UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 
 For the
quarterly period ended September 30, 2009
 
  ̈
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
 
 For the
transition period from  to
 
 Commission
File Number 333-129347
 
 WHITE
MOUNTAIN TITANIUM CORPORATION
 (Name
of small business issuer in its charter)
 
 NEVADA
                87-0577390(State
      of incorporation or
                (IRS
      Identification No.)organization)
 
 Augusto
Leguia 100, Oficina 812
 Las
Condes, Santiago
 Chile
 (Address
of principal executive offices)
 
 (56 2)
657-1800
 (Issuer’s
telephone number)
 
 Enrique
Foster Sur 20, Piso 19
 Las
Condes, Santiago
 Chile
 (Former Address, if Changed Since
Last Report)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed under Section 13 or 15(d) of the Exchange Act during the past 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 whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
 Yes   ̈    No   ̈
 
 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.
 
 Large Accelerate 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
 
 36,000,972
shares of the issuer’s common stock, $.001 par value, were outstanding at
November 12, 2009.
 
 Transitional
Small Business Disclosure Format (Check One) Yes  ̈ No
x
  
 
 PART
I. FINANCIAL INFORMATION
 
 Item 1.  Financial
Statements
 
 WHITE
MOUNTAIN TITANIUM CORPORATION
 (An
Exploration Stage Company)
 Consolidated
Balance Sheet
 (US
Funds)
  
 September
      30,
                                      
                                      
                                      December
      31,2009
                                      
                                      
                                      2008UnauditedAssetsCurrentCash
      and cash equivalents
                                      
                                      $
                                      1,242,172
                                      
                                      
                                      $
                                      1,475,460Prepaid
      expenses
                                      
                                      
                                      46,810
                                      
                                      
                                      
                                      54,530Receivables
                                      
                                      
                                      20,905
                                      
                                      
                                      
                                      15,646Total
      Current Assets
                                      
                                      
                                      1,309,887
                                      
                                      
                                      
                                      1,545,636Property and Equipment(Note
      2)
                                      
                                      
                                      80,077
                                      
                                      
                                      
                                      86,019Mineral
      Properties
                                      
                                      
                                      651,950
                                      
                                      
                                      
                                      651,950Total
      Assets
                                      
                                      $
                                      2,041,914
                                      
                                      
                                      $
                                      2,283,605LiabilitiesCurrentAccounts
      payable and accrued liabilities
                                      
                                      $
                                      61,663
                                      
                                      
                                      $
                                      35,777Total
      Current Liabilities
                                      
                                      
                                      61,663
                                      
                                      
                                      
                                      35,777Other Liabilities – warrants(Note
      5)
                                      
                                      
                                      1,788,825
                                      
                                      
                                      
                                      -Total
      Liabilities
                                      
                                      
                                      1,850,488
                                      
                                      
                                      
                                      35,777Stockholders’
      EquityCapital Stock(Note
3)Preferred
      Stock and Paid-in Capital in Excessof $0.001 Par
      Value20,000,000  Shares
      authorized625,000  Shares
      issued and outstanding
                                      
                                      
                                      500,000
                                      
                                      
                                      
                                      500,000Common
      Stock and Paid-in Capital in Excessof
      $0.001 Par Value100,000,000  Shares
      authorized34,404,042  (December
      31, 2008 – 32,004,042) shares issued and outstanding
                                      
                                      
                                      20,363,409
                                      
                                      
                                      
                                      17,930,947Deficit
      Accumulated During the Exploration Stage
                                      
                                      
                                      (20,671,983
                                      )
                                      
                                      
                                      (16,183,119
                                      )Total
      Stockholders’ Equity
                                      
                                      
                                      191,426
                                      
                                      
                                      
                                      2,247,828Total
      Liabilities and Stockholders’ Equity
                                      
                                      $
                                      2,041,914
                                      
                                      
                                      $
                                      2,283,605
 
 See notes
to the unaudited consolidated condensed financial statements
  2
  WHITE
MOUNTAIN TITANIUM CORPORATION
 (An
Exploration Stage Company)
 Consolidated
Condensed Statement of Operations
 (US
Funds)
 
 Three months ended
                                                                                                  September 30
                                                                                                
                                                                                                
                                                                                                Nine months ended
                                                                                                  September 30
                                                                                                
                                                                                                
                                                                                                Cumulative
                                                                                                  From Inception2009
                                                                                                  Unaudited
                                                                                                
                                                                                                
                                                                                                2008
                                                                                                  Unaudited
                                                                                                
                                                                                                
                                                                                                2009
                                                                                                  Unaudited
                                                                                                
                                                                                                
                                                                                                2008
                                                                                                  Unaudited
                                                                                                
                                                                                                
                                                                                                November 13,
                                                                                                  2001 through
                                                                                                  Sept. 30, 2009
                                                                                                  UnauditedExpensesAdvertising
      and promotion
                                                                                                
                                                                                                $
                                                                                                11,665
                                                                                                
                                                                                                
                                                                                                $
                                                                                                3,461
                                                                                                
                                                                                                
                                                                                                $
                                                                                                29,316
                                                                                                
                                                                                                
                                                                                                $
                                                                                                30,160
                                                                                                
                                                                                                
                                                                                                $
                                                                                                210,278Amortization
                                                                                                
                                                                                                
                                                                                                3,645
                                                                                                
                                                                                                
                                                                                                
                                                                                                5,995
                                                                                                
                                                                                                
                                                                                                
                                                                                                15,206
                                                                                                
                                                                                                
                                                                                                
                                                                                                17,483
                                                                                                
                                                                                                
                                                                                                
                                                                                                110,786Bank
      charges and interest
                                                                                                
                                                                                                
                                                                                                1,158
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,217
                                                                                                
                                                                                                
                                                                                                
                                                                                                2,859
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,428
                                                                                                
                                                                                                
                                                                                                
                                                                                                25,662Consulting
      fees
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                32,715
                                                                                                
                                                                                                
                                                                                                
                                                                                                294,438
                                                                                                
                                                                                                
                                                                                                
                                                                                                146,419
                                                                                                
                                                                                                
                                                                                                
                                                                                                2,225,060Consulting
      fees – directors and officersofficers
                                                                                                
                                                                                                
                                                                                                128,319
                                                                                                
                                                                                                
                                                                                                
                                                                                                91,964
                                                                                                
                                                                                                
                                                                                                
                                                                                                692,299
                                                                                                
                                                                                                
                                                                                                
                                                                                                288,156
                                                                                                
                                                                                                
                                                                                                
                                                                                                3,569,342Exploration
                                                                                                
                                                                                                
                                                                                                119,756
                                                                                                
                                                                                                
                                                                                                
                                                                                                458,744
                                                                                                
                                                                                                
                                                                                                
                                                                                                335,719
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,411,642
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,478,352Filing fees
                                                                                                
                                                                                                
                                                                                                788
                                                                                                
                                                                                                
                                                                                                
                                                                                                71
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,776
                                                                                                
                                                                                                
                                                                                                
                                                                                                2,570
                                                                                                
                                                                                                
                                                                                                
                                                                                                52,643Insurance
                                                                                                
                                                                                                
                                                                                                13,786
                                                                                                
                                                                                                
                                                                                                
                                                                                                14,595
                                                                                                
                                                                                                
                                                                                                
                                                                                                40,504
                                                                                                
                                                                                                
                                                                                                
                                                                                                46,575
                                                                                                
                                                                                                
                                                                                                
                                                                                                232,969Investor relations
                                                                                                
                                                                                                
                                                                                                1,316
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,809
                                                                                                
                                                                                                
                                                                                                
                                                                                                696,191
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,809
                                                                                                
                                                                                                
                                                                                                
                                                                                                769,989Licenses and taxes
                                                                                                
                                                                                                
                                                                                                3,187
                                                                                                
                                                                                                
                                                                                                
                                                                                                50,248
                                                                                                
                                                                                                
                                                                                                
                                                                                                21,393
                                                                                                
                                                                                                
                                                                                                
                                                                                                145,330
                                                                                                
                                                                                                
                                                                                                
