---

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 PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File No. 333-168187

CHILE MINING TECHNOLOGIES INC.(Name of Small Business Issuer in Its Charter)

|Nevada                          | 26-1516355                                
|------------------------------- | ------------------------------------------
|(State or other jurisdiction of | (I.R.S. Employer Identification
      No.)
|incorporation or organization)  |                                           

Jorge Canning 1410 
Ñuñoa, Santiago 
Republic of
Chile(Address of principal executive offices)

(56) (02) 813 1087(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]            
No [    ]

Indicate by check mark 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 accelerated filer [ ]                   | Accelerated filer [ ]        
|--------------------------------------------- | -----------------------------
|                                              |                              
|Non-accelerated filer [ ]                     | Smaller reporting company [X]
|(Do not check if a smaller reporting company) |                              

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).

Yes [    ]            
No [X]

The number of shares outstanding of each of the issuers
classes of common equity, as of November 18, 2010 is as follows:

|Class of Securities            | Shares Outstanding
|------------------------------ | ------------------
|Common Stock, $0.001 par value | 9,364,593         

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TABLE OF CONTENTS

|PART I   | FINANCIAL INFORMATION                                                                        |   
|-------- | -------------------------------------------------------------------------------------------- | --
|         |                                                                                              |   
|ITEM 1.  | FINANCIAL STATEMENTS.                                                                        | 3 
|ITEM 2.  | MANAGEMENTS DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | 26
|ITEM 3.  | QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK.                            | 38
|ITEM 4.  | CONTROLS AND PROCEDURES.                                                                     | 38
|         |                                                                                              |   
|PART II  | OTHER INFORMATION                                                                            |   
|         |                                                                                              |   
|ITEM 1.  | LEGAL PROCEEDINGS.                                                                           | 38
|ITEM 1A. | RISK
      FACTORS.                                                                          | 38
|ITEM 2.  | UNREGISTERED SALES OF EQUITY SECURITIES
      AND USE OF PROCEEDS.                           | 39
|ITEM 3.  | DEFAULTS UPON SENIOR
      SECURITIES.                                                       | 39
|ITEM 4.  | (REMOVED AND RESERVED).                                                                      | 39
|ITEM 5.  | OTHER INFORMATION.                                                                           | 39
|ITEM 6.  | EXHIBITS.                                                                                    | 39

1

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PART I 
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

CHILE MINING TECHNOLOGIES INC.
INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2010 AND
2009

|                                                                                                                                              | Page
|--------------------------------------------------------------------------------------------------------------------------------------------- | ----
|Interim Consolidated Financial
      Statements                                                                                               | 3   
|Interim Consolidated Balance Sheets as at September
      30, 2010 and March 31, 2010                                                         | 4   
|Interim Consolidated Statement of
      Operations, deficit and comprehensive loss for the six months ended
      September 30, 2010 and 2009 | 5   
|Interim Consolidated Statement of Cash flows for the six
      months ended September 30, 2010 and 2009                                       | 6   
|Condensed Consolidated Notes to
      financial statements                                                                                    | 7   

2

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CHILE MINING TECHNOLOGIES, INC.(Formerly Latin
America Ventures, Inc)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2010

(Amounts expressed in US Dollars)

(Unaudited)

3

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CHILE MINING TECHNOLOGIES, INC.(Formerly Latin
America Ventures, Inc.)INTERIM CONSOLIDATED BALANCE SHEETS as at
September 30, 2010 and March 31, 2010(Amounts expressed in U.S.
Dollars)

|                                                     |   | September 30, |   |   | March 31,  |  
|---------------------------------------------------- | - | ------------- | - | - | ---------- | -
|                                                     |   | 2010          |   |   | 2010       |  
|                                                     |   |               |   |   | (Audited)  |  
|ASSETS                                               |   |               |   |   |            |  
|                                                     |   |               |   |   |            |  
|Current                                              |   |               |   |   |            |  
|Cash and cash equivalent                             |   | 2,056,401     |   |   | -          |  
|Accounts
      receivables                           |   | 64,684        |   |   | -          |  
|Other receivables                                    | $ | 602,123       |   | $ | 70,263     |  
|Inventory-raw
      materials                        |   | 136,269       |   |   | -          |  
|Goods in transit                                     |   | -             |   |   | 22,850     |  
|                                                     |   | 2,859,477     |   |   | 93,113     |  
|                                                     |   |               |   |   |            |  
|Deferred Financing Costs (Note 8 (b))                |   | 263,057       |   |   | -          |  
|Property plant and equipment(Note
      3)           |   | 4,999,313     |   |   | 3,188,944  |  
|                                                     |   |               |   |   |            |  
|                                                     | $ | 8,121,847     |   | $ | 3,282,057  |  
|                                                     |   |               |   |   |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIENCY             |   |               |   |   |            |  
|                                                     |   |               |   |   |            |  
|Current liabilities                                  |   |               |   |   |            |  
|Accounts payable
      and accrued liabilities       | $ | 778,570       |   | $ | 1,134,345  |  
|Obligation under capital leases                      |   | 42,376        |   |   |            |  
|Promissory notes                                     |   | -             |   |   | 85,967     |  
|Due to related party (Note 5)                        |   | 786,976       |   |   | 607,873    |  
|Convertible
      Promissory Note (Note 8 (c))       |   | 190,000       |   |   | -          |  
|                                                     |   |               |   |   |            |  
|                                                     |   | 1,797,922     |   |   | 1,828,185  |  
|                                                     |   |               |   |   |            |  
|PROMISSORY NOTES (Note 4)                            |   | 1,071,996     |   |   | 1,765,338  |  
|LONG TERM -OBLIGATION UNDER CAPITAL LEASES           |   | 159,326       |   |   |            |  
|DERIVATIVE FINANCIAL INSTRUMENTS (Note 8 (a))        |   | 2,499,421     |   |   | -          |  
|                                                     |   |               |   |   |            |  
|                                                     |   | 5,528,665     |   |   | 3,593,523  |  
|                                                     |   |               |   |   |            |  
|REDEEMABLE COMMON STOCK (Note 8 (b))                 |   | 3,128,605     |   |   | -          |  
|Stockholders deficiency                             |   |               |   |   |            |  
|Capital stock
      (note 6)                         |   | 9,365         |   |   | 10,715     |  
|Contributed surplus (Note 4)                         |   | 2,271,893     |   |   | 1,404,458  |  
|Deficit                                              |   | (3,543,617    | ) |   | (1,842,036 | )
|Accumulated other comprehensive gain                 |   | 726,936       |   |   | 115,397    |  
|                                                     |   |               |   |   |            |  
|                                                     |   | (535,423      | ) |   | (311,466   | )
|                                                     |   |               |   |   |            |  
|Total liabilities and stockholders
      deficiency | $ | 8,121,847     |   | $ | 3,282,057  |  
|                                                     |   |               |   |   |            |  
|Commitments (Note 9)                                 |   |               |   |   |            |  
|Related Party Transactions (Note 12)                 |   |               |   |   |            |  

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

4

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CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)INTERIM CONSOLIDATED STATEMENT OF OPERATIONS,
DEFICIT ANDCOMPREHENSIVE LOSS(Amounts expressed in U.S.
Dollars)

|                                                                                                                                 |  | For the three months ended |   |  | For the six months ended |  
|-------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | - |  | ------------------------ | -
|                                                                                                                                 |  | September 30,              |   |  | September 30,            |  
|                                                                                                                                 |  |                            |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|                                                                                                                                 |  | 2010                       |   |  | 2009                     |  
|                                                                                                                                 |  | $                          |   |  | $                        |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Net sales                                                                                                                        |  | 64,684                     |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Cost of sales                                                                                                                    |  | 43,036                     |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Gross Profit                                                                                                                     |  | 21,648                     |   |  |                          |  
|Operating expenses:                                                                                                              |  |                            |   |  |                          |  
|Impairment of mining rights (Note 7)                                                                                             |  | 1,280                      |   |  | 1,011                    |  
|Salaries and wages                                                                                                               |  | 88,563                     |   |  | 15119                    |  
|General and administrative                                                                                                       |  | 261,723                    |   |  | 180,961                  |  
|Professional fees                                                                                                                |  | 24,438                     |   |  |                          |  
|Amortization                                                                                                                     |  | 89,280                     |   |  | -                        |  
|                                                                                                                                 |  | 465,284                    |   |  | 197,091                  |  
|                                                                                                                                 |  |                            |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Operating loss before the undernoted                                                                                             |  | (443,636                   | ) |  | (197,091                 | )
|                                                                                                                                 |  |                            |   |  |                          |  
|Other expense-interest                                                                                                           |  | (27,275                    | ) |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Other income (expense)-Derivative Financial
      Instrument                                                                     |  | 10,672                     |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Interest expense relating to initial
      recognition of long term non-interest bearing loans to related parties
      (Note 4) |  | (81,342                    | ) |  | -                        |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Net Loss for the period                                                                                                          |  | (541,581                   | ) |  | (197,091                 | )
|Foreign exchange translation adjustment for the period                                                                           |  | 650,855                    |   |  | 28,018                   |  
|                                                                                                                                 |  |                            |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|Comprehensive loss for the period                                                                                                |  | 109,274                    |   |  | (169,073                 | )
|                                                                                                                                 |  |                            |   |  |                          |  
|Accumulated other comprehensive gain
      (loss),                                                                               |  |                            |   |  |                          |  
|                                                                                                                                 |  |                            |   |  |                          |  
|beginning of period                                                                                                              |  | 76,081                     |   |  | (49,447                  | )
|                                                                                                                                 |  |                            |   |  |                          |  
|Foreign exchange translation adjustment for
      the period                                                                     |  | 650,855                    |   |  | 28,010                   |  
|Accumulated other comprehensive gain (loss), end of period                                                                       |  | 726,936                    |   |  | (21,437                  | )
|Weighted average number of common shares
      outstanding                                                                       |  | 9,364,593                  |   |  | 6,000,000                |  
|Loss per share  basic and diluted                                                                                               |  | (0.06                      | ) |  | (0.03                    | )

