U.S. SECURITIES AND EXCHANGE
COMMISSION


Washington,
D.C. 20549





FORM 10-K





ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For
the fiscal year ended May 31, 2010


Commission
file number: 0--32919





PATRIOT
GOLD CORP.


(Exact
name of registrant as specified in its charter)





Nevada
            
            86-0947048(State
      of incorporation)
            
            (I.R.S.
      Employer Identification No.)





3651
Lindell Road, Suite D


Las Vegas, Nevada,
89103


(Address
of principal executive offices)





(702)
456-9565


(Registrant’s
telephone number, including area code)





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


None





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


Common
Stock, $0.001 par value





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





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes  ̈     No x





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act 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 x No  ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.   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. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):


1





Large
accelerated filer  ̈                                           Accelerated
filer  ̈                                Non-accelerated
filer  ̈ (Do not
check if a smaller reporting company)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
issuer’s revenues for its most recent fiscal year were $Nil





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity as May 28, 2010 was approximately $5,769,368.





The
number of shares of the issuer’s common stock issued and outstanding as of
August 12, 2010 was 26,224,400 shares.





Documents
Incorporated By Reference:  None





2


TABLE OF
CONTENTS





PageGlossary of Mining Terms
            
            4PART
      IItem
      1
            Business
            7Item
      1A
            Risk
      Factors
            12Item
      1B
            Unresolved
      Staff Comments
            15Item
      2
            Properties
            15Item
      3
            Legal
      Proceedings
            53Item
      4
            Submission
      of Matters to a Vote of Security Holders
            53PART
      IIItem
      5
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
            53Item
      6
            Selected
      Financial Data
            56Item
      7
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            57Item
      7A
            Quantitative
      and Qualitative Disclosures About Market Risk.
            62Item
      8
            Financial
      Statements and Supplementary Data.
            62Item
      9
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
            62Item
      9A
            Controls
      and Procedures
            63Item
      9B
            Other
      Information
            64PART
      IIIItem
      10
            Directors,
      Executive Officers and Corporate Governance
            64Item
      11
            Executive
      Compensation
            66Item
      12
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            69Item
      13
            Certain
      Relationships and Related Transactions, and Director
      Independence
            71Item
      14
            Principal
      Accountant Fees and Services
            75PART
      IVItem
      15
            Exhibits,
      Financial Statement Schedules
            75SIGNATURES





3


Glossary of Mining
Terms





Adit(s),Historic working
driven horizontally, or nearly so into a hillside to explore for and exploit
ore.





Adularia.A potassium-rich
alteration mineral – a form of orthoclase.





Air track holes.Drill hole
constructed with a small portable drill rig using an air-driven
hammer.





BLEG sampling.Bulk leach
sampling. A large sample of soil or rock that is leached using cyanide to
determine gold and silver content down to a detection limit of as little as 1.0
parts per billion.





CSMT Survey.A Controlled
Source Magneto-telluric geophysical method used to map the variation of the
Earth’s resistance to conduct electricity by measuring naturally occurring
electric and magnetic fields at the Earth’s surface.





Controlled Source Magneto-telluric
Survey (CSMT).The recording of variations in a generated electrical
field using sophisticated geophysical survey methods.





Core holes.A hole in the
ground that is left after the process where a hollow drill bit with diamond chip
teeth is used to drill into the ground. The center of the hollow drill fills
with the core of the rock that is being drilled into, and when the drill is
extracted, a hole is left in the ground.




Felsic Tertiary Volcanic
Rocks. Quartz-rich rocks derived from volcanoes and deposited between two
and sixty-five million years ago.






Geochemical sampling.Sample
of soil, rock, silt, water or vegetation analyzed to detect the presence of
valuable metals or other metals which may accompany them. For example, arsenic
may indicate the presence of gold.




Geologic mapping.Producing a
plan and sectional map of the rock types, structure and alteration of a
property.





Geophysical survey.Electrical, magnetic, gravity and other means used to detect features,
which may be associated with mineral deposits





Ground magnetic survey.Recording variations in the earth’s magnetic field and plotting
same.





Ground radiometric survey.A
survey of radioactive minerals on the land surface.





Leaching. Leaching is a cost
effective process where ore is subjected to a chemical liquid that dissolves the
mineral component from ore, and then the liquid is collected and the metals
extracted from it.





Level(s),Main underground
passage driven along a level course to afford access to stopes or workings and
provide ventilation and a haulage way for removal of ore.


4





Magnetic lows.An occurrence
that may be indicative of a destruction of magnetic minerals by later
hydrothermal (hot water) fluids that have come up along faults. These
hydrothermal fluids may in turn have carried and deposited precious metals such
as gold and/or silver.





Plug.A vertical pipe-like
body of magma representing a volcanic vent similar to a dome.





Quartz Monzonite.A medium to
coarse crystalline rock composed primarily of the minerals quartz, plagioclase
and orthoclase.





Quartz Stockworks.A
multi-directional system of quartz veinlets.





RC holes.Short form for
Reverse Circulation Drill holes. These are holes left after the process of
Reverse Circulation Drilling.





Resource.An estimate of the
total tons and grade of a mineral deposit defined by surface sampling, drilling
and occasionally underground sampling of historic diggings when
available.





Reverse circulation drilling.A less expensive form of drilling than coring that does not allow for the
recovery of a tube or core of rock. The material is brought up from depth as a
series of small chips of rock that are then bagged and sent in for analysis.
This is a quicker and cheaper method of drilling, but does not give as much
information about the underlying rocks.





Rhyolite plug dome.A domal
feature formed by the extrusion of viscous quartz-rich volcanic
rocks.





Scintillometer survey.A
survey of radioactive minerals using a scintillometer, a hand-held, highly
accurate measuring device.





Scoping Study.A detailed
study of the various possible methods to mine a deposit.





Silicic dome.A convex
landform created by extruding quartz-rich volcanic rocks





Stope(s), An excavation from
which ore has been removed from sub-vertical openings above or below
levels.





Tertiary.That portion of
geologic time that includes abundant volcanism in the western U.S.





Trenching.A cost effective
way of examining the structure and nature of mineral ores beneath gravel cover.
It involves digging long usually shallow trenches in carefully selected areas to
expose unweathered rock and allow sampling.





Volcanic center.Origin of
major volcanic activity





Volcanoclastic.Coarse,
unsorted sedimentary rock formed from erosion of volcanic debris.





5


Forward-Looking
Statements





This
Annual Report on Form 10-K contains forward-looking information.
Forward-looking information includes statements relating to future actions,
prospective products, future performance or results of current or anticipated
products, sales and marketing efforts, costs and expenses, interest rates,
outcome of contingencies, financial condition, results of operations, liquidity,
business strategies, cost savings, objectives of management of Patriot Gold
Corp. (the “Company” or “we”) and other matters. Forward-looking information may
be included in this Annual Report on Form 10-K or may be incorporated by
reference from other documents filed with the Securities and Exchange Commission
(the “SEC”) by the Company. One can find many of these statements by looking for
words including, for example, “believes,” “expects,” “anticipates,” “estimates”
or similar expressions in this Annual Report on Form 10-K or in documents
incorporated by reference in this Annual Report on Form 10-K. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information or future
events.





The
Company has based the forward-looking statements relating to the Company’s
operations on management’s current expectations, estimates and projections about
the Company and the industry in which it operates. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that we cannot predict. In particular, we have based many of these
forward-looking statements on assumptions about future events that may prove to
be inaccurate. Accordingly, the Company’s actual results may differ materially
from those contemplated by these forward-looking statements. Any differences
could result from a variety of factors, including, but not limited to general
economic and business conditions, competition, and other factors.








6


PART
I


Item
1.  Description of Business.





We are
engaged in natural resource exploration and anticipate acquiring, exploring, and
if warranted and feasible, developing natural resource properties. Currently we
are in the exploration state and are undertaking exploration programs in Arizona
and Nevada.





History





We were
incorporated in the State of Nevada on November 30, 1998. We were originally
organized to engage in the business of breeding, raising and marketing
ostriches, ostrich meat and ostrich by-products to the wholesale and retail
markets. We operated from November 30, 1998 through approximately May 31, 2000
when we ceased all operations due to lack of capital.





Mr. Manfred
Schultz and Mr. Gerald Hinkley were our sole officers and directors from
inception in November 1998, until they resigned on October 31, 2002. During such
time, Messrs. Schultz and Hinkley were responsible for maintaining the
Company in compliance with all SEC and other rules and regulations and for
finding a suitable business opportunity to acquire or merge with the Company. On
October 20, 2002, Mr. Bruce Johnstone was appointed to the board of
directors and as an officer. On October 31, 2002, Mr. Manfred Schultz and
Mr. Gerald Hinkley resigned as directors and officers of the Company. The
resignations were offered for personal reasons and not for any disagreement with
management of the Company or its policies. Both resigning directors and the
Company parted ways on good terms.





On or
about May 1, 2001, the directors determined that it was in the best interest of
our stockholders to become active again and we began seeking potential operating
businesses and business opportunities with the intent to acquire or merge with
such businesses. In June 2003, we filed an Amended and Restated Articles of
Incorporation with the Secretary of State of the State of Nevada changing the
name of our Company and authorizing the issuance of preferred
stock.





On June
12, 2003, we issued 13,500,000 Series A 7% Redeemable Preferred Shares to
Mr. Bruce Johnstone, our director and officer, in consideration for his
services; this issuance having been previously approved by a vote of both the
Board of Directors and the majority stockholders. Each Series A 7% Redeemable
Preferred Share had the right to vote with the common shares on all matters
requiring stockholder vote, including without limitation the election of
directors. Mr. Johnstone received the shares in lieu of cash compensation
for the services he provided to us. These services included, without limitation,
the determination to transform the Company from the then business of ostrich
meat production to the current business activity of resource exploration and
ensuring that the Company would maintain its corporate existence. During this
process, Mr. Johnstone was responsible for finding and securing qualified
directors for the board, which made up the new management team for the Company.
Along with this he was also responsible for arranging and closing our July 2003
private placement financing. These funds provided the necessary funding to
secure the first resource exploration projects which Mr. Johnstone
established when he signed the Letter of Intent with MinQuest Inc. on June 27,
2003.





7


On June
13, 2003, Messrs. Schultz and Hinkley, our former officers and directors,
returned a total of 700,000 shares of common stock to us for cancellation. Given
the fact that said individuals were no longer affiliated with the Company, at
our request they agreed to return 70% of their holdings in the Company. We
determined that having them maintain 30% of their initial holdings in the
Company was adequate consideration for the four years’ of services which they
had performed. Since Messrs. Schultz and Hinkley were satisfied with our
business plan to make the Company a natural resource exploration company, they
did not request any consideration for the return of their shares.





On June
17, 2003, each issued and outstanding share of common stock was forward split at
a rate of one for seven and six-tenths  (1:7.6) so that each share of
common stock became equal to 7.6 shares.





On June
17, 2003, we received a new trading symbol to reflect the company name change
and forward split of the common stock. The new trading symbol is
PGOL.





On June
23, 2003 the Board adopted a resolution to (i) increase the number of positions
on the Board to a total of three and (ii) appoint to the newly created positions
Mr. Robert A. Sibthorpe of Vancouver, B.C. and Mr. Robert D. Coale of
Solana Beach, CA.





On July
21, 2003, Mr. Bruce Johnstone resigned as an officer and director. The
resignation was offered for personal reasons and not for any disagreement with
management of the Company or its policies. On July 21, 2003, Mr. Ronald C.
Blomkamp was appointed as the President, Chief Executive and Financial Officer
and Secretary and a director of the Company.





On
October 13, 2005, Mr. Ronald Blomkamp, the Chairman, President, Chief Executive
Officer, Chief Operating Officer, Secretary, and a director resigned from each
of his positions as an officer and director of the Company.   On
the same date, the Company’s board of directors voted to appoint Mr. Robert
Coale as Chairman, President, Chief Executive Officer, Chief Operating Officer,
Secretary and Treasurer.  Also on the same date, the Company’s board
of directors elected Mr. Duncan Budge as a member of the board of directors of
the Company.





On March
10, 2006 the Company granted stock options to Mr. Robert Coale, who was the
Chairman, President, Chief Executive Officer, Chief Operating Officer,
Secretary, Treasurer, and Director and to Mr. Robert Sibthorpe who was a
director of the Company.  In consideration therefore, Mr. Coale, Mr.
Sibthorpe and the Company entered into Buy-Back Option Agreements, pursuant to
which Messrs. Coale and Sibthorpe granted to the Company the option to purchase
all or any portion of the 3,000,000 shares of the Company’s common stock that
are owned by each of Mr. Coale and Mr. Sibthorpe respectively for a purchase
price of $0.01 per share.





Also on
March 10, 2006, the Company entered into a Redemption Agreement with Ronald
Blomkamp, the Company’s former President and Chief Executive Officer, pursuant
to which the Company purchased from Mr. Blomkamp the 3,000,000 shares of the
Company’s common stock that were owned by Mr. Blomkamp.  The purchase
price for such shares paid to Mr. Blomkamp by the Company was $0.01 per share,
which amounted to an aggregate of $30,000.  The purchased share were
returned to treasury and cancelled.





8


On
September 5, 2008 Mr. Robert Sibthorpe resigned from his position as a Director
of the Company and on the same date Mr. Jared Beebe was appointed a Director of
the Company.


On
September 12, 2008 Mr. Robert Coale resigned from his positions as President,
Chief Executive Officer, Secretary, and Treasurer but remained as a Director of
the Company.  In addition, on September 12, 2008, Mr. Duncan Budge
resigned from his position as a Director of the Company.





Also on
September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  Mr. Duerr
is also an Officer of MinQuest Inc (“MinQuest”).  All of the Company’s
mineral properties have either been directly or indirectly optioned from
MinQuest.





On April
16, 2010, we caused the incorporation of our wholly owned subsidiary, Provex
Resources Inc., (“Provex”) under the laws of Nevada.  Mr. Herb Duerr was appointed President,
Secretary, Treasurer, and Director of Provex.On April 16,
2010 the Company entered into an Assignment Agreement, with Provex to assign the
exclusive option to an undivided right, title and interest in the Bruner and
Vernal properties; the NK project; the Weepah Hills project; the Whiskey Flat
project; the Imperial property; and the Bruner Expansion properties, to Provex.
Pursuant to the Assignment Agreements, Provex assumed the rights, and agreed to
perform all of the duties and obligations, of the Company arising under the
Bruner and Vernal Property Option Agreement; the NK Property Option Agreement;
the Weepah Hills Property Option Agreement; the Whiskey Flat Property Option
Agreement; the Imperial Property Option Agreement; and the Bruner Expansion
Property Option Agreement.





Business
Operations





We are a
natural resource exploration company with an objective of acquiring, exploring,
and if warranted and feasible, developing natural resource properties. Our
primary focus in the natural resource sector is gold. We are an exploration
stage company. We do not consider ourselves a “blank check” company required to
comply with Rule 419 of the Securities and Exchange Commission, because we were
not organized for the purpose of effecting, and our business plan is not to
effect, a merger with or acquisition of an unidentified company or companies, or
other entity or person. We do not intend to merge with or acquire another
company in the next 12 months.





Though we
have the expertise on our board of directors to take a resource property that
hosts a viable ore deposit into mining production, the costs and time frame for
doing so are considerable, and the subsequent return on investment for our
shareholders would be very long term. Therefore, we anticipate selling or
partnering any ore bodies that we may discover to a major mining company. Many
major mining companies obtain their ore reserves through the purchase of ore
bodies found by junior exploration companies. Although these major mining
companies do some exploration work themselves, many of them rely on the junior
resource exploration companies to provide them with future deposits for them to
mine. By selling or partnering a deposit found by us to these major mining
companies, it would provide an immediate return to our shareholders without the
long time frame and cost of putting a mine into operation ourselves, and it
would also provide future capital for the Company to continue
operations.





9


The
search for valuable natural resources as a business is extremely risky. We can
provide investors with no assurance that the properties we have either optioned
or purchased in Nevada and Arizona contain commercially exploitable reserves.
Exploration for natural reserves is a speculative venture involving substantial
risk. Few properties that are explored are ultimately developed into producing
commercially feasible reserves. Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often
result in unsuccessful exploration efforts. In such a case, we would be unable
to complete our business plan and any money spent on exploration would be
lost.





Natural
resource exploration and development requires significant capital and our assets
and resources are limited. Therefore, we anticipate participating in the natural
resource industry through the selling or partnering of our properties, the
purchase of small interests in producing properties, the purchase of properties
where feasibility studies already exist or by the optioning of natural resource
exploration and development projects. To date we have several properties under
option, and are in the early stages of exploring these properties. There has
been no indication as yet that any commercially viable mineral deposits exist on
these properties, and there is no assurance that a commercially viable mineral
deposit exists on any of our properties. Further exploration will be required
before a final evaluation as to the economic and legal feasibility is
determined.





Financing





In July
2003 we completed a private placement of shares and warrants which generated an
aggregate of $367,500 in proceeds.  The private placement we closed in
November 2003 generated an additional $1,080,000 in gross proceeds. Also,
$2,060,825 and $1,597,500 during the years ended May 31, 2004 and 2005,
respectively, was obtained from the exercise of stock options issued under the
Company’s 2003 stock option plan. There were no fund raising activities
undertaken by the Company during the fiscal year ended May 31,
2009.  With the funds currently held by the Company, we are adequately
funded for all work programs and option commitments for the next 12 months. If
we were to develop any of our properties beyond the exploration activities
currently being undertaken by the Company, we would need to raise further
funding.  Management plans to seek the additional capital through
private placements and public offerings of its common stock but there can be no
assurances that management would be successful in its attempt to raise the
additional funds.





Competition





The
mineral exploration industry, in general, is intensively competitive and even if
commercial quantities of ore are discovered, a ready market may not exist for
sale of same. Numerous factors beyond our control may affect the marketability
of any substances discovered. These factors include market fluctuations, the
proximity and capacity of natural resource markets and processing equipment,
government regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and
environmental protection. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in our not receiving
an adequate return on invested capital.




10


Government
Regulation





The
federal government and various state and local governments have adopted laws and
regulations regarding the protection of natural resources, human health and the
environment. We will be required to conduct all exploration activities in
accordance with all applicable laws and regulations. These may include requiring
working permits for any exploration work that results in physical disturbances
to the land and locating claims, posting claims and reporting work performed on
the mineral claims. The laws and regulations may tell us how and where we can
explore for natural resources, as well as environmental matters relating to
exploration and development. Because these laws and regulations change
frequently, the costs of compliance with existing and future environmental
regulations cannot be predicted with certainty.





Any
exploration or production on United States Federal land will have to comply with
the Federal Land Management Planning Act which has the effect generally of
protecting the environment. Any exploration or production on private property,
whether owned or leased, will have to comply with the Endangered Species Act and
the Clean Water Act. The cost of complying with environmental concerns under any
of these acts varies on a case-by-case basis. In many instances the cost can be
prohibitive to development. Environmental costs associated with a particular
project must be factored into the overall cost evaluation of whether to proceed
with the project.





Other
than the normal bonding requirements, there are no costs to us at the present
time in connection with compliance with environmental laws. However, since we do
anticipate engaging in natural resource projects, these costs could occur at any
time. Costs could extend into the millions of dollars for which we could be
liable. In the event of liability, we would be entitled to contribution from
other owners so that our percentage share of a particular project would be the
percentage share of our liability on that project. However, other owners may not
be willing or able to share in the cost of the liability. Even if liability is
limited to our percentage share, any significant liability would wipe out our
assets and resources.





Employees





We have
commenced only limited operations. Therefore, we have no full time employees.
Our sole officer and three directors provide planning and organizational
services for us on a part-time basis.





Subsidiaries





On April
16, 2010, we caused the incorporation of our wholly owned subsidiary, Provex
Resources, Inc., (“Provex”) under the laws of Nevada.  On April 16,
2010 the Company entered into an Assignment Agreement to assign the exclusive
option to an undivided right, title and interest in the Bruner and Vernal
property; the NK, Weepah Hills and the Whiskey Flat projects; the Imperial
property; and the Bruner Expansion property to Provex. Pursuant to the
Assignment Agreement, Provex assumed the rights, and agreed to perform all of
the duties and obligations, of the Company arising under the Bruner and Vernal
Property Option Agreement; the NK project, Weepah Hills Project and the Whiskey
Flat project – Property Option Agreements; the Imperial Property Option
Agreement; and the Bruner Expansion Property Option
Agreement.  Provex’s only assets are the aforementioned agreements and
it does not have any liabilities.


11





Item
1A.  Risk Factors





Factors that May Affect
Future Results





1.
We will require additional funds to achieve our current business strategy and
our inability to obtain funding will cause our business to fail.





Based
upon current plans we expect to incur operating losses in future periods. This
will happen because there are expenses associated with the acquisition and
exploration of natural resource properties. While we have sufficient cash on
hand to fund our operating needs to May 31, 2011, we will need to raise
additional funds in the future through public or private debt or equity sales in
order to fund our future operations and fulfill contractual obligations. These
financings may not be available when needed. Even if these financings are
available, it may be on terms that we deem unacceptable or are materially
adverse to your interests with respect to dilution of book value, dividend
preferences, liquidation preferences, or other terms. Our inability to obtain
financing would have an adverse effect on our ability to implement our current
exploration in Arizona and Nevada, and as a result, could require us to diminish
or suspend our operations and possibly cease our existence. Obtaining additional
financing would be subject to a number of factors, including the market prices
for the mineral property and silver and copper. These factors may make the
timing, amount, terms or conditions of additional financing unavailable to
us.





2.
If we do not complete the required option payments and capital expenditure
requirements mandated in our respective agreements with MinQuest, Inc.
(“MinQuest”) we will lose our interest in that respective property and our
business may fail.





If we do
not make all of the property payments to MinQuest or incur the required
expenditures in accordance with the respective property option agreements we
will lose our option to purchase the respective property for which we have not
made the payments and may not be able to continue to execute our business
objectives if we are unable to find an alternate exploration interest. Since our
payment obligations are non-refundable, if we do not make any payments, we will
lose any payments previously made and all our rights to the
properties.




3.
Because of our reliance on MinQuest our operations would be severely impacted
should our relationship with MinQuest be terminated for any reason.






A portion
of our Moss property was acquired from MinQuest and we have directly or
indirectly optioned the Bruner, Vernal, Imperial, Whisky, NK, and Weepah
properties from MinQuest.  In addition, to date all of our exploration
activity on these properties has been undertaken by MinQuest.  As a
result, MinQuest has significant knowledge about our properties and it would be
very difficult for us to replace MinQuest should our relationship with them be
terminated for any reason.  Also, on September 12, 2008 Mr. Herb Duerr
was appointed President, Chief Executive Officer, Secretary, Treasurer, and
Director of the Company.  Mr. Duerr is also an Officer of
MinQuest.  To date, there have not been any conflicts between the
Company and MinQuest.




12




4.
Because our Directors serve as Officers and Directors of other companies engaged
in mineral exploration, a potential conflict of interest could negatively impact
our ability to acquire properties to explore and to run our
business.




All of
our Directors and Officers work for other mining and mineral exploration
companies.  Due to time demands placed on our Directors and Officers,
and due to the competitive nature of the exploration business, the potential
exists for conflicts of interest to occur from time to time that could adversely
affect our ability to conduct our business. The Officers and Directors’
full-time employment with other entities limits the amount of time they can
dedicate to us as a director or officer. Also, our Directors and Officers may
have a conflict of interest in helping us identify and obtain the rights to
mineral properties because they may also be considering the same properties. To
mitigate these risks, we work with several geologists in order to ensure that we
are not overly reliant on any one of our Directors to provide us with geological
services.  However, we cannot be certain that a conflict of interest
will not arise in the future.  To date, there have not been any
conflicts of interest between any of our Directors or Officers and the
Company.




5.
Because of the speculative nature of exploration and development, there is a
substantial risk that our business will fail.




The
search for valuable natural resources as a business is extremely risky. We can
provide investors with no assurance that the properties we have in Arizona and
Nevada contain commercially exploitable reserves. Exploration for natural
reserves is a speculative venture involving substantial risk. Few properties
that are explored are ultimately developed into producing commercially feasible
reserves. Problems such as unusual or unexpected formations and other conditions
are involved in mineral exploration and often result in unsuccessful exploration
efforts. In such a case, we would be unable to complete our business
plan.




6.
Because we have not commenced business operations, we face a high risk of
business failure due to our inability to predict the success of our
business





We are in
the initial stages of exploration of our mineral claims and thus have no way to
evaluate the likelihood that we will be able to operate our business
successfully. To date have been involved primarily in organizational activities,
and the acquisition and exploration of the mineral claims. We have not earned
any revenues as of the date of this report.





7.
Because of the unique difficulties and uncertainties inherent in mineral
exploration and the mining business, we face a high risk of business
failure





Potential
investors should be aware of the difficulties normally encountered by
early-stage mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.





13


In
addition, the search for valuable minerals involves numerous hazards. As a
result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we cannot insure or against
which we may elect not to insure. The payment of such liabilities may have a
material adverse effect on our financial position.





8.
Because we anticipate our operating expenses will increase prior to our earning
revenues, we may never achieve profitability





Prior to
completion of our exploration stage, we anticipate that we will incur increased
operating expenses without realizing any revenues. Therefore, we expect to incur
significant losses into the foreseeable future. We recognize that if we are
unable to generate significant revenues from the exploration of our mineral
claims we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we can provide investors with no assurance that we will
generate any operating revenues or ever achieve profitable operations. If we are
unsuccessful in addressing these risks, our business will most likely
fail.





9.
Because access to our mineral claims may be restricted by inclement weather, we
may be delayed in our exploration





Access to
our mineral properties may be restricted through some of the year due to weather
in the


area. As
a result, any attempt to test or explore the property is largely limited to the
times when weather permits such activities. These limitations can result in
significant delays in exploration efforts. Such delays can have a significant
negative effect on our results of operations.





10.
Because our President has only agreed to provide his services on a part-time
basis, he may not be able or willing to devote a sufficient amount of time to
our business operations, causing our business to fail




Mr.
Duerr, our sole officer, is also an Officer of MinQuest.  As a result
of his duties and responsibilities with MinQuest Mr. Duerr provides his
management and geological services to a number of companies. Because we are in
the early stages of our business, Mr. Duerr will not be spending all of his
time working for the Company. Mr. Duerr will expend enough time to
undertake the work programs that have been approved by the
Company.  Later, if the demands of our business require additional
time from Mr. Duerr, he is prepared to adjust his timetable to devote more
time to our business. However, it still may not be possible for Mr. Duerr
to devote sufficient time to the management of our business, as and when needed,
especially if the demands of Mr. Duerr’s other interests increase.
Competing demands on Mr. Duerr’s time may lead to a divergence between his
interests and the interests of our shareholders.





14


Risks Related To Legal
Uncertainty and Regulations





11.
As we undertake exploration of our mineral claims, we will be subject to
compliance with government regulation that may increase the anticipated cost of
our exploration programs





There are
several governmental regulations that materially restrict mineral exploration.
We will be subject to the federal, state and local laws of the United States,
Arizona, and Nevada as we carry out our exploration program. We may be required
to obtain work permits, post bonds and perform remediation work for any physical
disturbance to the land in order to comply with these laws. While our planned
exploration program budgets for regulatory compliance, there is a risk that new
regulations could increase our costs of doing business and prevent us from
carrying out our exploration programs.