                                                                                                382,745Management fees
                                                                                                
                                                                                                
                                                                                                34,800
                                                                                                
                                                                                                
                                                                                                
                                                                                                34,800
                                                                                                
                                                                                                
                                                                                                
                                                                                                104,400
                                                                                                
                                                                                                
                                                                                                
                                                                                                104,400
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,500,790Office
                                                                                                
                                                                                                
                                                                                                17,091
                                                                                                
                                                                                                
                                                                                                
                                                                                                15,749
                                                                                                
                                                                                                
                                                                                                
                                                                                                25,624
                                                                                                
                                                                                                
                                                                                                
                                                                                                34,313
                                                                                                
                                                                                                
                                                                                                
                                                                                                175,112Professional fees
                                                                                                
                                                                                                
                                                                                                29,891
                                                                                                
                                                                                                
                                                                                                
                                                                                                39,906
                                                                                                
                                                                                                
                                                                                                
                                                                                                94,782
                                                                                                
                                                                                                
                                                                                                
                                                                                                171,159
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,466,011Rent
                                                                                                
                                                                                                
                                                                                                20,622
                                                                                                
                                                                                                
                                                                                                
                                                                                                23,857
                                                                                                
                                                                                                
                                                                                                
                                                                                                55,303
                                                                                                
                                                                                                
                                                                                                
                                                                                                76,635
                                                                                                
                                                                                                
                                                                                                
                                                                                                373,309Telephone
                                                                                                
                                                                                                
                                                                                                4,234
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,170
                                                                                                
                                                                                                
                                                                                                
                                                                                                10,120
                                                                                                
                                                                                                
                                                                                                
                                                                                                16,160
                                                                                                
                                                                                                
                                                                                                
                                                                                                84,219Transfer agent fees
                                                                                                
                                                                                                
                                                                                                905
                                                                                                
                                                                                                
                                                                                                
                                                                                                560
                                                                                                
                                                                                                
                                                                                                
                                                                                                2,370
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,913
                                                                                                
                                                                                                
                                                                                                
                                                                                                13,593Travel and vehicle
                                                                                                
                                                                                                
                                                                                                42,270
                                                                                                
                                                                                                
                                                                                                
                                                                                                34,947
                                                                                                
                                                                                                
                                                                                                
                                                                                                96,825
                                                                                                
                                                                                                
                                                                                                
                                                                                                123,110
                                                                                                
                                                                                                
                                                                                                
                                                                                                961,858Loss before other items
                                                                                                
                                                                                                
                                                                                                (433,433
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (817,808
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (2,522,125
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (2,625,262
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (16,632,718
                                                                                                )Gain (loss) on sale of marketable
      securities
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                87,217Adjustment to market for
      marketable securities
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (67,922
                                                                                                )Gain onForeign
      exchange
                                                                                                
                                                                                                
                                                                                                9,056
                                                                                                
                                                                                                
                                                                                                
                                                                                                (141,335
                                                                                                )
                                                                                                
                                                                                                
                                                                                                27,179
                                                                                                
                                                                                                
                                                                                                
                                                                                                (124,868
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (169,795
                                                                                                )Loss on sale of assets
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (7,465
                                                                                                )
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (19,176
                                                                                                )Dividend income
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                4,597Interest income
                                                                                                
                                                                                                
                                                                                                360
                                                                                                
                                                                                                
                                                                                                
                                                                                                3,269
                                                                                                
                                                                                                
                                                                                                
                                                                                                1,372
                                                                                                
                                                                                                
                                                                                                
                                                                                                30,385
                                                                                                
                                                                                                
                                                                                                
                                                                                                346,747Change in fair value of
      warrants
                                                                                                
                                                                                                
                                                                                                998,012
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (903,450
                                                                                                )
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (903,450
                                                                                                )Financing agreement
      penalty
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (330,000
                                                                                                )Net  income (loss) and comprehensive
      income (loss) for the period
                                                                                                
                                                                                                
                                                                                                573,995
                                                                                                
                                                                                                
                                                                                                
                                                                                                (955,874
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (3,404,489
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (2,719,745
                                                                                                )
                                                                                                
                                                                                                
                                                                                                (17,684,500
                                                                                                )Preferred stock
      dividends
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
                                                                                                
                                                                                                
                                                                                                
                                                                                                (1,537,500
                                                                                                )Net income (loss) Available for
      Distribution
                                                                                                
                                                                                                $
                                                                                                573,995
                                                                                                
                                                                                                
                                                                                                $
                                                                                                (955,874
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (3,404,489
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (2,719,745
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (19,222,000
                                                                                                )Basic and diluted earnings (loss) per Common
      Share
                                                                                                
                                                                                                $
                                                                                                0.02
                                                                                                
                                                                                                
                                                                                                $
                                                                                                (0.03
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (0.10
                                                                                                )
                                                                                                
                                                                                                $
                                                                                                (0.09
                                                                                                )
                                                                                                
                                                                                                
                                                                                                -Weighted average number of Common
      Shares
                                                                                                  Outstanding
                                                                                                
                                                                                                
                                                                                                34,472,520
                                                                                                
                                                                                                
                                                                                                
                                                                                                29,199,542
                                                                                                
                                                                                                
                                                                                                
                                                                                                33,477,669
                                                                                                
                                                                                                
                                                                                                
                                                                                                29,189,133
                                                                                                
                                                                                                
                                                                                                
                                                                                                -
 
 See notes
to the unaudited consolidated condensed financial statements
  3
  WHITE
MOUNTAIN TITANIUM CORPORATION
 (An
Exploration Stage Company)
 Consolidated
Condensed Statements of Stockholders’ Equity
 (US
Funds)
  
 Shares
                      
                      
                      Common
      Stock
                        and
      Paid-In
                        Capital
      in
                        Excess
      of
                        Par
      Value
                      
                      
                      Shares
      of
                        Preferred
      Stock
                      
                      
                      Preferred
      Stock
                        and
      Paid-in
                        Capital
      in
                        Excess
      of
                        Par
      Value
                      
                      
                      Subscriptions
                        Receivable
                      
                      
                      Subscriptions
                        Received
                      
                      
                      Accumulated
                        Deficit
                      
                      
                      Total
                        Stockholders’
                        EquityBalance,
      December 31, 2007
                      
                      
                      29,189,133
                      
                      
                      $
                      15,918,522
                      
                      
                      
                      625,000
                      
                      
                      $
                      500,000
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (13,007,211
                      )
                      
                      $
                      3,411,311Stock-based
      compensation
                      
                      
                      -
                      
                      
                      
                      45,339
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      45,339Shares
      issued for cashPrivate
      placement
                      
                      
                      2,814,909
                      
                      
                      
                      1,967,086
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,967,086Net
      loss for the year
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (3,175,908
                      )
                      
                      
                      (3,175,908
                      )Balance,
      December 31, 2008
                      
                      
                      32,004,042
                      
                      
                      $
                      17,930,947
                      
                      
                      
                      625,000
                      
                      
                      $
                      500,000
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (16,183,119
                      )
                      
                      $
                      2,247,828Stock-based
      compensation
                      
                      
                      
                      
                      
                      
                      1,024,122
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,024,122Warrants
      exercised
                      
                      
                      2,100,000
                      
                      
                      
                      1,045,340
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1,045,340Reduction
      in warrant liability on exercise
                      
                      
                      
                      
                      
                      
                      199,000
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      199,000Bonus
      shares
                      
                      
                      400,000
                      
                      
                      
                      164,000
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      164,000Cumulative
      effect of EITF 07-5 application
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (1,084,375
                      )
                      
                      
                      (1,084,375
                      )Net
      loss for the period
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (3,404,489
                      )
                      
                      
                      (3,404,489
                      )Balance,
      September 30, 2009
                      
                      
                      34,504,042
                      
                      
                      $
                      20,363,409
                      
                      
                      
                      625,000
                      
                      
                      $
                      500,000
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (20,671,983
                      )
                      
                      $
                      191,426
 
 See notes
to the unaudited consolidated condensed financial statements
  4
  WHITE
MOUNTAIN TITANIUM CORPORATION
 (An
Exploration Stage Company)
 Consolidated
Condensed Statements of Cash Flows
 (US
Funds)
  
