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 March 31, 2011





OR





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





For the transition period from ______ to ______.





Commission File Number: 001-34996








SPARTAN GOLD LTD.


(Exact name of registrant as specified in its charter)








Nevada


27-3726384(State or other jurisdiction of

incorporation or organization)


(IRS Employer Identification No.)13951 N. Scottsdale Rd., Suite 233

Scottsdale, AZ


85254(Address of principal executive offices)


(Zip Code)





(480) 391-7400


(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 Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.


Yes  x  No  o





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  o  No  o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act:





Large Accelerated Filer  o
Accelerated Filer  oNon-Accelerated Filer  o
Smaller Reporting Company  x





Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o  No  x





As of as of May 6, 2011 the registrant had 228,587,668 shares of its Common Stock, $0.001 par value, outstanding.












SPARTAN GOLD LTD.


FORM 10-Q


MARCH 31, 2011


INDEX





PART I – FINANCIAL INFORMATIONItem 1.
Financial Statements
3Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010
3Statements of Operations for the Three Months Ended March 31, 2011 and 2010 and for the Period September 6, 2007 (Inception) to March 31, 2011 (unaudited)
4Statement of Stockholders’ Deficit for the Period September 6, 2007 (Inception) to March 31, 2011 (unaudited)
5Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 and for the Period September 6, 2007 (Inception) to March 31, 2011 (unaudited)
7Notes to Financial Statements (unaudited)
9Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22Item 3
Quantitative and Qualitative Disclosures About Market Risk
27Item 4.
Controls and Procedures
27PART II – OTHER INFORMATION
28Item 1.
Legal Proceedings
28Item 1.A.
Risk Factors
28Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
28Item 3.
Defaults Upon Senior Securities
29Item 4.
(Removed & Reserved)
29Item 5.
Other Information
29Item 6.
Exhibits
30SIGNATURE
31








2




PART I – FINANCIAL INFORMATION





Item 1. Financial Statements





SPARTAN GOLD LTD. (A Development Stage Company) Balance Sheets


March 31,


December 31,2011


2010(unaudited)ASSETSCurrent assets:Cash

$
150,626


$
21,834Prepaid expenses


41,666



-Deferred issuance costs


20,000



-Total current assets


212,292



21,834Property and equipment, net


5,835



-Total assets

$
218,127


$
21,834LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)Current liabilities:Accounts payable

$
20,317


$
24,711Accrued expenses


25,345



49,600Total liabilities


45,662



74,311Commitments and contingencies


-



-Stockholders' equity (deficit):Common stock $.001 par value 1,000,000,000 shares authorized, 228,587,668 and 213,754,334shares issued and outstanding, at March 31, 2011 and December 31, 2010, respectively


228,588



213,754Additional paid-in capital


16,584,251



389,425Issued and unearned stock compensation


(577,688
)


-Deficit accumulated during the development stage


(16,062,686
)


(655,656
)Total stockholders' equity (deficit)


172,465



(52,477
)Total liabilities and stockholders' equity (deficit)

$
218,127


$
21,834


See accompanying notes to unaudited financial statements.


3




SPARTAN GOLD LTD. (A Development Stage Company) Statements of Operations
 (unaudited)
 
 For the Three Months Ended


For the Period

September 6, 2007

(Inception) toMarch 31,


March 31,


March 31,2011


2010


2011Revenue

$
-


$
-


$
-Expenses:General and administrative


316,668



11,760



536,796Mineral exploration


30,602



-



30,602Impairment of mineral property costs


15,059,760



-



15,213,787Total expenses


15,407,030



11,760



15,781,185Net loss

$
(15,407,030
)

$
(11,760
)

$
(15,781,185
)Net loss per share - basic and diluted

$
(0.07
)

$
(0.00
)Weighted average number of sharesoustanding during the period -Basic and diluted


215,587,668



609,000,000
 See accompanying notes to unaudited financial statements.


4




SPARTAN GOLD LTD. (A Development Stage Company) Statement of Stockholders' Equity (Deficit) For the period from September 6, 2007 (Inception) to March 31, 2011 (unaudited)


DeficitaccumulatedCommon





Additional


Unearned





during the


Totalstock





paid-in


stock


Treasury


development


stockholders'Shares


Amount


capital


compensation


stock


stage


equity (deficit)Common stock issued to founders at $.000025 per share


480,000,000


$
480,000


$
-


$
-


$
-


$
(468,000
)

$
12,000Common stock issued for cash at $0.0005 per share


65,000,000



65,000



-



-



-



(32,500
)


32,500Net loss for the period September 6, 2007 (inception) to December 31, 2007


-



-



-



-



-



(24,400
)


(24,400
)Balance, December 31, 2007


545,000,000



545,000



-



-



-



(524,900
)


20,100Common stock issued for cash at $0.00025 per share under a private placement


60,000,000



60,000



-



-



-



(45,000
)


15,000Common stock issued for cash at $0.0005 per share under a private placement


4,000,000



4,000



-



-



-



(2,000
)


2,000Net loss for the year ended December 31, 2008


-



-



-



-



-



(36,538
)


(36,538
)Balance, December 31, 2008


609,000,000



609,000



-



-



-



(608,438
)


562Net loss for the year ended December 31, 2009


-



-



-



-



-



(13,375
)


(13,375
)Balance, December 31, 2009


609,000,000



609,000



-



-



-



(621,813
)


(12,813
)Contribution of related party loan


-



-



19,603



-



-



-



19,603Contribution of shares to treasury by principal shareholder










129,851



-



(129,851
)Treasury shares retired and cancelled


(395,850,000
)


(395,850
)






-



129,851



265,999



-Contribution of shares by principal shareholder to purchase Arbachoochee mineral rights at $0.00048555 per share


-



-



54,027



-



-



-



54,027Shares awarded - executive employment agreements contributed by principal shareholder at $0.000328 per share


-



-



5,248



-



-



-



5,248Common stock issued for cash at $.30 per share under a private placement


604,334



604



180,696



-



-



-



181,300Net loss for the year ended December 31, 2010


-



-



-



-



-



(299,842
)


(299,842
)Balance, December 31, 2010


213,754,334


$
213,754


$
389,425


$
-


$
-


$
(655,656
)

$
(52,477
)
  See accompanying notes to unaudited financial statements.


5




SPARTAN GOLD LTD.
 (A Development Stage Company)
 Statement of Stockholders' Equity (Deficit) (Continued)
 For the period from September 6, 2007 (Inception) to March 31, 2011
 (unaudited)


DeficitaccumulatedCommon stock


Additional


Unearned





during the


Totalpaid-in


stock


Treasury


development


stockholders'Shares


Amount


capital


compensation


stock


stage


equity (deficit)Balance, December 31, 2010


213,754,334


$
213,754


$
389,425


$
-


$
-


$
(655,656
)

$
(52,477
)Common stock issued for cash at $.60 per share under a private placement


833,334



834



499,166



-



-



-



500,000Shares awarded - to consultant at $0.6499 per share


1,000,000



1,000



648,900



(649,900
)


-



-



-Common stock issued under option agreement to acquire mineral rights at $.90 per share


13,000,000



13,000



11,687,000



-



-



-



11,700,000Warrants to purchase 6,999,500 shares of common stock issued under option agreements to acquire mineral rights


-



-



3,359,760



-



-



-



3,359,760Compensation recognized under consulting agreement (February 2, 2011)


-



-



-



72,212



-



-



72,212Net loss for the three months ended March 31, 2011


-



-







-



-



(15,407,030
)


(15,407,030
)Balance, March 31, 2011 (unaudited)


228,587,668


$
228,588


$
16,584,251


$
(577,688
)

$
-


$
(16,062,686
)

$
172,465
 
 
 See accompanying notes to unaudited financial statements.
  6
 SPARTAN GOLD LTD.