Item
1B.  Unresolved Staff Comments





There are
no unresolved staff comments.





Item
2. Description of Properties.





We do not
lease or own any real property. We currently maintain our corporate office on a
month-to-month basis at 3651 Lindell Road, Suite D Las Vegas, Nevada,
89103.  Management believes that our office space is suitable for our
current needs.





In the
following discussion relating to our interests in real property, there are
references to “patented” mining claims and “unpatented” mining claims. A
patented mining claim is one for which the U.S. government has passed its title
to the claimant, giving that person title to the land as well as the minerals
and other resources above and below the surface. The patented claim is then
treated like any other private land and is subject to local property taxes. An
unpatented mining claim on U.S. government lands establishes a claim to the
locatable minerals (also referred to as stakeable minerals) on the land and the
right of possession solely for mining purposes. No title to the land passes to
the claimant. If a proven economic mineral deposit is developed, provisions of
federal mining laws permit owners of unpatented mining claims to patent (to
obtain title to) the claim. If one purchases an unpatented mining claim that is
later declared invalid by the U.S. government, one could be
evicted.





15


Bruner and Vernal
Properties











Map of
our Bruner and Vernal properties located in western Nevada.





Acquisition of
Interest





Pursuant
to a Property Option Agreement, dated as of July 25, 2003, with MinQuest, Inc.,
a Nevada corporation (“MinQuest”), we have the option to earn a 100% interest in
the Bruner and Vernal mineral exploration properties located in
Nevada.   Together, these two properties originally consisted of
28 unpatented mining claims on a total of 560 acres in the northwest trending
Walker Lane located in western Nevada.  In September, 2008 the company
expanded the Bruner position from 16 unpatented mining claims to 51 unpatented
mining claims.  This brought the total number acres at Bruner under
the Company’s control to 1,020 acres at that time.  Any additional
claims agreed by the Company to be staked by MinQuest within 2 miles from the
existing perimeter of the Property boundaries shall form part of this Property
Option Agreement.





16


Simultaneous
with the execution and delivery of the Property Option Agreement, we paid
MinQuest $12,500. In order to earn a 100% interest in these two properties, we
must pay MinQuest, Inc. and incur expenditures relating to mining operations in
accordance with the following schedule: (i) on or before July 25, 2004, $20,000
to MinQuest and $75,000 in expenditures; (ii) on or before July 25, 2005,
$20,000 to MinQuest and an additional $100,000 in expenditures; (iii) on or
before July 25, 2006, $20,000 to MinQuest and an additional $100,000 in
expenditures; (iv) on or before July 25, 2007, $20,000 to MinQuest and an
additional $100,000 in expenditures; and (v) on or before July 25, 2008, an
additional $125,000 in expenditures. If we have not incurred the requisite
expenditures to maintain our option in good standing, we have a 60-day period
subsequent to July 25th to
make such payment along with such amount which shall be deemed to have been an
expenditure incurred by us during such period. Since our payment obligations are
non-refundable, if we do not make any payments, we will lose any payments made
and all our rights to the properties. If all said payments are made, then we
will acquire all mining interests in the property, subject to MinQuest retaining
a 3% royalty of the aggregate proceeds received by us from any smelter or other
purchaser of any ores, concentrates, metals or other material of commercial
value produced from the property, minus the cost of transportation of the ores,
concentrates or metals, including related insurance, and smelting and refining
charges, including penalties.





Pursuant
to the Property Option Agreement, we have a one-time option to purchase up to 2%
of MinQuest’s royalty interest at a rate of $1,000,000 for each 1%. We must
exercise our option 90 days following completion of a bankable feasibility study
of the Bruner and Vernal properties, which, as it relates to a mineral resource
or reserve, is an evaluation of the economics for the extraction (mining),
processing and marketing of a defined ore reserve that would justify financing
from a banking or financing institution for putting the mine into
production.





On July
25, 2003, we paid MinQuest $12,500 with respect to the properties, and we owed
an additional $80,000 which was due in four equal annual installments commencing
on July 25, 2004. With the approval of MinQuest, we paid the first installment
on August 27, 2004 and we paid the second installment on September 20,
2005.  On July 25, 2006 and 2007 respectively we made the third and
fourth installments of $20,000.  The payment made on July 25, 2007 was
the final payment due under the property option agreement for the Bruner and
Vernal properties.  To date we have spent an aggregate of
approximately $585,989 on exploration of the two properties which exceeds the
$500,000 exploration requirement of the Agreement.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Bruner and
Vernal Properties to Provex.  Pursuant to the Agreement, Provex
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Bruner and Vernal Property Option
Agreement.





17


Bruner Property
Expansion





On April
1, 2009, the Company entered into a Property Option Agreement (the “Agreement”)
with American International Ventures Inc. (“AIV”), to acquire the exclusive
option to an undivided right, title and interest in 28 patented Federal mining
claims and millsites located in Nye County, Nevada (the “Property”).
Simultaneous with the execution and delivery of the Agreement, the Company paid
AIV $30,000.  In order to earn its option in the Property, the Company
must make annual property option payments each year on April 1 consisting of
$35,000 in 2010, $40,000 in 2011, $45,000 in 2012, $50,000 in 2013, $55,000 in
2014, $60,000 in 2015, and $1,185,000 in 2016.  Following which the
Company shall be deemed to have exercised its option under the Agreement and
shall be entitled to an undivided 100% right, title and interest in and to the
Property subject to a 1.5% Net Smelter Return (“NSR”) royalty payable to AIV and
a 2% NSR payable to the former Property owner.  The 2% NSR royalty may
be purchased by the Company for a total payment of $500,000 and 1% of AIV’s 1.5%
NSR royalty can be purchased by the Company for an additional payment of
$500,000 at any time up to 30 days after beginning mine
construction.


The
claims optioned under the agreement with AIV are contiguous with the Company’s
existing Bruner property claims and therefore are also subject to the terms and
conditions of the original Bruner Property Option Agreement with
MinQuest.





To May
31, 2010 the Company has made the $30,000 payment due on signing and the $35,000
payment due on April 1, 2010.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Bruner
Expansion Property to Provex.  Pursuant to the Agreement, Provex
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Bruner Expansion Property Option
Agreement.





Bruner
Property





Description
and Location of the Bruner Property





The
property is located approximately 130 miles east-southeast of Reno, Nevada at
the northern end of the Paradise Range. Access from Fallon, the closest town of
any size, is by 50 miles of paved highway and 16 miles of gravel roads. We now
hold the property via 51 unpatented mining claims (1,020 acres) and 28 patented
claims (477.655 acres).





Exploration
History of the Bruner Property





The
original operators at the Bruner Property were varied. Prospecting at the
property began in the early 1900’s and underground mining began in
1920.  Mining on several of the veins located within the property
occurred up to 1949 producing over 58,500 gold equivalent ounces.  The
average gold to silver ratio from the Penelas mine was 1:4.5 for recorded
production from 1935 to 1942.  Modern exploration of the property
began in 1979 and included the following work:





o
            In
      1983, Kennecott Minerals Companydrilled fifteen RC
      holes (holes left after the process of reverse circulation drilling) on
      the property.


18





o
            In
      1988-1990, Newmont Exploration Ltd. drilled approximately 10 RC holes;
      conducted detailed geologic mapping (producing a plan map of the rock
      types, structure and alteration), geochemical surveys (which is sampling
      of rocks or soil and determination of the absolute abundances of
      elements), air and ground magnetic surveys (recording variations in the
      earth’s magnetic field and plotting same), and ground radiometric surveys
      (a survey of radioactive materials on the land
  surface).





o
            In
      1990-1995, Miramar Mining Corp. drilled 5 RC holes and conducted BLEG
      (bulk leach extractable gold) sampling and air photo interpretation. BLEG
      sampling involves a large sample of soil or rock that is leached using
      cyanide to determine gold and silver content down to a detection limit of
      as little as 1.0 part per billion.





19





20


Geology
of the Bruner Property Mineral Claims





The
Bruner mining district is underlain by a sequence of intermediate to felsic
Tertiary volcanic rocks (which are quartz-rich rocks derived from volcanoes and
deposited between two and sixty-five million years ago), including ash flow
tuffs, tuffaceous sediments, and flows. A volcanic center, the origin of major
volcanic activity, is thought to underlay the district, with associated silicic
domes (a convex landform created by extruding quartz-rich volcanic rocks) and
plugs (landform similar to a dome, but smaller) intruding the volcanic section.
The exposed stratigraphic section measures over 2,500 feet in thickness. The
“Duluth Tuff”, a variably crystal rich ash flow tuff, is the host for gold and
silver mineralization. Flow banded silicic volcanics, volcanoclastics (coarse,
unsorted sedimentary rock formed from volcanic rocks) and andesite underlie the
tuff and flow-banded rhyolite overlies the host unit. Two generations of
intrusive rocks have been described within the district. Ore in the Bruner
district is hosted by vuggy, fractured, quartz-adularia (potassium-rich
alternation mineral) -veined and/or stockworked tuff. Mineralization is
primarily fault controlled, although some disseminated values do
occur.





Current
State of Exploration





The
Bruner claims presently do not have any identified mineral reserves. The company
is in the process of compiling all historic drilling and underground sampling
results.  These results will be evaluated to determine if one or more
precious metals resources may exist within the property
boundaries.  The property that is the subject of our unpatented
mineral claims contains the Penelas workings with 1000 feet of shaft and 4,000
feet of crosscuts on nine levels.  Past production from the Penelas is
recorded at over 26,000 ounces of gold and 120,000 ounces of silver from 1935 to
1942.  Other historic workings include the Bruner adit with over 1,000
feet of workings and several shafts, and the Derelict mine with a 300 foot shaft
and small open pit.





The 28
patented mining claims contain the Duluth set of workings on the south end of
the patented claim group comprising over 1000 feet of workings in 3 shafts and
numerous stopes.  Past production from the Duluth is reported as
$70,000 of gold and silver from 1935 to 1944.  This amount is based on
a gold price of $35 per ounce and a silver price averaging $0.43 per
ounce.  The Paymaster mine is located on the north end of the patented
claim group.  It has a 375-foot shaft with 2,000 feet of workings on
three levels.  The Paymaster has no recorded production.





There is
no mining plant or equipment located within the property boundaries. Currently,
there is no power supply to the mineral claims. Our planned program includes
compilation of all activities to the present with the goal of producing an
outline of mineralized areas, guiding further exploration drilling and
potentially defining a resource figure based on historic exploration
activities.  However, this program is exploratory in nature and no
minable reserves may ever be found.





21


Geological
Exploration Program




In July
2003, members of our Board of Directors and geology team made an onsite
inspection of Bruner Property. From this visit, an exploration plan was
determined and a schedule to begin work on the properties was organized to
commence in the month of September 2003.  The Company completed an
exploration program consisting of geologic mapping, surface geochemical
sampling, a Global Positioning System (GPS) survey of grid based magnetic
survey, drill holes and cultural features, and a CSMT geophysical survey
(electrical, magnetic and other means used to detect features, which may be
associated with mineral deposits) was also conducted. Such a survey measures the
magnetic variations within the underlying rocks.





Since
then, a ground magnetics survey and detailed mapping and rock sampling of the
western portion of the claim block on the Bruner Property has been completed.
The rock sampling is a collection of a series of small chips over a measured
distance, which is then submitted for a chemical analysis, usually to determine
the metallic content over the sampled interval. The magnetics indicate the
presence of northwesterly and northerly trending faults under the pediment cover
that may host gold mineralization. Faults, which are breaks in the rock along
which the movement has taken place, are often the sites for the deposition of
metallic rich fluids. A pediment cover is a broad, gently sloping surface at the
base of a steeper slope. Geologic mapping of rocks exposed in the western
portion of our claims shows several small quartz bearing structures trending
northwest and dipping steeply to the northeast. These small structures are
thought to be related to a much larger vein, often filled with quartz, and
contained within a fault or break in the rock (a fault-hosted vein system) under
gravel cover in the broad valley south of the mapping. Approximately 1 square
mile of ground magnetics was completed at Bruner. The survey was done on 50
meter spaced lines, run north-south using a GPS controlled Geometrics
magnetometer, which is the geophysical instrument used in collecting magnetic
data with an attached GPS that allows the operator to more precisely determine
the location of each station where the magnetic signature is taken.





The
interpretation shows numerous northwest and north-south trending magnetic lows
associated with faults. Magnetic lows are an occurrence that may be indicative
of a destruction of magnetic minerals by later hydrothermal (hot water) fluids
that have come up along these faults. These hydrothermal fluids may in turn have
carried and deposited precious metals such as gold and/or silver. A much more
continuous northwest trending feature that has not been drill tested is located
to the southeast, under gravel cover (where there is no exposure of rock at the
surface).    Data were sufficiently encouraging that an
expanded CSMT survey was conducted to trace these structures in the third
dimension.





In
addition to our drilling programs noted below, our exploration program to date
at Bruner has included:




·
            geologic
      mapping (producing a plan map of the rock types, structure and
      alteration),


·
            rock
      chip geochemical sampling (sample of soil, rock, silt, water or vegetation
      analyzed to detect the presence of valuable metals or other metals which
      may accompany them (e.g., Arsenic may indicate the presence of
      gold),


·
            a
      ground magnetic survey, and


·
            a
      Controlled Source Magneto Telluric (CSMT) survey which recorded variations
      in a generated electrical field using sophisticated survey
      methods.


22





In
October 2004, we received the approval of a Notice of Intent for Exploration
Drilling, and an environmental bond filed with the Nevada office of the Bureau
of Land Management. A total of 18 drill sites were located to target both
extensions of the gold intercepts in previous drilling and in geophysical
anomalies found by a CSMT survey. A CSMT survey is an electromagnetic method
used to map the variation of the Earth’s resistance to conduct electricity by
measuring naturally occurring electric and magnetic fields at the Earth’s
surface. With the proper approvals in place, we began drilling on the Bruner
property on December 20, 2004. This drilling program was completed in March 2005
at a total cost of approximately $153,800, with a total of 3,200 feet of reverse
circulation (RC) drilling in 7 holes. The depths of the holes ranged from 300 to
750 feet. We have received assays for all holes and the results were encouraging
enough that additional drilling was conducted.





Because
of the favorable drilling results from the drilling program we began on December
20, 2004, we decided to conduct additional drill testing on the Bruner property,
including both reverse circulation and core drilling.  In April 2005,
we filed an amended drilling plan with the Bureau of Land Management that
allowed three fences of drill holes with the fences spaced 400 feet apart along
the apparent trend of the mineralization.  This program was completed
in the fall of 2005 with 11 holes totaling 4,205 feet being
drilled.





The Board
of Directors approved a 2007 exploration budget of approximately $120,000 for
the Bruner Property.  In November 2007, the Company drilled three
holes at Bruner to test deeper targets within the gold-bearing tuffaceous host
rocks.  The holes were drilled using an RC drill rig and totaled 3,240
feet. The holes were spaced roughly 400 feet apart on a line running
east-northeast.  All holes were angled steeply to the north to cut
projected, south-dipping shear zones. Drill hole B-18 and B-19 were drilled to a
depth of 1,000 and B-20 was drilled 1,240 feet deep.  All three holes
contained intermittent gold at various depths.





The
results show a distinct increase in gold grade from the southwest (B-18) to the
northeast (B-20). Only hole B-20 contained significant grade gold over any
significant width. Further drilling north and east of B-20 may be warranted to
vector in on the strongest part of the gold system. The drill program confirmed
that gold mineralization continues at depth and is hosted by tuffaceous
rocks.





The
Company recently expanded the Bruner property by adding to its unpatented claim
position and acquiring a lease/option on 28 patented claims within the project
area.  The recent acquisition of the entire district has required a
thorough compilation of all available data for the project area.  This
compilation has identified at least four viable drill targets separate from the
company’s original target.  These targets include the Duluth, Penelas,
Paymaster and Bruno targets.  These targets have seen moderate to
intense drill programs in the past due to surface mineralization and alteration
consistent with large precious metals systems located in other parts of the
Great Basin.    However, no recent resource or reserve
estimates have been conducted by the Company.





23


Future
plans for the Bruner Project include finalizing all compilations then designing
a drill program that will expand and in-fill within the Duluth area and include
step out drilling of high grade gold mineralization at the Penelas
target.  Evaluation of the Bruno and Paymaster targets will include
mapping and surface sampling and eventual drill program to test their potential
at depth.  Additional surface grid sampling will be conducted on other
localized gold anomalies within the project boundaries.  Past work has
included a widespread BLEG survey.  The survey has identified several
outlying anomalies that require further mapping and surface sampling to properly
assess their merits.





Vernal
Project





Description
and Location of the Vernal Property






24







25


The
property is located approximately 140 miles east-southeast of Reno, Nevada on
the west side of the Shoshone Mountains. Access from Fallon, the closest town of
any size, is by 50 miles of paved highway and 30 miles of gravel
roads.   We hold the property via 12 unpatented mining claims
(240 acres).





Exploration
History of the Vernal Property





Historical
work includes numerous short adits constructed on the property between 1907 and
1936. There appears to have been little or no mineral production.





Geology
of the Vernal Mineral Claims





The
Vernal Property is underlain by a thick sequence of Tertiary age rhyolitic
volcanic rocks including tuffs, flows and intrusives. A volcanic center is
thought to underlie the district, with an intruding rhyolite plug dome (a domal
feature formed by the extrusion of viscous quartz-rich volcanic rocks) thought
to be closely related to mineralization encountered by the geologists of
Amselco, the U.S. subsidiary of a British company, who explored the Vernal
Property back in the 1980’s, and who in 1983 mapped, sampled and drilled the
Vernal Property. Amelsco has not been involved with the Vernal Property over the
last 20 years and is not associated with our option on the property or the
exploration work we are doing there. A 225 foot wide zone of poorly outcropping
quartz stockworks (a multi-directional quartz veinlet system) and larger veining
trends exists northeast from the northern margin of the plug. The veining
consists of chalcedony containing 1-5% pyrite. Clay alteration of the host
volcanics is strong. Northwest trending veins are also present, but very poorly
exposed. Both directions carry gold values. Scattered vein float is found over
the plug. The most significant gold values in rock chips come from veining in
tuffaceous rocks north of the nearly east-west contact of the plug. This area
has poor exposure, but sampling of old dumps and pits show an open-ended gold
anomaly that measures 630 feet by 450 feet.





Current
State of Exploration





The
Vernal claims presently do not have any mineral reserves. The property that is
the subject of our mineral claims is undeveloped and does not contain any
open-pits.  Numerous shallow underground excavations occur within the
central portion of the property.  No reported historic production is
noted for the property.  There is no mining plant or equipment located
on the property that is the subject of the mineral claim. Currently, there is no
power supply to the mineral claims. Our planned exploration program is
exploratory in nature and no mineral reserves may ever be
found.  Although drill holes are present within the property boundary,
there is no drilled resource on our claims.





Geological
Exploration Program




In July
2003, members of our Board of Directors and geology team made an onsite
inspection of Vernal.  At the Vernal property, mapping (the process of
laying out a grid on the land for area identification where samples are taken)
and sampling (the process of taking small quantities of soil and rock for
analysis) have been completed.  In March 2005, we initiated the
process to secure the proper permits for trenching and geochemical sampling from
the U.S. Forest Service.





26


Our
exploration of the Vernal property to date has consisted of geologic mapping,
trenching and rock chip geochemical sampling.   The Board of
Directors approved a budget of approximately $55,000 (including the refundable
bond of $900) for the Vernal property.  An exploration program was
conducted in November, 2008.  The program consisted of 200 feet of
trenching, sampling and mapping, and opening, mapping and sampling of an
underground workings consisting of approximately 275 feet of
workings.  The Company is currently evaluating the results of the
program at the Vernal property.


27





Moss
Property











Moss
Property





The Moss
Property consists of 104 unpatented claims and 15 patented claims located in the
Oatman Mining District of Mohave County, Arizona. The Company acquired these
claims in a series of transactions during fiscal 2004 and 2005.





Acquisition
of Interest





Gintoff
Claim





On
November 14, 2003 the Company entered into a letter of intent to acquire a
single patented claim from Gregory Gintoff.  The total purchase price
of $50,000 was made in two installments of $10,000 in December 2003 and $40,000
in February 2004.





28


MinQuest
Claims





We hold
the MinQuest claims via 104 unpatented mining claims that were acquired from
MinQuest.   On March 4, 2004, we signed the Letter Agreement (the
“Agreement”) that earned us a 100 percent interest in these claims by paying
MinQuest a one-time lease fee of $50,000.   The fee of $50,000
was paid on July 7, 2004.  Subject to the terms and conditions of the
Agreement, MinQuest will retain a 3% NSR on any and all production derived from
the unpatented mining claims listed under the Agreement and on public lands
within 1 mile of MinQuest, Inc’s outside perimeter of the present claim
boundary;  a 1.0% NSR on patented claims with no other royalty within
the property; and a 0.5% overriding NSR on all production within the property
derived from patented claims with other royalty interests.





Williams
Property





The
property is comprised of six patented claims, which as a group, we call the
Williams Property. These claims were held collectively by as many as 23 owners
within an extended family who were represented by Barbara Williams, a realtor,
and a member of this extended family, who put together the letter of intent and
arranged for the signing of the agreement by the numerous owners. None of these
owners, including Barbara Williams, has or has had any relationship or
affiliation with us prior to the agreement for the Williams
Property.





In
October 2003, our former director Robert Sibthorpe (who is a geologist by
training) had evaluated the proposal for the purchase of the Williams Property.
His recommendation was to visit the site, and if the visual inspection supported
the information presented in the proposal, then an offer to purchase should be
drawn up.  In November 2003 we executed a letter of intent to purchase
a 100% interest in Williams Property owned by the extended family. This property
is unrelated to and separate from the MinQuest Claims.  The sellers
delivered to us all information in their possession regarding the Williams
Property.  During the six-month period after the signing of the letter
of intent we had the right to conduct our due diligence on the Williams Property
and if we decided not to proceed we had to give the sellers and escrow agent
notice no less than 10 days prior to the six-month anniversary of our intention
not to close. During this period we could not perform mining or remove any ore
from the property. We were responsible for all costs and expenses associated
with the purchase of the Williams Property, including escrow fees, cost of
feasibility study, charges resulting from any tests, environmental assessments
reports or surveys, and any exploration activity costs. Once we had concluded
our analysis and had determined that it is feasible to close on the purchase of
the Williams Property, doing so would give us full rights to begin mining
operations.





29


At the
recommendation of Mr. Sibthorpe, in January, 2004, Mr. Robert Coale
(P.E.), another one of our directors and our then-current President, visited the
site to see the overall geological setting and occurrence of mineralization and
evaluated the drilling program proposed by MinQuest, the company that we would
contract to co-ordinate any work programs undertaken. At that time, the
metallurgical data and reports that had been collected from the sellers were
reviewed. Mr. Coale’s analysis revealed that reagent (liquid chemicals used
for leaching) consumptions are acceptable and deleterious compounds (minerals
present in the ore that would be difficult to work with) were not apparent. He
recommended bulk sampling at a selected location in the future once the
definition of the ore body was further advanced through drilling.  On
January 31, 2004 Robert Sibthorpe wrote a report with a summary of the property,
a review of the draft budget supplied by Richard Kern, our work program
contractor, and a layout of the drilling program planned for the
property.





The
drilling was conducted throughout the spring and early summer of 2004, and in
June 2004, Mr. Sibthorpe wrote a report incorporating the results of the
drill program which encouraged us to pursue the project. Also in June 2004,
Mr. Kern sent a memo to the Company regarding the potential at the Williams
property. Mr. Kern’s recommendation was that we should proceed with the
purchase of the Williams Property.





On
February 19, 2004, we executed a formal agreement to purchase the Williams
Property for $350,000. On February 27, 2004 we deposited $25,000 with the title
company, which was acting as escrow agent, and three months after signing, on
June 14, 2004, we deposited an additional $25,000. When the title company,
acting as escrow agent, received the signature pages from the various sellers,
the initial $25,000 deposit was to be delivered to the sellers. On the
three-month anniversary after we signed the definitive agreement, the second
$25,000 was to be delivered to the sellers. By mid-July, 2004, the escrow agent
had received 19 of the 23 signatures, which under Arizona law was enough to
complete the transaction, and on July 24, 2004, the first and second deposits of
$25,000 each were released to the sellers. On or before the 6-month anniversary
after we signed the definitive agreement, the balance of $300,000 was due to the
sellers. As a result of our due diligence, we decided to complete the purchase
of the Williams Property. On August 27, 2004 we paid the final $300,000 to the
escrow agent for the closing of the sale. On November 11, 2004, the escrow agent
released the $300,000 to the sellers for the closing of the sale, and, as a
result, we now own 100% interest in the Williams Property.





Greenwood
Claim





On
January 18, 2005 the Company completed the acquisition of a single patented
claim from an individual for $150,000.





Martinez
Claims





The
Company acquired five patented claims from Ramon and Edna Martinez for a total
of $150,000.  The Company made one payment of $75,000 on November 8,
2004 and made the final payment of $75,000 on February 14, 2005.





30


Ruth and Rattan
Claims





On
January 18, 2005, the Company made a single payment of $25,000 to acquire two
patented claims known as the Ruth and Rattan claims.





Description
and Location of the Moss Property




The Moss
Property is located in Mohave County, Arizona in the historic Oatman
District, and is located some 5 miles northwest of the town of Oatman, with
Kingman, Arizona to the east, Laughlin, Nevada to the west and Las Vegas, Nevada
to the north. Access is via paved and gravel roads from Bullhead
City.




Exploration
History of the Moss Property





Discovered
in 1864, the Moss Mine was the first gold discovery made in the Oatman
District.  Historical records show that the Oatman District produced
up to two million ounces of gold mostly from underground mines.  The
Moss Mine reportedly produced high-grade gold values of $114,000 from two tons
of ore at $20 per ounce of gold.  A reported $240,000 of gold and
silver were produced from the Moss property before 1880.  The mine was
worked intermittently through the 1930’s but produced only minor amounts of gold
after the initial bonanza grades.   The mine lay idle until the
early 1980’s when a number of mining companies explored the district. These
companies included Billiton Minerals, Magma Copper, Golconda Resources and
Addwest Minerals.





Work
already completed on the Williams portion of the Moss Property includes a
pre-feasibility study as well as 36,000 feet of primarily reverse circulation
drilling which was conducted over twenty years ago. Reverse circulation drilling
is a less expensive form of drilling that does not allow for the recovery of a
tube or core of rock, in which the material is brought up from depth as a series
of small chips of rock that are then bagged and sent in for analysis. Though
this is a quicker and cheaper method of drilling, reverse circulation drilling
does not give as much information about the underlying rocks.





