UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

|ý                                | Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended November 30, 2009                    
|-------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|r                                | Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________________ to ________________
|Commission File Number 000-53520

Santos Resource Corp.

|Nevada 
(State of Incorporation) | 98-0507846
(I.R.S. Employer Identification No.)
|-------------------------------- | -----------------------------------------------



11450 - 201A Street
			Maple Ridge, British Columbia  V2X 0Y4
			Tel: (604) 460-8440(Address and telephone number of
			Registrant's principal executive offices)


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

Yes ý
      No r

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes r
      No ý

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

|Large accelerated filer r                                              | Accelerated filer r        
|---------------------------------------------------------------------- | ---------------------------
|Non-accelerated filer r

(Do not check if a smaller reporting company) | Smaller reporting company ý

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

Yes ý
   No q

Indicate the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Class: common stock - $0.001 par value
			
			Outstanding at January 14, 2010:
			32,076,500




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2





















Santos Resource Corp.

Financial Statements

November 30, 2009

(Unaudited - Prepared by Management)

(Presented In US Dollars)

















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3

Santos Resource Corp.

November 30, 
			2009 
			(Unaudited)
			
			February 28, 2009AssetsCurrent AssetsCash
			$
			308
			$
			38,661Total Assets
			$
			308
			$
			38,661Liabilities and
			Stockholders Equity (Deficit)Current LiabilitiesAccounts payable and accrued liabilities
			$
			1,965
			$
			12,508Payable to Shareholders (Note 3)
			
			9,457
			
			7,870Total Current
			Liabilities
			
			11,422
			
			20,378Stockholders'
			Equity (Deficit)Common Stock 75,000,000 shares
			authorized, 
			$0.001 par value - 32,076,500 shares issued (2009 - 32,076,500)
			
			32,077
			
			32,077Additional paid in capital
			
			149,871
			
			149,871Deficit accumulated during the
			exploration stage
			
			(193,062)
			
			(163,665)Total
			Stockholders' Equity (Deficit)
			
			(11,114)
			
			18,283Total
			Liabilities and Stockholders' Equity (Deficit)
			$
			308
			$
			38,661 Nature of operations and continuance of Business - Note 1 On Behalf of the Board: /s/ Richard Pierce  Director /s/ Andrew Lee Smith  Director   The accompanying notes are an integral part of
	these financial statements 4 Santos
	Resource Corp.(an Exploration stage company)
	Statements of Operations
	(Expressed in US Dollars)(Unaudited) Three months
			
			Ended
			Three months
			
			Ended
			Nine months
			
			Ended
			Nine months
			
			Ended
			Cumulative
			toNovember
			
			November
			
			November
			
			November
			
			November30, 2009
			
			30, 2008
			
			30, 2009
			
			30, 2008
			
			30, 2009ExpensesGeneral and
			Administrative
			$
			187
			$
			(1,260)
			$
			272
			$
			(1,183)
			$
			793Foreign
			Exchange
			
			
			487
			
			-
			
			1,243
			
			-
			
			(45)Mineral
			Property Costs
			
			
			600
			
			24,094
			
			9,526
			
			27,594
			
			69,689Professional
			Fees
			
			
			7,174
			
			23,206
			
			18,356
			
			48,854
			
			122,625Total
			Expenses
			
			
			8,448
			
			46,040
			
			29,397
			
			75,265
			
			193,062Net loss and
			comprehensive loss
			$
			(8,448)
			$
			(46,040)
			$
			(29,397)
			$
			(75,265)
			$
			(193,062)Net loss per
			shareBasic and
			diluted
			
			$
			-
			$
			-
			$
			-
			$
			-Weighted
			average number of shares outstanding - basic and diluted
			
			
			32,076,500
			
			32,076,500
			
			32,076,500
			
			32,076,500


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5

Santos Resource
			Corp.
			