(A Development Stage Company)
 Statements of Cash Flows
 (unaudited)


For thePeriod FromSeptember 6, 2007For the Three Months Ended


(Inception) toMarch 31,


March 31,


March 31,2011


2010


2011Cash flows used in operating activities:Net loss

$
(15,407,030
)

$
(11,760
)

$
(15,781,185
)Adjustments to reconcile net loss to net cash used in operations:Depreciation


254



-



254Stock-based compensation


72,212



-



72,212Stock issued for services


-



-



17,248Impairment of mineral rights


15,059,760



-



15,213,787Changes in operating assets and liabilities:Prepaid Expenses


(41,666
)


-



(41,666
)Accounts payable


(4,394
)


2,700



20,317Accrued expenses


(24,255
)


-



25,345Net cash used in operating activities


(345,119
)


(9,060
)


(473,688
)Cash flows used in investing activities:Purchase of property and equipment


(6,089
)


-



(6,089
)Acquisition of mineral rights


-



-



(100,000
)Net cash used in investing activities


(6,089
)


-



(106,089
)Cash flows from financing activities:Deferred issuance costs


(20,000
)


-



(20,000
)Increase in due to related party


-



25,000



35,550Payments to related party


-



(5,000
)


(15,947
)Proceeds from sale of common stock


500,000



-



730,800Net cash provided by financing activities


480,000



20,000



730,403Net increase in cash


128,792



10,940



150,626Cash at beginning of period


21,834



7



-Cash at end of period

$
150,626


$
10,947


$
150,626Supplemental disclosure of cash flow information:Cash paid for interest

$
-


$
-


$
-Cash paid for taxes

$
-


$
-


$
-
  See accompanying notes to unaudited financial statements.


7


SPARTAN GOLD LTD.
 (A Development Stage Company)
 Statements of Cash Flows (Continued)
 (unaudited)




For thePeriod FromSeptember 6, 2007For the Three Months Ended


(Inception) toMarch 31,


March 31,


March 31,2011


2010


2011Non-cash investing and financing activities:Value of Mineral rights and options acquired

$
(15,059,760
)

$
-


$
(15,059,760
)Common stock


13,000



-



13,000Additional paid in capital on stock issued


11,687,000



-



11,687,000Additional paid in capital on warrants issued


3,359,760



-



3,359,760Stock issued for prepaid consulting services


(649,900
)


-



(649,900
)Common stock


1,000



-



1,000Additional paid in capital on stock issued


648,900



-



648,900Conversion of related party payable to capital


-



-



(19,603
)Additional paid in capital


-



-



19,603Value of mineral rights contributed to the Company


-



-



(54,027
)Additional paid in capital


-



-



54,027Contribution of 395,850,000 shares of common stockto treasury by principal shareholder


-



-



(129,851
)Additional paid in capital


-



-



129,851Retirement and cancellation of 395,850,000 shares of common stock:Common stock


-



-



(395,850
)Treasury stock


-



-



129,851Deficit accumulated during the development stage


-



-



265,999








See accompanying notes to unaudited financial statements.




8




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 1 – Nature of Business, Presentation, and Going Concern





Organization





Spartan Gold Ltd., the “Company”, was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. for the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors.  On September 24, 2009, the Company changed its name to Algoil, Inc.  The central concept of Algoil, Inc. was making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil.





On May 21, 2010, the Company experienced a change in control.  Magic Grace Ltd. (“Magic Grace”) acquired the majority of the issued and outstanding common stock of Algoil, Inc. in accordance with a stock purchase agreement by and between Andriy Kovalenko and Magic Grace.  On the closing date, May 21, 2010, pursuant to the terms of the Stock Purchase Agreement, Magic Grace purchased from Mr. Kovalenko 14,290,000 (pre-split) restricted shares of Company’s outstanding common stock for $187,500.  In accordance with the agreement, all related party obligations were settled.   Also on May 21, 2010, Real Challenge Group, Ltd. (“Real Challenge”) acquired 935,000 (pre-split) free-trading shares of the Company’s outstanding common stock in accordance with a stock purchase agreement by and between Andriy Kovalenko, as a duly authorized representative of the selling shareholders, and Real Challenge for $187,500.   As a result of the change in control, the Company abandoned its original plan of developing and operating biodiesel facilities to concentrate on gold exploration and mining.





On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd.  The Company now operates as a U.S. based junior gold exploration and mining company.  The Company has acquired the mineral rights to a property in Alabama and entered into two option agreements dated December 22 and 27, 2010 which were amended March 28, 2011 to acquire the mineral rights to certain properties located in Nevada.  The Company is going to perform exploration activities on these properties to ascertain the feasibility of commencing production.  On April 1, 2011, the Company entered into a mining lease agreement to acquire the mineral rights to 1,760 acres in Elko County, Nevada.  See Note 9 – Subsequent Events.





Stock Split





On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock.  Subsequently, on August 12, 2010, Magic Grace contributed to the treasury, and the Company retired, 9,896,250 common shares of stock (395,850,000 as adjusted for the stock split).  The effect of the stock split and retirement of shares increased the number of shares of common stock outstanding from 15,225,000 to 213,150,000 as of August 12, 2010. All common share and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the stock split for all periods presented prior to July 19, 2010.  The total number of authorized common shares and the par value thereof was not changed by the split.





Basis of Presentation





The accompanying unaudited financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP”) for interim financial statement presentation and in accordance with Form 10-Q.  Accordingly, they do not include all of the information and footnotes required in annual financial statements.  In the opinion of management, the unaudited financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position and results of operations and cash flows.  The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year.





These unaudited financial statements should be read in conjunction with our 2010 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2011.





9




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 1 – Nature of Business, Presentation, and Going Concern (Continued)





Going Concern





The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred a net loss of $15,407,030 and $11,760 for the three months ended March 31, 2011 and 2010, respectively, and has incurred cumulative losses since inception of $15,781,185.  The Company has a total stockholders’ equity of $172,465 at March 31, 2011.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The Company’s continuation as a going concern is dependent upon its ability to generate revenues, its ability to continue to raise investment capital, and to implement its business plan.  No assurance can be given that the Company will be successful in these efforts.





The unaudited financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.





Note 2 – Summary of Significant Accounting Policies





Use of Estimates





The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Significant areas of estimate include the impairment of assets and rates for amortization, accrued liabilities, future income tax obligations and the inputs used in calculating stock-based compensation.  Actual results could differ from those estimates and would impact future results of operations and cash flows.





Cash and Cash Equivalents





The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2011 and December 31, 2010, respectively, the Company had no cash equivalents.





Development Stage and Mineral Property Costs





The Company has been in the development stage since September 6, 2007, as defined in ASC Topic 915 “Development Stage Entities”, and has not yet realized any revenues from its planned operations.  It is now primarily engaged in the acquisition, exploration, and development of mining properties.  Mineral property exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing probable and then proven reserves, then the costs incurred to develop such property are capitalized.  Such costs will be amortized using the units-of-production method over the estimated life of the probable-proven reserves.  If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.  The Company has incurred $30,602 of exploration costs and $0 of development costs from inception through March 31, 2011.





Impairment or Disposal of Long-Lived Assets





The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 360 “Property, Plant and Equipment”. ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.






10




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 2 – Summary of Significant Accounting Policies (Continued)





Deferred issuance costs





Costs relating to the future issuance of equity securities are deferred. When the additional equity securities are issued, the deferred costs are charged to additional paid-in-capital. The Company had certain deferred issuance costs as of March 31, 2011 consisting of investment banking and other expenses relating to the future issuance of common stock.  On February 7, 2011, the Company entered into a best efforts underwriting agreement with Century Pacific Securities, Inc. to sell $10,000,000 worth of the Company’s common stock under a Private Investment into Public Entity (PIPE) arrangement.  The Company will pay a fee between 3% and 7%.  The agreement expires one year from the date of execution.





Basic and Diluted Loss Per Share





The Company computes income (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations.  Basic EPS is computed by dividing income (loss) available to common shareholders by the weighted average number of shares outstanding during the period.  Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  All previously stated share and per share balances have been restated to give retroactive effect to the 40 to 1 forward stock split that occurred on July 19, 2010.  Dilutive loss per share has not been presented because as of March 31, 2011 and 2010, respectively, there were no common share equivalents outstanding.





Stock-Based Compensation





The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 is a revision to SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and its related implementation guidance. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.  The Company has not adopted a stock option plan and has not granted any stock options.





The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in shareholders' equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.





The Company issues restricted stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete. The Company recognized consulting


expense and a corresponding increase to additional paid-in-capital related to stock issued for services. In February 2011, the Company entered into a consulting agreement for services to be rendered over an eighteen month period. The consulting expense is to be recognized ratably over the requisite service period.




