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, 2011


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 of May 28, 2011 was approximately $2,491,318.





The number of shares of the issuer’s common stock issued and outstanding as of August 31, 2011 was 26,224,400 shares.


2


TABLE OF CONTENTS





PageGlossary of Mining Terms
4PART I

7Item 1
Business
7Item 1A
Risk Factors
11Item 1B
Unresolved Staff Comments
14Item 2
Properties
14Item 3
Legal Proceedings
35Item 4
Submission of Matters to a Vote of Security Holders
35PART II

36Item 5
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
36Item 6
Selected Financial Data
38Item 7
Management’s Discussion and Analysis of Financial Condition and Results of Operations
38Item 7A
Quantitative and Qualitative Disclosures About Market Risk.
45Item 8
Financial Statements and Supplementary Data.
45Item 9
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
45Item 9A
Controls and Procedures
45Item 9B
Other Information
46PART III

46Item 10
Directors, Executive Officers and Corporate Governance
46Item 11
Executive Compensation
49Item 12
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
52Item 13
Certain Relationships and Related Transactions, and Director Independence
55Item 14
Principal Accountant Fees and Services
56PART IVItem 15
Exhibits, Financial Statement Schedules
57SIGNATURES

88





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. (hereinafter referred to as the “Company,” “Patriot Gold” 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.





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 to Patriot Gold Corp. and moving the Company into it’s current business of natural resource exploration and mining. On June 17, 2003, we adopted a new trading symbol- PGOL- to reflect the name change. The Company has been in the resource exploration and mining business since June,
2003.





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 property, 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 Property Expansion
Option Agreement.  Provex’s only assets are the aforementioned agreements and it does not have any liabilities.





On May 28, 2010, Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) for Canamex to acquire up to a 75% undivided interest in the Bruner and the Bruner Property Expansion.





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On October 18, 2010, Mr. Herb Duerr resigned as President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company and its’ subsidiary.  Thereafter, on October 18, 2010, Robert Coale was appointed President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company and its’ subsidiary.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Whiskey, NK, Weepah and Imperial Property Option Agreements by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





On February 28, 2011, the Company entered into an Exploration and Option Agreement with Idaho State Gold Company, LLC, (“ISGC”) whereby the Company will grant the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the property called the Moss Mine Project, Mohave County, Arizona.





In March, 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Capital Inc. (“Northern Vertex”) pursuant to an Exploration and Option to Enter Joint Venture Agreement whereby Northern Vertex must spend an aggregate total of US$8 million on exploration and related expenditures over the next five years and subsequent to exercise of the earn-in, Northern Vertex and Patriot Gold will form a 70/30 joint venture.





The Moss Property agreements do not require on-going property payments nor minimum annual exploration expenditures. In May 2009 the Board of Directors approved a $200,000 exploration budget for the Moss Property. 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. The column tests will be conducted for a longer period to determine potential recoveries from various size fractions.





By May 31, 2010, the Company had incurred approximately $155,164 on exploration of the property. As of May 31, 2011, the Company had incurred an additional $82,158 in exploration expenditures. The total amount of exploration expenditures made on the Moss Property is $237,322.





Business Operations





We are a natural resource exploration and mining 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.





8


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.





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





There were no fund raising activities undertaken by the Company during the fiscal year ended May 31, 2011.  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.





9


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.





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 since moving into the natural resource exploration field in 2003. Currently, we have no full time employees. Our sole officer and two directors provide planning and organizational services for us on a part-time basis.





10


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 Property Expansion 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 Property Expansion Option Agreement.  Provex’s only assets are the aforementioned agreements and it does not have any liabilities.





On May 28, 2010, Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) to acquire up to a 75% undivided interest in the Bruner and Bruner Property Expansion.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Whiskey, NK, Weepah and Imperial Property Option Agreements by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in these properties.





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, 2012, 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.


11


2. 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 and Vernal 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.  To date, there have not been any conflicts between the Company and MinQuest.





3. 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.





4. 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.





5. 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 early 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.





12


6. 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.





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.





7. 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.





8. 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.





9. 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





Because we are in the early stages of our business, Mr. Coale will not be spending all of his time working for the Company. Mr. Coale 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. Coale, he is prepared to adjust his timetable to devote more time to our business. However, it still may not be possible for Mr. Coale to devote sufficient time to the management of our business, as and when needed, especially if the demands of Mr. Coale’s other interests increase. Competing demands on Mr. Coale’s time may lead to a divergence between his interests
and the interests of our shareholders.


13


Risks Related To Legal Uncertainty and Regulations





10. 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 for our corporate offices. 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.





14


Bruner and Vernal Properties








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





Acquisition of Interests





Pursuant to a Property Option Agreement, dated as of July 25, 2003, with MinQuest, Inc., a Nevada corporation (“MinQuest”), we acquired 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.





In order to earn a 100% interest in these two properties, option payments totaling $92,500 and an additional $500,000 in exploration expenditures were required.  All mining interests in the property are 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.





15


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 $603,429 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 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 Property Option Agreement.





On May 28, 2010 Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) for Canamex to acquire up to a 75% undivided interest in the original Bruner Property and the Bruner Property Expansion described above (collectively these properties are referred to herein as the “Bruner Properties”). Upon the completion of the terms of the Agreement by Optionee, and upon earning its’ initial interest, the parties have agreed to negotiate a definitive joint venture agreement in good faith which will supersede the current agreement.