			
			
			
			Deficit(an Exploration
			stage company)
			
			
			
			
			AccumulatedStatement of
			Stockholders Equity (Deficit)
			
			
			
			Additional
			During the
			TotalAt November 30,
			2009
			
			Common
			Stock
			Paid-in
			Exploration
			Shareholders'(Expressed in US
			Dollars)
			
			Number
			Par Value
			Capital
			Stage
			Equity (Deficit)Balance, May 24,
			2006(date of inception)
			
			-
			$           -
			$            -
			$             -
			$            -Net loss for the
			period endingFebruary 28, 2007
			
			-
			-
			-
			-
			-Balance,
			February 28, 2007
			
			-
			-
			-
			-
			-Capital Stock
			issued for subscriptionsreceivable at
			$0.0005 per share and servicesat $0.005 per share
			19-Jun-07
			31,040,000
			31,040
			(15,520)
			
			15,520Mineral Property
			Option - Starfire Minerals
			25-Jun-07
			75,000
			75
			11,175
			-
			11,250Private Placement
			at $0.15 per share
			1-Feb-08
			961,500
			962
			143,264
			-
			144,226Private Placement
			fees
			1-Feb-08
			-
			-
			(4,568)
			-
			(4,568)Net loss, for the
			year endingFebruary 29, 2008
			
			-
			-
			15,520
			(70,888)
			(55,368)Balance,
			February 29, 2008
			
			32,076,500
			32,077
			149,871
			(70,888)
			111,060Net loss, for the
			year endingFebruary 28, 2009
			
			-
			-
			-
			(92,777)
			(92,777)Balance,
			February 28, 2009
			
			32,076,500
			32,077
			149,871
			(163,665)
			18,283Net loss, for the
			nine months endingNovember 30, 2009
			
			-
			-
			-
			(29,397)
			(29,397)Balance,
			November 30, 2009
			
			32,076,500
			$  32,077
			$  149,871
			$  (193,062)
			$  (11,114) The accompanying notes are an integral part of
	these financial statements


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6

Santos Resource
	Corp.(an Exploration stage company)
	Statements of Cash Flows
	(Expressed in US Dollars)(Unaudited) Nine 
			months 
			ending
			
			Nine 
			months 
			ending
			
			Cumulative 
			toNovember 
			30, 2009
			
			November 
			30, 2008
			
			November 
			30, 2009Cash flows used
			in Operating ActivitiesNet loss for the period
			$
			(29,397)
			$
			(75,265)
			$
			(193,062)Adjustments to net
			loss for non-cash activitiesShares issued for property acquisition
			
			-
			
			-
			
			11,250Services provided by founders5 in
			exchange for shares
			
			-
			
			-
			
			15,520Unrealized foreign exchange loss (gain)
			
			1,243
			
			-
			
			(45)GST Recoverable
			
			-
			
			(4,670)
			
			-Accounts payable and accrued liabilities
			
			(10,543)
			
			(7,411)
			
			1,965Net cash used in
			operating activities
			
			(38,697)
			
			(87,346)
			
			(164,372)Cash flows from
			financing activitiesCapital Stock issued
			
			-
			
			-
			
			159,746Private Placement Fees
			
			-
			
			-
			
			(4,568)Advances from shareholders
			
			-
			
			(1,767)
			
			9,158Net cash flows
			from financing activities
			
			-
			
			(1,767)
			
			164,336Effect of foreign exchange on cash
			balance
			
			344
			
			(5)
			
			344Cash increase (decrease) during the
			period
			
			(38,353)
			
			(89,113)
			
