**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-KSB**




(Mark
                one)x
            **Annual
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934**For
                the Fiscal Year June 30, 2008, oro
            **Transition
                report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**





**000-52641**Commission
                File Number




**SILVER
      RESERVE CORP.**


(Exact
      name of registrant as specified in its charter)




**Delaware**
            
            **98-0492752**(State
                or other jurisdiction of incorporation or
              organization)
            
            (I.R.S.
                Employer Identification Number)





**1226
                White Oaks Blvd., Suite 10A**
              **Oakville,
                Ontario L6H 2B9**(Address
                of Principal Executive Offices) (Zip Code)**905-845-1073**(Registrant’s
                telephone number, including area
                code)




Securities
      registered under Section 12(b) of the Exchange Act: **None**




Securities
      registered under Section 12(g) of the Exchange Act:




**Common
      Stock, par value $0.0001 per share**




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Securities Exchange Act during the past
      12 months (or for such shorter period that the registrant was required to
      file such reports), and (2) has been subject to such filing requirements
      for the past 90 days.  Yes x  No o




Check
      if
      there is no disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to the best of issuer’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB.  o




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




The
      issuer had no revenue during the year ended June 30, 2008.




The
      aggregate market value of the Common Stock held by non-affiliates of the issuer,
      as of June 30, 2008 was approximately $ 20,462,255based upon a share valuation
      of $0.51 per share. This share valuation is based upon the 10-day trailing
      average price of the Company’s shares as of August 29, 2008. For purposes of
      this disclosure, shares of Common Stock held by persons who the issuer believes
      beneficially own more than 5% of the outstanding shares of Common Stock and
      shares held by officers and directors of the issuer have been excluded because
      such persons may be deemed to be affiliates of the issuer.




As
      of
      June 30, 2008, 43,785,569 shares of the issuer’s Common Stock were outstanding.
      No other classes of stock have been issued by the issuer.




Transitional
      Small Business Disclosure Yes o No
x









**TABLE
      OF CONTENTS**




**Part
      I**




PageItem
                1.
            Description
                of Business and Risk Factors
            4Item
                2.
            Description
                of Property
            6Item
                3.
            Legal
                Proceedings
            18Item
                4.
            Submission
                of Matters to a Vote of Securities Holders
            18**Part
                II**Item
                5.
            Market
                For Common Equity, Related Stockholder Matters and Small Business
                Issuer
                Purchase of Equity Securities
            19Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation
            26Item
                7.
            Financial
                Statements
            35Item
                8.
            Change
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure
            35Item
                8A.
            Controls
                and Procedures
            35Item
                8A(T)
            Controls
                and Procedures
            35Item
                8B.
            Other
                Information
            36**Part
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance With
                Section
                16(a) of the Exchange Act
            37Item
                10.
            Executive
                Compensation
            39Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            40Item
                12.
            Certain
                Relationships and Related Transactions
            41Item
                13.
            Exhibits
            42Item
                14.
            Principal
                Accountant Fees and Services
            43










**PART
      I**





*This
      Annual Report on Form 10-KSB contains forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and
      Section 21E of the Securities Exchange Act of 1934, as amended, which
      include, without limitation, statements about our explorations, development,
      efforts to raise capital, expected financial performance and other aspects
      of
      our business identified in this Annual Report, as well as other reports that
      we
      file from time to time with the Securities and Exchange Commission.  Any
      statements about our business, financial results, financial condition and
      operations contained in this Annual Report that are not statements of historical
      fact may be deemed to be forward-looking statements.  Without limiting the
      foregoing, the words “believes,” “anticipates,” “expects,” “intends,”
“projects,” or similar expressions are intended to identify forward-looking
      statements.  Our actual results could differ materially from those
      expressed or implied by these forward-looking statements as a result of various
      factors, including the risk factors described in the section entitled, RISK
      FACTORS and elsewhere in this report.  We undertake no obligation to update
      publicly any forward-looking statements for any reason, except as required
      by
      law, even as new information becomes available or other events occur in the
      future.*




***Item
      1.   Description of Business.***




Our
      name
      is **** Silver
      Reserve Corp. and we sometimes refer to ourselves in this annual report as
      “Silver Reserve”, the “Company”, or as “we,” “our,” or “us.” We are an
      exploration stage mining company. Our objective is to explore and, if warranted,
      develop our precious and base metal mineral claims located in Esmeralda County;
      Mineral County; Lyon County, Nye County, Elko County and Humboldt County, all
      in
      Nevada, as more fully described herein. In addition to our mineral claims,
      we
      own a milling facility, buildings and relating milling equipment located near
      Mina, Nevada. The Company continues to look for opportunities to locate and
      develop other mineral deposits of materials in high demand or anticipated high
      demand. We believe that the federal governments of Canada and the United States
      will embark on major infrastructure expenditures in the next ten years, creating
      a demand for cement that exceeds the current sources of supply. Cement is made
      from limestone and we believe acquisitions in this area have significant
      potential. Consequently, we are pursuing potential investment in this area
      as
      further described in this report.





We
      were
      incorporated in the State of Delaware on June 3, 1999. Our head office is at
      1135 Terminal Way, Suite 207B, Reno, Nevada 89502 and our administration office
      is also at this address with a branch office at 1226 White Oaks Blvd. Suite
      10A,
      Oakville, Ontario Canada L6H 2B9. Our toll free telephone number is 866-448-1073
      and our toll free fax number is 866-786-6415.




**RISK
      FACTORS**





1.
            THE
                COMPANY HAS NO SOURCE OF OPERATING REVENUE AND EXPECTS TO INCUR
                SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF
                IT IS
                ABLE TO ESTABLISH AN OPERATING COMPANY AT
                ALL.





Currently,
      the Company has no source of revenue, and no commitments to obtain additional
      financing. The Company will require additional working capital to carry out
      on
      going exploration programs. The Company has no operating history upon which
      an
      evaluation of its future success or failure can be made. The ability to achieve
      and maintain profitability and positive cash flow is dependent
      upon:





-
            further
                exploration of our mineral properties and the results of that
                exploration.





-
            raising
                the capital necessary to conduct this exploration and preserve the
                Company’s mineral properties.









-
            raising
                capital to develop our mineral properties, establish a mining operation,
                and operating in a profitable manner if any of these activities are
                warranted by the results of our exploration programs and a feasibility
                study.





Because
      the Company has no operating revenue, it expects to incur operating losses
      in
      future periods as it continues to spend funds to explore its mineral properties.
      Failure to raise the necessary capital to continue exploration and or
      development could cause the Company to go out of business.





2.
            IF
                THE COMPANY DEVELOPS MINERAL RESOURCES, THERE IS NO GUARANTEE THAT
                PRODUCTION WILL BE PROFITABLE.





Even
      if
      the Company finds mineral resources, there is no assurance that it will be
      able
      to mine them or that a mining operation would be profitable on any of its
      properties.





3.
            THE
                COMPANY IS HIGHLY DEPENDENT UPON ITS OFFICERS AND DIRECTORS. BECAUSE
                OF
                THEIR INVOLVEMENT IN OTHER SIMILAR BUSINESSES WHICH MAY BE COMPETITORS,
                THEY MAY HAVE A CONFLICT OF
                INTEREST.





All
      but
      one of the directors are officers or directors of other companies in similar
      exploration businesses. Such business activities may be considered a conflict
      of
      interest because these individuals must continually make decisions on how much
      of their time they will allocate to the Company as against their other business
      projects, which may be competitive. Also, the Company has no key man life
      insurance policy on any of its senior management or directors. The loss of
      one
      or more of these officers or directors could adversely affect the ability of
      the
      Company to carry on business.





4.
            THE
                COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING
                DELAYS.





The
      Company could face delays in obtaining permits to operate on the property
      covered by the claims. Such delays could jeopardize financing, if any is
      available, which could result in having to delay or abandon work on some or
      all
      of the mineral properties.





5.
            THERE
                ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT COULD LIMIT YOUR
                ABILITY TO SELL YOUR SHARES.





Our
      common stock is considered a "penny stock" and the sale of our stock by you
      will
      be subject to the "penny stock rules" of the Securities and Exchange Commission.
      The penny stock rules require broker-dealers to take steps before making any
      penny stock trades in customer accounts. As a result, the market for our shares
      could be illiquid and there could be delays in the trading of our stock which
      would negatively affect your ability to sell your shares and could negatively
      affect the trading price of your shares.




5




***Item
      2. Description of Property***





**Property
      Location and Description**





**The
      following is a map highlighting the counties in the State of Nevada where the
      properties are located:**











6




*Pansy
      Lee Claim Group*





On
      August
      1, 2006, the Company acquired the Pansy Lee Claims from Anglo Gold Mining Inc.
      in exchange for 1,850,000 shares of the Company’s common stock. Our interest was
      acquired pursuant to an Asset Purchase Agreement dated August 1, 2006 (the
      “Pansy Lee Purchase Agreement”). Pursuant to the Pansy Lee Purchase Agreement,
      in the event that any one or more claims becomes a producing claim, our revenue
      is subject to a 2% net smelter return royalty where net smelter returns are
      based upon gross revenue. Gross revenue would be calculated after commercial
      production commences and includes the aggregate of the following amounts:
      revenue received by Silver Reserve from arm’s length purchasers of all mineral
      products produced from the property, the fair market value of all products
      sold
      by Silver Reserve to persons not dealing with Silver Reserve at arms length
      and
      Silver Reserve’s share of the proceeds of insurance on products. From such
      revenue, the Company would be permitted to deduct: sales charges levied by
      any
      sales agent on the sale of products; transportation costs for products; all
      costs, expenses and charges of any nature whatsoever which are either paid
      or
      incurred by Silver Reserve in connection with the refinement and beneficiation
      of products after leaving the property and all insurance costs and
      taxes.





On
      August
      15, 2006, Anglo Gold Mining Inc. assigned the Pansy Lee Purchase Agreement
      to
      the shareholders of Anglo Gold Mining, Inc. with the consent of Silver Reserve.





The
      Pansy
      Lee Claim Group consists of 30 mineral claims located in Humboldt County,
      Nevada, approximately eight miles northwest of Winnemucca, Nevada. The claim
      names and numbers are listed below.





NAME
            NMC
                No.PANSY
                LEE No.1
            879333PANSY
                LEE No.3
            879334PANSY
                LEE No.5
            879335PANSY
                LEE 2
            859406PANSY
                LEE 4
            859407PANSY
                LEE 6
            859408PANSY
                LEE 7-30
            859409-432





The
      Pansy
      Lee claims are accessible by road from Winnemucca, Nevada. A graded dirt road
      runs northwesterly for a distance of 12 miles to the property which lies at
      elevations ranging from 4600 feet to 5200 feet.





A
      substantial amount of underground work has been done on the Pansy Lee Claims,
      as
      much as 910 feet below surface with over 6000 feet of horizontal tunneling
      on
      several levels. A mine was operated at the Pansy Lee claim site from 1937 to
      1942. Further production occurred in 1964 and 1974. Work was undertaken again
      in
      1981 and 1982. Much of our information about the Pansy Lee Claim Group was
      obtained from publicly available reports and articles concerning prior
      exploration of the site by other parties. A report by Hendrickson and Cazat,
      prepared in 1982, reported 151,300 tons of proven and possible ore with an
      average grade of 17.46 oz per ton silver and .218 oz per ton gold. This
      information is publicly available and may not be reliable. Hendrickson updated
      the report in 1986, reducing estimated mineable mineral material to 73,000
      tons
      with average grades of 0.218 ounces gold and 17.48 silver per ton for
      recoverable ounces of 14,480 gold and 1,159,700 silver.




The
      Company plans to carry out research and work to obtain its own data. Three
      core
      holes were drilled and completed to depths of 800 feet on angle below the
      existing workings. It appears the ‘Swede’ vein was encountered in all three
      holes. The core has been logged and cutting is complete on Hole #1 and select
      portions of Hole #2 and #3 will be cut and sent for assay





7





*Milling
      Facility*





On
      August
      1, 2006 the Company entered into an agreement with International Energy
      Resources, Inc. to purchase a mill building and related milling equipment
      located on 28 mill site claims at Mina in Mineral County, Nevada. The mill
      building is a corrugated steel structure. The assets were conveyed in exchange
      for 6,975,000 common shares of the Company pursuant to a Property Purchase
      Agreement with International Energy Resources, Inc. (the “International Energy
      Resources Purchase Agreement”).





On
      August
      15, 2006, International Energy Resources Inc. assigned the International Energy
      Resources Purchase Agreement to its shareholders with the consent of Silver
      Reserve.





The
      milling facility is a custom mill installation located near the town of Mina,
      Nevada, approximately 185 mile south east of Reno, Nevada on US 95. The mill
      has
      operated under various configurations to meet specific requirements of prior
      operators. Ore from various sources has been custom milled and processed for
      the
      production of concentrate or “doré” bars. “Doré” bars are bars of precious
      metal, in this case silver and gold, poured from molten material recovered
      in
      the final processing of the mill.





The
      mill
      is nominally designed to process 200 tons of ore per day. Depending on the
      ore
      hardness, the crushing circuit will be able to process up to about 250 tons
      of
      ore per day. The flotation and leach sections are also capable of running at
      the
      200 tons per day rate. However, other areas of the processing section do not
      appear to have sufficient capacity to sustain the mill’s nominal design rate and
      some additions may be required.





The
      28
      Mill Site claims are listed below:





NAME
            NMC
                No.IERI
                3
            NMC
                – 417400IERI
                4
            NMC
                – 417401IERI
                5
            NMC
                – 417402IERI
                6
            NMC
                – 417403IERI
                9
            NMC
                – 417406IERI
                10
            NMC
                – 417407IERI
                13
            NMC
                – 923205IERI
                14
            NMC
                – 923206IERI
                15
            NMC
                – 923207IERI
                16
            NMC
                – 923208IERI
                17
            NMC
                – 923209IERI
                18
            NMC
                – 923210IERI
                19
            NMC
                – 923211IERI
                20
            NMC
                – 923212IERI
                21
            NMC
                – 923213IERI
                22
            NMC
                – 923214IERI
                23
            NMC
                – 923215IERI
                24
            NMC
                – 923216IERI
                25
            NMC
                – 923217IERI
                26
            NMC
                – 923218IERI
                27
            NMC
                – 923219IERI
                28
            NMC
                – 923220IERI
                29
            NMC
                – 923221IERI
                30
            NMC
                – 923222IERI
                31
            NMC
                – 923223IERI
                32
            NMC
                – 923224IERI
                33
            NMC
                – 923225IERI
                34
            NMC
                - 923226




8




On
      August
      1, 2006 the Company entered into a property purchase agreement (the “Mojave
      Silver Property Purchase Agreement”) with the Mojave Silver Company, Inc. (the
“Mojave Silver Property”) to acquire a 100% interest in claims located in
      Esmeralda County and Mineral County, Nevada (as further described below) and
      known as the Klondyke Claim Group, Dyer Claim Group, Montezuma Claim Group,
      Nivloc Claim Group (now identified as NL Extension Claim Group), Sylvania Claim
      Group, Santa Fe Claim Group, Silver Queen Claim Group, Blue Dick Claim Group,
      Weepah Hills Claim Groups, Kope Sheelite Group, Quailey Patented Claims and
      Quailey Unpatented Claims (collectively the “Mojave Claims”). The Mojave Claims
      were conveyed **** in
      exchange for 3,540,600 shares of the Company’s common stock.





On
      August
      15, 2006 Mojave Silver Company Inc. assigned the Mojave Silver Property Purchase
      Agreement to the shareholders of Mojave Silver Company with the consent of
      Silver Reserve. Since the purchase, the Company has added claims to some of
      the
      groups and abandoned claims in other groups. The claim descriptions set out
      below represent the current holdings of the Company.




*The
      Klondyke Claim Group*




The
      Klondyke Claim Group, consists of 63 mineral claims (KD 1-63) located in
      Esmeralda County, Nevada. Following the purchase we staked an additional 103
      claims contiguous to the purchased group. The claim names and numbers are listed
      below.





NAME
            NMC
                No.KD
                1-63
              KD64-83
              KD
                87
              KD
                91-139
              KD
                141-173
            867448
                -867510
              936118-936137
              963141
              964624-964672
              964673-964705




PATENTED
                CLAIMS – LEASEDPresident
            APN
                #000-005-75Annex
            APN
                #000-005-79








The
      Klondyke Claim Group is accessible by road from Tonopah, Nevada. The property
      lies at elevations ranging from 5,400 feet to 5,908 feet.




9




The
      Klondyke district, which was discovered in 1899, lies about 10 miles south
      of
      Tonopah, Nevada. Most of the deposits in the area occur in limestone on veins
      carrying both silver and gold. Production up to 1960 was 2,758 tons, according
      to public records. The claim area hosts numerous prospects and mine shafts.
      The
      property geology was mapped at a scale of 1:12000 in 2007 and 5 separate sample
      grids were laid out and sampled to cover what appeared to anomalous zones
      outlined during the mapping program. A limited drill program has been proposed
      but not submitted to the BLM to follow up surface and geologic
      anomalies.




*Silver
      Queen Claim Group*





The
      Silver Queen Claim Group consists of 147 mineral claims located in Esmeralda
      County, Nevada, approximately nine miles west of Silver Peak, Nevada on Highway
      47. The claims are listed below:





NAME
            NMC
                No.SQ
                1
              SQ
                2-5
              SQ
                6 – 87
              SQ
                88-142
              SQ
                143-145
              
              Tattoo
                Me
              Tattoo
                U
            870453
              969847-969850
              870454-870535
              966963-967017
              969851-969853
              
              737072
              737071





The
      Silver Queen claims are accessible from the town of Silver Peak, Nevada. The
      claims lie at elevations ranging from 7,800 feet to 9,012 feet and are located
      in the Red Mountain District. The Silver Queen Claim Group covers a
      northerly-trending group of silver deposits that include the Silver Queen and
      Mohawk mines. The deposits located in the Red Mountain district were first
      discovered in 1907. In 1920 a producing mine was constructed and production
      continued through the late 1950’s. Based upon publicly available records, the
      ore produced from this mine averaged 20-25 ounces of silver per ton.





Subsequent
      to the period covered by this report a limited drill program was completed
      on a
      new surface anomalies noted during grid sampling. Four reverse circulation
      holes
      were drilled to depth of 400 to 500 feet vertically. Further surface sampling
      indicates that the anomaly is much larger than initially indicated and further
      drilling to the west is warranted. Three reverse circulation drill holes were
      completed on the Mohawk vein target with 2 holes, MRO1 and 3,.intercepting
      the
      vein itself, MRO2 was lost in a 40 foot void which was not on the underground
      workings maps we have in hand. Two core holes we drilled with MOC 1 encountering
      and going through the vein system. MOC2 was lost in broken material about 175
      above the vein intercept. All the reverse circulation drill holes are in the
      assay lab and the one core hole vein intercept is also in the assay
      lab.





Silver
      Reserve has obtained from public records a 1982 report on the Mohawk Mine,
      located within the Company’s Silver Queen Project, that was prepared for a prior
      owner of the property. Silver Reserve has not confirmed any of the findings
      in
      the report and cannot comment of the qualifications of its authors. The report
      states that 52,167 tons of probably and possible mineralized material grading
      an
      average of 13.4 ounces per ton of silver (699,000 ounces silver) remains unmined
      in the mine workings. The report estimates extraction, after mining losses,
      totaling 40,071 tons of probably and possible mineralized material grading
      13.3
      ounces per ton silver (532,900 ounces silver). In the opinion of the authors
      of
      the report, there is great potential for finding additional tons of mineralized
      material. Four major exploration targets with good potential within the claim
      group and separate from the Mohawk vein occurrence are documented in the report.
      These targets, combined, have over 4,000 feet of vein strike length open to
      exploration and could contain several major ore bodies, according to the
      report.





10





*Dyer
      Claim Group*





The
      Dyer
      Claim Group consists of 19 mineral claims located in Esmeralda County, Nevada,
      approximately 5 miles east of the town of Dyer, Nevada on Highway 3A. The claim
      names and numbers are listed below:





NAME
            NMC
                No.DR
                1- 15
              DR
                39-42
            871090-821104
              871128-871131





The
      Dyer
      group of claims are accessible from the town of Dyer, Esmeralda County. The
      property lies at elevations ranging from 4,800 feet to 5,600 feet. The Dyer
      district consists of several prospects and a few small mines. The deposits
      consist of black copper-silver sulfide in quartz veins in crushed and altered
      limestone. Surface oxidation has led to the formation of copper carbonate,
      iron
      oxide and silver chloride.




*Sylvania
      Claim Group*





The
      Sylvania Claim Group consists of 2 mineral claims located in Esmeralda County,
      Nevada. The claim names and numbers are listed below:





NAME
            NMC
                No.SY
                5-6
            871136
                and 871137





The
      Sylvania claims are accessible from the town of Lida, Nevada. The property
      lies
      at elevations ranging from 7,320 feet to 7,800 feet.





The
      Sylvania District consists of a number of prospects, the Sylvania Mine and
      three
      small open pit mines. Production has occurred in the past and a steel head
      frame
      in good condition remains on the property. Based upon publicly available
      records, the deposits occur in a mile-wide northwest-trending belt or zone.
      Based upon publicly available records, the deposits are mainly silver-lead
      but
      some gold and tungsten also occurs. Most of the silver-lead deposits are veins
      in limestone. The Company held a larger group of claims at this location but
      felt that further work was not warranted and allowed all but two claims covering
      the old workings to lapse.





*Montezuma
      Claim Group*




The
      Montezuma Claim Group consists of 19 mineral claims located in Esmeralda County,
      Nevada approximately 5.5 miles west of the town of Goldfield, Nevada on Highway
      95. The claim names and numbers are listed below.





NAME
              
              MR
                1 - 19
            NMC
                No.
              
              871176
                - 871194




11




The
      Montezuma claims are accessible from the town of Goldfield, Nevada. The property
      lies at elevations ranging from 6400 feet to 6895 feet. The Montezuma District
      consists of a number of prospects, some shafts and tunnels and one small mine.
      Based upon publicly available records, the district is predominantly a
      silver-lead district although small amounts of copper, gold and bismuth were
      found in some of the producers. The deposits consist of quartz veins in
      limestone and shale and also replacements in limestone. Mapping done in the
      spring of 2008 indicates the property lies on the southern edge of a caldera,
      warranting further exploration work. A “caldera” is cauldron-like volcanic
      feature formed by the collapse of land following a volcanic eruption. Some
      calderas are known to support rich mineralogy.