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

5

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CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(Amounts expressed in U.S. Dollars)

|                                                                                                                         |   | For the six months ended |  
|------------------------------------------------------------------------------------------------------------------------ | - | ------------------------ | -
|                                                                                                                         |   | September 30,            |  
|                                                                                                                         |   |                          |  
|                                                                                                                         |   | 2010                     |  
|                                                                                                                         |   |                          |  
|Cash Flows from Operating Activities:                                                                                    |   |                          |  
|Net loss                                                                                                                 | $ | (1,701,581               | )
|Impairment of
      mining rights                                                                                        |   | 6,920                    |  
|Amortization                                                                                                             |   | 164,488                  |  
|Discount
      from fair value on initial recognition of long term non-interest bearing
      loans from related parties |   | 159,971                  |  
|Issue of
      convertible promissory note for professional fees                                                         |   | 190,000                  |  
|Warrant derivative
      liabilities expensed                                                                            |   | 62,176                   |  
|Amortization of deferred finance costs                                                                                   |   | 27,275                   |  
|Fair value
      adjustments related to warrants                                                                         |   | (10,672                  | )
|Changes in non-cash working capital:                                                                                     |   |                          |  
|Increase in
      accounts receivables                                                                                   |   | (64,684                  | )
|Increase in other receivables                                                                                            |   | (525,931                 | )
|Increase in goods
      in transit/Inventory                                                                             |   | (88,641                  | )
|Increase in capital lease obligation                                                                                     |   | 201,702                  |  
|Increase
      (Decrease) in accounts payable and accrued liabilities                                                    |   | (451,490                 | )
|                                                                                                                         |   |                          |  
|Net Cash provided (used) by Operating Activities                                                                         |   | (2,030,467               | )
|                                                                                                                         |   |                          |  
|Cash Flows from Investing Activities:                                                                                    |   |                          |  
|                                                                                                                         |   |                          |  
|Acquisition of
      mining rights                                                                                       |   | (6,920                   | )
|Acquisition of equipment                                                                                                 |   | (1,707,036               | )
|                                                                                                                         |   |                          |  
|Net Cash used by Investing Activities                                                                                    |   | (1,713,956               | )
|                                                                                                                         |   |                          |  
|Cash Flows from Financing Activities:                                                                                    |   |                          |  
|Proceeds
      (Repayment) of promissory notes                                                                           |   | (47,222                  | )
|Due from related party                                                                                                   |   | 127,811                  |  
|Proceeds from
      redeemable common stock, net                                                                         |   | 5,286,190                |  
|                                                                                                                         |   |                          |  
|Net Cash Provided By Financing Activities                                                                                |   | 5,366,779                |  
|                                                                                                                         |   |                          |  
|Effects of foreign currency exchange rate changes                                                                        |   | 434,045                  |  
|                                                                                                                         |   |                          |  
|Net Increase in Cash                                                                                                     |   | 2,056,401                |  
|                                                                                                                         |   |                          |  
|Cash and cash equivalent at beginning of the year                                                                        |   | -                        |  
|                                                                                                                         |   |                          |  
|Cash and cash equivalent at end of the year                                                                              | $ | 2,056,401                |  
|                                                                                                                         |   |                          |  
|Supplemental information:                                                                                                |   |                          |  
|Income tax paid                                                                                                          |   | Nil                      |  
|Interest paid                                                                                                            |   | Nil                      |  

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

6

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CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|1. | NATURE OF OPERATIONS
|-- | --------------------

Basis of Presentation

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions to Form 10-Q
and therefore do not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash flows in
conformity with U.S. generally accepted accounting principles; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods.

The condensed consolidated financial statements should be read
in conjunction with the financial statements and Notes thereto together with
managements discussion and analysis of financial condition and results of
operations contained in the Companys annual report on Form S-1. In the opinion
of management, the accompanying condensed consolidated financial statements
reflect all adjustments of a normal recurring nature considered necessary to
fairly state the financial position of the Company at September 30, 2010 and
September 30, 2009, the results of its operations for the three and six month
periods ended September 30, 2010 and September 30, 2009, and its cash flows for
the three and six month periods ended September 30, 2010 and September 30, 2009.
In addition, some of the Companys statements in this quarterly report on Form
10-Q may be considered forward-looking and involve risks and uncertainties that
could significantly impact expected results. The results of operations for the
three and six month period ended September 30, 2010 are not necessarily
indicative of results to be expected for the full year. The interim consolidated
financial statements include the accounts of Chile Mining Technologies, Inc.
(the Company or Chile Mining ), and its subsidiary Minera Licancabur S.A.
(Minera) (99.99% owned by the Company). All material inter-company accounts
and transactions have been eliminated.

Organization

On May 12, 2010, Chile Mining Technologies, Inc (Formerly Latin
America Ventures, Inc) entered into and closed a share exchange agreement, or
the Share Exchange Agreement, with Minera, a Chilean company, and its
shareholders, pursuant to which the Company acquired 99.9% of the issued and
outstanding capital stock of Minera in exchange for 6,000,000 shares of common
stock, par value $0.001, which constituted 83.33% of the Companys issued and
outstanding capital stock on a fully-diluted basis as of and immediately after
the consummation of the transactions contemplated by the Share Exchange
Agreement and after giving effect to the Cancellation Agreement described
below.

7

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CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|1. | NATURE OF OPERATIONS-Contd
|-- | ---------------------------

The Companys Chief Executive Officer (CEO), who is also one
of the former shareholders of Minera, retained one share of Minera, constituting
0.1% of Mineras issued and outstanding capital stock. The acquisition of Minera
was structured to allow the CEO to retain one share of Minera in order to comply
with Chilean legal requirements to have at least two record owners of its
capital stock. Upon the closing of the Share Exchange Agreement, the CEO entered
into a nominee agreement with us pursuant to which he agreed to act as the
record holder of such share, but agreed that all other rights to the share,
including the right to receive distributions on the share, vote the share and be
the beneficial owner of the share, rest in the Company.

As a condition precedent to the consummation of the Share
Exchange Agreement, on May 12, 2010, the Company also entered into a
cancellation agreement, or the Cancellation Agreement, with Halter Financial
Investments, LP, or HFI, and Mr. Pierre Galoppi, the controlling stockholders,
whereby HFI and Mr. Galoppi agreed to the cancellation of an aggregate of
3,600,500 shares of common stock owned by them.

Private Placement Transaction

On May 12, 2010, the Company also completed a private placement
transaction with a group of accredited investors. Pursuant to a securities
purchase agreement that was entered into with the investors and Minera, or the
Securities Purchase Agreement, the Company issued to the investors an aggregate
of 2,089,593 shares of common stock for an aggregate purchase price of
$5,809,000, or $2.78 per share, and warrants, or the Closing Warrants, to
purchase up to 1,044,803 shares of our common stock. The Closing Warrants have a
term of four years, bear an exercise price of $3.61 per share (subject to
customary adjustments), are exercisable on a net exercise or cashless basis and
are exercisable by investors at any time after the closing date.

Pursuant to the Securities Purchase Agreement, the Company also
agreed to certain make good provisions. Under the make good provisions, the
Company issued additional warrants, or the Make Good Warrants, to the investors
to purchase up to an aggregate of 2,089,593 shares of its common stock, at an
exercise price of $0.01 per share, which will only become exercisable if the
company does not meet certain financial performance targets in 2011 and 2012.
The make good provisions established minimum net income thresholds of
$14,382,102 and $15,179,687 for the 2011 and 2012 fiscal years, respectively.
If, in a given fiscal year, 90% of the applicable minimum net income threshold
is not met, such aggregate number of Make Good Warrants will become exercisable
equal to the amount by which the Companys actual net income is less than the
applicable financial target, divided by the financial target, and multiplied by
2,338,130.

8

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CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|1. | NATURE OF OPERATIONS-Contd
|-- | ---------------------------

In connection with the private placement, the Company also
entered into (i) a registration rights agreement, or the Registration Rights
Agreement, pursuant to which the Company is obligated to register the shares of
common stock issued to investors, including the shares of common stock
underlying the warrants, within a pre-defined period and (ii) a closing escrow
agreement, or the Closing Escrow Agreement, with Halter Financial Securities,
Inc., or HFS, as placement agent, and Securities Transfer Corporation, as escrow
agent, for deposit of funds by the investors.

The company also entered into lock-up agreements with each of
our directors and officers, or the Lock-Up Agreements, pursuant to which each of
them agreed not to transfer any shares of capital stock held directly or
indirectly by them for a one year period following the effective date of a
registration statement covering the shares issued in connection with the private
placement.

Convertible Promissory Note and Make Good Warrant

Halter Financial Group, L.P., or HFG, provided certain advisory
services to the Company in connection with the acquisition of Minera and the
private placement transaction described above. Pursuant to an advisory agreement
that Minera entered into with HFG on April 16, 2009, HFG agreed to (a) advise
Minera with regard to its desire to effect a combination transaction with a U.S.
domiciled public shell corporation, (b) help Minera identify suitable investment
bank(s) to act as placement agent for its contemplated private placement
transactions and (c) counsel management on matters related to the operating a
U.S. domiciled public company. Under the terms of the advisory agreement, HFG
was entitled to receive a cash payment of $450,000 at the closing of the reverse
acquisition of Minera. In lieu of such cash payment, HFG agreed to accept a cash
payment of $260,000 and a promissory note issued by the Company in the principal
amount of $190,000 that accrues simple annual interest at a rate of 3%, or the
HFG Note. The HFG Note is due and payable on the sooner of the closing of our
next equity financing (including the receipt of additional funds by the Company
from any subsequent closing of the May 12 private placement) or the 180th day
following the date of its issuance. In addition, at any time that the HFG Note
remains outstanding, it may be converted at HFGs option into shares of our
common stock at a conversion price of $2.78. At the closing, HFG was also issued
a Make Good warrant, to purchase up to 985,104 shares of our common stock, or
the HFG Make Good Warrant. The terms of the HFG Make Good Warrant are identical
to the terms of the Make Good Warrants issued to the investors in the private
placement.

