |   | September 30, |
|                                    |       | **2008**                             |          | 2007          |   | 2008          |
| **Revenues**                            | ** ** | **$**                                | **-**         |          | $      | -             |   | $           | - |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Expenses**                            | ** ** |                                 |          |          |   |          |   |        |   |
| Professional fees                       |       |                                 | **24,963**    |          |   | 25,597        |   |        | 108,901 |
| Bank charges** **                  |       |                                 | **253**       |          |   | 414           |   |        | 869 |
| Office and general                      |       |                                 | **-**         |          |   | 500           |   |        | 500 |
| Taxes and dues                          |       |                                 | **-**         |          |   | 291           |   |        | 291 |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Total Expenses**                      | ** ** |                                 | **25,216**    |          |   | 26,802        |   |        | 110,561 |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Loss from Operations**                | ** ** |                                 | **(25,216)**  |          |   | (26,802)      |   |        | (110,561) |
| **Other**                               | ** ** |                                 |          |          |   |          |   |        |   |
| Foreign exchange loss                   |       |                                 | **-**         |          |   | (52)          |   |        | (41) |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Loss Before Income Taxes**            | ** ** |                                 | **(25,216)**  |          |   | (26,854)      |   |        | (110,602) |
| Provision for income taxes****(note 9)  |       |                                 | **-**         |          |   | -             |   |        | - |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Net Loss**                            | ** ** |                                 | **(25,216)**  |          |   | (26,854)      |   |        | (110,602) |
| Foreign currency translation adjustment |       |                                 | **2,819**     |          |   | (1,675)       |   |        | 6,457 |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Comprehensive Loss**                  | ** ** | **$**                                | **(22,397)**  |          | $      | (28,529)      |   | $           | (104,145) |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Basic and Diluted Loss per Share**    | ** ** | **      $** | **(0.00)**    |          | $      | (0.00)        |   |        |   |
|                                    |       |                                 |          |          |   |          |   |        |   |
| **Basic and Diluted Weighted Average**  | ** ** |                                 |          |          |   |          |   |        |   |
| **Number of Shares Outstanding During** | ** ** |                                 |          |          |   |          |   |        |   |
| **the Period**                          | ** ** |                                 | **5,116,320** |          |   | 5,116,320     |   |        |   |

(The accompaniednotes are an integral part of these interim financial statements.)

 

3

----

 

ORO VOLCANICO CORP.

**(AN EXPLORATION STAGECOMPANY)**

Interim Statements of Stockholders' Deficit

Nine Months Ended September 30, 2008 and the Periodfrom Date of Inception

(May 9, 2006) Through September 30, 2008

(Unaudited)

            
|                                 |   |          |   |        |    |        |           |              |      |            |           |            | **Deficit**       |          |   |   |
|--------------------------------------|--------|---------------|--------|-------------|---------|-------------|----------------|-------------------|-----------|-----------------|----------------|-----------------|-------------------|---------------|--------|--------|
|                                 |   |          |   |        |    |        |           |              |      | **Accumulated** |           | **Accumulated** |              | **Total**     |
|                                 |   |          |   |        |    |        | **Additional** |              | **Other** |            | **During the** |            | **Stockholders'** |
|                                 |   | **Number of** |   | **Capital** |    | **Paid-in** |           | **Comprehensive** |      | **Exploration** |           | **(Deficit)**   |
|                                 |   | **Shares**    |   | **Stock**   |    | **Capital** |           | **Income**        |      | **Stage**       |           | **Equity**      |
|                                 |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| Balance, May 9, 2006                 |   | -             |   | $           | -       |        | $              | -                 |      | $               | -              |            | $                 | -             |   | $      | - |
| Common shares issued for cash        |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
|  (note 8)                       |   | 5,016,320     |   |        | 502     |        |           | 59,214            |      |            | -              |            |              | -             |   |   | 59,716 |
| Common shares issued for             |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
|  mineral rights (notes 6 and 8) |   | 100,000       |   |        | 10      |        |           | -                 |      |            | -              |            |              | -             |   |   | 10 |
| Net loss for the period              |   | -             |   |        | -       |        |           | -                 |      |            | -              |            |              | (20,970)      |   |   | (20,970) |
|                                 |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| Balance, December 31, 2006           |   | 5,116,320     |   |        | 512     |        |           | 59,214            |      |            | -              |            |              | (20,970)      |   |   | 38,756 |
| Foreign currency translation         |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| adjustment                           |   | -             |   |        | -       |        |           | -                 |      |            | 3,638          |            |              | -             |   |   | 3,638 |
| Net loss for the year                |   | -             |   |        | -       |        |           | -                 |      |            | -              |            |              | (64,416)      |   |   | (64,416) |
|                                 |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| Balance, December 31, 2007           |   | 5,116,320     |   |        | 512     |        |           | 59,214            |      |            | 3,638          |            |              | (85,386)      |   |   | (22,022) |
| Foreign currency translation         |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| adjustment                           |   | -             |   |        | -       |        |           | -                 |      |            | 2,819          |            |              |          |   |   | 2,819 |
| Net loss for the period              |   | -             |   |        | -       |        |           | -                 |      |            | -              |            |              | (25,216)      |   |   | (25,216) |
|                                 |   |          |   |        |    |        |           |              |      |            |           |            |              |          |   |   |   |
| **Balance, September 30, 2008**      |   | **5,116,320** |   | **$**       | **512** |        | **$**          | **59,214**        |      | **$**           | **6,457**      |            | **$**             | **(110,602)** |   | **$**  | **(44,419)** |

(The accompaniednotes are an integral part of these interim financial statements.)