*NL
      Extension Projects Claim Group*





The
      NL
      Extension Projects Claim Group consists of 18 mineral claims located in
      Esmeralda County, Nevada approximately 6 miles southwest of Silver Peak, Nevada
      on Highway 47. The claim names an numbers are listed below.





NAME
            NMC
                No.NL
                1-15
              NL
                16-18
            867511-867525
              964719-964721




The
      NL
      Extension Projects claims are accessible from the town of Silver Peak, Nevada.
      Elevations on the property range from 5900 feet to 6400 feet. The NL Extension
      Projects claims lie on the eastern flank of Red Mountain and, with the
      Sixteen-to-One and Mohawk deposits, form a mineralized zone which trends
      northwesterly. The veins trend northeasterly across the zone. The Nivloc Mine
      operated from 1937 to 1943 with ore grading 0.05 ounces of gold and 11.0 ounces
      of silver per ton, according to public records. The Nivloc Mine is adjacent
      but
      not within the claim group held by the Company. Five reverse circulation angle
      holes and two follow up core angle holes have been completed on the property.
      Reverse circulation holes 3 and 5 intercepted ore grade silver values. The
      core
      holes have been logged but not yet cut and sent for assay.




*Blue
      Dick Claim Group*




The
      Blue
      Dick Claim Group consists of 32 mineral claims located in Esmeralda County,
      Nevada, approximately 2.5 miles west of the town of Lida, Nevada on Highway
      3.
      The claims names and numbers are listed below.





NAME
            NMC
                No.BD
                1-26
              BD
                30-32
              BD
                37-39
            868274-868299
              964709-964711
              964716-964718




The
      Blue
      Dick claims are accessible from the town of Lida, Nevada. The claims lie at
      elevations ranging from 6920 feet 8440 feet. The Blue Dick claims are located
      in
      the SE part of the Palmetto District. Production occurred prior to 1960 and
      the
      deposits contained silver, gold and lead and occur in veins, according to public
      records. Most of these veins trend west or northwest. The claim area contains
      numerous prospects, adits, shafts and two small open pit mines. The Blue Dick
      Mine, which has two shafts and two adits have no available data. Geologic
      mapping and grid sampling of the property was completed in 2007 and five drill
      targets were developed and will be drilled at a later date.




12




*Weepah
      Hills Claim Group*




The
      Weepah Hills claims are located in Esmeralda County, Nevada, approximately
      15.5
      miles southwest of Tonopah, Nevada on Highway 95. After the initial examination
      of this claim group, the Company decided further work was not warranted and
      all
      but one claim covering the old workings were allowed to lapse. The claim name
      and number is listed below.





NAME
            NMC
                No.WH
                20
            868320




There
      are
      mine workings and a large head frame on the claim which was operated in the
      early 1960’s, according to public records. A “head frame” is a mechanism for
      hoisting things out of a mine shaft.





*Kope
      Scheelite Claims Group*




The
      Kope
      Scheelite Claims Group consists of 44 mineral claims located in Mineral County,
      Nevada, approximately 2 miles east of Luning. Nevada. The claim names and
      numbers are listed below:





NAME
            NMC
                No.CP
                13-44
              CP
                45-56
            871213-871244
              964722-964733




The
      Kope
      Scheelite claims are accessible from Tonopah, Nevada. The elevations on the
      claim area range from 6800 feet to 7000 feet. The Kope Scheelite claims are
      located on the southernmost part of the Gabbs Valley Range. The workings on
      the
      property consist of two shafts, one about 100 feet deep with a connected short
      adit and the other shaft of unknown depth.





Geologic
      mapping completed in 2007 indicates strong NW/SE bearing mineralized trends
      running across the property. Grid sampling is planned to identify potential
      drill targets.





*Santa
      Fe Claim Group*





The
      Santa
      Fe Claim Group consists of 27 claims located in Mineral County, Nevada,
      approximately one mile north of Luning, Nevada. The claims name and numbers
      are
      listed below:





NAME
            NMC
                No.SF
                1-27
            868203-868229





The
      Santa
      Fe claims are accessible from the town of Luning, Nevada. The Santa Fe district
      is located in the Gabbs Valley Range northeast of Luning. The Santa Fe property
      was first located in 1879 and has produced silver and lead, according to public
      records. Workings consist of a 300 ft incline and several hundred feet of
      tunnels on different levels. Significant silver and gold values have been
      obtained from sampling on the vein systems warranting further exploration.
      The
      property was mapped in late 2007 and a follow up grid sampling program will
      be
      developed to define drill targets.





13





*The
      Quailey Mine Claim Group*





The
      Quailey Mine Claim Group consists of 35 lobe claims and 9 patented claims (for
      a
      total of 44 claims) located in Mineral County, Nevada approximately 16 miles
      southeast of Hawthorne, Nevada on the northwest side of Excelsior Mountains.
      The
      Company purchased 15 staked claims and 9 patented claims. Following the closing
      of the purchase the Company staked an additional 20 claims contiguous to the
      staked claims purchased. The claim names and numbers are listed
      below:




STAKED
                CLAIMSNAME
            NMC
                No.Q1
                –15
              Q16
                – 35
            916094-916108
              935436-935455





PATENTED
                CLAIMSNAME
            ACRES
            APM
                No.NEVADA
            20.66
            009-200-11SAN
                JUAN
            10.33
            009-200-05ROOSEVELT
            20.66
            009-200-12GREAT
                EASTERN
            20.66
            009-200-12BONANZA
            20.66
            009-200-10RED
                BANK
            20.66
            009-200-10CALUMET
            20.66
            009-200-12CENTRAL
            20.66
            009-200-10BUTTE
            20.66
            009-200-10





In
      the
      past the Federal government permitted private parties to obtain title to a
      claim
      known as a “patent claim” if certain conditions were met. Patents for claims are
      no longer issued. Staked claims are created by physically inserting a stake
      in
      the ground at each corner of the claim and filing the location of the claim
      as
      so demarcated with a government BLM recording office.





The
      Quailey Mine claims are accessible from the city of Hawthorne, Nevada. A number
      of dirt roads provide accesses to the main workings of the former mine. Most
      of
      the information for the Quailey Mine Project was obtained from a 1975 report
      by
      J. McLaren Forbes. The early work on the property was done in 1882 when copper
      ores with silver and gold values were mined and smelted on the property. Later,
      between 1907 and 1914, Excelsior Enterprises Inc. was active on the property.
      Just prior to this activity, a number of the claims were surveyed and patented.
      During the period 1975-76 the mine was rehabilitated. This work was done by
      Ladd
      Enterprises Inc, of Reno, Nevada. This property appears to be a skarn type
      deposit. A “skarn” is a metamorphic zone developed in the contact area around
      igneous rock intrusions when carbonate sedimentary rocks are invaded by and
      replaced with chemical elements that original from the igneous rock mass nearby.
      Many skarns also include ore minerals.





14





*Medicine
      Claim Group*





On
      May 1,
      2008 the Company entered into an Option Agreement with Nevada Eagle Resources
      LLC and Steve Sutherland to acquire 100% interest in 25 unpatented mineral
      claims known as the “Medicine Claim Group.” On execution of the agreement, the
      Company paid $10,000 and is required to make the following payments to exercise
      the option:





On
                the 1st anniversary of closing
            $15,000On
                the 2nd anniversary of closing
            $30,000On
                the 3rd anniversary of closing
            $60,000
                andOn
                the 4th thru 10th anniversaries of closing
            $80,000
                on each anniversary date.




On
      payment of all of the above payments, the Option shall be fully exercised and
      Silver Reserve shall own 100% of the Property.





The
      Optionor shall, at their option, have the right to accept part of all of the
      cash payments due under this Agreement in common stock of Silver Reserve Corp.,
      at a price of 10% below the 10 day average closing price, which the shares
      trade
      prior to the payment date.





The
      Optionor shall be entitled to a 3% Net Smelter Return (“NSR”) royalty on the
      Property in the event that claims enter into production.




Each
      of
      the Option payments shall be applied as advance royalty payments. Beginning
      on
      the 11 th anniversary
      date of this option agreement, an annual advance royalty of $80,000 is due
      and
      payable. All advance royalty payments shall be applied to the reduction of
      any
      future royalty payments due under the NSR royalty. While in production (if
      production occurs), the Company must annually pay the greater of the NSR royalty
      or $80,000. The NSR royalty also applies to the 124 contiguous claims staked
      by
      the Company.





The
      Medicine Claim Group consists of 25 unpatented claims and the company has staked
      an additional 124 contiguous claims located in Elko County, Nevada, covering
      the
      extension of the mineralized zone not covered by previous
      operation.





NAME
            NMC
                No.M
                1-124
              Medicine
                9-14
              Medicine
                37-46
              Medicine
                63-67
              Medicine
                125 – 126
              Peru
                1 - 2
            987285-987408
              979237-979242
              979243-979252
              979253-979257
              979258-979259
              781252-781253




The
      mineralized zone appears to continue to the north and south as well as to depth
      offering potential for substantial expansion of the drill indicated
      mineralization. As mineralization comes to the surface, there is potential
      for
      open pit mining. We are currently carrying out a drilling program, to determine
      the extent of the mineralization zone.





A
      technical report prepared by Edward P. Jucevic PE for a prior operator of the
      Medicine Claim Group and dated March 9, 2001, stated the following:





"The
      Medicine property contains a drill-indicated resource defined by approximately
      70 drill holes. The resource estimate was calculated by previous workers at
      US
      Mineral Exploration and includes 350,000 tons grading 2.3 ounces per ton silver.
      The resource covers an area roughly 200 feet wide and 600 feet long. Average
      depth of drilling has only followed the zone down to ± 100 feet. Wide spaced
      drilling outside of the area of the resource has encountered significant values
      of lead, zinc and silver metals.




15




Mineralization
      consists of barite-silver-lead-zinc along high angle structures and within
      bleached and sanded limestone. Although lead and zinc values were only assayed
      for part of the holes, barite, lead and silver appear to correlate well. Zinc
      values are often associated with the other metals, but are also zones
      stratagraphically beneath the silver-lead zone. The zinc zone can be as thick
      as
      50 feet and average +5%. Zinc values to 11.5% have been obtained from ten-foot
      intervals in drilling. Lead values average 3% over 10 to 40 foot thick zones.
      Lead values to 8% have been obtained from 10 foot intervals in drilling. Barite
      averages 12% throughout the mineralized zones but can attain 35% in individual
      intervals. Silver averages 2.3 ounces per ton with individual five foot assays
      carrying up to 26 ounces per ton."





A
      Phase
      one drill program of 15 holes has been completed to test the extension of the
      expansion of the drill indicated resource and results will be announced as
      available.





*Gold
      Point Claim Group*




On
      February 15, 2008, the Company entered into an agreement with Roger Hall, an
      officer and director of the Company, to acquire 15 mineral claims referred
      to as
      the Gold Point Claim Group in consideration of the sum of $5,000 dollars payable
      in cash and 175,000 common shares in the capital of the Company.





The
      Gold
      Point Claim Group consists of 15 mineral claims located in Nye County in the
      Gold Point District, about 10 miles north east of Current,
      Nevada.





NAME
            NMC
                No.GP
                1-14
            975797-975810




Mineralization
      from 0.5 to 10 ppm gold was noted in shaley rocks adjacent to substantial
      jasperoids on the property. The “jasperoids” found in Nevada are hard, dense
      purple-black rocks with considerable content of pyrite.




**Option
      to Purchase Mineral Claims from Sage Associates as Amended**





On
      August
      21, 2006, the Company entered into an option agreement with Sage Associates,
      Inc. (“Sage”) to purchase 12 mineral claims in Lyon County, Nevada (the “Sage
      Option Agreement”). The mineral claims covered by the Sage Option Agreement,
      including all claims that may be added during the term of the Agreement are
      collectively referred to herein as the “Como Claims”. The Company paid $20,000
      upon execution of the Sage Option Agreement as an initial payment. In the first
      year of the Sage Option Agreement the Company staked up 250 claims adjoining
      the
      Como Claims which claims became subject to the Sage Option Agreement.





Subsequent
      to the period covered by this report, the Company terminated the Sage Option
      Agreement and entered into a new agreement with Sage wherein the Company
      retained the claims described below subject to a 1% net smelter return royalty
      (an “NSR”). NSRs are calculated according to gross revenue beginning after
      commercial production commences, if ever. For purposes of determining gross
      revenue, the following items are included: revenue received by Silver Reserve
      from arm’s length purchasers of all mineral products produced from the property,
      the fair market value of all products sold by Silver Reserve in such period
      to
      persons not dealing with Silver Reserve at arms length, and Silver Reserve’s
      share of the proceeds of insurance on products minus “permissible deductions.”
Permissible deductions include: sales charges levied by any sales agent on
      the
      sale of products, transportation costs for products, all costs, expenses and
      charges of any nature whatsoever which are either paid or incurred by Silver
      Reserve in connection with the refinement and beneficiation of products after
      leaving the property; and all insurance costs and taxes.




16




*Como
      Claim Group*





NAME
            NMC
                No.CO
                65
            935159CO
                79 – 80
            935169
                – 935170CO
                97 – 98
            935184
                – 935185CO
                145 – 161
            935227
                – 935243CO
                163 – 179
            935245
                - 935261CO
                181 – 197
            935263
                - 935279CO
                199 – 215
            935281
                - 935297CO
                217 – 231
            935299
                - 935313




The
      Como
      claims are accessible from the town of Dayton, Nevada. The property lies about
      14 miles southeast of the Comstock Lode at Virginia City, Nevada. Elevations
      of
      the Como Claims Group range from 6,400 ft. to 7,200 feet. A number of “four
      wheel drive” trails provide access to various parts of the
      property.





The
      Como
      district was discovered in the 1860’s, but the first serious work began in 1894
      with the start of the Boyle Tunnel which was completed in 1934. During this
      period, the Como shaft was completed by 1910. The Como and adjacent Rapidian
      Mines produced about 25,000 tons of ore during the period from 1918 to 1920
      and
      about 57,000 tons in the period from 1935 to 1936, according to information
      contained in public records.





Eleven
      reverse circulation holes were drilled in October of 2007 and encountered thick
      intercepts of sub-economic gold values.





New
      surface sampling data, on the claims covered by the new agreement with Sage,
      indicates significant gold mineralization on the claims retained. The Company
      plans grid sampling over the area where the mineralization was encountered
      in an
      effort to develop new drill targets.




**Nevada
      Refinery Purchase Agreement**





On
      August
      1, 2006 the Company purchased a 100% interest in refinery equipment from Nevada
      Refinery Inc. in exchange for 88,500 shares of common stock of the Company.
      The
      Company intends to install this equipment in its mill building located near
      Mina, Nevada. The refinery equipment will be used to refine Dore bars or smelt
      concentrate produced from the milling process.




**Further
      Exploration**





The
      Company has sufficient capital to meet its operating requirements over the
      next
      year, and to continue developing its Projects. The results of specific
      exploration programs will be released as they become available.





17





**Regulations
      Governing Mining in Nevada**





All
      exploration and mining in Nevada is carried out under regulation established
      by
      the Federal Bureau of Land Management and the Nevada Bureau of Mining and
      Geology, and in some circumstances the local county or municipality where the
      claims are located. These regulations cover exploration work where the surface
      is disturbed, all types of underground mining, air and water quality, use of
      ground water from wells, rivers, ponds and lakes, waste management, protection
      of the environment wildlife and historical sites, road building, discharge
      and
      disposal of all materials from mining operations plus other matters.




**Government
      Requirements for Maintenance of Claims**





A
      claim
      holder is required to pay an annual fee of $125.00 per claim to the Bureau
      of
      Land Management on or before August 31 of each year. In addition, a claim holder
      is required to pay annual County filing fees in most counties within
      Nevada.




**Government
      Permitting**





The
      Federal Bureau of Land Management (the “BLM”) and the Nevada Bureau of Mining
      and Geology issue permits required for exploration and mining in the State
      of
      Nevada. The Company is required to post bonds with the BLM to cover reclamation
      cost related to the work carried out on any claim group.




***Item
      3.   Legal Proceedings.***





There
      is
      no legal proceeding pending or, to the best of our knowledge, threatened against
      the Company.




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





None.


18




**PART
      II**




***Item
      5.   Market for Common Equity and Related Stockholder
      Matters.***




As
      of
      August 31, 2008, there are 50,875,569 shares of common stock of the Company
      (a
“Share” or “Shares”) outstanding, held by 597 shareholders of record.





Private
      Placements for the Fiscal Year ended June 30, 2006





On
      May 8,
      2006, the Company completed a private placement of common shares at $0.10 per
      share from each of the Directors for the number of shares set out opposite
      their
      names below:





Todd
                D. Montgomery
            250,000
                sharesJoseph
                Montgomery
            100,000
                sharesRandal
                Ludwar
            100,000
                sharesBrent
                Walter
            100,000
                sharesMason
                Douglas
            100,000
                shares





The
      foregoing private placement was exempt from registration under the Securities
      Act of 1933, as amended (the “Securities Act”) pursuant to an exemption afforded
      by Regulation S promulgated thereunder (“Regulation S”). Each of the foregoing
      investors is a non-“U.S. Person” as that term is defined in Rule 902 of
      Regulation S.





On
      June
      5, 2006 the Company completed a private placement of 1,200,000 Shares at a
      price
      of $0.25 per Share to an accredited investor who is a non “U.S. Person” as that
      term is defined by Rule 902 of Regulation S. The foregoing private placement
      was
      exempt from registration under the Securities Act pursuant to an exemption
      afforded by Regulation S.





The
      Company registered the re-sale of the shares listed above in a Registration
      Statement on Form SB-2 that became effective on April 24, 2007.




Once
      registered the Shares were to be subject to a Lock Up Agreement providing that
      up to 25% of the Shares may be re-sold when the registration statement became
      effective, 25% may be re-sold six months from the date of effectiveness, 25%
      may
      be re-sold twelve months from the date of effectiveness and 25% may be re-sold
      eighteen months from the date of effectiveness. Each Subscriber was issued
      four
      certificates for the shares subscribed for and three of those certificates
      were
      legended to reflect the forgoing restrictions on re-sale.





The
      Company issued Convertible Debentures in the amounts and on the dates set out
      below.





**Issue
                Date**
            
            **Amount**6/5/2006
            
            $
            875,000.006/27/2006
            
            $
            145,862.50





Each
      Convertible Debenture had a term maturing on December 31, 2007 and bears
      interest at the rate of 2% per annum. Interest was payable on conversion or
      maturity and may be payable by delivery of cash or Shares (as defined below).
      The Convertible Debentures rank equal with each other.




19




The
      Convertible Debentures are convertible into “Units” where each Unit consists of
      one Share and Share purchase warrant (a “warrant”) at the rate of one Unit for
      each $0.50 of principal under the Convertible Debenture at the time of
      conversion. The Company reserved the right to pay interest in cash or Shares
      at
      its option. Each warrant entitled the holder thereof to purchase one Share
      at
      $0.75 per Share for a term of 12 months following issuance of the warrant.
      The
      Convertible Debentures were convertible at any time before maturity of the
      Convertible Debentures.





On
      conversion of the Convertible Debentures the Shares issued are subject to a
      Lock
      Up Agreement providing that up to 25% of the Shares may be re-sold when the
      registration statement became effective, 25% may be re-sold six months from
      the
      date of effectiveness, 25% may be re-sold twelve months from the date of
      effectiveness and 25% may be re-sold eighteen months from the date of
      effectiveness. Each subscriber is to be issued four certificates for the Shares
      received on conversion and three of those certificates will be legended to
      reflect the forgoing restrictions on re-sale. With respect to Shares issued
      upon
      exercise of the warrants (assuming a current prospectus covering the issuance
      of
      the underlying Shares is in place when the warrant is exercised), 50% of the
      Shares received on exercise of the warrants will be free trading with the
      remaining 50% will become free trading six months following the exercise of
      the
      warrants. The shares issued upon exercise of the warrants will be legended
      accordingly.





The
      Company registered the resale of the Shares and the Shares to be issued upon
      exercise of the warrants issued upon conversion of the Convertible Debentures
      in
      a registration statement on Form SB-2 that was made effective by the SEC on
      April 24, 2007.




The
      foregoing private placement of Convertible Debentures was exempt from
      registration under the Securities Act pursuant to an exemption afforded by
      Regulation S. Each of the investors who participated in the foregoing private
      placement was a non-“U.S. Person” as that term is defined in Rule 902 of
      Regulation S.





Private
      Placements of Securities for the Year Ended June 30, 2007





The
      Company completed private placements of Shares at $0.25 per share from
      accredited investors for the number of shares and on the dates set out
      below.





**Shares**
            **Date
                Issued**1,000,000
            July
                4, 20061,200,000
            July
                10, 2006914,888
            July
                26, 2006280,851
            August
                3, 2006





The
      Company registered the resale of the shares listed above in a registration
      statement on Form SB-2 which was made effective by the SEC on April 24, 2007.





Once
      registered the Shares were subject to a Lock Up Agreement providing that up
      to
      25% of the Shares may be re-sold when the registration statement became
      effective, 25% may be re-sold six months from the date of effectiveness, 25%
      may
      be re-sold twelve months from the date of effectiveness and 25% may be re-sold
      eighteen months from the date of effectiveness. Each Subscriber was issued
      four
      certificates for the shares subscribed for and three of those certificates
      were
      legended to reflect the forgoing restrictions on re-sale.





The
      foregoing private placements were exempt from registration under the Securities
      Act pursuant to an exemption afforded by Regulation S. Each of the investors
      that participated in the foregoing private placement was a non “U.S. Person” as
      that term is defined in Rule 902 of Regulation S.




20




The
      Company issued Convertible Debentures in the amounts and on the dates set out
      below.





**IssueDate**
            
            **Amount**7/4/2006
            
            $
            729,137.507/26/2006
            
            $
            671,280.007/10/2006
            
            $
            875,000.008/2/2006
            
            $
            204,787.25





Each
      Convertible Debenture had a term maturing on December 31, 2007 and bears
      interest at the rate of 2% per annum. Interest is payable on conversion or
      maturity and may be payable by delivery of cash or Shares (as defined below).
      The Convertible Debentures rank equal with each other.