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 ( (referred to herein as the “Bruner Property Expansion”)). 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 Bruner Property Expansion 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.





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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.





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 Property Expansion 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 Property Expansion Option Agreement.





On May 28, 2010 Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) for Canamex to acquire up to a 75% undivided interest in the Bruner Properties. Upon the completion of the terms of the Agreement by Optionee, and upon earning its’ initial interest, the parties have agreed to negotiate a definitive joint venture agreement in good faith which will supercede the current agreement.





Bruner Properties





Description and Location of the Bruner Properties





The Bruner 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 59 unpatented mining claims (1,020 acres) and 28 patented claims (477.655 acres). Canamex has subsequently added 21 new unpatented claims to the northern end of the Bruner Porperty which are now part of the aforementioned May 28, 2010 option agreement with Canamex and the area of interest.





Exploration History of the Bruner Properties





The original operators at the Bruner Properties 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.





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).





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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.do occur.





Geology of the Bruner Properties 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.





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Geological Exploration Program





In July 2003, members of our Board of Directors and geology team made an onsite inspection of the Bruner Properties. 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 Properties 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.





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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.


·


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 Properties 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 Properties, 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 Properties.  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.





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The Company recently expanded the Bruner Properties 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.





Vernal Project





Description and Location of the Vernal Property




The Vernal 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).





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Exploration History of the Vernal Property





Historical work includes numerous short adits constructed on the Vernal 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 Vernal 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.





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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.





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





Moss Property








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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 Interests





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.





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.





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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.





At the recommendation of Mr. Sibthorpe, in January, 2004, Mr. Robert Coale  (P.E.), a 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.





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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.





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.





Exploration and Option Agreement





On February 28, 2011, the Company entered into an Exploration and Option Agreement with Idaho State Gold Company, LLC, (“ISGC”) whereby the Company will grant the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the property called the Moss Mine Project, Mohave County, Arizona.





In March, 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Capital Inc. (“Northern Vertex”) pursuant to an Exploration and Option to Enter Joint Venture Agreement whereby Northern Vertex must spend an aggregate total of US$8 million on exploration and related expenditures over the next five years and subsequent to exercise of the earn-in, Northern Vertex and Patriot Gold will form a 70/30 joint venture.





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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.





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Current State of Exploration





The Moss Property has undergone an evaluation for potential mineral reserves. The evaluation was detailed in a report by Paul D. Noland, a registered professional geologist. The report concluded that the Moss Property hosts a drill-indicated gold/silver estimate, and requires systematic in-fill and down-dip drilling to be placed into a final reserve category. No economic or mining feasibility parameters were applied. The estimates are 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 evaluation 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.





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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.





In January, 2010, Patriot Gold 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 estimate. This estimate 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.


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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 Gold 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 timesfor 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 Gold 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.





In March of 2011, Patriot entered an agreement with Northern Vertex providing them with the right to earn an undivided 70% interest in the Moss property, subject to the terms of the Exploration and Option Agreement which are summarized as follows:





Patriot was paid US$500,000 upon execution of the agreement. Northern Vertex must spend an aggregate total of US$8 million on exploration and related expenditures over the next five years. Subsequent to exercise of the earn-in, Northern Vertex and Patriot will form a 70/30 joint venture. Financing of future work on the property will be on a proportional basis under the direction of a management committee with voting rights proportional to ownership percentage. Either party may be diluted on the basis of a standard formula if they do not contribute to the planned programs. If either party is diluted below 10 percent, their interest will convert to a three percent NSR (net smelter return) royalty. An existing 3-3.5
percent NSR exists on the Moss Mine property.





Beginning shortly after the agreement, Northern Vertex mobilized drilling equipment and personnel to the site to take additional core and reverse circulation samples.  The purpose of this drilling campaign was to correlate and corroborate the results of previous work and to provide step-out drilling to further define the limits of the deposit.


30


Northern Vertex advanced a total of drill 28 holes through July 2011.  The results of this drilling campaign demonstrate that the thickness and grade of the mineralized zone are compatible with and build upon historical drill results.  Northern Vertex chief geologist, an NI 43-101 certified geologist, stated, “the stockwork system is robust and the distribution of gold is proving to be consistent both along and across the 5,000 foot strike length evaluated.”  He further stated, “the consistency of the results suggests that mineralization is both widespread and dependable.”





Drilling highlights from the most recent drill holes are presented below.