			308Cash beginning of
			the period
			
			38,661
			
			132,303
			
			-Cash end of the
			period
			$
			308
			$
			43,190
			$
			308Interest Paid in
			the period
			$
			-
			$
			-
			$
			-Income Taxes Paid
			in the period
			$
			-
			$
			-
			$
			-   The accompanying notes are an integral part of
	these financial statements 7 Santos Resource Corp.(an exploration stage company)
	Notes to the Financial Statements
	For the period ending November 30, 2009
	(Expressed in U.S. dollars) 1)         Nature of Operations and Continuance of Business Santos Resource Corp. (the "Company") was
	incorporated in the state of Nevada on May 24, 2006.  The Company is an
	Exploration Stage Company.  The Company's principal business is the
	acquisition and exploration of mineral properties.  The Company has not
	presently determined whether its properties contain mineral reserves that
	are economically recoverable. The accompanying financial statements have been
	prepared on a going concern basis, which implies the Company will continue
	to realize its assets and discharge its liabilities in the normal course of
	business. The Company has never generated revenues since inception and has
	never paid any dividends and is unlikely to pay dividends or generate
	earnings in the immediate or foreseeable future. The continuation of the
	Company as a going concern is dependent upon the continued financial support
	from its shareholders, the ability of the Company to obtain necessary equity
	financing to continue operations, confirmation of the Company's interests in
	the underlying properties, and the attainment of profitable operations. As
	at November 30, 2009, the Company has never generated any revenues and has
	an accumulated loss of $193,062, since inception. These factors raise
	substantial doubt regarding the Company's ability to continue as a going
	concern. These financial statements do not include any adjustments to the
	recoverability and classification of recorded asset amounts and
	classification of liabilities that might be necessary should the Company be
	unable to continue as a going concern. 2.         Summary of Significant Accounting
	Policies a)         Basis of Presentation These interim financial statements have been
	prepared in accordance with U.S. generally accepted accounting principles
	for interim financial information and with the instructions to Form 10-Q and
	Item 310(b) of Article 8-03 of Regulation S-X.  In the opinion of
	management, all adjustments (consisting of normal recurring accruals)
	considered necessary for a fair presentation have been included.  Operating
	results for the periods ended November 30, 2009 and 2008 are not necessarily
	indicative of the results that may be expected for any interim period or the
	entire year. These interim financial statements should be read in
	conjunction with the audited financial statements for the year ended
	February 28, 2009.  The Company applies the same accounting policies and
	methods in its interim financial statements as those in the most recent
	audited annual financial statements, except as discussed in Note 2b) below. b)       Recent Accounting Pronouncements The Financial Accounting Standards Board has
	issued SFAS No. 155 "Accounting for Certain Hybrid Financial Instruments -
	an amendment of FASB Statements No. 133 and 140" and No. 156 "Accounting for
	Servicing of Financial Assets - an amendment of FASB Statement No. 140" has
	been adopted as of March 1, 2009 and is reflected in these statements. Effective December 1, 2008, the Company adopted
	Statement of Financial Accounting Standards No. 157, "Fair Value
	Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a
	framework for measuring fair value in generally accepted accounting
	principles (GAAP), and expands disclosures about fair value measurements.
	The adoption of SFAS 157 has not had any impact on the Company's financial
	position, results of operations, or cash flows. 8 Santos Resource Corp.(an exploration stage company)
	Notes to the Financial Statements
	For the period ending November 30, 2009
	(Expressed in U.S. dollars) 2.         Summary of Significant Accounting Policies (continued) b)         Recent Accounting Pronouncements (continued) Effective December 1, 2008, the Company adopted
