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, 2010





 ̈
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 organization)
            (IRS
      Identification No.)





Augusto
Leguia 100, Oficina 812


Las
Condes, Santiago


Chile


(Address
of principal executive offices)





(56 2)
657-1800


(Issuer’s
telephone number)





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





44,382,012
shares of the issuer’s common stock, $.001 par value, were outstanding at
October 20, 2010.











PART
I. FINANCIAL INFORMATION





Item 1.  Financial
Statements





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Consolidated
Balance Sheets


(US
Funds)


(Unaudited)





September 30,
                                    2010
                                  
                                  
                                  December 31, 2009AssetsCurrentCash
      and cash equivalents
                                  
                                  $
                                  1,275,603
                                  
                                  
                                  $
                                  1,343,994Prepaid
      expenses
                                  
                                  
                                  59,314
                                  
                                  
                                  
                                  57,546Receivables
                                  
                                  
                                  46,700
                                  
                                  
                                  
                                  50,443Total
      Current Assets
                                  
                                  
                                  1,381,617
                                  
                                  
                                  
                                  1,451,983Property and Equipment(Note
      2)
                                  
                                  
                                  54,800
                                  
                                  
                                  
                                  73,927Mineral
      Properties
                                  
                                  
                                  651,950
                                  
                                  
                                  
                                  651,950Total
      Assets
                                  
                                  $
                                  2,088,367
                                  
                                  
                                  $
                                  2,177,860LiabilitiesCurrentAccounts
      payable and accrued liabilities
                                  
                                  $
                                  12,890
                                  
                                  
                                  $
                                  188,534Total
      Current Liabilities
                                  
                                  
                                  12,890
                                  
                                  
                                  
                                  188,534Other Liabilities – Warrants(Note
      3(d))
                                  
                                  
                                  923,100
                                  
                                  
                                  
                                  2,956,725Total
      Liabilities
                                  
                                  
                                  935,990
                                  
                                  
                                  
                                  3,145,259Stockholders’
      Equity (Deficit)Preferred Stock and Paid-in
      Capital in Excess of $0.001 Par Value (Note
    3(a))20,000,000  shares
      authorizedNIL
      (December 31, 2009 – 625,000) shares issued and
outstanding
                                  
                                  
                                  -
                                  
                                  
                                  
                                  500,000Common
      Stock and Paid-in Capital in Excessof $0.001 Par Value(Note
      3(a))100,000,000  shares
      authorized40,382,012
      (December 31, 2009 – 36,400,972) shares issued and
    outstanding
                                  
                                  
                                  24,490,006
                                  
                                  
                                  
                                  21,660,100Deficit
      Accumulated During the Exploration Stage
                                  
                                  
                                  (23,337,629
                                  )
                                  
                                  
                                  (23,127,499
                                  )Total
      Stockholders’ Equity (Deficit)
                                  
                                  
                                  1,152,377
                                  
                                  
                                  
                                  (967,399
                                  )Total
      Liabilities and Stockholders’ Equity (Deficit)
                                  
                                  $
                                  2,088,367
                                  
                                  
                                  $
                                  2,177,860





See notes
to unaudited consolidated condensed financial statements.




2




WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Consolidated
Condensed Statements of Operations


(US
Funds)


(Unaudited)





Three Months 
      Ended
                          September
      30
                        
                        
                        Nine Months Ended
                          September 30
                        
                        
                        Cumulative
                          From Inception
                          November 13,
                          2001 Through
                          September 30,2010
                        
                        
                        2009
                        
                        
                        2010
                        
                        
                        2009
                        
                        
                        2010ExpensesAdvertising
      and promotion
                        
                        $
                        47,212
                        
                        
                        $
                        11,665
                        
                        
                        $
                        79,052
                        
                        
                        $
                        29,316
                        
                        
                        $
                        305,716Amortization
                        
                        
                        7,363
                        
                        
                        
                        3,645
                        
                        
                        
                        21,166
                        
                        
                        
                        15,206
                        
                        
                        
                        162,271Bank
      charges and interest
                        
                        
                        2,023
                        
                        
                        
                        1,158
                        
                        
                        
                        7,234
                        
                        
                        
                        2,859
                        
                        
                        
                        34,802Consulting fees (Note
      3(c))
                        
                        
                        23,573
                        
                        
                        
                        -
                        
                        
                        
                        177,367
                        
                        
                        
                        294,438
                        
                        
                        
                        2,159,152Consulting fees – directors and officers (Note
      3(c))
                        
                        
                        86,430
                        
                        
                        
                        128,319
                        
                        
                        
                        693,990
                        
                        
                        
                        692,299
                        
                        
                        
                        4,729,363Engineering
      consulting
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        719,282Exploration
                        
                        
                        110,007
                        
                        
                        
                        119,756
                        
                        
                        
                        246,091
                        
                        
                        
                        335,719
                        
                        
                        
                        4,766,615Filing
      fees
                        
                        
                        -
                        
                        
                        
                        788
                        
                        
                        
                        22,236
                        
                        
                        
                        4,776
                        
                        
                        
                        75,113Insurance
                        
                        
                        12,365
                        
                        
                        
                        13,786
                        
                        
                        
                        35,314
                        
                        
                        
                        40,504
                        
                        
                        
                        281,536Investor relations, net (Note
      3(c))
                        
                        
                        335
                        
                        
                        
                        1,316
                        
                        
                        
                        335
                        
                        
                        
                        696,191
                        
                        
                        
                        770,324Licenses,
      taxes and filing fees, net
                        
                        
                        7,141
                        
                        
                        
                        3,187
                        
                        
                        
                        -
                        
                        
                        
                        21,393
                        
                        
                        
                        379,947Management fees (Note
      3(c))
                        
                        
                        95,026
                        
                        
                        
                        34,800
                        
                        
                        
                        556,542
                        
                        
                        
                        104,400
                        
                        
                        
                        2,092,132Office (Note
      3(c))
                        
                        
                        46,502
                        
                        
                        
                        17,091
                        
                        
                        
                        101,087
                        
                        
                        
                        25,624
                        
                        
                        
                        287,622Professional
      fees
                        
                        
                        46,509
                        
                        
                        
                        29,891
                        
                        
                        
                        131,654
                        
                        
                        
                        94,782
                        
                        
                        
                        1,676,568Rent
                        
                        
                        22,752
                        
                        
                        