Hole ID
From (m)
To (m)
Int. (m)
Au (gpt)
Ag (gpt)
Au Eq. (gpt)*AR-57
105.16
166.12
60.96
0.41
5.87
0.56including
152.4
161.54
9.14
1.11
13.3
1.44AR-58
54.86
74.68
19.82
1.35
14.08
1.71including
59.44
71.63
12.19
2.06
19.68
2.55AR-59
112.78
167.64
54.86
0.53
6.98
0.70including
112.78
123.44
10.66
1.13
14.73
1.49AR-60
79.25
158.5
79.25
0.45
3.77
0.55including
140.21
150.88
10.67
1.67
8.8
1.89AR-61
115.82
182.88
67.06
0.45
3.94
0.54including
128.02
129.54
1.52
5.86
61.3
7.39including
163.07
172.21
9.14
0.72
8.16
0.93AR-62
100.58
172.21
71.63
0.83
11.16
1.11including
109.74
117.35
7.61
3.42
47.89
4.62including
109.74
143.26
33.52
1.27
18.28
1.73AR-63
7.62
82.3
74.68
0.36
5.27
0.49including
7.62
18.29
10.67
0.82
9.01
1.04AR-64
131.06
175.26
44.2
0.71
8.69
0.92including
143.26
173.74
30.48
0.94
10.84
1.21AR-66
150.89
184.4
33.51
1.25
30.17
2.01including
163.08
173.74
10.66
2.89
67.89
4.58AR-67R
80.77
126.49
45.72
1.47
20.0
1.97including
105.16
114.3
9.14
4.43
52.4
5.74AR-68R
83.82
134.11
50.29
1.24
13
1.57including
108.2
126.49
18.29
1.81
18.3
2.27AR-78R
47.24
80.77
33.53
1.12
22.9
1.69including
64.01
73.15
9.14
2.83
52
4.13AR-79R
111.25
176.78
65.53
0.25
4.7
0.37AR-80R
60.96
70.1
9.14
0.83
10.8
1.1AR-82R
149.35
172.21
22.86
0.39
4.9
0.51





* AuEq (gpt) = Au (gpt) + 1/40th Ag (gpt).      gpt = grams / metric tonne.  Please visit www.northernvertex.com/extras/drillresults.pdf for complete drill results and estimates results.





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Northern Vertex plans additional drilling in 2011 to further delineate the mineralized zone with the ultimate goal of fast tracking the deposit into production.  To further this end, Northern Vertex has also initiated parallel studies to define the infrastructure and permitting requirements for the project and has planned to perform additional metallurgical studies.





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.





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.





Whiskey Property





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”) then controlled by MinQuest.





The Company paid  MinQuest $50,000 upon execution of the agreement.   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.





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.





32


On December 21, 2010, the Company and its’ subsidiary chose to terminate the Whiskey Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





NK Property





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”) then  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.





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.





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 Assignment 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.  Included in the assignment were, without limitation, all sums incurred by Patriot Gold in connection with the NK property, specifically; (i) the $17,452 of exploration expenditures incurred by Patriot Gold prior to the Assignment Agreement; and (ii) the $40,000 paid to Minquest Inc. as property payments under the Property Agreement.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the NK Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





33


Weepah Property





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”)  controlled by MinQuest.  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 would acquire all mining interests in the property. If the Company failed 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.





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 Assignment 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.  Included in the assignment were, without limitation, all sums incurred by Patriot Gold in connection with the Weepah property, specifically; (i) the $6,823 of exploration expenditures incurred by Patriot Gold prior to the Assignment
Agreement; and (ii) the $40,000 paid to Minquest Inc. as property payments under the Property Agreement.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Weepah Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





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.





34


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 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.  Included in the assignment were, without limitation, all sums incurred by Patriot Gold in connection with the Imperial property, specifically; (i) the $13,769 of exploration expenditures incurred by Patriot Gold prior to the Assignment Agreement; amd (ii) the final $20,000 property payment paid to MinQuest Inc. under the Property Agreement.





As of April 16, 2010, Provex had incurred approximately $5,281 on exploration expenditures of the property leaving a shortfall of $209,287. Provex has incurred an additional $5,708 on exploration expenditures as of December 21, 2010.   Provex currently has a shortfall in exploration expenditures of approximately $203,579.  Provex is at risk of losing its interest in the property by not making the indicated property payments and incurring the exploration expenditures, when demanded.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Imperial Property Option Agreement by giving MinQuest Inc. written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the 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.





35


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 on the OTCQB, a marketplace developed by the OTC Markets Group, Inc.  (“OTCQB”) under the ticker symbol “PGOL.” The OTCQB 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://www.otcmarkets.comduring the years ending May 31, 2011 and May 31, 2010:





Financial Quarter
Bid Price Information*Year
Quarter
High Bid Price
Low Bid Price2011
Fourth Quarter
$0.147
$0.07Third Quarter
$0.15
$0.08Second Quarter
$0.23
$0.11First Quarter
$0.25
$0.112010
Fourth Quarter
$0.40
$0.22Third Quarter
$0.40
$0.17Second Quarter
$0.28
$0.14First Quarter
$0.31
$0.21





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





Holders.





On August 31, 2011, 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, 2011,





36


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, 2011, the end of our most recently completed fiscal year, regarding equity compensation plans that have not been approved by our stockholders.





Equity compensation plans not approved by stockholders – as of May 31, 2011Plan 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)

$0.05

791,0002005 Stock Option Plan*

2,000,000


$0.25

1,800,000Share Purchase Warrants

3,456,000


$1.48

N/A





*On March 21, 2011, 80,000 stock options issued under the 2003 Plan and 100,000 stock options 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, 2011, there were a total of 4,755,000 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 200,000 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.





37


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.





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, 2011.
 
 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, 2011.





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, 2012.





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.





38


Plan of Operation





During the twelve-month period ending May 31, 2012, 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, 2012.





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, 2012.





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 $603,429 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, 2010 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.





39


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.





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 Property Expansion 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 Property Expansion Option Agreement.