 

4

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Interim Statements of Cash Flows

Nine Months Ended September 30, 2008 and 2007, and thePeriod from Date of Inception (May 9, 2006) Through September 30, 2008

(Unaudited)

                         
|                                                                                       |              |         |          |   |          |   | Period from |
|--------------------------------------------------------------------------------------------|-------------------|--------------|---------------|--------|---------------|--------|-------------|
|                                                                                       |              |         |          |   |          |   | Date of     |
|                                                                                       |              |         |          |   |          |   | Inception   |
|                                                                                       | **Nine Months**   |         | Nine Months   |   | (May 9, 2006) |
|                                                                                       | **Ended**         |         | Ended         |   | Through       |
|                                                                                       | **September 30,** |         | September 30, |   | September 30, |
|                                                                                       | **2008**          |         | 2007          |   | 2008          |
| **Cash Flows from Operating Activities**                                                   |              |         |          |   |          |   |        |   |
| Net loss                                                                                   | **$**             | **(25,216)** |          | $      | (26,854)      |   | $           | (110,602) |
| Changes in working capital:                                                                |              |         |          |   |          |   |        |   |
| Prepaid expense                                                                            |              | **773**      |          |   | (3,280)       |   |        | 773 |
| Accounts payable                                                                           |              | **8,151**    |          |   | -             |   |        | 8,148 |
| Accrued liabilities                                                                        |              | **(18,552)** |          |   | (12,607)      |   |        | 5,107 |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Net Cash Used in Operating Activities**                                                  |              | **(34,844)** |          |   | (42,741)      |   |        | (96,574) |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Cash Flows from Investing Activities**                                                   |              |         |          |   |          |   |        |   |
| Acquisition of mineral rights                                                              |              | **1,423**    |          |   | (310)         |   |        | (19,287) |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Net Cash Provided by (Used in) Investing Activities**                                    |              | **1,423**    |          |   | (310)         |   |        | (19,287) |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Cash Flows from Financing Activities**                                                   |              |         |          |   |          |   |        |   |
| Stock issuance for cash                                                                    |              | **-**        |          |   | -             |   |        | 59,716 |
| Loans from related parties                                                                 |              | **30,703**   |          |   | 2,999         |   |        | 53,464 |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Net Cash Provided by Financing Activities**                                              |              | **30,703**   |          |   | 2,999         |   |        | 113,180 |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Foreign Currency Translation Adjustment**                                                |              | **2,819**    |          |   | -             |   |        | 2,819 |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Net Increase (Decrease) in Cash**                                                        |              | **101**      |          |   | (40,052)      |   |        | 138 |
| **Cash - Beginning of Period**                                                             |              | **37**       |          |   | 48,007        |   |        | - |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Cash - End of Period**                                                                   | **$**             | **138**      |          | $      | 7,955         |   | $           | 138 |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Supplementary Information**                                                              |              |         |          |   |          |   |        |   |
| Interest                                                                                   | **$**             | **-**        |          | $      | -             |   |        |   |
|                                                                                       |              |         |          |   |          |   |        |   |
| Income taxes                                                                               | **$**             | **-**        |          | $      | -             |   |        |   |
|                                                                                       |              |         |          |   |          |   |        |   |
| **Nonmonetary Transaction**                                                                |              |         |          |   |          |   |        |   |
| In December 2006, 100,000 common shares were issued  for mineral rights at a value of $10. |

 

(The accompaniednotes are an integral part of these interim financial statements.)

 

5

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

1.    Nature of Businessand Exploration Activities 

Oro Volcanico Corp., (the "Company"),incorporated in the state of Delaware on May 9, 2006, is an exploration stagecompany operating in Canada. The Company's principal business is theacquisition and exploration of mining properties.  On November 29, 2006, theCompany entered into an agreement to acquire an 80% interest in sixteen mineralclaims located in Dalet Township in the northwestern part of the province ofQuebec, Canada, from a company under common control. The interest was purchasedfor approximately $20,240 ($20,000 Canadian) plus issuance of 100,000 commonshares by the Company valued at $10 as described in notes 6 and 8. The Companyhas not presently determined whether its mineral rights contain mineralreserves that are economically recoverable. The exploration and development ofmineral deposits involves significant financial risks. The success of theCompany will be influenced by a number of factors, including exploration andextraction risks, regulatory issues, environmental regulations and other matters.

The explorationprogram will be oriented towards probing the conductive zones by groundgeophysics followed by diamond drilling. The total budget for the explorationprogram is approximately $26,858. The result of the program will then beevaluated to plan the investigation by drilling.

2.    Going Concern

These unauditedinterim financial statements have been prepared on a going concern basis, whichimplies the Company will continue to realize its assets and discharge itsliabilities in the normal course of business. The Company has not generatedrevenues since inception and has not paid any dividends and is unlikely to paydividends or generate earnings in the immediate or foreseeable future.  Thecontinuation of the Company as a going concern is dependant upon the continuedfinancial support from the stockholders, the ability of the Company to obtainnecessary equity financing to continue operations, and the attainment ofprofitable operations from its mineral rights. Management is planning to obtainequity financing to continue operations. Although the Company plans to pursueadditional financing, there can be no assurance that the Company will be ableto secure financing when needed or obtain such terms satisfactory to theCompany, if at all. As of September 30, 2008, the Company has an deficitaccumulated during the exploration stage of $110,602 (December 31, 2007 ‐$85,386). These and other factors raise substantial doubt regarding theCompany's ability to continue as a going concern.  

These unaudited interimfinancial statements do not include any adjustments to the recoverability andclassification of recorded asset amounts and classification of liabilities thatmight be necessary should the Company be unable to continue as a going concern.