                        20,622
                        
                        
                        
                        63,187
                        
                        
                        
                        55,303
                        
                        
                        
                        454,284Telephone
                        
                        
                        4,594
                        
                        
                        
                        4,234
                        
                        
                        
                        11,532
                        
                        
                        
                        10,120
                        
                        
                        
                        101,338Transfer
      agent fees
                        
                        
                        2,480
                        
                        
                        
                        905
                        
                        
                        
                        4,408
                        
                        
                        
                        2,370
                        
                        
                        
                        18,926Travel
      and vehicle
                        
                        
                        30,181
                        
                        
                        
                        42,270
                        
                        
                        
                        78,008
                        
                        
                        
                        96,825
                        
                        
                        
                        1,081,637Loss
      before other items
                        
                        
                        (544,493
                        )
                        
                        
                        (433,433
                        )
                        
                        
                        (2,229,203
                        )
                        
                        
                        (2,522,125
                        )
                        
                        
                        (20,096,628
                        )Gain
      on sale of marketable securities
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        87,217Loss
      on sale of assets
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (7,465
                        )
                        
                        
                        (19,176
                        )Adjustment
      to market for marketable securities
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (67,922
                        )Foreign
      exchange gain (loss)
                        
                        
                        3,062
                        
                        
                        
                        9,056
                        
                        
                        
                        (23,620
                        )
                        
                        
                        27,179
                        
                        
                        
                        (246,720
                        )Dividend
      income
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        4,597Interest
      income
                        
                        
                        3,079
                        
                        
                        
                        360
                        
                        
                        
                        9,068
                        
                        
                        
                        1,372
                        
                        
                        
                        356,211Change in fair
      value of warrants(Note
      3(d))
                        
                        
                        808,775
                        
                        
                        
                        998,012
                        
                        
                        
                        2,033,625
                        
                        
                        
                        (903,450
                        )
                        
                        
                        (1,122,099
                        )Financing
      agreement penalty
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (330,000
                        )Net
      and comprehensive income (loss) for the period
                        
                        
                        270,423
                        
                        
                        
                        573,995
                        
                        
                        
                        (210,130
                        )
                        
                        
                        (3,404,489
                        )
                        
                        
                        (21,434,520
                        )Preferred
      stock dividends
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (1,537,500
                        )Net
      Income (Loss) Available for Distribution
                        
                        $
                        270,423
                        
                        
                        $
                        573,995
                        
                        
                        $
                        (210,130
                        )
                        
                        $
                        (3,404,489
                        )
                        
                        $
                        (22,972,020
                        )Basic and
      Diluted Income (Loss) Per Share(Note 4)
                        
                        $
                        0.01
                        
                        
                        $
                        0.02
                        
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.10
                        )
                        
                        
                        -Weighted
      Average Number of Common Shares Outstanding
                        
                        
                        37,885,782
                        
                        
                        
                        34,472,520
                        
                        
                        
                        37,257,392
                        
                        
                        
                        33,477,669
                        
                        
                        
                        -





See notes
to unaudited consolidated condensed financial statements.





3




WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Consolidated
Condensed Statements of Cash Flows


(US
Funds)


(Unaudited)




Cumulative Periodfrom Inception(November 13,2001) ThroughNine Months Ended Sept. 30,
                    
                    
                    Sept. 30,2010
                    
                    
                    2009
                    
                    
                    2010(Unaudited)
                    
                    
                    (Unaudited)
                    
                    
                    (Unaudited)Operating
      ActivitiesNet
      loss for period
                    
                    $
                    (210,130
                    )
                    
                    $
                    (3,404,489
                    )
                    
                    $
                    (21,434,520
                    )Items
      not involving cashAmortization
                    
                    
                    21,166
                    
                    
                    
                    15,206
                    
                    
                    
                    150,560Stock-based
      compensation
                    
                    
                    146,682
                    
                    
                    
                    1,024,122
                    
                    
                    
                    3,334,893Loss
      on sale of assets
                    
                    
                    -
                    
                    
                    
                    7,465
                    
                    
                    
                    19,176Fair
      value of common stock issued for services
                    
                    
                    842,400
                    
                    
                    
                    164,000
                    
                    
                    
                    3,360,030Change
      in fair value of warrants
                    
                    
                    (2,033,625
                    )
                    
                    
                    903,450
                    
                    
                    
                    1,122,099Financing
      agreement penalty
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    330,000Adjustment
      to market on marketable securities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    67,922Gain
      on sale of marketable securities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (87,217
                    )Non-cash
      resource property expenditures
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    600,000Changes
      in non-cash working capitalPrepaid
      expenses
                    
                    
                    (1,768
                    )
                    
                    
                    7,720
                    
                    
                    
                    186,766Receivables
                    
                    
                    3,743
                    
                    
                    
                    (5,259
                    )
                    
                    
                    (46,700
                    )Marketable
      securities
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    19,295Accounts
      payable and accrued liabilities
                    
                    
                    (175,644
                    )
                    
                    
                    25,886
                    
                    
                    
                    (233,190
                    )Cash
      Used in Operating Activities
                    
                    
                    (1,407,176
                    )
                    
                    
                    (1,261,899
                    )
                    
                    
                    (12,610,886
                    )Investing
      ActivitiesAdditions
      to property and equipment, net
                    
                    
                    (2,039
                    )
                    
                    
                    (25,091
                    )
                    
                    
                    (224,536
                    )Additions
      to mineral property
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (651,950
                    )Cash
      Used in Investing Activities
                    
                    
                    (2,039
                    )
                    
                    
                    (25,091
                    )
                    
                    
                    (876,486
                    )Financing
      ActivitiesRepayment
      of long-term debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (100,000
                    )Issuance
      of preferred stock for cash
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    5,000,000Issuance
      of common stock for cash
                    
                    
                    1,340,824
                    
                    
                    
                    1,045,340
                    
                    
                    
                    9,631,804Stock
      subscriptions received
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    231,000Working
      capital acquired on acquisition
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    171Cash
      Provided by Financing Activities
                    
                    
                    1,340,824
                    
                    
                    
                    1,053,702
                    
                    
                    
                    14,762,975Inflow
      (Outflow) of Cash and Cash Equivalents
                    
                    
                    (68,391
                    )
                    
                    
                    (233,288
                    )
                    
                    
                    1,275,603Cash
      and Cash Equivalents,Beginning of Period
                    
                    
                    1,343,994
                    
                    
                    
                    1,475,460
                    
                    
                    
                    -Cash
      and Cash Equivalents, End of Period
                    
                    $
                    1,275,603
                    
                    
                    $
                    1,242,172
                    
                    
                    $
                    1,275,603Supplemental
      Cash Flow InformationIncome
      tax paid
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Interest
      paid
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Shares
      Issued forSettlement
      of debt
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    830,000Services
                    
                    $
                    842,400
                    
                    
                    $
                    164,000
                    
                    
                    $
                    3,360,030Issuance
      of common stock on conversion of preferred shares
                    
                    $
                    500,000
                    
                    
                    $
                    -
                    
                    
                    $
                    500,000





See notes
to unaudited consolidated condensed financial statements.