On May 28, 2010 Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) for Canamex to acquire up to a 75% undivided interest in the Bruner Properties. Upon the completion of the terms of the Agreement by Optionee, and upon earning its’ initial interest, the parties have agreed to negotiate a definitive joint venture agreement in good faith which will supercede the current 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 Gold 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.





On February 28, 2011, the Company entered into an Exploration and Option Agreement with Idaho State Gold Company, LLC, (“ISGC”) whereby the Company will grant the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the property called the Moss Mine Project, Mohave County, Arizona.  The terms require the establishment of a Management Committee in which Robert Coale, the Company’s President, was elected to serve as a Member of the Management Committee.





40


In March, 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Capital Inc. (“Northern Vertex”) pursuant to an Exploration and Option to Enter Joint Venture Agreement whereby Northern Vertex must spend an aggregate total of US$8 million on exploration and related expenditures over the next five years and subsequent to exercise of the earn-in, Northern Vertex and Patriot Gold will form a 70/30 joint venture.





The Moss Property agreements do not require on-going property payments nor minimum annual exploration expenditures. In May 2009 the Board of Directors approved a $200,000 exploration budget for the Moss Property. 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. The column tests will be conducted for a longer period to determine potential recoveries from various size fractions.





By May 31, 2010, the Company had incurred approximately $155,164 on exploration of the property. As of May 31, 2011, the Company had incurred an additional $82,158 in exploration expenditures. The total amount of exploration expenditures made on the Moss Property is $237,322.





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  December 21, 2010, the Company was to have incurred $200,000 on exploration but had incurred approximately $72,809 on exploration of the property, a shortfall of $127,191.   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.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Whiskey Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





41


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 December 21, 2010, the Company was to have incurred $125,000 on exploration but had incurred approximately $24,050 on exploration of the property, a shortfall of $100,950.





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.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the NK Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





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 December 21, 2010, the Company was to have incurred $125,000 on exploration but had incurred approximately $8,953 on exploration of the property, a shortfall of $116,047.





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.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Weepah Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





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. As of December 21, 2010,$19,477 has been  incurred leaving a shortfall of $203,579.





42


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.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Imperial Property Option Agreement by giving MinQuest Inc. written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





Results of Operations





The Twelve Months Ended May 31, 2011 compared to the Twelve Months Ended May 31, 2010





The Company had no revenues during the fiscal years ended May 31, 2011 and May 31, 2010 because it was in the exploration state during such fiscal years. The net loss from operations for fiscal 2011 was $431,892 compared to $559,821 in fiscal 2010.   The net loss from operations decreased significantly in 2011 compared to 2010 largely due to a decrease in exploration expenses to $133,629 in 2011 from $266,302 in 2010, a decrease of $132,673. In 2011, there were no property option payments made whereas in 2010 there was $35,000.





General and administrative expenses were $298,263 in 2011 compared to $293,519 in 2010, an increase of $4,744.  The difference relates to higher  costs associated with the Company’s corporate development activities, countered with increased costs to consulting.





Interest income decreased to $1,300 in 2011 from $7,694 in 2010.  The decrease is largely due to lower average invested cash balances and a decrease in interest rates on invested cash balances.





During the year ended May 31, 2011, the company received $500,000 from the sale of mineral rights to a third party, which was recorded in “Other Income (Expense)”.





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 was $35,000 of 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.


43


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.





Liquidity and Capital Resources





We had total assets of $679,953 at May 31, 2011 consisting of cash of $660,778, prepaid expenses of $5,020 and reclamation deposits of $14,155.  We had total liabilities of $11,119 at May 31, 2011 all of which are current liabilities consisting of accounts payable and accrued liabilities.





We anticipate that we will incur the following to May 31, 2012:





-
$200,000 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 provided by operations was $54,277 for the year ended May 31, 2011 while cash used in operations was $589,385 for 2010.  The increase in cash from operations for the year ended May 31, 2011 was due to cash received from the sale of mineral properties of $500,000, which caused the Company to have net income of $74,259 for the year ended May 31, 2011, compared to a net loss of $549,477 for the year ended May 31, 2010.  For the year ended May 31, 2011, the Company used cash of $19,962 to reduce accounts payable, while for the year ended May 31, 2010, the Company used cash of $34,908 to reduce accounts payable.





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.





Investing activities in 2010 and 2011 were $nil .    There were no financing activities in either 2011 or 2010.





44


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, 2012, 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.





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, 2011, 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 Chief Executive Officer , Mr. Robert Coale.




45


Changes in Internal Control Over Financial Reporting





During the most recently completed fiscal year ended May 31, 2011, 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, 2011, 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, 2011 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.





Item 9B. Other Information.





None.


PART II





Item 10.                  Directors, Executive Officers and Corporate


Governance.





46


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 AppointedRobert Coale
President, Chief  Executive Officer,  Secretary Treasurer, and Director
71
Oct. 13, 2005(1)Jared Beebe
Director
60
September 5, 2008Dennis Lance
Director
66
February 1, 2010





(1)Mr. Coale was first appointed as a Director on June 23, 2003. On September 12, 2008 Mr. Coale resigned as an officer of the Company but remained a Director . Subsequently  on October 18, 2010, Mr. Coale was reappointed as the Company’s President, Chief Executive Officer, Secretary and Treasurer and Mr. Duerr resigned as Director.