6

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies  

The accounting policies of the Company are in accordancewith generally accepted accounting principles of the United States of America,and their basis of application is consistent with that of the previous year. Outlined below are those policies considered particularly significant:

a)     Use of Estimates

Preparation of financial statements in accordance withaccounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the amountsreported in the financial statements and related notes to financialstatements.  These estimates are based on management's best knowledge ofcurrent events and actions the Company may undertake in the future. Actual resultsmay ultimately differ from estimates, although management does not believe suchchanges will materially affect the financial statements in any individualperiod.

b)     Mineral Rights and Deferred Exploration Expenses

Costs related to the acquisition and exploration ofmineral rights are recorded at cost and capitalized until the commencement ofcommercial production. If commercially profitable, mineral reserves aredeveloped, capitalized costs of the related mineral rights are reclassified asmining assets and amortized according to the units of production method. If itis determined that capitalized acquisition, exploration and development costsare not recoverable over the estimated economic life of the reserves, or if theproject is abandoned, then such costs are written down to their net realizablevalue. The Company’s management reviews the carrying values of assets on aregular basis to determine whether any write‐downs are necessary. Therecoverability of amounts recorded for mineral rights and deferred explorationexpenses depends on the discovery of economically recoverable reserves,confirmation of the Company’s interest in the mining claims, the ability of theCompany to obtain the necessary financing to complete the development, andfuture profitable production or proceeds from the disposition thereof. 

c)     Reporting Currency

The U.S. dollar has been used as the unit ofmeasurement in these financial statements.

d)     Foreign Currency Translation

The functional currency of the Company's foreignentity is the local currency.  The translation of foreign currencies into U.S.dollars is performed for balance sheet accounts using the exchange rates ineffect at the balance sheet dates and for revenue and expense accounts using aweighted average exchange rate during the period.  The gains or lossesresulting from the translation are included in Accumulated Other ComprehensiveIncome in the Statement of Stockholders’ (Deficit) Equity and are excluded fromnet loss.  

7

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

e)     Share‐Based Payment

The Company has adopted the disclosure requirements ofStatements of Financial Accounting Standards ("SFAS") No. 123R,"Share‐Based Payment" ("SFAS No. 123R") for stockoptions and similar equity instruments (collectively, "options")issued to employees. The Company applies the fair‐value based method ofaccounting as prescribed by SFAS No. 123R. Under the fair value based method,compensation cost is measured at the grant date based on the value of the awardand is recognized over the service period, which is usually the vestingperiod.  For stock options, the fair value is determined using an option‐pricingmodel that takes into account the stock price at the grant date, the exerciseprice, the expected life of the option, the volatility of the underlying stockand the expected dividends on it, and the risk‐free interest rate overthe expected life of the option. SFAS No. 123R also applies to transactions inwhich an entity issues its equity instruments to acquire goods or services fromnon‐employees. Those transactions must be accounted for based on the fairvalue of the consideration received or the fair value of the equity instrumentsissued, whichever is more reliably measurable.

Value of options granted has been estimated using theBlack‐Scholes option pricing model. The assumptions are evaluatedannually and revised as necessary to reflect market conditions and additionalexperience.

f)      Income Taxes

The Company accounts for income taxes pursuant to SFASNo. 109, "Accounting for Income Taxes" ("SFAS No. 109").Deferred taxes are provided under the liability method whereby deferred taxassets are recognized for deductible temporary differences, and deferred taxliabilities are recognized for taxable temporary differences. Temporarydifferences are the differences between the reported amounts of assets andliabilities and their tax bases. Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not thatsome portion or all of the deferred tax assets will not be realized. Deferredtax assets and liabilities are adjusted for the effects of changes in tax lawsand rates on the date of enactment.

g)     Comprehensive Income (Loss)

The Company has adopted SFAS No. 130, "ReportingComprehensive Income." ("SFAS No. 130").  SFAS No. 130 establishes standards for reporting and presentation of comprehensive incomeand its components in a full set of financial statements.  Comprehensive incomeis presented in the statement of stockholder's (deficit) equity, and consistsof net loss and unrealized gains (losses) on available for sale marketablesecurities; foreign currency translation adjustments; changes in market valueof future contracts that qualify as a hedge; and negative equity adjustmentsrecognized in accordance with  SFAS No. 87.  SFAS No. 130 requires onlyadditional disclosures in the financial statements and does not affect theCompany's financial position or results of operations. 

8

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

h)     Impairment of Long‐lived Assets

The Company evaluates the recoverability of long‐livedassets and the related estimated remaining lives when events or circumstanceslead management to believe that the carrying value of an asset may not berecoverable.   Recoverability is assessed based on the carrying amount of along‐lived asset compared to the sum of the future undiscounted cashflows expected to result from the use and the eventual disposal of the asset.An impairment loss is recognized when  the carrying amount is not recoverable(exceeds the total undiscounted cash flows expected from its use anddisposition) and exceeds fair value.  For the periods ended September 30, 2008and December 31, 2007, no events or circumstances occurred for which anevaluation of the recoverability of long‐lived assets was required.

i)      Asset Retirement Obligations

For operating properties, costs associated withenvironmental remediation obligations are accrued in accordance with SFAS No.143, ''Accounting for Asset Retirement Obligations'' (''SFAS No. 143''). SFASNo. 143 requires the Company to record a liability for the present value of theestimated environmental remediation costs, and the related asset created withit, in the period in which the liability is incurred. The liability will beaccreted and the asset will be depreciated over the life of the related assets.Adjustments for changes resulting from the passage of time and changes toeither the timing or amount of the original present value estimate underlyingthe obligation will be made.

For non‐operating properties, costs associatedwith environmental remediation obligations are accrued when it is probable thatsuch costs will be incurred and they can be reasonably estimated. Estimates forreclamation and other closure costs are prepared in accordance with SFAS No. 5''Accounting for Contingencies,'' or Statement of Position 96‐1''Environmental Remediation Liabilities.'' Accruals for estimated losses fromenvironmental remediation obligations have historically been recognized nolater than completion of the remedial feasibility study for each facility andare charged to provision for closed operations and environmental matters. Costsof future expenditures for environmental remediation are not discounted totheir present value unless subject to a contractually obligated fixed paymentschedule. Such costs are based on management's current estimate of amounts tobe incurred when the remediation work is performed, within current laws andregulations.