4





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Consolidated
Statements of Stockholders’ Equity (Deficit)


(US
Funds)





Shares of
                        Common
                        Stock
                      
                      
                      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
                      
                      
                      Share Subscriptions
                        Received/ Obligation to
                        Issue Shares
                      
                      
                      Accumulated
                        Deficit
                      
                      
                      Total
                        Stockholders’
                        Equity (Deficit)Balance,
      December 31, 2008
                      
                      
                      32,004,042
                      
                      
                      $
                      17,930,947
                      
                      
                      
                      625,000
                      
                      
                      $
                      500,000
                      
                      
                      $
                      -
                      
                      
                      $
                      (16,183,119
                      )
                      
                      $
                      2,247,828Stock-based compensation (Note
      3(c))
                      
                      
                      -
                      
                      
                      
                      1,024,122
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,024,122Warrants exercised (Note3(d))
                      
                      
                      2,100,000
                      
                      
                      
                      1,045,340
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,045,340Private placement (Note
      3(b))
                      
                      
                      1,496,930
                      
                      
                      
                      900,691
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      900,691Reduction
      in warrant liability on exercise of 2,000,000 warrants
                      
                      
                      -
                      
                      
                      
                      199,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      199,000Common stock issued for services (Note
      3(c))
                      
                      
                      800,000
                      
                      
                      
                      560,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      560,000Cumulative effect of change in accounting principle
      (Note
      5)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (1,084,375
                      )
                      
                      
                      (1,084,375
                      )Net
      loss for the year
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (5,860,005
                      )
                      
                      
                      (5,860,005
                      )Balance,
      December 31, 2009
                      
                      
                      36,400,972
                      
                      
                      
                      21,660,100
                      
                      
                      
                      625,000
                      
                      
                      
                      500,000
                      
                      
                      
                      -
                      
                      
                      
                      (23,127,499
                      )
                      
                      
                      (967,399
                      )Stock-based compensation (Note
      3(c))
                      
                      
                      -
                      
                      
                      
                      146,682
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      146,682Common stock issued for services (Note
      3(c))
                      
                      
                      738,000
                      
                      
                      
                      842,400
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      842,400Share subscriptions received/obligation to issue
      shares (Note
      3(e))
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      660,000
                      
                      
                      
                      -
                      
                      
                      
                      660,000Warrants exercised (Note3(d))
                      
                      
                      2,193,040
                      
                      
                      
                      1,315,824
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (660,000
                      )
                      
                      
                      
                      
                      
                      
                      655,824Options exercised (Note
      3(b))
                      
                      
                      50,000
                      
                      
                      
                      25,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      25,000Shares issued upon conversion of preferred shares
      (Note
      3(a))
                      
                      
                      1,000,000
                      
                      
                      
                      500,000
                      
                      
                      
                      (625,000
                      )
                      
                      
                      (500,000
                      )
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      -Net
      loss for the period
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (210,130
                      )
                      
                      
                      (210,130
                      )Balance,
      September 30, 2010 (Unaudited)
                      
                      
                      40,382,012
                      
                      
                      $
                      24,490,006
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (23,337,629
                      )
                      
                      $
                      1,152,377





See notes
to unaudited consolidated condensed financial statements.





5


WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





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
Accounting Standards Codification Topic 915, Development Stage
Entities.





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, 2010 and for the
period 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 consolidated
condensed financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company’s December 31,
2009 audited consolidated financial statements included in the Company’s 2009
annual report on Form 10-K filed with the United States Securities and Exchange
Commission (“SEC”).  The results of operations for the period ended
September 30, 2010 are not necessarily indicative of the operating results for
the full year.





2.
            PROPERTY
      AND EQUIPMENT





September 30, 2010AccumulatedCost
                        
                        
                        Amortization
                        
                        
                        NetVehicles
                        
                        $
                        54,154
                        
                        
                        $
                        43,216
                        
                        
                        $
                        10,938Office
      furniture
                        
                        
                        18,863
                        
                        
                        
                        6,341
                        
                        
                        
                        12,522Office
      equipment
                        
                        
                        11,311
                        
                        
                        
                        5,775
                        
                        
                        
                        5,536Computer
      equipment
                        
                        
                        8,197
                        
                        
                        
                        6,424
                        
                        
                        
                        1,773Computer
      software
                        
                        
                        1,542
                        
                        
                        
                        855
                        
                        
                        
                        687Field
      equipment
                        
                        
                        62,814
                        
                        
                        
                        39,470
                        
                        
                        
                        23,344$
                        156,881
                        
                        
                        $
                        102,081
                        
                        
                        $
                        54,800





December
      31, 2009AccumulatedCost
                    
                    
                    Amortization
                    
                    
                    NetVehicles
                    
                    $
                    54,153
                    
                    
                    $
                    38,031
                    
                    
                    $
                    16,122Office
      furniture
                    
                    
                    17,712
                    
                    
                    
                    3,189
                    
                    
                    
                    14,523Office
      equipment
                    
                    
                    10,828
                    
                    
                    
                    4,139
                    
                    
                    
                    6,689Computer
      equipment
                    
                    
                    8,197
                    
                    
                    
                    5,192
                    
                    
                    
                    3,005Computer
      software
                    
                    
                    1,142
                    
                    
                    
                    664
                    
                    
                    
                    478Field
      equipment
                    
                    
                    62,814
                    
                    
                    
                    29,704
                    
                    
                    
