U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549


Form
10-K


Mark
One





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


For the
fiscal year ended October 31, 2009





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





For the
transition period from ______ to _______


Commission
File No. 000-52495





PACIFIC COPPER CORP.
                    (Name
      of small business issuer in its charter)Delaware
                    (State
      or other jurisdiction of incorporation
                    or
      organization)
                  98-0504006
                    (I.R.S.
      Employer Identification No.)3040 N. Campbell Avenue, Suite
      110
                    Tucson, Arizona 85719
                    (Address
      of principal executive offices)(520) 989-0221
                    (Issuer’s
      telephone number)Securities
      registered pursuant to Section
                    12(b)
      of the Act:
                  Name
      of each exchange on which
                    registered:NoneSecurities
      registered pursuant to Section 12(g) of the Act:Common Stock, $0.0001(Title
      of Class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. o




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. o




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




Yes x              No
o




Indicate
by check mark whether the registrant has submitted elecontrically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).




Yes o               
No x




Indicate
by check mark if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.   x




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




Large
      accelerated filer  o
            Accelerated
      filer  oNon-accelerated
      filer  o
            Smaller
      reporting company  x




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




Yes o  No x




State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. January 25, 2010: $3,204,219 based upon
a share valuation of $0.09 per share.




ISSUERS
INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS




N/A




Check
whether the issuer has filed all documents and reports required to be filed by
Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the
distribution of securities under a plan confirmed by a
court.  Yeso  Noo




APPLICABLE
ONLY TO CORPORATE REGISTRANTS




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date.




Class
                Outstanding
      as of  January 26, 2010Common
      Stock, $0.0001
                49,561,600




DOCUMENTS
INCORPORATED BY REFERENCE




If the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
document is incorporated: (i) any annual report to security holders; (ii) any
proxy or information statement; and (iii) any prospectus filed pursuant to Rule
424(b) or (c) of the Securities Act of 1933 (the “Securities Act”). The listed
documents should be clearly described for identification purposes (e.g. annual
reports to security holders for fiscal year ended December 24,
1990).




N/A







TABLE
OF CONTENTS




PageItem 1.
                                                                  Description
      of Business and Risk Factors
                                                                  1Item 2.
                                                                  Properties
                                                                  4Item 3.
                                                                  Legal
      Proceedings
                                                                  15Item 4.
                                                                  Submission
      of Matters to a Vote of Securities Holders
                                                                  15Part
      IIItem 5.
                                                                  Market
      For Common Equity, Related Stockholder Matters and Small Business Issuer
      Purchase of Equity Securities
                                                                  16Item 6.
                                                                  Selected
      Financial Data
                                                                  21Item 7.
                                                                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                                  22Item 7A.
                                                                  Quantitative
      and Qualitative Disclosures About Market Risk
                                                                  27Item 8.
                                                                  Financial
      Statements and Supplementary Data
                                                                  27Item 9.
                                                                  Change
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
                                                                  27Item 9A.
                                                                  Controls
      and Procedures
                                                                  27Item 9A(T)
                                                                  Controls
      and Procedures
                                                                  27Item 9B.
                                                                  Other
      Information
                                                                  28Part
      IIIItem 10.
                                                                  Directors,
      Executive Officers and Corporate Governance
                                                                  29Item 11.
                                                                  Executive
      Compensation
                                                                  32Item 12.
                                                                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                                                  35Item 13.
                                                                  Certain
      Relationships and Related Transactions
                                                                  37Item 14.
                                                                  Principal
      Accountant Fees and Services
                                                                  39PART
      IVItem
      15.
                                                                  Exhibits,
      Financial Statement Schedules
                                                                  40
  ii
  PART
I





This
Annual Report on Form 10-K 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,
mineralization estimates, drilling results 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 Part I., Item 1, “Description of Business,” 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 and Risk Factors.




Our name
is  Pacific Copper
Corp. and we sometimes refer to ourselves in this Annual Report as “Pacific
Copper”, 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 mineral claims located in Chile and Peru, as more fully
described herein.  Our head office is at 3040 N. Campbell Ave., Suite
110, Tucson , AZ, 85719. Our telephone number is (520) 989-0021; FAX (520)
623-3326




RISK
FACTORS


RISKS
RELATED TO OUR BUSINESS





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 significant additional working
capital to carry out its 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 properties and the
results of that exploration;





§
     raising the capital necessary to conduct this
exploration; and





§
     raising capital to fund our exploration and
develop our properties.





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
properties.  Failure to raise the necessary capital to continue
exploration could cause the Company to go out of business.





2.WE WILL
NEED TO RAISE ADDITIONAL FINANCING TO COMPLETE FURTHER EXPLORATION





We
will require significant additional financing in order to continue our
exploration activities and our assessment of the commercial viability of our
properties in South America. Furthermore, if the costs of our planned
exploration programs are greater than anticipated, we may have to seek
additional funds through public or private share offerings or arrangements with
corporate partners. There can be no assurance that we will be successful in our
efforts to raise these require funds, or on terms satisfactory to us. The
continued exploration of current and future mineral properties and the
development of our business will depend upon our ability to establish the
commercial viability of our properties and to ultimately develop cash flow from
operations and reach profitable operations. We currently are in the exploration
stage and we have no revenue from operations and we are experiencing significant
negative cash flow. Accordingly, the only other sources of funds presently
available to us are through the sale of equity. Alternatively, we may finance
our business by offering an interest in any of our mineral properties to be
earned by another party or parties carrying out further exploration and
development thereof or to obtain project or operating financing from financial
institutions, neither of which is presently intended. If we are unable to obtain
this additional financing, we will not be able to continue our exploration
activities and our assessment of the commercial viability of our precious metal
and mineral properties. Further, if we are able to establish that development of
our precious metal and mineral properties is commercially viable, our inability
to raise additional financing at this stage would result in our inability to
place our mineral properties into production and recover our investment. We may
not discover commercially exploitable quantities of precious metals or minerals
on our properties that would enable us to enter into commercial production, and
achieve revenues and recover the money we spend on exploration.




Our
properties do not contain reserves in accordance with the definitions adopted by
the Securities and Exchange Commission, and there is no assurance that any
exploration programs that we out will establish reserves. All of our mineral
properties are in the exploration stage as opposed to the development stage and
have no known body of economic mineralization. The known mineralization at these
projects has not yet been determined, and may never be determined to be
economic. We plan to conduct further exploration activities on our properties,
which future exploration may include the completion of feasibility studies
necessary to evaluate whether a commercial mineable mineral exists on any of our
properties. There is a substantial risk that these exploration activities will
not result in discoveries of commercially recoverable quantities of minerals.
Any determination that our properties contain commercially recoverable
quantities of minerals may not be reached until such time that final
comprehensive feasibility studies have been concluded that establish that a
potential mine is likely to be economic. There is a substantial risk that any
preliminary or final feasibility studies carried out by us will not result in a
positive determination that our mineral properties can be commercially
developed.




3..
            SUBSTANTIAL PORTIONS OF OUR SOUTH
      AMERICAN COPPER OXIDE EXPLORATION PROPERTY ASSETS HAVE BEEN PLEDGED TO
      SECURE A SHORT-TERM NOTE AND COULD BE LOST IF WE CANNOT REPAY THE
      NOTE





On
February 17, 2009, Pacific Copper issued a promissory note (the “War Eagle
Note”) to War Eagle Mining Company, Inc. a Canadian corporation (“War
Eagle”).  The War Eagle Note has a face amount of
$155,000.  All amounts advanced under the War Eagle Note are due and
payable on June 30, 2009 with interest at 15% per annum.  By its
terms, the War Eagle Note was to be secured by a blanket security interest in
all real, personal, and intangible interests of the Company associated with each
of the La Guanaca, El Corral, La Mofralla and Venado projects (the Company’s
South American oxide copper properties, as described herein).  The
Company has declared a breach by War Eagle under the War Eagle Note for failure
by War Eagle to fully fund advances under the War Eagle Note, and has denied the
security interest.  While the Company believes it has a strong legal
position with respect to the dispute with War Eagle, it is possible that since
the Company has not  repaid the War Eagle Note on June 30, 2009 (the
maturity date), it could lose its interest in the properties securing the War
Eagle Note. (See Note 14 to the financial statements)





1




4..
              BECAUSE
      OF THE UNIQUE DIFFICULTIES AND UNCERTAINTIES INHERENT IN MINERAL
      EXPLORATION VENTURES AND CURRENT DETERIORATION IN EQUITY MARKETS, WE FACE
      A HIGH RISK OF BUSINESS
FAILURE.





Investors
should be aware of the difficulties normally encountered by new mineral
exploration companies and the high rate of failure of such enterprises. Our
prospects are further complicated by a pronounced deterioration in equity
markets and constriction in equity capital available to finance and maintain our
exploration activities. Our likelihood of success must be considered in light of
the problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake and the difficult economy and market volatility that we are
experiencing. Moreover, most exploration projects do not result in the discovery
of commercially mineable deposits.





5.
            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.





None of
the Company’s officers or directors works for the Company on a full-time
basis.  The Company’s President and Chief Executive Officer, Andrew
Brodkey, is also the president of two  other exploration stage mining
companies and, by the terms of his employment agreement with the Company, is
permitted to participate in other mining related businesses.  Some of
our 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.





6.
            THE
      COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING
  DELAYS.





The
Company could face further delays in obtaining title to properties under
contract with its subsidiary in Peru, as well as delays in obtaining permits to
explore on the properties covered by our claims or permits to develop the
projects.  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 properties.





7.
            RISKS
      ASSOCIATED WITH PROPERTIES IN SOUTH
AMERICA





The
Company is currently pursuing investments and exploration projects in Chile and
Peru. These investments and projects, as well as any other investments or
projects made or undertaken in the future in other developing nations, are
subject to the risks normally associated with conducting business in such
countries, including labor disputes and uncertain political and economic
environments, as well as risks of disturbances or other risks which may limit or
disrupt the projects, restrict the movement of funds or result in the
deprivation of contract rights or the taking of property by nationalization or
expropriation without fair compensation laws or policies, foreign taxation,
limitations on ownership and on repatriation of earnings, and foreign exchange
controls and currency fluctuations.  Foreign investments may also be
adversely affected by changes in United States laws and regulations relating to
foreign trade, investment and taxation.  If the Company’s operations
in a particular foreign country were halted, delayed or interfered with, the
Company’s business could be adversely affected.




8.OUR EXPLORATION ACTIVITIES ON
OUR MINERAL PROPERTIES MAY NOT BE COMMERCIALLY SUCCESSFUL, WHICH COULD LEAD US
TO ABANDON OUR PLANS TO DEVELOP THE PROPERTY ANDOUR INVESTMENTS IN
EXPLORATION


Our
long-term success depends on our ability to establish commercially recoverable
quantities of ore on our mineral properties that can then be developed into
commercially viable mining operations. Mineral exploration is highly speculative
in nature, involves many risks and is frequently non-productive. These risks
include unusual or unexpected geologic formations, and the inability to obtain
suitable or adequate machinery, equipment or labor. The success of mineral
exploration is determined in part by the following
factors:


·
              identification
      of potential mineralization based on superficial
  analysis;


·
            availability
      of government-granted exploration
permits;




·
            the
      quality of management and geological and technical
      expertise; and




·
            the
      capital available for
exploration.


Substantial
expenditures are required to establish proven and probable reserves through
drilling and analysis, to develop processes to extract minerals, and to develop
the mining and processing facilities and infrastructure at any chosen site.
Whether a mineral deposit will be commercially viable depends on a number of
factors, which include, without limitation, the particular attributes of the
deposit, such as size, grade and proximity to infrastructure; metal prices,
which fluctuate widely; and government regulations, including, without
limitation, regulations relating to prices, taxes, royalties, land tenure, land
use, importing and exporting of minerals and environmental protection. We may
invest significant capital and resources in exploration activities and abandon
such investments if it is unable to identify commercially exploitable mineral
reserves. The decision to abandon a project may reduce the trading price of our
common stock and impair our ability to raise future financing. We cannot provide
any assurance to investors that we will discover or acquire any mineralized
material in sufficient quantities on any of our properties to justify commercial
operations. Further, we will not be able to recover the funds that we spend on
exploration if we are not able to establish commercially recoverable quantities
of precious metals or minerals on our properties.





2




9. OUR
BUSINESS IS DIFFICULT TO EVALUATE BECAUSE WE HAVE LIMITED OPERATING HISTORY.




In
considering whether to invest in our common stock since there is only limited
historical financial and operating information available on which to base your
evaluation of our performance.  In addition, we have only recently
acquired or will acquire our primary minerals exploration prospects located in
South America with limited experience in early stage exploration
efforts.




10. WE
HAVE A HISTORY OF OPERATING LOSSES AND THERE CAN BE NO ASSURANCE WE WILL BE
PROFITABLE IN THE FUTURE.





We have a
history of operating losses, expect to continue to incur losses, and may never
be profitable, and we must be considered to be in the exploration stage.
Further, we have been dependent on sales of our equity securities and debt
financing to meet our cash requirements. We have incurred losses totaling
approximately $17,170,906 from inception to October 31, 2009. As of October 31,
2009, we had an accumulated deficit of $17,170,906 and incurred losses of
approximately $2,993,591 during fiscal year ended October 31, 2009. Further, we
do not expect positive cash flow from operations in the near term. There is no
assurance that actual cash requirements will not exceed our estimates. In
particular, additional capital may be required in the event that: (i) the costs
to acquire additional mineral exploration claims are more than we currently
anticipate or (ii) exploration and or future potential mining costs for
additional claims increase beyond our expectations;





11. COSTS
ASSOCIATED WITH ENVIRONMENT LIABILITIES AND COMPLIANCE MAY INCREASE WITH AN
INCREASE IN FUTURE SCALE AND SCOPE OF OPERATIONS





We
believe that our operations currently comply, in all material respects, with all
applicable environmental regulations. However, we are not fully insured at the
current date against possible environmental risks.




12. ANY
CHANGE IN GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE
IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY





The laws,
regulations, policies or current administrative practices of any government
body, organization or regulatory agency in South America or any other applicable
jurisdiction, may be changed, applied or interpreted in a manner which will
fundamentally alter our ability to carry on business. The actions, policies or
regulations, or changes thereto, of any government body or regulatory agency, or
other special interest groups, may have a detrimental effect on us. Any or all
of these situations may have a negative impact on our ability to operate and/or
our profitably.





13
            OUR PLANNED MINERAL EXPLORATION
      EFFORTS ARE HIGHLY SPECULATIVE; WE HAVE NOT YET ESTABLISHED ANY PROVEN OR
      PROBABLE RESERVES.





Mineral
exploration is highly speculative.  It involves many risks and is
often nonproductive.  Even if we believe we have found a valuable
mineral deposit, it may be several years before production is possible. During
that time, it may become no longer feasible to produce those minerals for
economic, regulatory, political, or other reasons.  Additionally, we
may be required to  make substantial capital expenditures and to
construct mining and processing facilities.  As a  result of
these costs and uncertainties, we may be unable to start, or if started, to
finish our exploration activities.  In addition, we have not to date
established any proven or probable reserves on our mining properties and there
can be no assurance that such reserves will ever be established.





14.
            MINING OPERATIONS  IN  GENERAL  INVOLVE  A
      HIGH DEGREE OF RISK, WHICH WE MAY BE UNABLE, OR MAY  NOT
      CHOOSE  TO INSURE AGAINST.
..





Our
operations are subject to all of the hazards and risks normally encountered in
the exploration, development and production of minerals. These include
unusual  and  unexpected  geological  formations,
rock falls, flooding and other conditions  involved in the drilling
and removal of material, any of which could
result  in  damage  to, or destruction of, mines
and other producing facilities, damage  to  life or
property, environmental damage and possible legal liability.  Although
we plan to take adequate precautions to minimize these risks, and risks
associated  with equipment failure or failure of retaining dams which
may result
in  environmental  pollution,  there  can  be  no  assurance  that
even with our precautions,  damage  or  loss will
not occur and that we will not be subject to liability  which will
have a material adverse effect on our business, results of operation and
financial condition.