The
      Convertible Debentures are convertible into “Units” where each Unit consists of
      one Share and Share purchase warrant (a “warrant”) at the rate of one Unit for
      each $0.50 of principal under the Convertible Debenture at the time of
      conversion. The Company reserved the right to pay interest in cash or Shares
      at
      its option. Each warrant entitles the holder to purchase one Share at $0.75
      per
      Share for a term of 12 months following issuance of the warrant. The Convertible
      Debentures are convertible at any time before maturity of the Convertible
      Debentures.





The
      Company registered the shares and the shares to be issued upon exercise of
      the
      warrants issuable upon conversion of the Convertible Debentures on a
      registration statement on Form SB-2 that was made effective on April 24, 2007.





On
      conversion of the Convertible Debentures the Shares issued on conversion of
      the
      Debenture were subject to a Lock Up Agreement providing that up to 25% of the
      Shares may be re-sold when the registration statement became effective, 25%
      may
      be re-sold six months from the date of effectiveness, 25% may be re-sold twelve
      months from the date of effectiveness and 25% may be re-sold eighteen months
      from the date of effectiveness. Each subscriber will be issued four certificates
      for the Shares received on conversion and three of those certificates will
      be
      legended to reflect the forgoing restrictions on re-sale. With respect to Shares
      issued upon exercise of the Warrants (assuming a current prospectus covering
      the
      issuance of the underlying Shares is in place when the Warrant is exercised),
      50% of the Shares received on exercise of the Warrants will be free trading
      with
      the remaining 50% to become free trading six months following the exercise
      of
      the Warrants. The shares issued upon exercise of the Warrants will be legended
      accordingly.





The
      foregoing private placement of Convertible Debentures was exempt from
      registration under the Securities Act pursuant to an exemption afforded by
      Regulation S. Each of the investors in the foregoing private placement is a
      non
“U.S. Person” as that term is defined in Rule 902 of Regulation S.





The
      Convertible Debentures listed above were converted into shares and warrants
      between October 3, 2007 and November 5, 2007. The interest was paid in common
      shares of the Company. This resulted in the issuance of the following Shares
      and
      warrants on the dates set out below.





21




**Conversion**
              **Date**
            
            **Shares**
            
            **Shares**
              **Issued for**
              **Interest**
            
            **Shares Issued for**
              **Warrants**Oct
                8/07
            
            
            446,812
            
            
            10,967
            
            
            446,812Oct
                9/07
            
            
            1,935,394
            
            
            52,663
            
            
            1,935,394Oct
                10/07
            
            
            300,000
            
            
            7,397
            
            
            300,000Oct
                12/07
            
            
            446,812
            
            
            11,067
            
            
            446,812Oct
                16/07
            
            
            2,159,574
            
            
            55,673
            
            
            2,159,574Oct
                25/07
            
            
            127,604
            
            
            3,460
            
            
            127,604Oct
                30/07
            
            
            127,663
            
            
            3,498
            
            
            127,663Nov
                5/07
            
            
            1,458,275
            
            
            39,871
            
            
            1,458,275





The
      interest shares were issued as “restricted shares,” as that term is defined
      under Rule 144 of the Securities Act.





Subsequent
      Events





Subsequent
      to the period covered by this report, as of August 22, 2008, the Company
      completed private placements of “Units” at $0.50 per Unit from accredited
      investors for 7,040,000 Units. Each Unit consists of one Share and one half
      Share purchase warrant (a “warrant”). Each full warrant entitles the holder to
      purchase one Share at $0.75 on or before September 1, 2010. The private
      placement was conducted entirely outside the United States and was exempt from
      registration under the Securities Act pursuant to an exemption afforded by
      Regulation S. All of the investors were non-U.S. Persons. The Company paid
      a
      commission of $147,000 and issued 294,000 broker warrants to purchase Units
      at
      $0.50 per Unit in connection with the private placement. The Units have the
      same
      terms as those sold to investors.





**Date**
            
            **$'s**
            
            **Shares**
            
            **Warrants**Jul
                7/08
            
            $
            250,000
            
            
            500,000
            
            
            250,000Jul
                8/08
            
            $
            500,000
            
            
            1,000,000
            
            
            500,000Jul
                6/08
            
            $
            50,000
            
            
            100,000
            
            
            50,000Jul
                21/08
            
            $
            100,000
            
            
            200,000
            
            
            100,000Jul
                24/08
            
            $
            20,000
            
            
            40,000
            
            
            20,000Jul
                29/08
            
            $
            100,000
            
            
            200,000
            
            
            100,000Aug
                1/08
            
            $
            200,000
            
            
            400,000
            
            
            200,000Aug
                5/08
            
            $
            350,000
            
            
            700,000
            
            
            350,000Aug
                13/08
            
            $
            500,000
            
            
            1,000,000
            
            
            500,000Aug
                14/08
            
            $
            200,000
            
            
            400,000
            
            
            200,000Aug
                15/08
            
            $
            1,000,000
            
            
            2,000,000
            
            
            1,000,000Aug
                22/08
            
            $
            250,000
            
            
            500,000
            
            
            250,000**$**
            **3,520,000**
            
            
            **7,040,000**
            
            
            **3,520,000**


22


**Other
      Sales or Issuances of Unregistered Securities**





Year
      ended June 30, 2007





Broker
      Purchase Warrants to purchase Convertible Debentures





Date Issued
            
            Expiration Date
            
            Exercise PriceJuly
                6, 2006
            
            
            December 31, 2007
            
            $
            175,000July
                26, 2006
            
            
            December 31, 2007
            
            
            67,128August
                2, 2006
            
            
            December 31, 2007
            
            
            107,979$
            350,107





*
      The
      expiry dates of all the above broker warrants were extended to December 31,
      2009





Subsequent
      Events





Subsequent
      to the period covered by this report the Company issued the following Broker
      Warrants to purchase “Units” where each Unit consists of one Share and one half
      a Share purchase warrant (a “warrant”). Each full warrant entitles the holder to
      purchase one common share at $0.75 on or before September 1, 2010.





Issued
            
            Expiration Date
            
            Units
            
            AmountAugust
                15, 2008
            
            
            September 1, 2010
            
            
            245,000
            
            $
            122,500.00August
                13, 2008
            
            
            September 1, 2010
            
            
            49,000
            
            $
            24,500.00





Subsequent
      to the Company’s year ended June 30, 2008 the Company issued 25,000 common
      shares to Endeavor Holdings on each of July 1, August 1 and September 1 of
      2008
      in accordance with the terms of the contract that became effective March
      3 rd ,
      2008.


23


Our
      common stock is traded on the Over the Counter Bulletin Board sponsored by
      the
      National Association of Securities Dealers, Inc. under the symbol “SLVV.” The
      Over the Counter Bulletin Board does not have any quantitative or qualitative
      standards such as those required for companies listed on the Nasdaq Small Cap
      Market or National Market System. Our high and low sales prices of our common
      stock during the fiscal year ended June 30, 2008 is as follows:





Quarter
                ended
            
            
            High
            
            
            LowSeptember
                30, 2007
            
            $
            0.75
            
            $
            0.10December
                31, 2007
            
            $
            0.88
            
            $
            0.61March
                31, 2008
            
            $
            0.61
            
            $
            0.32June
                30, 2008
            
            $
            0.65
            
            $
            0.24





Stock
      Option Plan





On
      April
      20, 2006, we adopted the 2006 Stock Option Plan (the "Plan") under which our
      officers, directors, consultants, advisors and employees may receive stock
      options. The aggregate number of shares of common stock that may be issued
      under
      the plan is 5,000,000. The purpose of the Plan is to assist us in attracting
      and
      retaining selected individuals to serve as directors, officers, consultants,
      advisors, and employees of Silver Reserve who contribute to our success, and
      to
      achieve long-term objectives that will inure to the benefit of all shareholders
      through the additional incentive inherent in the ownership of our common stock.
      Options granted under the plan will be either "incentive stock options",
      intended to qualify as such under the provisions of section 422 of the Internal
      Revenue Code of 1986, as from time to time amended (the "Code") or "unqualified
      stock options". For the purposes of the Plan, the term "subsidiary" shall mean
      “Subsidiary Corporation,” as such term is defined in section 424(f) of the Code,
      and "affiliate" shall have the meaning set forth in Rule 12b-2 of the Exchange
      Act.





The
      following table summarizes the options outstanding as at June 30:


Option Price
              
              Weighted
                average
                remaining
                contractual
                life
              
              Weighted
                average
                remaining
                contractual
                life
              
              Number of sharesExpiry Date
              
              Per Share
              
              2008
              
              2007
              
              2008
              
              2007April 9, 2012
              
              
              0.50
              
              
              3.75
              
              
              4.75
              
              
              1,850,000
              
              
              1,850,000April 16, 2012
              
              
              0.50
              
              
              3.75
              
              
              4.75
              
              
              50,000
              
              
              50,000May 16, 2012
              
              
              0.50
              
              
              
              
              
              4.83
              
              
              -
              
              
              10,000Jan 23, 2013
              
              
              0.60
              
              
              4.58
              
              
              
              
              
              50,000
              
              
              -April 1, 2013
              
              
              0.35
              
              
              4.75
              
              
              
              
              
              400,000
              
              
              -June 22, 2013
              
              
              0.52
              
              
              4.95
              
              
              
              
              
              250,000
              
              
              -Options
                  outstanding at end of year
              
              
              
              
              
              
              
              
              
              
              
              2,600,000
              
              
              1,910,000Weighted
                  average exercise price at end of year
              
              
              
              
              
              
              
              0.49
              
              
              0.50Weighted
                  average remaining contractual life
              
              4.03
              
              
              4.75




24


Number of Shares2008
            
            2007Outstanding,
                beginning of year
            
            
            1,910,000
            
            
            -Granted
            
            
            700,000
            
            
            1,910,000Expired
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Forfeited
            
            
            (10,000
            )
            
            -Cancelled
            
            
            -
            
            
            -Outstanding,
                end of year
            
            
            2,600,000
            
            
            1,910,000Exerciseable,
                end of year
            
            
            2,045,833
            
            
            317,450





Subsequent
      to June 30, 2008, on August 7, 2008 the Board granted stock options to Kim
      Fraser to purchase 50,000 common shares at an exercise price of $0.46 per share
      and for a term of 5 years. These options are granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest at the rate of 1/12
      each month until fully vested. On September 12, 2008 the Company cancelled
      the
      unvested options.


25


***Item
      6.   Management’s Discussion and Analysis***





*This
      section should be read in conjunction with the accompanying financial statements
      and notes included in this report.*





**MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





PLAN
      OF
      OPERATIONS





**Discussion
      of Operations & Financial Condition**


**Twelve
      months ended June 30, 2008**





Silver
      Reserve Corporation has no source of revenue and we continue to operate at
      a
      loss. We expect our operating losses to continue for so long as we remain in
      an
      exploration stage and perhaps thereafter. As at June 30, 2008, we had
      accumulated losses of $6,730,845. Our ability to emerge from the exploration
      stage and conduct mining operations is dependent, in large part, upon our
      raising additional equity financing.





As
      described in greater detail below, the Company’s major endeavor over the years
      has been its effort to raise additional capital to pursue its exploration
      activities.





We
      have
      continued to raise capital and are moving forward with exploration on our
      Projects. We have completed the evaluation of all 15 of our Projects and
      determined that the Medicine and Silver Queen Projects provide the best
      opportunity for development of resources that could go to production. Work
      is
      proceeding on these two Projects. We are progressing towards permitting of
      the
      Red Rock mill site at Mina, Nevada.





The
      Company continues to look for opportunities to develop other mineral deposits
      of
      commodities in high demand or anticipated high demand. We believe that the
      federal governments in the United States and Canada will embark on major
      infrastructure expenditures in the next 10 years creating a demand for cement
      that exceeds the current sources of supply. Cement is made from lime stone
      and
      we believe acquisitions in this area have significant potential. On August
      12,
      2008, Silver Reserve announced that it entered into a non-binding letter of
      intent (the “LOI”) dated as of August 12, 2008 to acquire, as a wholly-owned
      subsidiary, Infrastructure Materials Corp. US (“Infrastructure US”), a Nevada
      corporation holding all of the outstanding capital stock of Infrastructure
      Materials Corp. Canada, a Canadian corporation (“Infrastructure Canada”).
      Infrastructure US and Infrastructure Canada own limestone mineral properties
      in
      the United States and Canada, respectively, and each is actively engaged in
      the
      process of acquiring additional limestone mineral properties. Under the terms
      of
      the proposed transaction, Silver Reserve will issue 1,500,000 Shares in exchange
      for all of the outstanding capital stock of Infrastructure US. Todd Montgomery,
      the Company’s Chief Executive Officer, is the sole shareholder of Infrastructure
      US. The transaction contemplated in the LOI is contingent upon Silver Reserve’s
      due diligence review and the negotiation and execution of a definitive stock
      purchase agreement.


26


**SELECTED
      ANNUAL INFORMATION**





June
                30, 2008
            
            June
                30, 2007Revenues
            
            
            Nil
            
            
            NilNet
                Loss
            
            $
            3,791,042
            
            $
            2,845,424Loss
                per share-basic and diluted
            
            $
            (0.09
            )
            $
            (0.09
            )Total
                Assets
            
            $
            3,050,237
            
            $
            5,429,519Total
                Liabilities
            
            $
            350,402
            
            $
            3,769,934Cash
                dividends declared per share
            
            
            Nil
            
            
            Nil





Our
      total
      assets for the year ended June 30, 2008 includes cash and cash equivalents
      of
      $1,553,855, prepaid expenses of $155,546 and capital assets of $1,340,836.
      Our
      total assets for the year ended June 30, 2007 includes cash and cash equivalents
      of $2,639,256, short-term investments of $1,124,059, prepaid expenses of
      $29,425, capital assets of $1,554,224 and unamortized debt issuance cost of
      $82,555. The total assets decreased from $5,429,519 on June 30, 2007 to
      $3,050,237 on June 30, 2008. The decrease in total assets arose as the Company
      expended considerably on exploration and drilling projects during the year
      as
      compared to acquisition of claims in the prior year which were settled primarily
      through issue of shares.





**Revenues**




No
      revenue was generated by the Company’s operations during the years ended June
      30, 2008 and June 30, 2007.





**Net
      Loss**





The
      Company’s expenses are reflected in the Statements of Operation under the
      category of Operating Expenses. To meet the criteria of United States generally
      accepted accounting principles (“GAAP”), all mineral property acquisition and
      exploration costs are expensed as incurred. When it has been determined that
      a
      mineral property can be economically developed as a result of establishing
      proven and probable reserves, the costs incurred to develop such property are
      capitalized. For the purpose of preparing financial information, all costs
      associated with a property that has the potential to add to the Company's proven
      and probable reserves are expensed until a final feasibility study demonstrating
      the existence of proven and probable reserve is completed. No costs have been
      capitalized in the periods covered by these financial statements. Once
      capitalized, such costs will be amortized using the units-of-production method
      over the estimated life of the probable reserve.





The
      significant components of expense that have contributed to the total operating
      expense are discussed as follows:





(a) General
      and Administrative Expense





Included
      in Operating Expenses for the year ended June 30, 2008 is general and
      administrative expense of $1,782,706, as compared with $596,837 for the year
      ended June 30, 2007. General and administrative expense represents approximately
      46% of the total operating expense for the year ended June 30, 2008 and 20%
      of
      the total Operating Expense for the year ended June 30, 2007. General and
      administrative expense increased by $1,185,869 in the current year, compared
      to
      the prior year. The increase in this expense is mainly due to non cash expense
      relating to issue of stock to consultants for $995,500 (prior year $nil) and
      non
      cash expense relating to stock based compensation for $139,272 (prior year
      $30,026).


27


(b) Project
      Expense





Included
      in operating expenses for the year ended June 30, 2008 is project expenses
      for
      $1,836,077 as compared with $2,136,174 for the year ended June 30, 2007. Project
      expense is the most significant expense and it represents approximately 47
      % of
      the total operating expense for the year ended June 30, 2008 and approximately
      72% of the total operating expense for the year ended June 30, 2007. As majority
      of the project expense for the year ended June 30, 2008 related to exploration
      on the mineral claims, the significant components project expense for the year
      ended June 30, 2007 were as follows:




On
      August
      31, 2006 the Company issued 3,540,600 common shares to Mojave Silver Company
      Inc., a Nevada Corporation, for purchase of its 100% rights, title and interest
      in certain mineral claims situated in the State of Nevada. The total
      consideration paid for these claims was $885,150 based on a valuation of $0.25
      per Share. This amount was expensed to the income statement as Project expenses.




On
      August
      31, 2006 the Company issued 1,850,000 common shares to Anglo Gold Mining Inc.,
      a
      Nevada Corporation, for purchase of its 100% rights, title and interest in
      certain mineral claims situated in the State of Nevada. The total consideration
      paid for these claims was $462,500 based on a valuation of $0.25 per Share.
      This
      amount was expensed to the income statement as Project expenses.





**Liquidity
      and Capital Resources**





The
      following table summarizes the company’s cash flows and cash in
      hand:





Year ended
            
            Year endedJune 30, 2008
            
            June 30, 2007Cash
                and cash equivalent
            
            $
            1,553,855
            
            $
            2,639,256Working
                capital
            
            $
            1,358,999
            
            $
            22,806Cash
                used in operating activities
            
            $
            (2,173,006
            )
            $
            (900,193
            )Cash
                provided in investing activities
            
            $
            1,087,605
            
            $
            22,534Cash
                provided by financing activities
            
            $
            nil
            
            $
            2,966,140





As
      at
      June 30, 2008, the Company had working capital of $1,358,999 as compared to
      $22,806 as of June 30, 2007. The increase in working capital is primarily due
      to
      conversion of convertible debentures of $3,570,681 in 2008 and which were
      reflected as a current liability as of June 30, 2007. The Company did not raise
      any capital during the year ended June 30, 2008. During the year ended June
      30,
      2007, the Company raised $3,029,140 (gross) by issuing common shares and
      convertible debentures for cash.





**Off-Balance
      Sheet Arrangement**





The
      Company had no off- balance sheet arrangements as of June 30, 2008 and June
      30,
      2007.





**Contractual
      Obligations and Commercial Commitments**





The
      Company entered into a one-year renewal contract with Medallion Capital Corp.
      for consulting services commencing as of May 1, 2006, at a rate of $7,500 per
      month. On February 1, 2008 the company increased the monthly fee to $12,500
      per
      month. This agreement was terminated on April 30, 2008.


28





On
      August
      21, 2006, the Company entered into an Option Agreement with Sage Associates,
      Inc. to acquire mineral claims in the state of Nevada (the “Sage Option
      Agreement”). The Sage Option Agreement was amended on the following dates March
      30, 2007 and August 20, 2007. The Company paid $20,000 upon execution of the
      Sage Option Agreement as an initial payment. In the first year of the Sage
      Option Agreement the Company staked up 250 additional claims which became
      subject to the Sage Option Agreement. Subsequent to the date of this report
      on
      August 20, 2008 the Company terminated the Sage Option Agreement and entered
      into a new agreement with Sage covering 87 mineral claims in which the Company
      agreed to pay for the annual sustaining fees on the original 12 claims optioned
      in the August 21, 2006 agreement and granted to Sage a 1% NSR royalty on the
      87
      claims covered by the new agreement. The NSR royalty is calculated according
      to
      gross revenue beginning after commercial production commences. For purposes
      of
      determining gross revenue, the following items are included: revenue received
      by
      Silver Reserve from arm’s length purchasers of all mineral products produced
      from the property, the fair market value of all products sold by Silver Reserve
      in such period to persons not dealing with Silver Reserve at arms length, and
      Silver Reserve’s share of the proceeds of insurance on products minus
“permissible deductions.” Permissible deductions include: sales charges levied
      by any sales agent on the sale of products, transportation costs for products,
      all costs, expenses and charges of any nature whatsoever which are either paid
      or incurred by Silver Reserve in connection with the refinement and
      beneficiation of products after leaving the property; and all insurance costs
      and taxes.





Effective
      as of September 1, 2007, the Company entered into an agreement with Brehnam
      Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services
      on financial matters, business growth and development, and general business
      matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned
      in equal installments of 375,000 shares on December 1, 2007, June 1, 2008,
      December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered
      in
      one certificate upon execution of the agreement and are deemed to be in
      Brenham’s possession. The consultant must return any unearned Shares if the
      agreement is terminated early.





Effective
      as of September 1, 2007, the Company entered into an agreement with Costa View
      Inc. (“Costa”) for a term of 24 months to provide consulting services on
      financial public relations, business promotion, business growth and development,
      including mergers and acquisitions, and general business matters. The Company
      will pay Costa 1,500,000 restricted Shares to be earned in equal installments
      of
      375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June
      1,
      2009. The said 1,500,000 Shares were tendered in one certificate upon execution
      of the agreement and are deemed to be in Costa View’s possession. The consultant
      must return any unearned Shares if the agreement is terminated early.





On
      September 14, 2007 the Company accepted a proposal from Lumos & Associates
      to complete the regulatory permitting process for the Company’s Mill in Mina,
      Nevada. The total consideration to be paid under the proposal is approximately
      $350,000. The permitting process will be carried out in twelve stages over
      the
      next five years. The Company is required to authorize in writing each stage
      of
      the work before the work proceeds.





On
      January 14, 2008, the Company entered into a Letter Agreement with Frank and
      Kelly Jo Eagan (the “Eagans”) of Goldfield, Nevada, to purchase two (2)
      unpatented mining claims in the Red Mountain Mining District, situated in
      Esmeralda County, Nevada for a purchase price of $23,000. The Eagans retained
      access to the property for two years, to enable them to remove any personal
      property. These two claims are known as “Tattoo Me” and “Tattoo U” and are
      located inside the boundary of the Silver Queen claim group. These claims
      include the former producing Mohawk Mine. As of the date of this Report, the
      Company does not consider these claims material.




On
      February 15, 2008 the Company entered into an agreement with Roger Hall, an
      officer and director of the Company, to acquire 15 mineral claims referred
      to as
      the Gold Point Claim Group in consideration of the sum of $5,000 payable in
      cash
      and 175,000 common shares in the capital of the Company.





On
      February 21, 2008, the Company entered into a Drilling Agreement with Hansen
      Drilling, Inc. to perform drilling on the Pansy Lee Claims site at agreed rates
      for work to be performed.