9

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CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|2. | COMPLETION OF ACQUISITION
|-- | -------------------------

On May 12, 2010, Chile Mining Technologies, Inc (The Company)
completed an acquisition of Minera pursuant to the Share Exchange Agreement. The
acquisition was accounted for as a recapitalization effected by a share
exchange, wherein Minera is considered the acquirer for accounting and financial
reporting purposes. The assets and liabilities of the acquired entity have been
brought forward at their book value and no goodwill has been recognized.

|3. | MACHINERY AND EQUIPMENT
|-- | -----------------------

| |                               |  | 9/30/2010 |  |  | 3/31/2010    | 
| | ----------------------------- |  | --------- |  |  | ------------ | 
| |                               |  |           |  |  | Accumulated  | 
| |                               |  | Cost      |  |  | Amortization | 
| |                               |  | $         |  |  | $            | 
| | Santa Filomena Plant          |  | 1,289,017 |  |  | -            | 
| | Ana Maria Plant and equipment |  | 3,819,732 |  |  | 247,302      | 
| | Combarbala Plant              |  | 137,866   |  |  | -            | 
| |                               |  | 5,246,615 |  |  | 247,302      | 

|4. | PROMISSORY NOTES
|-- | ----------------

Promissory notes from related parties payable were unsecured
and consisted of the following:

|                |  |               |  |   | September 30, |  |  | March 31, | 
|--------------- |  | ------------- |  | - | ------------- |  |  | --------- | 
|Company         |  | Interest Rate |  |   | 2010          |  |  | 2010      | 
|                |  |               |  |   |               |  |  |           | 
|Ivan Vergara    |  | Nil           |  | $ | 187,722       |  |  | 232,097   | 
|Jorge Pizarro   |  | Nil           |  |   | 51,152        |  |  | 268,074   | 
|Geominco EIRL   |  | Nil           |  |   | 833,122       |  |  | 1,265,167 | 
|                |  |               |  |   |               |  |  |           | 
|Total Long Term |  |               |  | $ | 1,071,996     |  |  | 1,765,338 | 

10

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

All long term liabilities are valued at fair market value at
inception. These long term loans do not bear interest and had a maturity date of
March 31, 2013. The Company recognized a discount on the face value of the loans
at inception to adjust the carrying value to the fair value. Fair value was
calculated by using the net present value of the loans, at an assumed interest
rate of 18%. The amount of the discount, being $1,404,458 ($nil in 2009) was
recorded in Contributed surplus on the accompanying balance sheet.

During the prior quarter ended June 30, 2010, the promissory
note holders forgave $852,225 in debt. The transaction was accounted for as a
capital transaction with related parties and the company credited Contributed
surplus with $852,225.

In addition, the Company credited contributed surplus with
$13,835 (refer to Note 8 (c)) and an additional $3,540 on recapitalization of
reverse merger, being the excess over par value of the shares issued and
outstanding.

The discounts are being amortized over the lives of the
promissory notes using the effective interest method, with interest expense
being recorded as an expense in the related period. The Company recognized
interest expense to amortize discounts on promissory notes to related parties
for the six month period ended September 30, 2010 in the amount of $159,971
($nil in 2009).

|5. | DUE TO/FROM RELATED PARTY
|-- | -------------------------

As of September 30, 2010, the Company owes Geominco E.I.R.L.
$786,976. This advance is unsecured non-interest bearing and due on demand. The
Company did not establish a bank account from inception (January 24, 2008) to
March 31, 2010 and opened an account only during the period ended September 30,
2010. Thus, all cash transactions reflected in these financial statements prior
to opening of the bank account were recorded in the bank accounts of Geominco
E.I.R.L.

11

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|6. | CAPITAL STOCK
|-- | -------------

|Authorized                                        
|--------------------------------------------------
|Preferred Stock;
      $0.001 par value           
|10,000,000 shares
      authorized                
|                                                  
|Common Stock:
      $0.001 par value              
|100,000,000 shares
      authorized               
|                                                  
|Issued                                            
|Preferred Stock:
      None issued and outstanding
|                                                  
|Common Stock:                                     

|                                             |  | Number of  |   |  |        |  
|-------------------------------------------- |  | ---------- | - |  | ------ | -
|                                             |  | Shares     |   |  | Amount |  
|                                             |  |            |   |  | $      |  
|Minera common shares                         |  | 1,000      |   |  | 10,715 |  
|Adjustment for Reverse Takeover              |  | 5,999,000  |   |  | (3,540 | )
|Chile Mining Common Stock                    |  | 4,800,500  |   |  | 25     |  
|Cancellation of common stock of Chile Mining |  | (3,600,500 | ) |  |        |  
|Issuance of stock against private placement  |  | 2,089,593  |   |  | 2,090  |  
|Issuance of stock for credit facility AIBC   |  | 75,000     |   |  | 75     |  
|Share capital as of September 30, 2010       |  | 9,364,593  |   |  | 9,365  |  

12

---

CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|6. | CAPITAL STOCK-Contd
|-- | --------------------

On May 12, 2010, Chile Mining Technologies, Inc (Formerly Latin
America Ventures, Inc) entered into and closed a share exchange agreement, or
the Share Exchange Agreement, with Minera, a Chilean company, and its
shareholders, pursuant to which the Company acquired 99.9% of the issued and
outstanding capital stock of Minera in exchange for 6,000,000 shares of common
stock, par value $0.001, which constituted 83.33% of the Companys issued and
outstanding capital stock on a fully-diluted basis as of and immediately after
the consummation of the transactions contemplated by the Share Exchange
Agreement and after giving effect to the Cancellation Agreement described
below.

As a condition precedent to the consummation of the Share
Exchange Agreement, on May 12, 2010, the Company also entered into a
cancellation agreement, or the Cancellation Agreement, with Halter Financial
Investments, LP, or HFI, and Mr. Pierre Galoppi, the controlling stockholders,
whereby HFI and Mr. Galoppi agreed to the cancellation of an aggregate of
3,600,500 shares of common stock owned by them.

On May 12, 2010, the Company also completed a private placement
transaction with a group of accredited investors. Pursuant to a securities
purchase agreement that was entered into with the investors and Minera, or the
Securities Purchase Agreement, the Company issued to the investors an aggregate
of 2,089,593 shares of common stock for an aggregate purchase price of
$5,809,000, or $2.78 per share, and warrants, or the Closing Warrants, to
purchase up to 1,044,803 shares of our common stock. The Closing Warrants have a
term of four years, bear an exercise price of $3.61 per share (subject to
customary adjustments), are exercisable on a net exercise or cashless basis and
are exercisable by investors at any time after the closing date (refer note 8)

|7. | IMPAIRMENT OF MINING RIGHTS
|-- | ---------------------------

The Company has expensed mining rights, since the Company
currently has no formal plan to exploit these mineral rights.

13

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.) NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8(a) | DERIVATIVE FINANCIAL INSTRUMENTS
|---- | --------------------------------

Derivative financial instruments, as defined in FASB Accounting
Standards Codification (ASC) 815-10-15-83 Derivatives and Hedging,
consist of financial instruments or other contracts that contain a notional
amount and one or more underlying (e.g. interest rate, security price or other
variable), require no initial net investment and permit net settlement.
Derivative financial instruments may be free-standing or embedded in other
financial instruments. Further, derivative financial instruments are initially,
and subsequently, measured at fair value and recorded as liabilities or, in rare
instances, assets.

The Company generally does not use derivative financial
instruments to hedge exposures to cash-flow, market or foreign-currency risks.
However, the Company has entered into certain other financial instruments and
contracts, such as our secured convertible debenture and warrant financing
arrangements that are either (i) not afforded equity classification or (ii)
embody risks not clearly and closely related to host contracts. As required by
ASC 815, these instruments are required to be carried as derivative liabilities,
at fair value, in our financial statements.

The following table summarizes the components of the derivative
liabilities as of September 30, 2010 and inception of the instruments:

|                             |   | September 30, |  |   | Inception          | 
|---------------------------- | - | ------------- |  | - | ------------------ | 
|May 2010 Private Placement:  |   | 2010          |  |   | May
      12, 2010 | 
|Investor warrants            | $ | 1,295,556     |  | $ | 1,519,144          | 
|Broker warrants              |   | 233,197       |  |   | 273,442            | 
|Credit facility warrants     |   | 446,400       |  |   | 523,440            | 
|Make Good warrants           |   | 356,296       |  |   | 131,891            | 
|Acquisition advisory fees:   |   |               |  |   |                    | 
|Make Good warrants           |   | 167,972       |  |   | 62,176             | 
|Total derivative liabilities | $ | 2,499,421     |  | $ | 2,510,093          | 

14

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8(a) | DERIVATIVE FINANCIAL INSTRUMENTS Contd
|---- | ----------------------------------------

The following table summarizes the common shares indexed to the
derivative instruments as of September 30, 2010 and inception of the
instruments:

|                             |  | September 30, |  |  | Inception          | 
|---------------------------- |  | ------------- |  |  | ------------------ | 
|May 2010 Private Placement:  |  | 2010          |  |  | May
      12, 2010 | 
|Investor warrants            |  | 1,044,803     |  |  | 1,044,803          | 
|Broker warrants              |  | 188,062       |  |  | 188,062            | 
|Credit facility warrants     |  | 360,000       |  |  | 360,000            | 
|Make Good warrants           |  | 137,566       |  |  | 47,597             | 
|Acquisition advisory fees:   |  |               |  |  |                    | 
|Make Good warrants           |  | 64,854        |  |  | 22,438             | 
|Total derivative liabilities |  | 1,795,285     |  |  | 1,662,900          | 

Since the number of common shares indexed to the Make Good
warrants is dependent on the number of warrants that will vest based on the
achievement of certain performance conditions, as discussed below, the number of
shares of common stock indexed to the warrants was determined using
probability-weighted outcomes based on managements best estimate of the
probability of achievement of the performance conditions in 2011 and 2012.

|8 **(b).** | MAY 2010 PRIVATE PLACEMENT
|---------- | --------------------------

On May 12, 2010, the Company commenced a private placement of
(i) 2,089,593 shares of common stock for an aggregate purchase price of
$5,809,000, or $2.78 per share, (ii) Closing warrants to purchase up to
1,044,803 shares of our common stock, and (iii) Make Good warrants to purchase
up to an aggregate of 2,089,593 shares of our common stock (the May 2010
Private Placement). In connection with the May 2010 Private Placement, the
company entered into a Registration Rights Agreement related to the common stock
and warrants that requires the Company to, among other things, file a
Registration Statement within 65 days from the closing of the May 2010 Private
Placement and achieve effectiveness as soon as possible , but in no event later
than the 180th day following the Final Closing Date or the
5th trading day following the date on which the Company is notified
that the initial Registration Statement will not be reviewed or is no longer
subject to review and comments. The Registration Rights Agreement does not
provide for an alternative or contain a penalty in the event the Company is
unable to fulfill its requirements. As a result of the registration rights
obligation to file within a specified period, which is presumed not to be within
the Companys control, we are required to classify the common stock outside of
stockholders equity as redeemable common stock.