15.
            BECAUSE OF THE INHERENT DANGERS
      INVOLVED IN MINERAL EXPLORATION, THERE IS A RISK THAT WE MAY INCUR
      LIABILITY OR DAMAGES AS WE CONDUCT OUR
  BUSINESS.





The
search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure against. At the present time, we may not have sufficient coverage to
insure against these hazards.  Incurring such liabilities could result
in our going out of business.




16.
            GOING
      CONCERN QUALIFICATION




The
Company has included a “going concern” qualification in the Consolidated
Financial Statements to the effect that we are an exploration stage company and
have no established sources of revenue. In the event that we are unable to raise
additional capital and/or locate mineral resources, and ultimately develop
proven and probable reserves, as to which in each case there can be no
assurance, we may not be able to continue our operations. In addition, the
existence of the “going concern” qualification in our auditor's report may make
it more difficult for us to obtain additional financing. If we are unable to
obtain additional financing, you may lose all or part of your
investment.





17.
            OUR
      BUSINESS IS AFFECTED BY CHANGES IN COMMODITY
  PRICES.


Our
ability to develop our mineral properties and the future profitability of the
Company is directly related to the market price of certain minerals, including
but not limited to copper. The Company is negatively affected by the decline in
commodity prices.


3




18.
            OUR
      COMMON STOCK IS A PENNY STOCK.





Our
Common Stock is classified as a penny Stock, which is traded on the OTC Bulletin
Board.  As a result, an investor may find it more difficult to dispose
of or obtain accurate quotations as to the price of the shares of the Common
Stock.  In addition, the “penny stock” rules adopted by the Securities
and Exchange Commission subject the sale of the shares of the Common Stock to
certain regulations which impose sales practice requirements on
broker-dealers.  For example, broker-dealers selling such securities
must, prior to effecting the transaction, provide their customers with a
document that discloses the risks of investing in such securities. Furthermore,
if the person purchasing the securities is someone other than an accredited
investor or an established customer of the broker-dealer, the broker-dealer must
also approve the potential customer’s account by obtaining information
concerning the customer’s financial situation, investment experience and
investment objectives.  The broker-dealer must also make a
determination whether the transaction is suitable for the customer and whether
the customer has sufficient knowledge and experience in financial matters to be
reasonably expected to be capable of evaluating the risk of transactions in such
securities. Accordingly, the Commission’s rules may result in the limitation of
the number of potential purchasers of the shares of the Common
Stock.  In addition, the additional burdens imposed upon
broker-dealers by such requirements may discourage broker-dealers from effecting
transactions in the Common Stock, which could severely limit the market of the
Company’s Common Stock.




19.
ADDITIONAL ISSUANCES OF EQUITY SECURITIES MAY RESULT IN DILUTION OF OUR EXISTING
STOCKHOLDERS.




Our
Articles of Incorporation authorize the issuance of 200,000,000 shares of common
stock and 50,000,000 shares of preferred stock. The Board of Directors has the
authority to issue additional shares of our capital stock to provide additional
financing in the future and the issuance of any such shares may result in a
reduction of the book value or market price of the outstanding shares of our
common stock. If we do issue any such additional shares, such issuance also will
cause a reduction in the proportionate ownership and voting power of all other
stockholders. As a result of such dilution, if you acquire shares of our common
stock, your proportionate ownership interest and voting power could be
decreased. Further, any such issuances could result in a change of
control.




20. A
DECLINE IN THE PRICE OF OUR COMMON STOCK COULD AFFECT OUR ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR OPERATIONS.





A decline
in the price of our common stock could result in a reduction in the liquidity of
our common stock and a reduction in our ability to raise additional capital for
our operations. Since our operations to date have been principally financed
through the sale of equity securities, a decline in the price of our common
stock could have an adverse effect upon our liquidity and our continued
operations. A reduction in our ability to raise equity capital in the future
would have a material adverse effect upon our business plan and operations,
including our ability to continue our current operations. If our stock price
declines, we may not be able to raise additional capital or generate funds from
operations sufficient to meet our obligations.




Item
2.  Properties


PROPERTIES





Property
Locations and Descriptions





Pacific
Copper holds mineral concessions in Chile and Peru.  Pacific Copper’s
subsidiary, Sociedad Pacific Copper Chile Limitada (a Chilean limited liability
partnership,), holds or controls mining concessions in the Corral/Mofralla,
Venapai, Guanaca, Carrizal, Cerro Blanco and Carrera Pinto mining districts of
Chile and certain other areas in Atacama Region III of Chile (the “Chile
Claims”).   The Company also has a subsidiary, Pacific Copper Peru SRL
(a Peruvian limited liability partnership) that holds claims in the Medalla
Milagrosa district of Peru (the “Peru Claims”).  There is no assurance
that commercially viable mineralized material, let alone proven or probable
reserves, exist on any of our mineral concessions  and further
exploration will be required before a final evaluation as to economic
feasibility is determined.  We consider the La Guanaca, El Corral/La
Mofralla, and the Venapai properties in Chile to be material.  We do
not consider any of our other properties to be material at this time; however
the Company’s assessment may change if further exploration is undertaken on
these properties.





Pacific
Copper also held claims in Okanogan County, Washington referred to collectively
as the “Mazama Claims”.  On September 25, 2008, the Board of Directors
approved a resolution to discontinue the exploration of the Mazama Claims in
order to focus the Company’s efforts and resources on the Chile Claims and the
Peru Claims.  The Company has relinquished and  let lapse
with the United States Bureau of Land Management the Mazama Claims, thereby
relieving the Company of the cost of maintaining these claims.





Please
note that the Glossary at the end of this Section contains definitions for
certain geological and other specialized terms used in this
section.  Where appropriate, these definitions have been incorporated
in the text of this section.




4




PAFICIC
COPPER IN SOUTH AMERICA





SOCIEDAD
PACIFIC COPPER CHILE LIMITADA




On
January 8, 2008, Pacific Copper acquired 99% of the interests of Sociedad
Pacific Copper Chile Limitada, a limited liability partnership organized under
the laws of Chile (“Pacific LTDA”) pursuant to a share exchange agreement
entered into as of April 11, 2007, as amended (the “Chile Agreement”) between
the Company and the former partners of Pacific LTDA.  In order to
facilitate the formation of Pacific LTDA, upon execution of the Chile Agreement,
the Company paid $25,000 to cover expenses relating to formation of Pacific LTDA
and the consummation of the Chile Agreement.  On August 9, 2007,
Harold Gardner (then a partner of Pacific LTDA) was appointed to the Company’s
Board of Directors, in contemplation of the closing of the Chile Agreement. On
November 26, 2007, the Board of Directors of the Company approved the
appointment for Mr. Gardner, Eduardo Esteffan, Andrew Brodkey, George Orr and
Elden Schorn to serve as directors of Pacific LTDA.


Pursuant
to the Chile Agreement the Company issued, subject to an escrow agreement, an
aggregate of 6,088,452 of its common shares to the former partners of Pacific
LTDA as consideration for the acquisition (the “Consideration
Shares”).  Mr. Gardner received, in escrow, 2,425,000 Consideration
Shares.





Immediately
following the closing of the Chile Agreement, Pacific LTDA became a 99%-owned
subsidiary of the Company.   Mr. Esteffan retained a 1%
partnership interest in Pacific LTDA (the “Retained Interest”) in order to
comply with Chilean law requiring that a limited liability partnership have at
least two members.  The number of Consideration Shares Mr. Esteffan
was originally scheduled to receive under the Chile Agreement (2,425,000 Shares)
was reduced by 61,548 shares in order to avoid compensating him for the Retained
Interest.  The Retained Interest is subject to an option agreement
between the Company and Mr. Esteffan that entitles the Company to purchase the
Retained Interest in exchange for the issuance of 61,548 common shares of the
Company at any time in the future.





Through
closing of the Chile Agreement, Pacific LTDA holds title to or controls certain
mineral concessions  located in the Carrizal, Cerro Blanco and Carrera
Pinto mining districts in Chile (the “Chile Claims”).  The
Consideration Shares were exempt from registration under the Securities Act of
1933, as amended, were restricted upon issuance, and were issued in escrow
subject to a “Closing Agreement” between the Company, Pacific LTDA, and the
former partners of Pacific LTDA.  The conditions under the Closing
Agreement have been satisfied or waived, and the Chile Consideration shares have
been issued to the former partners of Pacific LTDA.


5





CHILEAN
OXIDE/LEACHABLE COPPER PROJECTS





La
Guanaca Chile Copper Oxide Property





On
January 24, 2008, the Company, through its subsidiary Pacific LTDA entered into
an exclusive exploration, mining and exploitation agreement (the "Guanaca
Lease") for the La Guanaca oxide copper project located northeast of the town of
Inca de Oro, Chanaral Province, Atacama Region 3, Chile.  This
property, which consists of approximately 250  hectares of exploration
concessions, is road-accessible and was previously explored in the mid-1990's
through geophysical methods, sampling and drilling by Empresa Nacional de
Mineria ("ENAMI") a Chilean nationally-owned mining enterprise.  The
Guanaca Lease is for a term of 5 years and is renewable automatically for
additional 5-year periods.  The owners of the La Guanaca propertywill
receive US$2,000 per month in cash as a lease payment during the term of the
agreement.


6




CLAIM
DATA





Claim Name
                        
                        Descriptions
                        
                        HectaresLa Guanaca Una
      a Cincuenta
                        
                        1
      to 10
                        
                        
                        5011
      to 20
                        
                        
                        5021
      to 30
                        
                        
                        5031
      to 40
                        
                        
                        5041
      to 50
                        
                        
                        50Total
                        
                        
                        
                        
                        250





El
Corral/La Mofralla and Venado Chile  Oxide/Leachable Copper
Properties





As of
February 27, 2009 Pacific Copper, through its wholly owned subsidiary Pacific
LTDA, entered into a definitive mineral property acquisition agreement (the
“Gareste Agreement”) with Gareste pursuant to which the Company acquired a 100%
interest in the following copper oxide or leachable copper properties located in
Atacama Region III, Chile: the “Venado Property” (also known as the “Venapai
Property”) consisting of approximately 5,000 hectares of exploration
concessions, located roughly 45 kilometers from the city of Copiapo; the “El
Corral Property”, consisting of approximately 3,600 hectares of exploration
concessions, located roughly 60 kilometers from the city of Copiapo, and the
adjacent “La Mofralla Property”, consisting of approximately 250 hectares of
exploration concessions also located roughly 60 kilometers from the City of
Copiapo.  These properties were subject to separate letters of intent
entered into during July and October of 2008, as previously described . Under
the Gareste Agreement the Company issued a total of 5,000,000 shares of its
common stock to Gareste on October 12, 2009, allocable as follows: 2,000,000
shares of common stock as consideration for the Venado Property, 2,000,000
shares of common stock as consideration for the El Corral Property and 1,000,000
shares of common stock as consideration for the La Mofralla Property
(collectively, the “Gareste Oxide Shares”).  In addition, the Venado
Property is subject to a 2% net smelter return royalty, capped at $10,000,000,
50% of which can be repurchased by Pacific Copper at any time prior to the
commencement of production for $3,000,000, and the El Corral Property is subject
to a 2% net smelter return royalty, capped at $10,000,000, 50% of which can be
repurchased by Pacific Copper at any time prior to the commencement of
production for $2,000,000.





7




EL
CORRAL / LA MOFRALLA PROPERTIES





Claims
      List
                      
                      
                      
                      
                      
                      Pacific
      LTDANAME
                      
                      PRIOR
      OWNER
                      
                      HECTARES
                      
                      STATUS
      OF PROPERTYCORRAL
      CERO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      UNO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      DOS
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      TRES
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      CUATRO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      CINCO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      SEIS
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      SIETE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      ONCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      DOCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionCORRAL
      TRECE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionMOFRALLA
                      
                      Gareste
      Ltda.
                      
                      250
                      
                      Exploration
      ConcessionTotal
      Hectares
                      
                      
                      
                      3,850




VENAPAI
PROPERTY





Claims
      List
                      
                      
                      
                      
                      
                      Pacific
      LTDANAME
                      
                      PRIOR
      OWNER
                      
                      HECTARES
                      
                      STATUS
      OF PROPERTYVENAPAI
      CERO
                      
                      Gareste
      Ltda.
                      
                      200
                      
                      Exploration
      ConcessionVENAPAI
      UNO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      DOS
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      TRES
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      CUATRO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      CINCO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      SEIS
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      SIETE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      OCHO
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      NUEVE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      DIEZ
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      ONCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      DOCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      TRECE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      CATORCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      QUINCE
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionVENAPAI
      DIECISEIS
                      
                      Gareste
      Ltda.
                      
                      300
                      
                      Exploration
      ConcessionTotal
      hectares
                      
                      
                      
                      5,000





8




CARRIZAL,
CERRO BLANCO, AND CARRERA PINTO


PORPHYRY
COPPER SYSTEMS IN CHILE





History





The
Carrizal District, the Cerro Blanco District and the Carrera Pinto District
(collectively the “Porphyry Districts”) were known in Europe and the United
States during the 1800’s.  Chile led all countries in world copper
production from 1850 – 1880, supplying as much as 40% of world
demand.  Almost half of all Chilean production during this period came
from the Districts.  The combined mining operations at Carrizal and
Cerro Blanco provided from 10% to 15% of the world’s copper during the period
from 1850-1880.  These historical results are not indicative of future
exploration results.





The
Copiapo Mining Company, a British Company, operated in the Districts from 1836
until 1911.  Total copper exported from the Districts during that
period was estimated to be 750,000 tons.  Gold production at Carrizal
alone has been estimated to be as high as 1.7 million ounces.  Based
upon available records, half of the veins at Cerro Blanco carried substantial
silver, which when hand cobbed, averaged 30 ounces per ton of
ore.  These historical results are not indicative of future
exploration results.





Each of
the Districts had dozens of high grade copper veins with precious metal
by-products.  After World War I, with deepening vein systems,
production eventually dwindled and was replaced at mines such as El Teniente and
Chuquicamata, with low grade porphyry systems, the technology for that made
these sites economical to mine.





To the
knowledge of the Company, no serious exploration effort has been made during the
last 100 years in the Districts to locate any of the mineralizing porphyry
systems.  Currently, there is a renewed interest in the Carrera Pinto
area, with several major mining companies having obtained land positions and
planning drilling operations. In total, the Company holds 5,000 hectares of
exploration concessions in these districts.





9





CARRERA
PINTO DISTRICT





The
Carrera Pinto District is located 60 kilometers northeast of Copiapo and is
reached on paved roads using the highway to Inca del Oro.  Travel time
is less than an hour.  Pacific Copper has three porphyry targets in a
group of properties totaling approximately 2,750 hectares of constituted
exploration concessions , with additional filings pending with respect to 1,100
additional hectares.  The properties are located in the plain and
along the fringes of a collapsed caldera system of approximately 20 kilometers
in diameter.  The hills forming the caldera walls are crossed with
numerous veins and mantos containing copper with some silver.





Turkesa
properties





The
Turkesa properties cover over 700 hectares, with an additional 500 contiguous
hectares covered by a filing, covering a porphyry target and crossing
mantos.  Land to the north is controlled by Teck Cominco Limited and
the Dulcinea mine, with workings more than 6,000 feet
deep.  Additional lands will  be claimed to the east as it
becomes available.  The crossing manto system feeds the Dulcinea
complex, and a series of former mines to the north.  A porphyry system
is believed to be covered in large part by the Turkesa claims.





Cobrizo
Properties





The
Cobrizo properties cover 2,000 hectares of registered exploration
concessions  with additional amounts filed totaling an additional 600
hectares.  Portions of this property were also drilled by CORFO Ltd.,
which identified a porphyritic system.  Pacific Copper believes that
it has covered a substantial portion of this system, as well as a small portion
of an adjacent system which it shares with Phelps Dodge Mining Co., BHP
Billiton, and Minera Carola.