11







SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 2 – Summary of Significant Accounting Policies (Continued)





As there is not sufficient public market history for its common stock, the Company determined the volatility for warrants granted based on an analysis of reported data for a peer group of companies. The expected volatility of warrants granted has been determined using an average of the historical volatility measures of this peer group of companies. The expected life of warrants has been determined utilizing the “simplified” method as prescribed by the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the warrants. The Company has not paid and does not anticipate paying cash dividends on its common stock; therefore, the expected dividend yield is assumed to be zero.





Income Taxes





Income taxes are accounted for under the liability method of accounting for income taxes.  Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled.  The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs.  Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.





The FASB has issued ASC 740 “Income Taxes” (formerly, Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” – An Interpretation of FASB Statement No. 109 (FIN 48)).  ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with prior literature SFAS No. 109, Accounting for Income Taxes.  This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.





As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of March 31, 2011.





Accounting Standards Codification





The FASB’s Accounting Standards Codification (“ASC”) became effective on September 15, 2009.  At that date, the ASC became FASB’s officially recognized source of authoritative generally accepted accounting principles (“GAAP”) applicable to all public and non-public non-governmental entities, superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”) and related literature.  All other accounting literature is considered non-authoritative.  The switch to the ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies.  Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.





Reclassifications





Certain items on the 2010 statement of operations and statement of cash flows have been reclassified to conform to current period presentation.





Effect of Recent Accounting Pronouncements





The Company reviews new accounting standards as issued. No new standards had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented and does not anticipate the need for any future restatement of these consolidated financial statements because of the retro-active application of any accounting pronouncements issued subsequent to March 31, 2011 through the date these financial statements were issued.




12






SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 3 – Mineral Properties





As of March 31, 2011 and 2010, the Company has incurred $15,213,787 and $0 in mineral property acquisition costs which have been charged to operations.  A summary by property is as follows:





September 6, 2007Three Months Ended


(Inception) toMarch 31,


March 31,


March 31,Property

2011


2010


2011Arbacoochee Mineral Rights

$
-


$
-


$
104,027Poker Flats Mineral Rights Option


4,974,000



-



4,999,000Ziggurat Mineral Rights Option


10,085,760



-



10,110,760$
15,059,760


$
-


$
15,213,787


A description of each property is summarized below:





Poker Flats Property





On December 22, 2010, the Company (Optionee) entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28 2011.  MMC, the Optionor, is the owner of a 100% interest in 25 mining claims known as “Poker Flats” located in the Carlin Mining District in Elko County Nevada.  The Optionor has agreed to grant a 70% (amended to 75%) interest in the mineral rights free of all charges, encumbrances and claims, except for the mining lease and royalty agreements currently in existence under the following terms and conditions: (a) an initial 51% interest in the property will be earned upon incurring exploration expenditures of US $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company, and (b) an additional 24% interest in the property will be earned upon incurring additional exploration expenditures of US $250,000 and completing and delivering to Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement.  Such additional expenditures and mining feasibility study were to be incurred and paid by Sphere.  Under the amendment, the Company will be obligated to pay these additional expenditures.





In order to maintain the option, Optionee and Sphere have agreed to the following: (a) Optionee will pay to Optionor US $25,000 upon executing the Option Agreement, and (b) Sphere will issue to Optionor 200,000 shares of Sphere Resources, Inc. common stock within 60 days of the execution of the Option Agreement and an additional 300,000 shares within 60 days of Optionee acquiring a 51% interest in the property.  The amendment extends the issuance of the 200,000 shares by Sphere to 60 days from the execution of the amendment and the issuance of the 300,000 shares by Sphere when the Company obtains a 75% in the mineral rights.





Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% Net Smelter Return (NSR) production royalty for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC.  The terms of the Production Royalty Agreement provides MMC the right to purchase each of the three percentage points of the NSR Production Royalty for a lump sum payment of US $1,000,000 per percent at any time during the Agreement.  Upon exercise of the option, the Optionee (Spartan) shall have the right to purchase up to 75% of the 3% NSR Production Royalty and MMC shall have the right to purchase up to 25% of the 3% Production Royalty.


13







SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 3 – Mineral Properties (Continued)





On March 28, 2011, the Company, Mexivada and Sphere entered into an Amendment to the Option and Mining Claim Acquisition Agreement.  This Amendment provides a) the Company retains the full 70% interest in the Poker Flats gold concession, b) the Company will acquire an additional 5% interest in the Poker Flats gold concession from Mexivada, and c) the Company shall assume the responsibility for the second phase of exploration, and the mining feasibility study, for which Sphere was previously responsible. As a result of this Amendment, when the Company fulfills its obligations under the Option and Mining Claim Acquisition Agreement, it shall own the majority 75% interest outright, free and clear of all charges, encumbrances and claims, save for certain Mining Lease and Royalties.





Under the terms of this Amendment, the Company is required to make payments to Sphere of $57,750 and $8,250 to Mexivada to secure the 75% ownership position.  These cash payments are contingent upon the Company’s filing a registration statement on Form S-1 and raising $2 million in equity. Additionally the Company is immediately required to issue: (1) to Sphere 3,887,500 common restricted shares, and a warrant to purchase an additional 1,887,500 common restricted shares at a price of $1.00; and (2) to Mexivada 412,500 common restricted shares and a warrant to purchase an additional 412,500 common restricted shares at a price of $1.00. The valuation of the total consideration of this Amendment is as follows:





Mexivada


Sphere


TotalValue of restricted common stock issuedat market value of $0.90 per share on March 28, 2011

$
371,250


$
3,498,750


$
3,870,000Fair value of warrants issued based on Black-Scholes optionpricing model (See Note 5 - Stockholders' Equity (Deficit))


198,000



906,000



1,104,000$
569,250


$
4,404,750


$
4,974,000


Ziggurat Property





On December 27, 2010, the Company (Optionee) entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28 2011.  MMC, the Optionor, is the owner of a 100% interest in 57 mining claims in Nye County, in the State of Nevada, known as “Ziggurat” Prospect.  Under the terms of the agreement, the optionor has agreed to grant to Optionee a 70% (amended to 75%) interest in and to the property mineral rights free and clear of all charges, encumbrances and claims under the following terms and conditions: (a) Optionee will acquire a 51% interest in the property upon incurring exploration expenditures of US $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by Spartan, and (b) Optionee will acquire an additional 24% interest in the property upon incurring additional exploration expenditures of US $1,000,000 and completing and delivering to Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement.  Such additional expenditures and mining feasibility study were to be incurred and paid by Sphere.  Under the amendment, the Company will be obligated to pay these additional expenditures.





In order to maintain the option, Optionee will be required to make the following cash payments: (a) US $25,000 upon execution of the agreement, (b) US $35,000 within 90 days of the execution of the agreement, (c) US $25,000 on or before the second anniversary date of the agreement, and (d) US $25,000 on or before the third anniversary date of the agreement.  Additionally, Sphere shall issue to Optionor 300,000 shares of its common stock within 60 days of the execution of the Option Agreement and an additional 400,000 shares within 60 days of Optionee acquiring a 51% interest in the property.  The amendment extends the issuance of the 300,000 shares by Sphere to 60 days from the execution of the amendment and the issuance of the 400,000 shares by Sphere when the Company obtains a 75% in the mineral rights.








14





SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 3 – Mineral Properties (Continued)





On March 28, 2011, the Company, Mexivada and Sphere entered into an Amendment to the Option and Mining Claim Acquisition Agreement.  This Amendment provides a) the Company retains the full 70% interest in the Ziggurat gold concession, b) the Company will acquire an additional 5% interest in the Ziggurat gold concession from Mexivada, and c) the Company shall assume the responsibility for the second phase of exploration, and the mining feasibility study, for which Sphere was previously responsible. As a result of this Amendment, when the Company fulfills its obligations under the Option and Mining Claim Acquisition Agreement, it shall own the majority 75% interest outright, free and clear of all charges, encumbrances and claims, save for certain Mining Lease and Royalties.