29


On
      March
      12, 2008 the Company entered into an agreement effective as of March 3, 2008,
      with Endeavor Holdings, Inc. (“Endeavor”) pursuant to which Endeavor was
      retained to provide general marketing and business consulting services to the
      Company for a period of 12 months. Under the terms of the agreement, the Company
      is required to issue to Endeavor 25,000 shares of restricted common stock and
      $5,000 each month during the term of the agreement. The Company issued 100,000
      restricted common shares valued at $58,000 till June 30, 2008. Either party
      may
      terminate the Endeavor Consulting Agreement upon 30-days’ prior written
      notice.





On
      April
      4, 2008, the Company entered into a Consultant Agreement with Lumos and
      Associates, to facilitate completing exploration drilling “Notice of Intent” and
      plan of operation in compliance with the requirements of the United States
      Bureau of Land Management. The Company estimates the costs of each Notice of
      Intent plan to range from $3,000 to $4,000.





On
      April
      8, 2008, the Company entered into a Drilling Agreement with W. R. Hansen,
      Contractor, to perform drilling on various locations in Nevada at a rate of
      $300
      per hour for work to be performed beginning in May of 2008.





On
      May 1,
      2008, the Company entered into a Consulting Services Agreement with Lance
      Capital Ltd. (“Lance”), a company owned by Patricia Kelley, wife of Stafford
      Kelley, former Corporate Secretary of the Company at $12,500 per month to
      provide personnel to carry out administration services for the Company. All
      activity of Lance shall be carried out at the direction of the Board of
      Directors of the Company or its officers.





On
      May 1,
      2008, the Company entered into an Option Agreement with Nevada Eagle Resources
      LLC and Steve Sutherland (together, the “Optionor”) to acquire 100% interest in
      25 unpatented mineral claims (the “Property”). On execution of the agreement,
      the Company paid $10,000 and is required to make the following payments to
      exercise the option:





On
                the 1st anniversary of closing
            
            $
            15,000On
                the 2nd anniversary of closing
            
            $
            30,000On
                the 3rd anniversary of closing
            
            $
            60,000
                andOn
                the 4ththru 10thanniversaries of closing
            
            $
            80,000 on each anniversary date





On
      payment of all of the above payments the Option shall be fully exercised and
      Silver Reserve shall own 100% of the Property.





The
      Optionor shall, at their option, have the right to accept part of all of the
      cash payments due under this said agreement in Shares of the Company, at a
      price
      of 10% below the 10 day average closing price, which the shares trade prior
      to
      the payment date.





The
      Optionor shall be entitled to a 3% Net Smelter Return (“NSR”) royalty on the
      Property, in the event the Property goes into production.




Each
      of
      the option payments shall be applied as advance royalty payments. Beginning
      on
      the 11 th anniversary date of said agreement, an annual advance royalty of $80,000 is
      due
      and payable. All advance royalty payments shall be applied to the reduction
      of
      any future royalty payments due under the NSR royalty. If and when the Property
      enters into production, the Company must annually pay the greater of the NSR
      royalty or $80,000. The NSR royalty also applies to the 124 contiguous claims
      staked by the Company.





Effective
      June 1, 2008, the Company entered into a consulting contract with a geologist
      expiring December 31, 2008. The contract will be automatically renewed after
      December 31, 2008, subject to any mutually agreed changes in the hourly fees
      for
      services, unless terminated by either party. The Company will compensate at
      the
      rate of $200 per day for the first 30 days, $225 per day during days 30 to
      90
      days and $275 per day during days 90 to December 31, 2008.


30





Effective
      as of June 23, 2008, the Company appointed Mason Douglas as the President of
      the
      Company. Mr. Douglas is also a director of the Company. In connection with
      the
      appointment, the Company entered into a consulting services agreement (the
      “Consulting Agreement”) with a corporation that is controlled by Mr. Douglas.
      The Consulting Agreement has a term of one year and is then automatically
      renewable thereafter. Either party may terminate the Consulting Agreement upon
      90 days notice to the other party. During the term of the Consulting Agreement
      the Company will pay the corporation a fee of $8,500 per month. The Company’s
      board of directors will review the performance of Mr. Douglas at six-month
      intervals and may adjust compensation based upon said reviews.





The
      Company executed a contract (the “Drilling Contract”) with Christiansen
      Drilling, Inc. (“Christiansen”) a Nevada corporation, on June 27, 2008
      (effective as of June 24, 2008), pursuant to which Christiansen was retained
      by
      the Company to conduct drilling projects on the Company’s mineral claims. The
      services Christiansen will provide under the Drilling Contract include: reverse
      circulation drilling with a three man crew at a rate of $500.00 per hour,
      equipment mobilization and demobilization at a rate of $150.00 per hour, grading
      and site preparation at a rate of $150.00 per hour, the procurement of drilling
      materials at cost plus 10%, and hole plugging(s), if needed, at a rate of
      $350.00 per hour plus material cost. Upon execution of the Drilling Contract
      the
      Company advanced $50,000 to be credited against future invoices submitted for
      various drill programs.





Subsequent
      to the period covered by this report , effective as of August 11, 2008, the
      Company entered into a Letter of Intent (the “LOI”) to acquire all of the
      capital stock of Infrastructure Materials Corp. US (“Infrastructure US”), a
      Nevada corporation. Infrastructure US holds all the capital stock of
      Infrastructure Materials Corp. Canada (“Infrastructure Canada”), an Alberta
      corporation. Under the terms of the LOI the purchase price for all of the
      capital stock of Infrastructure US would be the issuance at closing of 1,500,000
      Shares of the Company to Infrastructure US. Infrastructure US and Infrastructure
      Canada hold mineral claims in the US and Canada respectively covering limestone
      deposits. The Company is carrying out due diligence on the merits of the mineral
      claims and the status of the two companies. Todd Montgomery, the Company’s Chief
      Executive Officer, is the sole shareholder of Infrastructure US.





We
      expect
      to contract with independent contractors for all work done on the Projects
      for
      the foreseeable future until we have discovered a commercial ore body or
      abandoned the property. We anticipate that we will require substantial financing
      in order to proceed with our plan of exploration for an economic ore body.
      We
      presently do not have any commitments in place to finance future exploration
      and
      there is no assurance that the necessary financing will be obtained. If we
      are
      unable to secure new financing we will not be able to carry out the required
      exploration and may not be able to maintain our interest in the
      Projects.





CASH
      REQUIREMENTS





At
      June
      30, 2008, the Company had cash and cash equivalent of $1,553,855 and prepaid
      expenses of $155,546 **** for
      a
      total of $1,709,401. The Company has projected budgeted expenditures for the
      fiscal period commencing July 1, 2008 as follows:





General
      and Administration expenses of $844,720 and projected Project expenses of
      $6,498,000 (subject to availability of funds) for a total of $7,342,720. Our
      ability to incur the total Project expenses is subject to the availability
      of
      drill rigs to carry out drilling on the claim groups and results from first
      round drilling. The Company has no firm commitment for additional financing
      and
      may not be able to incur all of the Project expense planned in the budget unless
      further capital is raised.


31


During
      the fiscal year commencing on July 1, 2008, the Company plans to carry out
      work
      on the Medicine Project and the Silver Queen Project. If the Company
      completes the purchase of Infrastructure Materials Corp. US, the
      Company also plans to carry out exploration of the lime stone projects
      that would be acquired in that transaction. The Company will also continue
      moving forward to obtain the necessary permits for the operation of the Red
      Rock
      Mill in Mina, Nevada.





**Recent
      Accounting Pronouncements**





In
      July
      2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in
      income taxes recognized in enterprises’ financial statements in accordance with
      SFAS No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition
      threshold and measurement attributable for the financial statement recognition
      and measurement of a tax position taken or expected to be taken in a tax return.
      FIN 48 also provides guidance on derecognizing, classification, interest and
      penalties, accounting in interim periods, disclosures and transitions. FIN
      48 is
      effective for fiscal years beginning after December 15, 2006. The adoption
      of
      this statement is not expected to have a material effect on the Company's future
      reported financial position or results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measures” (“SFAS No.
      157”). SFAS No. 157 defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (“GAAP”), expands
      disclosures about fair value measurements, and applies under other accounting
      pronouncements that require or permit fair value measurements. SFAS No. 157
      is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007. The Company is currently reviewing the effect, if any, SFAS
      157 will have on its financial position and operations.





In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 158, Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and
      132(R)”. This statement requires employers to recognize the over funded or under
      funded status of a defined benefit postretirement plan (other than a multi
      employer plan) as an asset or liability in its statement of financial position
      and to recognize changes in that funded status in the year in which the changes
      occur through comprehensive income of a business entity or changes in
      unrestricted net assets of a not-for-profit organization.




This
      statement also requires an employer to measure the funded status of a plan
      as of
      the date of its year-end statement of financial position, with limited
      exceptions. The provisions of SFAS No. 158 are effective for employers with
      publicly traded equity securities as of the end of the fiscal year ending after
      December 15, 2006. The adoption of this statement did not have a material effect
      on the Company's future reported financial position or results of operations.




In
      February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) - the fair value option
      for financial assets and liabilities including in amendment of SFAS
      115.





This
      Statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. The objective is to improve financial
      reporting by providing entities with the opportunity to mitigate volatility
      in
      reported earnings caused by measuring related assets and liabilities differently
      without having to apply complex hedge accounting provisions. This Statement
      is
      expected to expand the use of fair value measurement objectives for accounting
      for financial instruments. This Statement is effective as of the beginning
      of an
      entity’s first fiscal year that begins after November15, 2007, and interim
      periods within those fiscal years. Early adoption is permitted as of the
      beginning of a fiscal year that begins on or before November 15, 2007, provided
      the entity also elects to apply the provisions of FASB Statement No. 157, Fair
      value measurements. The Company is currently evaluating the impact of SFAS
      No.
      159 on its financial statements.


32


In
      September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
      Accounting Bulletin No. 108 (Topic 1N), “Quantifying Misstatements in Current
      Year Financial Statements” (“SAB No. 108”). SAB No. 108 addresses how the effect
      of prior year uncorrected misstatements should be considered when quantifying
      misstatements in current year financial statements. SAB No. 108 requires SEC
      registrants (i) to quantify misstatements using a combined approach which
      considers both the balance sheet and income statement approaches; (ii) to
      evaluate whether either approach results in quantifying an error that is
      material in light of relevant quantitative and qualitative factors; and (iii)
      to
      adjust their financial statements if the new combined approach results in a
      conclusion that an error is material. SAB No. 108 addresses the mechanics of
      correcting misstatements that include effects from prior years. It indicates
      that the current year correction of a material error that includes prior year
      effects may result in the need to correct prior year financial statements even
      if the misstatement in the prior year or years is considered immaterial. Any
      prior year financial statements found to be materially misstated in years
      subsequent to the issuance of SAB No. 108 would be restated in accordance with
      SFAS No. 154, “Accounting Changes and Error Corrections.” Because the combined
      approach represents a change in practice, the SEC staff will not require
      registrants that followed an acceptable approach in the past to restate prior
      years’ historical financial statements. Rather, these registrants can report the
      cumulative effect of adopting the new approach as an adjustment to the current
      year’s beginning balance of retained earnings. SAB No. 108 is effective for
      fiscal years ending after November 15, 2006. The implementation of SAB No.
      108
      did not have a material impact on the Company’s results of operations and
      financial condition.




In
      December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”.
      This Statement replaces SFAS No. 141, *Business
      Combinations* .
      This
      Statement retains the fundamental requirements in Statement 141 that the
      acquisition method of accounting (which Statement 141 called the *purchase
      method* )
      be used
      for all business combinations and for an acquirer to be identified for each
      business combination. This Statement also establishes principles and
      requirements for how the acquirer: a) recognizes and measures in its financial
      statements the identifiable assets acquired, the liabilities assumed, and any
      non-controlling interest in the acquiree; b) recognizes and measures the
      goodwill acquired in the business combination or a gain from a bargain purchase
      and c) determines what information to disclose to enable users of the financial
      statements to evaluate the nature and financial effects of the business
      combination. SFAS No. 141(R) will apply prospectively to business
      combinations for which the acquisition date is on or after Company’s fiscal year
      beginning May 1, 2009. The Company is currently assessing the impact of FAS
      141(R).





In
      December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
      Consolidated Financial Statements”. This Statement amends ARB 51 to establish
      accounting and reporting standards for the non-controlling (minority) interest
      in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that
      a
      non-controlling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements. SFAS No. 160 is effective for the Company’s fiscal
      year beginning May 1, 2009. The Company is currently assessing the impact of
      FAS
      160.





In
      March 2008, the FASB issued SFAS No. 161, “ *Disclosures
      about Derivative Instruments and Hedging Activities—an amendment of FASB
      Statement No. 133* ”
(“FAS
      161”). FAS 161 changes the disclosure requirements for derivative instruments
      and hedging activities. Entities are required to provide enhanced disclosures
      about (a) how and why an entity uses derivative instruments, (b) how
      derivative instruments and related hedged items are accounted for under
      Statement 133 and its related interpretations, and (c) how derivative
      instruments and related hedged items affect an entity’s financial position,
      financial performance, and cash flows. The guidance in FAS 161 is effective
      for
      financial statements issued for fiscal years and interim periods beginning
      after
      November 15, 2008, with early application encouraged. This Statement
      encourages, but does not require, comparative disclosures for earlier periods
      at
      initial adoption. The Company is currently assessing the impact of FAS 161.


33


In
      May
      2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
      Accounting Principles" ("SFAS 162"). SFAS 162 is intended to improve financial
      reporting by identifying a consistent framework, or hierarchy, for selecting
      accounting principles to be used in preparing financial statements that are
      presented in conformity with U.S. GAAP for nongovernmental entities. SFAS 162
      is
      effective 60 days following the Securities and Exchange Commission's approval
      of
      the Public Company Accounting Oversight Board auditing amendments to AU Section
      411, "The Meaning of Present Fairly in Conformity with Generally Accepted
      Accounting Principles." The Company does not expect SFAS 162 to have a material
      effect on its consolidated financial statements.




In
      May
      2008, the FASB issued Statement of Financial Accounting Standards No. 163 ("SFAS
      163"), "Accounting for Financial Guarantee Insurance Contracts - an
      interpretation of FASB Statement No. 60." SFAS 163 prescribes accounting for
      insures of financial obligations, bringing consistency to recognizing and
      recording premiums and to loss recognition. SFAS 163 also requires expanded
      disclosures about financial guarantee insurance contracts. Except for some
      disclosures, SFAS 163 is effective for financial statements issued for fiscal
      years beginning after December 15, 2008. The adoption of SFAS 163 will not
      have
      an impact on the results of operations or financial position of the
      Company.





**Critical
      Accounting Policies**





The
      preparation of financial statements in accordance with accounting principles
      generally accepted in the United States, requires us to make estimates and
      assumptions that affect reported amounts of assets and liabilities at the date
      of the financial statements, the reported amount of revenues and expenses during
      the reporting period and related disclosure of contingent assets and
      liabilities. On an ongoing basis, we evaluate our estimates and judgments.
      To
      the extent actual results differ from those estimates, our future results of
      operations may be affected. Besides this critical accounting policy on use
      of
      estimates, we believe the following critical accounting policy affects the
      preparation of our financial statements.




Acquisition,
      Exploration and Evaluation Expenditures




The
      Company is an exploration stage mining company and has not yet realized any
      revenue from its operations. It is primarily engaged in the acquisition and
      exploration of mining properties. Mineral property exploration costs are
      expensed as incurred. Mineral property payments are capitalized only if the
      Company is able to allocate any economic value beyond proven and probable
      reserves. When it has been determined that a mineral property can be
      economically developed as a result of establishing proven and probable reserves,
      the costs incurred to develop such property will be capitalized. For the purpose
      of preparing financial information, the Company is unable to allocate any
      economic value beyond proven and probable reserves and hence all property
      payments are considered to be impaired and accordingly written off to project
      expense. All costs associated with a property that has the potential to add
      to
      the Company’s proven and probable reserves are expensed until a final
      feasibility study demonstrating the existence of proven and probable reserves
      is
      completed. No costs have been capitalized in the periods covered by these
      financial statements. Once capitalized, such costs will be amortized using
      the
      units-of-production method over the estimated life of the probable reserve.




Mineral
      property acquisition costs will also be capitalized in accordance with the
      FASB
      Emerging Issues Task Force ("EITF") Issue 04-2 when management has determined
      that probable future benefits consisting of a contribution to future cash
      inflows have been identified and that adequate financial resources are available
      or are expected to be available as required to meet the terms of property
      acquisition and budgeted exploration and development expenditures. Mineral
      property payments are expensed as incurred if the criteria for capitalization
      is
      not met.




To
      date,
      mineral property exploration costs have been expensed as incurred. As of the
      date of these financial statements, the Company has incurred only property
      payments and exploration costs which have been expensed. To date the Company
      has
      not established any proven or probable reserves on its mineral
      properties.




34


***Item
      7. Financial Statements***





See
      the
      financial statements and report of Schwartz Levitsky Feldman, LLP following
      the
      signature page of this report, which are incorporated herein by
      reference.





***Item
      8.   Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosure***





None.





***Item
      8A. and 8A(T)  Controls and Procedures***




**MANAGEMENT'S
      REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**




Based
      on
      an evaluation as of the date of the end of the period covered by this Form
      10-KSB, our Chief Executive Officer and Chief Financial Officer conducted an
      evaluation of the effectiveness of the design and operation of our disclosure
      controls and procedures, as required by Exchange Act Rule 13a-15(e). Based
      on
      that evaluation, our Chief Executive Officer and Chief Financial Officer
      concluded that our disclosure controls and procedures were effective to ensure
      that information required to be disclosed by us in the reports that we file
      or
      submit under the Exchange Act are recorded, processed, summarized and reported
      within the time periods specified by the SEC's rules and forms.




Management
      of Silver Reserve is responsible for establishing and maintaining adequate
      internal control over financial reporting. Internal control over financial
      reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
      Securities Exchange Act of 1934 as a process designed by, or under the
      supervision of, the company's principal executive and principal financial
      officers and effected by the company's board of directors, management and other
      personnel, to provide reasonable assurance regarding the reliability of
      financial reporting and the preparation of financial statements for external purposes
      in accordance with accounting principles generally accepted in the United States
      and includes those policies and procedures that:




*
      Pertain
      to the maintenance of records that in reasonable detail accurately and fairly
      reflect the transactions and dispositions of the assets of the company;




*
      Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with accounting principles
      generally accepted in the United States and that receipts and expenditures
      of
      the company are being made only in accordance with authorizations of management
      and directors of the company; and




*
      Provide
      reasonable assurance regarding prevention or timely detection of unauthorized
      acquisition, use or disposition of the company's assets that could have a
      material effect on the financial statements.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Even those systems determined to be effective
      can provide only reasonable assurance with respect to financial statement
      preparation and presentation. Because of the inherent limitations of internal
      control, there is a risk that material misstatements may not be prevented or
      detected on a timely basis by internal control over financial reporting.
      However, these inherent limitations are known features of the financial
      reporting process. Therefore, it is possible to design into the process
      safeguards to reduce this risk.




35




Management
      assessed the effectiveness of the Company's internal control over financial
      reporting as of June 30, 2008. In making this assessment, management used the
      criteria set forth by the Committee of Sponsoring Organizations of the Treadway
      Commission in Internal Control-Integrated Framework.




Inherent
      in small business is the pervasive problem of segregation of duties. Given
      that
      the Company has a small accounting department, segregation of duties cannot
      be
      completely accomplished at this stage in the corporate lifecycle. Management
      has
      added many compensating controls to effectively reduce and minimize the risk
      of
      a material misstatement in the Company’s annual or interim financial
      statements.




Based
      on
      its assessment, management concluded that, as of June 30, 2008, the Company's
      internal control over financial reporting is effective based on those
      criteria.




Auditor
      Attestation




This
      annual report does not include an attestation report of the company’s registered
      public accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by the company’s registered
      public accounting firm pursuant to temporary rules of the Securities and
      Exchange Commission that permit the Company to provide only management’s report
      in this annual report.




Changes
      in Internal Controls




There
      have been no changes in our internal control over financial reporting that
      occurred during the fourth fiscal quarter of the fiscal year ended June 30,
      2008
      that have materially affected, or are reasonably likely to materially affect,
      our internal control over financial reporting.




Audit
      Committee





The
      Audit
      Committee is comprised of three directors: Brent Walter, Randal Ludwar and
      Joseph Montgomery. The Audit Committee has reviewed the financial statements
      of
      the Company included with this report on Form 10-KSB for the year ended June
      30,
      2008.





***Item
      8B.   Other Information***





None.


36




**Part
      III**




***Item
      9.   Directors and Executive Officers of the
      Registrant***




**Board
      of Directors**




The
      following individuals have agreed to sit on the Board of Directors of the
      Company. Each director will serve until the next meeting of shareholders or
      until replaced. Each individual's background is of material importance to Silver
      Reserve and is described below:





Mason
                Douglas
            President
                and DirectorTodd
                D. Montgomery
            CEO
                and DirectorRoger
                Hall
            Director
                and Chief Operating OfficerRandal
                Ludwar
            Director
                and Chief Financial OfficerJoseph
                Montgomery
            Director
                and Chairman of the BoardBrent
                Walter
            Director





**Mason
      Douglas -** President,
      Director




Mr.
      Douglas received an MBA from the University of Saskatchewan in 2000. He received
      his Bachelor of Law (LL.B) from the University of Calgary in 2007. Mr. Douglas
      is presently an inactive member of the Law Society of Alberta. Between 2001
      and
      2004 Mr. Douglas was Vice President of Operations of Western Petrochemicals
      Corp. a privately owned oil development company. He has also operated as an
      independent consultant between 2001 and 2006 providing business plans, economic
      modeling and project management for a variety of mining projects. Mr. Douglas
      is
      33 years old.





**Todd
      Montgomery** –
Chief
      Executive Officer, Director





Mr.
      Montgomery was the founder and former President and CEO of Anglo Potash Ltd.,
      a
      Canadian mining company, formally Anglo Minerals Ltd. This company was purchased
      by BHP in 2008. Mr. Montgomery founded Anglo Minerals Ltd. in 1994. In 1999,
      Mr.
      Montgomery founded and served as President and Chief Operating Officer of
      SynEnco Energy Inc., an oil sands development corporation. Prior to 1999, Mr.
      Montgomery also provided the oil sands properties to Oil Sands Quest an AMEX
      listed company. Mr. Montgomery acted as an independent mining consultant and
      served as a director and officer of a number of private and public corporations.
      He is 41 years old.