15

---

CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|8 **(b).** | MAY 2010 PRIVATE PLACEMENT-Contd
|---------- | ---------------------------------

The Closing warrants included in the May 2010 Private Placement
are indexed to 1,044,803 shares of the Companys common stock and may be
exercised until the fourth anniversary of their issuance at an exercise price of
$3.61 per share. Pursuant to the Securities Purchase Agreement, the Company has
also agreed to issue Make Good warrants to investors to purchase up to an
aggregate amount of 2,089,593 shares of our common stock at an exercise price of
$0.01 per share which will only become exercisable if we do not meet certain
financial performance targets in 2011 and 2012. The make good provisions
established minimum net income thresholds of $14,382,102 and $15,179,687 for the
2011 and 2012 fiscal years, respectively. If, in a given fiscal year 90% of the
applicable minimum net income threshold is not met, such aggregate number of
Make Good warrants will become exercisable equal to the amount by which our
actual net income is less than the applicable financial target, divided by the
financial target, and multiplied by 2,089,593. The Closing and Make Good
warrants were evaluated under the guidance of ASC 480, Distinguishing
Liabilities and Equity for purposes of their classification. Due to the Make
Good warrants contingent exercise provisions, they did not meet the definition
of indexed to a Companys own stock and were required to be classified as
liabilities and measured at inception and an ongoing basis at fair value. The
Closing warrants met the definition of indexed to a Companys own stock;
however, they did not meet eight conditions for equity classification provided
in ASC 815-40 because they have firm registration rights with no economic
alternative to registration. We are required to assume that cash settlement
would be the only alternative to non-filing and effectiveness under the
standards. Accordingly, the Closing warrants required liability classification
at inception and on an ongoing basis at fair value until the registration rights
are fulfilled. Fair value of the warrants was measured using the
Black-Scholes-Merton valuation technique and in applying this technique we were
required to develop certain subjective assumptions which are listed in more
detail below.

The total basis in the financing was allocated first to
derivative instruments, required to be classified as liabilities with the
remaining basis being allocated to the common stock.

16

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8 **(b).** | MAY 2010 PRIVATE PLACEMENT-Contd
|---------- | ---------------------------------

The following table illustrates the initial allocation:

|                                    |   |            |   |   | Financing  |   |   |            |  
|----------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                    |   | Proceeds   |   |   | cost       |   |   | Final      |  
|                                    |   | allocation |   |   | allocation |   |   | Allocation |  
|Gross proceeds                      | $ | 5,809,000  |   | $ | --         |   | $ | 5,809,000  |  
|Financing costs paid in cash        |   | --         |   |   | (522,810   | ) |   | (522,810   | )
|                                    | $ | 5,809,000  |   | $ | (522,810   | ) | $ | 5,286,190  |  
|                                    |   |            |   |   |            |   |   |            |  
|Derivative liabilities:             |   |            |   |   |            |   |   |            |  
|Closing warrants:                   |   |            |   |   |            |   |   |            |  
|Investor
      warrants             | $ | (1,519,144 | ) |   |            |   | $ | (1,519,144 | )
|Broker warrants                     |   |            |   |   | (273,442   | ) |   | (273,442   | )
|Credit
      facility warrants      |   |            |   |   | (523,440   | ) |   | (523,440   | )
|Make Good warrants                  |   | (131,891   | ) |   |            |   |   | (131,891   | )
|Total derivative
      liabilities  | $ | 1,651,035  | ) |   | (796,882   | ) | $ | (2,447,917 | )
|                                    |   |            |   |   |            |   |   |            |  
|                                    |   |            |   |   |            |   |   |            |  
|Redeemable common stock             | $ | (4,157,965 | ) | $ | --         |   | $ | (4,157,965 | )
|Financing costs paid in cash        |   |            |   |   | 407,792    |   |   | 407,792    |  
|Financing costs paid with warrants  |   |            |   |   | 621,568    |   |   | 621,568    |  
|Total
      redeemable common stock | $ | (4,157,965 | ) | $ | 1,029,360  |   | $ | (3,128,605 | )
|                                    |   |            |   |   |            |   |   |            |  
|Deferred finance costs              | $ | --         |   | $ | 290,332    |   | $ | 290,332    |  

The Company amortized deferred finance cost by $27,275 during
the quarter ended September 30, 2010. Deferred finance costs outstanding as of
September 30, 2010 is $ 263,057

The direct financing costs are allocated to the financial
instruments (redeemable common stock and warrants), based upon their relative
fair values. Amounts related to the warrants are recorded as deferred finance
costs and amortized through charges to interest expense over the term of the
arrangement using the effective interest method while amounts related to the
common stock directly offset the carrying value of the redeemable common stock.

17

---

CHILE MINING TECHNOLOGIES INC. (Formerly Latin America
Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2010 (Amounts expressed in U.S. Dollars)

|8 **(c)** | CONVERTIBLE PROMISSORY NOTE AND MAKE GOOD WARRANT
|--------- | -------------------------------------------------

Halter Financial Group, L.P., or HFG, provided certain advisory
services to the Company in connection with the acquisition of Minera and the
private placement transaction described above. Pursuant to an advisory agreement
that Minera entered into with HFG on April 16, 2009, HFG agreed to (a) advise
Minera with regard to its desire to effect a combination transaction with a U.S.
domiciled public shell corporation, (b) help Minera identify suitable investment
bank(s) to act as placement agent for its contemplated private placement
transactions and (c) counsel management on matters related to the operating a
U.S. domiciled public company. Under the terms of the advisory agreement, HFG
was entitled to receive a cash payment of $450,000 at the closing of the reverse
acquisition of Minera. In lieu of such cash payment, HFG agreed to accept a cash
payment of $260,000 and a promissory note issued by us in the principal amount
of $190,000 that accrues simple annual interest at a rate of 3% (the HFG
Note). The HFG Note is due and payable on the sooner of the closing of our next
equity financing (including the receipt of additional funds by the Company from
any subsequent closing of the May 12 private placement) or the 180th day
following the date of its issuance. In addition, at any time that the HFG Note
remains outstanding, it may be converted at HFGs option into shares of our
common stock at a conversion price of $2.78.

The Company has evaluated the terms and conditions of the
Convertible Promissory Note under the guidance of ASC 815, Derivatives and
Hedging.The embedded conversion feature (ECF) is an equity-linked feature
that is not clearly and closely related to the risks of the host debt
instrument. However, current accounting standards afforded an exemption to
bifurcation of the ECF because it is both indexed to the Companys own stock and
otherwise met the definition of Conventional Convertible based upon the fixed
conversion price.

At the closing, HFG was also issued a make good warrant, to
purchase up to 985,104 shares of our common stock, (the HFG Make Good
Warrant). The terms of the HFG Make Good Warrant are identical to the terms of
the Make Good Warrants issued to the investors in the private placement and
accordingly, they did not meet the definition of indexed to a Companys own
stock and were required to be classified as liabilities and measured at
inception and an ongoing basis at fair value. The fair value of the Make Good
Warrants was determined using the Black-Scholes-Merton valuation technique over
the term to contractual expiration. In applying this technique we were required
to develop certain subjective assumptions which are listed in more detail below.

18

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8 **(c)** | CONVERTIBLE PROMISSORY NOTE AND MAKE GOOD WARRANT-Contd
|--------- | --------------------------------------------------------

The fair value of the Convertible Promissory Note was estimated
based upon the present value of its future cash flows, using credit risk
adjusted rates, as enhanced by the fair value of the ECF. Since the Company does
not have an established credit rating, the credit risk adjusted yield of 15.51%
was determined by reference to comparable instruments in public markets and
industry-specific risk. The fair value of the ECF was determined using the Monte
Carlo Simulation (MCS). MCS is an option-based model that embodies assumptions
that would likely be considered by market participants who trade the financial
instrument. In addition to more traditional assumptions, such as stock price,
trading volatilities and risk-free rates, MCS assumptions include credit risk,
interest risk and redemption considerations. Significant assumptions included in
the MSC valuation technique were as follows:

|                            |   | Assumption     | 
|--------------------------- | - | -------------- | 
|Linked common shares        |   | 68,345         | 
|Stock price                 | $ | 2.78           | 
|Expected life (years)       |   | 4.00           | 
|Volatility (based on peers) |   | 58.24%- 63.55% | 
|Risk adjusted yield         |   | 15.51%- 16.94% | 
|Risk adjusted interest rate |   | 1.52%- 1.65%   | 

19

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8 **(c)** | CONVERTIBLE PROMISSORY NOTE AND MAKE GOOD WARRANT-Contd
|--------- | --------------------------------------------------------

The advisory fee expense was determined based upon the fair
value of the Convertible Promissory Note and the Make Good warrants issued to
the HFG. In accordance with APB 14, the premium on the Convertible Promissory
Note, representing the difference between the fair value and the face value of
the note, was recorded to paid in capital.

The following table illustrates the initial allocation:

|                            |   | Initial    | 
|--------------------------- | - | ---------- | 
|                            |   | Allocation | 
|Convertible Promissory Note | $ | 190,000    | 
|Make Good warrants          |   | 62,176     | 
|Paid in capital             |   | 13,835     | 
|Total                       | $ | 266,011    | 

Fair value Disclosures:

ASC 820, Fair value Measurements and Disclosures, provides
requirements for disclosure of liabilities that are measured at fair value on a
recurring basis in periods subsequent to the initial recognition. Financial
instruments arising from the May 2010 Private Placement that are measured at
fair value on a recurring basis are (i) the investor warrants, (ii) the broker
warrants, (iii) the credit facility warrants and (iii) Make Good warrants,
respectively.