Under the terms of this Amendment, the Company is required to make payments to Sphere of $117,250 and $16,750 to Mexivada to secure the 75% ownership position.  These cash payments are contingent upon the Company’s filing a registration statement on Form S-1 and raising $2 million in equity.  Additionally the Company is immediately required to issue: (1) to Sphere 7,862,500 common restricted shares, and a warrant to purchase an additional 3,862,000 common restricted shares at a price of $1.00; and (2) to Mexivada 837,500 common restricted shares and a warrant to purchase an additional 837,500 common restricted shares at a price of $1.00. The valuation of the total consideration of this Amendment is as follows:





Mexivada


Sphere


TotalValue of restricted common stock issuedat market value of $0.90 per share on March 28, 2011

$
753,750


$
7,076,250


$
7,830,000Fair value of warrants issued based on Black-Scholes optionpricing model (See Note 5 - Stockholders' Equity (Deficit))


402,000



1,853,760



2,255,760$
1,155,750


$
8,930,010


$
10,085,760


Arbacoochee Gold Prospect





On October 22, 2010, the Company acquired all of the mineral rights in the Arbacoochee Gold Prospect, a tract of approximately 320 acres located within the historically significant gold mining region of northeastern Alabama. The acquisition includes all legal rights and equitable title to the mineral rights held by deed in the name of Alabama Mineral Properties, LLC (“AMP”).





The mineral rights were acquired for cash of $50,000 and 111,269,360 (post-split) shares of the Company’s issued and outstanding common stock which were issued to AMP (56,527,400) and consultants (54,741,960) who were instrumental in finding and structuring the purchase arrangement.  Magic Grace, who acquired 94% of the Company’s shares on May 21, 2010 through a change in control, and Real Challenge, who acquired 37,400,000 (post-split) free-trading shares of the Company’s outstanding common stock on May 21, 2010, issued the shares from their holdings to acquire the property resulting in a capital contribution.  The shares were valued at a weighted average price of $0.00048555.





The Company assumed an existing mineral royalty agreement which requires the payment of 6% Net Smelter Return (NSR) overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.





Note 4 – Related Party Transactions





On December 20, 2010 the Company issued 54,334 restricted shares of its common stock to Green Eagle Capital Corp. (“Green Eagle”) for $16,300 cash or $.30 per share.  Seth Shaw, a Vice President of the Company, is the sole officer and director of Green Eagle (See Note 6 – Stockholders’ Deficit).


15




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 4 – Related Party Transactions (Continued)





The Company owes Sphere Resources, Inc. $175,000 and issued 11,750,000 shares of the Company’s restricted common stock and warrants to purchase an additional 5,749,500 shares to Sphere in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated December 22 and 27, 2010 and amended on March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 3 – Mineral Properties).  Mr. Malcolm Stevens, the Company’s Chief Executive Officer, Director and Chairman, is also the Executive Chairman and President of Sphere Resources, Inc., a Canadian Corporation.





Note 5 – Stockholders’ Equity (Deficit)





On December 15, 2007, the Company issued 400,000,000 shares of its common stock at $0.000025 per share to Andriy Kovalenko, the CEO and a Founder of the Company for services rendered aggregating $10,000 as stock based compensation.





On December 15, 2007, the Company issued 80,000,000 shares of its common stock at $0.000025 per share to Dmitriy V. Dobroshtan, the CTO and a Founder of the Company for services rendered aggregating $2,000 as stock based compensation.





On December 15, 2007, the Company issued 65,000,000 restricted shares of its common stock for $32,500 cash or $0.0005 per share.





On January 30, 2008, the Company issued 60,000,000 restricted shares of its common stock for $15,000 cash or $0.00025 per share.





On May 2, 2008, the Company issued 4,000,000 restricted shares of its common stock for $2,000 cash or $0.0005 per share.





In accordance with the stock purchase agreement on May 21, 2010, all related party obligations were cancelled resulting in a capital contribution of $19,603.





On July 8, 2010, the Company filed an amendment to increase its authorized number of common shares to 1,000,000,000 at $0.001 par value.





On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split which was distributed on August 5, 2009 to shareholders of record and has filed an amendment to its Articles of Incorporation in the State of Nevada.  The par value of $0.001 remained the same.  On July 19, 2010, all previously issued shares were issued at par.  The impact of the forward split created an increase in common stock of $593,775 and a resultant charge to the deficit accumulated during the development stage.





On August 12, 2010, Magic Grace Ltd. contributed 395,850,000 shares of common stock to the Company’s treasury valued at $129,851 or $.00033 per share, based on the price paid by Magic Grace Ltd. to acquire the shares.  The Company immediately retired and canceled these shares resulting in a gain of $265,999 which was recorded as a credit to Deficit accumulated during the development stage.





On October 22, 2010, Magic Grace, Ltd. and Real Challenge Group, Ltd. utilized a combined 111,269,360 of their shares to acquire the Arbacoochee mineral rights located in Alabama resulting in a capital contribution of $54,027.  The shares were valued at a weighted average price of $0.00048555 per share.





In connection with the executive employment contracts the Company committed sixteen million shares of its common stock to these executives.  The shares were contributed by Magic Grace, the principal shareholder resulting from the change of control on May 21, 2010.  The shares were valued at $0.00033, the price at the commitment date of October 22, 2010.  The total value of the shares aggregated $5,248 and has been recorded as stock-based compensation with a credit to paid-in-capital as a capital contribution.





On December 15, 2010 the Company issued 350,000 restricted shares of its common stock for $105,000 cash or $.30 per share under a private placement agreement.





On December 20, 2010 the Company issued 54,334 restricted shares of its common stock to Green Eagle Capital Corp. (“Green Eagle”) for $16,300 cash or $.30 per share under a private placement agreement.  Seth Shaw, the Vice President of the Company, is the sole officer and director of Green Eagle (See Note 4 – Related Party Transactions).


16




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 5 – Stockholders’ Equity (Deficit) (Continued)





On December 26, 2010 the Company issued 200,000 restricted shares of its common stock for $60,000 cash or $.30 per share under a private placement agreement.





On January 17, 2011, the Company entered into a $5,000,000 financing commitment agreement with Geneva Switzerland based Knightstown Business Ltd (“Knightstown”).  On January 25, 2011, the Company received the first tranche of $500,000 from Knightstown under the agreement and issued 833,334 shares of its restricted stock at $.60 per share in a private placement.  Knightstown has committed to additional funding of $4,500,000 over the following six month period.  The additional funding is subject to an additional definitive agreement and the acceptance of future use of proceeds by the Company’s management team.





On February 2, 2011, the Company employed Mr. Marcus Flis as an executive and appointed him to the position of Chairman of the Company’s Advisory Board by entering into a Consulting Agreement with him (“Consultant”).  Under the terms of the Consulting Agreement, the Company issued 1,000,000 restricted shares of its restricted common stock to Mr. Flis at the market value per share of $0.6499 for a total of $649,900.  This amount is being amortized over the eighteen month period of the Consulting Agreement.  The Company has recognized $72,212 as stock compensation expense during the three months ended March 31, 2011.  The amount unearned is classified as a reduction to paid-in capital.  The consulting agreement requires a monthly salary of $1,500.





On March 28, 2011, the Company issued 1,250,000 restricted shares of its common stock to Mexivada Mining Corporation (“Mexivada”) in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 3 – Mineral Properties).  The shares were valued at the market price of the shares on March 28, 2011 of $0.90 for a total of $1,125,000.





On March 28, 2011, the Company issued 11,750,000 restricted shares of its common stock to Sphere Resources, Inc. (“Sphere”) in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 3 – Mineral Properties).  The shares were valued at the market price of the shares on March 28, 2011 of $0.90 for a total of $10,575,000.





Warrants





On March 28, 2011, the Company issued warrants to purchase 6,999,500 shares of the Company’s common stock in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties (See Note 3 – Mineral Properties).  These warrants have contractual lives of three years and were valued at a grant date fair value of $0.48 per warrant, or $3,359,760, using a Black-Scholes option pricing model with the following assumptions:





Stock price

$0.90Contractual term

3 yearsExpected volatility

87.6%Risk free interest rate

0.81%Dividend yield

0





The volatility was based on comparable volatility of other companies since the Company had no significant historical volatility. The risk free interest rate was based on the three year treasury rates, as applicable to the contract term. The dividend yield was assumed to be zero.