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.





Robert Coale has been a Director since June 2003 and has served as our President, Chief Executive Officer, Secretary and Treasurer for two terms: (i) October 2005 to September 2008; and (ii) October 18, 2010 to present.   Mr. Coale has over 47 years of resource related business and management experience and 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.  Mr. Coale serves on the Board of Directors of Giant Oil & Gas Inc. from April, 2004; Rush
Metals Corp. from September, 2008; and President of Tuffnell Ltd. From August, 2011, each of which is a publicly traded exploration company. Mr. Coale is also a Technical Advisor for Premium Exploration Inc. and a past Director of American Goldfields Inc. and Francisco Gold Corporation and past Technical Advisor to Andean American Gold Corp.  Mr. Coale is a Professional Engineer and holds two degrees in Engineering (1963 - MetE. - Colorado School of Mines, 1971 - MSc. - University of the Witwatersrand in South Africa) as well as an MBA from the University of Minnesota (1982).





47


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 a previous Shareholder Agreement with Mr. Coale, 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.





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.





48


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, 2011, 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





Mr. Robert Coale was first appointed as a Director on June 23, 2003 and on October 13, 2005. Mr. Coale was initially appointed as the Company’s Chairman, President, Chief Executive and Operating Officer, and Secretary and reappointed as the Company’s Chief Executive Officer, President, Secretary and Treasurer on October 18, 2010.





On September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company and resigned on October 18, 2010.  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, 2011, the Company made total property payments of $nil to MinQuest related to property option payments.  For the twelve-months ended May 31, 2011 the
Company paid Mr. Duerr an amount of $nil with respect to fees paid to Mr. Duerr for geological services rendered to the Company.





49


The following table sets forth information concerning the compensation paid or earned during the fiscal years ended May 31, 2011 and 2010 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, 2011, regardless of compensation level; (ii) all individuals who served as officers at May 31, 2011 and whose total compensation during the fiscal year ended May 31, 2011 exceeded $100,000; and (iii) up to two additional individuals who served as officers during the fiscal year ended May 31, 2011 and whose total compensation
during the fiscal year ended May 31, 2011 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)
2011
0
0
0
0
0
0
0
02010
12,550
0
0
0
0
0
0
12,550Robert Coale(2)
2011
11,081
0
0
0
0
0
0
11,08102010
0
0
0
0
0
0
0
0





(1)
On September 12, 2008 Mr. Herb Duerr was appointed President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company.   Mr. Duerr resigned from all positions on October 18, 2010.





50


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, 2011.





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 were fully vested and cancelled as of March 21, 2011.





(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.





51


Compensation of Directors





Mr. Beebe receives USD $500 per month for serving as a Director of the Company.  For the fiscal period ending May 31, 2011 a total of $6,000 was paid to Mr. Beebe.





Dennis Lance receives USD $500 per month for serving as a Director of the Company.For the year ended May 31, 2011, the Company paid $6,000 (2010 - $2,000) pursuant to this Agreement.





Robert receives USD $500 per month for serving as a Director of the Company.For the year ended May 31, 2011, the Company paid $11,081 (2010 - $2,500) pursuant to this agreement.





Item 12.                  Security Ownership of Certain Beneficial Owners and Management


and Related Stockholder Matters.





The following table lists, as of August 31, 2011, 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.





52


The percentages below are calculated based on 26,224,400 shares of Common Stock which are issued and outstanding as of August 31, 2011.  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%Jared Beebe

-

*Directors and Officers as a Group (3 individuals)

6,300,000

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.





Shareholders’ Agreement





Mr. Coale was a party to a Shareholder 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 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 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.





53


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.





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.





54


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, 2011, 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, 2011 the Company paid Mr. Duerr an amount of $nil with respect to fees paid to Mr. Duerr for geological services rendered to the Company.  Mr. Duerr resigned as President, Chief Executive Officer, Treasurer and Director on October 18, 2011.





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 $603,429 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.





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.





55


Related Party Transactions with Robert Coale





On March 10, 2006, we entered into a Stock Option Agreement with Robert Coale, our 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  6,000,000  shares  of  our common stock that are owned by Mr. Coale for a purchase price of $0.01 per share.





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.





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, 2011 and 2010 are set forth below:





Fiscal year ending

May 31, 2011

Fiscal year ending

May 31, 2010Audit Fees

$
29,280


$
27,300Audit Related Fees
NIL

NILTax Fees

NIL

NILAll Other Fees

NIL


NIL





As of May 31, 2011, 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.





56


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)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)





57


(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.








58







PATRIOT GOLD CORP.




(An Exploration State Company)




-:-




INDEPENDENT AUDITOR’S REPORT




MAY 31, 2011 AND 2010








59








Contents

PageReport of Independent Registered Public Accountants

F - 1Balance SheetsMay 31, 2011 and 2010

F - 2Statements of Operations for theYears Ended May 31, 2011 and 2010 and the Cumulative PeriodJune 1, 2000 (Inception of Exploration State) to May 31, 2011

F - 3Statement of Stockholders’ EquitySince November 30, 1998 (Inception) to May 31, 2011

F - 4Statements of Cash Flows for theYears Ended May 31, 2011 and 2010 and the Cumulative PeriodJune 1, 2000 (Inception of Exploration State) to May 31, 2011

F – 12Notes to Financial Statements

F - 14








60





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, 2011and 2010, and the related statements of operations and cash flows for the two years ended May 31, 2011 and 2010 and the cumulative period June 1, 2000 (inception of exploration state) to May 31, 2011, and the statements of stockholders’ equity since November 30, 1998 (inception) to May 31, 2011. 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, 2011 and 2010, and the results of its operations and its cash flows for the years ended May 31, 2011 and 2010 and the cumulative period June 1, 2000 (inception of exploration state) to May 31, 2011, 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
 September 13, 2011







F - 1












PATRIOT GOLD CORP.