Future closure, reclamation and environmental‐relatedexpenditures are difficult to estimate, in many circumstances, due to the earlystage nature of investigations, and uncertainties associated with defining thenature and extent of environmental contamination and the application of lawsand regulations by regulatory authorities and changes in reclamation orremediation technology. Management periodically reviews accrued liabilities forsuch reclamation and remediation costs as evidence becomes available indicatingthat the Company's liabilities have potentially changed.

9

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

j)      Loss per Share

The Company adopted SFAS No.128, "Earnings perShare" which requires disclosure on the financial statements of basic anddiluted earnings (loss) per share. Basic earnings (loss) per share is computedby dividing net earnings (loss) by the weighted average number of common sharesoutstanding for the period. Diluted earnings (loss) per share is computed bydividing net loss by the weighted average number of common shares outstandingplus common stock equivalents (if dilutive) related to stock options andwarrants for each period.

k)     Recent Accounting Pronouncements 

In September 2006, the  Financial Accounting StandardsBoard ("FASB") issued  FASB Staff Position ("FSP") SFAS No.157, "Fair Value Measurements" ("SFAS No. 157"), whichdefines fair value, establishes a framework for measuring fair value andexpands the related disclosure requirements. SFAS No. 157 applies under otheraccounting pronouncements that require or permit fair value measurements anddoes not require any new fair value measurements. SFAS No. 157 indicates, amongother things, that a fair value measurement assumes that the transaction tosell an asset or transfer a liability occurs in the principal market for theasset or liability or, in the absence of a principal market, the mostadvantageous market for the asset or liability. SFAS No. 157 defines fair valuebased upon an exit price model. In February 2008, the FASB issued FSP SFAS No.157‐1, "Application of FASB Statement No. 157 to FASB Statement No.13 and Its Related Interpretive Accounting Pronouncements That Address LeasingTransactions," and FSP SFAS No. 157‐2, "Effective Date of FASBStatement No. 157." FSP SFAS 157‐1 removes leasing transactions fromthe scope of SFAS No. 157, while SFAS No. 157‐2 defers the effective dateof SFAS No. 157 to the fiscal year beginning after November 15, 2008 fornonfinancial assets and nonfinancial liabilities that are recognized ordisclosed at fair value in the financial statements on a nonrecurring basis. Itdoes not defer recognition and disclosure requirements for financial assets andfinancial liabilities, or for nonfinancial assets and nonfinancial liabilitiesthat are remeasured at least annually. Effective January 1, 2008, the Companyadopted SFAS No. 157, with the exception of the application of the statement tonon‐recurring nonfinancial assets and nonfinancial liabilities. Theadoption of SFAS No. 157 did not impact the Company's financial position orresults of operations. 

In September 2006, FASB  issued  SFAS No. 158,“Employers' Accounting for Defined Benefit  Pension and Other PostretirementPlans ‐ an amendment of FASB Statements No. 87, 88, 106, and 132(R)”("SFAS No. 158") . The Company has adopted SFAS No. 158 except forthe requirement to measure plan assets and benefit obligations as of the dateof the Company's fiscal year‐end statement of financial position which iseffective to fiscal years beginning after December 15, 2008. The Company iscurrently assessing the potential impact that the adoption of SFAS No. 158could have on its financial statements.  

3.    Summary of Significant Accounting Policies (cont'd)

k)     Recent Accounting Pronouncements (cont'd)

In December 2007, FASB issued SFAS No. 141 (revised2007), "Business Combinations" ("SFAS No. 141(R)"). Thisstatement replaces SFAS No. 141, "Business Combinations" and requiresan acquirer to recognize the assets acquired, the liabilities assumed,including those arising from contractual contingencies, any contingentconsideration, and any noncontrolling interest in the acquiree at theacquisition date, measured at their fair values as of that date, with limitedexceptions specified in the statement. SFAS No. 141(R) also requires theacquirer in a business combination achieved in stages (sometimes referred to asa step acquisition) to recognize the identifiable assets and liabilities, aswell as the noncontrolling interest in the acquiree, at the full amounts oftheir fair values (or other amounts determined in accordance with SFAS No.141(R)). In addition, SFAS No. 141(R)'s requirement to measure thenoncontrolling interest in the acquiree at fair value will result inrecognizing the goodwill attributable to the noncontrolling interest inaddition to that attributable to the acquirer. SFAS No. 141(R) amends SFAS No.109, "Accounting for Income Taxes", to require the acquirer torecognize changes in the amount of its deferred tax benefits that arerecognizable because of a business combination either in income from continuingoperations in the period of the combination or directly in contributed capital,depending on the circumstances. It also amends SFAS 142, "Goodwill andOther Intangible Assets", to, among other things, provide guidance on theimpairment testing of acquired research and development intangible assets andassets that the acquirer intends not to use. SFAS No. 141(R) appliesprospectively to business combinations for which the acquisition date is on orafter the beginning of the first annual reporting period beginning on or afterDecember 15, 2008. The Company is currently assessing the potential impact thatthe adoption of SFAS No. 141(R) could have on its financial statements. 