17




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 5 – Stockholders’ Equity (Deficit) (Continued)





The following table summarized warrant transactions for the three months ended March 31, 2011:





WeightedWeighted


averageaverage


remaining


AggregateNumber


exercise


contracted


intrinsicof warrants


price


term (years)


valueOutstanding at December 31, 2010


-


$
-Granted


6,999,500


$
1.00Exercised


-


$
-Expired


-


$
-Outstanding at March 31, 2011


6,999,500


$
1.00



2.99


$
-Exercisable at March 31, 2011


6,999,500


$
1.00



2.99


$
-Weighted Average Grant Date Fair Value





$
0.48


Note 6 – Mineral Exploration Costs





During the quarter ended March 31, 2011, the Company began exploration activities on its three mineral properties.  Amounts incurred and charged to operations for the quarter ended March 31, 2011 are as follows:





PropertyArbacoochee

$
3,820Poker Flats


15,526Ziggurat


11,256$
30,602
  Note 7 – Income Taxes





No provision for income tax was made for the period from September 6, 2007 (Inception) to March 31, 2011 as the Company had cumulative operating losses.  For the three months ended March 31, 2011 and 2010, the Company incurred net losses for tax purposes of approximately $15,400,000 and $11,700, respectively.


18




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 7 – Income Taxes (Continued)





The income tax expense (benefit) differs from the amount computed by applying the United States Statutory corporate income tax rate as follows:





For the Three Months EndedMarch 31,2011


2010United States statutory corporate income tax rate


34.0%



34.0%Change in valuation allowance on deferred tax assets


-34.0%



-34.0%Provision for income tax


0.0%



0.0%


Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The components of the net deferred income tax assets are approximately as follows:





March 31,


December 31,2011


2010Deferred income tax assets:Net operating loss carry forwards

$
4,194,020


$
97,950Valuation allowance


(4,194,020
)


(97,950
)Net deferred income tax assets

$
-


$
-


The Company has established a full valuation allowance on its deferred tax asset because of a lack of sufficient positive evidence to support its realization.  The valuation allowance increased by $4,096,070 and $4,000 for the three months ended March 31, 2011 and 2010, respectively.





A reconciliation of the expected income tax at the federal statutory rate to the actual tax expense is as follows:





For the Three Months EndedMarch 31,2011


2010Expected income tax (benefit) at 34% statutory rate

$
(5,238,390
)

$
(4,000
)Permanent tax differences


1,142,320



-Change in valuation allowance


4,096,070



4,000Actual tax expense

$
-


$
-






19




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)





Note 7 – Income Taxes (Continued)





The Company believes that the net operating loss carried forward at the time of the change of control has been negated.  Therefore, total net operating losses carried forward and available to offset future income tax at March 31, 2011 are approximately $12,300,000.  The net operating losses expire as follows:





December 31,2030

$
300,0002031


12,000,000$
12,300,000
  Note 8 – Commitments and Contingencies





In connection with the Option and Mining Claim Acquisition Agreement dated December 27, 2010 and amended March 28, 2011 between the Company and Mexivada Mining Corporation as Amended on March 28, 2011, the Company is required to make future payments totaling $85,000 to maintain the option and must incur US $1,500,000 in exploration costs within 3 years of the date of the agreement and an additional $1,000,000 in exploration costs and delivering to Mexivada an Industry-standard Mining and Feasibility Study on or before the fifth anniversary of the agreement.





In connection with the Option and Mining Claim Acquisition Agreement dated December 22, 2010 and amended on March 28, 2011, the Company must incur US $500,000 in exploration costs within 3 years of the date of the agreement and an additional $250,000 in exploration costs and delivering to Mexivada an Industry-standard Mining and Feasibility Study on or before the fifth anniversary of the agreement.





In connection with Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 between the Company, Mexivada Mining Corporation and Sphere Resources, Inc., the Company is required to make future payments to Sphere of $175,000 and $25,000 to Mexivada.  These payments are contingent upon the Company’s filing a registration statement on Form S-1 of which 50% of the payments are required to be paid and the remaining 50% when the Company successfully raises $2,000,000.




On November 15, 2010, the Company entered into an employment agreement with its Chief Operating Officer.  The agreement expires on December 31, 2011 and is renewable annually on January 1, for an additional one year term unless the Company or Executive delivers written notice to the other party at least 60 days preceding the expiration of the initial term or any one-year extension.  The employment agreement provides for annual compensation of $60,000 per year and awards of four million shares of the Company’s common stock from its principal shareholder’s personal shares.





On December 2, 2010, the Company entered into an employment agreement with its President and Chief Financial Officer.  The agreement expires on December 31, 2011 and is renewable annually on January 1, for an additional one year term unless the Company or Executive delivers written notice to the other party at least 60 days preceding the expiration of the initial term or any one-year extension.  The employment agreement provides for annual compensation of $72,000 per year and awards of eight million shares of the Company’s common stock from its principal shareholder’s personal shares.





On December 2, 2010, the Company entered into an employment agreement with its Chief Executive Officer.  The agreement expires on December 31, 2011 and is renewable annually on January 1, for an additional one year term unless the Company or Executive delivers written notice to the other party at least 60 days preceding the expiration of the initial term or any one-year extension.  The employment agreement provides for annual compensation of $72,000 per year and awards of four million shares of the Company’s common stock from its principal shareholder’s personal shares.


20




SPARTAN GOLD LTD.


(A Development Stage Company)


Notes to Financial Statements


March 31, 2011


(unaudited)




Note 9 – Subsequent Events





On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the property located within the Carlin Mining District in Elko County, Nevada.





Under the terms of the Agreement, Tomera grants, lets and leases exclusively to Spartan Gold the property, together will all ores and minerals of every kind, except geothermal resources, coal and oil and gas and other hydrocarbons, water and sand and gravel, in, or under the Property, with the exclusive right to prospect and explore for, mine by any method now known or hereafter discovered, process, mill, prepare for market, store, sell, and dispose of the same; and together with all such rights-of-way and easements to the extent owned by Tomera, if any, through, over, on or appertaining to the Property. The property initially contains 1,760 net mineral acres and may be modified to increase or decrease over time at the option of the Company.





Under the terms of this Agreement, the Company agrees to pay Tomera a Production Royalty of 5% of Net Smelter Returns, as defined in the Agreement. In order to maintain this Agreement in effect, the Company shall pay to Tomera Advance Minimum Royalty (“AMR”) Payments. AMR payments are calculated based on the net mineral acres leased on an annual basis. The Company paid, at the execution of the Agreement, $30,800 for the first year of the lease based on the 1,760 net mineral acres leased at $17.50 per acre. Future AMR payments, on a per net mineral acre basis, are: $17.50 per acre on the first and second anniversaries of the Agreement, $21.00 per acre on the third and fourth anniversaries, $24.50 per acre on the fifth and sixth anniversaries, and $28.00 per acre on the seventh and any subsequent anniversaries. The term of the Agreement is for a period of ten years. The Company has the option to extend the initial term for an additional ten year period.





In connection with the Mining Lease and Agreement, the Company entered into a Surface Access and Use Agreement on April 1, 2011 with Kevin Tomera, a Nevada resident, which grants the Company general rights of ingress and egress over certain surface tracts and the right to use the surface tracts in conduct of its mineral exploration, development and mining activities.  Additionally, Tomera has granted the Company an option to purchase portions of the surface tracts.  Under the terms of the Surface Access and Use Agreement, the Company agrees to pay Kevin Tomera annual rental of $4.50 per acre for each acre of land included in the surface tracts.  At the date of the Agreement, 1,280 acres were included in the surface tracts.  The term of the Agreement is for ten years.





On April 26, 2011, the Company issued 250,000 shares of its restricted common stock to Knightstown Business Ltd. at $0.60 per share for a total of $150,000 in a private placement.





The Company has evaluated subsequent events through the date the financial statements were issued and filed with Securities and Exchange Commission. The Company has determined that there are no other events that warrant disclosure or recognition in the financial statements.


21





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





SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS





We believe that it is important to communicate our future expectations to our security holders and to the public.  This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” ”will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions.  Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement.  Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.





Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and in our subsequent filings with the Securities and Exchange Commission.  The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.