A total
of three porphyry systems, and a few crossing manto systems, comprise the
targets at Carerra Pinto.





CODELCO,
the Chilean state copper company, is also very active in the area, drilling a
large plain 30 kilometers north of Carrera Pinto.





CERRO
BLANCO DISTRICT





The
porphyry system at Cerro Blanco is believed to be approximately eight square
kilometers in area, of which Pacific Copper  is estimated to control
roughly 70%.  This system mineralizes both the high grade lode veins
of the historic district to the south, as well as the Corral chalcosite-silver
veins to the north.  Chalcosite is a copper mineral containing two
atoms of copper for each atom of sulfide.  The property consists of
940 hectares of registered exploration concessions, with an additional 200
hectares filed for registration.





Cerro
Blanco is located approximately 90 kilometers south of Copiapo and is accessed
using a paved road for half of the distance and an improved gravel road for the
balance.  Mean elevation of the porphyritic system is approximately
1,900 meters and weather conditions are appropriate for year round
operations.





CARRIZAL
DISTRICT





The
porphyry system in the Carrizal District is approximately eight kilometers wide
with two enriched copper ore zones, one on either side of a subsides area
crossed by vein lodes which formed the bulk of past copper and gold
production.  The eastern zone is the largest porphyry target, about
twelve square kilometers, almost all of which is covered by Pacific Copper’s
1,100 hectares of registered mining property. Pacific Copper will have 160
hectares of titled exploration concessions  on the smaller western
target, with applications for additional acreage pending.





Carrizal
is accessed using the Pan American highway south of Copaipo for about an hour,
then west on improved secondary roads for an additional 30
minutes.  The mean elevation is 700 meters, and weather is temperate
for year round operations.


10





The
following tables show the mineral concessions  held by Pacific LTDA in
the Porphyry Districts.





Pacific
LTD Concessions





CARRERA
PINTO TURKEZA PROJECT





Property Name
                                      
                                      Location
                                      
                                      Property
                                        Type
                                      
                                      UTM
                                        North
                                      
                                      
                                      UTM East
                                      
                                      Registration
                                      
                                      Title
                                      
                                      
                                      
                                      No
                                      
                                      Mine Office
                                      
                                      Initial hect.
                                        Filed
                                      
                                      
                                      Net Hectares to
                                        P.C.TURKEZA
      DOS
                                      
                                      Carrera
                                        Pinto
                                      
                                      Exploration
                                      
                                      
                                      6.998.500,00
                                      
                                      
                                      
                                      401.500,00
                                      
                                      12/11/2006
                                      
                                      
                                      7231
                                      
                                      
                                      
                                      5560
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      300TURKEZA
      TRES
                                      
                                      Carrera
                                        Pinto
                                      
                                      Exploration
                                      
                                      
                                      6.997.500,00
                                      
                                      
                                      
                                      401.500,00
                                      
                                      12/11/2006
                                      
                                      
                                      7232
                                      v
                                      
                                      
                                      5561
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      230TURKEZA
      CUATRO
                                      
                                      Carrera
                                        Pinto
                                      
                                      Exploration
                                      
                                      
                                      6.998.500,00
                                      
                                      
                                      
                                      403.500,00
                                      
                                      12/11/2006
                                      
                                      
                                      7233
                                      v
                                      
                                      
                                      5562
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      220750





CARRERA
PINTO COBRIZO PROJECT





Property Name
                                        
                                        Location
                                        
                                        Property
                                          Type
                                        
                                        UTM
                                          North
                                        
                                        
                                        UTM East
                                        
                                        Registration
                                        
                                        Title
                                        
                                        
                                        
                                        No
                                        
                                        Mine Office
                                        
                                        Initial hect.
                                          Filed
                                        
                                        
                                        Net Hectares to
                                          P.C.COBRIZO
      VEINTIUNO
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        6.999.500,00
                                        
                                        
                                        
                                        408.000,00
                                        
                                        12/21/2006
                                        
                                        7493
                                        
                                        
                                        
                                        5743
                                        
                                        Copiapo
                                        
                                        
                                        300
                                        
                                        
                                        
                                        260COBRIZO
      VEINTIDOS
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        6.999.500,00
                                        
                                        
                                        
                                        409.500,00
                                        
                                        12/21/2006
                                        
                                        7494
                                        
                                        
                                        
                                        5744
                                        
                                        Copiapo
                                        
                                        
                                        300
                                        
                                        
                                        
                                        240COBRIZO
      VEINTITRES
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        7.001.500,00
                                        
                                        
                                        
                                        409.000,00
                                        
                                        12/21/2006
                                        
                                        7495
                                        
                                        
                                        
                                        5745
                                        
                                        Copiapo
                                        
                                        
                                        200
                                        
                                        
                                        
                                        200COBRIZO
      UNO
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        7.001.500,00
                                        
                                        
                                        
                                        410.500,00
                                        
                                        7/21/2005
                                        
                                        3245
                                        
                                        
                                        
                                        2511
                                        
                                        Copiapo
                                        
                                        
                                        300
                                        
                                        
                                        
                                        300COBRIZO
      DOS
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        7.002.500,00
                                        
                                        
                                        
                                        412.000,00
                                        
                                        7/21/2005
                                        
                                        3246VTA
                                        
                                        
                                        
                                        2512
                                        
                                        Copiapo
                                        
                                        
                                        200
                                        
                                        
                                        
                                        200COBRIZO
      TRES
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        7.002.500,00
                                        
                                        
                                        
                                        409.500,00
                                        
                                        7/21/2005
                                        
                                        3248
                                        
                                        
                                        
                                        2513
                                        
                                        Copiapo
                                        
                                        
                                        300
                                        
                                        
                                        
                                        300COBRIZO
      CUATRO
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        7.003.500,00
                                        
                                        
                                        
                                        409.500,00
                                        
                                        7/21/2005
                                        
                                        3249VTA
                                        
                                        
                                        
                                        2514
                                        
                                        Copiapo
                                        
                                        
                                        300
                                        
                                        
                                        
                                        200COBRIZO
      CINCO
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        300
                                        
                                        
                                        
                                        300COBRIZO
      SEIT
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        300
                                        
                                        
                                        
                                        0COBRIZO
      SIETE
                                        
                                        Carrera
                                          Pinto
                                        
                                        Exploration
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        300
                                        
                                        
                                        
                                        02,000


11





CERRO
BLANCO PROJECT





Property Name
                                      
                                      Location
                                      
                                      Property
                                        Type
                                      
                                      UTM
                                        North
                                      
                                      
                                      UTM East
                                      
                                      Registration
                                      
                                      Title
                                      
                                      
                                      
                                      No
                                      
                                      Mine Office
                                      
                                      Initial hect.
                                        Filed
                                      
                                      
                                      Net Hectares to
                                        P.C.DON
      AUGUSTO
                                      
                                      Cerro
                                        Blanco
                                      
                                      Exploration
                                      
                                      
                                      6.903.500,00
                                      
                                      
                                      
                                      385.000,00
                                      
                                      1/5/2207
                                      
                                      
                                      115
                                      
                                      
                                      
                                      93
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      300DON
      AUGUSTO UNO
                                      
                                      Cerro
                                        Blanco
                                      
                                      Exploration
                                      
                                      
                                      6.902.500,00
                                      
                                      
                                      
                                      385.000,00
                                      
                                      1/5/2207
                                      
                                      
                                      116
                                      
                                      
                                      
                                      94
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      300DON
      AUGUSTO DOS
                                      
                                      Cerro
                                        Blanco
                                      
                                      Exploration
                                      
                                      
                                      6.903.000,00
                                      
                                      
                                      
                                      383.000,00
                                      
                                      1/5/2207
                                      
                                      
                                      117
                                      
                                      
                                      
                                      95
                                      
                                      Copiapo
                                      
                                      
                                      200
                                      
                                      
                                      
                                      200DON
      AUGUSTO TRES
                                      
                                      Cerro
                                        Blanco
                                      
                                      Exploration
                                      
                                      
                                      6.900.500,00
                                      
                                      
                                      
                                      386.250,00
                                      
                                      1/5/2207
                                      
                                      
                                      118
                                      
                                      
                                      
                                      96
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      60DON
      AUGUSTO CUATRO
                                      
                                      Cerro
                                        Blanco
                                      
                                      Exploration
                                      
                                      
                                      6.900.500,00
                                      
                                      
                                      
                                      385.250,00
                                      
                                      1/5/2207
                                      
                                      
                                      119
                                      
                                      
                                      
                                      97
                                      
                                      Copiapo
                                      
                                      
                                      300
                                      
                                      
                                      
                                      80940





CARRIZAL
ALTO PROJECT





Property Name
                                    
                                    Location
                                    
                                    Property
                                      Type
                                    
                                    UTM
                                      North
                                    
                                    
                                    UTM East
                                    
                                    Registration
                                    
                                    Title
                                    
                                    
                                    
                                    No
                                    
                                    Mine Office
                                    
                                    Initial hect.
                                      Filed
                                    
                                    
                                    Net Hectares to
                                      P.C.CARRIZON
      UNO
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.892.000,00
                                    
                                    
                                    
                                    316.000,00
                                    
                                    1/24/2007
                                    
                                    
                                    163
                                    
                                    
                                    
                                    70
                                    
                                    Freirina
                                    
                                    
                                    200
                                    
                                    
                                    
                                    100CARRIZON
      DOS
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.894.000,00
                                    
                                    
                                    
                                    315.500,00
                                    
                                    1/24/2007
                                    
                                    
                                    165
                                    
                                    
                                    
                                    71
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    250CARRIZON
      TRES
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.894.000,00
                                    
                                    
                                    
                                    316.500,00
                                    
                                    1/24/2007
                                    
                                    
                                    167
                                    
                                    
                                    
                                    72
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    300CARRIZON
      CUATRO
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.897.000,00
                                    
                                    
                                    
                                    315.700,00
                                    
                                    1/24/2007
                                    
                                    
                                    169
                                    
                                    
                                    
                                    73
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    300CARRIZON
      CINCO
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.897.000,00
                                    
                                    
                                    
                                    316.700,00
                                    
                                    1/24/2007
                                    
                                    
                                    171
                                    
                                    
                                    
                                    74
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    2001150





CARRIZAL
ALTO PROJECT





Property Name
                                    
                                    Location
                                    
                                    Property
                                      Type
                                    
                                    UTM
                                      North
                                    
                                    
                                    UTM East
                                    
                                    Registration
                                    
                                    Title
                                    
                                    
                                    
                                    No
                                    
                                    Mine Office
                                    
                                    Initial hect.
                                      Filed
                                    
                                    
                                    Net Hectares to
                                      P.C.CARRIZO
      UNO
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.892.500,00
                                    
                                    
                                    
                                    310.000,00
                                    
                                    2/13/2007
                                    
                                    
                                    296
                                    
                                    
                                    
                                    131
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    40CARRIZO
      DOS
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.892.500,00
                                    
                                    
                                    
                                    311.000,00
                                    
                                    2/13/2007
                                    
                                    
                                    298
                                    
                                    
                                    
                                    132
                                    
                                    Freirina
                                    
                                    
                                    300
                                    
                                    
                                    
                                    40CARRIZO
      TRES
                                    
                                    Carrizal
                                      Alto
                                    
                                    Exploration
                                    
                                    
                                    6.894.500,00
                                    
                                    
                                    
                                    310.500,00
                                    
                                    2/13/2007
                                    
                                    
                                    300
                                    
                                    
                                    
                                    133
                                    
                                    Freirina
                                    
                                    
                                    200
                                    
                                    
                                    
                                    80160TOTAL
      OF ALL CONCESSIONS
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    5,000


12





PACIFIC
COPPER PERU SRL




On
December 17, 2007, the Company completed the acquisition of Pacific Copper Peru
SRL, a limited partnership organized under the laws of Peru (“Peru SRL”)
pursuant to a Share Exchange Agreement among the Company, Peru SRL and the
former partners of Peru SRL dated as of April 11, 2007, as amended (the “Peru
Agreement”).  On August 9, 2007, Dr. David Hackman, a former partner
of Peru SRL, was appointed to the Company’s Board of Directors in anticipation
of the closing of the Peru Agreement.  On December 12, 2007, the
Company’s Directors passed a resolution appointing Harold Gardner, a member of
the Company’s Board of Directors, Manager of Peru SRL.





Pursuant
to the Peru Agreement, the Company issued 4,850,000 shares of the Company’s
common stock (the “Consideration Shares”), subject to an escrow agreement, to
the former partners of Peru SRL as consideration for the acquisition of Peru
SRL.  Dr.. Hackman was among the former partners of Peru SRL and
received 2,425,000 Consideration Shares.  As a result of the closing,
Peru SRL became a subsidiary of the Company.  Mr. Brodkey holds a 1%
interest in Peru SRL for the benefit of the Company.  Mr. Brodkey
holds this 1% interest in order to comply with the requirement under Peruvian
law that limited partnerships in Peru have at least two partners.





As of the
date of this report, Peru SRL has no material assets.  The
Consideration Shares were issued in escrow subject to a Closing and Escrow
Agreement dated December 14, 2007 among the Company, Peru SRL and the former
partners of Peru SRL (the “Closing Agreement”).  Pursuant to the terms
of the Closing Agreement, the former partners of Peru SRL must satisfy certain
post-closing items, including the following items





(a)
            Peru SRL must obtain, and have
      registered in its name, rights to the Peru Claims as contemplated in the
      Peru Agreement, free of all liens and
  encumbrances.





(b)
            Peru SRL must provide legal
      evidence demonstrating that the Peru Claims have been transferred to Peru
      SRL, that they are in good standing and that the Good Standing Fees
      (payable in Peru) are fully paid and up to date, including any penalties
      thereon.





(c)
            Peru SRL must demonstrate that it
      has the necessary permits to access the Peru Claims and that the necessary
      environmental permits have been
obtained.





(d)
            Peru SRL must provide a legal
      opinion that: (i) Peru SRL owns the Peru Claims, (ii) the  Peru
      Claims are free of encumbrances, mortgages, attachments, liens, or
      disputes of any nature, including judicial and (iii) the claims are in
      good standing and all the good standing fees and penalties thereon are
      fully paid and there are no amounts
  outstanding.





(e)
            Peru SRL must provide financial
      records, including receipts for incorporation costs and all other
      expenditures incurred since the date of inception of Peru
      SRL.





(f)
            The certificates evidencing the
      Peru SRL partnership interests acquired by the Company have been duly
      transferred and registered in Peru SRL’s records, such certificates
      legally representing the equity interests of Peru
    SRL.





(g)
            A legal opinion of counsel to
      Peru SRL, acceptable to Pacific Copper, covering the following
      points:





(i)
            the existence and good standing
      of Peru SRL as a limited liability partnership in
    Peru,





(ii)
            the authorization of the
      transactions contemplated by the Peru
  Agreement,


13




(iii)
            the valid issuance and
      certification of the Peru SRL partnership interests transferred to Pacific
      Copper,





(iv)
            the binding nature of the Peru
      Agreement upon Peru SRL and the former partners of Peru
      SRL,





(v)
            there are no required consents of
      governmental agencies or private third parties for Peru SRL to consummate
      the transactions contemplated in the Peru Agreement,
      and





(vi)
            no violation of Peruvian law as a
      result of the share exchange contemplated by the Peru
      Agreement.





(h)
            Obtaining
      a power of attorney granted by Mrs. Hackman (wife of David Hackman), in
      both languages (English and Spanish) with her signature duly legalized by
      the nearest Peruvian Consulate, granting power to third persons, for the
      ratification and confirmation of consent to the transfer of the
      partnership interests to Pacific Copper  by David Hackman, as
      required under Chilean law.