(An Exploration State Company)


BALANCE SHEETS





May 31,


May 31,2011


2010ASSETS:Current Assets:Cash

$
660,778


$
606,501Prepaid Expenses


5,020



5,000Total Current Assets


665,798



611,501Reclamation Deposits (note 4)


14,155



14,155Office Equipment, Net


—



—Total Assets

$
679,953


$
625,656LIABILITIES & STOCKHOLDERS’ EQUITY:Current Liabilities:Accounts Payable

$
11,119


$
31,081Total Current Liabilities


11,119



31,081Stockholders’ Equity:Preferred Stock, Par Value $.001Authorized 20,000,000 shares,No shares issued at May 31, 2011 and 2010


—



—Common Stock, Par Value $.001Authorized 100,000,000 shares,Issued 26,224,400 shares atMay 31, 2011 (May 31, 2010 – 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


(25,681,572
)


(25,755,831
)Retained Deficit


(41,082
)


(41,082
)Total Stockholders’ Equity


668,834



594,575Total Liabilities and Stockholders’ Equity

$
679,953


$
625,656





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,


Exploration2011


2010


StateRevenues

$
—


$
—


$
—Cost of Revenues


—



—



—Gross Margin


—



—



—Expenses:Mining Costs


133,629



266,302



3,775,174General and Administrative


298,263



293,519



22,866,065Net Loss from Operations


(431,892)



(559,821)



(26,641,239
)Other Income (Expense)Interest


1,300



7,694



455,096Currency Exchange


4,851



2,650



4,571Sale of Mineral Rights


500,000



—



500,000Net Other Income (Expense)


506,151



10,344



959,667Net Loss

$
74,259


$
(549,477)


$
(25,681,572
)Basic and Diluted loss perShare

$
(0.00
)

$
(0.02
)Weighted Average Shares OutstandingBasic


26,224,400



26,224,400Diluted


29,980,400



30,160,400





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
)Net Loss
—


—

—


—



—



—



—



—



74,259Balance May 31, 2010
—

$
—

26,224,400

$
26,224


$
26,381,625


$
—


$
(16,361
)

$
(41,082
)

$
(25,681,572
)
 
 
 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,


Exploration2011


2010


StateCASH FLOWS FROM OPERATING ACTIVITIES:Net Loss

$
74,259


$
(549,477
)

$
(25,681,572
)Adjustments to Reconcile Net Loss to NetCash Used in Operating Activities:Compensation Expense of Stock Options


—



—



5,003,484Stock Issued for Services


—



—



16,267,500Depreciation


—



—



4,193Change in Operating Assets and Liabilities:(Increase) Decrease in Prepaid Expenses


(20)



(5,000)



(5,020)Increase (Decrease) in Accounts Payable


(19,962
)


(34,908



4,876Net Cash Used in Operating Activities


54,277



(589,385
)


(4,406,539
)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of Office Equipment


—



—



(4,193)Reclamation Deposits


—



—



(14,155)Net Cash Used in Investing Activities


—



—



(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


54,277



(589,385)



660,778Cash and Cash Equivalentsat Beginning of Period


606,501



1,195,886



—Cash and Cash Equivalentsat End of Period

$
660,778


$
606,501


$
660,778








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,


Exploration2011


2010


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










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, 2011. 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. However, during the year ended May 31, 2011, the Company incurred a net operating gain of $74,259 as a result of a nonrefundable payment of $500,000 made by Idaho State Gold Company, LLC pursuant to the terms of the Exploration and
Option to Enter Joint Venture Agreement Moss Mine Project. The Company has an accumulated deficit of $25,681,572 at May 31, 2011.  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, 2011, the company has outstanding options and warrants of 300,000 and 3,456,000, respectively all of which are currently exercisable.  As of May 31, 2010, the company had outstanding options and warrants of 480,000 and 3,456,000, respectively all of which were exercisable.




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, 2011 or 2010 and accordingly, no compensation expense was recognized under APB No. 25 for the years ended May 31, 2011 or 2010.  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, 2011 or 2010 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, 2011 or 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, 2011 and 2010.





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 31,2011


2010Equipment

$
645


$
645Furniture


3,548



3,5484,193



4,193Less accumulated depreciation


(4,193
)


(4,193
)Total

$
-


$
-





Depreciation expense of $nil (2010 - $nil) has been recorded for each of the respective year ended May 31, 2011.





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, 2011 and 2010 approximates their fair values due to the short-term nature of these financial instruments.








F - 16





New Accounting Pronouncements





On September 30, 2009, the Company adopted updates issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards Codification TM (ASC) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues
Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Consolidated Financial Statements.