Company Overview





Spartan Gold Ltd. (the "Company", “Spartan”, “we”, “us” or “our”) is a U.S. based junior gold exploration and mining company with gold exploration and development activity centered in both the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada. Spartan’s Poker Flats gold prospect is located within the Carlin-Rain region, and the Ziggurat gold prospect is located within the Round Mountain-Northumberland Mining District.





Each of these regions is endowed with major gold deposits operated by many of the world leaders in the mining industry. Major mining projects in the Carlin Trend are currently operated by Barrick Gold Corporation (trading on the NYSE and the TSX) and Newmont Mining Corporation (trading on the NYSE) which exist both north and south of the Poker Flats prospects respectively.  Additionally, some of the major mining projects in the Round Mountain-Northumberland districts are currently operated by Barrick Gold Corporation and Fronteer Gold (trading on the ASE) which exist in close proximity to the Ziggurat prospect.  The Company also has mining interests in the northeast region of Alabama in the historical Arbacoochee Mining District.  The Company is currently pursuing opportunities for several acquisition targets around the world and focusing on operational plans for current projects.  The directors, management and advisers of Spartan Gold have over 90 years of combined experience in the exploration and development of global mining projects.





Spartan's commitment to asset growth and increased shareholder value will be sustained by the development of highly prospective projects, accelerated exploration activities and the acquisition of viable resources. Spartan has selected an international board of directors experienced in undertaking exploration, development and funding of numerous energy and minerals projects around the world.





Company History





Spartan Gold Ltd. was incorporated in Nevada on September 6, 2007 under the name Powergae, Inc. with the purpose of profitably constructing and operating biodiesel production facilities, establishing them in strategic locations, and selling the biodiesel through existing petroleum manufacturers and distributors.  On September 24, 2009, the Company changed its name to Algoil, Inc.  The central concept of Algoil, Inc. was making the production of biodiesel independent of its traditional sources such as soy bean, rape, sunflower seed or palm oil.





On May 21, 2010, the Company experienced a change in control.  Magic Grace Ltd. (“Magic Grace”) acquired the majority of the issued and outstanding common stock of Algoil, Inc. in accordance with a stock purchase agreement by and between Andriy Kovalenko and Magic Grace.  On the closing date, May 21, 2010, pursuant to the terms of the Stock Purchase Agreement, Magic Grace purchased from Mr. Kovalenko 14,290,000 (pre-split) restricted shares of Company’s outstanding common stock for $187,500.  In accordance with the agreement, all related party obligations were settled.   Also on May 21, 2010, Real Challenge Group, Ltd. (“Real Challenge”) acquired 935,000 (pre-split) free-trading shares of the Company’s outstanding common stock in accordance with a stock purchase agreement by and between Andriy Kovalenko, as a duly authorized representative of the selling shareholders, and Real Challenge for $187,500.   As a result of the change in control, the Company abandoned its original plan of developing and operating biodiesel facilities.


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On July 8, 2010, the Company filed an amendment to its Articles of Incorporation in the State of Nevada to change its name to Spartan Gold Ltd.  The Company has adopted its new strategic plan of gold exploration, development and mining.





On July 19, 2010, the Company's Board of Directors declared a forty-to-one forward stock split of all outstanding shares of common stock.  Subsequently, on August 12, 2010, Magic Grace contributed to the treasury, and the Company retired, 9,896,250 common shares of stock (395,850,000 as adjusted for the stock split).  The effect of the stock split and retirement of shares increased the number of shares of common stock outstanding from 15,225,000 to 213,150,000 as of August 12, 2010.





Our Strategy





We are currently focused on mineral exploration and development activities in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada.  We have options for the mineral concession rights at two projects in this region: Poker Flats and Ziggurat, both of which are located near pre-existing operations of large mining corporations and have available mining and transportation infrastructures. Our strategy is to advance each of these projects to the drilling stage as aggressively as prudent financing will allow and to determine the presence of gold, silver or other precious mineral resources. If we are successful in doing so, we believe we can attract the attention of the existing mining companies already operating in the area or new mining companies to either enter into development agreements with us or to acquire the projects from us outright.





Additionally, we are currently exploring additional acquisition opportunities.





Mineral Properties





Currently, we have completed two Option and Mining Claim Agreements to the mineral rights on two properties in the Carlin-Rain and Round Mountain-Northumberland Gold Trends in Nevada and own the mineral rights to one property in the northeast region of Alabama.  A description of each property is summarized below:





Poker Flats Property





On December 22, 2010, we entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28 2011.  MMC, the Optionor, is the owner of a 100% interest in 25 mining claims known as “Poker Flats” located in the Carlin Mining District in Elko County Nevada.  The Optionor has agreed to grant a 70% (amended to 75%) interest in the mineral rights free of all charges, encumbrances and claims, except for the mining lease and royalty agreements currently in existence under the following terms and conditions: (a) an initial 51% interest in the property will be earned upon incurring exploration expenditures of US $500,000 on or before the third anniversary date of the agreement, all of which will be paid by the Company, and (b) an additional 24% interest in the property will be earned upon incurring additional exploration expenditures of US $250,000 and completing and delivering to Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement.  Such additional expenditures and mining feasibility study were to be incurred and paid by Sphere.  Under the amendment, the Company will be obligated to pay these additional expenditures.





In order to maintain the option, Optionee and Sphere have agreed to the following: (a) Optionee will pay to Optionor US $25,000 upon executing the Option Agreement, and (b) Sphere will issue to Optionor 200,000 shares of Sphere Resources, Inc. common stock within 60 days of the execution of the Option Agreement and an additional 300,000 shares within 60 days of Optionee acquiring a 51% interest in the property.  The amendment extends the issuance of the 200,000 shares by Sphere to 60 days from the execution of the amendment and the issuance of the 300,000 shares by Sphere when the Company obtains a 75% in the mineral rights.





Upon exercise of the option, the Company will assume a 75% interest in an existing Production Royalty Agreement which requires the payment of 3% Net Smelter Return (NSR) production royalty for any and all products that are produced from the Poker Flats mining claims to the lessor of the claims to MMC.  The terms of the Production Royalty Agreement provides MMC the right to purchase each of the three percentage points of the NSR Production Royalty for a lump sum payment of US $1,000,000 per percent at any time during the Agreement.  Upon exercise of the option, the Optionee (Spartan) shall have the right to purchase up to 75% of the 3% NSR Production Royalty and MMC shall have the right to purchase up to 25% of the 3% Production Royalty.





On March 28, 2011, the Company, MMC and Sphere entered into an Amendment to the Option and Mining Claim Acquisition Agreement.  This Amendment provides a) the Company retains the full 70% interest in the Poker Flats gold concession, b) the Company will acquire an additional 5% interest in the Poker Flats gold concession from MMC, and c) the Company shall assume the responsibility for the second phase of exploration, and the mining feasibility study, for which Sphere was previously responsible for. As a result of this Amendment, when the Company fulfills its obligations under the Option and Mining Claim Acquisition Agreement, it shall own the majority 75% interest outright, free and clear of all charges, encumbrances and claims, save for the Mining Lease and Royalties.





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On April 1, 2011, the Company entered into a Mining Lease and Agreement (the “Agreement”) with K & K Tomera Lands, LLC, a Nevada Limited Liability Company (“Tomera”). This Mining Lease and Agreement pertains to the property located within the Carlin Mining District in Elko County, Nevada.  Under the terms of the Agreement, Tomera grants, lets and leases exclusively to Spartan Gold the property, together will all ores and minerals of every kind, except geothermal resources, coal and oil and gas and other hydrocarbons, water and sand and gravel, in, or under the Property, with the exclusive right to prospect and explore for, mine by any method now known or hereafter discovered, process, mill, prepare for market, store, sell, and dispose of the same; and together with all such rights-of-way and easements to the extent owned by Tomera, if any, through, over, on or appertaining to the Property. The property initially contains 1,760 net mineral acres and may be modified to increase or decrease over time at the option of the Company.