The
Consideration Shares were exempt from registration under the Securities Act of
1933, as amended, and were restricted upon issuance. As of the date of this
report, the Peru Consideration Shares remain in escrow, the Closing Conditions
have not been satisfied, and the Company has not yet elected to waive any of the
Closing Conditions.





The
Company through Pacific LTDA also executed a letter of intent with a single
vendor to acquire its interest in the Yerbas Buenas oxide copper property
located 130 km southeast of the city of Copiapo, Atacama Region
III.  Chile.  Yerbas Buenas is located roughly 20 km from
the El Corral property.  The vendor of Yerbas Buenas is Gareste,
Ltda., a Chilean entity which is owned in part by a Director of the
Company.  The vendor will receive 2 million shares of the Company’s
common stock at closing in exchange for its interest at Yerbas Buenas, and a 2%
NSR royalty, capped at $6 million, 1% of which can be repurchased for the sum of
$2 million at any time prior to commercial production.  This
transaction has not closed and is pending.  The Company does not
consider this property to be material. .





Pacific
Copper held claims in Okanogan County, Washington  referred to
collectively as the “Mazama Claims”.  On September 25, 2008, the Board
of Directors approved a resolution to discontinue the exploration of the Mazama
Claims in order to focus the Company’s efforts and resources on the Chile Claims
and the Peru Claims.  The Company has relinquished and  let
lapse with the United States Bureau of Land Management the Mazama Claims,
thereby relieving the Company of the cost of maintaining these
claims.





GLOSSARY OF
TERMS





Adit:  a
tunnel entrance.





Caldera:
a large basin shaped volcanic depression, more or less circular.





Chalcocite-
a sulfide mineral ore of copper.





Copper:  a
metallic chemical element, an isometric mineral





Diamond
Drilling:  diamond drilling differs from other geological drilling in
that a solid core is extracted from depth, for examination on the
surface.





Mantos:
flat lying bedded deposit


14





Mineral
Deposit:  a mass of naturally occurring mineral material





Mineral
Claims:  land title encompassing minerals





Mineralization:  deposition
of minerals in rocks





Molybdenum:  a
hard, silvery-white metallic element





Porphyry:   variety
of igneous rock consisting of large-grained crystals, such as feldspar or
quartz, dispersed in a fine-grained groundmass





Pyrite:  a
mineral composed of iron and sulfur





Staked:  acquisition
of mineral title is accomplished by placing posts in the ground or other
monuments to delineate the parameters of the claim and filing the location
notice at the mining recorders office.





Item
3.   Legal Proceedings.





Legal
Proceedings





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





Regulatory
Matters





On
October 28, 2008, the Company received a cease trade order (the “CTO”) from the
British Columbia Securities Commission (the “BCSC”), the effect of which
was  limited to the Province of British Columbia. By its terms, the
CTO was issued for improper disclosure and not filing  technical
reports under Canadian National Instrument 43-101 Standards of Disclosure for Mineral
Projects(“NI 43-101”) with respect to its material copper oxide projects
in Chile after having made public disclosures regarding such
properties.  On May 8, 2009, the BCSC revoked its CTO against the
Company.  In order to comply with BCSC standards, the Company issued
corrective disclosure and obtained technical reports under Canadian National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”)
with respect to each of the La Guanaca, El Corral and La Mofralla and Venapai
properties and amended its annual report for the fiscal year ended October 31,
2008 to indicate that it considers such properties to be material.





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





During
fiscal year ended October 31, 2009, no matters were submitted to our
stockholders for approval


15




PART
II




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




RECENT
SALES OF UNREGISTERED SECURITIES





As of the
date of this Annual Report and during fiscal year ended October 31, 2008 and October 31, 2009,
to provide capital, we sold stock in private placement offerings, issued
stock in exchange for our debts or pursuant to contractual agreements as set
forth below.


16





Private
Placements





Private Placements for the
Fiscal Year Ended October 31, 2008





The
Company, through private placements, issued 3,157,143 units at a price of $0.35
per unit. Each unit consisted of one common share and one half a common share
purchase warrant.  Each full warrant is exercisable for one common
share at $0.50 per share on or before April 30, 2010. The foregoing private
placement was exempt from registration under the Securities Act pursuant to an
exemption afforded by Regulation S.   The Company accrued share
issuance expense of $77,350 as a finder’s fee for introduction to subscribers
who purchased 3,157,143 units for a total investment of $1,105,000 in the above
private placements. The Company also issued to the finder a warrant to purchase
45,000 shares at $0.50 per share on or before April 30, 2010.





The
Company, through private placements, issued 325,715 and 417,857 units at a price
of $0.35 per unit during the months of June and July 2008 respectively. Each
unit consisted of one common share and one half a common share purchase warrant.
Each full warrant is exercisable for one common share at $0.50 per share for a
period of 2 years from the date of issuance. The foregoing private placement was
exempt from registration under the Securities Act pursuant to an exemption
afforded by Regulation S.  .  The Company expensed share
issuance expense of $13,370 being total finder’s fees. The Company also issued
to the finders a warrant to purchase 13,000 shares at $0.50 per share on or
before two years from date of issuance.





The
Company, through private placements, issued 506,501 and 70,000 units at a price
of $0.35 per unit during the months of September and October 2008 respectively.
Each unit consisted of one common share and one half a common share purchase
warrant. Each full warrant is exercisable for one common share at $0.50 per
share for a period of 2 years from the date of issuance.  The foregoing private
placement was exempt from registration under the Securities Act pursuant to an
exemption afforded by Regulation S.





On
October 27, 2008, the Company issued a $100,000 face value, 6% convertible note,
due October 31, 2010.  The principal amount of the note and interest
is payable on October 31, 2010.  While the note is outstanding, the
investor has the option to convert the principal balance and interest, into
conversion units at a conversion price of $0.16 per unit.  Each
conversion unit is convertible into one share of common stock and one warrant to
purchase one share of common stock.  Further, the terms of the
convertible note provide for certain redemption features.  If, in the
event of certain defaults on the terms of the note, certain of which are indexed
to equity risks, the holder can accelerate the payment of outstanding principal
and interest.  The financing transaction also provided the holder with
additional investment rights to purchase up to $800,000 face value convertible
notes under the same terms and conditions as the $100,000 convertible
note.





Private Placements for the
Fiscal Year Ended October 31, 2009





On July
27, 2009, the Company issued 12% convertible notes to multiple investors with an
aggregate face value of $166,500. The principal amount of the notes and interest
is payable on July 27, 2011. While the note is outstanding, the investor has the
option to convert the principal balance and interest, into common stock at a
fixed conversion price of $0.10. In the event of certain defaults on the terms
of the note, certain of which are indexed to equity risks, the holder can
accelerate the payment of outstanding principal and interest (the “Default
Put”).





On
October 26, 2009, the Company issued 12% convertible notes to two investors with
an aggregate face value of $20,000. The principal amount of the notes and
interest is payable on October 26, 2011. While the note is outstanding, the
investor has the option to convert the principal balance and interest, into
common stock at a fixed conversion price of $0.10. In the event of certain
defaults on the terms of the note, certain of which are indexed to equity risks,
the holder can accelerate the payment of outstanding principal and interest (the
“Default Put”).


17





Other
Sales or Issuances of Unregistered Securities





Year ended October 31,
2008





On
December 17, 2007, Pacific Copper acquired Peru SRL pursuant to a Share Exchange
Agreement among the Company, Peru SRL and the former partners of Peru SRL dated
as of April 11, 2007, as amended (the “Peru Agreement”).  Pursuant to
the Peru Agreement, the Company issued 4,850,000 shares of the Company’s common
stock (the “Peru Consideration Shares”) to the partners of Peru SRL as
consideration for the acquisition of 99% of Peru SRL.  As a result of
the acquisition, Peru SRL became a subsidiary of the Company.  The
Company expensed $2,449,295, relating to the issue of 4,850,000 common shares
calculated at $0.50 per common share and the allocation of minority interest for
$24,495 net of capitalization for $200 for mineral property
claims.  Property acquisition costs relating to the exploration
properties held by Peru SRL are being expensed until the economic viability of
the project is determined and proven and probable reserves
quantified.  In the absence of proven and probable reserves, the
Company is unable to allocate any economic values to the mining concessions held
by Peru SRL.  The Company does not consider such concessions to be
material assets at this time, but our assessment may change after further work
is done on the properties.





On
January 8, 2008, Pacific Copper acquired Pacific LTDA pursuant to a Share
Exchange Agreement entered into as of April 11, 2007 (the “Chile Agreement”), as
amended, between the Company and the former partners of Pacific
LTDA.  Pursuant to the Chile Agreement the Company issued 6,088,452 of
its common shares (the “Chile Consideration Shares”) to the former partners of
Pacific LTDA as consideration for the acquisition of 99% of Pacific
LTDA.  As a result of the acquisition, Pacific LTDA became a
subsidiary of the Company.  The Company expensed $3,074,576, relating
to the issue of 6,088,452 common shares calculated at $0.50 per common share and
the allocation of minority interest for $30,750 net of capitalization for $400
for mineral property claims.  Property acquisition costs relating to
the exploration properties held by Pacific LTDA are being expensed until the
economic viability of the project is determined and proven and probable reserves
quantified.  In the absence of proven and probable reserves, the
Company is unable to allocate any economic values to the mining concessions held
by Pacific LTDA. The Company does not consider such concessions to be
material assets at this time, but our assessment may change after further work
is done on the properties.





Year ended October 31,
2009




As of
February 27, 2009 Pacific Copper, through its wholly owned subsidiary Pacific
LTDA, entered into a definitive mineral property acquisition agreement (the
“Gareste Agreement”) with Gareste pursuant to which the Company acquired a 100%
interest in the following copper oxide properties located in Atacama Region III,
Chile: the “Venado Property” (also known as the “Venapai Property”) consisting
of approximately 5,000 hectares of exploration concessions, located roughly 45
kilometers from the city of Copiapo, the “El Corral Property”, consisting of
approximately 3,600  hectares of exploration concessions, located
roughly 60 kilometers from the city of Copiapo, and the adjacent “La Mofralla
Property”, consisting of approximately 250 hectares of exploration concessions
also located roughly 60 kilometers from the City of Copiapo.  These
properties were subject to separate letters of intent entered into during July
and October of 2008, as previously disclosed. Under the Gareste Agreement the
Company issued a total of 5,000,000 shares of its common stock to Gareste on
October 12, 2009, allocable as follows: 2,000,000 shares of common stock as
consideration for the Venado Property, 2,000,000 shares of common stock as
consideration for the El Corral Property and 1,000,000 shares of common stock as
consideration for the La Mofralla Property (collectively, the “Gareste Oxide
Shares”).  The Company expensed $749,700, relating to the issue of
5,000,000 common shares calculated at $0.15 per common share net of
capitalization for $300 for mineral property claims.  Property
acquisition costs relating to the exploration properties are being expensed
until the economic viability of the project is determined and proven and
probable reserves quantified.  In the absence of proven and probable
reserves, the Company is unable to allocate any economic values to the claims
groups acquired in the transaction. The Company considers such concessions to be
material assets at this time.


18





Trading of the Company’s
Common Stock





Our
common stock began trading on the NASD operated OTC Bulletin Board® (the “OTC”)
under the symbol “PPFP” on July 27, 2007.  The OTC 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.  The
high and low sales prices of our common stock during the fiscal years ended
October 31, 2009 and October 31, 2008 are as follows:





These
quotations represent inter-dealer prices, without mark-up, mark-down or
commission and may not represent actual transactions.


19





FISCAL
      YEAR 2009
                      
                      HIGH
                      
                      
                      LOWFirst
      Quarter
                      
                      $
                      0.11
                      
                      
                      $
                      0.04Second
      Quarter
                      
                      
                      0.15
                      
                      
                      
                      0.04Third
      Quarter
                      
                      
                      0.16
                      
                      
                      
                      0.06Fourth
      Quarter
                      
                      
                      0.12
                      
                      
                      
                      0.05FISCAL
      YEAR 2008First
      Quarter
                      
                      $
                      0.53
                      
                      
                      $
                      0.30Second
      Quarter
                      
                      
                      0.45
                      
                      
                      
                      0.35Third
      Quarter
                      
                      
                      0.60
                      
                      
                      
                      0.35Fourth
      Quarter
                      
                      
                      0.49
                      
                      
                      
                      0.04




Dividends





We have
not declared any cash dividends on our common stock.  We plan to
retain any future earnings, if any, for exploration programs, administrative
expenses and development of the Company and its assets.





Stock
Option Plan





On August
8, 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 originally
authorized under the plan was 5,000,000.  Since adoption of the Plan
an additional 900,000 shares were authorized for issuance pursuant to the Plan’s
“evergreen share reserve increase” provision.  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 Pacific Copper 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 Plan is
administered by the Board of Directors.





On June
22, 2007, Pacific Copper filed a registration statement on Form S-8 with the SEC
pursuant to which it registered 5,000,000 shares of common stock for issuance
upon exercise of options granted pursuant to the Plan.


20





Number of securities to
                        be issued upon exercise
                        of outstanding options,
                        warrants and rights
                      
                      
                      Weighted-average
                        exercise price of
                        outstanding options,
                        warrants and rights
                      
                      
                      Number of securities
                        remaining available for
                        future issuance under
                        equity compensation plans
                        (excluding securities
                        reflected in column (a))(a)
                      
                      
                      (b)
                      
                      
                      (c)Equity
      compensation plans approved by security holders
                      
                      
                      5,130,000
                      
                      
                      $
                      0.49
                      
                      
                      
                      -Equity
      compensation plans not approved by securities holders
                      
                      
                      N/A
                      
                      
                      
                      N/A
                      
                      
                      
                      N/ATotal
                      
                      
                      5,130,000
                      
                      
                      $
                      0.49
                      
                      
                      
                      -





The
following summarized options outstanding under the Plan as of October 31,
2009:


Option Price
                                          
                                          
                                          Number of sharesExpiry Date
                                          
                                          Per Share
                                          
                                          
                                          2009
                                          
                                          
                                          2008February
      28, 2010
                                          
                                          
                                          0.40
                                          
                                          
                                          
                                          250,000
                                          
                                          
                                          
                                          250,000May
      15, 2010
                                          
                                          
                                          0.35
                                          
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          200,000May
      14, 2012
                                          
                                          
                                          0.50
                                          
                                          
                                          
                                          1,650,000
                                          
                                          
                                          
                                          1,750,000July
      20, 2012
                                          
                                          
                                          0.50
                                          
                                          
                                          
                                          250,000
                                          
                                          
                                          
                                          250,000August
      1, 2012
                                          
                                          
                                          0.50
                                          
                                          
                                          
                                          1,700,000
                                          
                                          
                                          
                                          1,700,000August
      9, 2012
                                          
                                          
                                          0.51
                                          
                                          
                                          
                                          650,000
                                          
                                          
                                          
                                          650,000March
      1, 2013
                                          
                                          
                                          0.50
                                          
                                          
                                          
                                          380,000
                                          
                                          
                                          
                                          380,000September
      24, 2013
                                          
                                          
                                          0.50
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          50,0005,130,000
                                          
                                          
                                          
                                          5,230,000Weighted
      average exercise price at end of year
                                          
                                          
                                          
                                          0.49
                                          
                                          
                                          
                                          0.49





Item
6.   Selected Financial Data





The
following selected financial information is qualified by reference to, and
should be read in conjunction with our financial statements and the notes
thereto, and “Management’s Discussion and Analysis of Financial Condition and
Results of Operation” contained elsewhere herein. The selected income statement
data for fiscal years ended October 31, 2009 and October 31, 2008 and the
selected balance sheet data as of October 31, 2009 and October 31, 2008 are
derived from our audited consolidated financial statements which are included
elsewhere herein.