 CumulativeFrom
      InceptionNovember
      13,2001
      throughNine
      months ended Sept. 30
                            
                            
                            Sept.
      302009
                            
                            
                            2008
                            
                            
                            2009Unaudited
                            
                            
                            Unaudited
                            
                            
                            UnauditedOperating
      ActivitiesNet
      loss for period
                            
                            $
                            (3,404,489
                            )
                            
                            $
                            (2,719,745
                            )
                            
                            $
                            (17,684,500
                            )Items
      not involving cashAmortization
                            
                            
                            15,206
                            
                            
                            
                            17,483
                            
                            
                            
                            110,786Stock-based
      compensation
                            
                            
                            1,024,122
                            
                            
                            
                            57,056
                            
                            
                            
                            3,188,211Common
      stock issued for services
                            
                            
                            164,000
                            
                            
                            
                            -
                            
                            
                            
                            2,121,630Change
      in fair value of warrants
                            
                            
                            704,450
                            
                            
                            
                            -
                            
                            
                            
                            704,450Common
      stock adjustment - FV of warrants
                            
                            
                            199,000
                            
                            
                            
                            -
                            
                            
                            
                            199,000Financing
      agreement penalty
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            330,000Adjustment
      to market – securities
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            67,922Gain
      on sale of marketable securities
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (87,217
                            )Loss
      on sale of assets
                            
                            
                            7,465
                            
                            
                            
                            -
                            
                            
                            
                            (4,246
                            )Non-cash
      resource property expenditures
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            600,000Changes
      in Non-Cash Working CapitalReceivables
                            
                            
                            (5,259
                            )
                            
                            
                            (25,430
                            )
                            
                            
                            (20,905
                            )Marketable
      securities
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            19,295Accounts
      payable and accrued liabilities
                            
                            
                            25,886
                            
                            
                            
                            7,969
                            
                            
                            
                            61,663Prepaid
      expenses
                            
                            
                            7,720
                            
                            
                            
                            845
                            
                            
                            
                            (46,810
                            )Cash
      Used in Operating Activities
                            
                            
                            (1,261,899
                            )
                            
                            
                            (2,661,822
                            )
                            
                            
                            (10,440,721
                            )Investing
      ActivitiesAddition
      to property and equipment
                            
                            
                            (25,091
                            )
                            
                            
                            (85,780
                            )
                            
                            
                            (194,979
                            )Mineral
      property acquisition costs
                            
                            
                            -
                            
                            
                            
                            
                            
                            
                            
                            (651,950
                            )Cash
      Used in Investing Activities
                            
                            
                            (25,091
                            )
                            
                            
                            (85,780
                            )
                            
                            
                            (846,929
                            )Financing
      ActivitiesRepayment
      of long-term debt
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (100,000
                            )Issuance
      of Preferred Stock
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            5,000,000Issuance
      of common stock
                            
                            
                            1,045,340
                            
                            
                            
                            -
                            
                            
                            
                            7,390,289Stock
      subscriptions received
                            
                            
                            -
                            
                            
                            
                            1,994,651
                            
                            
                            
                            120,000Stock
      subscriptions receivable
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            111,000Sale
      of surplus assets
                            
                            
                            8,362
                            
                            
                            
                            -
                            
                            
                            
                            8,362Working
      capital acquired on acquisition
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            171Cash
      Provided by Financing Activities
                            
                            
                            1,053,702
                            
                            
                            
                            1,994,651
                            
                            
                            
                            12,529,822(Outflow)
      Inflow of Cash and equivalents
                            
                            
                            (233,288
                            )
                            
                            
                            (752,951
                            )
                            
                            
                            1,242,172Cash
      and Equivalents, beginning of period
                            
                            
                            1,475,460
                            
                            
                            
                            2,678,652
                            
                            
                            
                            -Cash
      and Cash Equivalents, end of period
                            
                            $
                            1,242,172
                            
                            
                            $
                            1,925,701
                            
                            
                            $
                            1,242,172Supplemental
      Cash Flow InformationIncome
      tax paid
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Interest
      paid
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Shares
      Issued forWarrants
      exercised
                            
                            $
                            1,045,340
                            
                            
                            $
                            -
                            
                            
                            $
                            1,045,340Settlement
      of debt
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            830,000Services
                            
                            $
                            164,000
                            
                            
                            $
                            -
                            
                            
                            $
                            2,121,630Penalty
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            187,500
 
 See notes
to the unaudited consolidated condensed financial statements
  5
  1.
                NATURE
      OF BUSINESS AND BASIS OF
PRESENTATION
 
 White
Mountain Titanium Corporation (the “Company”) currently has no ongoing
operations. Its principal business is to advance exploration and development
activities on the Cerro Blanco rutile (titanium dioxide) property (“Cerro
Blanco”) located in Region III of northern Chile. The Company is considered an
exploration stage company and its financial statements are presented in a manner
similar to a development stage company as defined in Statement of Financial
Accounting Standards (“SFAS”) No. 7.
  The
accompanying financial statements have been prepared by the Company without
audit.  In the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2009 and 2008
and for the periods then ended have been made.  Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted.  It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company’s December 31,
2008 audited financial statements included in the Company’s 2008 annual report
on Form 10-K filed with the SEC.  The results of operations for the periods
ended September 30, 2009 and 2008 are not necessarily indicative of the
operating results for the full year.
 
 2.
              PROPERTY
      AND EQUIPMENT
 
 September 30, 2009
                                UnauditedAccumulatedCost
                              
                              
                              Amortization
                              
                              
                              NetVehicles
                              
                              $
                              54,153
                              
                              
                              $
                              36,538
                              
                              
                              $
                              17,615Office
      furniture
                              
                              
                              17,363
                              
                              
                              
                              2,560
                              
                              
                              
                              14,803Office
      equipment
                              
                              
                              9,867
                              
                              
                              
                              3,631
                              
                              
                              
                              6,236Computer
      equipment
                              
                              
                              8,197
                              
                              
                              
                              4,794
                              
                              
                              
                              3,403Computer
      software
                              
                              
                              1,142
                              
                              
                              
                              606
                              
                              
                              
                              536Field equipment
                              
                              
                              62,814
                              
                              
                              
                              25,330
                              
                              
                              
                              37,484$
                              153,536
                              
                              
                              $
                              73,459
                              
                              
                              $
                              80,077
 
 December
      31, 2008AccumulatedCost
                            
                            
                            Amortization
                            
                            
                            NetVehicles
                            
                            $
                            70,534
                            
                            
                            $
                            32,050
                            
                            
                            $
                            38,484Office
      furniture
                            
                            
                            2,704
                            
                            
                            
                            1,846
                            
                            
                            
                            858Office
      equipment
                            
                            
                            5,417
                            
                            
                            
                            2,829
                            
                            
                            
                            2,588Computer
      equipment
                            
                            
                            7,553
                            
                            
                            
                            3,631
                            
                            
                            
                            3,922Computer
      software
                            
                            
                            1,142
                            
                            
                            
                            436
                            
                            
                            
                            706Field
      equipment
                            
                            
                            62,419
                            
                            
                            
                            22,958
                            
                            
                            
                            39,461$
                            149,769
                            
                            
                            $
                            63,750
                            
                            
                            $
                            86,019
  6


3.
                CAPITAL
      STOCK
 
 (a)
                Common
    stock
 
 The
Company’s authorized:
 i) Common stock with a par value of
$0.001 is 100,000,000 shares.
 ii) Preferred stock with a par value of
$0.001 is 20,000,000 shares.
 
 (b)
                Stock
      options
 
 During
the nine months ended September 30, 2009, no stock options were granted. The
portion of the 165,000 stock options granted in the second quarter of 2008 to
two new independent directors vested. As a result, $12,537 of unrecognized
stock-based compensation related to unvested options was recognized during the
current period.
  During
the nine month period ended September 30, 2009, 250,000 options were cancelled
and 100,000 previous granted options expired.
 