                    33,110$
                    154,846
                    
                    
                    $
                    80,919
                    
                    
                    $
                    73,927





6





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





3.
            CAPITAL
      STOCK





(a)
            Common and preferred
      stock





i)
            Common
      stock





During
the nine months ended September 30, 2010:





·
            738,000
      shares of common stock were issued for services.  Of this
      amount, 720,000 shares were issued as management compensation (Note
      3(c));


·
            2,193,040
      shares of common stock were issued upon the exercise of warrants
      (Note 3(d));


·
            50,000
      shares of common stock were issued upon the exercise of stock options
      (Note 3(b)); and


·
            1,000,000
      shares of common stock were issued upon the conversion of 625,000 shares
      of preferred stock into common stock at the election of the
      holder.





ii)
            Preferred
      stock





During
the three months ended September 30, 2010, the holder of the preferred stock
elected to convert the remaining 625,000 shares of preferred stock into
1,000,000 shares of common stock.  Accordingly, the Company does not
have any preferred stock outstanding as of September 30, 2010.





(b)
            Stock
      options





On June
29, 2010, the Board of Directors adopted the 2010 Stock Option/Stock Issuance
Plan (the “Plan”), which permits the Company to grant both incentive and
non-statutory stock options and to grant restricted shares of common
stock.  The Plan authorizes the issuance of up to 3,800,000 shares of
common stock.  The number of shares of common stock available for
issuance under the Plan will automatically increase by an amount such that on
the first trading day of January each calendar year during the term of the
Plan, beginning with calendar year 2011, the number of shares of common stock
reserved and available for issuance under the Plan will represent 10% of the
total number of shares of common stock outstanding on the last trading day in
December of the immediately preceding calendar year. The Plan is
administered initially by the Board of Directors.  The persons
eligible to participate in the Plan include:  (a) employees of the
Company and any of its subsidiaries; (b) non-employee members of the Board or
non-employee members of the Board of Directors of any of its subsidiaries; (c)
officers of the Company or any subsidiary; and (d) consultants and other
independent advisors who provide services to the Company or any of its
subsidiaries.  The Plan will continue in effect until all of the stock
available for grant or issuance has been acquired through exercise of options or
grants of shares, or until ten years after the adoption of the Plan by the Board
of Directors, whichever is earlier.  The Plan may also be terminated
in the event of certain corporate transactions such as a merger or consolidation
or the sale, transfer or other disposition of all or substantially all of the
Company’s assets.





During
the quarter ended September 30, 2010, no stock options were granted. Options for
50,000 shares exercisable at $0.50 per share were exercised.





7





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





3.
            CAPITAL
      STOCK (continued)





(b)
            Stock options
      (continued)





The
following table represents service based stock option activity during the nine
months of 2010.





September 30, 2010
                            
                            
                            December 31, 2009Number of
                              Shares
                            
                            
                            Weighted
                              Average
                              Exercise
                              Price
                            
                            
                            Number of
                              Shares
                            
                            
                            Weighted
                              Average
                              Exercise
                              PriceOutstanding
      - beginning of period
                            
                            
                            2,790,000
                            
                            
                            $
                            0.53
                            
                            
                            
                            3,140,000
                            
                            
                            $
                            0.57Expired
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (100,000
                            )
                            
                            $
                            2.00Exercised
                            
                            
                            (50,000
                            )
                            
                            $
                            0.50
                            
                            
                            
                            -
                            
                            
                            
                            -Forfeited
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (250,000
                            )
                            
                            $
                            0.50Outstanding
      – end of period
                            
                            
                            2,740,000
                            
                            
                            $
                            0.53
                            
                            
                            
                            2,790,000
                            
                            
                            $
                            0.53Exercisable
      – end of period
                            
                            
                            2,740,000
                            
                            
                            $
                            0.53
                            
                            
                            
                            2,790,000
                            
                            
                            $
                            0.53





As at
September 30, 2010 and December 31, 2009, the following director and consultant
stock options were outstanding:





Exercise
                          
                          
                          September
      30,
                          
                          
                          December
      31,Expiry
      Date
                          
                          Price
                          
                          
                          2010
                          
                          
                          2009January
      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
                          
                          
                          
                          300,000
                          
                          
                          
                          350,000August
      31, 2012
                          
                          $
                          0.50
                          
                          
                          
                          1,075,000
                          
                          
                          
                          1,075,000June
      23, 2013
                          
                          $
                          1.00
                          
                          
                          
                          165,000
                          
                          
                          
                          165,0002,740,000
                          
                          
                          
                          2,790,000





The
shares under option at September 30, 2010 were in the following exercise price
ranges:





Weighted Average
                                      Exercise Price
                                    
                                    
                                    Number of Shares
                                      under Option
                                    
                                    
                                    Aggregate Intrinsic
                                      Value
                                    
                                    
                                    Weighted Average
                                      Remaining Contractual Life in
                                      Years$
                                    0.50
                                    
                                    
                                    
                                    2,575,000
                                    
                                    
                                    $
                                    1,155,000
                                    
                                    
                                    
                                    1.18$
                                    1.00
                                    
                                    
                                    
                                    165,000
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    2.73$
                                    0.53
                                    
                                    
                                    
                                    2,740,000
                                    
                                    
                                    $
                                    1,155,000
                                    
                                    
                                    
                                    1.27





8





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





3.
            CAPITAL
      STOCK (continued)





(c)
            Stock-based
      compensation





During
the nine months ended September 30, 2010, the total stock-based compensation for
warrants recognized under the fair value method charged to management fees was
$146,682.  This is a result of the issuance of 2,000,000 warrants to
certain directors and officers (Note 3(d)).  The total stock-based
compensation calculated was $1,301,800.  The remaining balance of
$1,155,118 will be amortized through December 31, 2015. These warrants were
fair valued using the Black-Scholes option pricing model with the following
weighted average assumptions:  risk-free interest rate of 1.63%,
expected life of 5.9 years, an expected volatility factor of 69.30% and a
dividend yield of 0.00%.





In
February 2010, the Company granted 720,000 shares of common stock at a fair
value of $828,000 to management, employees and consultants.  The
shares were granted under the 2010 Management Compensation Plan.  The
shares were issued without registration under the Securities Act by reason of
the exemptions from registration afforded by the provisions of Section 4(2) of
the Securities Act and
regulations promulgated by the SEC.  Each person acknowledged
appropriate investment representations with respect to the issuance and
consented to the imposition of restrictive legends upon the certificates. The
remaining 18,000 shares of common stock, at a fair value of $14,400, were issued
to market advisors of the Company during the three months ended September 30,
2010.