CumulativeSinceInception
                                              
                                              
                                              2009
                                              
                                              
                                              2008$
                                              
                                              
                                              $
                                              
                                              
                                              $Operating
      ExpensesGeneral
      and administration
                                              
                                              
                                              5,605,466
                                              
                                              
                                              
                                              1,186,120
                                              
                                              
                                              
                                              2,966,670Project
      expenses
                                              
                                              
                                              5,185,561
                                              
                                              
                                              
                                              986,105
                                              
                                              
                                              
                                              2,000,180Mining
      claims acquisition cost expense
                                              
                                              
                                              6,273,571
                                              
                                              
                                              
                                              749,700
                                              
                                              
                                              
                                              5,523,871Amortization
                                              
                                              
                                              89,207
                                              
                                              
                                              
                                              46,549
                                              
                                              
                                              
                                              41,949Total
      Operating Expenses
                                              
                                              
                                              17,153,805
                                              
                                              
                                              
                                              2,968,474
                                              
                                              
                                              
                                              10,532,670Loss
      from Operations
                                              
                                              
                                              (17,153,805
                                              )
                                              
                                              
                                              (2,968,474
                                              )
                                              
                                              
                                              (10,532,670
                                              )Other
      income-interest
                                              
                                              
                                              54,508
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Other
      expense-Interest
                                              
                                              
                                              (110,861
                                              )
                                              
                                              
                                              (103,388
                                              )
                                              
                                              
                                              (7,473
                                              )Other
      income (expense)-Derivative FinancialInstrument
                                              
                                              
                                              38,750
                                              
                                              
                                              
                                              78,125
                                              
                                              
                                              
                                              (39,375
                                              )Loss
      before Income Taxes
                                              
                                              
                                              (17,171,408
                                              )
                                              
                                              
                                              (2,993,737
                                              )
                                              
                                              
                                              (10,579,518
                                              )Provision
      for income taxes
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Minority
      Interest
                                              
                                              
                                              502
                                              
                                              
                                              
                                              146
                                              
                                              
                                              
                                              356Net
      Loss
                                              
                                              
                                              (17,170,906
                                              )
                                              
                                              
                                              (2,993,591
                                              )
                                              
                                              
                                              (10,579,162
                                              )





As at
                  
                  
                  As atOctober 31, 2009
                  
                  
                  October 31, 2008Total
      Assets
                  
                  $
                  164,948
                  
                  
                  $
                  476,946Total
      Liabilities
                  
                  $
                  2,180,456
                  
                  
                  $
                  846,424Cash
      dividends declared per share
                  
                  Nil
                  
                  
                  Nil


21




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





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





Discussion
of Operations & Financial Condition


Twelve
months ended October 31, 2009





Pacific
Copper 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 October
31, 2009, we had accumulated losses of $17,170,906  Our ability to
emerge from the exploration stage and conduct mining operations is dependent, in
large part, upon successful exploration results on our properties and our
raising additional equity financing.





As
described in greater detail below, the Company’s major endeavor over the
twelve-month period ended October 31, 2009 has been its effort to raise
additional capital to pursue further acquisitions and carry out exploration
activities on its mineral claims.




The total
assets for the twelve-month period ended October 31, 2009, include cash and cash
equivalents for $9,349, prepaid expenses and other receivables for $5,782,
deferred financing costs for $4,023, advances to related parties for $36,000,
mining claims for $900 and capital assets for $108,894.  For the year
ended October 31, 2008, total assets include cash and cash equivalents for
$110,746, prepaid expenses and other receivables for $35,157, advances to
related parties for $175,000, mining claims for $600 and capital assets for
$155,443.  The current assets reduced significantly from $320,903 on
October 31, 2008 to $55,154 on October 31, 2009.  The reduction in
current assets is primarily due to cash outflow from operating activities of
$437,976 during the twelve month period ended October 31, 2009.





Revenues





No
revenue was generated by the Company’s operations during the twelve month period
ended October 31, 2009 and October 31, 2008.





Net
Loss





The
Company’s expenses are reflected in the Statements of Operation under the
category of Expenses to meet the criteria of United States generally accepted
accounting principles (“GAAP”).





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 twelve-month period ended October 31, 2009 is
general and administrative expense of $1,186,120, as compared with $2,966,670
for the twelve month period ended October 31, 2008.  General and
administrative expense represents approximately 39.9% of the total operating
expense for the twelve-month period ended October 31, 2009 and approximately
28.2% of the total operating expense for the twelve month period ended October
31, 2008.  The decrease in expenses in 2009 is mainly due to non-cash
compensation expense relating to the issue of options and warrants for $341,946
in 2009 (2008: $915,953); non-cash expense relating to the amortization of
deferred stock compensation relating to issue of stock to consultants for
$145,833 in 2009 (2008: $916,666) and office, payroll and other general expenses
for $534,567 in 2009 (2008: $1,006,558).


22





(b) Project
Expense





Included
in operating expenses for the year ended October 31, 2009 is project expenses of
$986,105 as compared with $2,000,180 for the year ended October 31,
2008.  Project expense represents approximately 33.2% of the total
operating expense for the twelve month period ended October 31, 2009 and
approximately 19% of the total operating expense for the twelve month period
ended October 31, 2008. This includes expenses related to mineral claim fees,
drilling and project consulting. The reduction in expenditure is primarily due
to funding needs.





(c) Mining
claims impairment charges





Included
in operating expenses for the year ended October 31, 2009 is mining claims
impairment charges of $749,700 as compared with $nil for the year ended October
31, 2008. As of February 27, 2009 Pacific Copper, through its wholly owned
subsidiary Pacific LTDA, entered into a definitive mineral property acquisition
agreement (the “Gareste Agreement”) with Gareste pursuant to which the Company
acquired a 100% interest in the following copper oxide properties located in
Atacama Region III, Chile: the “Venado Property” (also known as the “Venapai
Property”) consisting of approximately 5,000 hectares of exploration
concessions, located roughly 45 kilometers from the city of Copiapo, the “El
Corral Property”, consisting of approximately 3,600  hectares of
exploration concessions, located roughly 60 kilometers from the city of Copiapo,
and the adjacent “La Mofralla Property”, consisting of approximately 250
hectares of exploration concessions also located roughly 60 kilometers from the
City of Copiapo.  These properties were subject to separate letters of
intent entered into during July and October of 2008, as previously disclosed.
Under the Gareste Agreement the Company issued a total of 5,000,000 shares of
its common stock to Gareste on October 12, 2009, allocable as follows: 2,000,000
shares of common stock as consideration for the Venado Property, 2,000,000
shares of common stock as consideration for the El Corral Property and 1,000,000
shares of common stock as consideration for the La Mofralla Property
(collectively, the “Gareste Oxide Shares”).  In addition, the Venado
Property is subject to a 2% net smelter return royalty, capped at $10,000,000,
50% of which can be repurchased by Pacific Copper at any time prior to the
commencement of production for $3,000,000, and the El Corral Property is subject
to a 2% net smelter return royalty, capped at $10,000,000, 50% of which can be
repurchased by Pacific Copper at any time prior to the commencement of
production for $2,000,000.  The Company recorded impairment
charges of $749,700, relating to the issue of 5,000,000 common shares calculated
at $0.15 per common share net of capitalization for $300 for mineral property
claims.  Property acquisition costs relating to the exploration
properties were expensed (refer to note 8 to financial statements)
..  Pursuant to this acquisition the Company acquired interest in the
following mineral claims which were capitalized at $100 each:


Venado


El
Corral


La
Mofralla





Liquidity
and Capital Resources





The
following table summarizes the company’s cash flows and cash in hand for the
twelve month period:





October 31, 2009
                  
                  
                  October 31, 2008Cash
      and cash equivalent
                  
                  $
                  9,349
                  
                  
                  $
                  110,746Cash
      used in operating activities
                  
                  $
                  437,976
                  
                  
                  $
                  3,245,736Cash
      used in investing activities
                  
                  $
                  300
                  
                  
                  $
                  159,786Cash
      provided by financing activities
                  
                  $
                  335,000
                  
                  
                  $
                  1,897,860





As at October 31, 2009 the Company had
working capital (deficit) of $1,983,183.  During the twelve-month
period ended October 31, 2009 the Company raised $186,500 from the issue of
convertible notes. During
the twelve-month period ended October 31, 2008 the Company raised $1,475,815
(net) by issuing common shares for cash, $100,000 through convertible notes,
$322,045 through loans and invested $159,786 in acquisition of plant and
equipment and mining claims





The
Capital assets as on October 31, 2009 and October 31, 2008 are $ 108,894 and
$155,443 respectively.





Advances
to Related Parties




Advances
to a related party include a net receivable of $36,000, after providing a
reserve for doubtful receivable for $160,000, advanced interest free against
demand promissory notes to the Company related through common directors and
management.  The advance was used to cover common business expenses
between the two Companies. The Company opted to create a reserve for $160,000 as
a matter of prudence and caution due to the current unfavorable and challenging
general economic conditions. The Company received $36,000 subsequent to the year
end (see note 19-subsequent events).  This receivable was created primarily
due to funds being sent to an exploration contractor who was providing services
to both companies.





Critical
Accounting Policies





The
preparation of financial statements in accordance with US GAAP 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.





23




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 acquisition costs are initially
capitalized when incurred. The Company assesses the carrying costs for
impairment under Accounting Standards 930 Extractive Activities – Mining (AS
930) at each fiscal quarter end. An impairment is recognized when the sum of the
expected undiscounted future cash flows is less than the carrying amount of the
mineral property. Impairment losses, if any, are measured as the excess of the
carrying amount of the mineral property over its estimated fair value. When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the proven and probable
reserves. If mineral properties are subsequently abandoned or impaired, any
capitalized costs will be charged to operations.




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.





Off-Balance
Sheet Arrangement





The
Company had no off-balance sheet arrangements as of October 31, 2009 and October
31, 2008.





Contractual
Obligations and Commercial Commitments





On April
19, 2007, the Company executed an agreement dated as of April 11, 2007 with
David Hackman, a director of the Company, on behalf of a corporation to be
formed in Peru which, prior to closing, would then own certain mineral claims
located in Peru.  On December 17, 2007, Pacific Copper completed the
acquisition of Peru SRL, pursuant to the Share Exchange Agreement among the
Company, Peru SRL and the former partners of Peru SRL dated as of April 11,
2007.  The 4,850,000 shares of the Company’s common stock issued in
connection with the closing of this transaction are held in escrow subject to
the satisfaction of certain post-closing conditions.  See PAFICIC
COPPER IN SOUTH AMERICA - PACIFIC COPPER PERU SRL.





24




On April
19, 2007 the Company executed an agreement dated as of April 11, 2007 with
Harold Gardner, a director of the Company, on behalf of a corporation to be
formed in Chile which, prior to closing, would then own certain mineral claims
located in Chile.  On January 8, 2008, Pacific Copper acquired Pacific
LTDA pursuant to a Share Exchange Agreement entered into as of April 11, 2007
between the Company and the former partners of Pacific LTDA.  The
6,088,452 shares of the Company’s common stock issued in connection with the
closing of this transaction are held in escrow subject to the satisfaction of
certain post-closing conditions.  See PAFICIC COPPER IN SOUTH AMERICA
-  SOCIEDAD
PACIFIC COPPER CHILE LIMITADA.




On August
9, 2007 the Company and Andrew A. Brodkey executed an employment agreement
pursuant to which the Company retained Mr. Brodkey as President and Chief
Executive Officer.  The Employment Agreement had an initial two-year term
that commenced on August 1, 2007 and continued through August 1, 2009.
 Under the terms of the Employment Agreement, the term was
automatically renewed on August 1, 2009, for another two years.  Mr.
Brodkey’s base salary is $132,000 per year.  Upon certain events of
termination Mr. Brodkey would be entitled to a maximum of one year’s salary as a
severance payment.  Under the employment agreement, Mr. Brodkey is
permitted to pursue other business opportunities.





On August
22, 2007 the Company entered into an agreement with Kriyah Consultants LLC
(“Kriyah”) for the performance of certain administrative and management
services.   The Kriyah Agreement has an initial term of two years
and is then automatically renewable.  Either party may terminate the Kriyah
Agreement upon 60 days prior written notice.  Under the Kriyah
Agreement, Kriyah received an initial payment of $57,504 and will receive
payments of $4000 each month thereafter.  Commencing in January of
2009, this amount was reduced to $2,500 per month, and as of March, 2009,
reflecting market conditions, to $250 per month.  In order to
facilitate the retaining of Kriyah, the Company guaranteed a lease agreement for
the office space used by Kriyah in Tucson, Arizona.  The Company’s
maximum obligation under the lease guarantee, as of October 31, 2009, is
$212,774 in the event of a lease default with full acceleration of rent. The
lease which was executed by War Eagle Mining Corporation, a Canadian corporation
which at the time of execution was related to the Company through common
directors, (“War Eagle”) as Lessee, is now in default and Kriyah subsequently
moved its office location. The War Eagle lease is also guaranteed by Zoro Mining
Corp. (a related Company).  Kriyah’s Manager, Andrew A. Brodkey, is
also the President and CEO of the Company. The potential liability as a result
of this default is not determinable at this time. Expense, if any, will be
recorded in the period in which any liability becomes known.





On
September 1, 2007, the Company entered into a Payroll Service Agreement with
Kriyah to administer payroll and health insurance benefits to Andrew A. Brodkey,
President and CEO of the Company, as contemplated in his Employment Agreement
with the Company dated August 1, 2007 (“Employment Agreement”).  The
Company shall reimburse Kriyah monthly for all direct costs for wages, covered
by the Employment Agreement and health benefits provided by Kriyah and invoiced
to the Company for Mr. Brodkey.





On
January 24, 2008, the Company, through its subsidiary Pacific LTDA entered into
an exclusive exploration, mining and exploitation agreement (the "Guanaca
Lease") for the La Guanaca oxide copper project located northeast of the town of
Inca de Oro, Chanaral Province, Atacama Region 3, Chile. This property, which
consists of approximately 300 hectares of exploration concessions, is
road-accessible and was previously explored in the mid-1990's through
geophysical methods, sampling and drilling by Empresa Nacional de Mineria
("ENAMI") a Chilean nationally-owned mining enterprise.  The Guanaca
Lease is for a term of 5 years and is renewable automatically for additional
5-year periods.  The owners of the La Guanaca property will receive
US$2,000 per month in cash as lease payment during the term of the
agreement.





On
February 12, 2008, the Company’s subsidiary, Pacific LTDA, entered into an
Operator Agreement (the “Chile Operator Agreement”) with Gareste Limitada, a
limited liability partnership organized under the laws of Chile
(“Gareste”).  Pursuant to the Chile Operator Agreement Gareste will
prepare and submit proposed annual work programs and accompanying budgets to
Pacific LTDA covering the exploration and, if warranted, development of certain
mineral concessions held by Pacific LTDA.  Gareste will provide
comprehensive management services and contract for transportation, labor,
insurance and logistical services for all approved
programs.  Gareste’s overhead reimbursement and compensation will be
specified in each proposed budget and subject to approval by Pacific
LTDA.  The Chile Operator Agreement is terminable by either party upon
90-days’ prior notice.  Harold Gardner, a member of the Company’s
board of directors, is a partner in Gareste.




25




On
February 12, 2008 The Company’s subsidiary, Peru SRL entered into an Operator
Agreement (the “Peru Operator Agreement”) with Inversiones Mineras Stiles, a
limited liability partnership organized under the laws of Peru
(“Stiles”).  Pursuant to the Peru Operator Agreement Stiles will
prepare and submit proposed annual work programs and accompanying budgets to
Peru SRL covering the exploration and, if warranted, development of certain
mineral concessions held by Peru SRL.  Stiles will provide
comprehensive management services and contract for transportation, labor,
insurance and logistical services for all approved programs.  Stiles’
overhead reimbursement and compensation will be specified in each proposed
budget and subject to approval by Peru SRL.