The warrants were valued using the Black-Scholes-Merton
technique, and the Company estimated (i) the expected term as equal to the
remaining term on the warrant, (ii) the volatility, based upon a reasonable peer
group, (iii) the risk free rate as the published rate for zero coupon government
securities with terms consistent with the expected term.

Information and significant assumptions embodied in our warrant
valuations (including ranges for certain assumptions) as of September 30, 2010
are illustrated in the following tables:

|                            |  |            |  |   |          |  |   | Make     | 
|--------------------------- |  | ---------- |  | - | -------- |  | - | -------- | 
|                            |  | Fair value |  |   | Closing  |  |   | Good     | 
|                            |  | hierarchy  |  |   | Warrants |  |   | warrants | 
|Warrants to purchase common |  |            |  |   |          |  |   |          | 
|stock:                      |  |            |  |   |          |  |   |          | 
|Stock price (1)             |  | (2)        |  | $ | 2.60     |  | $ | 2.60     | 
|Strike price                |  | n/a        |  | $ | 3.61     |  | $ | 0.01     | 
|Volatility (2)              |  | (2)        |  |   | 79.02%   |  |   | 79.02%   | 
|Term (years) (3)            |  | (3)        |  |   | 3.62     |  |   | 3.62     | 
|Risk-free rate (2)          |  | (2)        |  |   | 0.64%    |  |   | 0.64%    | 
|Dividends                   |  | n/a        |  |   | --       |  |   | --       | 

20

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|8 **(c)** | CONVERTIBLE PROMISSORY NOTE AND MAKE GOOD WARRANT-Contd
|--------- | --------------------------------------------------------

|(1) | Level 1 inputs are quoted prices in active markets for identical
      assets and liabilities, or derived there from. We used our trading market
      price as of September 30, 2010 as input into the model which is a Level 1
      input.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | Level 2 inputs are inputs other than quoted prices that are
      observable. We use the current published yields for zero-coupon US
      Treasury Securities, with terms nearest the remaining term of the warrants
      for our risk free rate. We did not have a historical trading history
      sufficient to develop an internal volatility rate for use in the
      Black-Scholes-Merton model. As a result, we have used a peer approach
      wherein the historical trading volatilities of certain companies with
      similar characteristics as ours and who had a sufficient trading history
      were used as an estimate of our volatility. In developing this model, no
      one company was weighted more heavily.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | Level 3 inputs are unobservable inputs. Inputs for which any parts are
      level 3 inputs are classified as level 3 in their entirety. The remaining
      term used equals the remaining contractual term as our best estimate of
      the expected term. The probability-weighted outcomes of achieving the
      performance conditions are also a Level 3 input.                                                                                                                                                                                                                                                                                                                                                                   

The following tables summarize the effects on our income (loss)
associated with changes in the fair values of our derivative financial
instruments for the three and six months ended September 30, 2010:

|May 2010 Private Placement:    |   |          |  
|------------------------------ | - | -------- | -
|Investor
      warrants        | $ | 223,588  |  
|Broker warrants                |   | 40,245   |  
|Credit facility
      warrants |   | 77,040   |  
|Make Good warrants             |   | (224,405 | )
|Acquisition advisory fees:     |   |          |  
|Make Good warrants             |   | (105,796 | )
|                               | $ | 10,672   |  

21

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

8 (c) CONVERTIBLE PROMISSORY NOTE AND MAKE GOOD
WARRANT-Contd

The following represents a reconciliation of the changes in our
derivatives and the related changes in fair value on a recurring basis using
significant unobservable inputs (Level 3) during the quarter ended September 30,
2010:

|Balances at June 30, 2010      | $ | 2,510,093 |  
|------------------------------ | - | --------- | -
|                               |   |           |  
|Issuances                      |   | --        |  
|                               |   |           |  
|Conversions and cancellations  |   | --        |  
|                               |   |           |  
|Fair value adjustments (a)     |   | (10,672   | )
|                               |   |           |  
|Balances at September 30, 2010 | $ | 2,499,421 |  

Estimating fair values of derivative financial instruments
requires the development of significant and subjective estimates that may, and
are likely to, change over the duration of the instrument with related changes
in internal and external market factors. In addition, option-based techniques
are highly volatile and sensitive to changes in the trading market price of our
common stock, which has a high estimated volatility. Since derivative financial
instruments are initially and subsequently carried at fair values, our income
will reflect the volatility in these estimate and assumption changes.

22

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|9. | COMMITMENTS
|-- | -----------

Ana Maria Plant

On November 20, 2008, the Company signed an option to acquire
mining rights to a property located in the Choapa province in the Republic of
Chile known as the Ana Maria Plant. The option price is Chilean Pesos
250,000,000 that approximates $540,000. Due to certain government legal
processes and other required documents, there is a delay in the transfer of the
property ownership. The option to acquire the mining rights expired in June 2009
but was extended until the final legal process to transfer the land to the
Company is completed.

|10. | SEGMENT INFORMATION
|--- | -------------------

As at September 30, 2010, the Company operated in one
reportable segment, being the exploration for and the development of mining
rights in the Republic of Chile.

|11. | INTERNATIONAL OPERATIONS
|--- | ------------------------

The financial statements of the Companys international
operations through its subsidiary in Chile are measured using local currencies
as their functional currencies.

The Company translates the assets and liabilities of its
non-U.S. subsidiary at the exchange rates in effect at quarter end and the
results of operations at the average rate throughout the period. The translation
adjustments are recorded directly as a separate component of shareholders
equity, The Company recorded a translation gain of $611,539 in its equity
section of the Balance sheet under accumulated other comprehensive gain.

23

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CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSSeptember 30, 2010(Amounts expressed in U.S.
Dollars)

|12. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

During the quarter ended September 30, 2010, the Company paid
salaries of $10,593 ($nil in 2009) to parties that are related to the
shareholder of the Company.

During the quarter ended June 30, 2010, related promissory note
holders forgave $852,225 in debt. (See also Note 4)

The transactions are in the normal course of operations and are
measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties under common control.

|13. | FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK FACTORS
|--- | ----------------------------------------------------

The fair value of a financial instrument is the estimated
amount that the Company would receive or pay to settle the financial assets and
financial liabilities as at the reporting date. The book value of other
receivables, accounts payable and accrued liabilities, and due to related party
approximate fair values at the balance sheet dates.

The fair value of the long-term debt has been estimated by
discounting future cash flows at a rate offered for debt of similar maturities
and credit quality.

|                                         |  | 9/30/2010      |  |  | 3/31/2010  | 
|---------------------------------------- |  | -------------- |  |  | ---------- | 
|Assets/Liabilities                       |  | Carrying value |  |  | Fair value | 
|                                         |  |                |  |  |            | 
|Cash and cash equivalent                 |  | 2,056,401      |  |  | 2,056,401  | 
|Accounts receivables                     |  | 64,684         |  |  | -          | 
|Other receivables                        |  | 602,123        |  |  | 602,123    | 
|Accounts payable and accrued liabilities |  | 778,570        |  |  | 778,570    | 
|Due to related party                     |  | 786,976        |  |  | 786,976    | 

24

---

CHILE MINING TECHNOLOGIES INC.(Formerly Latin
America Ventures, Inc.)NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTSJune 30, 2010(Amounts expressed in U.S.
Dollars)

|13. | FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK FACTORS (contd)
|--- | -------------------------------------------------------------

Interest rate risk

The companys exposure to interest rate
fluctuations is not significant.

Credit risk

Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of
amounts receivable. The Company is not exposed to material losses on its
accounts receivable and future revenues.

Commodity price risk

The ability of the Company to develop
its properties and the future profitability of the Company is directly related
to the market price of certain minerals. The Company does not currently use
derivative financial instruments to reduce its exposure to commodity price risk.

Liquidity risk

The Companys exposure to liquidity
risk is dependent on the collection of amounts receivable and the ability to
raise funds to meet purchase commitments and to sustain operations. The company
controls its liquidity risk by managing working capital and cash flows.

Foreign currency risk

The Company is exposed to foreign
currency risk as substantially all of the Companys cash is denominated in
Chilean Pesos. This risk is partially mitigated by the fact that a significant
portion of the costs associated with the mining claims and deferred exploration
expenditures are incurred in Chilean Pesos.

25

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such
as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions
which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings,
revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business
in Chile, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties..

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business,
financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation to provide updates, revisions or amendments to any forward-looking
statements to reflect changes in our expectations or future events.

Use of Certain Defined Terms

Except as otherwise indicated by the context, references in this report to:

- the “Company,” “we,” “us,” or “our,” are to the combined business of CMT and its 99.9% owned subsidiary, Minera, but do not include the stockholders of CMT;
- “CMT” are to Chile Mining Technologies Inc., a Nevada corporation;
- “Minera” are to Sociedad Minera Licancabur, S.A., a Chilean company;
- “Chile” and “Chilean” are to the Republic of Chile;
- “Peso” are to the Chilean peso, the legal currency of Chile;
- “U.S. dollar,” “$” and “US$” are to the legal currency of the United States;
- “MT” are to metric tons
- “SEC” are to the Securities and Exchange Commission;
- “Securities Act” are to the Securities Act of 1933, as amended, and “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
- “Exploration” means the process of locating commercially viable concentrations of minerals to mine; and
- “Exploitation” means the act of extracting a mineral resource from source material.

Throughout this report, we have converted Peso to USD as follows:

26

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|September 30, 2009                                
|--------------------------------------------------
|Balance sheet                                     
|Statement of income and
      comprehensive income

Overview of Our Business

We are a mineral extraction company based in the Republic of
Chile, with copper as our pay metal. Our founders, Messrs. Jorge Osvaldo
Orellana Orellana and Jorge Fernando Pizarro Arriagada, have refined the
electrowin process in a way that permits the electrowin process to be used at a
relatively small mine and/or tailings sites. Electrowinning is a process in
which positive and negative electrodes are placed in an acidic solution
containing copper ions, and an electric current passed through the solution
causes the copper to be deposited on the negative electrodes so that it can be
collected.