Geology
of the Moss Property





The
project area is underlain by Tertiary quartz monzonite (a coarsely crystalline
rock composed primarily of the minerals quartz, plagioclase and orthoclase)
intruding tertiary volcanics. Precambrian basement rocks underlie the volcanics.
The veins consist of quartz-calcite and lesser adularia. The principal vein is
up to 45 feet thick and can be followed on surface for over 5,000 feet. The
hanging wall commonly has several tens of feet of stockwork veining. Gold values
are somewhat erratic, but appear to be highest in the thicker and deeper parts
of the vein explored to date.





31


Current
State of Exploration





The Moss
Property has undergone an evaluation for potential mineral reserves. The
evaluation detailed in a report by Paul D. Noland identified a resource of
515,611 ounces of gold and 5,455,423 ounces of silver (606,535 ounces gold
equivalent)within the project boundary.  These resource numbers are
drill-indicated, and require systematic in-fill and down-dip drilling to be
placed into a final reserve category. No economic or mining feasibility
parameters were applied to this resource category.  This resource
estimate is further defined in under the section “Geologic Exploration
Program”.  The property that is the subject to our mineral claims
contains several shafts.  At least one shaft is reported to be 230
feet deep with a single level at 225 feet deep trending along the strike of the
vein.  Several adits of variable length were driven to intersect the
vein along its strike.  A reported past production of $240,000 at a
$20 gold price occurred from a high-grade zone within the Moss
property.





Numerous
drill holes from past drilling endeavors combined with sampling of underground
workings within the patented mining claims have culminated in a pre-feasibility
study based on drill results from pre-1992 exploration.  The company
is contemplating further updating the historic pre-feasibility report with
additions from the recent resource report and ongoing metallurgical testing to
determine the existence of mineral reserves.





There is
no mining plant or equipment located on the property that is the subject of the
mineral claims.  Currently, there is no power supply to the mineral
claims. Our planned exploration program is exploratory in nature and no mineral
reserves may ever be found.





Geological
Exploration Program




Our
exploration of the Moss Property has consisted of geologic mapping, vein
geochemical sampling and drill testing of the identified veins.  The
Moss Property contains the site of the former Moss Mine.  The most
significant historic mining at Moss Mine occurred on narrow veins that trend
sub-parallel to the Moss Mine vein and dip steeply northerly. These veins should
intersect the Moss Mine vein at depth.





Phase 1
drilling has been completed at the Moss Property. A total of 36 holes were
drilled totaling 8,807 feet. Thirty holes were drilled on the Gintoff Claim on
the Moss Property, and six holes were drilled on one of the adjacent parcels of
land.   The easternmost section of the Property, which was mostly
untested by drilling, was drilled with thirty reverse circulation holes. This
allowed accurate cross-sections to be made for this area. The coverage on this
section is generally two or three holes on 100 foot sections testing grades and
widths from 50-250 feet down dip. In the western area, limited confirmation
drilling was carried out and the results obtained were generally in line with
the values obtained by previous operators. Geological information obtained may
now provide a structural explanation for the lack of success obtained here to
date by previous operators.





A study
of all drilling results at the Moss Property indicates a tendency for total gold
content to increase with intercept depth. Roughly 60% of the deeper holes have
better intercepts than shallow holes. An example from our drilling tests the
vein over a vertical extent of 300 feet. In this example the gold content nearly
doubles between AR-5 and AR-23.





32


An
expanded program of drilling began in April 2005, and was expected to be
completed by May 2006.  Approximately 12,000 feet of reverse
circulation (RC) drilling was planned to be done to test for possible high-grade
(0.30 ounces per ton or above) down-dip extensions of the Moss vein. We planned
to drill 10 to 15 holes.  The depths of these holes were to have
ranged from 500 to 1,300 feet. The program budget for this program was
$643,700.





The first
portion of this expanded drilling program was expected to be completed by the
fall of 2005.  However, after eight holes were attempted, drilling was
halted because of difficulty in drilling through the granite, because the
drilling rig that we contracted to use was too light to penetrate the
rock.  We had sought to contract a heavier rig to continue the
program, which we had expected to happen by December 2005.  The
remainder of the program was completed when the Company completed 6 core holes
from November 2006 to February 2007 for a total amount drilled of 3,917
feet.  The exploration program failed to find higher grades but it did
show that the vein system continues to at least 800 feet below the surface and
appears to be thickening.




In the
spring of 2008, the Company submitted core samples to a laboratory where leach
testing was conducted.  Leaching was conducted in both bench scale
(Bottle rolls) and in columns using crushed ore as the feed
sample.  Three column leach tests at 3 different crush sizes were
completed on the Moss drilling samples. They were leached for 120 days. The fine
crush of 1⁄4 inch had 66% of the gold and 42% of the silver recovered in 120
days.  The recovery curve is still not flat at the end of 120 days
indicating additional gold/silver could be recovered. The recoveries are already
near the 70% gold and 50% silver that is average for the
industry.  The 1 inch crush column recovered 39% of the gold and 14%
of the silver after 120 days, but the leach curve again indicates no significant
decrease in percent recovery by month indicating that greater recoveries may be
obtained over longer periods of time.




Using the
column leach data obtained from the testing program completed in April 2008 as
well as additional information, the Company may engage an outside firm to
conduct a preliminary economic analysis that will evaluate the overall value of
the property considering metallurgical recovery, volume and gold grade of
mineralized rock, capital and operating costs, and other
factors.  This information will be used to define additional work
needed to enhance the value of the property.





In May
2009 the Board of Directors approved a $200,000 exploration budget for the Moss
Property.  A program of six or seven core holes was planned to test
the down-dip extension of the Moss vein system. Total drilling footage was
estimated at 3,000 feet. The drilling  tested approximately 2,000 feet
of strike length of the vein.  The goal of this program was to further
define the trend and depth of mineralization as well as provide additional
metallurgical material for column tests.  The column tests will be
conducted for a longer period to determine potential recoveries from various
size fractions.





33


In
January 2010 Patriot engaged Mr. Paul D. Noland, a registered professional
geologist to conduct an independent resource study.  The report
concluded that the Moss Property hosts a drill indicated gold-silver resource
estimated to contain 20.8 million tons grading 0.029 oz/ton gold equivalent for
606,535 ounces (gold equivalent). This resource was determined using the
assumption that the deposit will be an open pit, bulk minable, heap leach mine.
To keep mining and grade control cost minimal, sub-cut off grade material within
the boundary of the resource was allowed to dilute the final grade.





These
resource numbers are drill-indicated, and require systematic in-fill and
down-dip drilling to be placed into a final reserve category. No economic or
mining feasibility parameters were applied to this resource category. However, a
cursory examination of several sections in the heart of the resource area
suggests that the entire resource (Main Zone and Hanging wall Zone) may be
exploited by an open pit with a stripping ratio of between 3:1 and 4:1, and
average pit wall slope of 45 degrees.





The
likelihood of finding additional bulk minable ore on the property is considered
very good. Patriot Gold geologists have suggested the likelihood of main zone
mineralization continuing at depth in previous reports. The main body of
mineralization appears to widen to the west along strike, but the grade
decreases. However, with the lower grades needed for an open pit, heap leachable
deposit, this material is now part of the resource. This means the deposit is
open-ended to the west. Much of the Main Zone remains untested down dip.
Continued drill evaluation of down-dip and strike extensions is
recommended.





Claims
acquired west and north of the original Patriot property in 2009 need detailed
evaluation. The claims were acquired after discovery of historic drilling in the
area containing significant gold/silver values. The claims need geologic mapping
and sampling before any drill targeting can be done. Additional metallurgical
testing to determine optimum recovery rates and leaching times


for
various size fractions using long term column leaching is needed. This work,
along with fill-in drilling and west extension drilling will make Moss resource
ready for a final feasibility study, permitting and mining.





In March
2010 Patriot engaged an outside firm to initiate a series of metallurgical tests
to focus on the amenability of the Moss deposit to heap leaching gold/silver
recovery.  Core from Moss will be tested in four column leach tests
with crush sizes up to 2 inches. The crushed ore will be leached in 5 feet high
columns for a minimum of 200 days. The tests are expected to determine maximum
obtainable gold and silver recoveries using leaching as well as the leach times
needed for maximum recovery.





34


Margarita
Property





Acquisition
of Interest





On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with American Goldrush Corp. (“Goldrush”) whereby
Goldrush assigned all of its rights and obligations under the Margarita Property
Option Agreement to the Company.  Pursuant to the Agreement, the
Company assumed the rights, and agreed to perform all of the duties and
obligations, of Goldrush arising under the Margarita Property Option
Agreement.   Simultaneous with the execution and delivery of the
Agreement, the Company paid Goldrush $200,000 which amount represents the full
payment and satisfaction for the assignment to the Company by
Goldrush.





Included
in the assignment to the Company were all sums incurred by Goldrush in
connection with its exploration of the Margarita Property which includes a
reclamation bond previously paid by Goldrush to the Forest Service in Arizona,
all expenditure credits incurred by Goldrush prior to the execution of the
Agreement and all property option payments made to the Margarita Property owner.
In addition, Goldrush also assigned all of its rights and obligations under the
Finders’ Fee Agreement to the Company.  Subsequent to the execution of
the Agreement, Goldrush did not retain any interest in the Margarita
Property.





The
underlying Margarita Property Option Agreement was subject to a 2% net smelter
return royalty to the property owner, James Sorrell (the “optionor”), upon
production. The Company had the option (exercisable for 90 days following
completion of a bankable feasibility study) to buy the optionor’s net smelter
return interest for $500,000 per 1% increment or $1,000,000 for the entire 2%
net smelter return interest.





In
addition, the Margarita Property was subject to a Finder’s Fee
Agreement.  The Company had agreed to pay a fee equal to 10% of the
Property Option Payments made during the first three years of the Margarita
Property Option Agreement.  It was estimated that if the Company made
all of the remaining scheduled property option payments, the amount to be paid
under the Finder’s Fee Agreement by the Company would have been $22,500. If the
Company terminates the Margarita Property Option Agreement, the Company would
not owe any further payments under the Finder’s Fee Agreement.  If it
had not been terminated earlier, the Finder’s Fee Agreement will terminate
automatically on July 14, 2009.





On July
25, 2008, subsequent to the completion of a drill program on the Margarita
Property, the Company terminated its option under the property option agreement
and does not currently have any interest in the Margarita
Property.  In exchange for its release from its obligations under the
Margarita Property Agreement, the Company agreed to pay the 2008 annual claim
filings fees on the property of $8,268.  Under the release agreement,
the Company is not required to make the $100,000 payment due May 31,
2008.





35


Whiskey
Property







36


Acquisition
of Interest





On March
15, 2008, the Company executed a property option agreement with MinQuest
granting the Company the right to acquire 100% of the mining interests in the
Whiskey Property (“Whiskey”) currently controlled by MinQuest.  Annual
option payments and minimum annual exploration expenditures under the agreement
are as noted below:


Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            50,000
            $
            -By
      March 15, 2009
            
            50,000
            
            50,000By
      March 15, 2010
            
            50,000
            
            150,000By
      March 15, 2011
            
            65,000
            
            200,000By
      March 15, 2012
            
            80,000
            
            350,000By
      March 15, 2013
            
            100,000
            
            200,000By
      March 15, 2014
            
            100,000
            
            200,000By
      March 15, 2015
            
            100,000
            
            200,000By
      March 15, 2016
            
            100,000
            
            200,000By
      March 15, 2017
            
            100,000
            
            200,000By
      March 15, 2018
            
            250,000
            
            750,000$
            1,045,000
            $
            2,500,000





Upon
execution of the Agreement, the Company paid MinQuest $50,000 in relation to the
execution of the agreement.  Since the payment obligations are
non-refundable, if any payments under the Agreement are not made, the Company
will lose any previous payments made and all its rights to the respective
property. If all said payments under the Agreement are made, then the Company
will acquire all mining interests in the property. If the Company fails to make
any payment when due, the Agreement gives the Company a 60-day grace period to
pay the amount of the deficiency.  MinQuest retained a 3% royalty of
the aggregate proceeds received by the Company from any smelter or other
purchaser of any ores, concentrates, metals or other material of commercial
value produced from the property, minus the cost of transportation of the ores,
concentrates or metals, including related insurance, and smelting and refining
charges, including penalties.





37


The
Company has the one time right exercisable for 90 days following completion of a
bankable feasibility study to buy up to one half (50%) of MinQuest’s royalty
interest (i.e. an amount equal to 1.5% of the royalty interest) for $2,250,000.
The right to purchase the said royalty interest shall be exercised by the
Company by providing the MinQuest with notice of the purchase accompanied by
payment in the amount of USD $2,250,000.





The
Company may use MinQuest for its mineral exploration expertise on the property.
In addition, any mineral interests staked, located, granted or acquired by
either the Company or MinQuest which is located within a 1 mile radius of the
property will be included in the option granted to the Company for the
respective property.  The agreement will terminate if the Company
fails to comply with its obligations in the agreement and fails to cure such
alleged breach. If the Company gives notice that it denies a default has
occurred, the matter shall be determined finally through such means of dispute
resolution as such matter has been subjected to by either party.





The
Company has made the $50,000 payment due on signing and the $50,000 due on March
15, 2009 but has not made the $50,000 payment due March 15,
2010.   By March 15, 2010, the Company was to have incurred
$200,000 on exploration but had incurred approximately $53,214 on exploration of
the property, a shortfall of $146,786.  The Company is at risk of
losing its interest in the property by not making the indicated option payments
and incurring the exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Whiskey
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Whiskey Property Option Agreement.





Description
and Location of the Whiskey Property





The
Whiskey is located in Mineral County, Nevada and currently consists of 83
unpatented mining claims.  Access is via paved highway, gravel and
dirt roads and the land is administered by the federal Bureau of Land
Management.





Exploration
History of the Whiskey Property





Portions
of the property have been explored by Conoco from 1971 to 1973, Grayhill/US
Minerals Exploration from 1981-1985, Homestake/Combined Metals Reduction from
1986-1991, Santa Fe Minerals from 1992 to 1994, and Newmont from
2003-2005.  During the bulk of the exploration work the property was
divided by ownership interests into the west and east halves.  Only
Newmont and MinQuest have completely controlled all of the alteration in the
basin.





38


Past exploration includes rock chip
sampling, geologic mapping, and drilling.  Advanced argillic
alteration is widespread along a set of east-southeast trending fault zones
covering an area 17,000 feet long by 6000 feet wide.  The alteration
zone is covered on the north, east and south sides by post-mineral volcanic
cover and on the west end by recent alluvium.  Drilling by the
Homestake-Combined Metals Reduction joint venture was restricted to the
southeast portion of the claim group.  This effort encountered
anomalous to ore-grade gold values in one of several siliceous knobs at the edge
of the basalt.  The drilling completed by Santa Fe and Dennison on the
west end of the property encountered anomalous to ore grade gold values in 6 of
15 holes.  The most recent work by Newmont suggested excellent
potential for gold mineralization along strike of known gold mineralization,
under alluvium cover and under post-mineral basalt cover.  Newmont’s
target size was 3 million ounces.  Targeting was primarily under
post-mineral cover.  Newmont dropped the property before testing their
exploration model.





Geology
of the Whiskey Property





The
property lies within the Walker Lane structural zone and within a well
mineralized easterly trend of volcanic hosted gold-silver deposits starting at
Bodie and trending through Paradise Peak.  A possible Cretaceous
granite outcrops on the northeast portion of the property.  The
granite is equigranular and coarsely crystalline.  Conoco initially
believed the intrusive to be responsible for the large area of alteration within
the Whiskey Flat area because of the intensely argillized and silicified rocks
surrounding the intrusive and the potassic alteration developed along the
southern margin of the stock.  This conviction led to the geologic
mapping and sampling conducted during the 1971 through 1973 field
seasons.





Tertiary
volcanic rock consisting of andesite flows, rhyolite tuffs, pyroclastics flows
and volcanoclastic sediments comprise the entire package of pre-mineral
rocks.  This package of pre-mineral rocks has been overlain by
Tertiary to Quaternary age post-mineral basalt flows and extensive wind-blown
sand.  High angle faults trend easterly forming the north and south
boundaries of the Whiskey basin.  Northerly trending faults offset the
easterly trending fault zones in several places.  At least one low
angle fault occurs along the southern border of the property.





Alteration
within the basin and along the margins consists of opaline replacement, intense
argillization, and intense silicification of all pre-mineral rock types along
structures.  The alteration events are typical of Paradise Peak and
Borealis style alteration events.  The alteration can be traced over
17,000 feet in length and covers a broad area about 6500 feet
across.  One area of intense clay alteration has been exploited as a
soil conditioner in the past.  Considerable prospecting for metals has
occurred throughout the rest of the area as demonstrated by numerous pits and
shafts.  Portions of the opaline alteration near the center of the
claim block have reportedly been exploited for mercury.  However, the
best gold in drilling failed to show any evidence of previous
prospecting.





39


The
historic shafts and pits prospected brecciated, silicified and iron stained
fault zones.  Many of these breccias contain silica and/or alunite
cementing the breccia fragments.  Outcropping, intensely silicified
rock on the southeast portion of the claim group is reported to contain gold at
surface.  This type of silicification forms bold knobs that have
survived erosion and peak through the post-mineral basalt
capping.  Previous drilling efforts have focused on these intensely
silicified knobs and their immediate projections.  The early
exploration successes in the surrounding area have driven much of the
exploration philosophy at Whiskey.





Initially,
exploration in the Borealis district successfully identified discrete, “dish
shaped” ore bodies by drilling on top of silicified knobs.  This same
exploration technique was employed at the Whiskey property throughout all of the
exploration programs described above.  This method of exploration at
Whiskey has identified at least two areas of gold mineralization.  The
eastern end of the property hosts ore grade gold mineralization within a
siliceous knob which is covered on the south and east by young
basalt.  The western end of the property contains several siliceous
knobs with sub-ore grade intercepts over substantial widths.  These
knobs of silica dip to the south, covered on the south by basalt and on the west
by wind-blown sand.





The
recent identification of “feeder structures” under opaline silica at the
Borealis Freedom Flats deposit has shifted the exploration philosophy to
evaluation of the structures along strike of the apparent silica
knobs.  Several fault zones within the boundaries of the Whiskey
claims were noted to be highly silicified and numerous faults contain opalized
material on surface.  These fault zones trend toward the silica knobs
and are believed to be the structural features that provided permeability for
the mobilization of mineralizing fluids.  No drilling has targeted
these fault zones.





Current
State of Exploration





The
Whiskey Property presently does not have any mineral reserves. The property that
is the subject to our mineral claims is undeveloped and does not contain any
open-pit or underground mines. There is no mining plant or equipment located on
the property that is the subject of the mineral claim. Currently, there is no
power supply to the mineral claim. Our planned exploration program is
exploratory in nature and no mineral reserves may ever be
found.  There is no drilled resource on our claims.





Geological
Exploration Program




To date
the work completed on the Whiskey Property has consisted of detailed mapping of
the entire property, cursory surface sampling and definition of drill
targets.  Further work considered for the project area entails grid
sampling of various highly altered volcanic tuffs expanding areas of known gold
mineralization with additional drilling.





40


NK
Property







41


Acquisition
of Interest





On March
15, 2008, the Company executed a property option agreement with MinQuest
granting the Company the right to acquire 100% of the mining interests in the NK
Property (“NK”) currently controlled by MinQuest.  On July 25, 2008
the NK Property Option Agreement was amended whereby the annual minimum work
expenditures were lowered to match those of the Weepah Agreement as the two
properties are at a similar stage of exploration.  Annual option
payments and minimum annual exploration expenditures under the agreement are as
noted below:


Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            20,000
            $
            -By
      March 15, 2009
            
            20,000
            
            50,000By
      March 15, 2010
            
            20,000
            
            75,000By
      March 15, 2011
            
            35,000
            
            100,000By
      March 15, 2012
            
            45,000
            
            250,000By
      March 15, 2013
            
            50,000
            
            100,000By
      March 15, 2014
            
            50,000
            
            100,000By
      March 15, 2015
            
            50,000
            
            100,000By
      March 15, 2016
            
            50,000
            
            100,000By
      March 15, 2017
            
            50,000
            
            100,000By
      March 15, 2018
            
            100,000
            
            250,000$
            490,000
            $
            1,225,000





Upon
execution of the Agreement, the Company paid MinQuest $20,000 in relation to the
execution of the agreement.  Since the payment obligations are
non-refundable, if any payments under the Agreement are not made, the Company
will lose any previous payments made and all its rights to the respective
property. If all said payments under the Agreement are made, then the Company
will acquire all mining interests in the property. If the Company fails to make
any payment when due, the Agreement gives the Company a 60-day grace period to
pay the amount of the deficiency.  MinQuest retained a 3% royalty of
the aggregate proceeds received by the Company from any smelter or other
purchaser of any ores, concentrates, metals or other material of commercial
value produced from the property, minus the cost of transportation of the ores,
concentrates or metals, including related insurance, and smelting and refining
charges, including penalties.


42


The
Company has the one time right exercisable for 90 days following completion of a
bankable feasibility study to buy up to one half (50%) of MinQuest’s royalty
interest (i.e. an amount equal to 1.5% of the royalty interest) for $2,250,000.
The right to purchase the said royalty interest shall be exercised by the
Company by providing the MinQuest with notice of the purchase accompanied by
payment in the amount of USD $2,250,000.





The
Company may use MinQuest for its mineral exploration expertise on the property.
In addition, any mineral interests staked, located, granted or acquired by
either the Company or MinQuest which is located within a 1 mile radius of the
property will be included in the option granted to the Company for the
respective property.  The agreement will terminate if the Company
fails to comply with its obligations in the agreement and fails to cure such
alleged breach. If the Company gives notice that it denies a default has
occurred, the matter shall be determined finally through such means of dispute
resolution as such matter has been subjected to by either party.





The
Company has made the $20,000 payment due on signing and the $20,000 due on March
15, 2009 but has not made the $20,000 payment due March 15, 2010.  By
March 15, 2010, the Company was to have incurred $125,000 on exploration but had
incurred approximately $17,451 on exploration of the property, a shortfall of
$107,549.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the NK
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the NK Property Option Agreement.





Description
and Location of the NK Property





The NK
currently consists of 24 unpatented mining claims and is located in Mineral
County in an unincorporated mining area in west-central
Nevada.  Access is via paved highways and gravel roads and
drainages.





Exploration
History of the NK Property





The
previous sampling and mapping indicates at least three separate mineralized
zones from 30 to 80 feet thick bisecting the property from south to
north.  An additional area of alteration is indicated from silicified
chips in float adjacent to the range front fault which parallels the eastern
border of the range.  Along with silicification of the host rock, some
areas contain quartz veins as stockworks, barite and fluorite veining, and
occasional gossanous areas of high sulfide content.  Exploration work
listed below has focused on apparent surface expressions of
mineralization.





Westely
Mines - 1984-1985 - Sampling and mapping





Brancote
- 1991-1992 - Mapping and sampling





Hemlo,
Cordex - 1993-1994 - Mapping and sampling


43


Geology
of the NK Property





The
regional geology consists of a thick pile of Tertiary to Oligocene volcanics
ranging from rhyolite tuffs to basalt flows.  Generally, the older
rhyolite units have been altered and mineralized while the younger basalt flow
post dates the mineralization.





Alteration
consists of bleaching, argillization and silicification along low and high angle
fault zones.  Quartz veining filling microfractures, barite and
fluorite veins, and occasional gossan zones representing massive sulfide fill
faults and fractures within the altered areas.  The best gold values
are related to areas of silicified volcanic rock with secondary druzy quartz
veinlets filing micro-fractures.





MinQuest
believes the best target is the range front fault zone.  Probable
alteration of volcanoclastic sediments and rhyolite tuff appear to be related to
the range front fault zone.  This fault may have contributed
additional structural preparation allowing further alteration and mineralization
to occur.  The entire structural zone has been mostly covered by
shedding material from the hillside above.  Further to the east
argillized and opaline altered volcanic rock appears intermittently in the base
of some ravines.





Current
State of Exploration





The NK
Property presently does not have any mineral reserves. The property that is the
subject to our mineral claims is undeveloped and does not contain any open-pit
or underground mines. There is no mining plant or equipment located on the
property that is the subject of the mineral claim. Currently, there is no power
supply to the mineral claim. Our planned exploration program is exploratory in
nature and no mineral reserves may ever be found.  There is no drilled
resource on our claims.





Geological
Exploration Program




To date
the exploration work undertaken on the NK property has consisted of detailed
mapping, additional surface sampling and definition of drill
targets.  Additional work contemplated for the project includes a
detailed geophysical survey along the range front to determine potential for
buried mineralization and a drill program to test the resultant
anomalies.





44


Weepah
Property









45


Acquisition
of Interest





On March
15, 2008, the Company executed a property option agreement with MinQuest
granting the Company the right to acquire 100% of the mining interests in the
Weepah Property (“Weepah”) currently controlled by MinQuest. Annual option
payments and minimum annual exploration expenditures under the agreement are as
noted below:


Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            20,000
            $
            -By
      March 15, 2009
            
            20,000
            
            50,000By
      March 15, 2010
            
            20,000
            
            75,000By
      March 15, 2011
            
            35,000
            
            100,000By
      March 15, 2012
            
            45,000
            
            250,000By
      March 15, 2013
            
            50,000
            
            100,000By
      March 15, 2014
            
            50,000
            
            100,000By
      March 15, 2015
            
            50,000
            
            100,000By
      March 15, 2016
            
            50,000
            
            100,000By
      March 15, 2017
            
            50,000
            
            100,000By
      March 15, 2018
            
            100,000
            
            250,000$
            490,000
            $
            1,225,000




Upon
execution of the Agreement, the Company paid MinQuest $20,000 in relation to the
execution of the agreement.  Since the payment obligations are
non-refundable, if any payments under the Agreement are not made, the Company
will lose any previous payments made and all its rights to the respective
property. If all said payments under the Agreement are made, then the Company
will acquire all mining interests in the property. If the Company fails to make
any payment when due, the Agreement gives the Company a 60-day grace period to
pay the amount of the deficiency.  MinQuest retained a 3% royalty of
the aggregate proceeds received by the Company from any smelter or other
purchaser of any ores, concentrates, metals or other material of commercial
value produced from the property, minus the cost of transportation of the ores,
concentrates or metals, including related insurance, and smelting and refining
charges, including penalties.




The
Company has the one time right exercisable for 90 days following completion of a
bankable feasibility study to buy up to one half (50%) of MinQuest’s royalty
interest (i.e. an amount equal to 1.5% of the royalty interest) for $2,250,000.
The right to purchase the said royalty interest shall be exercised by the
Company by providing the MinQuest with notice of the purchase accompanied by
payment in the amount of USD $2,250,000.


46


The
Company may use MinQuest for its mineral exploration expertise on the property.
In addition, any mineral interests staked, located, granted or acquired by
either the Company or MinQuest which is located within a 1 mile radius of the
property will be included in the option granted to the Company for the
respective property.  The agreement will terminate if the Company
fails to comply with its obligations in the agreement and fails to cure such
alleged breach. If the Company gives notice that it denies a default has
occurred, the matter shall be determined finally through such means of dispute
resolution as such matter has been subjected to by either party.