	Statement of Financial Accounting Standards No. 159, "The Fair Value Option
	for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159
	permits entities to choose to measure many financial instruments, and
	certain other items, at fair value. The adoption of SFAS 159 has not had any
	impact on the Company's financial position, results of operations, or cash
	flows. Effective June 1, 2009, the Company adopted
	Statement of Financial Accounting Standards No. 165, "Subsequent Events" ("SFAS
	165"). SFAS 165 establishes general standards of accounting for and
	disclosure of subsequent events. The adoption of SFAS 165 has not had any
	impact on the Company's financial position, results of operations, or cash
	flows. 3.         Related Party Transactions A shareholder loaned the company US$9,457
	(CAD$10,000) in April 2007. The loan is non interest bearing and unsecured
	and is payable upon request from the shareholder. Fair value cannot be
	determined. 4.         Mineral Properties On June 25, 2007 the Company signed an option agreement to acquire a 75% 
	interest in 18 mineral property claims in Northern Quebec known as the
	Lordeau Property, with Starfire Minerals Inc. ("Starfire"). Santos was
	granted an option to acquire 75% of the right, title and undivided interest
	in the property (subject to the NSR Royalty reserved to Starfire). Terms and
	conditions are as follows: a) 
	 $10,000 cash payment by Santos: (i)    
	$10,000 on execution of this agreement (paid); b)   75,000 common shares of Santos to be
	allotted and issued and certificates therefore delivered to Starfire
	as follows: (i)     
	75,000 common shares (issued June 25, 2007) c)   Exploration expenditures paid (i)     
	$24,092 on September 19, 2008; (ii)      $8,926 (CDN$10,260) on May 11, 2009 d)   Exploration expenditures to be incurred: (i)     
	$13,945 (CDN$14,740) to be paid on or before April 30, 2010 9 Santos Resource Corp.(an exploration stage company)
	Notes to the Financial Statements
	For the period ending November 30, 2009
	(Expressed in U.S. dollars) 4.       Mineral Properties (continued) In the event that the Company fails to incur the
	full amount of Expenditures in a given period, the Company may, within 45
	days of the end of such period pay Starfire an amount equal to the
	outstanding balance to be incurred by way of 50% cash and 50% shares (valued
	at the weighted average trading price for the 10 trading days preceding the
	period end date). In addition, any shares delivered, cash payments
	made, or Expenditures incurred toward the option price that is over and
	above that required to be made during a particular time shall be carried
	forward and applied against the required payment in subsequent periods. Santos will pay Starfire a 3% net smelter return
	royalty ("NSR Royalty").  Santos may purchase in the aggregate up to
	two-thirds (i.e., 2% NSR Royalty) of the NSR Royalty on the basis of one
	hundred thousand dollars for each one-tenth percent of the NSR Royalty
	(i.e., $100,000 per 0.1% NSR Royalty) acquired on the first one-half of the
	NSR Royalty (i.e., the first 1% NSR Royalty), and one hundred fifty
	($150,000) dollars for each one-tenth percent of the NSR Royalty (i.e.,
	$150,000 per 0.1% NSR Royalty) thereafter for the remaining NSR Royalty
	(i.e., the remaining 1% NSR Royalty).  To exercise its option to purchase
	the NSR Royalty or any portion thereof, Santos must provide the Owner with
	at least 30 days advance written notice of its intention to do so, and must
	close upon each purchase within 60 days of each notice. 5.        Financial Instruments The Company's financial instruments consist of
	cash, shareholder loans and accrued payables unless otherwise noted, it is
	management's opinion that the Company is not exposed to significant
	interest, currency, or credit risks arising from these financial
	instruments. The fair values of these financial instruments approximate
	their carrying value, unless otherwise noted. Currency risk is the risk to the Company's
	earnings that arises from fluctuations of foreign exchange rates and the
	degree of volatility of these rates. The Company does not use derivative
	instruments to reduce its exposure to foreign currency risk. At November 30, 2009 the Company had the
	following financial assets and liabilities in Canadian dollars: USD equivalent
			