The total
stock-based compensation recognized for shares issued, warrants granted and
options granted for services was as follows:





September 30,
                        
                        
                        December 312010
                        
                        
                        2009
                        
                        
                        2009
                        
                        
                        2008Consulting
      fees
                        
                        $
                        62,100
                        
                        
                        $
                        77,130
                        
                        
                        $
                        77,130
                        
                        
                        $
                        -Consulting
      fees - directors and officers
                        
                        
                        434,700
                        
                        
                        
                        252,118
                        
                        
                        
                        252,117
                        
                        
                        
                        45,339Investor
      relations
                        
                        
                        -
                        
                        
                        
                        694,874
                        
                        
                        
                        694,875
                        
                        
                        
                        -Management
      fees
                        
                        
                        436,482
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Advertising
      and promotion
                        
                        
                        14,400
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Office
                        
                        
                        41,400
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -$
                        989,082
                        
                        
                        $
                        1,024,122
                        
                        
                        $
                        1,024,122
                        
                        
                        $
                        45,339





9




WHITE
MOUNTAIN TITANIUM CORPORATION
 (An
Exploration Stage Company)
 Notes
to Consolidated Financial Statements
 Nine
Months Ended September 30, 2010 and 2009
 (Unaudited)
 (US
Funds)




3.
            CAPITAL
      STOCK (continued)





(d)
            Warrants





Details
of stock purchase warrant activity is as follows:





September 30, 2010
                            
                            
                            December 31, 2009Number
                              of Warrants
                            
                            
                            Weighted
                              Average
                              Exercise
                              Price
                            
                            
                            Number
                              of Warrants
                            
                            
                            Weighted
                              Average
                              Exercise
                              PriceOutstanding
      - beginning of period
                            
                            
                            10,587,385
                            
                            
                            $
                            0.56
                            
                            
                            
                            13,022,600
                            
                            
                            $
                            0.54Issued
                            
                            
                            2,000,000
                            
                            
                            $
                            1.50
                            
                            
                            
                            589,785
                            
                            
                            $
                            0.63Exercised
                            
                            
                            (2,193,040
                            )
                            
                            $
                            0.60
                            
                            
                            
                            (2,100,000
                            )
                            
                            $
                            0.50Expired
                            
                            
                            (3,654,560
                            )
                            
                            $
                            0.60
                            
                            
                            
                            (925,000
                            )
                            
                            $
                            0.50Outstanding
      - end of period
                            
                            
                            6,739,785
                            
                            
                            $
                            0.81
                            
                            
                            
                            10,587,385
                            
                            
                            $
                            0.56





As at
September 30, 2010, the following share purchase warrants were
outstanding:





Expiry Date
                              
                              Exercise Price
                              
                              
                              September 30,
                                2010
                              
                              
                              December 31,
                                2009August
      10, 2010
                              
                              $
                              0.60
                              
                              
                              
                              -
                              
                              
                              
                              5,847,600April
      1, 2011
                              
                              $
                              0.50
                              
                              
                              
                              4,250,000
                              
                              
                              
                              4,250,000June
      30, 2011
                              
                              $
                              0.75
                              
                              
                              
                              150,000
                              
                              
                              
                              150,000June
      30, 2012
                              
                              $
                              0.50
                              
                              
                              
                              235,000
                              
                              
                              
                              235,000June
      30, 2013
                              
                              $
                              0.90
                              
                              
                              
                              104,785
                              
                              
                              
                              104,785December
      31, 2015
                              
                              $
                              1.50
                              
                              
                              
                              2,000,000
                              
                              
                              
                              -6,739,785
                              
                              
                              
                              10,587,385





During
the nine months ended September 30, 2010, 2,000,000 warrants were issued to two
officers and directors of the Company as compensation as approved by the Board
in January 2010.  These warrants are exercisable at $1.50 per share
expiring December 31, 2015 (Note 3(c)). These warrants vest only upon occurrence
of one of the following events and are exercisable in full upon the first of the
following events:





(i)
            If
      on or before June 30, 2011, the closing price of the common stock of the
      Company is at least $2.00 per share for five consecutive trading
      days;





(ii)
            If
      on or before December 31, 2012, the closing price of the common stock of
      the Company is at least $2.50 per share for five consecutive trading days;
      and





(iii)
            If
      on or before December 31, 2015, the closing price of the common stock of
      the Company is at least $3.00 per share for five consecutive trading
      days.





These
prices shall be subject to reasonable adjustment upon occurrence of certain
conditions.





10





WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





3.           CAPITAL
STOCK (continued)





(d)
            Warrants
      (continued)





Effective
January 1, 2009, the Company adopted the provisions of Emerging Issues Task
Force (“EITF”) 07-05, Determining Whether an Instrument
(or Embedded Feature)is Indexed to an Entity’s Own
Stock, which was primarily codified into ASC Topic 815, Derivatives and
Hedging.  ASC 815 applies to any freestanding financial
instrument or embedded feature that have the characteristics of a derivative and
to any freestanding financial instruments that are potentially settled in an
entity’s own common stock.





As a
result of adopting ASC 815, warrants to purchase 6,875,000 shares of common
stock previously treated as equity pursuant to the derivative treatment
exemption were no longer afforded equity treatment. The warrants had an exercise
price of $0.50 per warrant and expire in July and September 2009, of which
4,250,000 warrants were extended to April 2011.  Effective January 1,
2009, the Company reclassified the fair value of these 4,250,000 warrants to
purchase common stock, which had exercise price reset features, from equity to
liability status as if these warrants were treated as a derivative liability
since their date of issue.   On January 1, 2009, the Company
reclassified $1,084,375 to beginning deficit and $1,084,375 to other liabilities
- warrants to recognize the fair value of such warrants on such
date.





As of
September 30, 2010, the 4,250,000 warrants were fair valued using the
Black-Scholes option pricing model with the following weighted average
assumptions:  risk-free interest rate of 1.63%, expected life of 1
year, an expected volatility factor of 53.19% and a dividend yield of 0.00%. The
fair value of these warrants to purchase common stock decreased to $923,100 as
of September 30, 2010. Accordingly, the Company recognized a $2,033,625 non-cash
income from the change in fair value of these warrants for the nine-month period
ended September 30, 2010.