The
Company,through
Pacific LTDA, also executed a letter of intent with Gareste to acquire its
interest in the “Yerbas Buenas” oxide copper property located 130 km southeast
of the city of Copiapo, Atacama Region III, Chile.  Yerbas Buenas is
located roughly 20 km from the El Corral property.  The letter of
intent contemplates that Gareste will receive 2 million shares of the Company at
closing in exchange for its interest at Yerbas Buenas, and a 2% NSR royalty,
capped at $6 million, 1% of which can be repurchased for the sum of $2 million
at any time prior to commercial production As of the date of this report, the
Company and Gareste have postponed performance under this letter of intent due
to the current copper market conditions and general economic decline
worldwide.





Pacific
Copper Corp. through its Chilean subsidiary Pacific Copper Chile Limitada,
entered into a mineral property acquisition agreement dated June 11, 2009 with
Gareste Limitada to purchase the San Enrique property located in Atacama Region
III, Chile and comprising 100 hectares. In consideration Pacific Copper will
issue 7 million shares of its capital stock and shall grant a 2% Net Smelter
Return (NSR) royalty to Gareste Limitada, capped at US$6 million, one half (1/2)
of which can be repurchased by Pacific Copper or its subsidiary at any time
prior to commencement of any commercial production by making a payment of US$2
million to Gareste Limitada. Since the entry into the agreement Gareste has
secured ground adjacent to the original claims in the approximate additional
amount of 190 hectares, which will be included in the properties to be acquired
by the Company. The parties have not yet closed on this agreement and have
mutually agreed to extend the closing date to June 30, 2010.


On
February 17, 2009, the Company issued a promissory note (the “War Eagle Note”)
to War Eagle Mining Company, Inc. a Canadian Corporation (“War
Eagle”).  War Eagle and the Company no longer share a common
director.  Under the terms of the War Eagle Note, a total of $100,000
has been advanced; all amounts advanced are due and payable on June 30, 2009
with interest at 15% per annum.  The War Eagle Note was to be secured
by a blanket security interest in all real, personal, and intangible interests
of Pacific Copper associated with each of the La Guanaca, El Corral, La Mofralla
and Venado projects (the Company’s South American oxide copper properties, as
described in this report).  In February 2009, War Eagle notified the
Company that it would not fund the full amounts contemplated in the War Eagle
Note, leaving a funding shortfall of $55,000.  The Company has
notified War Eagle that it considers this failure to fully fund the War Eagle
Note to be a breach, has denied the security interest, and has reserved all of
its legal rights.  The total amount due as of October 31, 2009,
including interest is $117,466.





Recent
Accounting Pronouncements




FASB ASC TOPIC 805 – “Business
Combinations.” The objective of this topic is to enhance the information that an
entity provides in its financial reports about a business combination and its
effects. The Topic mandates: (i) how the acquirer recognizes and measures the
assets acquired, liabilities assumed and any non-controlling interest in the
acquiree; (ii) what information to disclose in its financial reports and; (iii)
recognition and measurement criteria for goodwill acquired. This Topic is
effective for any acquisitions made on or after December 15, 2008. The adoption
of this Topic did not have a material impact on the Company’s financial
statements and disclosures.




FASB ASC TOPIC 810 –
“Noncontrolling Interests.” The objective of this Topic is to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements by
establishing accounting and reporting standards that require: (i) the ownership
interests in subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated statement of financial
position within equity, but separate from the parent's equity; (ii) the amount
of consolidated net income attributable to the parent and to the noncontrolling
interest be clearly identified and presented on the face of the consolidated
statement of income; (iii) changes in a parent's ownership interest while the
parent retains its controlling financial interest in its subsidiary be accounted
for consistently; (iv) when a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. The gain or loss on the deconsolidation of the subsidiary is
measured using the fair value of any noncontrolling equity investment rather
than the carrying amount of that retained investment and; (v) entities provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
Topic is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. Earlier adoption is prohibited.
The adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 815 –
“Derivatives and Hedging.” The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
This Topic requires enhanced disclosures about an entity's derivative and
hedging activities and thereby improves the transparency of financial reporting.
This Topic is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The adoption of this Topic is not expected to have a material impact
on the Company’s financial statements and disclosures.




FASB ASC TOPIC 944 –
“Financial Services – Insurance.” Diversity exists in practice in accounting for
financial guarantee insurance contracts by insurance enterprises. That diversity
results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred. This
Topic requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Topic is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years, except for
some disclosures about the insurance enterprise's risk-management activities.
The adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 855 -
“Subsequent Events.” In
May 2009, the FASB issued Topic 855, which establish general standards of
accounting and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. In
particular, this Topic sets forth : (i) the period after the balance sheet date
during which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, (ii) the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, (iii) the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This Topic
should be applied to the accounting and disclosure of subsequent events. This
Topic does not apply to subsequent events or transactions that are within the
scope of other applicable accounting standards that provide different guidance
on the accounting treatment for subsequent events or transactions. This Topic
was effective for interim and annual periods ending after June 15, 2009, which
was October 31, 2009 for the Company. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.




FASB ASC TOPIC 105 - “The FASB
Accounting Standard Codification and the Hierarchy of Generally Accepted
Accounting Principles.”In June 2009, the FASB
issued Topic 105, which became the source of authoritative GAAP recognized by
the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the SEC under authority of federal securities laws are also sources
of authoritative GAAP for SEC registrants. On the effective date of this Topic,
the Codification will supersede all then-existing non-SEC accounting and
reporting standards. All other non-SEC accounting literature not included in the
Codification will become non-authoritative. This Topic identifies the sources of
accounting principles and the framework for selecting the principles used in
preparing the financial statements of nongovernmental entities that are
presented in conformity with GAAP and arranged these sources of GAAP in a
hierarchy for users to apply accordingly. This Topic is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. The adoption of this topic did not have a material impact on the Company’s
disclosure of the financial statements.




26




FASB ASC TOPIC 320 -
“Recognition and Presentation of Other-Than-Temporary Impairments.”In April 2009, the FASB
issued Topic 320 amends the other-than-temporary impairment guidance in GAAP for
debt securities to make the guidance more operational and to improve the
presentation and disclosure of other-than-temporary impairments on debt and
equity securities in the financial statements. This Topic does not amend
existing recognition and measurement guidance related to other-than-temporary
impairments of equity securities. The Topic is effective for interim and annual
reporting periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. Earlier adoption for periods ending before
March 15, 2009, is not permitted. This Topic does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, this Topic requires comparative disclosures only
for periods ending after initial adoption. The adoption of this Topic did not
have a material impact on the Company’s financial statements and
disclosures.




FASB ASC TOPIC 860 -
“Accounting for Transfer of Financial Assets and Extinguishment of Liabilities.”
In June 2009, the FASB issued additional guidance under Topic 860 which improves
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. This additional guidance
requires that a transferor recognize and initially measure at fair value all
assets obtained (including a transferor’s beneficial interest) and liabilities
incurred as a result of a transfer of financial assets accounted for as a sale.
Enhanced disclosures are required to provide financial statement users with
greater transparency about transfers of financial assets and a transferor’s
continuing involvement with transferred financial assets. This additional
guidance must be applied as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. This additional guidance
must be applied to transfers occurring on or after the effective date. The
adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 810 -
“Consolidation of Variables Interest and Special Purpose Entities.” In June
2009, the FASB issued Topic 810, which requires an enterprise to perform an
analysis to determine whether the enterprise’s variable interest or interests
give it a controlling financial interest in a variable interest entity. This
analysis identifies the primary beneficiary of a variable interest entity as the
enterprise that has both of the following characteristics: (i) The power to
direct the activities of a variable interest entity that most significantly
impact the entity’s economic performance and (ii) The obligation to absorb
losses of the entity that could potentially be significant to the variable
interest entity or the right to receive benefits from the entity that could
potentially be significant to the variable interest entity. Additionally, an
enterprise is required to assess whether it has an implicit financial
responsibility to ensure that a variable interest entity operates as designed
when determining whether it has the power to direct the activities of the
variable interest entity that most significantly impact the entity’s economic
performance. This Topic requires ongoing reassessments of whether an enterprise
is the primary beneficiary of a variable interest entity and eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity, which was based on determining which
enterprise absorbs the majority of the entity’s expected losses, receives a
majority of the entity’s expected residual returns, or both. This Topic is
effective as of the beginning of each reporting entity’s first annual reporting
period that begins after November 15, 2009, for interim periods within that
first annual reporting period, and for interim and annual reporting periods
thereafter. Earlier application is prohibited. The adoption of this Topic is not
expected to have a material impact on the Company’s financial statements and
disclosures.




FASB ASC TOPIC 820 - “Fair
Value measurement and Disclosures”, an Accounting Standard Update. In September
2009, the FASB issued this Update to amendments to Subtopic 82010, “Fair Value Measurements and
Disclosures”. Overall, for the fair value measurement of investments in
certain entities that calculates net asset value per share (or its equivalent).
The amendments in this Update permit, as a practical expedient, a reporting
entity to measure the fair value of an investment that is within the scope of
the amendments in this Update on the basis of the net asset value per share of
the investment (or its equivalent) if the net asset value of the investment (or
its equivalent) is calculated in a manner consistent with the measurement
principles of Topic 946 as of the reporting entity’s measurement date, including
measurement of all or substantially all of the underlying investments of the
investee in accordance with Topic 820. The amendments in this Update also
require disclosures by major category of investment about the attributes of
investments within the scope of the amendments in this Update, such as the
nature of any restrictions on the investor’s ability to redeem its investments
at the measurement date, any unfunded commitment, and the investment strategies
of the investees. The major category of investment is required to be determined
on the basis of the nature and risks of the investment in a manner consistent
with the guidance for major security types in GAAP on investments in debt and
equity securities in paragraph 320-10-50-lB. The disclosures are required for
all investments within the scope of the amendments in this Update regardless of
whether the fair value of the investment is measured using the practical
expedient. The amendments in this Update apply to all reporting entities that
hold an investment that is required or permitted to be measured or disclosed at
fair value on a recurring or non recurring basis and, as of the reporting
entity’s measurement date, if the investment meets certain criteria The
amendments in this Update are effective for the interim and annual periods
ending after December 15, 2009. Early application is permitted in financial
statements for earlier interim and annual periods that have not been issued. The
adoption of this Update is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 740 - “Income
Taxes”, an Accounting Standard Update. In September 2009, the FASB issued this
Update to address the need for additional implementation guidance on accounting
for uncertainty in income taxes. For entities that are currently applying the
standards for accounting for uncertainty in income taxes, the guidance and
disclosure amendments are effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The adoption of this Update
did not have a material impact on the Company’s financial statements and
disclosures.





Item
7A. Quantitative and Qualitative Disclosure about Market Risk




As a
“smaller reporting company”, we are not required to provide the information
required by this Item.





Item
8. Financial Statements and Supplementary Data




See the
financial statements and report of Schwartz Levitsky Feldman, LLP contained in
this report.




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




None.




Item
9A. and 9A(T) Controls and Procedures




(a) Disclosure Controls and
Procedures. The Company's management, with the participation of the
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Company's disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and principal financial officer of the Company, respectively, have
concluded that, as of the end of such period, the Company's disclosure controls
and procedures are effective.




(b) Internal Control over
Financial Reporting. There have not been any changes in the Company's
internal control over financial reporting (as such term is defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended October
31, 2009 that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.





27




Management’s
Annual 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-K,
our Chief Executive Officer and Chief Financial Officer, assessed the
effectiveness of the design and operation of our disclosure controls and
procedures, as required by Exchange Act Rule 13a-l5(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 is recorded, processed, summarized and reported within
the time periods specified by the SEC's rules and forms.




The
management of Pacific Copper Corp. is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control
over financial reporting is defined in Rule I3a-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.




In making
its 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 time. Management has added 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 October 31, 2009, the Company's
internal control over financial reporting is effective based on those
criteria.




Auditor’s
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 rules of the Securities and Exchange
Commission that permit the company to provide only management's
report




Changes
in Internal Controls




There
have been no changes in our internal control over financial reporting that
occurred during the fourth quarter of the fiscal year ended October 31, 2009
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.




Board
has Assumed Responsibilities of Audit Committee




The Board
of Directors has as of the date of this report, three members, of which no
member is independent.  Due to the resignation of two members of the
Board of Directors, who were independent members of the audit committee during
the months of October, 2009 and January, 2010 respectively, the Board has
subsequently assumed the role of the Audit Committee on an interim
basis.




Item
9B. Other Information




None.





28




Part
III




Item
10. Directors, Executive Officers and Corporate Governance




The
following is a list of the Company’s current Directors.  Each Director
will serve until the next meeting of shareholders or until
replaced.





Andrew
      Brodkey
              Director,
      Chairman of the BoardHarold
      Gardner
              DirectorDavid
      Hackman
              Director





The
following is a list of the Company’s Senior Management:





Andrew
      Brodkey
                  Chief
      Executive Officer and PresidentHarold
      Gardner
                  Vice
      President, Business DevelopmentDavid
      Hackman
                  Vice
      President, ExplorationJodi
      Henderson
                  SecretaryRakesh
      Malhotra
                  Chief
      Financial Officer





Pacific
Copper had an Audit Committee that was appointed by the Board of
Directors.  There is no formal charter for the Audit
Committee.  The Audit Committee reviewed our quarterly and annual
financial statements and met with our independent auditors at least annually to
review financial results for the year, as reported in Pacific Copper’s financial
statements.  The Audit Committee also recommended to the board the
independent auditors to be retained; reviewed the engagement of the independent
auditors, including the scope, extent and procedures of the audit and the
compensation to be paid therefore; assisted and interacted with the independent
auditors in order that they may carry out their duties in the most efficient and
cost effective manner; and reviewed and approved all professional services
provided to the Company by the independent auditors and considered the possible
effect of such services on the independence of the auditors.  The
Audit Committee made such examinations, as are necessary to monitor the
corporate financial reporting and the external audits of the Company and its
subsidiaries, to provide to the board of directors the results of its
examinations and recommendations derived their work to outline to the board
improvements made, or to be made, in internal accounting controls, to nominate
independent auditors, and to provide to the board such additional information
and materials as it may deem necessary to make the board aware of significant
financial matters that require board attention.





The Audit
Committee was comprised of two directors and the Company’s Chief Financial
Officer.  The members were Elden Schorn (resigned on October 30,
2009), George Orr (resigned on January 15, 2010) and Rakesh
Malhotra. During the fiscal year ended October 31, 2009, there were three
meetings of the Audit Committee.





29




The
Company has no other standing committees.  The board of directors, as
a whole, undertakes compensation responsibilities and board nominating
functions.





Reorganization
of Directors and Officers





Effective
November 20, 2008, Donald G. Padgett resigned as a Director of the Company.
There were no disagreement between the Company and Mr. Padgett.


Effective
July 1, 2009, William (Bill) G. Timmins resigned as a director of the Company.
There were no disagreement between the Company and Mr. Timmins.


Effective
October 30, 2009, Elden Schorn resigned as a Director of the Company. There were
no disagreement between the Company and Mr. Schorn.


Effective
January 15, 2010, George Orr resigned as a Director of the Company. There were
no disagreement between the Company and Mr. Orr.





Andrew Brodkey, President,
Chief Executive Officer, Chairman of the Board





Mr.
Brodkey is a mining engineer and a lawyer. He graduated with distinction with a
B.S. in Mining Engineering from the University of Arizona in 1979. Mr. Brodkey
earned a law degree, cum
laude, from Creighton University in 1982. He worked at the Denver,
Colorado law firm of Gorsuch, Kirgis, Campbell, Walker and Grover as an
associate specializing in natural resources and environmental law from 1982
until 1987. Subsequently, Mr. Brodkey joined Magma Copper Company, a NYSE-traded
mining company in 1987, where he held various positions, eventually succeeding
to the role of Vice President and General Counsel in 1992. Following Magma’s
acquisition by BHP in 1996, he remained in a senior legal position with BHP
Copper Inc., and in 2000 moved to the position of Vice President, Business
Development for BHP Copper. Following his departure from BHP in 2002, Mr.
Brodkey held the position of Managing Director of the International Mining &
Metals Group of CB Richard Ellis, Inc (“CBRE”), where he was responsible for
creating and building the mining property practice of CBRE. Mr. Brodkey is 53
years old.