**Roger
      Hall** -
      Director and Chief Operating Officer





Mr.
      Hall
      comes to the Company with over twenty-nine years experience in the mineral
      exploration industry. He graduated with degree in geology from Ohio University
      in Athens, Ohio in 1978. He received his master’s degree in geology from Ohio
      University in 1983. Mr. Hall has held various positions as a geologist since
      his
      graduation in 1978. Since 1993 Mr. Hall has provided project oversight, contract
      supervision and geological consultations for mineral exploration and development
      companies. Mr. Hall is 56 years old.





**Randal
      Ludwar -** Director
      Chief Financial Officer





Mr.
      Ludwar received a B.Sc. (1977) in Business Administration from Yale University.
      Mr. Ludwar has been a director of Anglo Minerals Ltd. since 1995 and a private
      consultant to the Montgomery Group of Companies for the past ten years. Mr.
      Ludwar presently teaches business classes at SIAST Palliser Campus and has
      done
      so since 1987. Mr. Ludwar is 54 years old.


37





**Joseph
      Montgomery** -
      Director and Chairman of the Board





Mr.
      Montgomery is a geological engineer. He holds a B.Sc. (1959) in Geology, a
      M.Sc.
      (1960) in Geology and a Ph.D. (1967) in Geology. Mr. Montgomery has been
      practicing since 1959 and maintains his professional status as a member of
      the
      Association of Professional Engineers and Earth Sciences of British Columbia.
      Mr. Montgomery is also a member of the advisory board of the Canadian Institute
      of Gemology. Mr. Montgomery is 80 years old.





**Brent
      Walter** -
      Director





Mr.
      Walter received a LLB degree from the University of Saskatchewan in 1990. Since
      July 2004, he has been a lawyer with the firm, ProVenture Law LLP in Calgary,
      Alberta, and practices primarily in the areas of securities and
      corporate/commercial law. Prior to joining ProVenture Law LLP, he practiced
      with
      Phillips Sevalrud LLP in Calgary, Alberta. Mr. Walter currently serves as a
      director and officer of a number of public and private corporations, including
      Mystique Energy Inc. (TSXV), Anglo Minerals Ltd. (TSXV), AgriTec Systems, Inc.
      (TSXV) and Festino Venture Corp. (TSXV), and is a member of the audit committees
      for Mystique Energy Inc. and Anglo Minerals Ltd. He is a member of the Law
      Societies of Alberta and Saskatchewan (inactive), as well as the Canadian Bar
      Association. Mr. Walter is 42 years old.





**Officers**





**Janet
      Shuttleworth** –
      Corporate Secretary and Treasurer





Ms.
      Shuttleworth has over twenty years of accounting experience. She previously
      worked for Central Guaranty Trust Company as a financial analyst, and for
      Central Park Lodges as an accountant. Ms. Shuttleworth is 46 years
      old.





**Reorganization
      of Officers and Directors**





On
      April
      2, 2008 the resignation of Stafford Kelley as Corporate Secretary was accepted
      by the Board of Directors.





On
      April
      2, 2008 Joanne Hughes was appointed Corporate Secretary and Janet Shuttleworth
      was appointed as Treasurer of Silver Reserve. Each was granted an additional
      200,000 stock options.





On
      July
      30, 2008 Joanne Hughes resigned as Corporate Secretary





On
      August
      7, 2008, Joseph Montgomery was appointed to serve on the Audit Committee to
      replace Mason Douglas.





On
      August
      9, 2008 Janet Shuttleworth was appointed as Corporate Secretary.





**Compliance
      with Section 16(a) of the Exchange Act**





Section
      16(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”),
      requires the Company’s directors and officers, and persons who own more
      than 10% of the registered class of the Company’s equity securities (“Section 16
      Persons”), to file with the Securities and Exchange Commission (the “SEC”),
      initial reports of ownership and reports of changes in ownership of Common
      Stock
      and other equity securities of the Company. Section 16 Persons are required
      by
      SEC regulation to furnish the Company with copies of all Section 16(a) reports
      they filed. Based on the Company’s review of the forms it has received, on
      reports filed by Section 16 Persons with the SEC and on the Company’s records,
      the Company believes that during the twelve month period ended June 30, 2007,
      no
      Section 16 reports were filed late.




38


***Item
      10.  Executive Compensation***





Except
      for services provided by entities owned by some of our Officers and Directors
      as
      more particularly set out in CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
      no
      officer or director has received any other remuneration from us, directly or
      indirectly, since our inception. We have a stock option plan only, as described
      below. Although we have no other retirement, incentive, defined benefit,
      actuarial, pension or profit-sharing programs for the benefit of directors,
      officers or other employees, it is possible that we will adopt such a plan
      in
      the future.





(b)  Long
      Term
      Incentive Plan (LTIP Awards)




The
      Company does not have a long term incentive plan, pursuant to which cash or
      non-cash compensation intended to serve as an incentive for performance (whereby
      performance is measured by reference to financial performance or the price
      of
      the Company’s securities), was paid or distributed to any executive officers
      during the three most recent completed years.




(c)  Options
      and Stock Appreciation Rights (SARs)





Directors
      are not paid any fees in their capacity as directors of the Company. The
      directors are entitled to participate in the Company’s stock option plan.





Stock
      options granted to the named executive officers and directors during the fiscal
      year ended June 30, 2008 are provided in the table below:





Name
            
            # of Options
            
            Date Granted
            
            Exercise
              Price
            
            Expiry DateJanet
                Shuttleworth
            
            
            200,000
            
            
            April 2, 2008
            
            $
            0.35
            
            
            April 3, 2013Joanne
                Hughes
            
            
            200,000
            
            
            April 2, 2008
            
            $
            0.35
            
            
            April 3, 2013Mason
                Douglas
            
            
            250,000
            
            
            June 23, 2008
            
            $
            0.52
            
            
            June 22, 2013





No
      stock
      options were exercised during the fiscal year ended June 30, 2008.





d)
      Compensation of Directors





Other
      Arrangements





See
      above





Indebtedness
      of Directors and Executive Officers





None.


39


***Item
      11   Security Ownership and Certain Beneficial Owners and Management
      and Related Stockholder Matters***





As
      of
      August 31, 2008, we have 50,875,569 shares of common stock issued and
      outstanding. Consequently, for purposes of describing shareholder voting rights,
      we have included in the table below the number of common shares of Silver
      Reserve held by the officers and directors of Silver Reserve. The last column
      of
      the table below reflects the voting rights of each officer and/or director
      as a
      percentage of the total voting shares.


**Name and Address**
                **Of Beneficial Owner**
              
              **Number of Shares of**
                **Common Stock**
              
              **Percentage of Class**
                **Held**Todd
                  D. Montgomery, CEO
                1025
                  Grayson Cres.
                Moose
                  Jaw, SASK S6H 4N7
              
              
              3,038,500
              (1)
              
              5.97
                  % of Common
                SharesJoseph
                  Montgomery, Chairman
                8606
                  Fremlin Street
                Vancouver,
                  BC V6P 3X3
              
              
              500,000
              (2)
              
              0.98
                  % of Common
                SharesRandal
                  Ludwar, CFO
                1215
                  Mayberry Crescent
                Moose
                  Jaw, SASK S6H 6X7
              
              
              500,000
              
              
              0.98
                  % of Common
                SharesBrent
                  Walter
                2417 –
                  32nd Avenue SW
                Calgary,
                  AB T2T 1X4
              
              
              900,000(3
              )
              
              1.76
                  % of Common
                SharesMason
                  Douglas, President
                5542
                  Henwood St., S.W.
                Calgary,
                  AB T3E 6Z3
              
              
              550,000
              
              
              1.08
                  % of Common
                SharesRoger
                  Hall, COO
                HC73,
                  Box 36
                Franklin,
                  West Virginia 26807
              
              
              175,000
              
              
              0.34% of Common
                SharesJanet
                  Shuttleworth
                2332
                  Newcastle Crescent
                Oakville,
                  ON L6M 4P6
              
              
              42,500
              
              
              0.08% of Common
                SharesJoanne
                  Hughes, former secretary
                1415
                  Hazelton Blvd., #32
                Burlington,
                  ON L7P 4W6
              
              
              45,000
              
              
              0.09% of Common
                Shares**TOTAL**
              
              
              5,751,000
              
              
              11.30
              %




(1)
            88,500
                of Todd Montgomery’s shares are held by Nevada Refinery Inc. a Nevada
                corporation owned by Mr.
                Montgomery.




40




(2)
            400,000
                of Joseph Montgomery’s shares are held by his family
                members.




(3)
            200,000
                of Brent Walter’s shares are held by a family
                member.




As
      a
      group management and the directors own or control 11.3% of the issued and
      outstanding shares of Silver Reserve.




***Item
      12.   Certain relationships and Related
      Transactions***




Medallion
      Capital Corp., an Ontario, Canada Corporation (“Medallion”) and its wholly owned
      Nevada corporate subsidiary of the same name, provide office space, secretarial
      services, accounting services and other administrative services to Silver
      Reserve pursuant to a Consulting Services Agreement with the Company dated
      May
      1, 2006. Medallion was wholly owned by its President, Stafford Kelley. Mr.
      Kelley resigned as Corporate Secretary of Silver Reserve on April 2, 2008.
      He
      subsequently resigned as an officer of Medallion on April 11, 2008.





Under
      the
      terms of this agreement Medallion was responsible for providing personnel to
      carry out administration services for the Company.





Pursuant
      to the Consulting Agreement, Medallion received $7,500 per month and effective
      February 1, 2008 that amount increased to $12,500 per month. Medallion had
      received a total of $90,000 for the period July 1, 2006 to June 30, 2007.
      Medallion received $97,500 for the period July 1, 2007 to June 30, 2008, in
      connection with its provision of the above services. Medallion also receives
      reimbursement for certain costs, including specified office expenses, equipment
      and supplies. This agreement was terminated on April 30, 2008.





On
      May 1,
      2008, the Company entered into a Consulting Services Agreement with Lance
      Capital Ltd., a company owned by Patricia Kelley, wife of Stafford Kelley,
      former Corporate Secretary of the Company at $12,500 per month to provide
      personnel to carry out administration services for the Company.





All
      activities of the Consultant shall be carried out at the direction of the board
      of directors of the Corporation or its officers.





During
      the period from May 1, 2008 to June 30, 2008, Lance Capital received a total
      of
      $12,500 plus expenses incurred on behalf of the Company.





Roger
      Hall received a total of $157,729.20 for the period July 1, 2007 to June 30,
      2008 in connection with his services as senior geologist. Mr. Hall also received
      $5,000 plus 175,000 common shares for the Gold Point mineral claims purchased
      by
      the Company.





Janet
      Shuttleworth, Treasurer, received $14,836 from April 2, 2008 to June 30,
      2008.





Joanne
      Hughes, Corporate Secretary, received $12,360 from April 2, 2008 to June 30,
      2008.





Mason
      Douglas, President, received $2,236 from June 23, 2008 to June 30,
      2008.





Nevada
      Refinery Inc., a corporation substantially owned by Mr. Montgomery, sold assets
      to the Company as described in “PROPERTIES – Nevada Refinery Purchase
      Agreement.”


41





The
      Company’s CEO and Director, Todd Montgomery, is the beneficial owner of Mineral
      Exploration and Development Inc, (“Minerals”) and Sierra Nevada Geothermal Inc.
      (“Sierra”) both Nevada corporations, which were owed money by International
      Energy Resources Inc., Anglo Gold Mining Inc, and Mojave Silver Company Inc.,
      all of which are companies which sold assets to Silver Reserve. Each of these
      companies assigned their Property Purchase Agreements on August 15, 2006 to
      their respective shareholders in exchange for the shareholders assuming their
      debts to Minerals in the amount of $1,515,021 and Sierra in the amount of
      $1,579,379. These amounts were secured by promissory notes from the
      shareholders.


Mr.
      Montgomery advanced or arranged for the advance of $30,000 prior to June 30,
      2006 and $60,602.45 between June 30, 2006 and September 30, 2006 as a loan
      to
      Offshore Trust Services Ltd. a Nevada corporation doing contract work for Silver
      Reserve. These amounts where repaid at December 31, 2006.





***Item
      13.   Exhibits and Reports on Form 8-K***





The
      Financials Statements and Report of Schwartz Levitsky Feldman, LLP for the
      year
      ended June 30, 2008 and for the year ended June 30, 2007 are filed as part
      of this report





Index
                to ExhibitsAmendment
                to Sage Option Agreement
            10.1Consent
                of Schwartz Levitsky Feldman LLP Independent Auditors
            23.1Certification
                by the Principal Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002
            31.1Certification
                by the Chief Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002
            31.2Certification
                by the Principal Executive Officer and Chief Financial Officer pursuant
                to
                18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of
                2002
            32.1Report
                of Schwartz Levitsky Feldman, LLP
            F-1





In
      addition, the following reports are incorporated by reference.





Current
      Report on Form 8-K “Item 8.01 – Other Events,” dated July 27, 2007;





Current
      Report on Form 8-K “Item 1.01 – Entry into a Material Definitive
      Agreement,”


dated
      September 5, 2007.





Current
      Report on Form 8-K “Item 5.02 – Departure of Certain Directors or Officers;
      Election of Directors.




Current
      Report on Form 8-K “Item 1.01 – Entry into a Material Definitive
      Agreement,”


dated
      February 15, 2008.




Current
      Report on Form 8-K “Item 8.01 – Other Events,” dated March 12,
      2008.





42




Current
      Report on Form 8-K “Item 5.02 – Departure of Directors or Certain
      Officers,” dated March 20, 2008.





Current
      Report on Form 8-K “Item 8.01 – Other Events,” dated March 31,
      2008.





Current
      Report on Form 8-K “Item 5.02 – Appointment of Principal Officers,” dated
      April 2, 2008.





Current
      Report on Form 8-K “Item 1.01 – Entry into a Material Definitive
      Agreement,”


dated
      May
      20, 2008.


Current
      Report on Form 8-K “Item 1.01 – Entry into a Material Definitive Agreement, and
      Item 5.02


Appointment
      of Principal Officers,” dated June 23, 2008.





Current
      Report on Form 8-K “Item 1.01 – Entry into a Material Definitive
      Agreement,”


dated
      June 27, 2008.





Current
      Report on Form 8-K “Item 3.02 – Unregistered Sale of Securities,” dated August
      1, 2008




Current
      Report on Form 8-K “Item 5.02 – Departure of Directors or  Certain
      Officers; Appointment of Certain Officers” and "Item 8.01 Other Events," dated
      August 12, 2008.




Current
      Report on Form 8-K “Item 3.02 – Unregistered Sale of Securities,” dated
      August 15, 2008




***Item
      14.   Principal Accountant Fees and
      Expenses***




The
      Company appointed Schwartz Levitsky Feldman, LLP as independent auditors to
      audit the financial statements of the Company for the fiscal year ended June
      30,
      2008.





Audit
      Fees. The Company expensed audit and audit related fees for Schwartz Levitsky
      Feldman, LLP of approximately $28,693. for the fiscal year ended June 30,
      2008.


43


SIGNATURES




Pursuant
      to the requirements of the Section 13 or 15(d) of the Securities
      Exchange Act of 1934, the Registrant has duly caused this report on Form 10-KSB
      to be signed on its behalf by the undersigned, thereunto duly authorized, on
      the 24 th day of
      September, 2008.




SIGNATURE
            
            TITLE
            
            DATE/s/Mason
                Douglas
            
            President
                and Director
            
            September
                24, 2008Mason
                Douglas/s/Todd
                D. Montgomery
            
            Chief
                Executive Officer and Director
            
            September
                24, 2008Todd
                D. Montgomery/s/
                Roger Hall
            
            Director
                and Chief Operating Officer
            
            September
                24, 2008Roger
                Hall/s/
                Randal Ludwar
            
            Director
                and Chief Financial Officer
            
            September
                24, 2008Randal
                Ludwar/s/
                Joseph Montgomery
            
            Director
                and Chairman of the Board
            
            September
                24, 2008Joseph
                Montgomery/s/
                Brent Walter
            
            Director
            
            September
                24, 2008Brent
                Walter




44




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**




FINANCIAL
      STATEMENTS




YEARS
      ENDED JUNE 30, 2008 AND 2007




(Amounts
      expressed in US Dollars)





**CONTENTS**





Report
                of Independent Registered Public Accounting Firm
            **46**Balance
                Sheets as of June 30, 2008 and June 30, 2007
            **47**Statements
                of Operations for the years ended June 30, 2008 and June 30, 2007and
                for the period from inception (June 3, 1999) to June 30,
                2008
            **48**Statements
                of Changes in Stockholders' Equity for the years ended June 30,
                2008and June 30, 2007 and for the period from inception (June 3,
                1999)
                to June 30, 2008
            **49**Statements
                of Cash Flows for the year ended June 30, 2008 and June 30, 2007and
                for the period from inception (June 3, 1999) to June 30,
                2008
            **50**Notes
                to Financial Statements
            **51 -
                74**


45




**Schwartz
        Levitsky Feldman llp**
 CHARTERED
        ACCOUNTANTS
 LICENSED
        PUBLIC ACCOUNTANTS
 TORONTO ·  MONTREAL


REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
        the
        Board of Directors and Stockholders of
 Silver
        Reserve Corp.
 (An
        Exploration Stage Mining Company)
 
 We
        have
        audited the accompanying balance sheets of Silver Reserve Corp. as at June
        30,
        2008 and 2007 and the related statements of operations, cash flows and
        stockholders’ equity for the years ended June 30, 2008 and 2007 and for the
        period from incorporation to June 30, 2008 . These
        financial statements are the responsibility of the Company’s management. Our
        responsibility is to express an opinion on these consolidated financial
        statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audits to obtain reasonable assurance about whether the
        financial statements are free of material misstatement. An audit includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements. The company is not required to have, nor were we
        engaged to perform, an audit of its internal control over financial reporting.
        Our audit included consideration of internal control over financial reporting
        as
        a basis for designing audit procedures that are appropriate in the
        circumstances, but not for the purpose of expressing an opinion on the
        effectiveness of the company’s internal controls over financial reporting.
        Accordingly, we express no such opinion. An audit also includes assessing
        the
        accounting principles used and significant estimates made by management,
        as well
        as evaluating the overall financial statement presentation. We believe that
        our
        audits provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Silver Reserve Corp. as at June
        30,
        2008 and 2007 and the results of its operations and its cash flows for the
        years
        ended June 30, 2008 and 2007 and for the period from incorporation to June
        30,
        2008 in conformity with United States generally accepted accounting
        principles.
 
 **“SCHWARTZ
                  LEVITSKY FELDMAN
                  LLP”**Toronto, Ontario, Canada
              Chartered
                  AccountantsAugust 27, 2008 except for note 16
              Licensed
                  Public Accountantswhich
                  is as of September 1, 2008
 1167
          Caledonia Road
 Toronto,
          Ontario M6A 2X1
 Tel:
          416
          785 5353
 Fax:
          416
          785 5663


46


SILVER
      RESERVE CORP.