The
Company has made the $20,000 payment due on signing and the $20,000 due on March
15, 2009, but has not made the $20,000 payment due March 15,
2010.    By March 15, 2010, the Company was to have incurred
$125,000 on exploration but had incurred approximately $6,823 on exploration of
the property, a shortfall of $118,177.  The Company is at risk of
losing its interest in the property by not making the indicated option payments
and incurring the exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Weepah
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Weepah Property Option Agreement.





Description
and Location of the Weepah Property





The
Weepah Property currently consists of 14 unpatented claims and is located in
Esmeralda County, Nevada approximately 6 miles (9.6 km) northeast of Silver Peak
and 21 miles (33.6 km) west-northwest of Goldfield, Nevada.  Access is
via 7 miles (11 km) of paved and gravel roads from the town of Silver
Peak.  The Weepah Hills prospect is approximately 5 miles (8 km) south
of the historic Weepah mine and 8.5 miles (14 km) northeast of the Mineral Ridge
mine.





Exploration
History of the Weepah Property





The
Weepah Property was likely first discovered in the 1860’s when Silver Peak was
first developed.  No production is reported for the area, although
historic workings suggest some small shipments may have occurred from high-grade
veins.  If so, the ore was probably shipped to the nearby Silver Peak
mill.  Recent exploration efforts began in the early 1980's when
Grayhill Exploration sampled the property.  Since then WX Syndicate,
Newmont and Mountain West Exploration have conducted exploration efforts
totaling over US$100,000 in expenditures.





·
            Grayhill
      Exploration 1983-84                 Geochemical
      sampling


·
            WX
      Syndicate         
      1986-91                4
      RC holes for 500 feet (160 m)


·
            Newmont                              1988                      Geochemical
      sampling


·
            Mountain
      West                   1991-92                Geochemical
      Sampling





47


A total
of 500 feet (160 m) in 4 holes have been completed on the
property.  All of the drilling was shallow and drilled in the
pediment.  Drilling targeted the extension of mineralization within
the range.  Drilling failed to encounter the mineralized zone because
geology of the area was not understood.  This lack of understanding
and dearth of exploration within the outcropping mineralized area leaves
substantial potential for development of ore reserves.





Geology
of the Weepah Property





The
property lies within the southern portion of the Walker Lane structural
corridor.   Mineralization is hosted within the PreCambrian Wyman
Formation, Reed Dolomite and Lone Mountain Formation.  The Wyman
Formation is composed of up to 300 meters of micaceous shale, thin to
thick-bedded limestone and interbedded quartzite.  The Reed Dolomite
is composed of over 3000 feet of thick bedded dolostone with interbedded
limestone and quartzite.  The Lone Mountain Formation is composed of
more than 2100 feet of massive dolomite and limestone with thin interbeds of
shaley limestone.  Gold and silver mineralization at the Weepah
project are associated with quartz stockworks, silicified limestone and
disseminations within low and high-angle shear zones.





The
Weepah Hills property contains excellent untested sediment hosted
mineralization. Gold and silver mineralization identified at the Weepah Hills
property is of similar grades as the nearby Weepah and Mineral Ridge
mines.  Surface sampling has identified two zones from 1200 to 1500
feet long and up to 50 feet wide.





Structure
is the most important factor in ore control in the Silver Peak Mining
District.  At the Mineral Ridge deposit ore controls are believed to
be associated with detachment faults and high angle shear
zones.  These structures have developed a system of stacked
mineralized zones amenable to open-pit mining methods.  The historic
Weepah mine is associated with a high angle fault zone with coincident lateral
migration of mineralizing fluids.





The
Weepah Hills property has aspects of both nearby mines showing both low and high
angle fault zones and associated mineralization.  The Weepah Hills
mineralization is largely localized along three parallel structures which trend
northerly.  The low angle structures measure 20 to 30 degrees dipping
southeasterly and nearly parallel to bedding.  The high angle
structures dip 70 to 80 degrees to the west.  The mineralization has
been offset by a west-northwest fault on the south end and becomes covered by
massive dolomite to the north.  Gold/silver is hosted by silicified
limestone, quartz veined shale and iron rich shear zones. The highest grade
mineralization occurs in iron rich quartz veins within shale
beds.  Numerous dikes of intermediate to felsic origin have been
mapped within the core area.





Current
State of Exploration





The
Weepah Property presently does not have any mineral reserves. The property that
is the subject to our mineral claims is undeveloped and does not contain any
open-pit or underground mines. There is no mining plant or equipment located on
the property that is the subject of the mineral claim. Currently, there is no
power supply to the mineral claim. Our planned exploration program is
exploratory in nature and no mineral reserves may ever be
found.  There is no drilled resource on our claims.


48


Geological
Exploration Program




To date
exploration on the Weepah Property has consisted of a detailed geologic map and
geochemical sampling of the project area.  Mapping and sampling have
identified mineralization consistent with the nearby active Mineral Ridge
mine.  The company contemplates a geophysical survey to identify
mineralization under alluvial cover within the southern portion of the claim
block.  Drilling would be deemed necessary to test any significant
anomalies defined by the geophysical survey.





Imperial
Property











Acquisition
of Interest





On May
30, 2008, the Company entered into an Assignment and Assumption Agreement (the
“Agreement”) with American Goldfields Inc., a Nevada corporation (“Goldfields”),
to acquire the exclusive option to an undivided right, title and interest in 22
unpatented Federal mining claims located in Esmeralda County, Nevada, subject to
a 3% NSR royalty payable to MinQuest. Goldfields had originally acquired its
exclusive option on the Property on June 30, 2004, when it entered into a
Property Option Agreement (the “Property Agreement”) with MinQuest, the owner of
the Imperial Property.


49


Pursuant
to the Agreement, the Company assumed the rights, and agreed to perform all of
the duties and obligations, of Goldfields arising under the Property Agreement.
Simultaneous with the execution and delivery of the Agreement, the Company paid
Goldfields $250,000, which amount represents the full payment and satisfaction
for the assignment by Goldfields to the Company of the Property Agreement and
all rights and obligations with respect thereto. Included in the assignment
were, without limitation, all sums incurred by Goldfields in connection with the
Property, specifically (i) the refunding of the reclamation bond previously paid
by Goldfields to the Bureau of Land Management in Nevada in the amount of
$13,255; (ii) the approximately $277,000 of expenditures incurred by Goldfields
prior to the Agreement; and (iii) the $120,000 paid to MinQuest Inc. as option
payments under the Property Agreement.  On July 1, 2008 the Company
made a $20,000 property option payment to MinQuest which was the final option
payment due under the Imperial Property Option Agreement.  By July 1,
2009 the Company was to incur an aggregate $223,056 in property expenditures to
earn a 100% interest in the property, of which $8,488 was incurred leaving a
shortfall of $214,568.  The Company is at risk of losing its interest
in the property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Imperial
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Imperial Property Option Agreement.





Description
and Location of the Imperial Property





The
Imperial Property is located in Esmeralda County, Nevada, approximately 60
kilometres southwest of Tonopah and 300 kilometers northwest of Las Vegas in the
Railroad Springs Mining District. The property consists of 24 mineral claims
elongated in an east-west direction, covering approximately 450 acres located in
Railroad Pass between the Montezuma Range to the northeast and the Silver Peak
Range to the southwest. The property covers portions of two adjacent US
Geological Survey 7 1⁄2’ quadrangle map sheets:  Lida Wash, Nevada and
Montezuma Peak, SW Nevada. The center of the property is situated at
approximately 117o 31’
43” West longitude and 37o 33’
North latitude.




Land
claims in the district are administered under Department of Interior, Bureau of
Land Management (“BLM”) under the Federal Land Policy and Management Act of
1976. The Imperial claims cover portions of Sections 34, 35, and 36 in Township
4S, Range 40 East in Esmeralda County, Nevada. None of the claims have been
legally surveyed. The property is most easily accessed from the community of
Silver Peak, Nevada by following US route 95 west from Tonopah for a distance of
35 kilometers and turning south onto paved State Highway 295 for 21 kilometers
and then west on a secondary gravel road for 500 meters to the eastern claim
boundary.







MinQuest
is the registered owner of 14 of the claims that make up the Imperial Property.
Ten of the claims (Lida 1 to Lida 10) are registered to Richard Kern, Michael
Forth, and James Motter. Under the terms of a Letter Agreement, the Lida claims
have been leased to MinQuest for a period of 20 years. The lease allows MinQuest
to transfer title to third parties providing all conditions of the original
agreement are met.


50


Exploration
History of the Imperial Property





The
Imperial Property was first developed in the 1920’s but apparently had little or
no production until the late 1930’s. The Imperial Mine produced approximately
10,000 tons of ore and was probably shut down at the beginning of World War II.
The mine has two adits, the longest of which has approximately 2,600 feet of
drifts and crosscuts. A 200 foot shaft, which is not accessible, is also located
on the property.





The
property has been explored by Energy Reserves Group, Goldsil Mining, Felmont
Oil, and Nevada Star Resource Corporation. Felmont conducted the bulk of the
work during 1983 – 1984 including drilling 19 reverse circulation holes. Five of
these holes intercepted significant thickness of oxide gold in “Carlin-style”
mineralization. Six of their holes were drilled on the area that hosted the
Imperial Mine. No other holes were drilled on this target that is more than a
mile long. Felmont dropped the property partly because they lost the rights to
the portion of the claim covering the Imperial Mine and partly because they were
taken over by Homestake.





Nevada
Star conducted a soil survey over the non-Imperial Mine claim block in 1987 and
partially tested the area around two of the better Felmont holes with shallow,
close-spaced grid drilling. This work which defined an area of gold
mineralization and confirmed the presence of Carlin-style gold in silty rocks
adjacent to northeast trending high angle feeder faults, was to be followed up
by drill testing of this and several other targets. However, Nevada Star was
unable to raise the capital needed to continue and relinquished the
property.





Goldfields
completed a two phase exploration drill program that focused on the high-grade
vein and disseminated gold targets within the Imperial Property. The program
included 31 reverse circulation holes for a total of 7,935 feet of
drilling.





The first
phase of the program was completed in the fall of 2004 and included 10 drill
holes for a total of 2,995 feet. All of these holes were drilled on the Imperial
Target.  In addition to the drilling Goldfields has also conducted
underground sampling. A total of 40 samples have been taken of quartz vein
related mineralization underground. This work confirmed the presence of high
grade values in the two adits sampled and will help target further
drilling.





Of the
first ten drill holes drilled, several intersected stopes which were not visible
on existing underground maps. This was to be expected to some extent, as Phase I
of the drill program was designed to test an area of previous underground mining
which had already had extensive workings. Of particular interest was drill hole
IR-4 which intersected 10 feet of high grade gold. This 10 foot interval (105’
to 115’) averages 0.50 oz/ton gold occurs within a 40 foot interval (105’ to
145’) that averages 0.154 oz/ton gold. Seven of the ten holes drilled contain
gold intercepts exceeding 1.0 ppm (0.029 oz/ton).





51


The
second phase of the drilling was completed in the fall of 2005.  This
phase included 21 holes for a total of 4,940 feet.  Goldfields drilled
14 holes in the Resource Target area with all but five containing +0.01 oz/ton
gold intercepts.  Two of the holes intersected, or came close to
intersecting, the feeder structure within the favorable host sediment. Hole
IR-22 contained 35 feet averaging 0.072 oz/ton gold and IR-23 contained 25 feet
at 0.034 oz/ton gold including 5 feet at 0.096 oz/ton at the bottom of the
hole.  The drilling indicates the gold is located within one nearly
flat-lying favorable sedimentary unit (a calcareous siltstone) that is
approximately 50 feet thick. Gold grade drops off quickly as one moves away from
the feeder fault. Holes drilled beneath the mineralized unit, even those
intersecting the feeder fault, were barren. The flat-lying mineralization
appears to dip gently to the northwest and is approximately 200 feet wide and 40
to 50 feet thick. The gold bearing horizon has not been drilled to the
southwest.





Two holes
targeted the Jasperoid Breccia Target with one hole being drilled under the gold
bearing jasperoid and another targeting the possible intersection of the
northeast trending feeder fault with the Imperial fault.   Both
of these holes (IR-25 and26) were barren. Just as at the Resource Target, these
holes drilled beneath the favorable stratigraphy and missed the mineralization.
Future drilling should be collared above the favorable horizon in proximity to
the feeder fault.





In
addition to the drilling, a total of 40 channel (continuous and consistent
amount) samples were taken across veins exposed in the upper and lower adits.
Sample widths were noted. Once at the assay lab each was weighed. Sample
preparation, performed by ALS Chemex in Reno, Nevada, consisted of crushing the
entire sample, splitting off 1,000 grams, pulverizing all 1,000 grams and
splitting off 50 grams of this pulp for fire assay for gold and 50 grams for
silver.





Geology
of the Imperial Property





The
geology of the property is described in a December, 2002 report by Geoffrey N.
Goodall, President of Global Geological Consultants Ltd., a private consulting
firm. Regionally, the Imperial Property is located within the Walker Lane which
hosts several precious metal deposits. Two distinct types of gold mineralization
occur on the Imperial Property. The first type is associated with high angle
bodies of jasperoid that outcrop along the east-west axis of the property. The
second type of mineralization is identified from drill hole data in the eastern
part of the property. Here gold mineralization is associated with flat lying
bedding and is disseminated throughout highly altered limonite stained
decalcified siltstones.





Structurally,
two fault sets appear closely related to mineralization. The Imperial Fault and
other associated west-northwest structural zones have received the bulk of the
exploration within the district. Numerous northeast trending faults, some of
which are shown by soil geochemistry, have received little attention as possible
feeders. Nearly all gold anomalies from the eastern half of the claims have a
northeast trend. These anomalies are thought to be leakage along feeder
faults.





Three
primary Carlin-type targets are present at Imperial. The first and most
important is the Imperial Target that has only one hole on the favorable side of
the approximately 1,600 meter long structure. The second target, called the
Resource Target is an open-ended 500 meter long gold in soil anomaly along a
northeast trending fault system. A final target called the Jasperoid Breccia
Target is a large anomaly under cover in the central portion of the claim group.
The anomaly is 400 meters long and has gold in soil anomaly at its west
end.




52


Current
State of Exploration





The
Imperial Property presently does not have any identified mineral reserves. The
property that is the subject to our mineral claims is undeveloped and does not
contain any open-pit or underground mines. There is no mining plant or equipment
located on the property that is the subject of the mineral claim. Currently,
there is no power supply to the mineral claim. Our planned exploration program
is exploratory in nature and no mineral reserves may ever be
found.  There is no drilled resource on our claims.





Geological
Exploration Program




The
Company is currently evaluating the drill locations and results of the programs
completed by Goldfields in order to determine the next phase of exploration for
the Imperial Property.





Item
3.  Legal Proceedings.





There are
no pending legal proceedings to which the Company is a party or in which any
director, officer or affiliate of the Company, any owner of record or
beneficially of more than 5% of any class of voting securities of the Company,
or security holder is a party adverse to the Company or has a material interest
adverse to the Company.  The Company’s properties are not the subject
of any pending legal proceedings.





Item
4.  Submission of Matters to a Vote of Security Holders.





No
matters were submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this report.





PART
II





Item
5. Market
for Registrant’s Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities.





Market
Information.


Our
common stock is traded on the Financial Industry Regulatory Authority Over The
Counter Bulletin Board (“OTCBB”) under the symbol “PGOL.” The OTCBB does not
have any quantitative or qualitative standards such as those required for
companies listed on Nasdaq.  The following table sets forth the range
of quarterly high and low closing bid prices of the common stock as reported on
http://finance.yahoo.com during the years ending May 31, 2010 and May 31,
2009:


53





Financial Quarter
            Bid Price Information*Year
            Quarter
            High Bid Price
            Low Bid Price2010
            Fourth
      Quarter
            $0.40
            $0.22Third
      Quarter
            $0.40
            $0.17Second
      Quarter
            $0.28
            $0.14First
      Quarter
            $0.31
            $0.212009
            Fourth
      Quarter
            $0.31
            $0.065Third
      Quarter
            $0.11
            $0.065Second
      Quarter
            $0.09
            $0.065First
      Quarter
            $0.09
            $0.06





*The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.





Holders.





On August
12, 2010, there were approximately sixty-five (65) holders of record of the
Company’s common stock.





Dividends.





The
Company has not declared or paid any cash dividends on its common stock nor does
it anticipate paying any in the foreseeable future. Furthermore, the Company
expects to retain any future earnings to finance its operations and expansion.
The payment of cash dividends in the future will be at the discretion of its
Board of Directors and will depend upon its earnings levels, capital
requirements, any restrictive loan covenants and other factors the Board
considers relevant.





Warrants or
Options.





No
warrants, options or other securities convertible or exchangeable into equity
securities were issued during the fiscal year ending May 31, 2010,





Securities Authorized for
Issuance under Equity Compensation Plans





We do not
have any equity compensation plans that were approved by our shareholders. Set
forth below is certain information as of May 31, 2010, the end of our most
recently completed fiscal year, regarding equity compensation plans that have
not been approved by our stockholders.


54





Equity
      compensation plans not approved by stockholders – as of May 31,
      2010Plan
      Category
            
            Number
      of securities to be
              issued
      upon exercise of
              outstanding
      options, warrants and rights
            
            Weighted
      average exercise
              price
      of outstanding options,
              warrants
      and rights
            
            Number
      of securities
              remaining
      available for
              future
      issuance2003
      Stock Option Plan*
            
            5,546,000
            (1)
            
            $0.49
            
            711,0002005
      Stock Option Plan**
            
            2,000,000
            
            
            $0.25
            
            1,700,000Share
      Purchase Warrants
            
            3,456,000
            
            
            $1.48
            
            N/A





*On June
8, 2009, 205,000 stock options issued under the 2003 Plan and 500,000 stock
options under the 2005 Plan were cancelled.





**On
November 1, 2009, 200,000 stock options issued under the 2005 Plan were
cancelled.





(1)           Since
the plan provides for appropriate adjustments in the event of stock splits and
other similar events, when our common stock was forward split on June 17, 2003,
a corresponding adjustment was made to the option plan. Accordingly, as of June
17, 2003 there were 2,546,000 shares available for issuance under the Stock
Option Plan. On September 22, 2003, we amended our Stock Option Plan by
increasing the number of shares available for issuance under the plan to
5,546,000 shares





As of May
31, 2010, there were a total of 4,835,000 options granted under the 2003 Plan
with exercise prices ranging from $0.05 per share to $1.50 per
share.  There were also a total of 300,000 options granted under the
2005 Plan with an exercise price of $0.25 per share.





The
following discussion describes material terms of grants made pursuant to the
stock option plans:





Pursuant
to the 2003 and 2005 Stock Option Plans, grants of shares can be made to
employees, officers, directors, consultants and independent contractors of
non-qualified stock options as well as stock options to employees that qualify
as incentive stock options under Section 422 of the Internal Revenue Code of
1986 (“Code”). The Plan is administered by the Option Committee of the Board of
Directors (the “Committee”), which has, subject to specified limitations, the
full authority to grant options and establish the terms and conditions for
vesting and exercise thereof. Currently the entire Board functions as the
Committee.





In order
to exercise an option granted under the Plan, the optionee must pay the full
exercise price of the shares being purchased. Payment may be made either: (i) in
cash; or (ii) at the discretion of the Committee, by delivering shares of common
stock already owned by the optionee that have a fair market value equal to the
applicable exercise price; or (iii) with the approval of the Committee, with
monies borrowed from us.





55


Subject
to the foregoing, the Committee has broad discretion to describe the terms and
conditions applicable to options granted under the Plan. The Committee may at
any time discontinue granting options under the Plan or otherwise suspend, amend
or terminate the Plan and may, with the consent of an optionee, make such
modification of the terms and conditions of such optionee’s option as the
Committee shall deem advisable.





Recent Sales of Unregistered
Securities; Use of Proceeds from Registered Securities.


There was
no sale of unregistered securities during the fiscal year ended May 31,
2010.
 
 Purchases of Equity
Securities by the Company and Affiliated Purchasers.


There was
no purchase of equity securities by the Company and affiliated purchasers during
the fiscal year ended May 31, 2010.





Item
6.  Selected Financial Data





A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.





Item
7.  Management’s Discussion and Analysis or Plan of
Operation.





Overview





As a
natural resource exploration company our focus is to locate prospective
properties that may host mineral reserves that could eventually be put into
mining production. With this in mind, we have to this date identified and
secured interests in several mining claims with respect to properties in the
Walker Lane area of Nevada and the historic Oatman mining district of Arizona.
We have adequate funding to meet all our obligations on our current projects
until at least May 31, 2011.





We do not
intend to use any employees, with the exception of part-time clerical assistance
on an as-needed basis. Outside advisors, attorneys or consultants will only be
used if they can be obtained for a minimal cost or for a deferred payment basis.
Management is confident that it will be able to operate in this manner and
continue during the next twelve months.





Plan of
Operation





During
the twelve-month period ending May 31, 2011, our objective is to continue to
explore the properties subject to our mining claims.  The funds in our
treasury are sufficient to meet all planned activities as outlined below, with a
contingency margin. As a result of this, we do not expect to enter into any new
financing arrangements during the twelve months ending May 31,
2011.





56


We
continue to run our operations with the use of contract operators, and as such
do not anticipate a change to our company staffing levels. We remain focused on
keeping the staff compliment, which currently consists of our four directors, at
a minimum to conserve capital. Our staffing in no way hinders our operations, as
outsourcing of necessary operations continues to be the most cost effective and
efficient manner of conducting the business of the Company.





We do not
anticipate any equipment purchases in the twelve months ending May 31,
2011.





The
following is an overview of the project work to date, as well as anticipated
work for the next twelve months. Specific dates when work will begin, and how
long it will take to complete each step is subject to change due to the
variables of weather, availability of work crews for a particular type of work,
and the results of work that is planned, the outcome of which will determine
what the next step on that project will be.





Bruner and Vernal
Projects.





We have
substantially fulfilled our exploration and property option commitments with
respect to the Bruner and Vernal projects.  We have made total
property option payments of $80,000 and have incurred approximately $499,327 of
property expenditures.  On July 25, 2007 we made the final property
option installment of $20,000.  Under the property agreement we were
to have spent $500,000 by July 25, 2008.  To date we have spent an
aggregate of approximately $585,989 on exploration of the two properties which
exceeds the exploration requirement of the Agreement.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Bruner and
Vernal Properties to Provex.  Pursuant to the Agreement, Provex
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Bruner and Vernal Property Option
Agreement.





Bruner
Expansion





On April
1, 2009 simultaneous with the execution and delivery of the Bruner Expansion
Agreement, the Company made the initial property option payment of $30,000 and
the property option payment of $35,000 on April 1, 2010.  The Bruner
Expansion Agreement does not require minimum annual exploration
expenditures.





Future
plans for the Bruner Project include finalizing all compilations then designing
a drill program that will expand and in-fill within the Duluth area and include
step out drilling of high grade gold mineralization at the Penelas
target.  Evaluation of the Bruno and Paymaster targets will include
mapping and surface sampling and eventual drill program to test their potential
at depth.  Additional surface grid sampling will be conducted on other
localized gold anomalies within the project boundaries.  Past work has
included a widespread BLEG survey.  The survey has identified several
outlying anomalies that require further mapping and surface sampling to properly
assess their merits.





57


On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Bruner
Expansion Property to Provex.  Pursuant to the Agreement, Provex
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Bruner Expansion Property Option
Agreement.





Moss
Property





The Moss
Property agreements do not require on-going property payments nor minimum annual
exploration expenditures.  In June 2009 a drill program commenced to
test the down-dip extension of the Moss vein system. Total drilling footage is
estimated at 3,000 feet. The drilling tested approximately 2,000 feet of strike
length of the vein.  The goal of this program is to further define the
trend and depth of mineralization as well as provide additional metallurgical
material for column tests.





In March
2010 Patriot engaged an outside firm to initiate a series of metallurgical tests
to focus on the amenability of the Moss deposit to heap leaching gold/silver
recovery.  Core from Moss will be tested in four column leach tests
with crush sizes up to 2 inches. The crushed ore will be leached in 5 feet high
columns for a minimum of 200 days. The tests are expected to determine maximum
obtainable gold and silver recoveries using leaching as well as the leach times
needed for maximum recovery.





Margarita
Property





On
January 29, 2008, the Company acquired exploration rights to the Margarita
Property.  Subsequent to the completion of a drill program, the
Company terminated the Margarita Property Option Agreement. As a result of
terminating the Margarita Property Option Agreement, the Company agreed to pay
the 2008 annual claim filings fees on the property of $8,268.  Under
the release agreement, the Company was not required to make the $100,000 payment
due May 31, 2008 and no longer has any obligations under the
agreement.





Whiskey
Property





The
Company acquired the Whiskey Property on March 15, 2008.  The Company
has made the $50,000 payment due on signing and the $50,000 due on March 15,
2009 but has not made the $50,000 payment due March 15,
2010.   By March 15, 2010, the Company was to have incurred
$200,000 on exploration but had incurred approximately $53,214 on exploration of
the property, a shortfall of $146,786.  The Company is at risk of
losing its interest in the property by not making the indicated option payments
and incurring the exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Whiskey
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Whiskey Property Option Agreement.





58


NK
Property





The
Company acquired the NK Property on March 15, 2008.  The Company has
made the $20,000 payment due on signing and the $20,000 due on March 15, 2009
but has not made the $20,000 payment due March 15, 2010.  By March 15,
2010, the Company was to have incurred $125,000 on exploration but had incurred
approximately $17,451 on exploration of the property, a shortfall of
$107,549.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the NK
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the NK Property Option Agreement.





Weepah
Property





The
Company acquired the Weepah Property on March 15, 2008.  The Company
has made the $20,000 payment due on signing and the $20,000 due on March 15,
2009, but has not made the $20,000 payment due March 15,
2010.    By March 15, 2010, the Company was to have incurred
$125,000 on exploration but had incurred approximately $6,823 on exploration of
the property, a shortfall of $118,177.  The Company is at risk of
losing its interest in the property by not making the indicated option payments
and incurring the exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Weepah
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Weepah Property Option Agreement.





Imperial
Property





On May
30, 2008, the Company acquired the rights to the Imperial
Property.  On July 1, 2008 the Company made a $20,000 property option
payment to MinQuest which was the final option payment due under the Imperial
Property Option Agreement.  By July 1, 2009 the Company was to incur
an aggregate $223,056 in property expenditures to earn a 100% interest in the
property, of which $8,488 was incurred leaving a shortfall of
$214,568.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), to assign
the exclusive option to an undivided right, title and interest in the Imperial
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Imperial Property Option Agreement.





59


Results of
Operations





The
Twelve Months Ended May 31, 2010 compared to the Twelve Months Ended May 31,
2009





The
Company had no revenues during the fiscal years ended May 31, 2010 and May 31,
2009 because it was in the exploration state during such fiscal years. The net
loss from operations for fiscal 2010 was $559,821 compared to $714,796 in fiscal
2009.   The net loss from operations decreased significantly in
2010 compared to 2009 largely due to a decrease in exploration expenses to
$266,302 in 2010 from $386,192 in 2009, a decrease of $119,890.  A
large portion of the difference in exploration expenses between 2010 and 2009
was the total amount of property option payments that were due.  In
2010, there were no property option payments made, while in 2009 they totaled
$140,000.