In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements—amendment ofAccounting Research Bulletin No. 51” (“SFAS No. 160”) SFAS No. 160 establishesaccounting and reporting standards for the noncontrolling interest in asubsidiary and for the deconsolidation of a subsidiary. It also clarifies thata noncontrolling interest in a subsidiary is an ownership interest in theconsolidated entity that should be reported as equity in the consolidatedfinancial statements. SFAS No. 160 also changes the way the consolidated incomestatement is presented by requiring consolidated net income to be reported atamounts that include the amounts attributable to both the parent and thenoncontrolling interest. It also requires disclosure, on the face of theconsolidated statement of income, of the amounts of consolidated net incomeattributable to the parent and to the noncontrolling interest. SFAS No. 160requires that a parent recognize a gain or loss in net income when a subsidiaryis deconsolidated and requires expanded disclosures in the consolidatedfinancial statements that clearly identify and distinguish between theinterests of the parent owners and the interests of the noncontrolling ownersof a subsidiary. SFAS No. 160 is effective for fiscal periods, and interimperiods within those fiscal years, beginning on or after December 15, 2008. Theadoption of SFAS No. 160 will have no impact on the Company's financialstatements.

10

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

k)     Recent Accounting Pronouncements (cont'd)

In February 2008, FASB issued FSP on SFAS No. 140‐3,“Accounting for Transfers of Financial Assets and Repurchase FinancingTransactions” (“FSP SFAS 140‐3”).  The objective of this FSP is to provideguidance on accounting for a transfer of a financial asset and a repurchasefinancing.  This FSP presumes that an initial transfer of a financial asset anda repurchase financing are considered part of the same arrangement (linkedtransaction) under SFAS No. 140, “Accounting for Transfers and Servicing ofFinancial Assets and Extinguishments of Liabilities” ("SFAS No.140").  However, if certain criteria are met, the initial transfer andrepurchase financing shall not be evaluated as a linked transaction and shallbe evaluated separately under SFAS No. 140.  FSP SFAS 140‐3 is effectivefor financial statements issued for fiscal years beginning after November 15,2008, and interim periods within these fiscal years.  Earlier application isnot permitted.  The Company is currently reviewing the effect, if any; theproposed guidance will have on its financial statements.

In March 2008, FASB issued SFAS No. 161,"Disclosures about Derivative Instruments and Hedging Activities—amendmentof FASB Statement No. 133" ("SFAS No. 161").  SFAS No. 161requires enhanced disclosures about an entity’s derivative and hedgingactivities and thereby improves the transparency of financial reporting.  SFASNo. 161 is effective for financial statements issued for fiscal years andinterim periods beginning after November 15, 2008.  Earlier application isencouraged.  The Company is currently reviewing the effect, if any; theproposed guidance will have on its financial statements.

In April 2008, FASB issued FSP SFAS No. 142‐3, “Determinationof the Useful Life of Intangible Assets” (“FSP SFAS No. 142‐3”).  FSPSFAS No. 142‐3 amends the factors that should be considered in developingrenewal or extension assumptions used to determine the useful life of arecognizable intangible asset under SFAS No. 142, “Goodwill and OtherIntangible Assets” (“SFAS No. 142”).  The intent of FSP SFAS No. 142‐3 isto improve the consistency between the useful life of a recognizable intangibleasset under SFAS No. 142 and the period of expected cash flows used to measurethe fair value of the asset under SFAS 141(R), “Business Combinations” andother U.S. generally accepted accounting principles.  FSP SFAS No. 142‐3is effective for financial statements issued for fiscal years beginning afterDecember 15, 2008, and interim periods within those fiscal years.  Earlyadoption is prohibited.  The Company does not anticipate that the adoption ofFSP SFAS No. 142‐3 will have an impact on its financial position orresults of operations.

 

11

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

k)     Recent Accounting Pronouncements (cont'd)

In May 2008, FASB issued FSP Accounting PrinciplesBoard ("APB") 141‐1 "Accounting for Convertible DebtInstruments That May Be Settled in Cash upon Conversion (Including Partial CashSettlement)" ("APB 141‐1").  APB 141‐1 clarifiesconvertible debt instruments that may be settled in cash upon conversion(including partial cash settlement) are not addressed by paragraph 12 of APBOpinion No. 14, Accounting for Convertible Debt and Debt Issued with StockPurchase Warrants. Additionally, APB 141‐1 specifies that issuers of suchinstruments should separately account for the liability and equity componentsin a manner that will reflect the entity’s nonconvertible debt borrowing ratewhen interest cost is recognized in subsequent periods.  Effective forfinancial statements issued for fiscal years beginning after December 15, 2008,and interim periods within those fiscal years. Early adoption is notpermitted.  The Company is currently reviewing the effect, if any; the proposedguidance will have on its financial statements.

In May 2008, the FASB issued SFAS No. 162, “TheHierarchy of Generally Accepted Accounting Principles" ("SFAS No.162"). SFAS No. 162 defines the order in which accounting principles thatare generally accepted should be followed. SFAS No. 162 is effective 60 daysfollowing the SEC’s approval of the Public Company Accounting Oversight Board(“PCAOB”) amendments to AU Section 411, "The Meaning of Present Fairly inConformity with Generally Accepted Accounting Principles". The Companydoes not expect the adoption of SFAS No. 162 to have a material impact on itsfinancial statements.

In June 2008, FASB issued FSP EITF Issue 03‐6‐1,“Determining Whether Instruments Granted in Share‐Based PaymentTransactions Are Participating Securities” (“FSP EITF 03‐6‐1”). FSP EITF 03‐6‐1 addresses whether instruments granted in share‐basedpayment transactions are participating securities prior to vesting and,therefore, need to be included in the earnings allocation in computing earningsper share under the two‐class method described in paragraphs 60 and 61 ofSFAS No. 128, “Earnings per Share”. FSP EITF 03‐6‐1 is effectivefor financial statements issued for fiscal years beginning after December 15,2008, and interim periods within those years.  The Company is currentlyreviewing the effect, if any; the proposed guidance will have on its financialstatements.