 The
Black-Scholes option pricing model calculated compensation based on the
following assumptions:
 (i)
 (ii)
 2009
                              
                              
                              2008Expected
      life (years)
                              
                              
                              N/A
                              
                              
                              
                              5Interest
      rate
                              
                              
                              N/A
                              
                              
                              
                              3.52
                              %Volatility
                              
                              
                              N/A
                              
                              
                              
                              57.12
                              %Dividend
      yield
                              
                              
                              N/A
                              
                              
                              
                              0
                              %
 
 Period
      endedSept.
      30, 2009
                                    Unaudited
                                  
                                  
                                  December
      31, 2008Weighted
                                  
                                  
                                  
                                  
                                  
                                  WeightedAverage
                                  
                                  
                                  
                                  
                                  
                                  AverageNumber
                                  
                                  
                                  Exercise
                                  
                                  
                                  Number
                                  
                                  
                                  Exerciseof
      Options
                                  
                                  
                                  Price
                                  
                                  
                                  of
      Options
                                  
                                  
                                  PriceOutstanding
      - beginning of period
                                  
                                  
                                  3,140,000
                                  
                                  
                                  $
                                  0.57
                                  
                                  
                                  
                                  2,975,000
                                  
                                  
                                  $
                                  0.50Granted
                                  
                                  
                                  -
                                  
                                  
                                  $
                                  0.00
                                  
                                  
                                  
                                  165,000
                                  
                                  
                                  $
                                  1.00Cancelled/expired
                                  
                                  
                                  (350,000
                                  )
                                  
                                  $
                                  0.50
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Outstanding
      – end of period
                                  
                                  
                                  2,790,000
                                  
                                  
                                  $
                                  0.58
                                  
                                  
                                  
                                  3,140,000
                                  
                                  
                                  $
                                  0.57Exercisable
      - end of period
                                  
                                  
                                  2,790,000
                                  
                                  
                                  $
                                  0.58
                                  
                                  
                                  
                                  3,078,125
                                  
                                  
                                  $
                                  0.57
  At the
quarter ended September 30, 2009, the following director and consultant stock
options were outstanding:
  Exercise
                                        
                                        
                                        September
      30, December 31,Expiry
      Date
                                        
                                        Price
                                        
                                        
                                        2009
                                        
                                        
                                        2008August
      1, 2009
                                        
                                        $
                                        2.00
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        100,000April
      5, 2010
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        250,000January
      31, 2011
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        400,000
                                        
                                        
                                        
                                        400,000May
      31, 2011
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        600,000
                                        
                                        
                                        
                                        600,000August
      1, 2011
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        200,000
                                        
                                        
                                        
                                        200,000August
      31, 2011
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        350,000
                                        
                                        
                                        
                                        350,000August
      31, 2012
                                        
                                        $
                                        0.50
                                        
                                        
                                        
                                        1,075,000
                                        
                                        
                                        
                                        1,075,000June
      23, 2013
                                        
                                        $
                                        1.00
                                        
                                        
                                        
                                        165,000
                                        
                                        
                                        
                                        165,0002,790,000
                                        
                                        
                                        
                                        3,140,000
 
 7
 
  3.            CAPITAL
STOCK
  (b)
                Stock options
      (continued)
 
 The
shares under option at September 30, 2009 were in the following exercise price
ranges:
 
 Options
      Exercisable and OutstandingExercise
      Price
                                  
                                  Weighted
                                    Average
                                    Exercise
      Price
                                  
                                  
                                  Number
      of
                                    Shares
      Under
                                    Option
                                  
                                  
                                  Aggregate
                                    Intrinsic
      Value
                                  
                                  
                                  Weighted
      Average
                                    Remaining
                                    Contractual
      Life in
                                    Years$0.50
                                  
                                  $
                                  0.50
                                  
                                  
                                  
                                  2,625,000
                                  
                                  
                                  $
                                  28,750
                                  
                                  
                                  
                                  2.03$1.00
                                  
                                  $
                                  1.00
                                  
                                  
                                  
                                  165,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3.73$
                                  0.58
                                  
                                  
                                  
                                  2,790,000
                                  
                                  
                                  $
                                  28,750
                                  
                                  
                                  
                                  2.27
  (c)
                Stock-based
      compensation
 
 During
the nine months ended September 30, 2009, the total stock-based compensation
recognized under the fair value method was $1,024,122.
 
 Stock
based compensation was reported in the first quarter with respect to 400,000
shares issued two officers and directors of the Company upon attaining
previously determined milestones as established by the Compensation committee. A
fair value of $164,000 (2008: $nil) was attributed to these shares based on a
fair market value of $0.41 per share and was charged to Consulting fees –
directors and officers.
 
 During
the six months ended June 30, 2009, $216,310 was charged to consulting/directors
and officers fees (2008: $42,792), and $77,130 (2008: $nil) related to the
warrants issued during the period (note 3(d)), and $694,875 (2008: $nil) was
charged to investor relations as a result of an extension of the expiry date of
4,250,000 warrants (Note 3(d)). All amounts were determined using the
Black-Scholes option pricing model (Note 3(b)). During the six months ended June
30, 2009, $23,271 (2008: $45,339) was charged to Consulting fees in relation to
unvested stock options issued in a prior period (note 3(b)).
  During
the nine months ended September 30, 2009 the remaining balance of $12,537
attributable to past option issuances was charged to Consulting fees, directors
and officers.
 
 The total
stock-based compensation recognized under the fair value method to various
parties was as follows:
 
 Sept.
      30,
                                
                                
                                Dec
      31,
                                
                                
                                Dec.
      31,2009
                                
                                
                                2008
                                
                                
                                2007Investor
      relations
                                
                                $
                                694,874
                                
                                
                                $
                                -
                                
                                
                                $
                                -Consulting
      fees- directors and officers
                                
                                
                                252,118
                                
                                
                                
                                45,339
                                
                                
                                
                                359,227Consulting
      fees
                                
                                
                                77,130
                                
                                
                                
                                -
                                
                                
                                
                                248,507Management
      fees
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                110,450Compensation
      - options
                                
                                $
                                1,024,122
                                
                                
                                $
                                45,339
                                
                                
                                $
                                718,184
 
 8
 
 3.            CAPITAL
STOCK
 
 (d)
                Warrants
 
 Details
of stock purchase warrant activity is as follows:
 
 September
      30, 2009
                                    (Unaudited)
                                  
                                  
                                  December
      31, 2008
                                    (Audited)Number
                                    of
      Shares
                                  
                                  
                                  Weighted
                                    Average
                                    Exercise
                                    Price
                                  
                                  
                                  Number
                                    of
      Shares
                                  
                                  
                                  Weighted
                                    Average
                                    Exercise
                                    PriceOutstanding
      - beginning of period
                                  
                                  
                                  13,022,600
                                  
                                  
                                  $
                                  0.54
                                  
                                  
                                  
                                  13,022,600
                                  
                                  
                                  $
                                  0.54Issued
                                  
                                  
                                  485,000
                                  
                                  
                                  $
                                  0.58
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Exercised
                                  
                                  
                                  (2,100,000
                                  )
                                  
                                  $
                                  0.50
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Expired
                                  
                                  
                                  (925,000
                                  )
                                  
                                  $
                                  0.50
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Outstanding
      - end of period
                                  
                                  
                                  10,482,600
                                  
                                  
                                  $
                                  0.56
                                  
                                  
                                  
                                  13,022,600
                                  
                                  
                                  $
                                  0.54
 
 During
the period ended September 30, 2009:
 
 ·
                Two
      million warrants were exercised by a European institutional investor. The
      balance of 4.25 million warrants held by the investor had their expiry
      date extended from July 11, 2009 to April 1, 2011. A cashless exercise
      provision was added to the warrants in the event the Company fails to
      reasonably maintain an effective registration statement for the shares
      issuable upon exercise of the
warrants;
 ·
                150,000
      warrants having an exercise price of $0.75 and an expiry date of June 30,
      2011 we issued to a consultant for services. An additional 335,000
      warrants having an exercise price of $0.50 and an expiry date of June 30,
      2012 were issued to two independent directors in lieu of stock options.
      Stock based compensation totaling $293,440 was recorded with respect to
      these issuances;
 ·
                100,000
      warrants were exercised at a price of $0.50 for gross proceeds of $50,000;
      and
 ·
                925,000
      warrants with an exercise price of $0.50 expired
    unexercised.
  As at
September 30, 2009 the following share purchase warrants were
outstanding:
 