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Balance
      Sheet as at


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**2008**
            
            **2007****ASSETS****Current**Cash
                and cash equivalents
            
            
            **1,553,855**
            
            
            2,639,256Short-term
                investments
            
            
            **-**
            
            
            1,124,059Prepaid
                expenses
            
            
            **155,546**
            
            
            29,425**Total
                Current Assets**
            
            
            **1,709,401**
            
            
            3,792,740**Plant
                and Equipment, net**(note 5)
            
            
            **1,340,836**
            
            
            1,554,224**Debt
                Issuance Costs,**less
                amortization of****$82,555
                in 2008 (2007-$162,092) (note 4)
            
            
            **-**
            
            
            **82,555****Total
                Assets**
            
            
            **3,050,237**
            
            
            5,429,519**LIABILITIES****Current**Accounts
                payable
            
            
            **157,516**
            
            
            87,246Accrued
                liabilities (note 14)
            
            
            **192,886**
            
            
            112,007Convertible
                Debentures (note 6)
            
            
            **-**
            
            
            3,570,681**Total
                Current Liabilities**
            
            
            **350,402**
            
            
            3,769,934**Total
                Liabilities**
            
            
            **350,402**
            
            
            3,769,934**Commitments
                and Contingencies (note 10)****Related
                Party Transactions (note 13)****STOCKHOLDERS'
                EQUITY****Capital
                Stock (note 7)**Class
                ‘A’ Convertible Preferred stock, $0.0001 par value, 50,000,000 shares
                authorized, Nil issued and outstanding (2007 - nil)
            
            
            **-**
            
            
            -Common
                stock, $0.0001 par value, 100,000,000 shares authorized, 43,785,569
                issued
                and outstanding (2007 -33,323,839)
            
            
            **4,379**
            
            
            3,332**Additional
                Paid-in Capital**
            
            
            **10,738,801**
            
            
            4,596,056**Deferred
                Stock Compensation (note 9)**
            
            
            **(1,312,500**
            **)**
            
            -**Deficit
                Accumulated During the Exploration Stage**
            
            
            **(6,730,845**
            **)**
            
            (2,939,803
            )**Total
                Stockholders' Equity**
            
            
            **2,699,835**
            
            
            1,659,585**Total
                Liabilities and Stockholders' Equity**
            
            
            **3,050,237**
            
            
            5,429,519


47


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Statements
      of Operations and Comprehensive Loss for
      the


Years
      Ended June 30, 2008 and 2007 and the Period from Inception (June 3, 1999) to
      June 30, 2008


(Amounts
      expressed in US Dollars)





CumulativeSinceInception
            
            2008
            
            2007**Expenses**General
                and administrative
            
            
            2,475,995
            
            
            1,782,706
            
            
            596,837Project
                expenses (Note 7)
            
            
            3,972,251
            
            
            1,836,077
            
            
            2,136,174Amortization
            
            
            497,189
            
            
            249,842
            
            
            246,730**Total
                Operating Expenses**
            
            
            6,945,435
            
            
            3,868,625
            
            
            2,979,741**Loss
                from Operations**
            
            
            (6,945,435
            )
            
            (3,868,625
            )
            
            (2,979,741
            )Interest
                Income
            
            
            305,043
            
            
            98,422
            
            
            202,652Interest
                Expense
            
            
            (90,453
            )
            
            (20,839
            )
            
            (68,335
            )**Loss
                before Income Taxes**
            
            
            (6,730,845
            )
            
            (3,791,042
            )
            
            (2,845,424
            )Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            -**Net
                Loss and Comprehensive Loss**
            
            
            (6,730,845
            )
            
            (3,791,042
            )
            
            (2,845,424
            )**Loss
                per Weighted Average Number of Shares Outstanding- Basic and Fully
                Diluted**
            
            
            
            
            
            (0.09
            )
            
            (0.09
            )**Basic
                Weighted Average Number of Shares Outstanding During the
                Years****-
                Basic and Fully Diluted**
            
            
            
            
            
            40,987,468
            
            
            31,017,579





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




48




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Statements
      of Changes
      in Stockholder’s Equity for the


Years
      Ended June 30, 2008 and 2007 and the Period from Inception (June 3, 1999) to
      June 30, 2008


(Amounts
      expressed in US Dollars)





DeficitAccumulatedCommon
                Stock
            
            Additional
            
            Deferred
            
            during
                the
            
            TotalNumber
            
            
            
            Paid-in
            
            Stock
            
            Exploration
            
            Stockholders'of
                Shares
            
            Amount
            
            Capital
            
            Compensation
            
            Stage
            
            Equity$
            
            $
            
            $
            
            $
            
            $For
                the period from inception (June 3, 1999) through July 1,
                2004
            
            
            1
            
            
            -
            
            
            5,895
            
            
            
            
            
            (5,895
            )
            
            -Net
                (loss)
            
            
            -
            
            
            -
            
            
            910
            
            
            
            
            
            (910
            )
            
            -Balance,
                June 30, 2005
            
            
            1
            
            
            -
            
            
            6,805
            
            
            -
            
            
            (6,805
            )
            
            -Contribution
                to additional paid-in capital
            
            
            -
            
            
            -
            
            
            3,024
            
            
            
            
            
            
            
            
            3,024Cancelled
                shares
            
            
            (1
            )
            
            -
            
            
            (1
            )
            
            
            
            
            
            
            
            (1
            )Common
                shares issued for nil consideration
            
            
            14,360,000
            
            
            1,436
            
            
            (1,436
            )
            
            
            
            
            -
            
            
            -Common
                shares issued for cash
            
            
            2,050,000
            
            
            205
            
            
            414,795
            
            
            
            
            
            -
            
            
            415,000Subscription
                for stock
            
            
            
            
            
            
            
            
            300,000
            
            
            
            
            
            -
            
            
            300,000Stock
                issuance cost
            
            
            -
            
            
            -
            
            
            (24,500
            )
            
            
            
            
            -
            
            
            (24,500
            )Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            (87,574
            )
            
            (87,574
            )Balance,
                June 30, 2006 (audited)
            
            
            16,410,000
            
            
            1,641
            
            
            698,687
            
            
            -
            
            
            (94,379
            )
            
            605,949Common
                shares issued for cash
            
            
            3,395,739
            
            
            340
            
            
            548,595
            
            
            
            
            
            -
            
            
            548,935Common
                shares issued to agents in lieu of commission for placement of common
                shares and convertible debentures
            
            
            1,064,000
            
            
            106
            
            
            265,894
            
            
            
            
            
            -
            
            
            266,000Common
                shares issued for acquisition of interests in mineral
                claims
            
            
            3,540,600
            
            
            354
            
            
            884,796
            
            
            
            
            
            -
            
            
            885,150Common
                shares issued for acquisition of interests in mineral
                claims
            
            
            1,850,000
            
            
            185
            
            
            462,315
            
            
            
            
            
            -
            
            
            462,500Common
                shares issued for acquisition of interests in a refinery
            
            
            88,500
            
            
            9
            
            
            22,116
            
            
            
            
            
            -
            
            
            22,125Common
                shares issued for purchase of a mill with capital
                equipments
            
            
            6,975,000
            
            
            697
            
            
            1,743,053
            
            
            
            
            
            -
            
            
            1,743,750Stock
                issuance cost
            
            
            
            
            
            
            
            
            (59,426
            )
            
            
            
            
            
            
            
            (59,426
            )Stock
                based compensation
            
            
            
            
            
            
            
            
            30,026
            
            
            
            
            
            
            
            
            30,026Net
                loss for the year ended June 30, 2007
            
            
            
            
            
            -
            
            
            -
            
            
            
            
            
            (2,845,424
            )
            
            (2,845,424
            )Balance,
                June 30, 2007 (audited)
            
            
            33,323,839
            
            
            3,332
            
            
            4,596,056
            
            
            -
            
            
            (2,939,803
            )
            
            1,659,585Common
                stock issued to consultants
            
            
            3,000,000
            
            
            300
            
            
            2,249,700
            
            
            (1,875,000
            )
            
            -
            
            
            375,000Stock
                based compensation
            
            
            
            
            
            -
            
            
            139,272
            
            
            
            
            
            -
            
            
            139,272Conversion
                of convertible debentures with accrued interest
            
            
            7,186,730
            
            
            719
            
            
            3,590,801
            
            
            -
            
            
            -
            
            
            3,591,520Common
                  shares issued for acquisition ofinterests
                  in mineral claims
            
            
            175,000
            
            
            18
            
            
            104,982
            
            
            
            
            
            
            
            
            105,000Common
                stock issued to a consultant
            
            
            100,000
            
            
            10
            
            
            57,990
            
            
            
            
            
            
            
            
            58,000Amortization
                of deferred stock compensation
            
            
            
            
            
            
            
            
            
            
            
            562,500
            
            
            
            
            
            562,500Net
                loss for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (3,791,042
            )
            
            (3,791,042
            )Balance
                June 30, 2008 (audited)
            
            
            43,785,569
            
            
            4,379
            
            
            10,738,801
            
            
            (1,312,500
            )
            
            (6,730,845
            )
            
            2,699,835





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




49




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Statements
      of Cash Flows for
      the


Years
      Ended June 30, 2008 and 2007 and the Period from Inception (June 3, 1999) to
      June 30, 2008


(Amounts
      expressed in US Dollars)





CumulativeSinceInception
            
            2008
            
            2007**Cash
                Flows from Operating Activities**Net
                loss
            
            
            (6,730,845
            )
            
            (3,791,042
            )
            
            (2,845,424
            )Adjustments
                for:Amortization
            
            
            497,189
            
            
            249,842
            
            
            246,730Amortization
                of debt issuance cost
            
            
            247,490
            
            
            82,555
            
            
            162,092Stock
                based compensation
            
            
            169,298
            
            
            139,272
            
            
            30,026Shares
                issued for mineral claims, as part of project expenses
            
            
            1,452,650
            
            
            105,000
            
            
            1,347,650Shares
                issued for consultant services expensed
            
            
            995,500
            
            
            995,500
            
            
            -Interest
                on convertible debentures
            
            
            90,453
            
            
            20,839
            
            
            68,335Changes
                in non-cash working capitalPrepaid
                expenses
            
            
            (155,546
            )
            
            (126,121
            )
            
            (26,636
            )Accounts
                payable
            
            
            157516
            
            
            70,270
            
            
            62,444Accrued
                liabilities
            
            
            193,327
            
            
            80,879
            
            
            54,590Net
                cash used in operating activities
            
            
            (3,082,968
            )
            
            (2,173,006
            )
            
            (900,193
            )Cash
                Flows from Investing ActivitiesDecrease
                in Short-term investments
            
            
            -
            
            
            1,124,059
            
            
            30,265Acquisition
                of plant and equipment for cash
            
            
            (74,484
            )
            
            (36,454
            )
            
            (10,231
            )Proceeds
                from sale of plant and equipment
            
            
            2,500
            
            
            -
            
            
            2,500Net
                cash provided (used) in investing activities
            
            
            (71,984
            )
            
            1,087,605
            
            
            22,534Cash
                Flows from Financing ActivitiesIssuance
                of common shares for cash
            
            
            1,270,740
            
            
            -
            
            
            548,935Issuance
                of convertible debentures subsequently converted to stock
            
            
            3,501,067
            
            
            -
            
            
            2,480,205Stock
                and debenture placement commissions paid in cash
            
            
            (63,000
            )
            
            -
            
            
            (63,000
            )Net
                cash provided by financing activities
            
            
            4,708,807
            
            
            -
            
            
            2,966,140Net
                Change in Cash
            
            
            1,553,855
            
            
            (1,085,401
            )
            
            2,088,481Cash-
                beginning of year
            
            
            -
            
            
            2,639,256
            
            
            550,775Cash
                - end of year
            
            
            1,553,855
            
            
            1,553,855
            
            
            2,639,256Supplemental
                Cash Flow InformationInterest
                paid
            
            
            -
            
            
            -
            
            
            -Income
                taxes paid
            
            
            -
            
            
            -
            
            
            -





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





50






**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**1.**
            **Nature
                of Business and Operations**




Silver
      Reserve Corp. (the "Company"), was incorporated on June 3, 1999 as 54836
      Corporation under the laws of the State of Delaware. On April 10, 2006, 54836
      Corporation changed its name to Silver Reserve Corp. The Company operates with
      the intent of exploration and extraction of silver and other metals in the
      state
      of Nevada. The financial statements include the accounts of Silver Reserve
      Corp.
      (the “Company”).




**2.**
            **Exploration
                Stage Activities**





The
      Company's financial statements are presented on a going concern basis, which
      contemplates the realization of assets and satisfaction of liabilities in the
      normal course of business.





The
      Company is in the exploration stage and has not yet realized revenues from
      its
      planned operations. It is primarily engaged in acquisition and exploration
      of
      mining properties. The Company has incurred a cumulative loss of $6,730,845
      from
      inception to June 30, 2008. The Company has funded operations through the
      issuance of capital stock and convertible debentures. In May and June 2006,
      the
      Company closed a private placement of its common stock for gross proceeds of
      $415,000. During the year ended June 30, 2007 the Company raised $848,935
      (including $ 300,000 received in prior year as stock subscription) through
      private placement of its common stock for cash. The Company also issued
      Convertible Debentures for $1,020,862 during the year ended June 30, 2006 and
      an
      additional $2,480,205 during the year ended June 30, 2007. As of August 22,
      2008, the Company completed private placements of common stock for proceeds
      of
      $3,373,000 net of cash expenses. Management's plan is to continue raising
      additional funds through future equity or debt financing until it achieves
      profitable operations from mineral extraction on its properties, if
      feasible.




**3.**
            **Summary
                of Significant Accounting
                Policies**




The
      accounting policies of the Company are in accordance with accounting principles
      generally accepted in the United States of America and their basis of
      application is consistent with that of the previous year. Outlined below are
      the
      significant accounting policies:




Basis
      of
      Presentation




a)
            Cash
                and Cash Equivalents




Cash
      consists of cash and cash equivalents, which are short-term, highly liquid
      investments with original terms to maturity of 90 days or less.




b)
            Short-Term
                Investments




Short-term
      investments include money market instruments and commercial paper carried at
      the
      lower of cost or market value.


51




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting
                Policies-Cont’d**





c)
            Acquisition,
                Exploration and Evaluation
                Expenditures




The
      Company is an exploration stage mining company and has not yet realized any
      revenue from its operations. It is primarily engaged in the acquisition and
      exploration of mining properties. Mineral property exploration costs are
      expensed as incurred. Mineral property payments are capitalized only if the
      Company is able to allocate any economic value beyond proven and probable
      reserves. When it has been determined that a mineral property can be
      economically developed as a result of establishing proven and probable reserves,
      the costs incurred to develop such property will be capitalized. For the purpose
      of preparing financial information, the Company is unable to allocate any
      economic value beyond proven and probable reserves and hence all property
      payments are considered to be impaired and accordingly written off to project
      expense. All costs associated with a property that has the potential to add
      to
      the Company’s proven and probable reserves are expensed until a final
      feasibility study demonstrating the existence of proven and probable reserves
      is
      completed. No costs have been capitalized in the periods covered by these
      financial statements. Once capitalized, such costs will be amortized using
      the
      units-of-production method over the estimated life of the probable reserve.




Mineral
      property acquisition costs will also be capitalized in accordance with the
      FASB
      Emerging Issues Task Force ("EITF") Issue 04-2 when management has determined
      that probable future benefits consisting of a contribution to future cash
      inflows have been identified and that adequate financial resources are available
      or are expected to be available as required to meet the terms of property
      acquisition and budgeted exploration and development expenditures. Mineral
      property payments are expensed as incurred if the criteria for capitalization
      is
      not met.




To
      date,
      mineral property exploration costs have been expensed as incurred. As of the
      date of these financial statements, the Company has incurred only property
      payments and exploration costs which have been expensed. To date the Company
      has
      not established any proven or probable reserves on its mineral
      properties.




d)
            Plant
                and Equipment




Plant
      and
      equipment are recorded at cost less accumulated depreciation. Depreciation
      is
      provided commencing in the month following acquisition using the following
      annual rate and method:




Computer
                equipment
            30%
            
            declining
                balance methodOffice
                furniture and fixtures
            20%
            
            declining
                balance methodLeasehold
                improvements
            3
                years
            
            straight
                line methodPlant
                and Machinery
            15%
            
            declining
                balance methodTools
            25%
            
            declining
                balance methodVehicles
            20%
            
            declining
                balance methodConsumables
            50%
            
            declining
                balance methodMolds
            30%
            
            declining
                balance methodMobile
                Equipment
            20%
            
            declining
                balance methodFactory
                Buildings
            5%
            
            declining
                balance method


52




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting Policies**(cont'd)




e)
            Debt
                Issuance Costs




Debt
      issuance costs represent expenses incurred by the Company in connection with
      the
      convertible debentures transactions. These charges are deferred and amortized
      over the term of the related debenture facilities.




The
      Company also defers the direct incremental costs of raising capital until such
      time as the offering is completed. At the time of the completion of the
      offering, the costs are charged against the capital raised. Should the offering
      be terminated, deferred offering costs are charged to operations during the
      period in which the offering is terminated. As of June 30, 2008, the Company
      had
      expensed $247,490 in deferred offering costs.




f)
            Impairment
                of Long-lived Assets




In
      accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
      "Accounting for the Impairment or Disposal of Long-Lived Assets", long-lived
      assets to be held and used are analyzed for impairment whenever events or
      changes in circumstances indicate that the related carrying amounts may not
      be
      recoverable. The Company evaluates at each balance sheet date whether events
      and
      circumstances have occurred that indicate possible impairment. If there are
      indications of impairment, the Company uses future undiscounted cash flows
      of
      the related asset or asset grouping over the remaining life in measuring whether
      the assets are recoverable. In the event such cash flows are not expected to
      be
      sufficient to recover the recorded asset values, the assets are written down
      to
      their estimated fair value. Long-lived assets to be disposed of are reported
      at
      the lower of carrying amount or fair value of asset less cost to sell.




g)
            Asset
                Retirement Obligation




The
      Company accounts for asset retirement obligations in accordance with Financial
      Accounting Standards Board ("FASB") Statement No. 143, "Accounting for Asset
      Retirement Obligations" (“Statement 143”), which requires that the fair value of
      an asset retirement obligation be recorded as a liability in the period in
      which
      a company incurs the obligation.




h)
            Revenue
                Recognition




Revenue
      is recognized when the silver or other metals are extracted, processed, and
      sold. The Company will record revenues from the sale of silver or other metals
      when delivery to the customer has occurred, collectability is reasonably assured
      and title has transferred.


53




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting Policies
                –Cont’d**




i)
            Income
                Taxes




The
      Company accounts for income taxes in accordance with SFAS No. 109, "Accounting
      for Income Taxes". Deferred tax assets and liabilities are recorded for
      differences between the financial statement and tax basis of the assets and
      liabilities that will result in taxable or deductible amounts in the future
      based on enacted tax laws and rates. Valuation allowances are established when
      necessary to reduce deferred tax assets to the amount expected to be realized.
      Income tax expense is recorded for the amount of income tax payable or
      refundable for the period increased or decreased by the change in deferred
      tax
      assets and liabilities during the period.




j)
            Earnings
                (Loss) Per Share





The
      Company adopted Statement of Financial Accounting Standards ("FAS") No. 128,
      "Earnings per Share" which requires disclosure in the financial statements
      of
      "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per
      share
      is computed by dividing net income (loss) by the weighted average number of
      common shares outstanding for the year. Diluted earnings (loss) per share is
      computed by dividing net income (loss) by the weighted average number of common
      shares outstanding plus common stock equivalents (if dilutive) related to stock
      options and warrants for each year. There were no common equivalent shares
      outstanding at June 30, 2008 and 2007 that have been included in dilutive loss
      per share calculation as the effects would have been anti-dilutive. At June
      30,
      2008, there were 2,600,000 options from the 2006 Stock Option Plan and
      7,702,348  warrants
      outstanding. At June 30, 2007, there were 1,910,000 options from the 2006 Stock
      Option Plan and 700,214 warrants outstanding.




k)
            Fair
                Value of Financial Instruments




The
      estimated fair value of financial instruments has been determined by the Company
      using available market information and valuation methodologies. Considerable
      judgment is required in estimating fair value. Accordingly, the estimates may
      not be indicative of the amounts the Company could realize in a current market
      exchange. As of June 30, 2008 and 2007 the carrying value of financial
      instruments approximates their fair value due to the short-term maturity of
      these instruments.




Commodity
      Price Risk:


The
      ability of the Company to develop its properties and the future profitability
      of
      the Company is directly related to the market price of certain
      minerals.





Foreign
      exchange risk:


The
      Company conducts some of its operating activities in Canadian dollar. The
      Company is therefore subject to gains or losses due to fluctuations in Canadian
      currency relative to the US dollar.





Long-term
      Financial Instruments





The
      fair
      value of each of the Company’s long-term financial assets and debt instruments
      is based on the amount of future cash flows associated with each instrument
      discounted using an estimate of what the Company’s current borrowing rate for
      similar instruments of comparable maturity would be.


54




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**3.**
            **Summary
                of Significant Accounting Policies-Cont’d**





l)
            Stock
                Based Compensation





All
      awards granted to employees and non-employees after June 30, 2005 are valued
      at
      fair value in accordance with the provisions of SFAS 123 (R) by using the
      Black-Scholes option pricing model and recognized on a straight line basis
      over
      the service periods of each award. The Company accounts for equity instruments
      issued in exchange for the receipt of goods or services from other than
      employees in accordance with SFAS No. 123 and the conclusions reached by the
      Emerging Issues Task Force (“EITF”) in Issue No. 96-18, “Accounting for Equity
      Instruments That Are Issued to Other Than Employees for Acquiring or in
      Conjunction with Selling Goods or Services”.  Costs are measured at
      the estimated fair market value of the consideration received or the estimated
      fair value of the equity instruments issued, whichever is more reliably
      measurable.  The value of equity instruments issued for consideration
      other than employee services is determined on the earlier of a performance
      commitment or completion of performance by the provider of goods or services
      as
      defined by EITF No. 96-18.





As
      of
      June 30, 2008 there was $187,397  of
      unrecognized expense related to non-vested stock-based compensation arrangements
      granted. The total stock-based compensation expense relating to all employees
      and non employees for the years ended June 30, 2008 and 2007 was $139,272 and
      $30,026 respectively.





m)
            Concentrationof
                Credit Risk





SFAS
      No. 105 ,
      "Disclosure of Information about Financial Instruments with Off-Balance Sheet
      Risk and Financial Instruments with Concentration of Credit Risk", requires
      disclosure of any significant off-balance sheet risk and credit risk
      concentration. The Company does not have significant off-balance sheet risk
      or
      credit concentration.


55




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting Policies**(cont'd)




n)
            Use
                of Estimates




Preparation
      of financial statements in accordance with accounting principles generally
      accepted in the United States of America requires management to make estimates
      and assumptions that affect the amounts reported in the financial statements
      and
      related notes to financial statements. These estimates are based on management's
      best knowledge of current events and actions the Company may undertake in the
      future. Actual results may ultimately differ from such estimates. Significant
      estimates include accruals and estimates for calculation for stock based
      compensation.




o)
            Comprehensive
                Income




The
      Company has adopted SFAS No. 130 Reporting Comprehensive Income. This standard
      requires companies to disclose comprehensive income in their consolidated
      financial statements. In addition to items included in net income, comprehensive
      income includes items currently charged or credited directly to stockholders’
equity, such as foreign currency translation adjustments.




p)
            Recent
                Accounting Pronouncements





In
      July
      2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in
      income taxes recognized in enterprises’ financial statements in accordance with
      SFAS No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition
      threshold and measurement attributable for the financial statement recognition
      and measurement of a tax position taken or expected to be taken in a tax return.
      FIN 48 also provides guidance on derecognizing, classification, interest and
      penalties, accounting in interim periods, disclosures and transitions. FIN
      48 is
      effective for fiscal years beginning after December 15, 2006. The adoption
      of
      this statement did not have a material effect on the Company's future reported
      financial position or results of operations.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measures” (“SFAS No.
      157”). SFAS No. 157 defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (“GAAP”), expands
      disclosures about fair value measurements, and applies under other accounting
      pronouncements that require or permit fair value measurements. SFAS No. 157
      is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007. The Company is currently reviewing the effect, if any, SFAS
      157 will have on its financial position and operations.




In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
      Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and
      132(R)”. This statement requires employers to recognize the overfunded or
      underfunded status of a defined benefit postretirement plan (other than a multi
      employer plan) as an asset or liability in its statement of financial position
      and to recognize changes in that funded status in the year in which the changes
      occur through comprehensive income of a business entity or changes in
      unrestricted net assets of a not-for-profit organization.


56




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**3.**
            **Summary
                of Significant Accounting Policies**




p)
            Recent
                Accounting Pronouncements-Cont’d




This
      statement also requires an employer to measure the funded status of a plan
      as of
      the date of its year-end statement of financial position, with limited
      exceptions. The provisions of SFAS No. 158 are effective for employers with
      publicly traded equity securities as of the end of the fiscal year ending after
      December 15, 2006. The adoption of this statement did not have a material effect
      on the Company's future reported financial position or results of operations.




In
      February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) - the fair value option
      for financial assets and liabilities including in amendment of SFAS
      115.