General
and administrative expenses were $293,519 in 2010 compared to $328,604 in 2009,
a decrease of $35,085.  The difference relates to lower costs
associated with the Company’s corporate development activities, countered with
increased costs to consulting.





Interest
income decreased to $7,694 in 2010 from $40,099 in 2009.  The decrease
is largely due to lower average invested cash balances and a decrease in
interest rates on invested cash balances.





The
Twelve Months Ended May 31, 2009 compared to the Twelve Months Ended May 31,
2008





The
Company had no revenues during the fiscal years ended May 31, 2009 and May 31,
2008 because it was in the exploration state during such fiscal years. The net
loss from operations for fiscal 2009 was $714,796 compared to $1,325,808 in
fiscal 2008.   The net loss from operations decreased
significantly in 2009 compared to 2008 largely due to a large decrease in
exploration expenses to $386,192 in 2009 from $1,172,292 in 2008, a decrease of
$786,100.  A large portion of the difference in exploration expenses
between 2009 and 2008 was that two significant payments made in 2008 did not
recur in 2009.  In 2008, the Company acquired the Margarita Property
for $200,000 and the Imperial Property for $250,000.  In 2009 total
property option payments were $140,000 while in 2008 they totaled
$110,000.  In both 20009 and 2008 the Company paid an aggregate
$90,000 for the Whiskey, NK, and Weepah properties but in 2009 an additional
$30,000 was paid under the Bruner Expansion Agreement and the final Imperial
property option payment of $20,000 was made while in 2008 the final $20,000
payment under the original Bruner and Vernal agreement was
paid.    An additional reason for the decrease in
exploration expenses was that during 2009 the Company undertook minimal
exploration of its Whiskey, NK, and Weepah properties and as at May 31, 2009 the
Company had only just commenced its planned Moss drill program. In 2008 the
Company completed drill programs on both the Bruner and Margarita
Properties.





60


General
and administrative expenses were $328,604 in 2009 compared to $153,516 in 2008,
an increase of $175,088.  The increase relates to expenses for
corporate development. Other than the increased costs associated with the
Company’s corporate development activities, general and administrative expenses
decreased slightly in 2009 compared to 2008.





Interest
income decreased to $40,099 in 2009 from $108,903 in 2008.  The
decrease is largely due to lower average invested cash balances and a decrease
in interest rates on invested cash balances.





Liquidity and capital
resources





We had
total assets of $625,656 at May 31, 2010 consisting of cash of $606,501, prepaid
expenses of $5,000 and reclamation deposits of $14,155.  We had total
liabilities of $31,081 at May 31, 2010 all of which are current liabilities
consisting of accounts payable and accrued liabilities.





We
anticipate that we will incur the following to May 31, 2011:





-
              $75,000
      in property exploration expenses and claim payments in order to meet the
      requirements of the Company’s property option
  agreements;





-
              $100,000
      for operating expenses, including working capital and general, legal,
      accounting and administrative expenses associated with reporting
      requirements under the Securities Exchange Act of
  1934.





Cash used
in operations was $589,385 for the year ended May 31, 2010 while it was $936,627
for 2009.  A significant portion of the decrease was due to a large
reduction in accounts payable in 2010 compared to 2009.  In 2010
accounts payable were reduced by $34,908 while in 2009 accounts payable were
increased by $262,773.  The effect of the change over the two year
period resulted in a $227,865 difference in cash flows from 2010 compared to
2009.  Partially offsetting the effect of the change on accounts
payable was a decrease in the net loss to $549,477 in 2010 from $673,168 in
2009.  The effect of stock-based compensation was consistent between
2010 and 2009.





Cash from
operations from inception to date has not been sufficient to provide the
operating capital necessary to operate. In November 2003 we issued 864,000
shares of common stock and 864,000 Class A warrants, 864,000 Class B warrants,
864,000 Class C warrants and 864,000 Class D warrants. This private offering
generated gross proceeds of $1,080,000.00. The Class A-1 warrants are
exercisable on November 27, 2004 for an original period of five years at an
exercise price of $1.40 per share of common stock; the Class B-1 warrants are
exercisable on November 27, 2005 for an original period of four years at an
exercise price of $1.45; the Class C-1 warrants are exercisable on November 27,
2006 for an original period of three years at an exercise price of $1.50; and
the Class D-1 warrants are exercisable on November 27, 2007 for an original
period of two years at an exercise price of $1.55. The Company has the right, in
its sole discretion, to accelerate the exercise date of the warrants, to
decrease the exercise price of the warrants and/or extend the expiration date of
the warrants.  On June 8, 2009 the expiry date on all of the warrants
was extended from November 27, 2009 to November 27, 2011.  On May 26,
2010 the expiry date on all of the warrants was extended from November 27, 2011
to November 27, 2013.





61


Investing
activities in 2010 were $nil, whereas in 2009 the Company received a $17,000
refund of the reclamation deposit that it had previously paid on the Margarita
property.  There were no financing activities in either 2010 or
2009.





Going Concern
Consideration





Management
believes that the gross proceeds from the private placements and from the
exercise of stock options will be sufficient to continue our planned activities
until May 31, 2011, the end of our next fiscal year. However, we anticipate
generating losses and therefore we may be unable to continue operations in the
future as a going concern. No adjustment has been made in the accompanying
financial statements to the amounts and classification of assets and liabilities
that could result should we be unable to continue as a going
concern.





We
currently have no agreements, arrangements or understandings with any person to
obtain funds through bank loans, lines of credit or any other
sources.





Accordingly,
our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.





Off-balance sheet
arrangements





We have
no off-balance sheet arrangements.





Item
7A  Quantitative and Qualitative Disclosure About Market
Risk





A smaller
reporting company, as defined by Item 10 of Regulation S-K, is not required to
provide the information required by this item.








Item
8.  Financial Statements.





The
financial statements are set forth immediately preceding the signature
page.





Item
9. Changes
In and Disagreements with Accountants on Accounting and Financial
Disclosure.





None.





62


Item
9A(T).  Controls and Procedures.





Evaluation of Disclosure Controls and
Procedures





As
required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange
Act”), the Company’s management carried out an evaluation of the effectiveness
of the design and operation of its disclosure controls and procedures as of May
31, 2010, being the date of the Company’s most recently completed fiscal year
end. This evaluation was carried out under the supervision and with the
participation of our Principal Executive Officer and Principal Financial
Officer, Mr. Herb Duerr.




Changes
in Internal Control Over Financial Reporting





During
the most recently completed fiscal year ended May 31, 2010, the Company reduced
its staff and as a result, a limitation in the segregation of duties
occurred.  This weakness has been reported by the
Company.





Evaluation of Internal Control Over
Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Our internal control system has been designed
to provide reasonable assurance to our management and board of directors
regarding the preparation and fair presentation of our published financial
statements. All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.





Management
conducted an evaluation of the design and operation of the Company’s internal
control over financial reporting as of May 31, 2010, based on the criteria set
forth in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.  This evaluation
included review of the documentation of controls, evaluation of the design
effectiveness of controls, testing of the operating effectiveness of controls
and a conclusion on this evaluation. Based on this evaluation, management
concluded that our internal control over financial reporting was not effective
as of May 31, 2010 due to the following material weakness:





·
            Our
      Company’s administration is composed of a small number of administrative
      individuals resulting in a situation where limitations on segregation of
      duties exist.  In order to remedy this situation we would need
      to hire additional staff to provide greater segregation of
      duties.  Currently, it is not feasible to hire additional staff
      to obtain optimal segregation of duties.  Management will
      reassess this matter in the following year to determine whether
      improvement in segregation of duty is
feasible.





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





63


Item
9B. Other Information.





None.


PART
II





Item
10.  Directors, Executive Officers and Corporate
Governance.





Directors and
Officers.





All
directors of our Company hold office until the next annual general meeting of
the stockholders or until their successors are elected and qualified. The
officers of our Company are appointed by our board of directors and hold office
until their earlier death, retirement, resignation or removal. Our directors,
executive officers and other significant employees, their ages, positions held
and duration each person has held that position, are as follows:





Name
            Position
      Held with the Company
            Age
            Date
      First AppointedHerb
      Duerr
            Chairman,
      President, Chief  Executive Officer, Chief Operating Officer,
      Secretary Treasurer, and Director
            56
            September
      12, 2008(1)Robert
      Coale
            Director
            70
            June
      23, 2003(1)Jared
      Beebe
            Director
            59
            September
      5, 2008Dennis
      Lance
            Director
            65
            February
      1, 2010





(1)On September 12, 2008 Mr.
Herb Duerr was appointed President, Chief Executive Officer, Secretary,
Treasurer, and Director of the Company.   Mr. Coale was first
appointed as a Director on June 23, 2003 and on October 13, 2005 Mr. Robert
Coale was appointed as the Company’s Chairman, President, Chief Executive and
Operating Officer, and Secretary.  Since September 12, 2008 Mr. Coale
has served only as a Director of the Company.





Business
Experience





The
following is a brief account of the education and business experience of each
director, executive officer and key employee during at least the past five
years, indicating each person’s principal occupation during the period, and the
name and principal business of the organization by which he was
employed.





Herb Duerr is an exploration
geologist with over twenty-five years experience in base and precious metal
exploration.  Since 1998 Mr. Duerr has been a principal of MinQuest
Inc. which is a privately held precious metal exploration and development
company.  He holds a Bachelor of Science in Geology from Florida
Atlantic University.





64


Robert Coale has been a
Director since June 2003 and served as our Chairman, President, and Chief
Executive and Operating Officer and Secretary and Treasurer from October 2005 to
September 2008.   Since April 2004 he has also been a Director of
Giant Oil & Gas Inc., a publicly traded natural gas exploration company. He
is a Professional Engineer with two engineering degrees (1963 - MetE. - Colorado
School of Mines, 1971 - MSc. - University of the Witwatersrand in South Africa)
and an MBA from the University of Minnesota (1982).  He has over 40
years of resource related business and management
experience.   Mr. Coale is currently an independent consulting
engineer specializing in mineral processing and natural gas fueling systems
including development of projects for converting low-grade or stranded natural
gas sources into liquefied natural gas.





Jared Beebe is an experienced
geologist with an extensive background in mineral
exploration.   In his nearly 20 years of working in the mining
industry, he has worked for a variety of exploration companies in Canada and the
United States.  He is currently an independent consulting Project
Manager.  He previously worked for Soho Resources from 2007 to 2008,
for Globex Mining in 2006, for Scorpio Mining in 2005 and from 1999 to 2004 he
worked as a researcher at the University of Quebec where he studied Geographic
Information Systems.  Mr. Beebe earned a Bachelor of Science degree in
Geology from Metropolitan State College, Denver, Colorado, in
1981.  He is a member of the Association of Applied Geochemists, the
Geological Society of Nevada, the Ordre du Géologues du Québec, and the Society
of Economic Geologists. Mr. Beebe also currently a Director of American
Goldfields Inc, a publicly-traded junior mineral exploration
company.





Dennis Lanceis an exploration
geologist with more than 35 years of domestic and international experience in
base and precious metals exploration.  Mr. Lance has an extensive
background both in field and management positions, and has worked for such
companies as Phelps Dodge Corporation, Houston Oil and Minerals and USMX
Inc.  For the past decade, Mr. Lance has acted as a geological
consultant to mining exploration companies including Thunder Mountain Gold,
Inc., from 2006 to present and Freegold Ventures Ltd., from 2006 to 2008 where
his responsibilities were surveying, geochemistry, geological mapping and
generative exploration work in preparation for 43-101 resource
estimates.  Mr. Lance earned a B.A. in Earth Science from California
State University, and attended Graduate School at the Mackay School of Mines
(University of Nevada).





There are
no family relationships among our directors or officers.  None of our
directors or officers has been affiliated with any company that has filed for
bankruptcy within the last five years.  We are not aware of any
proceedings to which any of our officers or directors, or any associate of any
such officer or director, is a party adverse to our company or has a material
interest adverse to it.  Other than the previous Shareholders
Agreement among Mr. Coale and Mr. Sibthorpe which is discussed below, there are
no agreements with respect to the election of Directors. Other than described in
Section 10 below, we have not compensated our Directors for service on our Board
of Directors, any committee thereof, or reimbursed for expenses incurred for
attendance at meetings of our Board of Directors and/or any committee of our
Board of Directors.





65


Audit Committee Financial
Expert.





The Board
of Directors has not established an audit committee and does not have an audit
committee financial expert. The Board is seeking additional Board members whom
it hopes will qualify as such an expert.





Section 16(a) Beneficial
Ownership Reporting Compliance.





Section
16(a) of the Securities Exchange Act of 1934 requires officers and Directors of
the Company and persons who own more than ten percent of a registered class of
the Company’s equity securities to file reports of ownership and changes in
their ownership with the Securities and Exchange Commission, and forward copies
of such filings to the Company. During the most recent fiscal year, none of the
directors, officers, and beneficial owners of more than ten percent of the
equity securities of the Company registered pursuant to Section 12 of the
Exchange Act has failed to file such forms on a timely basis.





Code of
Ethics.





The
Company has not adopted a Code of Ethics, as defined by SEC rules that applies
to the Company's Chief Executive Officer and Chief Financial Officer, and
Secretary (its principal executive officer and principal accounting and
financial officer). The Company has not adopted such a Code of Ethics because of
the small size and limited resources of the Company, and because management's
attention has been focused on matters pertaining to raising capital and the
operation of the business.





Changes to Procedures for
Recommendations of Director Nominees.





During
the fiscal year ended May 31, 2010, there were no material changes to the
procedures by which security holders may recommend nominees to our board of
directors.





Item
11.  Executive Compensation.





Summary
Compensation





On
November 1, 2005, the Company signed a service agreement with its former
President, Robert Coale.  Pursuant to the agreement the Company paid
Mr. Coale, beginning November 2005, $2,500 per month for his expertise to
identify and acquire certain exploration style properties that fit the
parameters of the Company’s business plan, oversee and manage, as directed by
the Company, the Company’s exploration programs that will be undertaken from
time-to-time, and perform all of the duties normally associated with serving as
the President and Chief Executive Officer of a publicly traded mining
company.  The service agreement was for an indefinite term,
cancellable in writing by either party with 30 days written
notice.  Effective July 1, 2008, Mr. Coale agreed to indefinitely
suspend payments under the agreement and effective September 12, 2008 the
agreement was cancelled when Mr. Coale resigned as President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  For the
year ended May 31, 2010, the Company paid $nil (2009 - $2,500) pursuant to this
agreement.





66


On
September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  Mr. Duerr
is also an Officer of MinQuest Inc (“MinQuest”).  All of the Company’s
mineral properties have either been directly or indirectly optioned from
MinQuest.  All exploration work undertaken on any of the Company’s
properties will be at the direction and discretion of the
Company.   For the year ended May 31, 2010, the Company made
total property payments of $nil to MinQuest related to property option
payments.  For the twelve-months ended May 31, 2010 the Company paid
Mr. Duerr an amount of $12,550 with respect to fees paid to Mr. Duerr for
geological services rendered to the Company.





The
following table sets forth information concerning the compensation paid or
earned during the fiscal years ended May 31, 2010 and 2009 for services rendered
to our Company in all capacities by the following persons: (i) all individuals
who served as the principal executive officer or acting in a similar capacity
during the fiscal year ended May 31, 2010, regardless of compensation level; (ii) all individuals who served as officers
at May 31, 2010 and whose total compensation during the fiscal year ended May
31, 2010 exceeded $100,000; and (iii) up to two additional individuals who
served as officers during the fiscal year ended May 31, 2010 and whose total
compensation during the fiscal year ended May 31, 2010 exceeded $100,000,
regardless of whether they were serving as officers at the end of such fiscal
year.





SUMMARY
      COMPENSATION TABLEName
      and principal position
              (a)
            Year
              (b)
            Salary
      ($)
              (c)
            Bonus
      ($)
              (d)
            Stock
      Awards ($)
              (e)
            Option
      Awards ($)
              (f)
            Non-Equity
      Incentive Plan Compensation ($)
              (g)
            Nonqualified
      Deferred Compensation Earnings ($)
              (h)
            All
      Other Compensation ($)
              (i)
            Total
      ($)
              (j)Herb
      Duerr(1)
            2010
            12,550
            0
            0
            0
            0
            0
            0
            12,5502009
            32,325
            0
            0
            0
            0
            0
            0
            32,325Robert
      Coale(1)
            2010
            0
            0
            0
            0
            0
            0
            0
            02009
            2,500
            0
            0
            0
            0
            0
            0
            2,500





(1)On September
12, 2008 Mr. Herb Duerr was appointed President, Chief Executive Officer,
Secretary, Treasurer, and Director of the Company.   Mr. Duerr is
our only officer.  Mr. Coale was first appointed as a Director on June
23, 2003 and on October 13, 2005 Mr. Robert Coale was appointed as the Company’s
Chairman, President, Chief Executive and Operating Officer, and
Secretary.  Since September 12, 2008 Mr. Coale has served only as a
Director of the Company.





Outstanding
Equity Awards





The table
set forth below presents certain information concerning unexercised options,
stock that has not vested, and equity incentive plan awards for each named
executive officer above outstanding as of May 31, 2010.





67





OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
            STOCK
      AWARDSName
              (a)
            Number
      of Securities Underlying Unexercised Options
              (#)
              Exercisable
              (b)
            Number
      of Securities Underlying Unexercised Options
              (#)
              Unexer-
              cisable
              (c)
            Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
              (#)
              (d)
            Option
      Exer-
              cise
      Price
              ($)
              (e)
            Option
      Expira-
              tion
      Date
              (f)
            Number
      of Shares or Units of Stock That Have Not Vested
              (#)
              (g)
            Mark-
              et
      Value of Shares or Units of Stock That Have Not Vested
              ($)
              (h)
            Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
              (#)
              (i)
            Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not Vested
              (#)
              (j)Herb
      Duerr
            40,000
            0
            0
            1.03
            July
      25, 2013
            0
            0
            0
            0Robert
      Coale
            100,000(2)
            0
            0
            0.05
            June
      23, 2013
            0
            0
            0
            0200,000(3)
            0
            0
            0.25
            March
      10, 2016
            0
            0
            0
            0





(1) On
July 25, 2003 Mr. Duerr was granted the right to purchase an aggregate of 40,000
common shares at an exercise price of $1.03 per option pursuant to the 2003
Stock Option Plan.  These options have fully vested.





(2) On
June 23, 2003 Mr. Coale was granted the right to purchase an aggregate of
100,000 common shares at an exercise price of $0.05 per option pursuant to the
2003 Stock Option Plan.  These options have fully vested.





(3) On
March 10, 2006, Mr. Coale was granted the right to purchase an additional
200,000 common shares at an exercise price of $0.25 per option pursuant to the
2005 Stock Option Plan.  The $0.25 options vest in equal installments
of 33,333 commencing September 10, 2006 and ending March 10,
2009.  These options have fully vested.





Compensation
of Directors





Except as
described above under the section entitled “Summary Compensation,” none of our
directors received any compensation during the fiscal year ended May 31,
2010.





68


Mr. Beebe
receives USD $500 per month for serving as a Director of the
Company.  From April 1, 2009, until February 28, 2010, Mr. Beebe
agreed to suspend his director’s fees in order to conserve working
capital.  For the fiscal period ending May 31, 2010 a total of $1,500
was paid to Mr. Beebe.





Effective
February 1, 2010 Mr. Lance will receive USD $500 per month for serving as a
Director.  For the fiscal period ending May 31, 2010 a total of $2000
was paid to Mr. Lance.





Item
12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.





The
following table lists, as of August 12, 2010, the number of shares of common
stock of the Company beneficially owned by (i) each person or entity known to
the Company to be the beneficial owner of more than 5% of the outstanding common
stock; (ii) each officer and director of the Company; and (iii) all officers and
directors as a group. Information relating to beneficial ownership of common
stock by our principal stockholders and management is based upon information
furnished by each person using “beneficial ownership” concepts under the rules
of the Securities and Exchange Commission. Under these rules, a person is deemed
to be a beneficial owner of a security if that person has or shares voting
power, which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not have
any pecuniary beneficial interest. Except as noted below, each person has sole
voting and investment power.





The percentages below are calculated
based on 26,224,400 shares of Common Stock which are issued and outstanding as
of August 12, 2010.  Unless indicated otherwise, all addresses below
are c/o Patriot Gold Corp., 3651 Lindell Road, Suite D, Las Vegas, Nevada,
89103.





Name
      of Beneficial Owner
            
            Amount
      and Nature of Beneficial Ownership
            
            Percentage
              of
      ClassRobert
      D. Coale
            
            6,300,000
            (1)
            24.0%Almir
      Ramic
            
            1,730,000
            (2)
            6.6%Colin
      Bruce Worth
            
            1,600,000
            (3)
            6.1%Peak
      Geological Inc.
            
            1,400,000
            
            5.3%Herb
      Duerr
            
            40,000
            (4)
            *Jared
      Beebe
            
            -
            
            *Directors
      and Officers as a Group (3 individuals)
            
            6,340,000
            
            25.9%





*
Represents less than 1%.





(1)
            Includes
      100,000 options pursuant to the 2003 Stock Option Plan to purchase common
      stock at a purchase price of $0.05 per share and 200,000 options pursuant
      to the 2005 Stock Option Plan to purchase common stock at a purchase price
      of $0.25 per share.


(2)
            Includes
      1,280,000 shares of our common stock issuable upon the exercise of
      warrants held by Mr. Ramic.  All such warrants are
      currently exercisable.


(3)
            Includes
      1,280,000 share of our common stock issuable upon the exercise of warrants
      held by Mr. Worth. All such warrants are currently
      exercisable.


(4)
            Includes
      40,000 options pursuant to the 2003 Stock Option Plan to purchase common
      stock at a purchase price of $1.03 per
share.


69


Shareholders’
Agreement





Messrs. Sibthorpe
and Coale were party to a Shareholders’ Agreement dated as of January 22, 2004.
The agreement provided that for so long as the person holds any of the 3,000,000
shares which he received from Bruce Johnstone, the directors shall vote such
shares to maintain three persons on our board. Upon any vote to appoint
representatives to the Board, each shareholder agreed that he shall vote his
shares for the other two shareholders. If one of the three shareholders is no
longer a shareholder, or if the Board or our shareholders decided to remove one
of the Board members, or the shareholder no longer holds any of the 3,000,000
shares which he received from Mr. Johnstone, then the other two
shareholders agreed to vote their shares together to either maintain the number
of Board members as two or to nominate and appoint a third Board member. The
agreement also provides that for all other matters in which shares are voted,
the three shareholders shall vote their 3,000,000 shares together as determined
by the decision of two of the three shareholders. These three shareholders had
determined that such agreement would be beneficial in maintaining control among
themselves over the shares that they had received from
Mr. Johnstone.





The
shareholders also agreed that he will not, directly or indirectly, sell, pledge,
gift or in any other way dispose of any of the 3,000,000 shares which he
received from Mr. Johnstone. This transfer restriction shall apply to such
shares in all situations during all times that such individual holds any of the
3,000,000 shares. Although the shareholders’ agreement restricts transfers of
the shares received from Mr. Johnstone and held by the directors, a
director can no longer hold the shares which he received from Mr. Johnstone
if he dies or if the agreement is amended by the parties to permit a transfer.
The Company is not aware of any such amendment being contemplated by the
parties.  Mr. Coale acquired Mr. Sibthorpe’s shares upon Mr.
Sibthrope’s resignation from the Board of Directors.  As a result, the
Shareholders’ Agreement no longer has effect as Mr. Coale is the sole
shareholder under the original agreement.





Buyback
Agreements





On March
10, 2006 the Company granted stock options to Mr. Robert Coale, who was the
Company’s former Chairman, President, Chief Executive Officer, Chief Operating
Officer, Secretary, and a director and to Mr. Robert Sibthorpe who was a former
director of the Company.  In consideration therefor, Mr. Coale, Mr.
Sibthorpe and the Company entered into a Buy-Back Option Agreements, pursuant to
which Messrs. Coale and Sibthorpe granted to the Company the option to purchase
all or any portion of the 3,000,000 shares of the Company’s common stock that
are owned by each of Mr. Coale and Mr. Sibthorpe respectively for a purchase
price of $0.01 per share.  Mr. Coale acquired Mr. Sibthorpe’s
3,000,000 shares upon Mr. Sibthrope’s resignation from the Board of
Directors.  The shares acquired by Mr. Coale are subject to the same
terms as originally agreed to by Mr. Sibthorpe under the buyback
agreement.





Also on
March 10, 2006, the Registrant entered into a Redemption Agreement with Ronald
Blomkamp, the Company’s former President and Chief Executive Officer pursuant to
which the Company purchased from Mr. Blomkamp the 3,000,000 shares of the
Company’s common stock that were owned by Mr. Blomkamp.  The purchase
price for such shares paid to Mr. Blomkamp by the Company was $0.01 per share,
which amounted to an aggregate of $30,000.  The 3,000,000 common
shares purchased from Mr. Blomkamp were cancelled by the
Company.


70


We are
unaware of any other contract or other arrangement the operation of which may at
a subsequent date result in a change in control of our company.





Securities Authorized for
Issuance under Equity Compensation Plans





Information
regarding our equity compensation plans is set forth above under Part II, Item
5.





Item
13.  Certain Relationships and Related Transactions, and Director
Independence.





Related
Party Transactions





Related Party Transactions
with Herb Duerr and MinQuest Inc.





On
September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  Mr. Duerr
is also an Officer of MinQuest Inc (“MinQuest”).  All of the Company’s
mineral properties have either been directly or indirectly optioned from
MinQuest.  All exploration work undertaken on any of the Company’s
properties will be at the direction and discretion of the
Company.   For the year ended May 31, 2010, the Company made
total property payments of $nil to MinQuest related to property option payments
for the Whiskey, NK, Weepah, and Imperial properties.  For the
twelve-months ended May 31, 2010 the Company paid Mr. Duerr an amount of $12,550
with respect to fees paid to Mr. Duerr for geological services rendered to the
Company.





Bruner
and Vernal Property Option Agreement





Pursuant
to a Property Option Agreement, dated as of July 25, 2003, with MinQuest the
Company has the option to earn a 100% interest in the Bruner and Vernal mineral
exploration properties located in Nevada.   Simultaneous with the
execution and delivery of the Property Option Agreement, we paid MinQuest
$12,500 and we owed an additional $80,000 which was due in four equal annual
installments commencing on July 25, 2004. With the approval of MinQuest, we paid
the first installment on August 27, 2004 and we paid the second installment on
September 20, 2005.  On July 25, 2006 and 2007 respectively we made
the third and fourth installments of $20,000.  The payment made on
July 25, 2007 was the final payment due under the property option agreement for
the Bruner and Vernal properties.  To date we have spent an aggregate
of approximately $585,989 on exploration of the two properties which exceeds the
$500,000 exploration requirement of the Agreement.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), of which
Mr. Herb Duerr is President, Secretary, Treasurer, and Director, to assign the
exclusive option to an undivided right, title and interest in the Bruner and
Vernal Properties to Provex.  Pursuant to the Agreement, Provex
assumed the rights, and agreed to perform all of the duties and obligations, of
the Company arising under the Bruner and Vernal Property Option
Agreement.