 Expiry
      Date
                                      
                                      Exercise
      Price
                                      
                                      
                                      Sept.
      30, 2009
                                      
                                      
                                      December
      31, 2008July
      11, 2009
                                      
                                      $
                                      0.50
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      6,550,000April
      1, 2011
                                      
                                      $
                                      0.50
                                      
                                      
                                      
                                      4,250,000
                                      
                                      
                                      
                                      -September
      7, 2009
                                      
                                      $
                                      0.50
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      625,000August
      10, 2010
                                      
                                      $
                                      0.60
                                      
                                      
                                      
                                      5,847,600
                                      
                                      
                                      
                                      5,847,600June
      30, 2011
                                      
                                      $
                                      0.75
                                      
                                      
                                      
                                      150,000
                                      
                                      
                                      
                                      -June
      30, 2012
                                      
                                      $
                                      0.50
                                      
                                      
                                      
                                      235,000
                                      
                                      
                                      
                                      -10,482,600
                                      
                                      
                                      
                                      13,022,600
  9
  3.
              CAPITAL
      STOCK
 
 (d)
              Warrants
      (continued)
  In June
2008, the FASB ratified the consensus reached on Emerging Issues Task Force
(EITF) Issue No. 07-05, Determining Whether an Instrument (or Embedded Feature)
Is Indexed to an Entity’s Own Stock. EITF Issue No. 07-05 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an
entity’s own stock, which would qualify as a scope exception under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. We adopted EITF
Issue No. 07-05 as of January 1, 2009. During the year ended 2007, the Company
repriced previously issued warrants for 6,875,000 shares of our Common Stock in
a private placement to an institutional investor. These warrants were reassessed
under EITF 07-5 and due to a price adjustment clause included in these warrants,
such warrants are no longer deemed to be indexed to our stock and therefore, no
longer meet the scope exception of FAS 133. Therefore, these warrants were
reclassified to a liability and will be adjusted to fair value on a quarterly
basis going forward. As a result, we recorded a cumulative catch up adjustment
of $1,084,375 to accumulated deficit on January 1, 2009.
  The fair
value of these warrants decreased to $991,687 as of March 31, 2009. As such, the
$92,688 change in fair value was recorded in the statement of operations for the
three months ended March 31, 2009.
 
 During
the quarter ended June 30, 2009, 2,000,000 warrants were exercised and as such
the fair value of $199,000 attributed to these warrants was transferred to
additional paid in capital. The fair value of the remaining warrants increased
to $2,786,837 as of June 30, 2009. As such, the $1,994,150 change in fair value
was recorded in the statement of operations for the three months ended June 30,
2009.
 
 During
the quarter ended September 30, 2009 the fair value of the warrants decreased to
$1,788,825.  As such, the $998,012 change in fair value was recorded
in the statement of operations for the three months ended September 30,
2009
 
 4.
              EARNINGS
      PER SHARE
 
 The
Company computes net income (loss) per share in accordance with SFAS No. 128,
"Earnings per Share". SFAS No. 128 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the income statement. Basic EPS
is computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if converted method. In computing Diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is anti
dilutive. Basic and diluted loss per share is computed using the weighted
average number of common shares outstanding:
  Weighted
      average number of shares
                      
                      
                      34,472,520Options
      (see below)
                      
                      
                      741,646Warrants
      (See below)
                      
                      
                      3,051,89638,266,062Diluted
      Earnings per share
                      
                      
                      0.02
 
 5.
              FAIR
      VALUE OF MEASUREMENTS
 
 The
Company’s financial instruments consist of cash and cash equivalents,
receivables, and accounts payable and accrued liabilities.  The
carrying amounts of these instruments approximate their respective fair values
because of the short maturities of those instruments.
 
 Liabilities
measured at market value on a recurring basis include warrant liability
resulting from our recent equity financing.  In accordance with the
guide which is now ASC 815-40 (formally EITF (Emerging Issues Task Force) 00-19,
Accounting for Derivative Financial Instruments Indexed and Potentially Settled
in a Company’s Own Stock), the warrant liabilities are being marked to market
each quarter-end until they are completely settled.  The warrants are
valued using a Black-Scholes method, using assumptions consistent with our
application of ASC 718 (previously SFAS 123R).  The gain or loss
resulting from the marked to market calculation is shown on the Consolidated
Condensed Statements of Operations as Change in fair value of
warrants.  The Company recognized a gain of $988,012 during the
quarter.
  10
  5.
              FAIR
      VALUE MEASUREMENTS (continued)
 
 The
Company adopted new guidance which is now part of ASC 820-10 (formerly Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 157),
Fair Value Measurements (“FAS 157”), effective January 1, 2008.  SFAS
157 does not require any new fair value measurements; instead it defines fair
value, establishes a framework for measuring fair value in accordance with
existing generally accepted accounting principles and expands disclosure about
fair value measurements.  The adoption of SFAS 157 for our financial
assets and liabilities did not have an impact on our financial position or
operating results.  Beginning January 1, 2008, assets and liabilities
recorded at fair value in consolidated balance sheets are categorized based upon
the level of judgment associated with the inputs used to measure fair
value.  Level inputs, as defined by SFAS 157, are as
follows:
 
 ·
                Level
      1 - quoted
      prices in active markets for identical assets or
    liabilities
 ·
                Level
      2 - other
      significant observable inputs for the assets or liabilities through
      corroboration with market data at the measurement
  date
 ·
                Level
      3 - significant
      unobservable inputs that reflect management’s best estimate of what market
      participants would use to price the assets or liabilities at the
      measurement date.
 
 The
following table summarizes fair value measurement by level at September 30, 2009
for assets and liabilities measured at fair value on a recurring
basis.
 
 Level
      I
                            
                            
                            Level
      II
                            
                            
                            Level
      III
                            
                            
                            TotalCash
      and cash equivalents
                            
                            
                            1,242,172
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            1,242,172Receivables
                            
                            
                            20,905
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            $
                            20,905Accounts
      Payable and Accrued Liabilties
                            
                            
                            61,663
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            $
                            61,663Other
      liabilities - warrants
                            
                            
                            
                            
                            
                            
                            1,788,825
                            
                            
                            
                            
                            
                            
                            $
                            1,788,825
 
 6.
              SUBSEQUENT
      EVENTS
 
 Subsequent
events have been evaluated through November 5, 2009, the date these financial
statements were issued.
 
 On
October 16, 2009 the Company closed on a previously announced private
placement.  Subscriptions were accepted for 1,496,930 shares at a
price of $0.65 per share for gross proceeds of $973,005.  Commissions
of $68,110 were paid and broker’s warrants were issued for 104,785 shares at a
price of $0.90 exercisable until April 15, 2011.
  11
  Item 2. Management’s
Discussion and Analysis
 
 The
following discussion should be read in conjunction with our unaudited
consolidated financial statements and related notes thereto as filed with this
report.
 
 Background
 
 We are a
mineral exploration company.  We hold mining concessions composed of
33 registered mining exploitation concessions, and 5 exploration concessions,
over approximately 8,225 hectares located approximately 39 kilometers west of
the City of Vallenar in the Atacama, or Region III, geographic region of
northern Chile (hereinafter referred to as “Cerro Blanco”).  We are in
the exploration stage, which means we are engaged in the search for mineral
deposits or reserves which could be economically and legally extracted or
recovered.  Our primary expenditures at this stage consist of
acquisition and exploration costs and general and administration
expenses.  We have produced no revenues, have achieved losses since
inception, have no operations, and currently rely upon the sale of our
securities to fund our operations.
 
 Plan
of Operation
 
 We
completed the acquisition of an undivided interest in Cerro Blanco in September
2005.  Exploration drilling by us and the previous owner has defined
rutile mineralization.  Metallurgical test work performed by Lakefield
Research has demonstrated that this mineralization can be concentrated to a
level meeting buyer specifications and can be produced using a conventional
milling and flotation process.
 