4.
            LOSS
      PER SHARE





Basic and
diluted loss per share is computed using the weighted average number of common
shares outstanding as follows:





Three Months Ended
                                September 30,
                              
                              
                              Nine Months Ended
                                September 30,2010
                              
                              
                              2009
                              
                              
                              2010
                              
                              
                              2009Net
      income (loss) for period
                              
                              $
                              270,423
                              
                              
                              $
                              573,995
                              
                              
                              $
                              (210,130
                              )
                              
                              $
                              (3,404,489
                              )Net
      income (loss) available for distribution
                              
                              $
                              270,423
                              
                              
                              $
                              573,995
                              
                              
                              $
                              (210,130
                              )
                              
                              $
                              (3,404,489
                              )Allocation
      of undistributed income (loss)Preferred
      shares (0.00%, 2009 - 1.80%)
                              
                              $
                              -
                              
                              
                              $
                              10,332
                              
                              
                              $
                              -
                              
                              
                              $
                              (61,281
                              )Common
      shares (100%,  2009 - 98.20%)
                              
                              
                              270,423
                              
                              
                              
                              563,663
                              
                              
                              
                              (210,130
                              )
                              
                              
                              (3,343,208
                              )$
                              270,423
                              
                              
                              $
                              573,995
                              
                              
                              $
                              (210,130
                              )
                              
                              $
                              (3,404,489
                              )Basic
      income (loss) per share amountsUndistributed
      amountsIncome
      (loss) per preferred share
                              
                              $
                              0.00
                              
                              
                              $
                              0.02
                              
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.10
                              )Income
      (loss) per common share
                              
                              $
                              0.01
                              
                              
                              $
                              0.02
                              
                              
                              $
                              (0.01
                              )
                              
                              $
                              (0.10
                              )





11




WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





4.
            LOSS
      PER SHARE (continued)





Weighted
average number of shares:





Three Months Ended
                              September 30,
                            
                            
                            Nine Months Ended
                              September 30,2010
                            
                            
                            2009
                            
                            
                            2010
                            
                            
                            2009Weighted
      average number of shares for undistributed amountsPreferred
      stock (common stock equivalent)
                            
                            
                            -
                            
                            
                            
                            625,000
                            
                            
                            
                            625,000
                            
                            
                            
                            625,000Common
      stock
                            
                            
                            37,885,782
                            
                            
                            
                            34,472,520
                            
                            
                            
                            37,257,392
                            
                            
                            
                            34,472,520





Potentially
dilutive securities not included in diluted weighted average shares outstanding
include shares underlying 2,740,000 in outstanding options and 6,739,785
warrants.





5.
            FAIR
      VALUE 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.





The
Company follows the accounting guidance, which is now part of ASC 820-10
(formerly Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 157), Fair Value
Measurements (“SFAS 157”).  ASC 820 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 ASC 820 for the Company’s financial
assets and liabilities did not have an impact on the Company’s financial
position or operating results.  Beginning January 1, 2008, assets and
liabilities recorded at fair value in the 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 ASC 820, 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, 2010
for assets and liabilities measured at fair value on a recurring
basis.





Level 1
                        
                        
                        Level 2
                        
                        
                        Level 3
                        
                        
                        TotalCash
      and cash equivalents
                        
                        $
                        1,275,603
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        1,275,603Receivables
                        
                        $
                        46,700
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        46,700Accounts
      payable and accrued liabilities
                        
                        $
                        12,890
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        12,890Other
      liabilities - warrants
                        
                        $
                        -
                        
                        
                        $
                        923,100
                        
                        
                        $
                        -
                        
                        
                        $
                        923,100




12




WHITE
MOUNTAIN TITANIUM CORPORATION


(An
Exploration Stage Company)


Notes
to Consolidated Financial Statements


Nine
Months Ended September 30, 2010 and 2009


(Unaudited)


(US
Funds)





6.
            SUBSEQUENT
      EVENTS





The
Company has evaluated its activities subsequent to September 30, 2010 and has
concluded that no subsequent events have occurred that would require recognition
or disclosure in the consolidated condensed financial statements, except as
follows:





·
            On
      October 1, 2010, the Company issued 4,000,000 shares of common stock
      pursuant to the terms of the non-exclusive, sublicensing agreement of the
      titanium metal technology developed by Chinuka Limited plc (“Chinuka” or
      the “Chinuka Process”).  The Company now has access to the
      Chinuka Process for the Cerro Blanco project.  La Serena
      Technologies Ltd. (“La Serena”) executed the sublicensing agreement as
      holder of the Chinuka Process master license.  As consideration
      for the sublicense, the terms of the agreement between the Company and La
      Serena are:





·
            4,000,000
      restricted shares of common stock were issued to Chinuka and La Serena
      (800,000 to Chinuka and 3,200,000 to La Serena).  These shares
      are to be released from escrow over 24 months with 500,000 shares released
      to each Chinuka and La Serena on closing and the balance released from
      escrow at the end of each subsequent fiscal quarter on the basis of 37,500
      to Chinuka and 337,500 to La Serena.  The Company may cancel the
      sublicense agreement (and related escrow share releases) at any time
      following the initial release of
shares;


·
            The
      expenditure of $5,000,000 by the Company within five years of closing to
      advance development of the Chinuka Process towards
      commercialization;


·
            A
      2% gross royalty payment to La Serena on any revenue generated by the
      Cerro Blanco project, which is attributable to the Chinuka Process, and to
      make advance minimum royalty payments to La Serena of $200,000 per year
      commencing five years after closing;
and


·
            Commercial
      production of titanium metal using the Chinuka Process and feed stock
      derived from the Cerro Blanco project within nine years after
      closing.




·
            On
      October 13, 2010, the Company announced the signing of its first Letter of
      Intent off-take agreement with a major pigment producer for the supply of
      standard grade rutile concentrate. The Letter of Intent, which at this
      stage is non-binding on the parties and subject to the successful
      completion of a bankable feasibility study, is covered by a non-disclosure
      agreement.




13




Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations





The
following discussion should be read in conjunction with our unaudited
consolidated financial statements and related notes thereto as filed with this
report.





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.