71


Moss
Property Option Agreement





A portion
of our Moss Property was acquired from MinQuest.  On March 4, 2004,
the Company signed the agreement that earned us a 100 percent interest in 62
unpatented mining claims by paying MinQuest a one-time lease fee of
$50,000.   The fee of $50,000 was paid on July 7,
2004.





Whiskey
Property Option Agreement





On March
15, 2008, the Company executed the Whiskey Property Option Agreement with
MinQuest granting the Company the right to acquire 100% of the mining interests
of the Nevada mineral exploration property.  Under the agreement the
Company agreed to make total property options payments to MinQuest of $1,045,000
and incur an aggregate $2,500,000 in property exploration expenditures by March
15, 2018.  The Company has made the $50,000 payment due on signing and
the $50,000 due on March 15, 2009 but has not made the $50,000 payment due March
15, 2010.   By March 15, 2010, the Company was to have incurred
$200,000 on exploration but had incurred approximately $53,214 on exploration of
the property, a shortfall of $146,786.  The Company is at risk of
losing its interest in the property by not making the indicated option payments
and incurring the exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), of which
Mr. Herb Duerr is President, Secretary, Treasurer, and Director, to assign the
exclusive option to an undivided right, title and interest in the Whiskey
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Whiskey Property Option Agreement.





NK
Property Option Agreement





On March
15, 2008, the Company executed the NK Property Option Agreement with MinQuest
granting the Company the right to acquire 100% of the mining interests of the
Nevada mineral exploration property.  Under the agreement the Company
agreed to make total property options payments to MinQuest of $490,000 and incur
an aggregate $1,225,000 in property exploration expenditures by March 15,
2018.  To May 31, 2009 the Company has made the $20,000 payment due on
signing and the $20,000 due on March 15, 2009.    The
Company has made the $20,000 payment due on signing and the $20,000 due on March
15, 2009 but has not made the $20,000 payment due March 15, 2010.  By
March 15, 2010, the Company was to have incurred $125,000 on exploration but had
incurred approximately $17,451 on exploration of the property, a shortfall of
$107,549.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), of which
Mr. Herb Duerr is President, Secretary, Treasurer, and Director, to assign the
exclusive option to an undivided right, title and interest in the NK Property to
Provex.  Pursuant to the Agreement, Provex assumed the rights, and
agreed to perform all of the duties and obligations, of the Company arising
under the NK Property Option Agreement.





72


Weepah
Property Option Agreement





On March
15, 2008, the Company executed the Weepah Property Option Agreement with
MinQuest granting the Company the right to acquire 100% of the mining interests
of the Nevada mineral exploration property.  Under the agreement the
Company agreed to make total property options payments to MinQuest of $490,000
and incur an aggregate $1,225,000 in property exploration expenditures by March
15, 2018.  The Company has made the $20,000 payment due on signing and
the $20,000 due on March 15, 2009, but has not made the $20,000 payment due
March 15, 2010.    By March 15, 2010, the Company was to
have incurred $125,000 on exploration but had incurred approximately $6,823 on
exploration of the property, a shortfall of $118,177.  The Company is
at risk of losing its interest in the property by not making the indicated
option payments and incurring the exploration expenditures, when
demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), of which
Mr. Herb Duerr is President, Secretary, Treasurer, and Director, to assign the
exclusive option to an undivided right, title and interest in the Weepah
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Weepah Property Option Agreement.





Imperial
Property Option Agreement





On May
30, 2008, the Company entered into an Assignment and Assumption Agreement (the
“Agreement”) with American Goldfields Inc., a Nevada corporation (“American
Goldfields”), to acquire the exclusive option to an undivided right, title and
interest in 22 unpatented Federal mining claims located in Esmeralda County,
Nevada (the “Property”). American Goldfields had originally acquired its
exclusive option on the Property on June 30, 2004, when it entered into a
Property Option Agreement with MinQuest, the owner of the
Property.  On July 1, 2008 the Company made a $20,000 property option
payment to MinQuest which was the final option payment due under the Imperial
Property Option Agreement.  By July 1, 2009 the Company was to incur
an aggregate $223,056 in property expenditures to earn a 100% interest in the
property, of which $8,488 was incurred leaving a shortfall of
$214,568.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





On April
16, 2010, the Company entered into an Assignment Agreement with its wholly owned
subsidiary, Provex Resources, Inc., a Nevada corporation (“Provex”), of which
Mr. Herb Duerr is President, Secretary, Treasurer, and Director, to assign the
exclusive option to an undivided right, title and interest in the Imperial
Property to Provex.  Pursuant to the Agreement, Provex assumed the
rights, and agreed to perform all of the duties and obligations, of the Company
arising under the Imperial Property Option Agreement.





73


Related Party Transactions
with Robert Coale





On March
10, 2006, we entered into a Stock Option Agreement with Robert Coale, who was
our former Chairman, President, Chief Executive Officer, Chief Operating
Officer, Secretary, and a director. Pursuant to such agreement, Mr. Coale was
issued 200,000 options, each entitling him to purchase one share of common stock
at a price of $0.25 until March 10, 2016.  In
consideration  therefore,  Mr. Coale and our
company  entered into a Buy-Back
Option  Agreement,  pursuant to which Mr.
Coale  granted to our company  the
option  to  purchase  all  or  any  portion  of  the  3,000,000  shares  of  our
common stock that are owned by Mr. Coale for a purchase price of $0.01 per
share.





Related Party Transactions
with Robert Sibthorpe





On March
10, 2006, we entered into a Stock Option Agreement with Robert Sibthorpe, who
was our former director.  Pursuant to such agreement, Mr. Sibthorpe
was issued 200,000 options, each entitling him to purchase one share of common
stock at a price of $0.25 until March 10, 2016.  In consideration
therefore, Mr. Sibthorpe and our company entered into a Buy-Back Option
Agreement,  pursuant to which Mr. Sibthorpe granted to our company an
option  to  purchase  all  or  any  portion  of  the  3,000,000  shares  of
our common stock that are owned by Mr. Sibthorpe for a purchase price of $0.01
per share.  Mr. Coale acquired Mr. Sibthorpe’s 3,000,000 shares upon
Mr. Sibthrope’s resignation from the Board of Directors.  The shares
acquired by Mr. Coale are subject to the same terms as originally agreed to by
Mr. Sibthorpe under the buyback agreement.





Related Party Transactions
with Ronald Blomkamp





Also on
March 10, 2006, we entered into a Redemption Agreement with Ronald Blomkamp, the
Company’s former President and Chief Executive Officer pursuant to which the
Company purchased from Mr. Blomkamp the 3,000,000 shares of the Company’s common
stock that were owned by Mr. Blomkamp.  The purchase price for such
shares paid to Mr. Blomkamp by the Company was $0.01 per share, which amounted
to an aggregate of $30,000.  The 3,000,000 common shares purchased
from Mr. Blomkamp were cancelled by the Company.





There are
no promoters associated or involved with the company.





Director
Independence





We are
not subject to the listing requirements of any national securities exchange or
national securities association and, as a result, we are not at this time
required to have our board comprised of a majority of “independent directors.”
We do not believe that any of our directors currently meet the definition of
“independent” as promulgated by the rules and regulations of the American Stock
Exchange.





74


ITEM
14                      PRINCIPAL
ACCOUNTING FEES AND SERVICES





Robison,
Hill & Co. is currently serving as the Company’s auditors. Their fees billed
to the Company for the fiscal years ending May 31, 2010 and 2009 are set forth
below:


Fiscal
      year ending
              May
      31, 2010
            
            Fiscal
      year ending
              May
      31, 2009Audit
      Fees
            
            $
            27,300
            
            
            $
            27,000Audit
      Related Fees
            NIL
            
            NILTax
      Fees
            
            NIL
            
            NILAll
      Other Fees
            
            NIL
            
            
            NIL


As of May
31, 2010, the Company did not have a formal, documented pre-approval policy for
the fees of the principal accountant. It is in the process of adopting such a
policy.





Item
15.                      Exhibits.





EXHIBIT
              NUMBER
            
            DESCRIPTION3.1
            
            Articles
      of Incorporation of Registrant. (1)3.2
            
            Registrant’s
      Restated Articles of Incorporation. (2)3.3
            
            By-Laws
      of Registrant. (1)4.1
            
            Specimen
      common stock certificate. (1)4.2
            
            Form
      of Class A Warrant. (3)4.3
            
            Form
      of Class B Warrant. (3)4.4
            
            Form
      of Class C Warrant. (3)4.5
            
            Form
      of Class D Warrant. (3)4.6
            
            Warrant
      Agreement – July 2003 private placement. (3)4.7
            
            Form
      of Class A-1 Warrant. (6)4.8
            
            Form
      of Class B-1 Warrant. (6)4.9
            
            Form
      of Class C-1 Warrant. (6)4.10
            
            Form
      of Class D-1 Warrant. (6)4.11
            
            Warrant
      Agreement – November 2003 private placement. (8)10.1
            
            Property
      Option Agreement dated as of July 25, 2003 between MinQuest Inc. and
      Patriot Gold Corporation. (9)10.2
            
            2003
      Stock Option Plan. (4)10.3
            
            Agreement
      dated as of September 2, 2003 by and between Patriot Gold Corp. and Bruce
      Johnstone. (5)10.4
            
            Shareholders’
      Agreement dated as of January 22, 2004, among Patriot Gold Corp., Ron
      Blomkamp, Robert Sibthorpe and Robert Coale. (6)10.5
            
            Agreement
      dated January 22, 2004 executed by Bruce Johnstone with respect to
      registration rights. (8)10.6
            
            Letter
      of Intent dated November 13, 2003 between Patriot Gold Corp. and
      Ms. Barbara Williams. (9)10.7
            
            Purchase
      Contract dated February 19, 2004 between the Company, the parties
      identified therein as the Seller and First American Title Insurance
      Company of Yavapai County, as escrow agent.
(7)





75





10.8
            
            Binding
      Letter Agreement, dated March 4, 2004, by and between the Company and
      MinQuest, Inc. (8)10.9
            
            Agreement
      with Shareholder.com (10)10.10
            
            2005
      Stock Option Plan (11)10.11
            
            Buy-Back
      Option Agreement, dated March 10, 2006, between the Company and Robert
      Coale (12)10.12
            
            Buy-Back
      Option Agreement, dated March 10, 2006, between the Company and Robert
      Sibthorpe (12)10.13
            
            Redemption
      Agreement, dated March 10, 2006, between the Company and Ronald C.
      Blomkamp (12)10.14
            
            Letter
      Agreement, dated July 24, 2007, between MinQuest Inc. and the Company
      (13)10.15
            
            Assignment
      and Assumption Agreement dated January 29, 2008 between the Company and
      American Goldrush Corp. (14)10.16
            
            Whiskey
      Flat Property Option Agreement, dated March 15, 2008 between the Company
      and MinQuest Inc. (15)10.17
            
            NK
      Property Option Agreement, dated March 15, 2008 between the Company and
      MinQuest Inc. (15)10.18
            
            Weepah
      Property Option Agreement, dated March 15, 2008 between the Company and
      MinQuest Inc. (15)10.19
            
            Assignment
      and Assumption Agreement dated May 30, 2008 between the Company and
      American Goldfields Inc. (16)10.20
            
            Bruner
      Property Option Agreement, dated April 1, 2009 between the Company and
      American International Ventures Inc. (17)10.21
            
            Resource
      Report for Moss Mine Gold Project(18)31
            
            Rule
      13a-14(a)/15d14(a) Certifications (attached hereto)32
            
            Section
      1350 Certifications (attached
hereto)





(1)
Previously filed with the Company’s Form 10SB12g submitted to the SEC on June
25, 2001, SEC file number 0-32919.


(2)
Previously filed as an exhibit to the Company’s Information Statement submitted
to the SEC on May 21, 2003.


(3)
Previously filed as exhibits to the Company’s May 31, 2003 Form 10-K submitted
to the SEC on August 26, 2003.


(4)
Previously filed as Exhibit 4.1 to the Company’s Form S-8 on May 30, 2003, SEC
File Number 333-105691, as amended by the Company’s Post-Effective Amendment of
Form S-8 filed on September 23, 2003.


(5)
Previously filed as an exhibit to the Company’s August 31, 2003 Form 10-QSB
submitted to the SEC on October 14, 2003.


(6)  Previously
filed with the Company’s registration statement on Form SB-2, Registration No.
333-112424, submitted to the SEC on February 2, 2004.


(7)
Previously filed as an exhibit to the Company’s February 29, 2004 Form 10-QSB
submitted to the SEC on April 9, 2004.


(8)  Previously
filed with the amendment No. 2 to the Company’s registration statement on Form
SB-2/A, Registration No. 333-112424, submitted to the SEC on July 16,
2004.


(9)  Previously
filed with the amendment No. 3 to the Company’s registration statement on Form
SB-2/A, Registration No. 333-112424, submitted to the SEC on October 6,
2004.


(10)
Previously filed with the amendment No. 4 to the Company’s registration
statement on Form SB-2/A, Registration No. 333-112424, submitted to the SEC on
December 27, 2004.


(11)
Previously filed as Exhibit 4.1 to the Company’s Form S-8 filed on November 18,
2005 File Number 333-129840.


(12)
Previously filed with the Company’s Form 8-K submitted to the SEC on March 10,
2006.


(13)
Previously filed as an exhibit to the Company’s May 31, 2007 Form 10-K submitted
to the SEC on August 29, 2008.


(14)
Previously filed with the Company’s Form 8-K submitted to the SEC on February 1,
2008.


(15)
Previously filed with the Company’s Form 8-K submitted to the SEC on March 20,
2008.


(16)
Previously filed with the Company’s Form 8-K submitted to the SEC on June 3,
2008.


(17)
Previously filed with the Company’s Form 8-K submitted to the SEC on April 1,
2009.


(18)
Previously filed with the Company’s Form 8-K submitted to the SEC on January 29,
2010.








76






PATRIOT
GOLD CORP.




(An
Exploration State Company)




-:-




INDEPENDENT
AUDITOR’S REPORT




May 31,
2010 and 2009







77








Contents
            
            PageReport
      of Independent Registered Public Accountants
            
            F -
      1Balance
      SheetsMay
      31, 2010 and 2009
            
            F -
      2Statements
      of Operations for theYears
      Ended May 31, 2010 and 2009 and the Cumulative PeriodJune
      1, 2000 (Inception of Exploration State) to May 31, 2010
            
            F -
      3Statement
      of Stockholders’ EquitySince
      November 30, 1998 (Inception) to May 31, 2010
            
            F -
      4Statements
      of Cash Flows for theYears
      Ended May 31, 2010 and 2009 and the Cumulative PeriodJune
      1, 2000 (Inception of Exploration State) to May 31, 2010
            
            F –
      12Notes
      to Financial Statements
            
            F -
      14






78




ROBISON, HILL & CO.
              
              
              
              Certified
      Public AccountantsA
      PROFESSIONAL CORPORATIONBRENT
      M. DAVIES, CPADAVID
      O. SEAL, CPAW.
      DALE WESTENSKOW, CPABARRY
      D. LOVELESS, CPASTEPHEN
      M. HALLEY, CPA
 
  REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
  Patriot
Gold Corp.
  (An
Exploration State Company)
  We have
audited the accompanying balance sheet of Patriot Gold Corp. (An Exploration
State Company) as of May 31, 2010 and 2009, and the related statements of
operations and cash flows for the two years ended May 31, 2010 and 2009 and the
cumulative period June 1, 2000 (inception of exploration state) to May 31, 2010,
and the statements of stockholders’ equity since November 30, 1998 (inception)
to May 31, 2010. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting.  Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
  In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Patriot Gold Corp. (An Exploration
State Company) as of May 31, 2010 and 2009, and the results of its operations
and its cash flows for the years ended May 31, 2010 and 2009 and the cumulative
period June 1, 2000 (inception of exploration state) to May 31, 2010, in
conformity with accounting principles generally accepted in the United States of
America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from operations and has no
source of revenue that raise substantial doubt about its ability to continue as
a going concern. Management’s plans in regard to these matters are also
described in Note 2. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
  
  
  /S/ Robison, Hill &
Co.
 Certified
Public Accountants
  Salt Lake
City, Utah
 August
27, 2010







F -
1










PATRIOT GOLD
CORP.


(An
Exploration State Company)


BALANCE
SHEETS





May
      31,
            
            
            May
      31,2010
            
            
            2009ASSETS:Current
      Assets:Cash
            
            $
            606,501
            
            
            $
            1,195,886Prepaid Expenses
            
            
            5,000
            
            
            
            -Total
      Current Assets
            
            
            611,501
            
            
            
            1,195,886Reclamation
      Deposits (note 4)
            
            
            14,155
            
            
            
            14,155Office
      Equipment, Net
            
            
            -
            
            
            
            -Total
      Assets
            
            $
            625,656
            
            
            $
            1,210,041LIABILITIES
      & STOCKHOLDERS’ EQUITY:Current
      Liabilities:Accounts
      Payable
            
            $
            31,081
            
            
            $
            65,989Total
      Current Liabilities
            
            
            31,081
            
            
            
            65,989Stockholders’
      Equity:Preferred
      Stock, Par Value $.001Authorized
      20,000,000 shares,No
      shares issued at May 31, 2010 and 2009
            
            
            —
            
            
            
            —Common
      Stock, Par Value $.001Authorized
      100,000,000 shares,Issued
      26,224,400 shares atMay
      31, 2010 (May 31, 2009 – 26,224,400)
            
            
            26,224
            
            
            
            26,224Paid-In
      Capital
            
            
            26,381,625
            
            
            
            26,381,625Currency
      Translation Adjustment
            
            
            (16,361
            )
            
            
            (16,361
            )Deficit
      Accumulated Since Inception of Exploration State
            
            
            (25,755,831
            )
            
            
            (25,206,354
            )Retained
      Deficit
            
            
            (41,082
            )
            
            
            (41,082
            )Total
      Stockholders’ Equity
            
            
            594,575
            
            
            
            1,144,052Total
      Liabilities and Stockholders’ Equity
            
            $
            625,656
            
            
            $
            1,210,041





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





F -
2










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENTS
OF OPERATIONS





CumulativeSinceJune
      1, 2000For
      the Year Ended
            
            
            Inception
      ofMay
      31,
            
            
            Exploration2010
            
            
            2009
            
            
            StateRevenues
            
            $
            —
            
            
            $
            —
            
            
            $
            —Cost
      of Revenues
            
            
            —
            
            
            
            —
            
            
            
            —Gross
      Margin
            
            
            —
            
            
            
            —
            
            
            
            —Expenses:Mining
      Costs
            
            
            266,302
            
            
            
            386,192
            
            
            
            3,641,545General
      and Administrative
            
            
            293,519
            
            
            
            328,604
            
            
            
            22,567,802Net
      Loss from Operations
            
            
            (559,821)
            
            
            
            (714,796)
            
            
            
            (26,209,347
            )Other
      Income (Expense)Interest
            
            
            7,694
            
            
            
            40,099
            
            
            
            453,796Currency
      Exchange
            
            
            2,650
            
            
            
            1,529
            
            
            
            (280)Net
      Other Income (Expense)
            
            
            10,344
            
            
            
            41,628
            
            
            
            453,516Net
      Loss
            
            $
            (549,477)
            
            
            $
            (673,168)
            
            
            $
            (25,755,831
            )Basic
      and Diluted loss perShare
            
            $
            (0.02
            )
            
            $
            (0.03)Weighted
      Average SharesOutstanding
            
            
            26,224,400
            
            
            
            26,224,400





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





F -
3










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateBalance
      at November 30, 1998(inception)
            —
            
            $
            —
            
            —
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —November
      30, 1998 Issuance ofStock
      for services and paymentof
      accounts payable
            —
            
            
            —
            
            1,000,000
            
            
            1,000
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —April
      1, 1999 Issuance of Stockfor
      cash pursuant to privateplacement
            —
            
            
            —
            
            1,004,000
            
            
            1,004
            
            
            
            49,196
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (38,305
            )
            
            
            —Currency
      Translation Adjustment
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (15,996
            )
            
            
            —
            
            
            
            ——Balance
      at May 31, 1999
            —
            
            
            —
            
            2,004,000
            
            
            2,004
            
            
            
            49,196
            
            
            
            —
            
            
            
            (15,996
            )
            
            
            (38,305
            )
            
            
            —Retroactive
      Adjustment for 1:7.6Stock
      Split June 17, 2003
            —
            
            
            —
            
            13,226,400
            
            
            13,226
            
            
            
            (13,226
            )
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Restated
      Balance May 31, 1999
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            35,970
            
            
            
            —
            
            
            
            (15,996
            )
            
            
            (38,305
            )
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (2,777
            )
            
            
            —Currency
      Translation Adjustment
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (489
            )
            
            
            —
            
            
            
            —Balance
      at May 31, 2000
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            35,970
            
            
            
            —
            
            
            
            (16,485
            )
            
            
            (41,082
            )
            
            
            —








F -
4










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateBalance
      at May 31, 2000
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            35,970
            
            
            
            —
            
            
            
            (16,485
            )
            
            
            (41,082
            )
            
            
            —Contributed
      Capital
            —
            
            $
            —
            
            —
            
            $
            —
            
            
            $
            3,788
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (3,811
            )Currency
      Translation Adjustment
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            172
            
            
            
            —
            
            
            
            —Balance
      at May 31, 2001
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            39,758
            
            
            
            —
            
            
            
            (16,313
            )
            
            
            (41,082
            )
            
            
            (3,811
            )Contributed
      Capital
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            2,080
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (2,630
            )Currency
      Translation Adjustment
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (48
            )
            
            
            —
            
            
            
            —Balance
      at May 31, 2002
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            41,838
            
            
            
            —
            
            
            
            (16,361
            )
            
            
            (41,082
            )
            
            
            (6,441
            )Contributed
      Capital
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            3,972
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (11,215
            )Balance
      at May 31, 2003
            —
            
            
            —
            
            15,230,400
            
            
            15,230
            
            
            
            45,810
            
            
            
            —
            
            
            
            (16,361
            )
            
            
            (41,082
            )
            
            
            (17,656
            )








F -
5










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
              
              
              
              
              
              AccumulatedSubscription
              
              
              Currency
              
              
              
              
              
              DuringPreferred
      Stock
              
              Common
      Stock
              
              
              Paid-In
              
              
              Stock
              
              
              Translation
              
              
              Retained
              
              
              ExplorationShares
              
              
              Par
      Value
              
              Shares
              
              
              Par
      Value
              
              
              Capital
              
              
              Receivable
              
              
              Adjustment
              
              
              Deficit
              
              
              StateBalance
      at May 31, 2003
              —
              
              
              
              —
              
              15,230,400
              
              
              
              15,230
              
              
              
              45,810
              
              
              
              —
              
              
              
              (16,361
              )
              
              
              (41,082
              )
              
              
              (17,656
              )June
      11, 2003 Issuances of
                Preferred
      Shares for Services
              13,500,000
              
              
              
              13,500
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Shares
      from Former Officer/Directors
              —
              
              
              $
              —
              
              (5,320,000
              )
              
              $
              (5,320
              )
              
              $
              5,320
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —
              
              
              $
              —July
      25, 2003, Shares andWarrants
      Issued for Cash
              —
              
              
              
              —
              
              350,000
              
              
              
              350
              
              
              
              367,150
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —July,
      2003 Compensation fromIssuance
      of Stock OptionsBelow
      Fair Market Value
              —
              
              
              
              —
              
              —
              
              
              
              —
              
              
              
              235,354
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —September
      2, 2003, PreferredShares
      Converted to Common
              (13,500,000
              )
              
              
              (13,500
              )
              13,500,000
              
              
              
              13,500
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —September
      12, 2003, StockOptions
      Exercised
              —
              
              
              
              —
              
              200,000
              
              
              
              200
              
              
              
              9,800
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —September
      17, 2003, StockOptions
      Exercised
              —
              
              
              
              —
              
              930,000
              
              
              
              930
              
              
              
              45,570
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —September
      22, 2003, StockOptions
      Exercised
              —
              
              
              
              —
              
              525,000
              
              
              
              525
              
              
              
              25,725
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —September
      23, 2003, StockOptions
      Exercised
              —
              
              
              
              —
              
              105,000
              
              
              
              105
              
              
              
              8,895
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —








F -
6










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateSeptember
      26, 2003, StockOptions
      Exercised
            —
            
            $
            —
            
            465,000
            
            $
            465
            
            
            $
            602,785
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —September,
      2003 CompensationFrom
      Issuance of StockOptions
      Below Fair MarketValue
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            1,458,240
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —October
      1, 2003, Stock OptionsExercised
            —
            
            
            —
            
            5,000
            
            
            5
            
            
            
            3,995
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —October
      15, 2003, StockOptions
      Exercised
            —
            
            
            —
            
            625,000
            
            
            625
            
            
            
            900,625
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —November
      12, 2003, StockOptions
      Exercised
            —
            
            
            —
            
            220,000
            
            
            220
            
            
            
            109,780
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —November
      27, 2003, CommonStock
      and Warrants Issued forCash
            —
            
            
            —
            
            864,000
            
            
            864
            
            
            
            1,079,136
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —








F -
7










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateNovember
      2003, CompensationFrom
      Issuance of StockOptions
      Below Fair MarketValue
            —
            
            $
            —
            
            —
            
            $
            —
            
            
            $
            290,818
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —December
      2, 2003 StockOptions
      Exercised
            —
            
            
            —
            
            5,000
            
            
            5
            
            
            
            3,995
            
            
            
            (4,000
            )
            
            
            —
            
            
            
            —
            
            
            
            —December
      22, 2003, StockOptions
      Exercised
            —
            
            
            —
            
            20,000
            
            
            20
            
            
            
            20,580
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —December
      2003, CompensationFrom
      Issuance of StockOptions
      Below Fair MarketValue
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            346,412
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —January
      2, 2004, Stock OptionsExercised
            —
            
            
            —
            
            220,000
            
            
            220
            
            
            
            164,780
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —January
      24, 2004, CapitalContributed
      for DirectorCompensation
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            16,254,000
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —February
      2004, CompensationFrom
      Issuance of StockOptions
      Below Fair MarketValue
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            1,949,522
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —








F -
8










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateMarch
      2004, CompensationFrom
      Issuance of StockOptions
      Below Fair MarketValue
            —
            
            $
            —
            
            —
            
            
            $
            —
            
            
            $
            612,030
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —March
      5, 2004, Stock OptionsExercised
            —
            
            
            —
            
            1,285,000
            
            
            
            1,285
            
            
            
            1,761,215
            
            
            
            (1,597,500
            )
            
            
            —
            
            
            
            —
            
            
            
            —April
      2, 2004, Stock OptionsExercised
            —
            
            
            —
            
            50,000
            
            
            
            50
            
            
            
            74,950
            
            
            
            (75,000
            )
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (21,625,478
            )Balance
      May 31, 2004
            —
            
            
            —
            
            29,279,400
            
            
            
            29,279
            
            
            
            26,376,487
            
            
            