Harold Gardner, Vice President
Business Development, Director





Mr.
Gardner has been involved in the private mining sector for the past 26 years and
has extensive experience in exploration of precious and base metal properties,
as well as industrial mineral properties in Latin America. Mr. Gardner has
served as a consultant, officer, and director of 17 different mining companies
and private investment funds, and currently sits on the board of four companies
in Mexico, Peru, and Chile. Mr. Gardner is 53 years old.





30




Dr. David Hackman, Vice
President Exploration, Director





Dr.
Hackman is a geologist and a registered profession engineer with over 35 years
international experience specializing in the evaluation of leachable metal
deposits. He has worked as a geologist for Mobil Oil Company and ALCOA. From
1990 to 1995, he was the president, of Liximin, Inc., a mineral exploration and
mine development company based in Tucson, Arizona. From 1996 to 2000, he was an
officer and director of Silver Eagle Resources Ltd. Currently; he is also an
officer and director of War Eagle Mining Company, Inc., a mineral exploration
and development company. Mr. Hackman is 68 years old.





Rakesh Malhotra, Chief
Financial Officer





Mr.
Malhotra is a United States certified public accountant (CPA) and a Canadian
chartered accountant (CA) with considerable finance and accounting
experience.  Mr. Malhotra graduated with a Bachelor of Commerce
(Honours) from the University of Delhi (India) and worked for a large accounting
firm A.F Ferguson & Co. (Indian correspondent for KPMG) and obtained his CA
designation in India.  Having practiced as an accountant for over 10
years in New Delhi, he moved to the Middle East and worked for 5 years with the
highly successful International Bahwan Group of Companies in a senior finance
position.  He worked as a Chartered Accountant with a mid-sized
Chartered Accounting firm in Toronto doing audits of Public Companies and has
since been a consultant to many public companies.  Mr. Malhotra has
more than 20 years of experience in accounting and finance.  Mr.
Malhotra is 53 years old.





Jodi Henderson, Corporate
Secretary





Ms.
Henderson is currently the Director of Operations for Kriyah Consultants, LLC an
administration company that manages publicly held mining exploration
companies.  Prior to her September 2007 appointment to Kriyah she
managed the administration and marketing for the International Mining &
Metals Group of CB Richard Ellis, Inc.  After she received her degree
in Applied Mathematics from the Indiana State University she gained 10 years of
board, administration and finance management experience which included a tenure
as a Director for the Tucson Museum of Art from 2002 to 2005.  Ms.
Henderson is 36 years old.





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 a registered stock 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 October 31, 2009,
no Section 16 reports were filed late





31





Item
11.   Executive Compensation





Except
for services provided by entities owned by some of our Officers and 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.





On August
9, 2007, the Company and Andrew A. Brodkey executed an employment agreement (the
“Employment Agreement”) pursuant to which the Company has retained Mr. Brodkey
as President and Chief Executive Officer.





The
Employment Agreement has a two-year term commencing on August 1, 2007, and
continued through August 1, 2009.  Under the terms of the Employment
Agreement, the term was automatically renewed on August 1, 2009, for another two
years. Mr.
Brodkey’s base salary is $132,000 per year.  Mr. Brodkey also received
1,700,000 stock options.  Mr. Brodkey is paid through a payroll
service agreement administered by Kriyah Consultants LLC, a company engaged by
the Company to provide administrative services.  Under the terms of
that agreement payroll amounts and the cost of health insurance benefits are
billed to the Company.  These include all amounts related to Mr.
Brodkey’s employment.





a)
Compensation of Officers





The
following table shows the compensation expensed during the fiscal years ended
October 31, 2009 and 2008 for the Chief Executive Officer and the next two most
highly compensated Directors of the Company





SUMMARY
COMPENSATION TABLE





Name and principal
                                    position
                                  
                                  Year
                                    Ended
                                    June 30,
                                  
                                  Salary
                                    ($)
                                  
                                  Bonus
                                    ($)
                                  
                                  Stock
                                    Awards
                                    ($)
                                  
                                  Option
                                    awards
                                    ($)
                                  
                                  Non-equity
                                    incentive plan
                                    compensation
                                    ($)
                                  
                                  Nonqualified
                                    deferred
                                    compensation
                                    earnings ($)
                                  
                                  All other
                                    compensation
                                    ($)
                                  
                                  Total
                                    ($)Andrew
      A. Brodkey
                                  
                                  2009
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  192,401
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  143,829
                                  
                                  336,230CEO
      and Director
                                  
                                  2008
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  160,334
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  137,069
                                  
                                  297,403Harold
      GardnerDirector
                                  
                                  2009
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  90,000
                                  
                                  90,0002008
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  45,792
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  90,000
                                  
                                  135,792David
      HackmanDirector
                                  
                                  2009
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  84,000
                                  
                                  84,0002008
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  45,792
                                  
                                  NIL
                                  
                                  NIL
                                  
                                  90,000
                                  
                                  135,792




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.





No stock
options were granted to the named executive officers and directors during the
fiscal year ended October 31, 2009. Stock options granted to the named executive
officers during fiscal year ended October 31, 2008 are provided in the table
below:





32





Year ended October 31,
2008





Name of Option
                          Holder
                        
                        Number of
                          Outstanding
                          Options Held
                        
                        Date of Grant
                        
                        Exercise Price
                          of Options
                        
                        Expiry DateJodi
      Henderson
                        
                        
                        50,000
                        *
                        3/1/2008
                        
                        $
                        0.50
                        
                        3/1/2013





* These options vest at
the rate of 25,000 options on March 1, 2009 and 25,000 options on March 1,
2010.





No stock
options were exercised during the fiscal year ended October 31, 2009 or October
31, 2008.





The
following is the summary of options and stock appreciation rights granted to the
following directors and officers during the year ended October 31,
2009:





Name
                  
                  Number of
                    Securities
                    underlying
                    unexercised
                    options (#)
                    Exercisable
                  
                  Number of
                    Securities
                    underlying
                    unexercised
                    options (#)
                    Unexercisable
                  
                  Equity
                    Incentive
                    plan
                    awards:
                    Number of
                    Securities
                    underlying
                    unexercised
                    unearned
                    options
                    (#)
                  
                  Option
                    exercise
                    price
                    ($)
                  
                  Option
                    expiration
                    date
                  
                  Number
                    of
                    shares
                    or units
                    of stock
                    that
                    have
                    not
                    vested
                    (#)
                  
                  Market
                    value
                    of
                    shares
                    of
                    units
                    of
                    stock
                    that
                    have
                    not
                    vested
                    ($)
                  
                  Equity
                    Incentive
                    plan
                    awards:
                    Number
                    of
                    unearned
                    shares,
                    units or
                    other
                    rights
                    that have
                    not
                    vested
                    (#)
                  
                  Equity
                    Incentive
                    plan
                    awards:
                    Market
                    or
                    payout
                    value of
                    unearned
                    shares,
                    or units
                    or other
                    rights
                    that have
                    not
                    vested
                    ($)Andrew
      A. Brodkey
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NILHarold
      Gardner
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NILDavid
      Hackman
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NILRakesh
      Malhotra
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NILJodi
      Henderson
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL
                  
                  NIL




33





Mr.
Donald Padgett resigned as a director of the Company on November 20, 2008. There
were no disagreement between the Company and Mr. Donald Padgett





William
(Bill) G. Timmins resigned as a director of the Company on July 1, 2009.. There
were no disagreement between the Company and Mr. Timmins.





Elden
Schorn resigned as a Director of the Company on October 30, 2009. There were no
disagreement between the Company and Mr. Elden Schorn





George
Orr resigned as a Director of the Company on January 15, 2009. There were no
disagreement between the Company and Mr. George Orr.





Equity
Awards





The
following table provides certain information concerning equity awards held by
the named executive officers as of October 31, 2009.


34





OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END





OPTION AWARDS
                                
                                STOCK AWARDSName
                                
                                No. of
                                  Securities
                                  Underlying
                                  Unexercised
                                  Options (#)
                                  Exercisable
                                
                                
                                Number of
                                  Securities
                                  Underlying
                                  Unexercised
                                  Options (#)
                                  Unexercisable
                                
                                
                                Option
                                  Exercise
                                  Price ($)
                                
                                Option
                                  Expiration
                                  Date
                                
                                Number of
                                  Shares or
                                  Units of Stock
                                  That Have Not
                                  Vested (#)
                                
                                
                                Equity
                                  Incentive Plan
                                  Awards:
                                  Number of
                                  Unearned
                                  Shares, Units
                                  Or Other
                                  Rights That
                                  Have Not
                                  Vested(#)Andrew
      Brodkey
                                
                                
                                1,666,666
                                
                                
                                
                                33,334
                                
                                
                                $
                                0.50
                                
                                8/1/2012
                                
                                
                                -0-
                                
                                
                                
                                -0-Rakesh
      Malhotra
                                
                                
                                250,000
                                
                                
                                
                                -0-
                                
                                
                                $
                                0.50
                                
                                5/14/2012
                                
                                
                                -0-
                                
                                
                                
                                -0-Jodi
      Henderson
                                
                                
                                100,000
                                
                                
                                
                                -0-
                                
                                
                                $
                                0.50
                                
                                7/19/2012
                                
                                
                                -0-
                                
                                
                                
                                -0-Jodi
      Henderson
                                
                                
                                25,000
                                
                                
                                
                                25,000
                                
                                
                                $
                                0.50
                                
                                3/1/2013
                                
                                
                                -0-
                                
                                
                                
                                -0-





Compensation
of Directors or Other Arrangements





See
above





Indebtedness
of Directors and Executive Officers





None.





Item
12   Security Ownership and Certain Beneficial Owners and Management
and Related Stockholder Matters





We have
49,561,600 shares of common stock issued and outstanding as of October 31,
2009.  We have included in the table below the number of common shares
of Pacific Copper held by the officers and directors of Pacific
Copper.  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.


35





Name and Address
                                                                
                                                                Number of Shares
                                                                
                                                                PercentageOf Beneficial Owner
                                                                
                                                                of Common Stock
                                                                
                                                                Class HeldWilliam
      (Bill) G. Timmins, Former Director
                                                                
                                                                
                                                                785,714
                                                                
                                                                1.59%
      of Common Shares#3
      – 950 Lanfranco Rd.Kelowna,
      B.C. V1W 3W8M.
      Elden Schorn, Former Director
                                                                
                                                                
                                                                100,000
                                                                
                                                                0.20%
      of Common SharesSuite
      1247 – 235 Keith Rd.West
      Vancouver, B.C.  V7T 1L5Rakesh Malhotra, Chief Financial Officer
                                                                
                                                                
                                                                60,000
                                                                
                                                                0.12%
      of Common Shares4580
      Beaufort TerraceMississauga,
      ON L5M 3H7Harold
      Gardner (1)
                                                                
                                                                
                                                                2,425,000
                                                                
                                                                4.89%
      of Common Shares22604
      S. 215 th
      StreetQueen
      Creek, AZ 85242David
      Hackman (1)
                                                                
                                                                
                                                                2,425,000
                                                                
                                                                4.89%
      of Common Shares3430
      E. Sunrise Drive, Ste 160Tucson,
      AZ 85718Eduardo
      Esteffan (1)
      (2)
                                                                
                                                                
                                                                2,363,452
                                                                
                                                                4.77%
      of Common SharesVan
      Buren 208Copiapo,
      ChileGareste
      (3)
                                                                
                                                                
                                                                5,000,000
                                                                
                                                                10.09%
      of Common SharesTOTAL
                                                                
                                                                
                                                                13,159,166
                                                                
                                                                26.55
      % of Common
Shares


1
  These shares are held in escrows established in connection with the
acquisition of subsidiaries in South America.  The shares will be
released from the escrows upon satisfaction of certain post-closing items
specified in the Closing and Escrow agreements governing such
escrows.  For more information, please see Item 2 – Description of
Property – PACIFIC COPPER IN SOUTH AMERICA – SOCIEDAD PACIFIC COPPER
CHILE LIMITADA and PACIFIC COPPER PERU SRL.


2
  Eduardo Esteffan is a director of Pacific Copper Chile
LTDA.  In addition to his shares of Pacific Copper, Mr. Esteffan holds
a 1% interest in Pacific Copper Chile LTDA as described in “PACIFIC COPPER IN
SOUTH AMERICA - SOCIEDAD PACIFIC COPPER CHILE LIMITADA.”


3





As a
group management and the directors own or control 28.17% of the issued and
outstanding shares of Pacific Copper.—





Agosto
Corporation Limited, based in St. James, Barbados, BVI, and controlled by Gordon
Murphy, a resident of Barbados, BVI, owns approximately 12.2 % of the
outstanding shares of the Company.





Donald
Stiles owns approximately 4.89% of the outstanding shares of the
Company.  Mr. Stiles’ shares are held in an escrow established in
connection with the acquisition of the subsidiary in Peru.  The shares
will be released from the escrow upon satisfaction of certain post-closing items
specified in the Closing and Escrow agreement governing such
escrow.  For more information, please see Item 2 – Description of
Property – PACIFIC COPPER IN SOUTH AMERICA – PACIFIC COPPER PERU
SRL.


36


Item
13.   Certain relationships and Related
Transactions





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





Fiscal
year ended October 31, 2009


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


A)
            During
      the year ended October 31, 2009, the Company expensed stock based
      compensation for $195,036 to its directors and officers relating to the
      vesting of the stock options issued in years 2007 and
  2008





B)
            A
      director of the Company provided consulting geological services to the
      Company and a total of $84,000 was expensed to a private Company with that
      director in common. As of October 31, 2009, $114,000 was owed to this
      private company.





C)
            A
      director of the Company provided consulting services to the Company and a
      total of $90,000 was expensed to a private company with that director in
      common.  As of October 31, 2009, $263,954 was owed to this
      private company which also includes non-reimbursed
    expenses.





D)
            The
      Company expensed $143,829 being the amount payable to Kriyah, including
      benefits charged to the Company, relating to compensation payable to
      the  President, CEO, Director and Chairman of the Board of
      Directors of the Company. As of October 31, 2009, $99,491 was owed which
      also included non-reimbursed
expenses.





E)
            The
      Secretary of the Company is an employee of Kriyah and was paid $31,993 by
      Kriyah, including payroll burden and benefits that was charged to the
      Company.





F)
            The
      Company expensed $20,261 for services rendered to the Company by the CFO
      of the Company. As of October 31, 2009, $7,024 was owed to the
      CFO.





G)
            On
      June 1, 2007, the Company entered into an agreement with Sweetwater for a
      term of 24 months to provide financial public relations, business
      promotion, business growth and development consulting services, including
      consultation regarding mergers and acquisitions, and general business
      consultation.  The Company expensed $138,600 for the year ended
      October 31, 2009 and also amortized deferred stock compensation expense
      for $145,833 relating to issue of 1,000,000 restricted shares of the
      Company's common stock that was earned during the year ended October 31,
      2009. As of October 31, 2009, $118,608 was owed to
    Sweetwater.





H)
            The
      Company incurred a total of $757,450 to a private Chilean company that
      provides exploration services to the Company in Chile, and has a director
      in common, of which $451,956 was owed at October 31, 2009 with such costs
      recorded as project costs.