There may
also be other risks and uncertainties that we are unable to predict at this time
or that we do not now expect to have a material adverse impact on our
business.





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 and Financial Condition





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.




14





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 the metallurgical test work and pilot
scale testing completed last year.  With commencement of our marketing
plan to seek suitable off-take contracts, we intend to 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 by second quarter 2011, subject
to the availability of funds, personnel and equipment.  We estimate
the cost to take the project to the point of completing a final engineering
feasibility study at approximately $3,810,000, including general and
administrative and marketing expenses.  As of November 10, 2010, our
cash position was approximately $1,003,000. We currently do not have sufficient
capital to complete this plan and we will require additional financing to do
so.





On
October 1, 2010 the Company issued 4,000,000 shares of common stock pursuant to
the terms of the non-exclusive, sublicensing agreement of the titanium metal
technology developed by Chinuka Limited plc (“Chinuka” or the “Chinuka
Process”).  The Company now has access to the Chinuka Process for the
Cerro Blanco project.  La Serena Technologies Ltd. (“La Serena”)
executed the sublicensing agreement as holder of the Chinuka Process master
license.  As consideration for the sublicense, the terms of the
agreement between the Company and La Serena are:





·
            4,000,000
      restricted shares of common stock were issued to Chinuka and La Serena
      (800,000 to Chinuka and 3,200,000 to La Serena).  These shares
      are to be released from escrow over 24 months with 500,000 shares released
      to each Chinuka and La Serena on closing and the balance released from
      escrow at the end of each subsequent fiscal quarter on the basis of 37,500
      to Chinuka and 337,500 to La Serena.  The Company may cancel the
      sublicense agreement (and related escrow share releases) at any time
      following the initial release of
shares;





·
            The
      expenditure of $5,000,000 by the Company within five years of closing to
      advance development of the Chinuka Process towards
      commercialization;





·
            A
      2% gross royalty payment to La Serena on any revenue generated by the
      Cerro Blanco project, which is attributable to the Chinuka Process, and to
      make advance minimum royalty payments to La Serena of $200,000 per year
      commencing 5 years after closing;
and





·
            Commercial
      production of titanium metal using the Chinuka Process and feed stock
      derived from the Cerro Blanco project within nine years after
      closing.




The
Chinuka Process was developed under the direction of Dr. Derek Fray, Professor
and Director of Research, Materials Science and Metallurgy, University of
Cambridge, UK.  Unlike the industry-standard, multi-step Kroll batch
process which uses titanium pigment as a feed stock to produce titanium sponge
metal, the Chinuka Process is essentially a one-step process and uses titanium
ores and concentrates as a feed stock.  By replacing a multi-step
process with a process in which refining and electro-deposition take place
simultaneously and substituting ores and concentrates as a feed stock, the
Chinuka Process holds forth potentially significant cost and production time
saving over the Kroll process.




We
anticipate the sublicensing of the Chinuka Process will create an opportunity to
add value to the Cerro Blanco project, particularly with respect to the planned
minus 53 micron titanium concentrate product.




On
October 13, 2010 the Company announced that it has signed its first Letter of
Intent off-take agreement with a major pigment producer for the supply of
standard grade rutile concentrate.   The Letter of Intent, which
at this stage is non-binding on the parties and subject to the successful
completion of a bankable feasibility study, is covered by a non-disclosure
agreement.




15





Results
of Operations





We
recorded an income for the three months ended September 30, 2010 of $270,423 or
$0.01 per weighted average common share outstanding compared to an income of
$573,995 ($0.02 per share) for the comparable interim period in
2009.  On a year to date basis, for the nine months ended September
30, 2010 the loss was $210,130 ($0.01 per share) compared to $3,404,489 ($0.10
per share) for the comparable period in 2009.





The
income in the third quarter of both 2010 and 2009 is a direct result of the
adoption of Emerging Issues Task Force (“EITF”) 07-05, Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock, which was
primarily codified into ASC Topic 815, Derivatives and
Hedging.  ASC 815 applies to any freestanding financial
instruments or embedded features that have the characteristics of a derivative
and to any freestanding financial instruments that are potentially settled in an
entity’s own common stock.





ASC Topic
815 was effective January 1, 2009 resulted in a cumulative adjustment of
$1,084,375 to accumulated deficit as of January 1, 2009.  For the
three months ended September 30, 2010 we recorded a fair value change (gain) of
$808,775 (gain of $2,033,625 year to date).  The comparable effects in
2009 were a gain of $998,012 in the third quarter (loss of $903,450 year to
date). See Note 3(d) for a more detailed discussion.





Excluding
the above, and other items such as interest and foreign exchange, our loss from
our operations was $544,493 for the third quarter of 2010 (Year to date:
$2,229,203).  The results for the same period of 2009 were losses of
$433,433 (2009 Year to date: $2,522,125).





Generally
most expenses continue to be comparable this quarter to the comparable quarter
of 2009 and on a year to date basis, except for the following material
items:





·
            During
      the third quarter of 2010, stock-based compensation of $55,005 (YTD:
      $146,682) was recognized as management fees expense (note
      3(c).  This is a result of the issuance of 2,000,000 warrants to
      certain directors and officers (Note 3(d)).  The total
      stock-based compensation calculated was $1,301,800, and will be amortized
      until December 31, 2015.  During the same nine month period of
      2009, $1,024,122 of stock based compensation was recognized, including
      $694,875 as investor relations expense, resulting from the extension of
      warrants held by the European institutional investor who exercised two
      million warrants during the quarter. There was no such charge in the
      second quarter of 2010.  In 2009 the Board of Directors approved
      an employee benefit plan for officers, directors, and employees to
      increase stockholder value and the success of the company by motivating
      members of management to provide services to the company and perform to
      the best of their abilities, to achieve the company’s objectives, and to
      allow us to minimize the cash component of compensation.  The
      pool consists of up to 1% of the outstanding shares at the end of each
      year.  During the first quarter or 2010 we issued 720,000 shares
      at a fair value of $828,000.  This expense was allocated to
      Consulting fees, Consulting fees – directors and officers, Management fees
      and office (see note 3(c) of the quarterly financial
      statements).  There was no such expense in the current
      quarter.