In December 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-29 (ASU 2010-29), Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations. This Accounting Standards Update requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting
period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The amendments in this Update affect any public entity as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this Update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  Early adoption is permitted. The Company does not expect the provisions of ASU 2010-29 to have a material effect on its financial
position, results of operations or cash flows.





In January 2010, the FASB issued Update No. 2010-6, “Improving Disclosures About Fair Value Measurements” (“ASU 2010-6”), which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair-value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures, which are effective for annual periods beginning after December 15, 2010. The Company is
currently evaluating the effect of this update on its financial position, results of operations and liquidity.





In October 2009, the FASB issued authoritative guidance on revenue recognition that became effective for the Company beginning July 1, 2010, with earlier adoption permitted. Under the new guidance on arrangements that include software elements, tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue recognition guidance. Adoption of this new guidance did not have a material impact on our financial statements.





In August 2010, the FASB issued Accounting Standards Update 2010-22 (ASU 2010-22), Accounting for Various Topics -- Technical Corrections to SEC Paragraphs - An announcement made by the staff of the U.S. Securities and Exchange Commission. This Accounting Standards Update amends various SEC paragraphs based on external comments received and the issuance of SAB 112, which amends or rescinds portions of certain SAB topics.  The Company does not expect the provisions of ASU 2010-22 to have a material effect on its financial position, results of operations or cash flows.





In August 2010, the FASB issued Accounting Standards Update 2010-21 (ASU 2010-21), Accounting for Technical Amendments to Various SEC Rules and Schedules: Amendments to SEC Paragraphs Pursuant to Release No. 33-9026: Technical Amendments to Rules, Forms, Schedules and Codification of Financial Reporting Policies. The Company does not expect the provisions of ASU 2010-21 to have a material effect on its financial position, results of operations or cash flows.





F - 17





In July 2010, the FASB issued Accounting Standards Update 2010-20 (ASU 2010-20), Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.The amendments in this Update are to provide financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. The disclosures about activity that occurs during the reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010.  The Company does not expect the provisions of ASU 2010-20 to have a material
effect on its financial position, results of operations or cash flows.





In April 2010, the FASB issued Accounting Standards Update 2010-17 (ASU 2010-17), Revenue Recognition – Milestone Method (Topic 605).  ASU 2010-17 provides guidance on applying the milestone method of revenue recognition in arrangements with research and development activities. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010.  The Company’s adoption of the provisions of ASU 2010-17 did not have a material impact on its revenue recognition.





In March 2010, the FASB issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives. The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this Update. The Company’s adoption of the provisions of ASU 2010-11 did not have a material effect on its financial position, results of operations or cash flows.





In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds. The amendments in this Update are effective as of the beginning of a reporting entity’s first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted. The Company’s adoption of provisions of ASU 2010-10 did not have a material effect on its financial position, results of operations or cash flows.





In February 2010, the FASB issued ASU No. 2010-09 Subsequent Events (ASC Topic 855) - Amendments to Certain Recognition and Disclosure Requirements (ASU 2010-09).  ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Company’s financial position, results of operations or cash flows.





Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.




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.





F - 18







NOTE 5 - INCOME TAXES





As of May 31, 2011, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $8,889,285 that may be offset against future taxable income through 2030. 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:


2011


2010Loss carry-forwards

$
3,022,000


$
,3,043,000Less:  Valuation allowance


(3,022,000
)


(3,043,000
)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% (2010 – 34%) to net loss for the year. The sources and tax effect of the differences are as follows:


2011


2010Computed “expected” tax benefit (liability)

$
(21,000
)

$
187,000Change in Valuation Allowance


21,000



(187,000
)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.





Interest costs related to unrecognized tax benefits, if any, would be 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, 2011. 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 2007. The following describes the open tax years, by major tax jurisdiction, as of May 31, 2011:





United States (a)

2007 – 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.





F - 19







NOTE 8 - RELATED PARTY TRANSACTIONS





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, 2011, the Company made total property payments of $nil to MinQuest related to property option payments.  Included in the net loss for twelve-months ended May 31, 2011 is an amount of
$12,550 with respect to fees paid to Mr. Duerr for geological services rendered to the Company.  On October 18, 2010, Mr. Herb Duerr resigned as President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company and its’ subsidiary.  Thereafter, on October 18, 2010, Robert Coale was appointed President, Chief Executive Officer, Secretary, Treasurer, and Director of the Company and its’ subsidiary.




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.





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, 2011 4,755,000 stock options have been granted to various directors and consultants for an exercise price ranging from $.05 to $1.50 per share. An additional 791,000 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, 200,000 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, 2011 or 2010. 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








F - 20





The following table sets forth the options outstanding under the 2003 Plan as of May 31, 2011:





Available for Grant


Options Outstanding


Weighted Average Exercise PriceBalance, May 31, 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



0.49Options granted


-



-



-Options cancelled


80,000



(80,000
)


1.03Options exercised


-



-



-Balance, May 31, 2011


791,000



100,000


$
0.05





The following table sets forth the options outstanding under the 2005 Plan as of May 31, 2011:





Available for Grant


Options Outstanding


Weighted Average Exercise PriceBalance, May 31, 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



0.25Options granted


-



-



-Options cancelled


100,000



(100,000
)


0.25Options exercised


-



-



-Balance, May 31, 2011


1,800,000



200,000


$
0.25





The following table summarizes information concerning outstanding and exercisable common stock options under the 2003 and 2005 Plans at May 31, 2011:





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
2.33
$ 0.05
100,000
$ 0.05$ 0.25
200,000
5.08
$ 0.25
200,000
$ 0.25300,000

$ 0.18
300,000
$ 0.18





The aggregate intrinsic value of stock options outstanding at May 31, 2011 was $4,500 and the aggregate intrinsic value of stock options exercisable at May 31, 2011 was $4,500. No stock options were exercised in 2011. As of May 31, 2011 all stock options had vested and as a result, there was no unrecognized compensation expense.