 Over the
next twelve to twenty-four months we have two principal objectives: to advance
the project towards a final engineering feasibility level and to secure off-take
contracts for the planned rutile concentrate output.  We also continue
to investigate the commercial viability of producing a feldspar
co-product.  The feldspar could find applications in the glass and
ceramics industries.
 
 Marketing
 
 We
commenced a marketing and market awareness program in 2007 directed at potential
buyers of rutile, and have engaged a consultant with extensive experience in the
international pigments business, to evaluate and advise on the
market.  The marketing program includes provision for testing of
samples of Cerro Blanco rutile concentrates at the buyers’ operations and,
subject to technical acceptability, will end with the negotiation of off-take
contracts.
 
 In April
2008 executive management and our marketing team attended the Industrial
Minerals Conference in Athens Greece.  At this event we also met with
buyers of high grade rutile concentrate.  We received considerable
interest in our projects, with questions concentrating on tonnage as opposed to
pricing, a major change in perspective from past conferences.
 
 In March
2009, the Company’s marketing consultant attended the Intertech Titanium
Conference held in Rome.  He advised management that the consensus
view held by most titanium industry experts is that the combination of firm
demand together with limited new supply of high quality titanium ores such as
natural and synthetic rutile will result in ore prices continuing to firm. This
is a significant reversal to the view held 5 years ago that largely as a
consequence of increasing quantities of chloride slag from several new Southern
African producers, titanium ores would be in oversupply and that ore prices
would weaken.  Over the last 5 years, chloride slag has grown at a
slower rate, several new projects have been cancelled or deferred and existing
operations, rationalised.  In contrast titanium pigment production has
grown steadily and metal manufacture has taken off, leading to a tightening
market for titanium ores and rising prices.  For example, one major
pigment producer at the conference indicated that for 2009 they expect their
average price for rutile to increase by in excess of 6% to US$525-550 per tonne
for bulk tonnage deliveries, and US$650-700 for smaller volumes. Our consultant
concluded that titanium pigment producers are now demanding and buyers are
paying premium prices for high quality ores, particularly those with a high
concentration of TiO2 and low
levels of radioactivity.
 
 During
the second quarter, several one kilogram samples of the high grade titanium
concentrate obtained as a result of Stage 1 of the pilot plant program were sent
to various potential customers for evaluation.
 
 Based on
these discussions and preliminary marketing results, we continue to believe that
demand for our products will meet or exceed the planned capacity of the
currently anticipated proposed physical plant.  The market for
TiO2feedstock, particularly high grade rutile, appears to be entering a
growth period, with increased demand coming not only from the paint and pigment
industries, but also from welding rod manufacturers and metal
producers.  Our ability to enter this market, however, is subject to
significant risk factors, including our ability to raise sufficient funds to
meet the engineering plans noted above, as well as the successful completion of
pilot plant operations which produce product that meets purchaser’s
specifications.
  12
  Geology
and Engineering
 
 Geology
and Mineralization
 
 Management
believes the Cerro Blanco property contains a large and possibly unique type of
titanium mineralization.  Nevertheless, we are still in the
exploration stage of development and there are no known reserves on the
property.  The titaniferous mineral located on the property is clean
red-brown and black rutile which occurs disseminated with the tonalitic suite of
an alkalic diorite-gabbro-pyroxenite intrusive.  Its uniformly
disseminated nature and associated alteration endow it with strong similarities
to porphyry copper deposits.  Natural rutile concentrates such as
found on this property would be the preferred feed stock for both titanium metal
and pigment grade titanium dioxide production.
 
 Exploration
and Project Development Plans
 
 In
January, 2008 the Company retained Thomas A. Henricksen, PhD. and a qualified
person under Canadian National Instrument 43-101 to prepare a NI 43-101
compliant technical report on the Cerro Blanco property (the “Technical
Report”).  The Technical Report, which was dated February 25, 2008,
was based on extensive geological mapping, surface sampling, 14,078 meters of
drilling and a geological model developed by the Company.
 
 Following
completion of the Technical Report, the Company retained Dr. Henricksen to
compile a NI 43-101 compliant preliminary assessment of the Cerro Blanco project
(the “Assessment”). The Assessment, which was dated May 30, 2008, incorporated
by reference the Technical Report as well as reports prepared for the Company by
other independent experts in their fields.  The latter reports include
preliminary process engineering and costing report prepared by AMEC-Cade dated
March, 2008, a preliminary pit design report prepared by NCL Ingenieria y
Construccion dated May 2008, various metallurgical reports prepared by SGS
Lakefield, an environmental base line study prepared by Arcadis Geotecnica dated
December 2004 and titanium marketing information provided by the Company’s
marketing consultant.
 
 For
engineering design purposes, the Assessment adopted a base case set of
assumptions, the major assumptions being the construction of an open pit mine,
processing plant and ancillary facilities capable of producing 100,000 tonnes
per year of high grade rutile concentrate grading plus 94.5% TiO2 at start
up, scaling to 130,000 tonnes per year in production Year 4 at an assumed
undiluted head grade to the plant of 2.3% TiO2.  Mining
would commence on the Las Carolinas prospect and feed would be conveyed downhill
to a processing plant located less than two kilometers to the
northeast.  Within the plant, the process flow sheet consisted of a
semi-autogenous grinding mill, gravity pre-concentration and column flotation
circuits and high intensity magnetic separation with process water sourced from
a desalination plant constructed at the port of Huasco.
 
 Based on
these assumptions AMEC-Cade, our internationally recognized engineering
contractor, designed a processing plant with an initial operating capacity of
approximately 5.1 million tonnes per year, increasing to approximately 6.1
million tonnes per year by Year 4.  They estimated a cost to construct
the plant and ancillary facilities of US$117 million in direct costs and US$42
million in indirect costs, for a total of US$159 million.  To this
figure, and as this was a preliminary study, AMEC-Cade added a 20% contingency
to arrive at a total estimated cost of US$190 million. With respect to
processing plant operating costs, AMEC-Cade estimated site and transportation
costs to port of US$3.60 per tonne processed (US$184 per tonne of rutile
concentrate) in Year 1, dropping to US$3.50 per tonne processed (US$180 per
tonne of rutile concentrate) in Year 4. The anticipated reduction in operating
costs is attributed to increased volumes as well as increased efficiencies from
the gravity pre-concentration circuit.  Electric power consumption was
the highest single cost item, comprising approximately 31% of the total
estimated unit operating costs. AMEC-Cade recommended that the Company proceed
to the pilot stage and investigate two possibilities for reducing capital costs:
the use of sea water rather than desalinated water in the processing plant and
siting the plant elsewhere on the property to lower the installed cost of the
conveyor. Two alternate sites were identified.
  On April
8, 2009 we reported the completion of Stage 1 of the pilot plant program.
Following the extraction of approximately 500 tonnes of mineralized rock
representative of the Cerro Blanco Las Carolinas deposit (the “bulk sample”),
our engineering team undertook Stage 1 with the assistance of technical
consultants Centro de Investigacion Minera y Metalurgica Tecnologia y Servicios,
Cytec Chile Limitada  and AMEC-Cade.  The objective of the
program was to produce a high grade titanium concentrate from small quantities
of the bulk sample, using a conventional metallurgical flow sheet comprised of
gravity pre-concentration followed by flotation.
  Stage 1
succeeded in producing a high grade rutile concentrate even without high
intensity magnetic separation. Process recovery was over 92% and concentrate
grade, over 94% TiO2. This
result was obtained using normal water, at a neutral pH
(acidity).  Tests with sea water returned equally good product grades,
but the process recoveries were lower.  Test work on the use of sea
water as the aqueous medium in flotation is on-going.
  13
  On July
8, 2009 we entered into an agreement with SGS Lakefield ("SGS") to complete the
Stage 2 pilot plant test work program.  A 280 tonne bulk
representative sample from the Las Carolinas deposit of the Company's Cerro
Blanco titanium project was bagged for container transport to Lakefield,
Ontario.  During the quarter, the shipment left Chile by container
ship, and arrived in Canada, where stage 2 of the pilot plant test work program
commenced.
  On
November 5, 2009 we reported that the Stage 2 pilot plant test work program was
completed.  The program was overseen by Company management and
technical staff from the Santiago office of AMEC-Cade, the Company’s principal
engineering consultant.  The primary objective of the test work was to
produce a natural rutile, titanium dioxide concentrate which meets the chemical
and particulate specifications of titanium pigment and metal
producers.
  Drawing
upon a process flow sheet and procedures which have been developed and refined
over the past two years, the bulk sample is first crushed to -1/2 inch and then
ground to a particle size no finer than 100 mesh.  The ground sample
then passes through a gravity pre-concentration circuit where non-mineralized
material is rejected and mineralized material, collected.  The
collected mineralized material is expected to represent approximately 50% by
volume of the total material passing through the gravity pre-concentration
circuit, with a corresponding increase in grade.  For the bulk sample,
the expectation is that the grade of the gravity pre-concentrate passing to the
flotation circuit will be approximately 6% TiO2.
 