12

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

3.    Summary of Significant Accounting Policies (cont'd)

k)     Recent Accounting Pronouncements (cont'd)

In September 2008, FASB issued FSP SFAS 133‐1 andFIN 45‐4, "Disclosures about Credit Derivatives and CertainGuarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No.45; and Clarification of the Effective Date of FASB Statement No. 161"(“FSP SFAS 133‐1 and FIN 45‐4”).  FSP SFAS 133‐1 and FIN 45‐4amends FASB Statement No. 133, “Accounting for Derivative Instruments andHedging Activities”, to require disclosures by sellers of credit derivatives,including credit derivatives embedded in a hybrid instrument. FSP SFAS 133‐1and FIN 45‐4 also amends FASB Interpretation No. 45, “Guarantor’sAccounting and Disclosure Requirements for Guarantees, Including IndirectGuarantees of Indebtedness of Others”, to require an additional disclosureabout the current status of the payment/performance risk of a guarantee.Further, FSP SFAS 133‐1 and FIN 45‐4 clarifies the Board’s intentabout the effective date of FASB Statement No. 161, “Disclosures aboutDerivative Instruments and Hedging Activities”. FSP SFAS 133‐1 and FIN 45‐4is effective for reporting periods (annual or interim) ending after November15, 2008. The adoption of FSP SFAS 133‐1 and FIN 45‐4 will have noimpact on the Company’s financial statements.

In October 2008, FASB issued FSP SFAS 157‐3,"Determining the Fair Value of a Financial Asset When the Market for ThatAsset Is Not Active"” (“FSP SFAS 157‐3”).  FSP SFAS 157‐3clarifies the application of FASB Statement No. 157, “Fair Value Measurements”,in a market that is not active and provides an example to illustrate keyconsiderations in determining the fair value of a financial asset when themarket for that financial asset is not active. FSP SFAS 157‐3 iseffective upon issuance, including prior periods for which financial statementshave not been issued.  The Company is currently reviewing the effect, if any;the proposed guidance will have on its financial statements. 

4.    Financial Instruments

Unless otherwise noted, it ismanagement's opinion that the Company is not exposed to significant interest,currency or credit risk arising from the financial instruments. The fair valueof the financial instruments approximates their carrying values, unlessotherwise noted.

Currency Risk

The Company realizes aportion of its expenses in foreign currencies, consequently, some assets,liabilities, and expenses are exposed to foreign exchange fluctuations. Thefollowing assets and liabilities originate in Canadian dollars and are subjectto fluctuations:

Long‐term assets                                $        22,165 

Current liabilities                                 $        60,226 

13

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

5.    Fair Value Measurements

Effective January 1, 2008, the Company adopted SFAS No.157, except as it applies to the nonfinancial assets and nonfinancialliabilities subject to FSP SFAS No. 157‐2.  SFAS No. 157 clarifies thatfair value is an exit price, representing the amount that would be received tosell an asset or paid to transfer a liability in an orderly transaction betweenmarket participants.  As such, fair value is a market‐based measurementthat should be determined based on assumptions that market participants woulduse in pricing an asset or a liability.  As a basis for considering suchassumptions, SFAS No. 157 establishes a three‐tier value hierarchy, whichprioritizes the inputs used in the valuation methodologies in measuring fairvalue:

Level 1   ‐   Observable inputs that reflectquoted prices (unadjusted) for identical assets or liabilities in activemarkets.

Level 2   ‐   Include other inputs that aredirectly or indirectly observable in the marketplace.

Level 3   ‐   Unobservable inputs which aresupported by little or no market activity.

The fair value hierarchy also requires an entity tomaximize the use of observable inputs and minimize the use of unobservableinputs when measuring fair value.

Cash (level 1), prepaid expense, accounts payable,accrued liabilities and loans from related parties (level 2) are reflected inthe balance sheet at carrying value, which approximates fair value due to theshort‐term nature of these instruments.

6.    Mineral Rights 

On November 29, 2006, the Company entered into anagreement to acquire an 80% interest in twenty four mineral claims located inDalet Township in the northwestern part of the province of Quebec, Canada, froma company under common control. The interest in mineral rights includes thefollowing:

 
|                             |   | **September  30,** |       | December  31, |
|----------------------------------|--------|--------------------|------------|---------------|
|                             |   | **2008**           |       | 2007          |
| Original  acquisition costs      |   | **$**              | **19,020** |          | $ | 20,240 |
| Miscellaneous  acquisition costs |   |               | **3,145**  |          |   | 3,348 |
|                             |   |               |       |          |   |   |
|                             |   | **$**              | **22,165** |          | $ | 23,588 |

 

14

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

7.    Loans from Related Parties
|                                                    |   | **September  30,** |       | December  31, |
|---------------------------------------------------------|--------|--------------------|------------|---------------|
|                                                    |   | **2008**           |       | 2007          |
| Les Services Financiers Francis Mailhot Inc. -          |   | ** **         | ** ** |          |   |   |
|  100% owned by the chief executive officer and     |   | ** **         | ** ** |          |   |   |
|  major  shareholder of the Company                 |   | **$**              | **40,316** |          | $ | 8,602 |
| 6541950  Canada Inc. - 50% owned by the chief executive |   | ** **         | ** ** |          |   |   |
| officer  and major shareholder of the Company, and 50%  |   | ** **         | ** ** |          |   |   |
|  owned  by a director and minority shareholder of  |   | ** **         | ** ** |          |   |   |
|  the  Company                                      |   |               | **10,149** |          |   | 10,930 |
| Francis  Mailhot - chief executive officer and major    |   |               | ** ** |          |   |   |
|  shareholder  of the Company                       |   |               | **2,999**  |          |   | 3,229 |
|                                                    |   |               |       |          |   |   |
|                                                    |   | **$**              | **53,464** |          | $ | 22,761 |

The loans are non‐interest bearing, unsecured, anddue on demand.

8.    Capital Stock      

During 2006, the Company issued 5,016,320 common sharesfor proceeds of $59,716.