			CDN DollarsCash on deposit
			$
			308
			$
			326Due to Shareholder
			$
			9,457
			$
			10,000Accounts payable and accrued
			liabilities
			$
			1,964
			$
			2,076 At November 30, 2009 US dollar amounts were converted at a rate of $1.057
	Canadian dollars to $1.00 US dollar. 6.       Subsequent Events The Company has evaluated subsequent events from the balance sheet date
	through January 7, 2010 and has determined that there are no events to
	disclose.


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10

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

THE FOLLOWING PRESENTATION OF MANAGEMENT'S
DISCUSSION AND ANALYSIS OF SANTOS RESOURCE CORP. SHOULD BE READ IN CONJUNCTION
WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.

Overview

Santos Resource Corp. (the "Company" or "Santos")
was incorporated under the laws of the state of Nevada on May 24, 2006.  We have
not commenced business operations and we are considered an exploration stage
company.  We are defined as a "shell company" under the Rule 405 of the
Securities Act and Rule 12b-2 of the Exchange Act because we have nominal
operations and nominal assets.  To date, our activities have been limited to
organizational matters, obtaining a geological report on the Lourdeau Claims and
the preparation and filing of a registration statement on Form S-1.

Lourdeau Claims

Under the Property Option Agreement entered into on
June 25, 2007, we acquired an option to acquire a 75% interest in and to 18
mineral claims called the Lourdeau Claims from Starfire Minerals Inc., the
registered owner of the Lourdeau Claims.  On May 29, 2008, we amended the
property option agreement whereby our option to acquire the Lourdeau Claims is
subject to the approval of the TSX Venture Exchange, which approval was obtained
in September 2008.  On April 23, 2009, we amended the Property Option Agreement
again, which amends the schedule to the final $25,000 of Expenditures to earn
Starfire's interest in the Lourdeau Claims.  The Lourdeau Claims consist of 18
mineral claims covering approximately 900.75 hectares (9.01 km2),
located in the La Grande geological area of Quebec in the James Bay Territory
about 620 miles (1,000 km) north of Montreal, Quebec.

Under the Property Option Agreement, Starfire
Minerals Inc. has a 3% Net Smelter Return ("NSR") royalty interest in the
Lourdeau Claims, if and when Santos exercises its option to acquire a 75%
interest in the Lourdeau Claims by making the required cash and share payments. 
NSR means the actual proceeds received from the sale of ore, metals or
concentrated products from the Lourdeau Property derived from commercial
production as recorded by the producer and net of any smelting and refining
charges, penalties, costs of transportation of ores, metals or concentrates from
the Lourdeau Property to any mint, smelter or other purchaser, cost of insurance
of the products, and any export and import taxes levied with respect to
production from the Lourdeau Property.

Santos also has the right to purchase up to
two-thirds of the NSR royalty (i.e. 2% of the NSR royalty) on the basis of
$100,000 for each 0.1% of the NSR royalty (i.e. $100,000 per 0.1% NSR royalty)
acquired on the first one-half of the NSR royalty, and $150,000 for each 0.1% of
the NSR royalty (i.e. $150,000 per 0.1% NSR royalty) thereafter for the
remaining NSR royalty (i.e. the remaining 1% NSR royalty).  To exercise its
option to purchase the NSR royalty or any portion thereof, Santos must provide
Starfire with at least 30 days advance written notice of its intention to do so,
and must close upon each purchase within 60 days of each notice.

Under the Property Option Agreement, Santos is
required to make all filings related to the Lourdeau Property and to maintain
the Lourdeau Claims in good standing by preparing and filing the assessment
reports, paying taxes and keeping the Lourdeau Property free and clear of all
liens and encumbrances.  The Lourdeau Claims are in good standing until
July 18, 2011 and have been assigned tenure
numbers 87500, 87501, 87502, 87503, 87504, 87505, 87506, 87507, 87508, 87509,
87510, 87511, 87512, 87513, 87514, 87515, 87516 and 87517 by the Province of
Quebec.

In order to exercise the Option and to earn its 75%
interest in the Property, Santos has to pay Starfire $10,582 (CAD$10,000) in
cash payment and issue 75,000 shares to Starfire, and incur an aggregate of
CAD$50,000) in expenditures before April 30, 2010, within the following time
schedule:



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11

(a)        pay $10,582 (CAD$10,000) upon signing of
the Property Option Agreement (paid);

(b)        issue and deliver 75,000 shares within 10
business days of the date of approval of the Property Option Agreement by the
board of directors of Santos (issued in June 2007);

(c)        incur $24,092 (CAD$25,000) of
expenditures on the Lourdeau Property on or before September 30, 2008 (in
September 2008, Santos paid Starfire cash of $24,092 instead of incurring
expenditures on the property);

(d)        incur $8,926 (CAD$10,260) on the Lourdeau
Property on or before May 11, 2009 (in May 2009 Santos paid Starfire cash of
$8,926 instead of incurring expenditures on the property); and

(e)        incur additional expenditures of
approximately $13,945 (CAD$14,740) on the Lourdeau Property on or before April
30, 2010.