F - 21







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.




On May 26, 2010 the Warrant Expiration Date was extended  from November 27, 2011 to November 27, 2013 with respect to to the Class A, Class B, Class C and Class D Warrants





The following table sets forth common share purchase warrants outstanding as of May 31, 2011:





Warrants OutstandingBalance, May 31, 2010 and 2009


3,456,000Warrants granted


-Warrants expired


-Balance, May 31, 2011


3,456,000





The following table lists the common share warrants outstanding at May 31, 2011.  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
2.50
864,000
$ 1.40864,000
$ 1.45
2.50
864,000
$ 1.45864,000
$ 1.50
2.50
864,000
$ 1.50864,000
$ 1.55
2.50
864,000
$ 1.553,456,000


3,456,000





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.





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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.




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, 2011, 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.





F - 23







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.




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.





F - 24







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, 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.





On April 16, 2010 the Company entered into an Assignment Agreement, with its wholly owned subsidiary, Provex Resources Inc. (Provex), to assign the exclusive option to an undivided right, title and interest in the Bruner and Vernal 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.





To May 28, 2010 the Company and its’ subsidiary 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, we were to have incurred $500,000 on exploration.  To May 28, 2010 the Company and its’ subsidiary has incurred approximately $603,429 on exploration of the two properties.





On May 28, 2010, Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) to acquire up to a 75% undivided interest in the Bruner and Bruner Expansion Property (described below).  Pursuant to the Assignment Agreement, Canamex assumed the rights, and agreed to perform all of the duties and obligations, of the Company arising under the Bruner and Bruner Expansion Property Option Agreements.





Bruner Expansion Property





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.





On April 16, 2010 the Company entered into an Assignment Agreement, with our wholly owned subsidiary, Provex Resources Inc. (Provex), to assign the exclusive option to an undivided right, title and interest in 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 Expansion Property Option Agreement.





To May 28, 2010 the Company and it’s subsidiary has made all of its’ property option payments with respect to the Bruner Expansion Property Option Agreement.





F - 25





On May 28, 2010, Provex Resources, Inc. entered into an exclusive right and option agreement with Canamex Silver Corp. (“Canamex”) to acquire up to a 75% undivided interest in the Bruner and Bruner Expansion Property.  Pursuant to the Assignment Agreement, Canamex assumed the rights, and agreed to perform all of the duties and obligations, of the Company arising under the Bruner and Bruner Expansion Property Option Agreements.




Moss Property





The Moss Property consists of 104 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.





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 104 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.





On February 28, 2011, the Company entered into an Exploration and Option Agreement with Idaho State Gold Company, LLC (ISGC), whereby the Corporation will grant the option and right to earn a vested seventy percent (70%) interest in the property and the right and option to form a joint venture for the management and ownership of the property called the Moss Mine Project, Mohave County, Arizona.  The terms require the establishment of a Management Committee in which Robert Coale, the Company’s President, was elected to serve as a Member of the Management Committee.  A nonrefundable payment of five hundred thousand dollars ($500,000) was made by ISGC, to the Company.





In March, 2011, ISGC transferred its rights to the Exploration and Option Agreement dated February 28, 2011, to Northern Vertex Capital Inc. (“Northern Vertex”) pursuant to an Exploration and Option to Enter Joint Venture Agreement whereby Northern Vertex must spend an aggregate total of US $8 million on exploration and related expenditures over the next five years and subsequent to exercise of the earn-in, Northern Vertex and Patriot Gold will form a 70/30 joint venture.





Margarita Property





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.




Imperial, Whisky, NK, and Weepah Properties







On December 21, 2010, the Company and its’ subsidiary chose to terminate the Whiskey Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





F - 26





On December 21, 2010, the Company and its’ subsidiary chose to terminate the NK Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Weepah Property Option Agreement by giving MinQuest written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





On December 21, 2010, the Company and its’ subsidiary chose to terminate the Imperial Property Option Agreement by giving MinQuest Inc. written notice to terminate.  The Company and its’ subsidiary do not maintain any further rights, interests, or obligations in the property.





NOTE 15 – SUBSEQUENT EVENTS





The Company adopted ASC 855, and has evaluated all events occurring after May 31, 2011, the date of the most recent balance sheet, for possible adjustment to the financial statements or disclosures through September 13, 2011, 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, 2011 to September 13, 2011.





F - 27





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: September 13, 2011
By:                /s/ Robert CoaleName:                Robert CoaleTitle:                  President





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/ Robert Coale

Robert Coale
Director
September 13, 2011/s/ Jared Beebe

Jared Beebe
Director
September 13, 2011/s/ Dennis Lance

Dennis Lance
Director
September 13, 2011