In December 2006, 100,000 common shares valued at $10,were issued as part of the acquisition of mineral rights as described in note6.

9.    Income Taxes 

The Company accounts for income taxes pursuant to SFASNo. 109.  SFAS No. 109 prescribes the use of the liability method wherebydeferred tax asset and liability account balances are determined based ondifferences between financial reporting and tax bases of assets and liabilitiesand are measured using the enacted tax rates. The effects of future changes intax laws or rates are not anticipated.  

Under SFAS No. 109 income taxes are recognized for thefollowing: a) amount of tax payable for the current period, and b) deferred taxliabilities and assets for future tax consequences of events that have beenrecognized differently in the financial statements than for tax purposes.  

15

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ORO VOLCANICO CORP.

(AN EXPLORATION STAGE COMPANY)

Notes to Interim Financial Statements

September 30, 2008 and 2007

(Unaudited)

9.    Income Taxes (cont'd)

The current provision for income taxes have been computedas follows:
| Expected  income tax recovery at the statutory rate - 31% |   | **$**  | **(7,817)** |
|-----------------------------------------------------------|--------|--------|-------------|
| Valuation  allowance                                      |   |   | **7,817**   |
|                                                      |   |   |        |
| Current  provision for income taxes                       |   | **$**  | **-**       |

The Company has tax losses available to be appliedagainst future years' taxable income.  Due to the losses incurred in thecurrent period and expected future operating results, management determinedthat it is more likely than not that the deferred tax asset resulting from thetax losses available for carryforward and will not be realized through thereduction of future income tax payments.  Accordingly a 100% valuationallowance has been recorded for the current income taxes and the deferredincome tax assets.

The Company has deferred income tax assets as follows:
| Net  operating loss carryforwards                   |   | **$**  | **34,287**   |
|-----------------------------------------------------|--------|--------|--------------|
| Valuation  allowance for deferred income tax assets |   |   | **(34,287)** |
|                                                |   |   |         |
|                                                |   | **$**  | **-**        |

As of September 30, 2008, theCompany had $110,602 of Federal and state net operating loss carryforwardsavailable to offset future taxable income.  The Company has the followinglosses which expire in 20 years from the date the losses were incurred:

2026                                                  $        20,970 

2027                                                  $        64,416 

2028                                                  $        25,216 

10.  Contingencies

The Company’soperations are governed by governmental laws and regulations regardingenvironmental protection. Environmental consequences are difficult to identify,in terms of level, impact or when they might occur. At the present time, and tothe best knowledge of its management, the Company is in conformity with thelaws and regulations in effect.

 

16

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**ITEM 2MANAGEEMENT’S DISCUSSION AND ANALYSIS OR PLAN**

**OF OPERATION**

 

Management’s Discussion andAnalysis contains statements that are forward-looking. These statements arebased on current expectations and assumptions that are subject to risks anduncertainties. Actual results could differ materially because of variousfactors.

 

**OVERVIEW**

** **

**Plan of Operation**

 

Over the next twelve months, we intend to explore theDalet Properties in order to determine if any mineral deposits in commerciallyviable quantities are present in such properties.

 

Exploration activities at theearly exploration stage generally consist of conducting geological explorationwork on the properties in order to discover the existence of any mineraldeposits.  Initially, we will focus on probing the conductive zones by groundgeophysics, followed by diamond drilling. The existing data base is very goodand the activities will be used to locate the drilling targets on the ground. Induced polarization is the preferred method of detection for disseminated andmassive metallic mineralization.  It has the capability to detect lower gradezones and is not influenced by the physical environment of mineral occurrences.It is also less sensitive to variations in conductivity.  If we discover anymineral deposits, we will also undertake additional exploration work in orderto determine the economic and legal feasibility of mining any such mineraldeposits.  

 

----

We have sufficient resourcesto pay for the operating expenses that we expect to incur in connection withour proposed exploration program over the next twelve months.  As of September30. 2008 we had approximately $138 in cash.  We estimate that we will incurapproximately $31,100 in expenses in carrying out our proposed explorationprogram over the next twelve months.  With respect to Dalet I, such expenseswill amount to approximately $25,100 and will consist of the following: $6,800for line cutting over the zone of airborne anomalies; $12,000.00 forgeophysical survey – induced polarization; $1,800 in fees payable toconsultants; $2,000 in travel expenses and lodging; and $2,500 forcontingencies.  With respect to Dalet II, such expenses will amount toapproximately $6,000 and will consist of the following: $4,000 for location ofthe grid and flagging of the survey stations; and $2,000 for travel andlodging.  To the extent our cash resources are not adequate for the next twelvemonths of operations, our principal shareholder, Les Services FinanciersFrancis Mailhot Inc., has committed to arrange for a loan, advance orinvestment of up to $50,000 by itself or others to fund our operations.  As of September 30, 2008, Mr. Mailhot andentities controlled by him had advanced the Company an aggregate of approximately$XX<XXX on an interest free basis.  We will require additional financing todevelop the Dalet Properties and will look to Mr. Mailhot who has no obligationto make further advances.

 

If we discover any mineraldeposits, we may need additional funds to undertake additional exploratory workto determine if the development of such mineral deposits is feasible.  Becausewe do not expect to have any cash flow from operations, we will need to raiseadditional capital to pay for such expenses.  We may have to borrow money fromshareholders or issue debt or equity or enter into a strategic arrangement witha third party.  There can be no assurance that additional capital will beavailable to us.  We currently have no agreements, arrangements orunderstandings with any person to obtain funds through bank loans, lines ofcredit or any other sources. 

 

**Going ConcernConsideration**

 

Our independent auditorsincluded an explanatory paragraph in their audit report on the December 31,2007 financial statements regarding concerns about our ability to continue as agoing concern. Our financial statements contain additional note disclosuresdescribing the circumstances that lead to this disclosure.