We have obtained rights to conduct our mineral extraction
operations at 7 different sites, and are in negotiations to obtain rights to one
additional site, in and around the Coquimbo region, which is located in
north-central Chile, approximately 400 kilometers north of Santiago. While these
sites each have their own mineral deposits, we will procure the majority
(approximately 88%) of our source material from non-traditional sources,
including tailings, ore, or a combination thereof, by purchasing rights to such
source material at smaller sites, where it is not economical for larger open-pit
mining companies to operate, due largely to the transportation costs associated
with moving source materials to fixed processing sites.

By utilizing Minimum Intrusion Non-traditional Input, or MINI,
plants, we are able to build scalable, less expensive plants closer to source
material deposits, thereby resulting in significant processing savings. In
addition, since smaller sites generally require higher copper prices, due to
transportation costs, to operate profitably, these deposits can currently be
purchased at a discount. By utilizing this strategy, we are able to reduce costs
and operate profitably with smaller deposits. We estimate that the MINI plant
technology will allow us to break even at copper prices as low as US$1.00 per
pound or US$2,205 per metric ton. As of September 30, 2010, copper was trading
at $8,053 per metric ton on the London Metals Exchange, or LME.

Operations are currently underway at our Ana Maria plant.
Following capacity upgrades in May 2010, the present annual capacity of the Ana
Maria plant is approximately 2,225 metric tons. We have also begun preparatory
work at some of the additional sites we have under our control, in anticipation
of the construction of additional MINI plants over the next 18 to 24 months.

Acquisition of Minera and Private Placement

On May 12, 2010, we completed a reverse acquisition transaction
through a share exchange with Minera and its shareholders whereby we acquired
99.9% of the issued and outstanding capital stock of Minera in exchange for
6,000,000 shares of our common stock, par value $0.001, which constituted 83.33%
of our issued and outstanding capital stock on a fully-diluted basis as of and
immediately after the consummation of the reverse acquisition. As a result of
the reverse acquisition, Minera became our subsidiary and the former
shareholders of Minera became our controlling stockholders. For accounting
purposes, the share exchange transaction with Minera was treated as a reverse
acquisition, with Minera as the acquirer and CMT as the acquired party.

On May 12, 2010, we also completed a private placement in which
we issued and sold to certain accredited investors an aggregate of 2,089,593
shares of our common stock for an aggregate purchase price of $5,809,000, or
$2.78 per share, and warrants to purchase up to 1,044,803 shares of our common
stock. The warrants have a term of four years, bear an exercise price of $3.61
per share (subject to customary adjustments for stock splits, stock
combinations, reclassifications and similar events), are exercisable on a net
exercise or cashless basis and are exercisable by investors at any time after
the closing date. As a result of this private placement, we raised approximately
$5.8 million in gross proceeds, which left us with approximately $4.5 million in net proceeds after the deduction
of offering expenses in the amount of approximately $1.3 million.

27

---

On May 6, 2010, Minera entered into a letter agreement that
outlines the proposed terms of a standby facility of credit with AIBC
International Corp.(SR), or AIBC. Under the letter agreement we may,
subject to the satisfaction of certain conditions, from time to time upon 90
days notice, request an advance from AIBC up to an aggregate of $3.0 million.
Any amounts borrowed under the facility will accrue interest at a rate of 12.5%
per annum, and must be re-paid within six months from the date of the drawdown.
In connection with the execution of the letter agreement, we issued to AIBC
75,000 shares of our common stock a one-year warrant to purchase up to 360,000
shares of our common stock, at an exercise price of $2.78 per share. In
addition, we will pay to AIBC additional compensation upon the drawdown of any
portion of the $3.0 million, which compensation will be equal to (i) 8% for the
first $1.0 million, (ii) 12% for the second $1.0 million and 18% for the third
$1.0 million. If we draw down all $3.0 million of the facility, we would receive
net proceeds of $2.62 million and pay aggregate compensation to AIBC of
$380,000.

Results of Operations

Comparison ofthe Three-Month Periods Ended
September 30, 2010 and 2009 (Unaudited)

The following tables set forth key components of our results of
operations for the periods indicated, both in dollars and as a percentage of
sales revenue and key components of our revenue for the periods indicated in
dollars. The financial data for the three months ended September 30, 2010
reflect the second quarter of Fiscal Year 2011, while the financial data for the
same period in 2009 reflect the second quarter of Fiscal Year 2010.

|                                                                                                                       |   | Three Months Ended |   |   |          |  
|---------------------------------------------------------------------------------------------------------------------- | - | ------------------ | - | - | -------- | -
|                                                                                                                       |   | September 30,      |   |   |          |  
|                                                                                                                       |   | 2010               |   |   | 2009     |  
|                                                                                                                       |   |                    |   |   |          |  
|                                                                                                                       |   |                    |   |   |          |  
|                                                                                                                       |   | Amount             |   |   | Amount   |  
|Net sales                                                                                                              | $ | 64,684             |   | $ |          |  
|                                                                                                                       |   |                    |   |   |          |  
|Cost of sales                                                                                                          | $ | 43,036             |   | $ |          |  
|                                                                                                                       |   |                    |   |   |          |  
|Gross profit                                                                                                           | $ | 21,648             |   | $ |          |  
|                                                                                                                       |   |                    |   |   |          |  
|Operating expenses                                                                                                     |   |                    |   |   |          |  
|Impairment of mining rights                                                                                            | $ | 1,280              |   | $ | 1,011    |  
|Salaries and wages                                                                                                     | $ | 88,563             |   | $ | 15,119   |  
|General and admin expenses                                                                                             | $ | 261,723            |   | $ | 180,961  |  
|Professional fees                                                                                                      | $ | 24,438             |   | $ |          |  
|Amortization                                                                                                           | $ | 89,280             |   | $ |          |  
|                                                                                                                       |   |                    |   |   |          |  
|Total operating expenses                                                                                               | $ | 465,284            |   | $ | 197,091  |  
|                                                                                                                       |   |                    |   |   |          |  
|                                                                                                                       |   |                    |   |   |          |  
|Operating loss before the undernoted                                                                                   | $ | (443,636           | ) | $ | (197,091 | )
|Other expense-interest                                                                                                 | $ | (27,275            | ) | $ |          |  
|Other income (expense)-Derivative Financial Instrument                                                                 | $ | 10,672             |   | $ |          |  
|Discount
      from fair value on initial recognition of long term non-interest bearing
      loans to related parties | $ | (81,342            | ) | $ |          |  

|Net Loss for the period                                      | $ | (541,581 | ) | $ | (197,091 | ) |  | (175%  | )
|------------------------------------------------------------ | - | -------- | - | - | -------- | - |  | ------ | -
|Foreign
      exchange translation adjustment for the period | $ | 650,855  |   | $ | 28,018   |   |  | 2,223% |  
|                                                             |   |          |   |   |          |   |  |        |  
|Comprehensive gain / loss for the year                       | $ | 109,274  |   | $ | (169,073 | ) |  | 165%   |  

28

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Net Sales

The Company had revenues of $64,684 for the three months ended
September 30, 2010. The Ana Maria plant was taken off-line the first week of May
2010 in order to increase the capacity of this facility. As a result, the total
capacity of the Ana Maria plant went from 120 MT/month to 180 MT/month,
effectively increasing its capacity by 50%. We resumed operations at the plant
with the additional capacity in place in August 2010. The decision to increase
the capacity at the Ana Maria plant resulted in our lowered production levels
for this quarter. The Company anticipates resuming its ramp to full capacity
during the 3rd fiscal quarter of 2010, with no additional time
offline for this facility.

The Company had revenues of $64,684for the three months ended
September 30, 2010 as compared with no revenues for the year ago period ending
September 30, 2009. During the three months ended September 30, 2009, we had not
begun the extraction of copper.

Cost of Sales

Cost of sales includes direct costs associated with the sale of
the product. The Company incurred cost of sales of $43,036 for the three months
ended September 30, 2010, as compared with no cost of sales for the year ago
same period ending September 30, 2009

Gross Profit and Gross Margin

Gross profit is equal to the difference between our revenue and
the cost of revenue. Gross margin is equal to gross profit divided by revenue.
In the three months ended September 30, 2010, gross profit was $21,648 and gross
margin was 33.5% . During the three months ended September 30, 2009, we had not
begun the extraction of copper and therefore had no gross profit.

Operating Expenses

Our operating expenses primarily consist of salaries and wages,
general and administrative expenses and professional fees. As we continue to
ramp up our extraction activities, we will begin to incur material operating
costs

Salaries and Wages

For the three months ended September 30, 2010, salaries and
wages were $88,563. As the Company has grown and commenced material operations,
it has added employees and hired a management team. For the three months ended
September 30, 2009, we incurred $15,119 in salaries and wages as we had not yet
commenced extraction operations.

General and Administrative Expenses

General and administrative expenses consist primarily of
building maintenance and repairs, energy costs and general expenses. We expect
most components of our general and administrative expenses will increase as our
business grows and as we incur increased costs as a public company. General and
administrative expenses for the three months ended September 30, 2010 were
$261,723 as compared with $180,961 for the same period in 2009. We had not yet
commenced extraction operations as of the three
months ended September 30, 2009 and as a result incurred fewer general and administrative expenses at such time.

29

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Professional Fees

Professional fees consist of legal fees, accounting fees and other fees associated with our private placement transaction and operating as a public company. For the three months ended September 30, 2010, professional fees were $24,438. We
incurred no professional fees during the same period last year. The increase is due to our becoming a public company in May 2010.

Amortization

The Company records amortization to record the impairment or usage of its property, plant and equipment which had been put to use. For the three months ended September 30, 2010, amortization was $89,280. During the three months ended September
30, 2009, we had not commenced the use of our property, plant and equipment and had not begun recording amortization.

Other Expenses

Other expense – interest

Interest expense for the three months ended September 30, 2010 was $27,275 which is the amortization of deferred finance costs (refer to note 8(b) to the financial statements). During the three months ended September 30, 2009, no interest
expense was recorded because the Company had not raised funds and not incurred finance costs.