            (1,676,500
            )
            
            
            (16,361
            )
            
            
            (41,082
            )
            
            
            (21,643,134
            )Cash
      from SubscriptionReceivable
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            1,597,500
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (1,093,485
            )Balance
      May 31, 2005
            —
            
            
            —
            
            29,279,400
            
            
            
            29,279
            
            
            
            26,376,487
            
            
            
            (79,000
            )
            
            
            (16,361
            )
            
            
            (41,082
            )
            
            
            (22,736,619
            )March
      2006, Redemption of3,000,000
      common shares
            —
            
            
            —
            
            (3,000,000
            )
            
            
            (3,000
            )
            
            
            (27,000
            )
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —March
      2006, CompensationFrom
      the Issuance of StockOptions
      at Fair Market Value.
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            86,483
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (290,042
            )Balance
      May 31, 2006
            —
            
            $
            —
            
            26,279,400
            
            
            $
            26,279
            
            
            $
            26,435,970
            
            
            $
            (79,000
            )
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (23,026,661
            )










F -
9





PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateBalance
      May 31, 2006
            —
            
            $
            —
            
            26,279,400
            
            
            $
            26,279
            
            
            $
            26,435,970
            
            
            $
            (79,000
            )
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (23,026,661
            )January
      12, 2007, CancellationOf
      55,000 common shares
            —
            
            $
            —
            
            (55,000
            )
            
            $
            (55
            )
            
            $
            (78,945
            )
            
            $
            79,000
            
            
            $
            —
            
            
            $
            —
            
            
            $
            —Compensation
      From theRevaluation
      of StockOptions
      Granted in Prior Years
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            26,611
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (295,288
            )Balance
      May 31, 2007
            —
            
            $
            —
            
            26,224,400
            
            
            $
            26,224
            
            
            $
            26,383,636
            
            
            $
            —
            
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (23,321,949
            )Compensation
      From theRevaluation
      of StockOptions
      Granted in Prior Years
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            (973)
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (1,211,237
            )Balance
      May 31, 2008
            —
            
            $
            —
            
            26,224,400
            
            
            $
            26,224
            
            
            $
            26,382,663
            
            
            $
            —
            
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (24,533,186
            )Compensation
      From theRevaluation
      of StockOptions
      Granted in Prior Years
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            (1,038)
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Net
      Loss
            —
            
            
            —
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (673,168
            )Balance
      May 31, 2009
            —
            
            $
            —
            
            26,224,400
            
            
            $
            26,224
            
            
            $
            26,381,625
            
            
            $
            —
            
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (25,206,354
            )








F -
10





PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENT
OF STOCKHOLDERS’ EQUITY


(Continued)





DeficitCumulative
            
            
            
            
            
            AccumulatedSubscription
            
            
            Currency
            
            
            
            
            
            DuringPreferred
      Stock
            
            Common
      Stock
            
            
            Paid-In
            
            
            Stock
            
            
            Translation
            
            
            Retained
            
            
            ExplorationShares
            
            Par
      Value
            
            Shares
            
            Par
      Value
            
            
            Capital
            
            
            Receivable
            
            
            Adjustment
            
            
            Deficit
            
            
            StateBalance
      May 31, 2009
            —
            
            $
            —
            
            26,224,400
            
            $
            26,224
            
            
            $
            26,381,625
            
            
            $
            —
            
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (25,206,354
            )Net
      Loss
            —
            
            
            —
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (549,477)Balance
      May 31, 2010
            —
            
            $
            —
            
            26,224,400
            
            $
            26,224
            
            
            $
            26,381,625
            
            
            $
            —
            
            
            $
            (16,361
            )
            
            $
            (41,082
            )
            
            $
            (25,755,831
            )








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





F -
11










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENTS
OF CASH FLOWS





CumulativeSinceJune
      1, 2000For
      the Year Ended
            
            
            Inception
      ofMay
      31,
            
            
            May
      31,
            
            
            Exploration2010
            
            
            2009
            
            
            StateCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Loss
            
            $
            (549,477
            )
            
            $
            (673,168
            )
            
            $
            (25,755,831
            )Adjustments
      to Reconcile Net Loss to NetCash
      Used in Operating Activities:Compensation
      Expense of Stock Options
            
            
            —
            
            
            
            (1,038)
            
            
            
            5,003,484Stock
      Issued for Services
            
            
            —
            
            
            
            —
            
            
            
            16,267,500Depreciation
            
            
            —
            
            
            
            352
            
            
            
            4,193Change
      in Operating Assets and Liabilities:(Increase)
      Decrease in Prepaid Expenses
            
            
            (5,000)
            
            
            
            —
            
            
            
            (5,000)Increase
      (Decrease) in Accounts Payable
            
            
            (34,908
            )
            
            
            (262,773)
            
            
            
            24,838Net
      Cash Used in Operating Activities
            
            
            (589,385
            )
            
            
            (936,627)
            
            
            
            (4,460,816
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of Office Equipment
            
            
            —
            
            
            
            —
            
            
            
            (4,193)Reclamation
      Deposits
            
            
            —
            
            
            
            17,000
            
            
            
            (14,155)Net
      Cash Used in Investing Activities
            
            
            —
            
            
            
            17,000
            
            
            
            (18,348)CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from Sale of Common Stock
            
            
            —
            
            
            
            —
            
            
            
            5,105,825Redemption
      of Common Shares
            
            
            —
            
            
            
            —
            
            
            
            (30,000)Proceeds
      from Contributed Capital
            
            
            —
            
            
            
            —
            
            
            
            9,840Net
      Cash Provided by Financing Activities
            
            
            —
            
            
            
            —
            
            
            
            5,085,665Net
      (Decrease) Increase inCash
      and Cash Equivalents
            
            
            (589,385)
            
            
            
            (919,627)
            
            
            
            606,501Cash
      and Cash Equivalentsat
      Beginning of Period
            
            
            1,195,886
            
            
            
            2,115,513
            
            
            
            —Cash
      and Cash Equivalentsat
      End of Period
            
            $
            606,501
            
            
            $
            1,195,886
            
            
            $
            606,501








F -
12










PATRIOT
GOLD CORP.


(An
Exploration State Company)


STATEMENTS
OF CASH FLOWS


(Continued)





CumulativeSinceJune
      1, 2000For
      the Year Ended
            
            
            Inception
      ofMay
      31,
            
            
            May
      31,
            
            
            Exploration20010
            
            
            
            2009
            
            
            StateSUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the year for:Interest
            
            $
            —
            
            
            $
            —
            
            
            $
            —Income
      taxes
            
            $
            —
            
            
            $
            —
            
            
            $
            —SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:





Settlement
      of Subscription ReceivableBy
      the Cancellation of Common Stock
            $
            —
            
            
            $
            —
            
            
            $
            79,000





During
the year ended May 31, 2006, the Company granted 1,000,000 stock options to
various directors and consultants for an exercise price of $0.25 per share.
Consulting expense of $86,483 was recorded for the year ended May 31,
2006.  The vesting period for some of these options is up to three
years.  As a result, the unvested portions of the options have been
revalued in subsequent periods resulting in a reversal of stock option expense
of nil and ($1,038) at May 31, 2010 and 2009 respectively and a reversal of
expense of ($973) at May 31, 2008 due to the amortization of the fair value of
the options as determined by the Black-Scholes model between the date of grant
and May 31, 2010, 2009, and 2008.   As of May 31, 2009 all of
these options have fully vested and as a result will not be revalued in
subsequent periods.







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





F -
13










NOTE 1 –
NATURE OF BUSINESS AND OPERATIONS




The
Company has no products or services as of May 31, 2010. The Company operated
from November 30, 1998 through approximately May 31, 2000 in the production of
ostrich meat. On June 1, 2000, the Company ceased operations.




In June
2003, Management decided to change the direction of the Company and has decided
to become a natural resource exploration company and will seek opportunities in
this field. The Company is currently engaging in the acquisition, exploration,
and if warranted and feasible, development of natural resource properties. Since
June 1, 2000, the Company has been in the exploration state.




On April
16, 2010, we caused the incorporation of our wholly owned subsidiary, Provex
Resources, Inc., (“Provex”) under the laws of Nevada.  On April 16,
2010 the Company entered into an Assignment Agreement to assign the exclusive
option to an undivided right, title and interest in the Bruner and Vernal
property; the NK, Weepah Hills and the Whiskey Flat projects; the Imperial
property; and the Bruner Expansion property to Provex, Pursuant to the
Assignment Agreement, Provex assumed the rights, agreed to perform all duties
and obligations of the Company arising under the Bruner and Vernal Property
Option Agreement; the NK project, Weepah Hills Project and the Whiskey Flat
project – Property Option Agreements; the Imperial Property Option Agreement;
and the Bruner Expansion Property Option Agreement.  Provex’s only
assets are the aforementioned agreements and it does not have any
liabilities.




NOTE 2 –
ABILITY TO CONTINUE AS A GOING CONCERN




The
accompanying consolidated financial statements have been prepared in U.S.
dollars and in accordance with accounting principles generally accepted in the
United States on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities and commitments in the normal course
of business.  Since June 1, 2000 the Company has been in the
exploration state.  The Company has not realized any revenue from its
present operations.  During the year ended May 31, 2010, the Company
incurred a loss of $549,477 and has an accumulated deficit of $25,755,831 at May
31, 2010.  These conditions raise substantial doubt about the
Company's ability to continue as a going concern.




The
Company's ability to continue as a going concern is dependent on its ability to
develop its natural resource properties and ultimately achieve profitable
operations and to generate sufficient cash flow from financing and operations to
meet its obligations as they become payable. The Company expects that it will
need approximately $175,000 to fund its operations during the next twelve months
which will include property option payments, exploration of its properties as
well as the costs associated with maintaining an office.  The Company
currently has sufficient cash to fund its planned operations for the next twelve
months.  However, in order to develop its properties, the Company will
need to obtain financing in the future.  Management plans to seek
additional capital through private placements and public offerings of its common
stock.  Although there are no assurances that management’s plans will
be realized, management believes that the Company will be able to continue
operations in the future.  Accordingly, no adjustment relating to the
recoverability and classification of recorded asset amounts and the
classification of liabilities has been made to the accompanying financial
statements in anticipation of the Company not being able to continue as a going
concern.




NOTE 3 –
SIGNIFICANT ACCOUNTING POLICIES




Management’s Estimates and
Assumptions




The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.




Consolidation




The
accompanying consolidated financial statements include the accounts of the
company and its wholly owned subsidiary Provex Resources,
Inc.  Intercompany transactions and balances have been eliminated in
consolidation.





F -
14







Cash and Cash
Equivalents




For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.




Foreign
Currency




Prior to
the quarter ending August 31, 2003, the Company’s primary functional currency
was the Canadian dollar. During, the quarter ended August 31, 2003, the Company
underwent significant changes in its operations. Prior to May 31, 2000, the
company was in the business of producing ostrich meat in Canada. Subsequently,
on June 1, 2000, the Company ceased operations and remained dormant until June
2003, when the Company decided to enter the mining industry in the United
States. Due to the change in direction of the Company the majority of its
operations and transactions would be located in the United States and the
majority of the transaction would be in U.S. dollars. This was considered “a
significant change in economic facts and circumstances” per ASC 830 (formerly
SFAS 52, Appendix A) and thus the Company changed its functional currency from
the Canadian dollar to the U.S. dollar.




The
Company’s functional currency is the U.S. dollar. However, the Company still has
a few transactions with Canadian suppliers. Transaction gains and losses are
included in income.




Concentration of Credit
Risk




The
Company has no off-balance-sheet concentrations of credit risk such as foreign
exchange contracts, options contracts or other foreign hedging arrangements. The
Company maintains the majority of its cash balances with one financial
institution in the form of demand deposits.




Loss per
Share




Net
income (loss) per share is computed by dividing the net income by the weighted
average number of shares outstanding during the period. As of May 31, 2010, the
company has outstanding options and warrants of 1,385,000 and 3,456,000,
respectively all of which are currently exercisable.  The effects of
the Company’s common stock equivalents are anti-dilutive for May 31, 2010 and
2009 and are thus not presented.




Comprehensive
Income




The
Company has adopted ASC 220 (formerly SFAS No. 130, “Reporting Comprehensive
Income”), which establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. The Company has disclosed this
information on its Statement of Operations. Comprehensive income is comprised of
net income (loss) and all changes to capital deficit except those resulting from
investments by owners and distribution to owners.




Stock
Options





Effective
June 1, 2006, the company adopted the provisions of ASC 505 and 718 (formerly
SFAS No. 123(R)). ASC 505 and 718 requires employee equity awards to be
accounted for under the fair value method. Accordingly, share-based compensation
is measured at grant date based on the fair value of the award. Prior to
June 1, 2006, the company accounted for awards granted to employees under
its equity incentive plans under the intrinsic value method prescribed by
Accounting Principles Board (APB) Opinion No. 25, “Accounting for
Stock Issued to Employees” (APB 25), and related interpretations, and provided
the required pro forma disclosures prescribed by ASC 505 and 718 (formerly SFAS
No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123)), as
amended.   No stock options were granted to employees during the
years ended May 31, 2010 or 2009 and accordingly, no compensation expense was
recognized under APB No. 25 for the years ended May 31, 2010 or
2009.  In addition, no compensation expense is required to be
recognized under provisions of ASC 505 and 718 with respect to
employees.








F -
15





Under the
modified prospective method of adoption for ASC 505 and 718, the compensation
cost recognized by the company beginning on June 1, 2006 includes
(a) compensation cost for all equity incentive awards granted prior to, but
not yet vested as of June 1, 2006, based on the grant-date fair value
estimated in accordance with the original provisions of ASC 505 and 718, and
(b) compensation cost for all equity incentive awards granted subsequent to
June 1, 2006, based on the grant-date fair value estimated in accordance
with the provisions of ASC 505 and 718. The company uses the straight-line
attribution method to recognize share-based compensation costs over the service
period of the award. Upon exercise, cancellation, forfeiture, or expiration of
stock options, or upon vesting or forfeiture of restricted stock units, deferred
tax assets for options and restricted stock units with multiple vesting dates
are eliminated for each vesting period on a first-in, first-out basis as if each
vesting period was a separate award. To calculate the excess tax benefits
available for use in offsetting future tax shortfalls as of the date of
implementation, the company followed the alternative transition method discussed
in FASB Staff Position No. 123(R)-3.





During
the year ended May 31, 2010 or 2009 no stock options were granted to
non-employees.  Accordingly, no stock-based compensation expense was
recognized for new stock option grants in the Statement of Operations and
Comprehensive Loss at May 31, 2010 or 2009.





Compensation
expense for unvested options granted to non-employees in previous periods is
revalued at each period end and is being amortized over the vesting period of
the options.  As a result of amortizing and revaluing the common stock
option expense for unvested options granted in the year ended May 31, 2006, a
reversal of stock option expense of ($1,038) has been recognized in the
Statement of Operations at May 31, 2009.  As of May 31, 2009 all
outstanding stock options were fully vested and as a result no stock-based
compensation expense has been recognized for the year ended May 31,
2010.





Exploration and Development
Costs





On June
1, 2000, the Company ceased operations and until June 2003 conducted minimal
administrative activities. The Company has been in the exploration state since
that time and has not yet realized any revenue from its planned operations. It
is primarily engaged in the acquisition, exploration and development of mining
properties. Mineral exploration costs and payments related to the acquisition of
the mineral rights are expensed as incurred. When it has been determined that a
mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs incurred to acquire and develop such
property will be capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable
reserve.





Advertising
Costs





Advertising
costs are expensed as incurred. There were no advertising expenses for the years
ended May 31, 2010 and 2009.





Office Equipment and
Furniture





Equipment
and furniture are recorded at cost and depreciated using the straight-line
method over the estimated useful lives of the assets which range from three to
five years.





Equipment
      and Furniture consist of the following:
            
            May
      31,2010
            
            
            2009Equipment
            $
            645
            
            $
            645Furniture
            
            3,548
            
            
            3,5484,193
            
            
            4,193Less
      accumulated depreciation
            
            (4,193)
            
            
            (4,193)Total
            $
            -
            
            $
            -





Depreciation
expense of $nil (2009 - $352) has been recorded for each of the respective year
ended May 31, 2010.








F -
16





Fair Value of Financial
Instruments





The
carrying value of the Company's financial instruments, including receivables,
prepaids, accounts payable, and accrued liabilities, at May 31, 2010 and 2009
approximates their fair values due to the short-term nature of these financial
instruments.





New Accounting
Pronouncements





ASC
820





In April
2009, the FASB updated ASC 820 to provide additional guidance for estimating
fair value when the volume and level of activity for the asset or liability have
decreased significantly. ASC 820 also provides guidance on identifying
circumstances that indicate a transaction is not orderly. The implementation of
ASC 820 did not have a material effect on the Company’s financial
statements.





ASC
825





In April
2009, the FASB updated ASC 825 regarding interim disclosures about fair value of
financial instruments.  ASC 825 requires disclosures about fair value
of financial instruments in interim reporting periods of publicly traded
companies that were previously only required to be disclosed in annual financial
statements. The implementation of ASC 825 did not have a material effect on the
Company’s financial statements.





ASC
320





In April
2009, the FASB updated ASC 320 for proper recognition and presentation of
other-than-temporary impairments.  ASC 320 provides additional
guidance designed to create greater clarity and consistency in accounting for
and presenting impairment losses on securities.  The implementation of
ASC 320 did not have a material effect on the Company’s consolidated financial
statements.





ASC
105





In June
2009, the FASB created the Accounting Standards Codification, which is codified
as ASC 105.  ASC 105 establishes the codification as the single
official non-governmental source of authoritative accounting principles (other
than guidance issued by the SEC) and supersedes and effectively replaces
previously issued GAAP hierarchy framework.  All other literature that
is not part of the codification will be considered
non-authoritative.  The codification is effective for interim and
annual periods ending on or after September 15, 2009.  The Company has
applied the codification, as required, beginning with the 2009 Form
10-K.  The adoption of the codification did not have a material impact
on the Company’s financial position, results of operations or cash
flows.





ASC
855





In June
2009, the FASB updated ASC 855, which established principles and requirements
for subsequent events.  This guidance details the period after the
balance sheet date which the Company should evaluate events or transactions that
may occur for potential recognition or disclosure in the financial statements,
the circumstances under which the Company should recognize events or
transactions occurring after the balance sheet date in its financial statements
and the required disclosures for such events.  ASC 855 is effective
for interim and annual periods ending after June 15, 2009.  The
implementation of ASC 855 did not have a material effect on the Company’s
financial statements.





ASU
2009-13





In
October 2009, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update 2009-13 (ASU 2009-13), which provided an update to
ASC 605.  ASU 2009-13 addresses how to separate deliverables and how
to measure and allocate arrangement consideration to one or more units of
accounting in multiple-deliverable arrangements. The amendments in this update
will be effective prospectively for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010. The
Company is currently evaluating the impact that this update will have on its
Financial Statements.





F -
17







NOTE 4 –
RECLAMATION DEPOSITS





The
Company has been granted an exploration permit from the State of Nevada for its
Vernal property.  As part of the application process, the Company is
required to pay a refundable deposit to the State as surety for the estimated
reclamation costs associated with the planned exploration
program.    In addition, as part of the Company’s
acquisition of the Margarita and Imperial Properties the reclamation bonds for
these respective properties were transferred to the Company. Upon completion of
required reclamation the Company will receive a refund of the
deposits.  During the year ended May 31, 2009, the Company received a
refund in the amount of $17,000 for the reclamation bond related to the
Margarita Property.





NOTE 5 -
INCOME TAXES





As of May
31, 2010, the Company had a net operating loss carryforward for income tax
reporting purposes of approximately $8,950,000 that may be offset against future
taxable income through 2029. Current tax laws limit the amount of loss available
to be offset against future taxable income when a substantial change in
ownership occurs. Therefore, the amount available to offset future taxable
income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same
amount.





Deferred
tax assets of the Company are as follows:


2010
            
            
            2009Loss
      carry-forwards
            
            $
            3,043,000
            
            
            $
            2,856,000Less:  Valuation
      allowance
            
            
            (3,043,000
            )
            
            
            (2,856,000
            )Deferred
      tax asset recognized
            
            $
            -
            
            
            $
            -





A
valuation allowance has been recorded to reduce the net benefit recorded in the
financial statements related to these deferred tax assets.  The
valuation allowance is deemed necessary as a result of the uncertainty
associated with the ultimate realization of these deferred tax
assets.





The
provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate of 34% (2009 – 34%) to net loss for the
year.  The sources and tax effect of the differences are as
follows:


2010
            
            
            2009Computed
      “expected” tax benefit
            
            $
            187,000
            
            
            $
            229,500Change
      in Valuation Allowance
            
            
            (187,000
            )
            
            
            (229,500
            )Income
      tax provision
            
            $
            -
            
            
            $
            -





NOTE
      6 - UNCERTAIN
      TAX POSITIONS





Effective
June 1, 2007, the company adopted the provisions of ASC 740-10 (formerly FASB
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an
interpretation of FASB Statement No. 109” (“FIN 48”)). ASC 740-10 prescribes a
recognition threshold and a measurement attribute for the financial statement
recognition and measurement of tax positions taken or expected to be taken in a
tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not to be sustained upon examination by taxing authorities. The
adoption of the provisions of ASC 740-10 did not have a material impact on the
company’s condensed consolidated financial position and results of operations.
At June 1, 2007, the company had no liability for unrecognized tax benefits and
no accrual for the payment of related interest.








F -
18





Interest
costs related to unrecognized tax benefits are classified as “Interest expense,
net” in the accompanying consolidated statements of operations. Penalties, if
any, would be recognized as a component of “Selling, general and administrative
expenses”. The Company recognized $0 of interest expense related to unrecognized
tax benefits for the year ended May 31, 2010. In many cases the company’s
uncertain tax positions are related to tax years that remain subject to
examination by relevant tax authorities. With few exceptions, the company is
generally no longer subject to U.S. federal, state, local or non-U.S. income tax
examinations by tax authorities for years before 2006. The following describes
the open tax years, by major tax jurisdiction, as of May 31, 2010:





United
      States (a)
            
            2006
      – Present





NOTE
7 – EXPLORATION STATE COMPANY





The
Company has not begun principal operations and as is common with a company in
the exploration state, the Company has had recurring losses. Continuation of the
Company as a going concern is dependent upon obtaining the additional working
capital necessary to be successful in its planned activity, and the management
of the Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding and long term financing, which will
enable the Company to operate for the coming year.





NOTE 8 -
RELATED PARTY TRANSACTIONS





On
November 1, 2005, the Company signed a service agreement with its former
President, Robert Coale.  Pursuant to the agreement the Company paid
Mr. Coale, beginning November 2005, $2,500 per month for his expertise to
identify and acquire certain exploration style properties that fit the
parameters of the Company’s business plan, oversee and manage, as directed by
the Company, the Company’s exploration programs that will be undertaken from
time-to-time, and perform all of the duties normally associated with serving as
the President and Chief Executive Officer of a publicly traded mining
company.  The service agreement was for an indefinite term,
cancellable in writing by either party with 30 days written
notice.  Effective July 1, 2008, Mr. Coale agreed to indefinitely
suspend payments under the agreement and effective September 12, 2008 the
agreement was cancelled when Mr. Coale resigned as President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  For the
year ended May 31, 2010, the Company paid $nil (2009 - $2,500) pursuant to this
agreement.





On
September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive
Officer, Secretary, Treasurer, and Director of the Company.  Mr. Duerr
is also an Officer of MinQuest Inc (“MinQuest”).  All of the Company’s
mineral properties have either been directly or indirectly optioned from
MinQuest.  All exploration work undertaken on any of the Company’s
properties will be at the direction and discretion of the
Company.   For the year ended May 31, 2010, the Company made
total property payments of $nil to MinQuest related to property option payments
for the Whiskey, NK, Weepah, and Imperial properties.  Included in the
net loss for twelve-months ended May 31, 2010 is an amount of $12,550 with
respect to fees paid to Mr. Duerr for geological services rendered to the
Company.





NOTE 9 -
STOCK OPTIONS


Pursuant
to the 2005 and 2003 Stock Option Plans, grants of shares can be made to
employees, officers, directors, consultants and independent contractors of
non-qualified stock options as well as for the grant of stock options to
employees that qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986 (“Code”) or as non-qualified stock options. The
Plan is administered by the Option Committee of the Board of Directors (the
“Committee”), which has, subject to specified limitations, the full authority to
grant options and establish the terms and conditions for vesting and exercise
thereof. Currently the entire Board functions as the Committee.





In order
to exercise an option granted under the Plan, the optionee must pay the full
exercise price of the shares being purchased. Payment may be made either: (i) in
cash; or (ii) at the discretion of the Committee, by delivering shares of common
stock already owned by the optionee that have a fair market value equal to the
applicable exercise price; or (iii) with the approval of the Committee, with
monies borrowed from us.





Subject
to the foregoing, the Committee has broad discretion to describe the terms and
conditions applicable to options granted under the Plan. The Committee may at
any time discontinue granting options under the Plan or otherwise suspend, amend
or terminate the Plan and may, with the consent of an optionee, make such
modification of the terms and conditions of such optionee’s option as the
Committee shall deem advisable.





F -
19





On May
26, 2003, the Board of Directors approved a stock option plan whereby 2,546,000
common shares have been set aside for employees and consultants to be
distributed at the discretion of the Board of Directors. On September 22, 2003,
the Board of Directors amended the stock option plan to allow 3,000,000
additional options. As of May 31, 2010, 4,835,000 stock options have been
granted to various directors and consultants for an exercise price ranging from
$.05 to $1.50 per share.  An additional 711,000 remain available to be
granted under the 2003 Plan.  In most cases the fair value of the
stock issued was higher than the exercise price. Compensation expense of
$4,892,401 has been recorded in connection with the granting of the stock
options as of May 31, 2004.   No options have been granted under
the 2003 Plan subsequent to May 31, 2004.