 

**Off-Balance SheetArrangements**

 

We have no off-balance sheetarrangements.

 

 

**INFLATION**

 

If we become operational,inflation can be expected to have an impact on our operating costs. A prolongedperiod of inflation could cause a general economic downturn and negativelyimpact our results. 

 

**SEASONALITY**

 

If we become operational, wedo not believe that our business will be seasonal to any material degree exceptthat operations may be more difficult in extreme whether during winter months.

 

----

 

*Recent Accounting Pronouncements*

 

InJune 2003, the Securities and Exchange Commission adopted final rules underSection 404 of the Sarbanes-Oxley Act of 2002. Commencing with our annualreport for the year ended December 31, 2008, we will be required to include areport of management on our internal control over financial reporting. Theinternal control report must include a statement. 

 

§of management’s responsibility for establishing and maintainingadequate internal control over our financial reporting; 

§of management’s assessment of the effectiveness of our internal controlover financial reporting as of year end; 

§of the framework used by management to evaluate the effectiveness ofour internal control over financial reporting; and

§that our independent accounting firm has issued an attestation reporton management’s assessment of our internal control over financial reporting, whichreport is also required to be filed 

 

*CriticalAccounting Policies*

 

Thepreparation of financial statements and related notes requires us to makejudgments, estimates, and assumptions that affect the reported amounts ofassets, liabilities, revenue and expenses, and related disclosure of contingentassets and liabilities. An accounting policy is considered to be critical if itrequires an accounting estimate to be made based on assumptions about mattersthat are highly uncertain at the time the estimate is made, and if differentestimates that reasonably could have been used, or changes in the accountingestimates that are reasonably likely to occur periodically, could materiallyimpact the financial statements.

 

*Off BalanceSheet Transactions*

* *

Wehave not engaged in off-balance sheet arrangements described in Regulation S-KSection 303.

 

**ITEM 3. QUALITATIVE AND QUANTITATIVEDISCLOSURES ABOUT MARKET RISKS**

** **

                Wedo not own the type of market risk sensitive instruments described inRegulation S-K Section 305 

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** **

**ITEMS 4 AND 4T.  CONTROLS AND PROCEDURES**

 

Wemaintain disclosure controls and procedures (as defined in Exchange Act Rule13a-15(e)) that are designed to assure that information required to bedisclosed in our Exchange Act reports is recorded, processed, summarized andreported within the time periods specified in the Securities and ExchangeCommission’s rules and forms, and that such information is accumulated andcommunicated to management, including our Chief Executive Officer and ChiefFinancial Officer (one person, our President), as appropriate, to allow timelydecisions regarding required disclosures. 

 

Asrequired by Exchange Act Rule 13a-15(b), as of the end of the period covered bythis report, under the supervision and with the participation of our ChiefExecutive Officer and Chief Financial Officer, we evaluated the effectivenessof our disclosure controls and procedures. Based on this evaluation, our ChiefExecutive Officer and Chief Financial Officer concluded that our disclosurecontrols and procedures were effective as of that date. 

 

Therewas no change in our internal control over financial reporting during our mostrecently completed fiscal quarter that has materially affected, or isreasonably likely to materially affect, our internal control over financialreporting.

 

| .                     |                                                                                                                                                                                                        |   |
|-----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  **PART II**     |
| ** **            |                                                                                                                                                                                                        |   |
| **OTHER INFORMATION** |
| ** **            |                                                                                                                                                                                                        |   |
| Item 1                | Legal  Proceedings                                                                                                                                                                                          | None   |
| Item 1A               |                                                                                                                                                                                                        |   |
|                  | Risk Factors:   Reference is made to our the section entitled “Risk Factors” in our  Registration Statement on Form SB-2 number 333-146407 which was ordered  effective on October 12, 2007. |   |
| ** **            |                                                                                                                                                                                                        |   |
| Item 2                | Unregistered  Sale of Equity Securities and Use of Proceeds                                                                                                                                                 |
|                  |                                                                                                                                                                                                        |   |
|                  | None                                                                                                                                                                                                        |   |
|                  |                                                                                                                                                                                                        |   |
| Item 3                | Defaults Upon  Senior Securities                                                                                                                                                                            |
|                  |                                                                                                                                                                                                        |   |
|                  | None                                                                                                                                                                                                        |   |
|                  |                                                                                                                                                                                                        |   |
| Item 4                | Submission of  Matters to a Vote of Shareholders                                                                                                                                                            |
|                  |                                                                                                                                                                                                        |   |
|                  | None                                                                                                                                                                                                        |   |
|                  |                                                                                                                                                                                                        |   |
| Item 5                | Other  Information                                                                                                                                                                                          |
|                  |                                                                                                                                                                                                        |   |
|                  | None                                                                                                                                                                                                        |   |
|                  |                                                                                                                                                                                                        |   |
| Item 6                | Exhibits                                                                                                                                                                                                    |
|                  |                                                                                                                                                                                                        |   |

 

 

|           |   |                                                                                                                                                                                |
|----------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit Number |   |  

Description                                                                                                                                                                 |
| 31.1           |   | Section 302 Certification Of Chief Executive Officer  and Chief Financial Officer                                                                                                   |
|           |   |                                                                                                                                                                                |
| 32.1           |   | Certification Pursuant To 18 U.S.C. Section 1350, As  Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 – Chief  Executive Officer and Chief Financial Officer |

 

 

----

 

 

Pursuant to the requirements of the Securities and Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.

 

Oro Volcanico Corp.

________________

(Registrant)

 

November 13, 2008

Montreal, Quebec

 

 

 

 

                                                          By: /s/ Francis Mailhot           

                                                                   Francis Mailhot, Chief Executive Officer

                                                                  (Principal Executive, Financial and Accounting Officer)