This
      Statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. The objective is to improve financial
      reporting by providing entities with the opportunity to mitigate volatility
      in
      reported earnings caused by measuring related assets and liabilities differently
      without having to apply complex hedge accounting provisions. This Statement
      is
      expected to expand the use of fair value measurement objectives for accounting
      for financial instruments. This Statement is effective as of the beginning
      of an
      entity’s first fiscal year that begins after November15, 2007, and interim
      periods within those fiscal years. Early adoption is permitted as of the
      beginning of a fiscal year that begins on or before November 15, 2007, provided
      the entity also elects to apply the provisions of FASB Statement No. 157, Fair
      value measurements. The Company is currently evaluating the impact of SFAS
      No.
      159 on its financial statements.




In
      September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
      Accounting Bulletin No. 108 (Topic 1N), “Quantifying Misstatements in Current
      Year Financial Statements” (“SAB No. 108”). SAB No. 108 addresses how the effect
      of prior year uncorrected misstatements should be considered when quantifying
      misstatements in current year financial statements. SAB No. 108 requires SEC
      registrants (i) to quantify misstatements using a combined approach which
      considers both the balance sheet and income statement approaches; (ii) to
      evaluate whether either approach results in quantifying an error that is
      material in light of relevant quantitative and qualitative factors; and (iii)
      to
      adjust their financial statements if the new combined approach results in a
      conclusion that an error is material. SAB No. 108 addresses the mechanics of
      correcting misstatements that include effects from prior years. It indicates
      that the current year correction of a material error that includes prior year
      effects may result in the need to correct prior year financial statements even
      if the misstatement in the prior year or years is considered immaterial. Any
      prior year financial statements found to be materially misstated in years
      subsequent to the issuance of SAB No. 108 would be restated in accordance with
      SFAS No. 154, “Accounting Changes and Error Corrections.” Because the combined
      approach represents a change in practice, the SEC staff will not require
      registrants that followed an acceptable approach in the past to restate prior
      years’ historical financial statements. Rather, these registrants can report the
      cumulative effect of adopting the new approach as an adjustment to the current
      year’s beginning balance of retained earnings. SAB No. 108 is effective for
      fiscal years ending after November 15, 2006. The implementation of SAB No.
      108
      did not have a material impact on the Company’s results of operations and
      financial condition.


57




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting
                Policies-Cont’d**




p)
            Recent
                Accounting Pronouncements-Cont’d





In
      December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”.
      This Statement replaces SFAS No. 141, *Business
      Combinations* .





This
      Statement retains the fundamental requirements in Statement 141 that the
      acquisition method of accounting (which Statement 141 called the *purchase
      method* )
      be used
      for all business combinations and for an acquirer to be identified for each
      business combination. This Statement also establishes principles and
      requirements for how the acquirer: a) recognizes and measures in its financial
      statements the identifiable assets acquired, the liabilities assumed, and any
      non-controlling interest in the acquiree; b) recognizes and measures the
      goodwill acquired in the business combination or a gain from a bargain purchase
      and c) determines what information to disclose to enable users of the financial
      statements to evaluate the nature and financial effects of the business
      combination. SFAS No. 141(R) will apply prospectively to business
      combinations for which the acquisition date is on or after Company’s fiscal year
      beginning May 1, 2009. The Company is currently assessing the impact of FAS
      141(R).





In
      December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
      Consolidated Financial Statements”. This Statement amends ARB 51 to establish
      accounting and reporting standards for the non-controlling (minority) interest
      in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that
      a
      non-controlling interest in a subsidiary is an ownership interest in the
      consolidated entity that should be reported as equity in the consolidated
      financial statements. SFAS No. 160 is effective for the Company’s fiscal
      year beginning May 1, 2009. The Company is currently assessing the impact of
      FAS
      160.





In
      March 2008, the FASB issued SFAS No. 161, “ *Disclosures
      about Derivative Instruments and Hedging Activities—an amendment of FASB
      Statement No. 133* ”
(“FAS
      161”). FAS 161 changes the disclosure requirements for derivative instruments
      and hedging activities. Entities are required to provide enhanced disclosures
      about (a) how and why an entity uses derivative instruments, (b) how
      derivative instruments and related hedged items are accounted for under
      Statement 133 and its related interpretations, and (c) how derivative
      instruments and related hedged items affect an entity’s financial position,
      financial performance, and cash flows. The guidance in FAS 161 is effective
      for
      financial statements issued for fiscal years and interim periods beginning
      after
      November 15, 2008, with early application encouraged. This Statement
      encourages, but does not require, comparative disclosures for earlier periods
      at
      initial adoption. The Company is currently assessing the impact of FAS 161.




In
      May
      2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
      Accounting Principles" ("SFAS 162"). SFAS 162 is intended to improve financial
      reporting by identifying a consistent framework, or hierarchy, for selecting
      accounting principles to be used in preparing financial statements that are
      presented in conformity with U.S. GAAP for nongovernmental entities. SFAS 162
      is
      effective 60 days following the Securities and Exchange Commission's approval
      of
      the Public Company Accounting Oversight Board auditing amendments to AU Section
      411, "The Meaning of Present Fairly in Conformity with Generally Accepted
      Accounting Principles." The Company does not expect SFAS 162 to have a material
      effect on its consolidated financial statements.


58




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**3.**
            **Summary
                of Significant Accounting
                Policies-Cont’d**




In
      May
      2008, the FASB issued Statement of Financial Accounting Standards No. 163 ("SFAS
      163"), "Accounting for Financial Guarantee Insurance Contracts – an
      interpretation of FASB Statement No. 60." SFAS 163 prescribes accounting for
      insures of financial obligations, bringing consistency to recognizing and
      recording premiums and to loss recognition. SFAS 163 also requires expanded
      disclosures about financial guarantee insurance contracts. Except for some
      disclosures, SFAS 163 is effective for financial statements issued for fiscal
      years beginning after December 15, 2008. The adoption of SFAS 163 will not
      have
      an impact on the results of operations or financial position of the
      Company.




**4.**
            **Debt
                Issuance Costs**




Costs
      associated with issuance of convertible debentures are deferred and amortized
      over the life of the related debenture.




**5.**
            **Plant
                and Equipment, Net**





June 30, 2008
            
            June 30, 2007Accumulated
            
            
            
            AccumulatedCost
            
            Depreciation
            
            Cost
            
            Depreciation$
            
            $
            
            $
            
            $Office,
                furniture and fixtures
            
            
            17,573
            
            
            6,036
            
            
            16,818
            
            
            3,293Computer
                equipment
            
            
            6,408
            
            
            2,049
            
            
            3,761
            
            
            956Leasehold
                improvements
            
            
            16,230
            
            
            9,405
            
            
            16,230
            
            
            4,885Plant
                and Machinery
            
            
            1,514,511
            
            
            387,851
            
            
            1,512,619
            
            
            189,077Tools
            
            
            5,781
            
            
            2,186
            
            
            5,400
            
            
            1,104Vehicles
            
            
            63,481
            
            
            12,566
            
            
            34,833
            
            
            5,806Consumables
            
            
            64,197
            
            
            45,473
            
            
            64,197
            
            
            26,749Molds
            
            
            900
            
            
            427
            
            
            900
            
            
            225Mobile
                Equipment
            
            
            73,927
            
            
            24,323
            
            
            71,797
            
            
            11,966Factory
                Buildings
            
            
            74,849
            
            
            6,705
            
            
            74,849
            
            
            3,1191,837,857
            
            
            497,021
            
            
            1,801,404
            
            
            247,180Net
                carrying amount
            
            
            
            
            
            1,340,836
            
            
            1,554,224Amortization
                charges
            
            
            
            
            
            249,842
            
            
            246,730


59




**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**6.**
            **Convertible
                Debentures**




Year
      Ended June 30, 2006




During
      the year 2006, the Company issued convertible debentures for a total of
      $1,020,862.




Year
      Ended June 30, 2007




During
      the year ended June 30, 2007 the Company issued convertible debentures for
      a
      total of $2,480,205. During the quarter ended December 31, 2007, all holders
      of
      the Company’s convertible debentures exercised their conversion rights. Under
      the terms of the convertible debentures, the holders converted the principal
      amount of their convertible debentures into “units” at $0.50 per unit, where
      each unit consisted of a share of the Company’s common stock (a “Share”) and a
      warrant to purchase a Share at a purchase price of $0.75 per Share. An aggregate
      of 7,002,134 Shares and an aggregate of 7,002,134 Share purchase warrants were
      issued upon conversion of the principal amount.





The
      convertible debentures had a maturity of December 31, 2007 and an interest
      rate
      of 2% per annum. Pursuant to the terms of the convertible debentures, the
      Company had the option of paying interest in shares or in cash. The Company
      elected to pay interest in shares, which were restricted upon issuance. An
      aggregate of 184,596 Shares were issued upon the conversion of the convertible
      debentures as payment of interest converted at one share for each $0.49 of
      interest.




The
      Shares issued upon conversion of the convertible debentures and the Shares
      underlying the warrants are subject to a lock-up agreement limiting their
      resale. Up to 25% of the shares may be re-sold when a Registration Statement
      on
      Form SB-2 became effective on April 24, 2007 (the “Date of Effectiveness”), 25%
      may be re-sold six months from the Date of Effectiveness, 25% may be re-sold
      twelve months from the Date of Effectiveness and 25% may be re-sold eighteen
      months from the date of effectiveness. With respect to Shares issued upon
      exercise of the warrants, pursuant to the lock-up agreement 50% of the Shares
      received on exercise of the warrants will be free trading with the remaining
      50%
      to become free trading six months following the exercise of the warrants.




**7.**
            **Capital
                Stock**




Year
      ended June 30, 2008





Effective
      as of September 1, 2007, the Company entered into an agreement with Brehnam
      Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services
      on financial matters, business growth and development, and general business
      matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned
      in equal installments of 375,000 shares on December 1, 2007, June 1, 2008,
      December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered
      in
      one certificate upon execution of the agreement and Brehnam is deemed to have
      possession of all of the Shares. The consultant must return any unearned Shares
      if the agreement is terminated early.




Effective
      as of September 1, 2007, the Company entered into an agreement with Costa View
      Inc. (“Costa”) for a term of 24 months to provide consulting services on
      financial public relations, business promotion, business growth and development,
      including mergers and acquisitions, and general business matters. The Company
      will pay Costa 1,500,000 restricted Shares to be earned in equal installments
      of
      375,000 Shares on December 1, 2007, June 1, 2008, December 1, 2008 and June
      1,
      2009. The said 1,500,000 Shares were tendered in one certificate upon execution
      of the agreement and Costa is deemed to have possession of all of the Shares.
      The consultant must return any unearned Shares if the agreement is terminated
      early.


60


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**7.**
            **Capital
                Stock –Cont’d**





During
      the three month period ended December 31, 2007, all holders of the Company’s
      convertible debentures exercised their conversion rights. Under the terms of
      the
      convertible debentures, the holders converted the principal amount of their
      convertible debentures into “units” at $0.50 per unit, where each unit consisted
      of a Share and a warrant to purchase a Share at a purchase price of $0.75 per
      Share. An aggregate of 7,002,134 Shares and an aggregate of 7,002,134 share
      purchase warrants were issued upon conversion of the principal
      amount.





The
      convertible debentures had a maturity of December 31, 2007 and an interest
      rate
      of 2% per annum. Pursuant to the terms of the convertible debentures, the
      Company had the option of paying interest in Shares or in cash. The Company
      elected to pay interest in Shares, which were restricted upon issuance. An
      aggregate of 184,596 shares were issued upon the conversion of the convertible
      debentures as payment of interest converted at one Share for each $0.49 of
      interest.





The
      Company entered into an asset purchase agreement with Roger Hall, effective
      as
      of February 15, 2008, to acquire a 100% interest in certain mineral claims
      located in Nye County, Nevada that are owned by Mr. Hall. Upon closing of the
      Agreement, the Company issued to Mr. Hall 175,000 shares of the Company’s common
      stock valued at $105,000 and paid him $5,000 as consideration for the mineral
      claims. Mr. Hall is the Company’s Chief Operating Officer and a member of its
      Board of Directors. The Agreement was approved by the disinterested members
      of
      the Company’s board of directors. The Company does not consider the claims
      purchased to be material assets at this time and expensed this cost to project
      expense. The Company’s assessment may change after exploration of the
      claims.




On
      March
      12, 2008 the Company entered into an agreement effective as of March 3, 2008,
      with Endeavor Holdings, Inc. (“Endeavor”) pursuant to which Endeavor was
      retained to provide general marketing and business consulting services to the
      Company for a period of 12 months. Under the terms of the agreement, the Company
      is required to issue to Endeavor 25,000 shares of restricted common stock and
      $5,000 each month during the term of the agreement. The Company issued 100,000
      restricted common shares valued at $58,000 till June 30, 2008.


61


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**7.**
            **Capital
                Stock –Cont’d**




Year
      ended June 30, 2007




The
      Company issued 3,395,739 Shares through a private placement for total cash
      consideration of $848,935, which includes $300,000 stock subscription received
      in the prior year. These Shares were issued at $0.25 per Share.




On
      July
      28, 2006 and on August 4, 2006, the Company issued 658,000 and 406,000 common
      shares, respectively, in settlement of a 7% commission in the amount of $266,000
      due on the placement of common shares and Convertible Debentures totaling
      $3,800,000.




On
      August
      31, 2006 the Company issued 3,540,600 Shares to Mojave Silver Company Inc.,
      a
      Nevada Corporation, for purchase of its 100% right, title and interest in
      certain mineral claims situated in the State of Nevada. The total consideration
      of $885,150, calculated at $0.25 per Share, has been expensed to the income
      statement as Project expenses. Mojave Silver Company, Inc. subsequently assigned
      it right to receive the 3,540,600 Shares to its own shareholders.




On
      August
      31, 2006 the Company issued 1,850,000 Shares to Anglo Gold Mining Inc., a Nevada
      Corporation, for purchase of its 100% right, title and interest in certain
      mineral claims situated in the State of Nevada. The total consideration of
      $462,500 calculated at $0.25 per Share has been expensed to the income statement
      as Project expenses. Anglo Gold Mining Inc. subsequently assigned its right
      to
      receive the 1,850,000 Shares to its own shareholders.




On
      August
      31, 2006 the Company issued 88,500 Shares to Nevada Refinery Inc., a Nevada
      Corporation, for purchase of its 100% right, title and interest in a refinery
      facility and equipment. The total consideration of $22,125 calculated on the
      basis of $0.25 per Share has been capitalized to Plant and
      Equipment.




On
      August
      31, 2006 the Company issued 6,975,000 Shares to International Energy Resources
      Inc., a Nevada Corporation, for purchase of its 100% right, title and interest
      in a mill facility and equipment. The total consideration of $1,743,750,
      calculated on the basis of $0.25 per Share, has been capitalized to Plant and
      Equipment.




**Warrants**





During
      the year ended June 30, 2007, the Company issued broker warrants to purchase
      convertible debentures as part of the commission due the agents who placed
      the
      offering of common shares and convertible debentures. These warrants represented
      an amount equal to 10% of the convertible debentures placed.





The
      Company issued 700,214 warrants at an exercise price of $0.50. The expiry dates
      of the above listed broker warrants was originally June 30, 2007 and was
      extended to December 31, 2007 and were further extended to December 31, 2008
      from December 31, 2007 by resolution of the Board of Directors on November
      21,
      2007. Further the Board of Directors by a resolution on June 18, 2008, extended
      the expiry of these warrants till December 31, 2009.





During
      the year ended June 30, 2008, all holders of the Company’s convertible
      debentures exercised their conversion rights. Under the terms of the convertible
      debentures, the holders converted the principal amount of their convertible
      debentures into “units” at $0.50 per unit, where each unit consisted of a Share
      and a warrant to purchase a Share at a purchase price of $0.75 per Share. An
      aggregate of 7,002,134 Shares and an aggregate of 7,002,134 share purchase
      warrants were issued upon conversion of the principal amount. The expiry dates
      of these warrants were extended to December 31, 2009 by a resolution of the
      Board of Directors on June 18, 2008.


62


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





Number
                ofWarrants
            
            ExerciseGranted
            
            Prices
            
            Expiry
                Date$Outstanding
                at June 30, 2006 and average exercise price
            
            
            -
            
            
            -Granted
                in year 2006-2007
            
            
            700,214
            
            
            0.50
            
            
            Dec
                31, 2009Exercised
                in year 2006-2007
            
            
            -
            
            
            -Expired
                in year 2006-2007
            
            
            -
            
            
            -Cancelled
            
            
            -
            
            
            -Outstanding
                at June 30, 2007 and average exercise price
            
            
            700,214
            
            
            0.50Granted
                in year 2007-2008
            
            
            7,002,134
            
            
            0.75
            
            
            Dec
                31, 2009Exercised
                in year 2007-2008
            
            
            -
            
            
            -Expired
                in year 2007-2008
            
            
            -
            
            
            -Cancelled
            
            
            -
            
            
            -Outstanding
                at June 30, 2008 and average exercise price
            
            
            7,702,348
            
            $
            0.73




**8.**  **Stock
      Based Compensation**




In
      April
      2006, the Board of Directors approved an employee stock option plan ("2006
      Stock
      Option Plan"), the purpose of which is to enhance the Company's stockholder
      value and financial performance by attracting, retaining and motivating the
      Company's officers, directors, key employees, consultants and its affiliates
      and
      to encourage stock ownership by such individuals by providing them with a means
      to acquire a proprietary interest in the Company's success through stock
      ownership. Under the 2006 Stock Option Plan, officers, directors, employees
      and
      consultants who provide services to the Company may be granted options to
      acquire common shares of the Company at not less than 110 percent of the fair
      market value of the stock on the date of grant. Options will have a term of
      10
      years. The total number of shares reserved for issuance under the 2006 Stock
      Option Plan is 5,000,000.





The
      Company has adopted SFAS123 (Revised) commencing as of July 1, 2006. The fair
      value of each grant was estimated at the grant date using the Black-Scholes
      option-pricing model. The Black-Scholes option pricing model requires the use
      of
      certain assumptions, including expected terms, expected volatility, expected
      dividends and risk-free interest rate to calculate the fair value of stock-based
      payment awards. The assumptions used in calculating the fair value of stock
      option awards involve inherent uncertainties and the application of management
      judgment. In the absence of data for historic volatility, the estimated
      volatility was determined by comparing the volatility of similar Companies
      within the industry sector.





The
      expected term calculation is based upon the expected term the option is to
      be
      held, which is the full term of the option. The risk-free interest rate is
      based
      upon the U.S. Treasury yield in effect at the time of grant for an instrument
      with a maturity that is commensurate with the expected term of the stock
      options. The dividend yield of zero is based on the fact that we have never
      paid
      cash dividends on our common stock and we have no present intention to pay
      cash
      dividends. The expected forfeiture rate of 0% is based on the vesting of stock
      options in a short period of time.


63


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**8.**  **Stock
      Based Compensation-Cont’d**





During
      the year ended June 30, 2007 the Company granted the following stock
      options :





On
      April
      10, 2007 the Board granted stock options to seven (7) Officers, Directors and
      Consultants to purchase 250,000 common shares each at an exercise price of
      $0.50
      per share or the closing price on the first day the Company’s shares trade on
      the OTC BB, which ever is the highest. These options are each granted in
      accordance with the terms of the Company’s 2006 Stock Option Plan and shall vest
      at the rate of 1/12 each month until fully vested. Should any of the above
      parties leave their position or be discharged from the Company, no further
      vesting will take place as of the date they leave or are discharged. The option
      granted shall be for a term of 5 years.





The
      Board
      also granted options to two consultants to purchase 50,000 common shares each
      at
      a price of $0.50 per share or the closing price on the first day the Company’s
      shares trade on the OTC BB which ever is the higher price. These options are
      granted in accordance with the terms of the Company’s 2006 Stock Option Plan and
      shall vest at the rate of 1/12 each month until fully vested. Should any of
      the
      above parties leave their position or be discharged from providing services
      to
      the Company, no further vesting will take place as of the date they leave or
      are
      discharged. The option granted shall be for a term of 5 years.





On
      April
      17, 2007 the Board granted options to one consultant to purchase 50,000 common
      shares at a price of $0.50 per share or the closing price on the first day
      the
      Company’s shares trade on the OTC BB which ever is the higher price. These
      options are granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and shall vest at the rate of 1/12 each month until fully vested.
      Should any of the above parties leave their position or be discharged from
      providing services to the Company, no further vesting will take place as of
      the
      date they leave or are discharged. The option granted shall be for a term of
      5
      years.





On
      May
      17, 2007 the Board granted options to one consultant to purchase 10,000 common
      shares at a price of $0.50 per share or the closing price on the first day
      the
      Company’s shares trade on the OTC BB which ever is the higher price. These
      options are granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and shall vest at the rate of 1/12 each month until fully vested.
      Should any of the above parties leave their position or be discharged from
      providing services to the Company, no further vesting will take place as of
      the
      date they leave or are discharged. The option granted shall be for a term of
      5
      years.





During
      the year ended June 30, 2008 the Company granted the following stock
      options :





On
      January 24, 2008, the Board granted options to one consultant to purchase 50,000
      common shares at a price of $0.60 per share. These options were granted in
      accordance with the terms of the Company’s 2006 Stock Option Plan and vest at
      the rate of 1/12 each month until fully vested. The options granted are for
      a
      term of 5 years.


64


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**8.**  **Stock
      Based Compensation-Cont’d**





On
      April
      2, 2008 the Board granted options to two newly appointed officers to purchase
      200,000 common shares each at an exercise price of $0.35 per share. These
      options were granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and vest at the rate of 1/12 each month until fully vested. The
      options granted are for a term of 5 years.





On
      June
      23, 2008 the Board granted options to the newly appointed President to purchase
      250,000 common shares at an exercise price of $0.52 per share. These options
      were granted in accordance with the terms of the Company’s 2006 Stock Option
      Plan and vest at the rate of 1/12 each month until fully vested. The options
      granted are for a term of 5 years.