·
            During
      the first quarter of 2010 we commenced a brokered offering of shares to
      raise up to $6 million. After discussions with our advisors during the
      second quarter, we elected to withdraw this offering based on market
      conditions.  As a result, during the second quarter we wrote off
      deferred offering costs of approximately $80,000 to Advertising ($3,000),
      Consulting ($30,000), Filing fees ($17,000) and Professional fees
      ($30,000).





·
            Advertising
      and Promotion was $47,212 in the quarter (year to date $79,052), compared
      to $11,665 and $29,316 respectively for 2009.  This was a result
      of fees paid to a market advisor of $32,400 in cash and
      stock,  increased news releases and filings, and attendance at
      conferences





·
            During
      the current quarter we incurred lower exploration expense of $110,007
      (YTD: $246,091) (2009: $119,756 and $335,719), as our work was primarily
      restricted to planning for upcoming drilling and final feasibility
      activities.  Similarly we incurred Engineering Consulting fees
      of $nil (YTD: $nil) (2009: $128,319 and $200,674).  We
      anticipate that both of these expenses will increase significantly in the
      fourth quarter and subsequent quarters of the new year as we commence
      infill drilling and final
feasibility.





Recent
Accounting Pronouncements





Codification





In June
2009, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles, a
replacement of SFAS No. 162 (the “Codification”).  The
Codification will be the single source of authoritative non-governmental US
accounting and reporting standards, superseding existing FASB, AICPA, EITF and
related literature. The Codification eliminates the hierarchy of GAAP contained
in SFAS No. 162 and establishes one level of authoritative GAAP. All other
literature is considered non-authoritative. This Statement was effective for the
Company’s September 30, 2009 financial statements for interim and annual
periods.  All accounting references have been updated with Accounting
Standard Codification (“ASC”) references.





16





Fair
value measurements





In August
2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05, which amends
ASC Topic 820, Measuring
Liabilities at Fair Value, which provides additional guidance on the
measurement of liabilities at fair value. These amended standards clarify that
in circumstances in which a quoted price in an active market for the identical
liability is not available, the Company is required to use the quoted price of
the identical liability when traded as an asset, quoted prices for similar
liabilities, or quoted prices for similar liabilities when traded as assets. If
these quoted prices are not available, the Company is required to use another
valuation technique, such as an income approach or a market approach. These
amended standards were effective on October 1, 2009 and did not have a material
impact on the consolidated financial statements.





In
January 2010, the FASB issued ASU No. 2010-06, Fair Value Measurements and
Disclosures, which amends ASC Topic 820, adding new requirements for
disclosures for Levels 1 and 2, separate disclosures of purchases, sales,
issuances and settlements relating to Level 3 measurements and clarification of
existing fair value disclosures.





ASU
2010-06 is effective for interim and annual periods beginning after December 15,
2009, except for the requirement to provide Level 3 activity of purchases,
sales, issuances and settlements on a gross basis, which will be effective for
fiscal years beginning after December 15, 2010 (the Company’s fiscal year 2011);
early adoption is permitted. The Company is currently evaluating the impact of
adopting ASU 2009-14 on its consolidated financial statements.




In June
2008, the FASB ratified the consensus reached on ASC 815-40 Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock. ASC 815-40
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. The Company adopted ASC
815-40 as of January 1, 2009 (Note 11).




In May
2009, the FASB issued ASC 855.  ASC 855 is intended to establish
general standards of accounting for and disclosure of events that occur after
the balance sheet date but before 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 and the basis for that
date—that is, whether that date represents the date the financial statements
were issued or were available to be issued.  In February 2010, the
FASB amended ASC 855 to remove the requirement for an SEC registrant to disclose
the date through which subsequent events were evaluated as this requirement
would have potentially conflicted with SEC requirements. Removal of this
disclosure requirement is not expected to affect the nature or timing of
subsequent events evaluations performed by the Company.





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
4.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.





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, 2010, 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





On July
1, 2010, we signed a consulting agreement with DRC Partners, LLC, a New Jersey
limited liability company.  We engaged the service provider on a
non-exclusive basis to provide certain investor relations services for
us.  Pursuant to the consulting agreement, we issued 18,000 shares as
compensation for the services.  These shares were issued without
registration under the Securities Act by reason of the exemption from
registration afforded by the provisions of Sections 4(2) and 4(5) thereof, and
Rule 506 promulgated thereunder, as a transaction by an issuer not involving any
public offering.  DRC Partners was an accredited investor at the time of
the issuance.  It delivered appropriate investment representations
with respect to the issuance and consented to the imposition of restrictive
legends upon the stock certificates.  DRC Partners did not enter into
the consulting agreement 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 and had a preexisting relationship with
persons representing our company at the time of the
transaction.  Representatives of DRC Partners were afforded the
opportunity to ask questions of our management and to receive answers concerning
the terms and conditions of the warrant issuance.  No underwriting
discounts or commissions were paid in connection with the
transaction.





In
September 2006 we issued 350,000 options to purchase shares of our common stock
on or before August 31, 2011.  As of September 22, 2010, one of these
option holders, Charles E. Jenkins, our CFO and a director, exercised his
options and purchased an aggregate of 50,000 shares of our common stock at $0.50
per share for total gross proceeds of $25,000.  The remaining 300,000
outstanding options are still outstanding and will expire August 31,
2011.  The shares were issued without registration under the
Securities Act by reason of the exemption from registration afforded by the
provisions of Regulation S.  Mr. Jenkins was a non-U.S. person at the
time of the exercise.  The issuance of the shares was made in an
offshore transaction and no directed selling efforts were made in the U.S. by us
or anyone acting on our behalf.  No underwriting discounts or
commissions were paid in connection with the issuance of the
shares.





Item 6.
Exhibits





The
following exhibits are furnished with this report:





10.1
              Sublicense
      Agreement dated September 15, 2010, between Sociedad Contractual Minera
      White Mountain Titanium and La Serena Technologies Limited (confidential
      information has been
redacted)


31.1
            Rule
      15d-14(a) Certification by Principal Executive
  Officer


31.2
            Rule
      15d-14(a) Certification by Chief Financial
  Officer


32.1
            Section
      1350 Certification of Principal Executive
  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 12, 2010
            
            By
            /s/ M. P. KurtanjekMichael
      P. Kurtanjek, President(Principal
      Executive Officer)Date:
      November 12, 2010
            
            By
            /s/ C.E. JenkinsCharles
      E. Jenkins, Chief Financial Officer(Principal
      Financial Officer)





18