Poker Flats is located approximately 20 miles south-southwest of Elko, Nevada in the Carlin-Rain Trend.  Poker Flats began with 500 acres in the Carlin region which is home to some of the world's leaders in the mining industry.  Neighboring mining projects north and south of Poker Flats include Newmont Mining Corporation, Gold Standard Ventures Corporation, and Premier Gold Mines Limited.  The company has recently expanded Poker Flats to 3,600 acres and now holds an option for 75% majority ownership of this project.  The geological mapping process is under way, as well as the first phase interpretations of Poker Flats including an updated NI 43-101 report.  The new claim blocks and private mineral rights now included in the Poker Flats project are surrounded by Newmont Mining Corporation's Emigrant project on the northern border and several other productive projects including Newmont's Rain-Tess Mine, Premier Gold Mines Limited's Saddle gold prospect and Gold Standard Ventures Corporations' Railroad gold project.  The Company’s team is now conducting geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  Once mapping and interpretations are completed, we will proceed with the finalization of an updated NI 43-101 compliant technical report encompassing the entire property that includes the private mineral rights to better define future drill and exploration targets.





Additional drilling, geophysical and geological work is planned at Poker Flats by Spartan under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Pinyon and Railroad, and the mineralized host rocks appear similar to those at Newmont's Rain Mine and at the Railroad deposit, additional exploration expenditures are justified for the Poker Flats property.





The exploration goal at the Poker Flats prospect is to identify a 500,000 to 1,000,000 ounce open-pit gold mining resource. Major mining projects are currently operated by Barrick Gold Corporation (trading on the NYSE and the TSX) and Newmont Mining Corporation (trading on the NYSE) which exist both north and south of the Poker Flats prospects, respectively.





Ziggurat Property





On December 27, 2010, we entered into an Option and Mining Claim Acquisition Agreement between Mexivada Mining Corporation (“MMC”) and Sphere Resources, Inc. (“Sphere”).  The agreement was amended on March 28 2011.  MMC, the Optionor, is the owner of a 100% interest in 57 mining claims in Nye County, in the State of Nevada, known as “Ziggurat” Prospect.  Under the terms of the agreement, the optionor has agreed to grant to Optionee a 70% (amended to 75%) interest in and to the property mineral rights free and clear of all charges, encumbrances and claims under the following terms and conditions: (a) Optionee will acquire a 51% interest in the property upon incurring exploration expenditures of US $1,500,000 on or before the third anniversary date of the agreement, all of which will be paid by Spartan, and (b) Optionee will acquire an additional 24% interest in the property upon incurring additional exploration expenditures of US $1,000,000 and completing and delivering to Optionor an industry-standard mining feasibility study on or before the fifth anniversary date of the agreement.  Such additional expenditures and mining feasibility study were to be incurred and paid by Sphere.  Under the amendment, the Company will be obligated to pay these additional expenditures.





In order to maintain the option, Optionee will be required to make the following cash payments: (a) US $25,000 upon execution of the agreement, (b) US $35,000 within 90 days of the execution of the agreement, (c) US $25,000 on or before the second anniversary date of the agreement, and (d) US $25,000 on or before the third anniversary date of the agreement.  Additionally, Sphere shall issue to Optionor 300,000 shares of its common stock within 60 days of the execution of the Option Agreement and an additional 400,000 shares within 60 days of Optionee acquiring a 51% interest in the property.  The amendment extends the issuance of the 300,000 shares by Sphere to 60 days from the execution of the amendment and the issuance of the 400,000 shares by Sphere when the Company obtains a 75% in the mineral rights.





On March 28, 2011, the Company, MMC and Sphere entered into an Amendment to the Option and Mining Claim Acquisition Agreement.  This Amendment provides a) the Company retains the full 70% interest in the Ziggurat gold concession, b) the Company will acquire an additional 5% interest in the Ziggurat gold concession from MMC, and c) the Company shall assume the responsibility for the second phase of exploration, and the mining feasibility study, for which Sphere was previously responsible for. As a result of this Amendment, when the Company fulfills its obligations under the Option and Mining Claim Acquisition Agreement, it shall own the majority 75% interest outright, free and clear of all charges, encumbrances and claims.





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The Ziggurat gold property is located approximately 33 kilometers north of Kinross Gold Corporation and Barrick Gold Corporation’s Round Mountain gold mine in Nye County, Nevada.  The Ziggurat property began with 1,140 acres in the prolific Round Mountain-Northumberland Trend. The neighboring Northumberland mining project is located eight kilometers to the northeast of Ziggurat, and is owned by mining industry world leader Newmont Mining Corporation.  The company has recently expanded Ziggurat to 6,800 acres and now holds an option for 75% majority ownership of this project.  Previous geophysical and geological interpretations indicate that the Ziggurat property has favorable characteristics for Carlin-style gold mineralization.  Since the property is situated in close proximity to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditures. Spartan's team is now conducting geological mapping and analysis, in conjunction with geophysical mapping involving gravity and magnetic survey work.  Once mapping and interpretations are completed, Spartan will proceed with the finalization of an updated NI 43-101 compliant technical report encompassing the entire property to better define future drill and exploration targets.





Additional drilling, geophysical and geological work is planned under a two-phase exploration program. Since the property is situated adjacent to other current gold mining properties such as Northumberland, Gold Hill, and Round Mountain, and the geologic structure and surface-mineralized host rocks appear very favorable, the Ziggurat property justifies additional exploration expenditure.





The exploration goal at the Ziggurat prospect is to identify a multi-million ounce open-pit gold mining resource. Major mining projects are currently operated by Barrick Gold Corporation (trading on the NYSE and the TSX) and Fronteer Gold (trading on the ASE) which exist both south and north of the Ziggurat prospect, respectively.





Arbacoochee Gold Prospect





On October 22, 2010, we acquired the mineral rights to a Gold Prospect which is a tract of approximately 320 acres located in close proximity to the historic Arbacoochee Gold Mining District. This Prospect contains minable placer located in Cleburne County, Alabama, 9 miles southeast of the city of Heflin. The property is located adjacent to the historic Gold Hill and is the central drain point for that hill. Most of the area’s historic gold production came from placer deposits near Gold Hill and Clear Creek. This property has not been worked in over 120 years.  The recent price of gold has made the previously dormant properties a viable target to explore and bring online.





The Company assumed an existing mineral royalty agreement which requires the payment of 6% Net Smelter Return (NSR) overriding royalty for any and all precious metals that are mined, processed or recovered from the Arbacoochee Gold Prospect to AMP.





Results of Operations





For the Three Months Ended March 31, 2011 and 2010 and For the Period September 6, 2007 (Inception) to March 31, 2011





Revenues





The Company had no revenue for the period from September 6, 2007 (inception) to March 31, 2011 as we are still in the exploration and development stage.





Operating Expenses





For the three months ended March 31, 2011 our total operating expenses were $15,407,030 compared to $11,760 for the three months ended March 31, 2010 resulting in an increase of $15,395,270.  The increase is attributable to impairment charges on mineral properties of $15,059,760 and mineral exploration costs of $30,602 during the three months ended March 31, 2011. General and administrative expenses increased $304,908 due primarily to management compensation of $66,000; consulting, legal and professional fees of $77,941; stock compensation of $72,212; costs and fees associated with being a publicly-traded company of $19,696; and general office, travel and overhead expense of $69,059.  As a result, net loss was $15,407,030 for the three months ended March 31, 2011 compared to $11,760 for the three months ended March 31, 2010.





For the period from September 6, 2007 (inception) to March 31, 2011, total operating expenses and net loss were $15,781,185, composed of general and administrative expenses of $536,796, mineral exploration costs of $30,602, and impairment of mineral property costs of 15,213,787.


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Liquidity and Capital Resources





Overview





For the three months ended March 31, 2011 and 2010, we funded our operations through financing activities consisting of private placements of equity securities with outside investors, while for the three months ended March 31, 2010 we funded our limited operations through loans from shareholders and officers. Our principal use of funds during the three months ended March 31, 2011 has been for mineral exploration, ongoing acquisition of mineral property rights and general corporate expenses.





Liquidity and Capital Resources during the three months ended March 31, 2011 compared to the three months ended March 31, 2010





As of March 31, 2011, we had cash of $150,626 and working capital of $166,630.  The Company generated a negative cash flow from operations of $345,119 for the three months ended March 31, 2011 compared to cash used in operations of $9,060 for the three months ended March 31, 2010. The negative cash flow from operating activities for the three months ended March 31, 2011is primarily attributable to the Company's net loss from operations of $15,407,030, offset by non cash impairment charges of $15,059,760, non cash stock compensation of $72,212 and net cash used in changes in operating assets and liabilities of $70,315.