On
November 18, 2005, the Board of Directors approved the 2005 stock option plan
whereby 2,000,000 common shares have been set aside under the
plan.  For the year ended May 31, 2006, 1,000,000 were granted to
various directors and consultants for an exercise price of $0.25 per
share.  No options were granted under the 2005 Plan during the years
ended May 31, 2010 or 2009.  The Black-Scholes option pricing model
was used to calculate to estimate the fair value of the options granted in 2006.
The following assumptions were made:





Risk
      Free Rate
            4.24%Expected
      Life of Option
            10
      yearsExpected
      Volatility of Stock (Based on Historical Volatility)
            80.43%Expected
      Dividend yield of Stock
            0.00





The
following table sets forth the options outstanding under the 2003 Plan as of May
31, 2010:





Available
      for Grant
            
            
            Options
      Outstanding
            
            
            Weighted
      Average Exercise PriceBalance,
      May 31, 2008 and 2009
            
            
            506,000
            
            
            
            385,000
            
            
            $
            0.26Options
      granted
            
            
            -
            
            
            
            -
            
            
            
            -Options
      cancelled
            
            
            205,000
            
            
            
            (205,000
            )
            
            
            0.07Options
      exercised
            
            
            -
            
            
            
            -
            
            
            
            -Balance,
      May 31, 2010
            
            
            711,000
            
            
            
            180,000
            
            
            $
            0.49





The
following table sets forth the options outstanding under the 2005 Plan as of May
31, 2010:





Available
      for Grant
            
            
            Options
      Outstanding
            
            
            Weighted
      Average Exercise PriceBalance,
      May 31, 2008 and 2009
            
            
            1,000,000
            
            
            
            1,000,000
            
            
            $
            0.25Options
      granted
            
            
            -
            
            
            
            -
            
            
            
            -Options
      cancelled
            
            
            700,000
            
            
            
            (700,000
            )
            
            
            0.25Options
      exercised
            
            
            -
            
            
            
            -
            
            
            
            -Balance,
      May 31, 2010
            
            
            1,700,000
            
            
            
            300,000
            
            
            $
            0.25





The
following table summarizes information concerning outstanding and exercisable
common stock options under the 2003 and 2005 Plans at May 31, 2010:





Exercise
      Prices
            Options
      Outstanding
            Remaining
      Contractual Life
              (in
      years)
            Weighted
              Average
              Exercise
      Price
            Number
      of Options Currently Exercisable
            Weighted
              Average
              Exercise
      Price$
      0.05
            100,000
            3.08
            $
      0.05
            100,000
            $
      0.05$
      0.25
            300,000
            5.75
            $
      0.25
            300,000
            $
      0.25$
      1.03
            80,000
            3.17
            $
      1.03
            80,000
            $
      1.03480,000
            
            $
      0.34
            480,000
            $
      0.34





F -
20





The
aggregate intrinsic value of stock options outstanding  at May 31,
2010 was $17,000 and the aggregate intrinsic value of stock
options  exercisable at May 31, 2009 was $86,000.  No stock
options were exercised in 2010.  As of May 31, 2010 all stock options
had vested and as a result, there was no unrecognized compensation
expense.





NOTE 10 -
WARRANTS





On July
25, 2003, the Company issued 350,000 Class A warrants, 350,000 Class B warrants,
350,000 Class C warrants, and 350,000 Class D warrants. Each warrant is
exercisable, commencing October 25, 2003, for a period of three years at a price
of $1.40, $1.45, $1.50 and $1.55, respectively, for one share of common stock.
The warrants were determined to have no value at the time of their issuance. The
shares and warrants were issued to three non-US residents.





On
November 27, 2003, the Company issued 864,000 Class A warrants, 864,000 Class B
warrants, 864,000 Class C warrants, and 864,000 Class D warrants. The Class A
warrants are exercisable on November 27, 2004 for a period of five years at an
exercise price of $1.40 per share of common stock; the Class B warrants are
exercisable on November 27, 2005 for a period of four years at an exercise price
of $1.45; the Class C warrants are exercisable on November 27, 2006 an at
exercise price of $1.50; and the Class D warrants became exercisable on November
27, 2007 at an exercise price of $1.55. The Company has the right, in its sole
discretion, to accelerate the exercise date of the warrants, to decrease the
exercise price of the warrants and/or extend the expiration date of the
warrants. The warrants were determined to have no value at the time of their
issuance. The shares and warrants were issued to three non-US
residents.





The
following table sets forth common share purchase warrants outstanding as of May
31, 2010:





Warrants
      OutstandingBalance,
      May 31, 2008
              
              
              3,456,000Warrants
      granted
              
              
              -Warrants
      expired
              
              
              -Balance,
      May 31, 2010 and 2009
              
              
              3,456,000





The
following table lists the common share warrants outstanding at May 31,
2010.  Each warrant is exchangeable for one common share.





Number
      Outstanding
            Exercise
              Price
            Weighted
      Average Contractual Remaining Life (years) *
            Number
      Currently Exercisable
            Exercise
              Price864,000
            $
      1.40
            3.50
            864,000
            $
      1.40864,000
            $
      1.45
            3.50
            864,000
            $
      1.45864,000
            $
      1.50
            3.50
            864,000
            $
      1.50864,000
            $
      1.55
            3.50
            864,000
            $
      1.553,456,000
            
            
            3,456,000





*Subsequent
to May 31, 2010 the expiry date of all of the warrants was extended to November
27, 2013.








F -
21





NOTE 11 -
COMMON STOCK TRANSACTIONS





The
Company was incorporated to allow for the issuance of up to 100,000,000 shares
of $.001 par value common stock (as amended).  At inception, the
Company issued 7,600,000 shares of common stock to its officers and directors
for services performed and payments made on the Company’s behalf during its
formation. This transaction was valued at approximately $.001 per share or an
aggregate approximate $1,000.





On
February 8, 1999, to provide initial working capital, the Company authorized a
private placement sale of an aggregate of 7,600,000 (1,000,000 pre-split) shares
of common stock at approximately $.05 per share. The private placement was
completed April 1, 1999 and 7,630,400 shares were issued for approximately
$50,200 in proceeds to the Company which were primarily used to pay operating
expenses.





On June
12, 2003, the previous President of the Company, returned 5,320,000 (700,000
pre-split) shares of common stock to the Company.





On July
25, 2003, the Company issued 350,000 shares of common stock and 1,400,000
warrants for $367,500 in cash to three individuals. Shares and warrants were
issued for $1.05 per share. The warrants were determined to have no fair value
at the time of their issuance and thus none of the proceeds were allocated to
the warrants.





On
September 2, 2003, the Company’s previous president converted his 13,500,000
shares of preferred stock into 13,500,000 shares of common stock. On January 24,
2004, Mr. Johnstone transferred 3,000,000 common shares to each of the
three directors. Compensation expense of $16,254,000 was record in connection
with the transfer.





During
September, October and November 2003, 3,075,000 common shares were issued to
various directors and consultants in connection with the exercising of stock
options for $1,710,225 in cash. The exercise price ranged from $0.05 to
$1.50.





On
November 27, 2003, the Company issued 864,000 shares of common stock and
3,456,000 warrants for $1,080,000 in cash to three individuals. Shares and
warrants were issued for $1.25 per share. The warrants were determined to have
no fair value at the time of their issuance and thus none of the proceeds were
allocated to the warrants.





During
the quarter ending February 29, 2004, 245,000 common shares were issued in
connection with the exercising of stock options for cash of $189,600. The
exercise price ranged from $0.75 to $1.03.





During
March and April 2004, 1,335,000 common shares were issued in connection with the
exercising of stock options for cash of $1,837,500. The exercise price ranged
from $0.75 to $1.50.





On March
10, 2006 the Company granted stock options to Mr. Robert Coale, who is the
President, Chief Executive Officer, Secretary, and Treasurer, and a director and
to Mr. Robert Sibthorpe who is a director of the Company.  In
consideration therefor, Mr. Coale, Mr. Sibthorpe and the Company entered into a
Buy-Back Option Agreements, pursuant to which Messrs. Coale and Sibthorpe
granted to the Company the option to purchase all or any portion of the
3,000,000 shares of the Company’s common stock that are owned by each of Mr.
Coale and Mr. Sibthorpe respectively for a purchase price of $0.01 per
share.





Also on
March 10, 2006, the Registrant entered into a Redemption Agreement with Ronald
Blomkamp, the Company’s former President and Chief Executive Officer pursuant to
which the Company purchased from Mr. Blomkamp the 3,000,000 shares of the
Company’s common stock that were owned by Mr. Blomkamp.  The purchase
price for such shares paid to Mr. Blomkamp by the Company was $0.01 per share,
which amounted to an aggregate of $30,000.  The purchased shares were
returned to treasury and cancelled.





On
January 12, 2007 the Company settled the outstanding balance of its
Subscriptions Receivable of $79,000.  The two shareholders returned
the underlying 55,000 shares of common stock to the Company in settlement of the
balance of $79,000.  The shares were then cancelled by the
Company.





F -
22





NOTE 12 -
PREFERRED STOCK





The
Company has authorized a total of 20,000,000 shares of Preferred Stock with a
par value of $.001. As of May 31, 2010, there are no preferred shares
outstanding.





The
Corporation is under no obligation to pay dividends on the Series A Redeemable
Preferred Stock, and the stock is redeemable at the option of the
Company.





In the
event of any liquidation, dissolution or winding-up of the Corporation, the
holders of outstanding shares of Series A Preferred shall be entitled to be paid
out of the assets of the Corporation available for distribution to shareholders,
before any payment shall be made to or set aside for holders of the Common
Stock, at an amount of $.001 plus any unpaid and accrued dividends per
share.





A holder
of Series A Preferred has the right to one vote per share in the case of matters
provided for in the General Corporation Law of the State of Nevada or the
Amended and Restated Articles of Incorporation or Bylaws to be voted on by the
holders of the Series A Preferred Stock as a separate class. In the case of
matters to be voted on by the holders of Common Stock and the holders of Series
A Preferred voting together as a single class, each share of Series A Preferred,
has full voting rights and powers equal to the voting rights and powers of the
holders of the Common Stock.





On June
11, 2003, the Company issued 13,500,000 Series A shares of preferred stock to
its president for services rendered and recorded $13,500 in consulting expenses.
The Series A shares have non-cumulative dividends of 7% of the redemption price
when declared by the Board. On September 2, 2003, the Company’s previous
president converted his 13,500,000 shares of preferred stock into 13,500,000
shares of common stock.





NOTE 13 -
STOCK SPLITS





On June
17, 2003, the Company approved a forward split at a rate of one for seven and
six-tenths so that each share of common stock was equal to 7.6 shares. All
references to shares in the accompanying financial statements have been adjusted
for the stock split.





On
November 17, 2006, the Company held a special meeting (the "Meeting") of the
shareholders, pursuant to a proxy statement that it filed with the Securities
and Exchange Commission and that it had furnished to holders of record of the
outstanding shares of its common stock as of October 20, 2006.  At the
Meeting, the Board of Directors received approval from a majority of the
Company’s shareholders of the following matters: (1) grant of discretionary
authority to the Board of Directors to implement either of the following: (a) a
reverse stock split of the common stock on the basis of one post-consolidation
share for up to each ten pre-consolidation shares to occur at some time within
twelve months of the date of the shareholders’ meeting, with the exact time of
the reverse split to be determined by the Board of Directors, or (b) a forward
stock split of the common stock on the basis of up to three post-split shares
for each one pre-split share to occur at some time within twelve months of the
date of the shareholders’ meeting, with the exact time of the forward split to
be determined by the Board of Directors; and (3) the increase of the number of
authorized shares of the common stock from 100,000,000 shares, par value $0.001,
to 200,000,000 shares, par value $0.001, should the Board of Directors implement
a forward stock split as previously described.  Our Directors believed
that shareholder approval of a range for the exchange ratio of the reverse or
forward splits (as contrasted with approval of a specified ratio of the split)
provided the Board of Directors with maximum flexibility to achieve the purposes
of a stock split, and, therefore, was in the best interests of our shareholders.
The actual ratio for implementation of the reverse or forward split was to have
been determined by our Board based upon its evaluation as to what ratio of
pre-split shares to post-split shares would have been most advantageous to our
shareholders.  Our Board of Directors also believed that, should it
have determined to implement a forward stock split as described above, it would
have been necessary to have increased the number of authorized shares of common
stock in order to provide the Company with the flexibility to issue common stock
without further action by the Company's stockholders.  As of the date
of this report, the one year anniversary of the approval by the Company’s
shareholders has elapsed.  Prior to the elapsing of the one year time
period, the Board of Directors determined that it was in the best interests of
the Company’s shareholders not to undertake a share split of any
kind.





F -
23





NOTE 14 -
MINERAL PROPERTIES





Bruner  and Vernal
Properties





The
Company has an agreement with Minquest, Inc. (“MinQuest”) which gives us the
right to purchase 100% of the mining interests of two Nevada mineral exploration
properties currently controlled by MinQuest, a natural resource exploration
company. Together, these two properties originally consisted of 28 mining claims
on a total of 560 acres in the northwest trending Walker Lane located in western
Nevada.  In September, 2008 the company expanded the Bruner position
from 16 unpatented mining claims (320 acres) to 51 unpatented mining
claims.  This brought the total number acres under the Company’s
control at that time to 1,020 acres.





In order
to earn a 100% interest in these two properties, the Company must pay MinQuest
and incur expenditures relating to mining operations in accordance with the
following schedule: (i) on or before July 25, 2004, $20,000 to MinQuest and
$75,000 in expenditures; (ii) on or before July 25, 2005, $20,000 to MinQuest
and an additional $100,000 in expenditures; (iii) on or before July 25, 2006,
$20,000 to MinQuest and an additional $100,000 in expenditures; (iv) on or
before July 25, 2007, $20,000 to MinQuest and an additional $100,000 in
expenditures; and (v) on or before July 25, 2008, an additional $125,000 in
expenditures. If the Company has not incurred the requisite expenditures to
maintain the option in good standing, the Company  has a 60-day period
subsequent to July 25th to
make such payment along with such amount which shall be deemed to have been an
expenditure incurred by us during such period. Since the payment obligations are
non-refundable, if the Company does not make any payments, it will lose any
payments made and all our rights to the properties. If all said payments are
made, then the Company will acquire all mining interests in the properties,
subject to MinQuest retaining a 3% royalty of the aggregate proceeds. The
Company has the right at any time to discontinue making the payments if the
exploration is determined to be unfeasible.





To May
31, 2010 the Company has made all of its property option payments with the
payment on July 25, 2007 being the final payment due under the property option
agreement for the Bruner and Vernal properties.  By July 25, 2008, the
Company was to have incurred $500,000 on exploration.  To May 31, 2010
the Company has incurred approximately $585,989 on exploration of the two
properties.  The Company intends to complete the additional required
expenditures of $673 during 2010.





Bruner Property
Expansion





On April
1, 2009, the Company entered into a Property Option Agreement (the “Agreement”)
with American International Ventures Inc. (“AIV”), to acquire the exclusive
option to an undivided right, title and interest in 28 patented Federal mining
claims and millsites located in Nye County, Nevada (the “Property”).
Simultaneous with the execution and delivery of the Agreement, the Company paid
AIV $30,000.  In order to earn its option in the Property, the Company
must make annual property option payments each year on April 1 consisting of
$35,000 in 2010, $40,000 in 2011, $45,000 in 2012, $50,000 in 2013, $55,000 in
2014, $60,000 in 2015, and $1,185,000 in 2016.  Following which the
Company shall be deemed to have exercised its option under the Agreement and
shall be entitled to an undivided 100% right, title and interest in and to the
Property subject to a 1.5% Net Smelter Return (“NSR”) royalty payable to AIV and
a 2% NSR payable to the former Property owner.  The 2% NSR royalty may
be purchased by the Company for a total payment of $500,000 and 1% of AIV’s 1.5%
NSR royalty can be purchased by the Company for an additional payment of
$500,000 at any time up to 30 days after beginning mine
construction.





The
claims optioned under the agreement with AIV are contiguous with the Company’s
existing Bruner property claims.




Moss
Property




The Moss
Property consists of 63 unpatented claims and 15 patented claims.  The
property has been acquired from various individuals and on various dates as
noted below.





On
November 14, 2003 the Company entered into a letter of intent to acquire a
single patented claim from Gregory Gintoff.  The total purchase price
of $50,000 was made in two installments of $10,000 in December 2003 and $40,000
in February 2004.





F -
24





On
February 19, 2004, the Company executed a formal agreement to purchase 100%
mining interest in six patented mining claims making up the Williams portion of
the Moss Property located in the historic Oatman gold mining district for
$350,000. On February 27, 2004, $25,000 was paid in connection with this
agreement and three months after signing, on June 14, 2004, an additional
$25,000 was paid. On or before the 6-month anniversary from when we signed the
definitive agreement, the balance of $300,000 was due to the sellers. On August
27, 2004, the Company paid the final $300,000 to the sellers.





On March
4, 2004, the Company signed an agreement that allowed it to acquire a 100
percent interest in 63 unpatented claims contiguous to the 15 patented claims at
the Moss Property.   The Company acquired these claims from
MinQuest for a one time lease fee of $50,000.   The fee of
$50,000 was paid on July 7, 2004.





On
January 18, 2005 the Company completed the acquisition of a single patented
claim from an individual for $150,000.





The
Company acquired five patented claims from Ramon and Edna Martinez for a total
of $150,000.  The Company made one payment of $75,000 on November 8,
2004 and made the final payment of $75,000 on February 14, 2005.





On
January 18, 2005, the Company made a single payment of $25,000 to acquire two
patented claims known as the Ruth and Rattan claims.





Margarita
Property





On
January 29, 2008, the Company entered into an Assignment and Assumption
Agreement (the “Agreement”) with American Goldrush Corp. (“Goldrush”) whereby
Goldrush assigned all of its rights and obligations under the Margarita Property
Option Agreement to the Company.  Pursuant to the Agreement, the
Company assumed the rights, and agreed to perform all of the duties and
obligations, of Goldrush arising under the Margarita Property Option
Agreement.   Simultaneous with the execution and delivery of the
Agreement, the Company paid Goldrush $200,000 which amount represents the full
payment and satisfaction for the assignment to the Company by
Goldrush.





Included
in the assignment to the Company were all sums incurred by Goldrush in
connection with its exploration of the Margarita Property which includes a
reclamation bond previously paid by Goldrush to the Forest Service in Arizona,
all expenditure credits incurred by Goldrush prior to the execution of the
Agreement and all property option payments made to the Margarita Property owner.
In addition, Goldrush also assigned all of its rights and obligations under the
Finders’ Fee Agreement to the Company.  Subsequent to the execution of
the Agreement, Goldrush did not retain any interest in the Margarita
Property.





The
underlying Margarita Property Option Agreement is subject to a 2 % net smelter
return royalty to the property owner, James Sorrell (the “optionor”), upon
production. The Company has the option (exercisable for 90 days following
completion of a bankable feasibility study) to buy the optionor’s net smelter
return interest for $500,000 per 1% increment or $1,000,000 for the entire 2%
net smelter return interest.





In
addition, the Margarita Property is subject to a Finder’s Fee
Agreement.  The Company has agreed to pay a fee equal to 10% of the
Property Option Payments made during the first three years of the Margarita
Property Option Agreement.





Subsequent
to the completion of a drill program on the Margarita Property, the Company
terminated its option under the property option agreement and does not currently
have any interest in the Margarita Property.








F -
25





Whisky, NK, and Weepah
Properties





On March
15, 2008, the Company executed three separate property option agreements (the
“Agreements”) with MinQuest granting the Company the right to acquire 100% of
the mining interests of three Nevada mineral exploration properties currently
controlled by MinQuest, a natural resource exploration company.  The
properties consist of the Whiskey Flat Property (“Whiskey”), NK Property (“NK”),
and the Weepah Property (“Weepah”) (collectively the
“Properties”).  Each of the Agreements is a separate agreement that
can be terminated irrespective of the status of any of the other
Agreements.





The
Properties are located in Nevada with the Whiskey and NK being in Mineral County
while the Weepah is located in Esmeralda County.  The Whiskey Property
currently consists of 83 unpatented mining claims, the NK Property currently
consists of 24 unpatented mining claims, and the Weepah Property currently
consists of 14 unpatented claims.





Upon
execution of the Agreements, the Company paid MinQuest a total of $90,000 in
relation to the three agreements.  Since the payment obligations are
non-refundable, if any payments under any of the Agreements are not made, the
Company will lose any previous payments made and all its rights to the
respective property. If all said payments under any of the Agreements are made,
then the Company will acquire all mining interests in the respective property.
If the Company fails to make any payment when due, each of the Agreements gives
the Company a 60-day grace period to pay the amount of the
deficiency.  MinQuest retained a 3% royalty of the aggregate proceeds
received by the Company from any smelter or other purchaser of any ores,
concentrates, metals or other material of commercial value produced from the
Properties, minus the cost of transportation of the ores, concentrates or
metals, including related insurance, and smelting and refining charges,
including penalties.





The
Company has the one time right exercisable for 90 days following completion of a
bankable feasibility study to buy up to one half (50%) of MinQuest’s royalty
interest (i.e. an amount equal to 1.5% of the royalty interest) for $2,250,000.
The right to purchase the said royalty interest shall be exercised by the
Company by providing the MinQuest with notice of the purchase accompanied by
payment in the amount of USD $2,250,000.





The
Company may use MinQuest for its mineral exploration expertise on the
Properties. In addition, any mineral interests staked, located, granted or
acquired by either the Company or MinQuest which is located within a 1 mile
radius of the Properties will be included in the option granted to the Company
for the respective property.  Any of the Agreements will terminate if
the Company fails to comply with its obligations in any of the respective
Agreements and fails to cure such alleged breach. If the Company gives notice
that it denies a default has occurred, the matter shall be determined finally
through such means of dispute resolution as such matter has been subjected to by
either party.








F -
26





Whiskey
Property





Annual
option payments and minimum annual exploration expenditures under the Whiskey
Property Agreement are as noted below:





Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            50,000
            $
            -By
      March 15, 2009
            
            50,000
            
            50,000By
      March 15, 2010
            
            50,000
            
            150,000By
      March 15, 2011
            
            65,000
            
            200,000By
      March 15, 2012
            
            80,000
            
            350,000By
      March 15, 2013
            
            100,000
            
            200,000By
      March 15, 2014
            
            100,000
            
            200,000By
      March 15, 2015
            
            100,000
            
            200,000By
      March 15, 2016
            
            100,000
            
            200,000By
      March 15, 2017
            
            100,000
            
            200,000By
      March 15, 2018
            
            250,000
            
            750,000$
            1,045,000
            $
            2,500,000





To May
31, 2010 the Company has made the $50,000 payment due on signing and the $50,000
due on March 15, 2009.    In addition, the Company has
incurred approximately $53,214 on exploration of the property.  At May
31, 2010 the Company had a shortfall in property expenditures of approximately
$196,786.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.








F -
27





NK
Property





Annual
option payments and minimum annual exploration expenditures under the NK
Property Agreement are as noted below:





Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            20,000
            $
            -By
      March 15, 2009
            
            20,000
            
            50,000By
      March 15, 2010
            
            20,000
            
            75,000By
      March 15, 2011
            
            35,000
            
            100,000By
      March 15, 2012
            
            45,000
            
            250,000By
      March 15, 2013
            
            50,000
            
            100,000By
      March 15, 2014
            
            50,000
            
            100,000By
      March 15, 2015
            
            50,000
            
            100,000By
      March 15, 2016
            
            50,000
            
            100,000By
      March 15, 2017
            
            50,000
            
            100,000By
      March 15, 2018
            
            100,000
            
            250,000$
            490,000
            $
            1,225,000





To May
31, 2010 the Company has made the $20,000 payment due on signing and the $20,000
due on March 15, 2009.    In addition, the Company has
incurred approximately $17,451 on exploration of the property.  At May
31, 2010 the Company had a shortfall in property expenditures of approximately
$127,549.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.








F -
28





Weepah
Property





Annual
option payments and minimum annual exploration expenditures under the Weepah
Property Agreement are as noted below:





Property
            
            WorkPayments
            
            Expenditures$USD
            
            $USDUpon
      Execution of the Agreement
            $
            20,000
            $
            -By
      March 15, 2009
            
            20,000
            
            50,000By
      March 15, 2010
            
            20,000
            
            75,000By
      March 15, 2011
            
            35,000
            
            100,000By
      March 15, 2012
            
            45,000
            
            250,000By
      March 15, 2013
            
            50,000
            
            100,000By
      March 15, 2014
            
            50,000
            
            100,000By
      March 15, 2015
            
            50,000
            
            100,000By
      March 15, 2016
            
            50,000
            
            100,000By
      March 15, 2017
            
            50,000
            
            100,000By
      March 15, 2018
            
            100,000
            
            250,000$
            490,000
            $
            1,225,000





To May
31, 2010 the Company has made the $20,000 payment due on signing and the $20,000
due on March 15, 2009.    In addition, the Company has
incurred approximately $6,823 on exploration of the property.  At May
31, 2010 the Company had a shortfall in property expenditures of approximately
$138,117.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.





Imperial
Property





On May
30, 2008, the Company entered into an Assignment and Assumption Agreement (the
“Agreement”) with American Goldfields Inc., a Nevada corporation (“American
Goldfields”), to acquire the exclusive option to an undivided right, title and
interest in 22 unpatented Federal mining claims located in Esmeralda County,
Nevada (the “Property”). American Goldfields had originally acquired its
exclusive option on the Property on June 30, 2004, when it entered into a
Property Option Agreement (the “Property Agreement”) with MinQuest, the owner of
the Property.





Pursuant
to the Agreement, the Company assumed the rights, and agreed to perform all of
the duties and obligations, of American Goldfields arising under the Property
Agreement. Simultaneous with the execution and delivery of the Agreement, the
Company paid American Goldfields $250,000, which amount represents the full
payment and satisfaction for the assignment by American Goldfields to the
Company of the Property Agreement and all rights and obligations with respect
thereto. Included in the assignment were, without limitation, all sums incurred
by American Goldfields in connection with the Property, specifically (i) the
refunding of the reclamation bond previously paid by American Goldfields to the
Bureau of Land Management in Nevada in the amount of $13,255; (ii) the
approximately $277,000 of expenditures incurred by American Goldfields prior to
the Agreement; and (iii) the $120,000 paid to MinQuest as option payments under
the Property Agreement.  In the event the Company does not make the
indicated option payments and incur the exploration expenditures, when demanded,
the Company will lose its interest in the property.  On July 1, 2008
the Company made the final $20,000 property option payment due under the
Imperial Property Option Agreement.  By July 1, 2009 the Company was
to incur an aggregate $223,056 in property expenditures to earn a 100% interest
in the property, of which $8,488 was incurred leaving a shortfall of
$214,568.  The Company is at risk of losing its interest in the
property by not making the indicated option payments and incurring the
exploration expenditures, when demanded.




As of May
31, 2010, these properties are unproven and all amounts paid in connection with
the acquisition of these rights and for expenditures in exploration of these
properties have been expensed.







NOTE
15 – SUBSEQUENT EVENTS





The
Company adopted ASC 855, and has evaluated all events occurring after May 31,
2010, the date of the most recent balance sheet, for possible adjustment to the
financial statements or disclosures through August 27, 2010, which is the date
on which the financial statements were issued.  The Company has
concluded that there are no significant or material transactions to be reported
for the period from June 1, 2010 to August 27, 2010.





F -
29


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.





PATRIOT
      GOLD CORP.Dated:
      August 27, 2010
            By:                /s/ Herb DuerrName:                Herb
      DuerrTitle:                President,
      Chief Executive and Operating Officer, Secretary and Treasurer, and
      Director (Principal Executive, Financial and Accounting
      Officer)





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.





SIGNATURE
            TITLE
            
            DATE/s/Herb Duerr
              Herb
      Duerr
            Director,
      President, Chief Executive and Operating Officer, Secretary, and Treasurer
      (Principal Executive, Financial, and Accounting Officer)
            
            August
      27, 2010/s/ Robert Coale
              Robert Coale
            Director
            
            August
      27, 2010/s/ Jared Beebe
              Jared Beebe
            Director
            
            August
      27, 2010/s/ Dennis Lance
              Dennis Lance
            Director
            
            August
      27, 2010