 The Stage
2 pilot plant test work program was conducted over a period of 10 days and was
completed on October 30, 2009.  The program consisted of a series of 9
hour trials culminating in a continuous 60 hour test run.  Crushed
bulk sample material with an average grade of 2.9% TiO2 was ground
to a fineness of 100 mesh and conveyed to a gravity pre-concentration circuit at
an average rate of 1.2 tonnes per hour.  The gravity pre-concentration
circuit rejected approximately 50% of non-mineralized material and the resultant
mineralized material was slurried to the flotation circuit at an average rate of
650 Kg per hour.
  SGS
expect to complete a final report on the Stage 2 pilot plant test work by the
end of November, at which time the Company will be in a position to make further
announcements on the program results including final chemical and particle size
analysis of the rutile concentrate, overall recovery and plant
efficiency.  Company management can, however, confirm that the Stage 2
pilot plant operated well and that previous process tests carried out by SGS at
a bench scale were well reproduced at the pilot plant
scale.  Management can as well confirm that the process flow sheet
circuit was very robust; there were no procedural or other issues which impeded
the test work and approximately 3 tonnes of high grade rutile concentrate has
been produced.
  Management
believes the Stage 2 piloting will provide valuable process data, which will be
incorporated in the final feasibility study.  Using the rutile
concentrate from the bulk sampling, our marketing team intends to supply
potential customers with bulk material for evaluation in commercial chlorinators
for pigment use and for titanium sponge metal applications.  We are
also evaluating the economics of feldspar production and its potential impact on
the project.
  We now
have a considerable body of engineering design and process engineering work
completed, both by us and previous owners, for the development of a large open
pit mine and milling operation.  The extent to which this engineering
work could be incorporated into a feasibility study will depend on factors such
as optimal plant sizing and configuration based on product volumes and
specifications set out in off-take contracts and process design, the latter to
be determined by refinements coming out of this year’s planned metallurgical
test work and pilot scale testing.  With off-take contracts in hand,
we would undertake a program of drilling to provide data for mine planning and
design, for an environmental impact assessment and permitting program, and to
commission a feasibility study.  As some of these activities would be
undertaken in tandem, we believe a feasibility study could be completed within
twelve to fourteen months of us receiving off-take contracts, subject to the
availability of funds, personnel and equipment.  We estimate the cost
to take the project to the point of commissioning a final engineering
feasibility study at approximately $3,408,000.  This figure includes a
20% contingency but excludes general and administrative expenses.  As
of November 12, 2009, our cash position was approximately
$1,955,000.  We currently do not have sufficient capital to complete
this plan and estimate that we will require additional financing to do
so.
  Also, as
an exploration stage company, our work is highly speculative and involves unique
and greater risks than are generally associated with other
businesses.  We cannot know if our mining concessions contain
commercially viable ore bodies or reserves until additional exploration work is
done and an evaluation based on such work concludes that development of and
production from the ore body is technically, economically, and legally
feasible.
 
 If we
proceed to development of a mining operation, our mining activities could be
subject to substantial operating risks and hazards, including environmental
hazards, industrial accidents, labor disputes, encountering unusual or
unexpected geologic formations or other geological or grade problems,
encountering unanticipated ground or water conditions, pit-wall failures,
flooding, rock falls, periodic interruptions due to inclement weather conditions
or other unfavorable operating conditions and other acts of God.  Some
of these risks and hazards are not insurable or may be subject to exclusion or
limitation in any coverage which we obtain or may not be insured due to economic
considerations.
  14
  Results
of Operations
 
 We
recorded a profit for the three months ended September $573,995 ($0.02) per
weighted average common share outstanding compared to a loss of $955,874
(($0.03) per share) for the comparable interim period in 2008.  This
was a direct result of a gain recorded due to the change in valuation of the
warrant liability in the quarter of $998,012.  Excluding this gain,
our loss for the quarter was $424,017. The principal reason for the difference
in the third quarter of 2009 compared to 2008 was the reduced level of
exploration expenditures as the activities of the Company were focused on the
pilot plant program and not field exploration.
 
 On a year
to date basis, for the nine months ended September 30, 2009 the loss was
$3,404,489 (($0.10) per share) compared to $2,719,745 (($0.09) per share) for
the comparable period in 2008.  Again, excluding the change in warrant
valuation of $903,450, our year to date loss is a more comparable to
$2,501,039.
 
 Generally
most expenses continue to be comparable or lower this quarter than in the
comparable quarter of 2008 and on a year to date basis.  The most
significant items are:
 
 ·
              On
      a year to date basis, consulting expense of $294,438 compared to $146,419
      in 2008 reflects the payment of the first installment on Stage 2 of the
      piloting program.  There will be significant additional
      expenditures in this area prior to year
end.
 
 ·
              Consulting
      fees – directors and officers was $128,319 (YTD - $692,299) compared to
      2008 expense of $91,964 (YTD - $288,156) as a result of stock based
      compensation recognized for previously issued options which vested during
      the period.
 
 ·
              Investor
      relations expense of $1,316 (YTD: $696,191) compared to $4,809 ($4,809)
      for 2008 reflects the stock based compensation expense recorded with
      respect to the revaluation of the warrants in second
    quarter.
 
 ·
              Interest
      revenue at $360 (YTD - $1,372) was down significantly from 2008 at $3,269
      (YTD - $30,385) due to continued lower US dollar denominated deposit
      interest rates.
 
 Recent
Accounting Pronouncements
 
 In June
2009, the FASB issued Accounting Standards Codification (“ASC”) 105, “Generally
Accepted Accounting Principles.” ASC 105 establishes the FASB Accounting
Standards Codification (“Codification”) 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 US GAAP
for Securities and Exchange Commission (“SEC”) registrants. All guidance
contained in the Codification carries an equal level of authority. The
Codification supersedes all existing non-SEC accounting and reporting standards.
The FASB will now issue new standards in the form of Accounting Standards
Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own
right. ASUs will serve only to update the Codification, provide background
information about the guidance and provide the basis for conclusions on the
changes in the Codification. References made to FASB guidance have been updated
for the Codification throughout this document. The Codification did not have an
impact on the Company’s condensed consolidated financial
statements.
 
 In
June 2009, the Company adopted guidance issued by the FASB and included in
ASC 855, “Subsequent Events,” which establishes general standards of accounting
for and disclosures of events that occur after the balance sheet date but before
the financial statements are issued or are available to be issued. It requires
the disclosure of the date through which an entity has evaluated subsequent
events. The additional disclosures required are included in Note 6.
 
 In April
2009, the Company adopted guidance issued by the FASB that requires disclosure
about the fair value of financial instruments for interim financial statements
of publicly traded companies, which is included in the Codification in ASC 825,
“Financial Instruments.” The adoption of ASC 825 did not have an impact on the
Company’s condensed consolidated financial statements.
 