The increase in investing activities is attributable the purchase of equipment of $6,089 during the three months ended March 31, 2011. During the three months ended March 31, 2011, the Company raised $500,000 by issuing common stock to outside investors. During the three months ended March 31, 2010, the Company raised a net of $20,000 from advances from its Chief Executive Officer.





We will require additional financing during the current fiscal year according to our planned exploration activities. We plan to spend approximately $2,200,000 from April to December 2011 to carry out exploration and administration activities on our Nevada mineral properties. We presently do not have sufficient financing to enable us to complete these activities and will require additional financing to perform future exploration work on all of our mineral properties. Our actual expenditures on these activities will depend on the amount of funds we have available as a result of our financing efforts. There is no assurance that we will be able to raise the necessary financing.





In January, 2011, we entered into a $5,000,000 financing commitment agreement with Geneva Switzerland based Knightstown Business Ltd (“Knightstown”).  On January 25, 2011, the Company received the first tranche of $500,000 from Knightstown under the agreement and issued 833,334 shares of its restricted stock at $.60 per share in a private placement.  Knightstown has committed to additional funding of $4,500,000 over the following six month period.  The additional funding is subject to an additional definitive agreement and the acceptance of future use of proceeds by the Company’s management team.  There is no assurance that the additional funding will in fact take place.





In February, 2011, we entered into an investment banking agreement with Century Pacific Securities, Inc. (“Century Pacific”).  Under terms of the agreement, Century Pacific will represent the Company in a best-efforts capacity in a $10,000,000 Private Placement into Public Equity (PIPE) transaction.  The private placement will be for an offering of restricted equity securities in the form of Spartan Gold’s common stock.  Century Pacific is a licensed broker-dealer and a member of FINRA (Financial Industry Regulatory Authority).  There is no assurance that Century Pacific, or the Company, will be successful in these efforts.





Going Concern





Due to the uncertainty of our ability to meet our current operating and capital expenses, our independent auditors included an explanatory paragraph in their report on the financial statements for the year ended December 31, 2010 regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.





Our unaudited financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. Our unaudited financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.





There is no assurance that our operations will be profitable. The Company has conducted private placements of its common stock, which have generated funds to satisfy the initial cash requirements of its planned Nevada exploration ventures. Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate either through the generation of revenue or the issuance of additional debt or equity.





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Off-Balance Sheet Arrangements





We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.





Critical Accounting Policies





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.





Our significant accounting policies are summarized in Note 2 of our financial statements. While all of these significant accounting policies impact the Company’s financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company and require management to use a greater degree of judgment and estimates. We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting for the valuation of mineral rights and options acquired, the impairment of mineral rights and options, and stock-based compensation. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations. We suggest that our significant accounting policies be read in conjunction with this Management's Discussion and Analysis of Financial Condition.





Additional Information





We file reports and other materials with the Securities and Exchange Commission. These documents may be inspected and copied at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549. You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also get copies of documents that the Company files with the Commission through the Commission's Internet site at www.sec.gov.





Item 3.    Quantitative and Qualitative Disclosures About Market Risk.





The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.





Item 4.    Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to chief executive and chief financial officers to allow timely decisions regarding disclosure.





As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Interim Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date.  The Chief Executive Officer and Interim Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:




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1.
Lack of oversight by independent directors in the establishment and monitoring of required internal controls and procedures;2.
Lack of functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;3.
Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;4.
Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.





To remediate our internal control weaknesses, management intends to implement the following measures:





▪
The Company will add sufficient number of independent directors to the board and appoint an audit committee.





▪
The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.





▪
Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.





The additional hiring is contingent upon the Company’s efforts to obtain additional funding through equity or debt for its continued exploration activities and corporate expenses. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.





Changes in Internal Control over Financial Reporting





There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter, which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





PART II – OTHER INFORMATION





Item 1.    Legal Proceedings





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





Item 1A.  Risk Factors





The disclosure required under this item is not required to be reported by smaller reporting companies; as such term is defined by Item 503(e) of Regulation S-K.  Please refer to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2011.





Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.





On January 17, 2011, the Company received $500,000 from Knightstown Business Ltd. and issued 833,334 shares of its restricted stock at $.60 per share in a private placement.  The proceeds are being used to fund our current mineral exploration activities and for general corporate expenses.





On February 2, 2011, the Company issued 1,000,000 restricted shares of its restricted common stock to Mr. Marcus Flis at the market value per share of $0.6499 for a total of $649,900 as compensation for services.





On March 28, 2011, the Company issued 1,250,000 restricted shares of its common stock to Mexivada Mining Corporation in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties.  The shares were valued at the market price of the shares on March 28, 2011 of $0.90 for a total of $1,125,000.





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On March 28, 2011, the Company issued 11,750,000 restricted shares of its common stock to Sphere Resources, Inc. in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties.  The shares were valued at the market price of the shares on March 28, 2011 of $0.90 for a total of $10,575,000.





On March 28, 2011, the Company issued warrants to purchase 1,250,000 shares of the Company’s common stock to Mexivada Mining Corporation in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties.  The warrants have contractual lives of three years and an exercise price of $1.00.





On March 28, 2011, the Company issued warrants to purchase 5,749,500 shares of the Company’s common stock to Sphere Resources, Inc. in connection with the Amendments to the Option and Mining Claim Acquisition Agreements dated March 28, 2011 for its Poker Flats and Ziggurat properties.  The warrants have contractual lives of three years and an exercise price of $1.00.





Item 3.    Defaults Upon Senior Securities.





None.





Item 4.    (Removed and Reserved).





Item 5.    Other Information.





None.





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Item 6.    Exhibits





Exhibit 3.1
Articles of Incorporation (1)Exhibit 3.2
Bylaws (1)Exhibit 3.3
Certificate of Amendment to Articles of Incorporation for Change of Company’s Name (2)Exhibit 3.4
Certificate of Amendment to Articles of Incorporation for Increase in Authorized Common Shares (2)Exhibit 3.5
Certificate of Amendment to Articles of Incorporation for Forty-to-One Forward Stock Split (2)Exhibit 10.1
Asset Purchase Agreement between Spartan Gold Ltd. And Alabama Mineral Properties LLC (3)Exhibit 10.2
Option and Mining Claim Acquisition Agreement between Spartan Gold Ltd. and Mexivada Mining Corporation (4)Exhibit 10.3
Option and Mining Claim Acquisition Agreement between Spartan Gold Ltd. and Mexivada Mining Corporation (5)Exhibit 10.4
Amendment to Option and Mining Claim Acquisition Agreement (Ziggurat) between Spartan Gold Ltd., Mexivada Mining Corporation, and Sphere Resources, Inc. (6)Exhibit 10.5
Amendment to Option and Mining Claim Acquisition Agreement (Poker Flats) between Spartan Gold Ltd., Mexivada Mining Corporation, and Sphere Resources, Inc. (6)Exhibit 10.6
Mining Lease and Agreement between Spartan Gold Ltd. And K & K Tomera Lands, LLC (6)Exhibit 31.1
Rule 13a-14(a) Certification by the Principal Executive Officer (7)Exhibit 31.2
Rule 13a-14(a) Certification by the Principal Financial Officer (7)Exhibit 32.1
Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (7)Exhibit 32.2
Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (7)








(1)
Incorporated by reference from Registrant’s Form S-1 filed with the Securities and Exchange Commission on March 4, 2008.(2)
Incorporated by reference from Company’s Form 10-Q filed with the Securities and Exchange Commission on August 23, 2010.(3)
Incorporated by reference from Company’s Form 10-Q filed with the Securities and Exchange Commission on November 22, 2010.(4)
Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on December 28, 2010.(5)
Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on December 28, 2010.(6)
Incorporated by reference from Company’s Form 8-K filed with the Securities and Exchange Commission on April 11, 2011.(7)
Filed herewith.











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SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) 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.








Date:  May 13, 2011

By:  /s/ Malcolm StevensMalcolm StevensChief Executive Officer

(Principal Executive Officer)








Date:  May 13, 2011

By:  /s/ William H. Whitmore, Jr.William H. Whitmore, Jr.President and Interim Chief Financial Officer

(Principal Financial Officer)
















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