Other income-Derivative Financial Instrument

Other income related to the derivative financial instrument for the three months ended September 30, 2010 was $10,672. This was to record the fair value adjustments relating to warrants issued and outstanding as of September 30, 2010. . During
the three months ended September 30, 2009, no other income related to the derivative financial instrument was recorded because the Company did not have any derivative instruments in its financial statements.

Interest expense relating to the initial recognition of long term non-interest bearing loans to related parties

Interest expense relating to initial recognition of long term non-interest bearing loans to related parties for the three months ended September 30, 2010 was $81,342. This relates to the valuation of promissory notes valued at fair market value
at inception. These long term promissory loans do not bear interest and had a maturity date of March 31, 2013. The Company recognized a discount on the face value of the loans at inception to adjust the carrying value to the fair value. The
discounts are being amortized over the lives of the promissory notes using the effective interest method, with interest expense being recorded as an expense in the related period

Net Loss

Net loss increased to $(541,581) for the three months ended September 30, 2010 from a net loss of $(197,091) for the same period last year, mainly as a result of the reasons as stated above.

Comparison of the Six Months Ended September 30, 2010 and 2009 (audited)

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage increase/decrease over prior year numbers for the periods indicated in dollars.

30

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The financial data for the six months ended September 30, 2010
reflect the first and second quarters of Fiscal Year 2011, while the financial
data for the same period in 2009 reflect the first and second quarters of Fiscal
Year 2010.

|                                                                                                                 |   | Six Months Ended |   |   |          |  
|---------------------------------------------------------------------------------------------------------------- | - | ---------------- | - | - | -------- | -
|                                                                                                                 |   | September 30,    |   |   |          |  
|                                                                                                                 |   | 2010             |   |   | 2009     |  
|                                                                                                                 |   |                  |   |   |          |  
|                                                                                                                 |   |                  |   |   |          |  
|                                                                                                                 |   | Amount           |   |   | Amount   |  
|Net sales                                                                                                        | $ | 64,684           |   | $ |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Cost of sales                                                                                                    | $ | 43,036           |   | $ |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Gross profit                                                                                                     | $ | 21,648           |   | $ |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Operating expenses                                                                                               |   |                  |   |   |          |  
|Impairment of mining rights                                                                                      | $ | 6,920            |   | $ | 26,227   |  
|Salaries and wages                                                                                               | $ | 225,089          |   | $ | 36,897   |  
|General and admin expenses                                                                                       | $ | 622,829          |   | $ | 213,438  |  
|Professional fees                                                                                                | $ | 527,329          |   | $ |          |  
|Amortization                                                                                                     | $ | 164,488          |   | $ |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Total
      operating expenses                                                                                   | $ | 1,546,655        |   | $ | 276,562  |  
|                                                                                                                 |   |                  |   |   |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Operating loss before the undernoted                                                                             | $ | (1,525,007       | ) | $ | (276,562 | )
|Other expense-interest                                                                                           | $ | (27,275          | ) | $ |          |  
|Other income (expense)-Derivative Financial Instrument                                                           | $ | 10,672           |   | $ |          |  
|Discount from fair value on initial recognition of long
      term non-interest bearing loans to related parties | $ | (159,971         | ) | $ |          |  
|                                                                                                                 |   |                  |   |   |          |  
|Net loss
      for the period                                                                                    | $ | (1,701,581       | ) | $ | (276,562 | )
|Foreign exchange translation adjustment for the period                                                           | $ | 611,539          |   | $ | 111,328  |  
|                                                                                                                 |   |                  |   |   |          |  
|Comprehensive loss for the year                                                                                  | $ | (1,090,042       | ) | $ | (165,234 | )

Net Sales

The Company had revenues of $64,684 for the six months ended
September 30, 2010. The Ana Maria plant was taken off-line the first week of May
2010 in order to increase the capacity of this facility. As a result, the total
capacity of the Ana Maria plant went from 120 MT/month to 180 MT/month,
effectively increasing its capacity by 50%. We resumed operations at the plant
with the additional capacity in place in August 2010.

The Company had revenues of $64,684for the six months ended
September 30, 2010 as compared with no revenues for the year ago period ending
September 30, 2009. During the six months ended September 30, 2009, we had not
begun extraction of copper.

31

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Cost of Sales

Cost of sales includes direct costs associated with the sale of the product. The Company incurred cost of sales of $43,036 for the six months ended September 30, 2010, as compared with no cost of sales for the year ago same period ending
September 30, 2009

Gross Profit and Gross Margin

Gross profit is equal to the difference between our revenue and the cost of revenue. Gross margin is equal to gross profit divided by revenue. In the six months ended September 30, 2010, gross profit was $21,648 and gross margin was 33.5% .
During the six months ended September 30, 2009, we had not begun the extraction of copper and therefore had no gross profit.

Operating Expenses

Our operating expenses primarily consist of salaries and wages, general and administrative expenses and professional fees. As we continue to ramp up our extraction activities, we will begin to incur material operating costs

Salaries and Wages

For the six months ended September 30, 2010, salaries and wages were $225,089. As the Company has grown and commenced material operations, it has added employees and hired a management team. For the six months ended September 30, 2009, we
incurred $36,897 in salaries and wages as we had not yet commenced extraction operations.

General and Administrative Expenses

General and administrative expenses consist primarily of building maintenance and repairs, energy costs and general expenses. We expect most components of our general and administrative expenses will increase as our business grows and as we incur
increased costs as a public company. General and administrative expenses for the six months ended September 30, 2010 were $622,829 as compared with $213,438 for the same period in 2009. We had not yet commenced extraction operations as of
the six months ended September 30, 2009, and as a result incurred significantly fewer general and administrative expenses at such time.

Professional Fees

Professional fees consist of legal fees, accounting fees and other fees associated with our private placement transaction and operating as a public company. For the six months ended September 30, 2010, professional fees were $527,329. We did not
incur any professional fees during the six months ended September 20, 2009. The increase is due, to undertaking the private placement transaction and becoming a public company in May 2010.

Amortization

The Company records amortization to record the impairment or usage of its property, plant and equipment which had been put to use. For the six months ended September 30, 2010, amortization was $164,488. During the six months ended September 30,
2009, we had not commenced the use of our property, plant and equipment and had not begun recording amortization.

32

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Other Expenses

Other expense  interest

Interest expense for the six months ended September 30, 2010
was $27,275 which is the amortization of deferred finance costs (refer to note
8(b) to the financial statements). During the six months ended September 30,
2009, no interest expense was recorded because the Company had not raised funds
and not incurred finance costs.

Other income-Derivative Financial Instrument

Other income related to the derivative financial instrument for
the six months ended September 30, 2010 was $10,672. This was to record the fair
value adjustments relating to warrants issued and outstanding as of September
30, 2010. . During the six months ended September 30, 2009, no other income
related to the derivative financial instrument was recorded because the Company
did not have any derivative instruments in its financial statements.

Interest expense relating to the initial recognition of long
term non-interest bearing loans to related parties

Interest expense relating to initial recognition of long term
non-interest bearing loans to related parties for the six months ended September
30, 2010 was $159,971. This relates to the valuation of promissory notes valued
at fair market value at inception. These long term promissory loans do not bear
interest and had a maturity date of March 31, 2013. The Company recognized a
discount on the face value of the loans at inception to adjust the carrying
value to the fair value. The discounts are being amortized over the lives of the
promissory notes using the effective interest method, with interest expense
being recorded as an expense in the related period

Net Loss

Net loss increased to $(1,701,581) for the six months ended
September 30, 2010 from a net loss of $(276,562) for the same period last year,
mainly as a result of the reasons as stated above.

Liquidity and Capital Resources

As of September 30, 2010 we had cash and cash equivalents of
$2,056,401, and working capital of $1,061,555. The following table provides
detailed information about our net cash flow for all financial statement periods
presented in this report.

Cash Flow(all amounts in U.S. dollars)

|                                                          |   | Six Months Ended |  
|--------------------------------------------------------- | - | ---------------- | -
|                                                          |   | September 30,    |  
|                                                          |   | 2010             |  
|Net cash provided by (used in)
      operating activities | $ | (2,030,467       | )
|Net cash
      provided by (used in) investing activities | $ | (1,713,956       | )
|Net cash provided by (used in)
      financing activities | $ | 5,366,779        |  
|Effects of
      Exchange Rate Change in Cash             | $ | (434,045         | )
|Net Increase in Cash and Cash
      Equivalents           | $ | 2,056,401        |  
|Cash and
      Cash Equivalents, Beginning                | $ | -                |  
|Cash and Cash Equivalent, End                             | $ | 2,056,401        |  

33

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Operating activities

Net cash used in operating activities was $(2,030,467) for the six months ended September 30, 2010, as compared to $(177,361) net cash used in operating activities for the same period in 2009. The increase in operating activities is mainly
due to our commencement of operations in 2010, and expenses incurred to become a public company

Investing activities

Net cash used in investing activities for the six months ended September 30, 2010 was $(1,713,956), as compared to $(1,038,314) net cash used in investing activities for the same period in 2009. This increase is mainly the result of
investing the majority of the cash received from CMT’s Private Placement transaction into acquisition of plant and equipment..

Financing activities

Net cash provided by financing activities for the six months ended September 30, 2010 was $5,366,779, as compared to $1,210,693 net cash provided by financing activities for the same period in 2009.

As discussed above, on May 12, 2010, we also completed a private placement in which we issued and sold to certain accredited investors an aggregate of 2,089,593 shares of our common stock for an aggregate purchase price of $5,809,000, or
$2.78 per share, and warrants to purchase up to 1,044,803 shares of our common stock. The warrants have a term of four years, bear an exercise price of $3.61 per share (subject to customary adjustments), are exercisable on a net exercise or
cashless basis and are exercisable by investors at any time after the closing date. As a result of this private placement, we raised approximately $5.8 million in gross proceeds, which left us with approximately $4.5 million in net proceeds
after the deduction of offering expenses in the amount of approximately $1.3 million.

We believe that our current cash on hand following our recent private placement and expected revenue from operations will be sufficient to implement our plan of operations.