 In
January 2009, the Company adopted guidance issued by the FASB that requires
enhanced disclosures regarding derivative instruments and hedging activities,
enabling a better understanding of their effects on an entity’s financial
position, financial performance and cash flows. The guidance is included in the
Codification in ASC 815, “Derivatives and Hedging.” The adoption of ASC 815 did
not have an impact on the Company’s condensed consolidated financial
statements.
 
 In
January 2009, the Company adopted guidance issued by the FASB and included in
(a.) ASC 805, “Business Combinations”, and (b.) ASC 810, “Non controlling
Interests in Consolidated Financial Statements.” The application of these ASCs
is intended to improve, simplify and converge internationally the accounting for
business combinations and the reporting of non-controlling interests in
consolidated financial statements. The adoption of these ASCs did not have any
impact on its condensed consolidated financial statements.
  15
  (a.) ASC
805 requires an acquiring entity in a business combination to: (i) recognize all
(and only) the assets acquired and the liabilities assumed in the transaction,
(ii) establish an acquisition-date fair value as the measurement objective for
all assets acquired and the liabilities assumed, and (iii) disclose to investors
and other users all of the information they will need to evaluate and understand
the nature of, and the financial effect of, the business combination, and, (iv)
recognize and measure the goodwill acquired in the business combination or a
gain from bargain purchase.
 
 (b.) ASC
810 is intended to improve the relevance, comparability and transparency of
financial information provided to investors by requiring all entities to: (i)
report non-controlling (minority) interests in subsidiaries in the same manner,
as equity but separate from the parent’s equity, in consolidated financial
statements, (ii) net income attributable to the parent and to the
non-controlling interest must be clearly identified and presented on the face of
the consolidated statement of income, and (iii) any changes in the parent’s
ownership interest while the parent retains the controlling financial interest
in its subsidiary be accounted for consistently.
 
 In August
2009, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Updates (“ASU”) 2009-05, Fair Value Measurements and Disclosures
(Topic 820) – Measuring Liabilities at Fair Value. This ASU clarifies how an
entity should measure the fair value of liabilities and that restrictions on the
transfer of a liability should not be included in its fair value measurement.
The effective date of this ASU is the first reporting period after issuance
date, August 26, 2009. The Company adopted this ASU for the quarter ended
September 30, 2009. The adoption of this ASU did not have an impact on the
Company’s condensed consolidated financial statements.
 
 Forward
Looking Statements
 
 The
statements contained in this report that are not historical facts are
forward-looking statements that represent management’s beliefs and assumptions
based on currently available information.  Forward-looking statements
include the information concerning our possible or assumed future results of
operations, business strategies, need for financing, competitive position,
potential growth opportunities, potential operating performance improvements,
ability to retain and recruit personnel, the effects of competition and the
effects of future legislation or regulations.  Forward-looking
statements include all statements that are not historical facts and can be
identified by the use of forward-looking terminology such as the words
“believes,” “intends,” “may,” “will,” “should,” “anticipates,” “expects,”
“could,” “plans,” or comparable terminology or by discussions of strategy or
trends.  Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot give any assurances that
these expectations will prove to be correct.  Such statements by their
nature involve risks and uncertainties that could significantly affect expected
results, and actual future results could differ materially from those described
in such forward-looking statements.  Among the factors that could
cause actual future results to differ materially are the risks and uncertainties
discussed in this report.  While it is not possible to identify all
factors, we continue to face many risks and uncertainties including, but not
limited to, the cyclicality of the titanium dioxide industry, global economic
and political conditions, global productive capacity, customer inventory levels,
changes in product pricing, changes in product costing, changes in foreign
currency exchange rates, competitive technology positions and operating
interruptions (including, but not limited to, labor disputes, leaks, fires,
explosions, unscheduled downtime, transportation interruptions, war and
terrorist activities).  Mining operations are subject to a variety of
existing laws and regulations relating to exploration and development,
permitting procedures, safety precautions, property reclamation, employee health
and safety, air and water quality standards, pollution and other environmental
protection controls, all of which are subject to change and are becoming more
stringent and costly to comply with.  Should one or more of these
risks materialize (or the consequences of such a development worsen), or should
the underlying assumptions prove incorrect, actual results could differ
materially from those expected.  We disclaim any intention or
obligation to update publicly or revise such statements whether as a result of
new information, future events or otherwise.
 
 Item
3.  Quantitative and Qualitative Disclosures About Market
Risk
 
 As a
smaller reporting company, we have elected not to provide the disclosure
required by this item.
 
 Item
4T.                      Controls and
Procedures
 
 Disclosure
Controls and Procedures
 
 Our
President and our CFO, after evaluating the effectiveness of our “disclosure
controls and procedures” (as defined in the Rule 15d-15 (e) under the Exchange
Act) as of the end of the period covered by this Quarterly Report on Form 10-Q
(the “Evaluation Date”), have concluded that as of the Evaluation Date, our
disclosure controls and procedures were effective to provide assurance that
information we are required to disclose in reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our principal executive and financial officers, as appropriate, to
allow timely decisions regarding required disclosure.
  16
  Changes
in Internal Control Over Financial Reporting
 
 There
were no changes in our internal control over financial reporting (as defined in
Rule 15d-15(f) under the Exchange Act) that occurred during our most recent
quarter ended September 30, 2009, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable and not absolute assurance that the objectives of the
system will be met. In addition, the design of any control system is based in
part upon certain assumptions about the likelihood of future
events.  Because of these and other inherent limitations of control
systems, there is only reasonable assurance that our controls will succeed in
achieving their stated goals under all potential future
conditions.
  17
  PART
II.  OTHER INFORMATION
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
 
 In
October 2009 we closed our offering of common shares at a price of $0.65 per
share.  We sold a total of 1,496,930 shares of common stock in the
offering for gross proceeds of $973,005.  These shares were sold
without registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Section 4(6) and/or Section 4(2)
thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not
involving any public offering.  Each of the 25 purchasers was an
accredited investor as defined in Regulation D.  Each investor
delivered appropriate investment representations with respect to this stock sale
and consented to the imposition of restrictive legends upon the stock
certificate representing the shares.  No investor entered into the
transaction with us as a result of or subsequent to any advertisement, article,
notice, or other communication published in any newspaper, magazine, or similar
media or broadcast on television or radio, or presented at any seminar or
meeting.  Each investor was also afforded the opportunity to ask
questions of our management and to receive answers concerning the terms and
conditions of the transaction.  The Company paid $68,110 in selling
commissions to a licensed selling agent in this offering and granted warrants to
purchase 104,785 shares at a price of $0.90 exercisable until April 15,
2011.
 
 The
foregoing warrants were granted to Chelsea Financial Services, a licensed
boker-dealer, in connection with the above-referenced offering.  These
warrants were issued without registration under the Securities Act by reason of
the exemption from registration afforded by the provisions of Section 4(6)
and/or Section 4(2) thereof, and Rule 506 promulgated thereunder, as a
transaction by an issuer not involving any public offering.  The
investor was an accredited investor as defined in Regulation D.  It
delivered appropriate investment representations with respect to this warrant
issuance and consented to the imposition of restrictive legends upon the
certificate representing the warrants.  The investor did not enter
into the transaction with us as a result of or subsequent to any advertisement,
article, notice, or other communication published in any newspaper, magazine, or
similar media or broadcast on television or radio, or presented at any seminar
or meeting.  The investor was also afforded the opportunity to ask
questions of our management and to receive answers concerning the terms and
conditions of the transaction.
 
 Item 6.
Exhibits
 
 The
following exhibits are furnished with this report:
 
 31.1
                  Rule
      15d-14(a) Certification by Principal Executive Officer31.2
                  Rule
      15d-14(a) Certification by Chief Financial Officer32.1
                  Section
      1350 Certification of Principal Executive Officer32.2
                  Section
      1350 Certification of Chief Financial
Officer
 
 SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
  White
      Mountain Titanium CorporationDate:
      November 13, 2009
                  By
                  /s/ Michael P. KurtanjekMichael
      P. Kurtanjek, President
                    (Principal
      Executive Officer)Date:
      November 13, 2009
                  By
                  /s/ Charles E. JenkinsCharles
      E. Jenkins, Chief Financial Officer
                    (Principal
      Financial Officer)
  18