Any shares delivered, cash payments made, or
expenditures incurred toward the option price that is over and above that
required to be made during a particular time will be carried forward and applied
against the required payment in subsequent periods.

If Santos does not incur the full amount of
expenditures within the set time period, Santos may, within 45 days after the
end of the period, pay Starfire the outstanding balance to be incurred for that
specific year by way of either 100% cash or 50% cash and 50% shares (valued at
the weighted average trading price during the 10 trading days preceding the
period ended).  After these payments, the option from Starfire remains in good
standing and Santos will be deemed to have acquired 75% of the Lourdeau Claims
from Starfire.

Plan of Operation

Our business plan is to proceed with the exploration
of the Lourdeau Claims to determine whether there are commercially exploitable
reserves of base and precious metals.  We presently do not have funds to meet
our general operating expenses and to meet our obligations under the Property
Option Agreement.  We do not have the funds to conduct the recommended
exploration program.  Due to extreme weather conditions, exploration activities
can only be conducted between June and August of each year.  We are attempting
to raise additional money, and have not started the exploration program.  If we
are able to raise additional money, we can only conduct the exploration program
recommended by Mr. Michel Boily in the summer of 2010.  We anticipate the
recommended program will cost approximately $101,770 (CAD$107,570).

Mr. Michel Boily, Ph.D., P. Geo. was hired by Santos
to provide a Technical Report in July 2007 on the Lourdeau Claims. 
Mr. Boily does not have any interest in the Lourdeau
Property or the Company.  The report is based on published and private reports,
maps and data provided by the Company and in the public domain.

Mr. Boily recommends a systemic surface sampling
program of the Lourdeau Vein site and its vicinity, and the northern edge of the
Lourdeau Hill, incorporating grab and channel sampling, in order to get a solid
geochemical assay database.  Mr. Boily recommends obtaining a helicopter-borne
geophysical survey to cover the rest of the Lourdeau Property.  Mr. Boily
recommends the geophysical magnetic and radiometric surveys to be done on a 100
m spaced grid.

Depending on the results of this program, the next
phase could involve a drilling campaign which would define the targets acquired
during the geophysical surveys and sampling campaign.  The focus of the drilling
will be the uranium-mineralized sandstones at the Lourdeau Hill, with the gold,
copper and silver-mineralized metavolcanic constituting secondary targets.

In the event that we require additional funding, we
anticipate that such funding will be in the form of equity financing from the
sale of our common stock.  However, we cannot provide investors with any
assurance that we will be able to raise sufficient funding from the sale of our
common stock to fund additional phases of the exploration program should we
decide to proceed. We believe that debt financing will not be an alternative for

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12

funding any further phases in our exploration
program. The risky nature of this enterprise and lack of tangible assets places
debt financing beyond the credit-worthiness required by most banks or typical
investors of corporate debt until such time as an economically viable mine can
be demonstrated. We do not have any arrangements in place for any future equity
financing.

Risk Factors

An investment in Santos' common stock involves a
number of very significant risks.  Prospective investors should refer to all the
risk factors disclosed in Santos' Annual Report on Form 10-K filed with the SEC
on May 27, 2009.

Financial Condition

As at November 30, 2009, Santos had a cash balance
of $308.  Management does not anticipate generating any revenue for the
foreseeable future.  When additional funds become required, the additional
funding will come from equity financing from the sale of Santos' common stock. 
If Santos is successful in completing an equity financing, existing shareholders
will experience dilution of their interest in Santos.  Santos does not have any
financing arranged and Santos cannot provide investors with any assurance that
Santos will be able to raise sufficient funding from the sale of its common
stock.  In the absence of such financing, Santos' business will fail.

Based on the nature of Santos' business, management
anticipates incurring operating losses in the foreseeable future.  Management
bases this expectation, in part, on the fact that very few mineral claims in the
exploration stage ultimately develop into producing, profitable mines.  Santos'
future financial results are also uncertain due to a number of factors, some of
which are outside its control.  These factors include, but are not limited to:

- Santos' ability to raise additional funding;
- the market price for minerals; and
- the results of Santos' proposed exploration programs on its exploration
	mineral properties.