For
      this
      year ended June 30, 2008, the Company has recognized in the financial
      statements, stock-based compensation costs as per the following details. The
      fair value of each option used for the purpose of estimating the stock
      compensation is based on the grant date using the Black-Scholes option pricing
      model with the following weighted average assumptions:





10-April
            
            17-April
            
            17-May
            
            24-Jan
            
            2-Apr
            
            23-Jun2007
            
            2007
            
            2007
            
            2008
            
            2008
            
            2008
            
            TotalRisk
                free rate
            
            
            4.5
            %
            
            4.5
            %
            
            4.5
            %
            
            5.0
            %
            
            5.0
            %
            
            5.0
            %Volatility
                factor
            
            
            50
            %
            
            50
            %
            
            50
            %
            
            50
            %
            
            90.86
            %
            
            111.64
            %Expected
                dividends
            
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            -Forfeiture
                rate
            
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %
            
            -Expected
                life
            
            
            5
                years
            
            
            5
                years
            
            
            5
                years
            
            
            5
                years
            
            
            5
                years
            
            
            5
                years
            
            
            -Exercise
                price
            
            $
            0.50
            
            $
            0.50
            
            $
            0.50
            
            $
            0.60
            
            $
            0.35
            
            $
            0.52
            
            
            -Total
                number of options granted
            
            
            1,850,000
            
            
            50,000
            
            
            10,000
            
            
            50,000
            
            
            400,000
            
            
            250,000
            
            
            2,610,000Grant
                date fair value
            
            $
            0.07
            
            $
            0.07
            
            $
            0.07
            
            $
            0.29
            
            
            0.25
            
            
            0.42
            
            
            -Total
                number of options forfeited
            
            
            
            
            
            
            
            
            (10,000
            )
            
            
            
            
            
            
            
            
            
            
            (10,000
            )Stock-based
                compensation cost expensed during the year ended June 30,
                2008
            
            $
            102,447
            
            $
            2,837
            
            
            -
            
            $
            6,339
            
            $
            25,338
            
            $
            2,311
            
            $
            139,272Unexpended
                Stock -based compensation cost deferred over the vesting
                period
            
            
            -
            
            
            -
            
            
            -
            
            $
            8,255
            
            $
            76,011
            
            $
            103,131
            
            $
            187,397





As
      of
      June 30, 2008 there was $187,397 of unrecognized expenses related to non-vested
      stock-based compensation arrangements granted. The stock-based compensation
      expense for the years ended June 30, 2008 and June 30, 2007 was $139,272 and
      $30,026 respectively.


65


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**8.**
            **Stock
                Based Compensation-Cont’d**





The
      following table summarizes the options outstanding as at June 30:





Option Price
            
            Weighted
              average
              remaining
              contractual
              life
            
            Weighted
              average
              remaining
              contractual
              life
            
            Number of sharesExpiry Date
            
            Per Share
            
            2008
            
            2007
            
            2008
            
            2007April
                9, 2012
            
            
            0.50
            
            
            3.75
            
            
            4.75
            
            
            1,850,000
            
            
            1,850,000April
                16, 2012
            
            
            0.50
            
            
            3.75
            
            
            4.75
            
            
            50,000
            
            
            50,000May
                16, 2012
            
            
            0.50
            
            
            
            
            
            4.83
            
            
            -
            
            
            10,000Jan
                23, 2013
            
            
            0.60
            
            
            4.58
            
            
            
            
            
            50,000
            
            
            -April
                1, 2013
            
            
            0.35
            
            
            4.75
            
            
            
            
            
            400,000
            
            
            -June
                22, 2013
            
            
            0.52
            
            
            4.95
            
            
            
            
            
            250,000
            
            
            -Options
                outstanding at end of year
            
            
            
            
            
            
            
            
            
            
            
            2,600,000
            
            
            1,910,000Weighted
                average exercise price at end of year
            
            
            
            
            
            
            
            
            
            
            
            0.49
            
            
            0.50Weighted
                average remaining contractual life
            
            
            
            
            
            4.03
            
            
            4.75




Number
                of Shares2008
            
            2007Outstanding,
                beginning of year
            
            
            1,910,000
            
            
            -Granted
            
            
            700,000
            
            
            1,910,000Expired
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Forfeited
            
            
            (10,000
            )
            
            -Cancelled
            
            
            -
            
            
            -Outstanding,
                end of year
            
            
            2,600,000
            
            
            1,910,000Exerciseable,
                end of year
            
            
            2,045,833
            
            
            317,450




**9.**
            **Deferred
                stock compensation**





The
      Company issued 1,500,000 restricted common shares each to two consultants,
      for a
      total of 3,000,000 common shares valued at $2,250,000. The Company expensed
      proportionate consulting expenses of $937,500 and the balance of $1,312,500
      is
      reflected as a deferred stock compensation expense under shareholders’ equity in
      the balance sheet.


66


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**10.**
            **Commitments
                and Contingencies**





On
      August
      21, 2006, the Company entered into an Option Agreement to acquire mineral claims
      in the state of Nevada. The Option Agreement was amended on the following dates
      March 30, 2007 and August 20, 2007 and now provides as follows. The Company
      paid
      $20,000 on signing and agreed, among other things, to complete a $500,000
      exploration program to earn a 40% interest in the mineral claims. If the Company
      elects to proceed, to earn 100%, it must spend an additional $500,000 on further
      exploration on the claims. The property is subject to a 2.1% Net Smelter Return
      royalty payment with advance royalty payments of $10,000 per annum up to a
      maximum of $100,000 or until feasibility study is completed recommending the
      property be put into production, which ever occurs first. The first annual
      royalty payment was made on August 15, 2007. On August 20, 2008 the Company
      terminated the Option Agreement entered into on August 21, 2006 and entered
      into
      a new agreement with the Optionee covering 87 mineral claims in which the
      Company paid for the annual sustaining fees on the original 12 claims optioned
      in the August 21, 2006 agreement and granted the Optionee a 1% NSR royalty
      on
      the 87 claims covered by the new agreement.





Effective
      as of September 1, 2007, the Company entered into an agreement with Brehnam
      Trading Corp. (“Brehnam”) for a term of 24 months to provide consulting services
      on financial matters, business growth and development, and general business
      matters. The Company will pay Brehnam 1,500,000 restricted Shares to be earned
      in equal installments of 375,000 shares on December 1, 2007, June 1, 2008,
      December 1, 2008 and June 1, 2009. The said 1,500,000 Shares were tendered
      in
      one certificate upon execution of the agreement and are deemed to be in
      Brenham’s possession. The consultant must return any unearned Shares if the
      agreement is terminated early.





Effective
      as of September 1, 2007, the Company entered into an agreement with Costa View
      Inc. (“Costa”) for a term of 24 months to provide consulting services on
      financial public relations, business promotion, business growth and development,
      including mergers and acquisitions, and general business matters. The Company
      will pay Costa 1,500,000 restricted Shares to be earned in equal installments
      of
      375,000 shares on December 1, 2007, June 1, 2008, December 1, 2008 and June
      1,
      2009. The said 1,500,000 Shares were tendered in one certificate upon execution
      of the agreement and are deemed to be in Costa View’s possession. The consultant
      must return any unearned Shares if the agreement is terminated
      early.





On
      September 14, 2007 the Company accepted a proposal from Lumos & Associates
      to complete the regulatory permitting process for the Company’s Mill in Mina,
      Nevada. The total consideration to be paid under the contract is approximately
      $350,000. The permitting process will be carried out in twelve stages over
      the
      next three years. The Company is required to authorize in writing each stage
      of
      the work before the work proceeds.





On
      January 14, 2008, the Company entered into a Letter Agreement with Frank and
      Kelly Jo Eagan (the “Eagans”) of Goldfield, Nevada, to purchase two (2)
      unpatented mining claims in the Red Mountain Mining District, situated in
      Esmeralda County, Nevada for a purchase price of $23,000. The Eagans retained
      access to the property for two years, to enable them to remove any personal
      property. These two claims are known as “Tattoo Me” and “Tattoo U” and are
      located inside the boundary of the Silver Queen claim group. These claims
      include the former producing Mohawk Mine. As of the date of this Report, the
      Company does not consider these claims material.


67


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**10.**
            **Commitments
                and Contingencies-Cont’d**





On
      February 21, 2008, the Company entered into a Drilling Agreement with Hansen
      Drilling, Inc. to perform drilling on the Pansy Lee Claims site at agreed rates
      for work to be performed.





On
      March
      12, 2008 the Company entered into an agreement effective as of March 3, 2008,
      with Endeavor Holdings, Inc. (“Endeavor”) pursuant to which Endeavor was
      retained to provide general marketing and business consulting services to the
      Company for a period of 12 months. Under
      the
      terms of the agreement, the Company is required to issue to Endeavor 25,000
      shares of restricted common stock and $5,000 each month during the term of
      the
      agreement. The Company issued 100,000 restricted common shares valued at $58,000
      till June 30, 2008.


Either
      party may terminate the Endeavor Consulting Agreement upon 30-days’ prior
      written notice.





On
      April
      4, 2008, the Company entered into a Consultant Agreement with Lumos and
      Associates, to facilitate completing an exploration drilling “Notice of Intent”
and plan of operation in compliance with the requirements of the United States
      Bureau of Land Management. The Company estimates the costs of each Notice of
      Intent plan to range from $3,000 to $4,000.





On
      April
      8, 2008, the Company entered into a Drilling Agreement with W. R. Hansen,
      Contractor, to perform drilling on various locations in Nevada at a rate of
      $300
      per hour for work to be performed beginning in May of 2008.




Effective
      April 30, 2008, the Consulting Agreement between the Company and Medallion
      Capital Corp., was terminated.




The
      Company entered into a one year renewable contract with Lance Capital Ltd.
      for
      consulting and corporate administrative services commencing as of May 1, 2008,
      at a rate of $12,500 per month.


68


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**10.**
            **Commitments
                and Contingencies-Cont’d**





On
      May
      20, 2008, the Company entered into an option agreement with Nevada Eagle
      Resources, LLC and Steve Sutherland (together, the “Optionees”) effective as of
      May 1, 2008 (the “Date of Closing”), to acquire 25 mineral claims located in
      Elko County, Nevada and known as the “Medicine Claims.” During the term of the
      Option Agreement, the Company has the exclusive right to explore and develop,
      if
      warranted, the Medicine Claims.





The
      Company paid $10,000 to the Optionees upon execution of the Option Agreement.
      The Option Agreement requires the Company to make additional payments as
      follows: $15,000 on the first anniversary of the Date of Closing, $30,000 on
      the
      second anniversary of the Date of Closing, $60,000 on the third anniversary
      of
      the Date of Closing and $80,000 on each anniversary of the Date of Closing
      thereafter until the tenth anniversary of the Date of Closing. The Optionees
      may
      elect to receive payment in cash or in shares of the Company’s common stock.
      Upon making the final payment on the tenth anniversary of the Date of Closing,
      the Company will have earned a 100% undivided interest in the Medicine Claims.





Pursuant
      to the Option Agreement, the Medicine Claims are subject to a 3% net smelter
      return (“NSR”) royalty payable to the Optionees. The payments made during the
      term of the Option Agreement are to be applied as advance NSR royalty payments.
      Beginning on the eleventh anniversary of the Date of Closing, the Company is
      required to make annual advance royalty payments of $80,000. At such time as
      the
      Medicine Claims are in production, if ever, the Company shall make annual
      royalty payments equal to the greater of the actual 3% NSR or $80,000.





The
      Company may terminate the Option Agreement at any time before the option is
      fully exercised upon 60 days notice to the Optionees.





The
      Company does not consider the Medicine Claims to be material assets at this
      time; however this assessment may change upon further exploration.





Effective
      June 1, 2008, the Company entered into a consulting contract with a geologist
      expiring December 31, 2008. The contract will be automatically renewed after
      December 31, 2008, subject to any mutually agreed changes in the hourly fees
      for
      services, unless terminated by either party. The Company will compensate at
      the
      rate of $200 per day for the first 30 days, $225 per day during days 30 to
      90
      days and $275 per day during days 90 to December 31, 2008.





Effective
      as of June 23, 2008, the Company appointed Mason Douglas as the President of
      the
      Company. Mr. Douglas is also a director of the Company. In connection with
      the
      appointment, the Company entered into a consulting services agreement with
      a
      corporation that is controlled by Mr. Douglas. The Consulting Agreement has
      a
      term of one year and is then automatically renewable. Either party may terminate
      the Consulting Agreement upon 90 days notice to the other party. During the
      term
      of the Consulting Agreement the Company will pay the corporation a fee of $8,500
      per month. The Company’s board of directors will review the performance of Mr.
      Douglas at six-month intervals and may adjust compensation based upon said
      reviews.


69


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**10.**  **Commitments
      and Contingencies-Cont’d**





The
      Company executed a contract (the “Drilling Contract”) with Christiansen
      Drilling, Inc. (“Christiansen”) a Nevada corporation, on June 27, 2008
      (effective as of June 24, 2008), pursuant to which Christiansen was retained
      by
      the Company to conduct drilling projects on the Company’s mineral claims. The
      services Christiansen will provide under the Drilling Contract include: reverse
      circulation drilling with a three man crew at a rate of $500.00 per hour,
      equipment mobilization and demobilization at a rate of $150.00 per hour, grading
      and site preparation at a rate of $150.00 per hour, the procurement of drilling
      materials at cost plus 10%, and hole plugging(s), if needed, at a rate of
      $350.00 per hour plus material cost. Upon execution of the Drilling Contract
      the
      Company advanced $50,000 to be credited against future invoices submitted for
      various drill programs.





**11.
      Changes in officers and directors**





The
      Board
      of Directors of the Company accepted the resignation of Stafford Kelley as
      Corporate Secretary of the Company, effective as of April 2, 2008. There were
      no
      disagreements between Mr. Kelley and the Company with regards to the Company’s
      operations, policies or practices.





On
      April
      2, 2008, the Company appointed Joanne Hughes to the position of Corporate
      Secretary and Janet Shuttleworth to the position of Treasurer of the
      Company.





Effective
      as of June 23, 2008, the Company appointed Mason Douglas as the President of
      the
      Company. Mr. Douglas is also a director of the Company. Effective as of June
      23,
      2008, Todd Montgomery tendered his resignation as President of the Company.
      He
      will remain as the Company’s chief executive officer. There were no
      disagreements between the Company and Mr. Montgomery with regards to the
      Company’s operations, policies or practices.


70


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





**12.**
            **Income
                Taxes**




The
      Company's current and deferred income taxes are as follows:




**2008**
            
            2007Loss
                before income taxes
            
            **$**
            **(3,791,042**
            **)**
            $
            (2,845,424
            )Expected
                income tax recovery at the statutory rates of 35% (2007 -
                35%)
            
            **$**
            **(1,326,865**
            **)**
            $
            (995,894
            )Increase
                in income taxes resulting from:Permanent
                differences
            
            
            **114,389**
            
            
            182,454Valuation
                allowance
            
            
            **1,212,476**
            
            
            813,440Provision
                for income taxes
            
            **$**
            **-**
            
            $
            -




The
      Company has deferred income tax assets as follows:





**2008**
            
            2007Net
                operating loss carry forward
            
            **$**
            **5,852,356**
            
            $
            2,388,141Deferred
                Income tax on loss carry forward
            
            **$**
            **2,048,325**
            
            
            835,849Valuation
                allowance for deferred income tax assets
            
            **$**
            **(2,048,325**
            **)**
            
            (835,849
            )Deferred
                income taxes
            
            **$**
            **-**
            
            $
            -




As
      of
      June 30, 2008 the Company has non-capital losses of approximately $5,852,356
      available to offset future taxable incomes which expire as follows:




2026
            
            $
            64,0242027
            
            $
            2,324,1172028
            
            $
            3,464,215




**13.**
            **Related
                Party Transactions**




**2007-2008**




The
      Company had entered into a one year renewable contract with Medallion Capital
      Corp. for consulting and corporate administrative services commencing as of
      May
      1, 2006, at a rate of $7,500 per month, which increased to $12,500 commencing
      February 2008. Medallion Capital Corp. was owned and controlled by the Company’s
      Corporate Secretary who later resigned effective March 20, 2008. During the
      year
      ended June 30, 2008, the Company paid $97,500 to Medallion Capital Corp. The
      Contract was mutually terminated effective April 30, 2008


71


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)




**13.
      Related Party Transactions-Cont’d**




The
      Company entered into an asset purchase agreement with Roger Hall, a director
      and
      officer of the Company, effective as of February 15, 2008, to acquire a 100%
      interest in certain mineral claims located in Nye County, Nevada that are owned
      by Mr. Hall. Upon closing of the Agreement, the Company issued to Mr. Hall
      175,000 shares of the Company’s common stock, valued at $105,000 and paid him
      $5,000 as consideration for the mineral claims. Roger Hall received a total
      of
      $157,729 for the period July 1, 2007 to June30, 2008 in connection with his
      services as senior geologist.




Janet
      Shuttleworth, Treasurer, received $14,836 from April 2, 2008 (date of
      appointment) to June 30, 2008.




Joanne
      Hughes, Corporate Secretary, received $12,360 from April 2, 2008 (date of
      appointment) to June 30, 2008.




Mason
      Douglas, President, received $2,236 from June 23, 2008 to June 30,
      2008.





On
      April
      2, 2008 the Board granted options to two newly appointed officers to purchase
      200,000 common shares each at an exercise price of $0.35 per share. These
      options were granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and vest at the rate of 1/12 each month until fully vested. The
      options granted are for a term of 5 years. The Company expensed stock based
      compensation cost for $25,338 during the year ended June 30, 2008.




On
      June
      23, 2008 the Board granted options to the newly appointed President to purchase
      250,000 common shares at an exercise price of $0.52 per share. These options
      were granted in accordance with the terms of the Company’s 2006 Stock Option
      Plan and vest at the rate of 1/12 each month until fully vested. The options
      granted are for a term of 5 years. The Company expensed stock based compensation
      cost for $2,311 during the year ended June 30, 2008.





On
      April
      10, 2007 the Board had granted stock options to Officers and Directors to
      purchase 250,000 common shares each at an exercise price of $0.50 per share
      or
      the closing price on the first day the Company’s shares trade on the OTC BB,
      which ever is the highest. (Refer to related party note for 2006-2007). The
      Company expensed stock based compensation cost of $96,909 during the year ended
      June 30, 2008.




**2006-2007**





On
      April
      10, 2007 the Board granted stock options to six (6) Officers and Directors
      to
      purchase 250,000 common shares each at an exercise price of $0.50 per share
      or
      the closing price on the first day the Company’s shares trade on the OTC BB,
      which ever is the highest. These options are granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest at the rate of 1/12
      each month until fully vested. Should any of the above parties leave their
      position or be discharged from the Company, no further vesting will take place
      as of the date they leave or are discharged. The option granted shall be for
      a
      term of 5 years. For these six officers and directors, the Company expensed
      stock based compensation cost of $23,690 during the year ended June 30,
      2007.





72




**14.
      Accrued Liabilities**





Accrued
      liabilities are comprised of the following:





2008
            
            2007Exploration
                expenses
            
            
            49,826Insurance
            
            
            20,945Audit
                and accounting
            
            
            23,000
            
            
            25,000Clean
                -up
            
            
            0
            
            
            75,000Reclamation
                Bonding
            
            
            55,704Others
            
            
            30,530
            
            
            12,007Total
            
            
            192,886
            
            
            112,007





**15.
      Geographic location of assets**





Except
      for Cash and Cash equivalent for $1,427,191 and Plant and equipment for $18,833
      located in Canada, all assets in the financial statements are located in the
      United States of America.





**16.
      Subsequent Events**





On
      July
      30, 2008 Joanne Hughes resigned her position as Corporate Secretary of the
      Company.





Effective
      August 11, 2008, the Company entered into a Letter of Intent to acquire all
      of
      the capital stock of Infrastructure Materials Corp.US (“Infrastructure US”), a
      Nevada corporation. Infrastructure US holds all the capital stock of
      Infrastructure Materials Corp. Canada, an Alberta corporation. The purchase
      price for all of the capital stock of Infrastructure US would be the issuance
      at
      closing of 1,500,000 common shares of Silver Reserve.





On
      August
      20, 2008 the Company terminated the Option Agreement entered into on August
      21,
      2006 and entered into a new agreement with the Optionee covering 87 mineral
      claims in which the Company paid for the annual sustaining fees on the original
      12 claims optioned in the August 21, 2006 agreement and granted the Optionee
      a
      1% NSR royalty on the 87 claims covered by the new agreement.





Net
      Smelter Returns are calculated according to gross revenue beginning after
      commercial production commences. For purposes of determining gross revenue,
      the
      following items are included: revenue received by Silver Reserve from arm’s
      length purchasers of all mineral products produced from the property, the fair
      market value of all products sold by Silver Reserve in such period to persons
      not dealing with Silver Reserve at arms length, and Silver Reserve’s share of
      the proceeds of insurance on products minus “permissible deductions.”
Permissible deductions include: sales charges levied by any sales agent on
      the
      sale of products, transportation costs for products, all costs, expenses and
      charges of any nature whatsoever which are either paid or incurred by Silver
      Reserve in connection with the refinement and beneficiation of products after
      leaving the property; and all insurance costs and taxes.





On
      August
      7, 2008, the Company appointed Janet Shuttleworth as Corporate Secretary of
      the
      Company.





On
      August
      7, 2008 the Board granted stock options to Kim Fraser to purchase 50,000 common
      shares each at an exercise price of $0.46 per share and for a term of 5 years.
      These options are granted in accordance with the terms of the Company’s 2006
      Stock Option Plan and shall vest at the rate of 1/12 each month until fully
      vested. On September 12, 2008 the Company cancelled the unvested
      options.


73


**SILVER
      RESERVE CORP.**


**(AN
      EXPLORATION STAGE MINING COMPANY)**


Notes
      to
      the financial statements


June
      30,
      2008 and 2007


(Amounts
      expressed in US Dollars)





As
      of
      August 22, 2008, the Company completed private placements of Units at $0.50
      per
      Unit from accredited investors for 7,040,000 Units. Each Unit consists of One
      Common Share and one half a common share purchase warrant. Each full warrant
      entitles the holder to purchase one common share at $0.75 on or before September
      1, 2010. The private placement was conducted entirely outside the United States
      pursuant to an exemption from registration under the Securities Act of 1933,
      as
      amended, provided by Regulation S. All of the investors were non-U.S. Persons.
      The Company paid a commission of $147,000 and issued 294,000 broker warrants
      to
      purchase Units at $0.50 per Unit in connection with the private placement.
      The
      Units have the same terms as those sold to investors.





Subsequent
      to the Company’s year ended June 30, 2008 the Company issued 25,000 common
      shares to Endeavor Holdings on each of July 1, August 1 and September 1 of
      2008
      in accordance with the terms of the contract that became effective March
      3 rd ,
      2008


74