Obligations under Material Contracts

On July 1, 2008, we entered into an agreement with Contratista en Geologia, Mineria y Construccion Jorge Orellana E.I.R.L., or Geominco, a Chilean company wholly-owned by our Chief Executive Officer, Jorge Osvaldo Orellana Orellana. Pursuant to this
agreement, we retained Geominco to perform certain construction, remediation and administrative services in relation to our properties located in Matancilla and Salamanca. Payment for services performed under the agreement are pursuant to monthly
invoices submitted by Geominco which are payable by us within 30 days. As of March 31, 2010, we owed 318,805,176 Pesos (approximately $607,873) to Geominco under the agreement, however, all amounts payable were forgiven in connection with our
reverse acquisition and private placement transactions described below.

On September 11, 2008, we issued a promissory note to Geominco in exchange for a loan of 200,000,000 Pesos (approximately $381,345). The entire amount of the loan remained outstanding as of March 31, 2010, however, on June 17, 2010 Geominco
forgave 186,308,540 Pesos of the indebtedness under this loan, pursuant to a Loan Cancellation Agreement. Therefore, 13,691,460 Pesos (approximately $26,106) of this loan, which does not bear interest and matures on March 31, 2013, remains
outstanding.

On December 30, 2008, we issued a second promissory note to Geominco in exchange for a loan of 100,000,000 Pesos (approximately $190,672). The promissory note does not bear interest and is payable on demand. The entire amount of the loan
remained outstanding as of March 31, 2010, however all amounts
payable pursuant to this loan were forgiven by Geominco on June 17, 2010, pursuant to a Loan Cancellation Agreement.

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On July 31, 2009, we issued a third promissory note to Geominco in exchange for a loan of 250,000,000 Pesos (approximately $476,681). The promissory note does not bear interest and matures on March 31, 2013. The entire amount of the loan was
outstanding as of March 31, 2010 and remains outstanding.

On December 31, 2009, we issued a fourth promissory note to Geominco in exchange for a loan of 554,200,000 Pesos (approximately $1,056,708). The promissory note does not bear interest and matures on March 31, 2013. The entire amount of the loan
was outstanding as of March 31, 2010 and remains outstanding.

On September 30, 2009, we issued a promissory note to Thomas Cooper in exchange for a loan of 24,766,200 Pesos (approximately $47,222). The promissory note bears interest at 18% per annum and is payable on demand. The entire amount of the loan
remained outstanding as of March 31, 2010, however all amounts payable pursuant to this loan were repaid in connection with our reverse acquisition and private placement transactions disclosed below.

From time to time, Minera has borrowed funds from its shareholders, directors and officers. As of March 31, 2010, Minera had borrowed 200,000,000 Pesos (approximately $381,345) from Iván Orlando Vergara Huerta, a shareholder, 231,000,000
Pesos (approximately $440,453) from Jorge Fernando Pizarro Arriagada, a shareholder, and 6,320,000 Pesos (approximately $12,050) from Alain Orellana Sejas, its Chief Operating Officer. The loan from Alain Orellana Sejas was repaid in
connection with our reverse acquisition and private placement transactions described above. In addition, on June 17, 2010, Mr. Jorge Fernando Pizarro Arriagada forgave 126,420,030 Pesos (approximately $241,048) of the indebtedness under his loan
and Mr. Iván Orlando Vergara Huerta forgave 34,229,250 Pesos (approximately $65,266) of the indebtedness under his loan, pursuant to separate Loan Cancellation Agreements. Accordingly, as of September 30, 2010, the outstanding face values
of the loans to Mr. Iván Orlando Vergara Huerta and Mr. Jorge Fernando Pizarro, which do not bear interest and mature on March 31, 2013, were approximately US $316,079 and $199,405, respectively.

Inflation

Inflation does not materially affect our business or the results of our operations.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to our stockholders.

Seasonality

The price of copper on the LME fluctuates during the year, with prices tending to be stronger in the April to September period, and weaker in the October to March period, subject to global supply and demand.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates, and judgments that affect the amounts reported, including the notes
thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an
understanding of our financial condition and
results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result
of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because
of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the
preparation of our financial statements:

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- Exploration Costs and Mineral Property Right Acquisitions. The Company is engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs
are initially capitalized when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive Activities – Mining (AS 930) at each fiscal quarter end. Impairment is recognized when the sum of the
expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. When it has been
determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production
method over the estimated life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
- Foreign Currency Translation. The Company uses the “Current rate method” to translate its financial statements from Chilean Pesos into U.S. Dollars. The assets and liabilities of the Company, except for the capital, are
translated into U.S. Dollars using the rate of exchange prevailing at the balance sheet date. The capital is translated at the historical rate. Adjustments resulting from the translation of the balance sheets of the company into U.S. Dollars are
recorded in stockholders' equity as part of accumulated comprehensive income. The statement of operations is translated at average rates during the reporting period. Gains or losses resulting from transactions in currencies other than the functional
currencies are reflected in the statement of operations for the reporting periods. The statement of income and expenses are translated at average rates during the reporting period, with the exception of issue of share and payment of dividends which
are translated at the historical rates. Due to the use of different rates for translation, the figures in the statement of changes in cash flows may not agree with the differences between the year end balances as shown in the balance sheets.
- Machinery and Equipment. Machinery and equipment is recorded at cost and is stated net of accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The costs of improvements that
extend the life of equipment are capitalized. These capitalized costs may include structural improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred. Machinery and equipment are depreciated at rates
sufficient to write off their cost over their estimated useful lives on a straight-line basis. The estimated useful lives of the assets are as follows: Property, Plant and Equipment -10 years. Additions during the year are amortized on half year
rule.
- Revenue Recognition. Revenue is recognized at the time the sale price is fixed, the product’s title is transferred to the buyer and collectability of the sales proceeds is reasonably assured.
- Comprehensive income. The Company has chosen to report comprehensive income in the statements of changes in stockholders’ deficiency. Comprehensive income comprised net income and all changes to stockholders' deficiency except
those due to investments by owners and distributions to owners.
- Assets Retirement Obligation. The Company discloses its financial accounting and reporting obligations associated with the retirement of tangible long-lived assets and the associated
retirement costs. This standard applies to legal obligations associated with the retirement of long- lived assets that result from the acquisition, construction, development and normal use of the asset. The fair value of a liability for an asset
retirement obligation should be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying
amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize
a gain or loss on settlement. As at September 30, 2010, there are no assets retirement obligations.

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- Income Taxes. The Company recognizes a liability or asset for deferred tax consequences of all temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Deferred tax items mainly relate to net operating loss carry forwards and accrued expenses. These deferred tax
assets or liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. Deferred tax assets are reviewed periodically for recoverability, and valuation allowances are provided when it is more likely than not that some or all of the deferred tax assets may not be realized.
- Impairment and Disposal of Long-Lived Assets. The carrying values of long-lived assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. For assets that are to be held and used, an
impairment loss is recognized when the estimated undiscounted future cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value,
and a loss is recorded as the difference between the carrying value and fair value.
- Accounting for Derivative Instruments and Hedging Activities. The Company recognizes all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. The Company has not
entered into derivative contracts either to hedge existing risks or for speculative purposes. The adoption of this pronouncement does not have an impact on the Company’s financial statements.
- Earnings (Loss) Per Share. The Company computes net loss of both basic and diluted earnings per share, or EPS, on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by
the weighted average number of common shares outstanding during the year. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing diluted EPS, the average stock
price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Because the Company does
not have any potentially dilutive securities only basic loss per share is presented in the accompanying financial statements.

Recent Accounting Pronouncements

See Item 1 of Part I, “Financial Statements — Note 1 — Accounting Policies — Recent Accounting Pronouncements.”

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEMS 4 AND 4A(T). CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and
reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September
30, 2010. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2010, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed,
our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.

Changes in Internal Controls over Financial Reporting

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes
may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

Other than the foregoing changes, there were no changes in our internal controls over financial reporting during the three months ended September 30, 2010 that have materially affected, or are reasonably likely to materially affect our internal
control over financial reporting.

PART II 
OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may
arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in Exhibit 99.1 of Amendment No. 1 of our Current Report on Form 8-K filed on August 12, 2010,
which could materially affect our business, financial condition or future results. The risks described in our Current Report on Form 8-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that
we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the quarter ended
September 30, 2010 which sale was not previously disclosed in a current report
on Form 8-K filed during that period.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.     (REMOVED AND RESERVED).

ITEM 5.     OTHER INFORMATION.

We have no information to include that was required to be but
was not disclosed in a report on Form 8-K during the period covered by this Form
10-Q. There have been no material changes to the procedures by which security
holders may recommend nominees to our board of directors.

ITEM 6.     EXHIBITS.

The following exhibits are filed as part of this report or
incorporated by reference:

|Exhibit Number |  | Description                                                                                                    
|-------------- |  | ---------------------------------------------------------------------------------------------------------------
|31.1           |  | Certifications of Chief Executive
      Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|31.2           |  | Certifications of Chief Financial
      Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|32.1           |  | Certifications of Chief Executive
      Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|32.2           |  | Certifications of Chief Financial
      Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                         | Chile Mining Technologies Inc.                                
|------------------------ | --------------------------------------------------------------
|                         |                                                               
|Dated: November 19, 2010 | /s/ Jorge Osvaldo Orellana Orellana                           
|                         | Jorge Osvaldo Orellana Orellana                               
|                         | Chairman and Chief Executive Officer                          
|                         | (Principal Executive Officer)                                 
|                         |                                                               
|Dated: November 19, 2010 | /s/ Jose Luis Munoz Aviles                                    
|                         | Jose Luis Munoz Aviles                                        
|                         | Chief Financial Officer                                       
|                         | (Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

|Exhibit Number |  | Description                                                                                                    
|-------------- |  | ---------------------------------------------------------------------------------------------------------------
|31.1           |  | Certifications of Chief Executive
      Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|31.2           |  | Certifications of Chief Financial
      Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|32.1           |  | Certifications of Chief Executive
      Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002
|               |  |                                                                                                                
|32.2           |  | Certifications of Chief Financial
      Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002

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