Due to Santos' lack of operating history and present
inability to generate revenues, Santos' auditors have stated their opinion that
there currently exists a substantial doubt about Santos' ability to continue as
a going concern.  This means that there is substantial doubt whether Santos can
continue as an on going business for the next 12 months unless we obtain
additional capital to pay our bills.  We presently do not have the funds to
conduct the recommended exploration program.  Further, even if Santos completes
its current exploration program, we will require additional funds in order to
place the Lourdeau Claims into commercial production.

Liquidity

Santos' internal sources of liquidity will be loans
that may be available to Santos from management.  Although Santos has no written
arrangements with any of directors and officers, Santos expects that the
directors and officers will provide Santos with internal sources of liquidity,
if it is required.

Also, Santos' external sources of liquidity will be
private placements for equity conducted outside the United States.  Since
inception on May 24, 2006 to November 30, 2009, Santos did not complete any
definitive arrangements for any external sources of liquidity, except for a
private placement in February 2008 where the Company issued 961,500 shares of
common stock at $0.15 per share for proceeds of $144,226.

Capital Resources

As of November 30, 2009,
Santos had total assets of $308 and total liabilities of $11,422 for a net
working capital deficiency of $11,114, compared with a net working capital of
$18,283 as of February 28, 2009 (a decrease of $29,397).  The assets as at
November 30, 2009 are comprised of cash of $308.  The liabilities as at November
30, 2009 consisted of shareholders loan of $9,457 and accounts payables of
$1,965.

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13

There are no assurances that Santos will be able to
achieve further sales of its common stock or any other form of additional
financing.  If Santos is unable to achieve the financing necessary to continue
its plan of operations, then Santos will not be able to continue its exploration
programs and its business will fail.

Management estimates that Santos' current cash will
not be sufficient to meet our general operating expenses for the next 12 months
and to meet our obligations under the Property Option Agreement.  We do not have
the funds to conduct the recommended exploration program which is estimated to
cost approximately $101,770 (CAD$107,570).  We need to raise additional money to
conduct our exploration program.  If we are able to raise additional money, we
plan to conduct our exploration program in the summer of 2010.

Results of Operations

Our results of operations for the three and nine
month periods ended November 30, 2009 and 2008 are summarized as follows:

|                   |   | Three months 
		ended Nov. 30,2009 |   | Three months 
		ended Nov. 30,2008 |  |   | Nine months 
		ended Nov. 30,2009 |   | Nine months 
		ended Nov. 30,2008
|------------------ | - | ---------------------------------- | - | ---------------------------------- |  | - | --------------------------------- | - | ---------------------------------
|Revenue            | $ | -                                  | $ | -                                  |  | $ | -                                 | $ | -                                
|Operating Expenses | $ | 8,448                              | $ | 46,040                             |  | $ | 29,397                            | $ | 75,265                           
|Net Loss           | $ | (8,448)                            | $ | (46,040)                           |  | $ | (29,397)                          | $ | (75,265)                         

We did not earn any revenues for the nine months
ended November 30, 2009 and 2008.  We do not anticipate earning revenues until
such time as we have entered into commercial production of our mineral
properties. We are presently in the exploration stage of our business and we can
provide no assurance that we will discover commercially exploitable levels of
mineral resources on our properties, or if such resources are discovered, that
we will enter into commercial production of our mineral properties.

Our expenses for the three and nine month periods
ended November 30, 2009 and 2008 are outlined in the table below:

|                             |   | Three months ended Nov. 30, 2009 |   | Three months ended Nov. 30, 2008 |  |   | Nine months ended Nov. 30, 2009 |   | Nine months ended Nov. 30, 2008
|---------------------------- | - | -------------------------------- | - | -------------------------------- |  | - | ------------------------------- | - | -------------------------------
|General and
		Administrative | $ | 187                              | $ | (1,260)                          |  | $ | 272                             | $ | (1,183)                        
|Foreign Exchange             |   | 487                              |   | -                                |  |   | 1,243                           |   | -                              
|Mineral Property Costs       |   | 600                              |   | 24,094                           |  |   | 9,526                           |   | 27,594                         
|Professional Fees            |   | 7,174                            |   | 23,026                           |  |   | 18,356                          |   | 48,854                         
|Total                        | $ | 8,448                            | $ | 46,040                           |  | $ | 29,397                          | $ | 75,265                         

The decrease in professional fees for the nine
months ended November 30, 2009 compared to the nine months ended November 30,
2009 was due to the Company not incurring further professional fees associated
with the filing and preparation of the Company's registration statement on Form
S-1.

Off-Balance Sheet Arrangements

Santos has no off-balance sheet arrangements.

Cautionary Statement Regarding
Forward-Looking Statements

This quarterly report contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.

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14

These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
"our company believes," "management believes" and similar language. These
forward-looking statements are based on our current expectations and are subject
to certain risks, uncertainties and assumptions, including those set forth in
the following discussion, including under the heading "Risk Factors". Our actual
results may differ materially from results anticipated in these forward-looking
statements. We base our forward-looking statements on information currently
available to us, and we assume no obligation to update them. In addition, our
historical financial performance is not necessarily indicative of the results
that may be expected in the future and we believe that such comparisons cannot
be relied upon as indicators of future performance. Other important factors that
could cause actual results to differ materially include the following: business
conditions, the price of precious metals, ability to attract and retain
personnel; the price of the Company's stock; and the risk factors set forth from
time to time in the Company's SEC reports, including but not limited to its
annual report on Form 10-K; its quarterly reports on Form 10-Q; and any current
reports on Form 8-K.  In addition, the Company disclaims any obligation to
update or correct any forward-looking statements in all the Company's annual
reports and SEC filings to reflect events or circumstances after the date
hereof.

Item 3.  Quantitative and Qualitative
Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of
the Company's management, including the Company's principal executive officer
and principal financial officer, the Company has evaluated the effectiveness of
the design and operation of its disclosure controls and procedures pursuant to
Exchange Act Rule 13a-15(e) and Rule 15d-15(e) as of the end of the period
covered by this quarterly report.  Based on that evaluation, the principal
executive officer and principal financial officer have identified that the lack
of segregation of accounting duties as a result of limited personnel resources
is a material weakness of its financial procedures.  Other than for this
exception, the principal executive officer and principal financial officer
believe the disclosure controls and procedures are effective to ensure that
information required to be disclosed by us in the reports we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms and that our disclosure and controls are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, or
persons performing similar functions, as appropriate to allow timely decisions
regarding required disclosure. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation and there were no
corrective actions with regard to significant deficiencies and material
weaknesses.

Changes in Internal Control over Financial
Reporting

None.



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15

PART II  -  OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Not
applicable.

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

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

|            |                                                                                                                                             |                | Incorporated by reference
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | -------------------------
|Exhibit No. | Description of Exhibit                                                                                                                      | Filed herewith | Form                     
|3.1         | Articles of Incorporation                                                                                                                   |                | S-1                      
|3.2         | Bylaws                                                                                                                                      |                | S-1                      
|4.1         | Specimen Stock Certificate                                                                                                                  |                | S-1                      
|31.1        | Certifications of Principal
		Executive Officer and Principal Financial Officer Pursuant to Section
		302 of the Sarbanes-Oxley Act of 2002 | X              |                          
|32.1        | Certifications of Principal
		Executive Officer and Principal Financial Officer Pursuant to Section
		906 of the Sarbanes-Oxley Act of 2002 | X              |                          



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SIGNATURES

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

|                        | SANTOS RESOURCE CORP.                                                            
|----------------------- | ---------------------------------------------------------------------------------
|Date:  January 14, 2010 | By:       /s/ Richard Pierce
		Richard Pierce
		Director, President and Treasurer







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