37




Fiscal
year ended October 31, 2009


A
              During the year ended October 31,
      2008, the Company expensed stock based compensation for $442,984 relating
      to the vesting of the following stock options issued in year 2007 and 2008
      to its directors and
officers:
 
 a)
              On May 14, 2007, stock options to
      purchase 250,000 common shares at an exercise price of $0.50/per share
      were issued to each of three Officers/ Directors of the
      Company.
 
 b)
              On May 14, 2007, stock options to
      purchase 100,000 common shares at an exercise price of $0.50 per share
      were issued to each of two directors of the Company, one officer and a
      former chief financial officer of the
  Company.
 
 c)
              On July 20, 2007, stock options
      to purchase 150,000 common shares at an exercise price of $0.50 per share
      were issued to a director.
 
 d)
              On August 1, 2007, stock options
      to purchase 1,700,000 common shares at an exercise price of $0.50 per
      share were issued to the Company’s new
  CEO.
 
 e)
              On August 9, 2007, stock options
      to purchase 650,000 common shares at an exercise price of $0.50 per share
      were issued to the Company’s two directors (250,000 options each), and to
      one director (150,000
options).
 
 f)
              On March 1, 2008, stock options
      to purchase 50,000 common shares at an exercise price of $0.50 per share
      were issued to the Company’s
officer.
 
 B)
              During the year ended October 31,
      2008, the Company paid $22,500 to Medallion Capital Corp., a private
      corporation owned by a former officer of the Company for consulting
      services. The officer resigned effective February 1.
      2008
 
 C)
              A director of the Company
      provided consulting services to the Company and a total of $90,000 was
      expensed to his company, Sage Associates, for the year ended October 31,
      2008.
 
 D)
              A director of the Company
      provided consulting services to the Company and a total of $90,000 was
      expensed to his company, Pro Business Trust, for the year ended October
      31, 2008.
 
 E)
              The President, CEO, Director and
      Chairman of the Board of Directors of the Company, was paid $137,069 by
      Kriyah, including benefits billed to the Company during the year ended
      October 31, 2008.
 
 F)
              The Secretary of the Company is
      an employee of Kriyah and was paid $20,523 by Kriyah, including payroll
      burden and benefits that was billed to the Company during the year ended
      October 31, 2008.
 
 G)
              The Company expensed $21,690 for
      services rendered to the Company by the CFO of the Company, during the
      year ended October 31, 2008.
 
 H)
              On June 1, 2007, the Company
      entered into an agreement with Sweetwater Capital Corporation, a private
      company with a director in common with the Company (“Sweetwater”) for a
      term of 24 months to provide financial public relations, business
      promotion, business growth and development consulting services, including
      consultation regarding mergers and acquisitions, and general business
      consultation.  The Company expensed $48,000 for the year ended
      October 31, 2008 and also amortized deferred stock compensation expense
      for $250,000 relating to issue of 1,000,000 restricted shares of the
      Company's common stock that was earned during the year ended October 31,
      2008.
 38
  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 October
31, 2009 and October 21, 2008.





The
following is a summary of the fees expensed relating to professional services
rendered by the principal accountants for the fiscal years ended October 31,
2009 and October 31, 2008:





Fee Category
                  
                  2009 Fees
                  
                  
                  2008 FeesAudit
      Fees
                  
                  $
                  23,000
                  
                  
                  $
                  20,340Audit
      Related Fees
                  
                  $
                  1,000
                  
                  
                  $
                  0Tax
      Fees
                  
                  $
                  0
                  
                  
                  $
                  0All
      Other Fees
                  
                  $
                  0
                  
                  
                  $
                  0Total
      Fees
                  
                  $
                  24,000
                  
                  
                  $
                  20,340




Audit
Fees. Consists of fees billed for professional services rendered for the audit
of our financial statements and review of interim consolidated financial
statements included in quarterly reports and services that are normally provided
by the principal accountants in connection with statutory and regulatory filings
or engagements.





Audit
Related Fees. Consists of fees billed for assurance and related services that
are reasonably related to the performance of the audit or review of our
consolidated financial statements and are not reported under “Audit
Fees”.





Tax
Fees. Consists of fees billed for professional services for tax compliance,
tax advice and tax planning.  These services include preparation of
federal and state income tax returns.





All
Other Fees.  Consists of fees for product and services other than the
services reported above.


39




PART
1V





Item
13.   Exhibits, Financial Statement Schedules





The
Financials Statements and Report of Schwartz Levitsky Feldman, LLP for the year
ended October 31, 2009 and October 31, 2008 are filed as part of this
report





Index to ExhibitsList
      of Subsidiaries
                                                21.1Consent
      of Schwartz Levitsky Feldman LLP Independent Auditors
                                                23.1Certification
      by the Principal Executive Officer pursuant toSection
      302 of the Sarbanes-Oxley Act of 2002
                                                31.1Certification
      by the Chief Financial Officer pursuant toSection
      302 of the Sarbanes-Oxley Act of 2002
                                                31.2Certification
      by the Principal Executive Officerand
      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-2




40




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-K)
to be signed on its behalf by the undersigned, thereunto duly authorized, on
the 5th day of February, 2010.





SIGNATURE
                      
                      TITLE
                      
                      DATE/s/Andrew
      Brodkey
                      
                      Director,
      President and CEO
                      
                      February
      5,, 2010Andrew
      Brodkey/s/Harold
      GardnerHarold
      Gardner
                      
                      Director
                      
                      February
      5, 2010/s/David
      HackmanDavid
      Hackman
                      
                      Director
                      
                      February
      5,  2010/s/Rakesh
      MalhotraRakesh
      Malhotra
                      
                      Chief
      Financial Officer
                      
                      February
      5,  2010


41






PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)




CONSOLIDATED
FINANCIAL STATEMENTS




YEARS
ENDED OCTOBER 31, 2009 AND 2008




(Amounts
expressed in US Dollars)




CONTENTS





Report
      of Independent Registered Public Accounting Firm
                  
                  F-2Consolidated
      Balance Sheets as at October 31, 2009 and October 31, 2008
                  
                  F-3Consolidated
      Statements of Operations for the years ended October 31, 2009 and October
      31, 2008 and the period from inception (May 18, 1999) to October 31,
      2009
                  
                  F-4Consolidated
      Statements of Stockholders' Equity (Deficiency) for the years ended
      October 31, 2009 and October 31, 2008 and the period from inception (May
      18, 1999) to October 31, 2009
                  
                  F-5Consolidated
      Statements of Cash Flows for the years ended October 31, 2009 and October
      31, 2008 and the period from inception (May 18, 1999) to October 31,
      2009
                  
                  F-6Notes
      to Financial Statements
                  
                  F-7 - F-36




F-1




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
 Pacific
Copper Corp.
 (An
Exploration Stage Mining Company)
 
 We have
audited the accompanying consolidated balance sheets of Pacific Copper Corp. (an
Exploration Stage Mining Company) as at October 31, 2009 and 2008 and the
related consolidated statements of operations, cash flows and stockholders’
equity (deficiency) for the years ended October 31, 2009 and 2008 and for the
period from inception (May 18, 1999) to October 31, 2009. These consolidated
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.  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 consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Pacific Copper Corp. as at
October 31, 2009 and 2008 and the results of its operations and its cash flows
for the years ended October 31, 2009 and 2008 and for the period from inception
(May 18, 1999) to October 31, 2009 in conformity with United States generally
accepted accounting principles.
 
 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.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 2
to the consolidated financial statements, the Company is an exploration stage
mining company and has no established source of revenues. These conditions raise
substantial doubt about its ability to continue as a going
concern.  Management’s plans regarding these matters are also
described in the notes to the consolidated financial statements.  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
 
 
 “SCHWARTZ
      LEVITSKY FELDMAN LLP”Toronto,
      Ontario, Canada
              Chartered
      AccountantsJanuary
      19, 2010
              Licensed
      Public Accountants
  1167
      Caledonia Road
                Toronto,
      Ontario M6A 2X1
                Tel:  416
      785 5353
                Fax:  416
      785 5663


F-2




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Balance Sheets as at


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




October 31,
                            
                            
                            October 31,2009
                            
                            
                            2008$
                            
                            
                            $ASSETSCurrentCash
                            
                            
                            9,349
                            
                            
                            
                            110,746Prepaid
      expenses and other receivables
                            
                            
                            5,782
                            
                            
                            
                            35,157Deferred
      financing costs
                            
                            
                            4,023
                            
                            
                            
                            -Advances
      to related parties (note 13)
                            
                            
                            36,000
                            
                            
                            
                            175,000Total
      Current Assets
                            
                            
                            55,154
                            
                            
                            
                            320,903Plant and Equipment, net
      (note 4)
                            
                            
                            108,894
                            
                            
                            
                            155,443Mining
      claims (note 8)
                            
                            
                            900
                            
                            
                            
                            600Total
      Assets
                            
                            
                            164,948
                            
                            
                            
                            476,946LIABILITIESCurrentAccounts
      payable
                            
                            
                            350,832
                            
                            
                            
                            297,370Accrued
      liabilities
                            
                            
                            84,208
                            
                            
                            
                            85,852Due
      to related parties (note 10)
                            
                            
                            1,055,033Derivative
      financial instrument (note 3 h)
                            
                            
                            23,125
                            
                            
                            
                            101,250Advances
      from non-related parties (note 14)
                            
                            
                            525,139
                            
                            
                            
                            259,244Advances
      from related party
                            
                            
                            -
                            
                            
                            
                            70,000Total
      Current Liabilities
                            
                            
                            2,038,337
                            
                            
                            
                            813,716Convertible
      notes (note 15)
                            
                            
                            142,119
                            
                            
                            
                            32,708Total
      Liabilities
                            
                            
                            2,180,456
                            
                            
                            
                            846,424Minority
      Interest (note 8)
                            
                            
                            54,804
                            
                            
                            
                            54,9502,235,260
                            
                            
                            
                            901,374Going
      Concern (note 2)Related
      Party Transactions (note 10)Commitments and
      Contingencies (note 9)STOCKHOLDERS'
      DEFICIENCYCapital Stock(note
      5)Preferred
      stock, $0.0001 par value, 50,000,000 shares authorized, Nil issued and
      outstanding (2008 - nil)
                            
                            
                            -
                            
                            
                            
                            -Common
      stock, $0.0001 par value, 200,000,000 shares authorized, 49,561,600 issued
      and outstanding (2008 -44,561,600)
                            
                            
                            4,956
                            
                            
                            
                            4,456Additional
      Paid-in Capital
                            
                            
                            15,092,695
                            
                            
                            
                            13,893,200Deferred
      stock compensation (note 12)
                            
                            
                            -
                            
                            
                            
                            (145,833
                            )Accumulated
      Other Comprehensive Income
                            
                            
                            2,943
                            
                            
                            
                            1,064Deficit
      Accumulated During the Exploration Stage
                            
                            
                            (17,170,906
                            )
                            
                            
                            (14,177,315
                            )Total
      Stockholders' Deficiency
                            
                            
                            (2,070,312
                            )
                            
                            
                            (424,428
                            )Total Liabilities and
      Stockholders' Deficiency
                            
                            
                            164,948
                            
                            
                            
                            476,946




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




F-3




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statements of Operations


Years
Ended October 31, 2009 and 2008 and the Period from Inception (May 18, 1999) to
October 31, 2009


(Amounts
expressed in US Dollars)





CumulativeSinceInception
                      
                      
                      2009
                      
                      
                      2008$
                      
                      
                      $
                      
                      
                      $Operating
      ExpensesGeneral
      and administration (note 17)
                      
                      
                      5,605,466
                      
                      
                      
                      1,186,120
                      
                      
                      
                      2,966,670Project
      expenses (note 16)
                      
                      
                      5,185,561
                      
                      
                      
                      986,105
                      
                      
                      
                      2,000,180Mining
      claims impairment charges (note 8)
                      
                      
                      6,273,571
                      
                      
                      
                      749,700
                      
                      
                      
                      5,523,871Amortization
                      
                      
                      89,207
                      
                      
                      
                      46,549
                      
                      
                      
                      41,949Total
      Operating Expenses
                      
                      
                      17,153,805
                      
                      
                      
                      2,968,474
                      
                      
                      
                      10,532,670Loss
      from Operations
                      
                      
                      (17,153,805
                      )
                      
                      
                      (2,968,474
                      )
                      
                      
                      (10,532,670
                      )Other
      income-interest
                      
                      
                      54,508
                      
                      
                      
                      -
                      
                      
                      
                      -Other
      expense-Interest
                      
                      
                      (110,861
                      )
                      
                      
                      (103,388
                      )
                      
                      
                      (7,473
                      )Other
      income (expense)-Derivative Financial Instrument
                      
                      
                      38,750
                      
                      
                      
                      78,125
                      
                      
                      
                      (39,375
                      )Loss
      before Income Taxes
                      
                      
                      (17,171,408
                      )
                      
                      
                      (2,993,737
                      )
                      
                      
                      (10,579,518
                      )Provision
      for income taxes
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Minority
      Interest
                      
                      
                      502
                      
                      
                      
                      146
                      
                      
                      
                      356Net
      Loss
                      
                      
                      (17,170,906
                      )
                      
                      
                      (2,993,591
                      )
                      
                      
                      (10,579,162
                      )Loss
      per share-Basic and Diluted
                      
                      
                      
                      
                      
                      
                      (0.07
                      )
                      
                      
                      (0.26
                      )Weighted
      Average Common Shares Outstanding
                      
                      
                      
                      
                      
                      
                      44,835,573
                      
                      
                      
                      40,249,210




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


F-4




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statements of Changes in Stockholders’ Equity (Deficiency) from inception (May
18, 1999) to October 31, 2009 (Amounts expressed in US
Dollars)





Deficit
                                                        
                                                        
                                                        AccumulatedAccumulated
                                                        
                                                        
                                                        OtherCommonStock
                                                        
                                                        
                                                        Additional
                                                        
                                                        
                                                        Deferred
                                                        
                                                        
                                                        Stock
                                                        
                                                        
                                                        during the
                                                        
                                                        
                                                        Comprehensive
                                                        
                                                        
                                                        TotalPaid-in
                                                        
                                                        
                                                        Stock
                                                        
                                                        
                                                        Subscription
                                                        
                                                        
                                                        Exploration
                                                        
                                                        
                                                        Income
                                                        
                                                        
                                                        Stockholders’
                                                        
                                                        
                                                        ComprehensiveNumber
                                                        
                                                        
                                                        Amount
                                                        
                                                        
                                                        Capital
                                                        
                                                        
                                                        Compensation
                                                        
                                                        
                                                        Receivable
                                                        
                                                        
                                                        Stage
                                                        
                                                        
                                                        (Loss)
                                                        
                                                        
                                                        Equity
                                                        
                                                        
                                                        IncomeofShares
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        $
                                                        
                                                        
                                                        (loss)Common
      stock issued on inception
                                                        
                                                        
                                                        1
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1Common
      shares issued for nil consideration
                                                        
                                                        
                                                        7,605,932
                                                        
                                                        
                                                        
                                                        761
                                                        
                                                        
                                                        
                                                        (761
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -Cancelled
      shares
                                                        
                                                        
                                                        (1
                                                        )
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (1
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (1
                                                        )Contributed
      Services
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        8,743
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        8,743Net
      Loss for the period from inception (May 18, 1999) through October 31,
      2004
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (8,743
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (8,743
                                                        )Balance,
      October 31, 2004
                                                        
                                                        
                                                        7,605,932
                                                        
                                                        
                                                        
                                                        761
                                                        
                                                        
                                                        
                                                        7,982
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (8,743
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -Contributed
      Services
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1,178
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1,178Net
      Loss
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (1,178
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (1,178
                                                        )Balance
      October 31, 2005
                                                        
                                                        
                                                        7,605,932
                                                        
                                                        
                                                        
                                                        761
                                                        
                                                        
                                                        
                                                        9,160
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (9,921
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -Common
      shares issued for cash
                                                        
                                                        
                                                        4,710,000
                                                        
                                                        
                                                        
                                                        471
                                                        
                                                        
                                                        
                                                        470,529
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        471,000Common
      shares issued for acquisition of interests in mineral
    claims
                                                        
                                                        
                                                        5,000,000
                                                        
                                                        
                                                        
                                                        500
                                                        
                                                        
                                                        
                                                        499,500
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        500,000Net
      Loss
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (647,453
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (647,453
                                                        )Balance,
      October 31, 2006 (audited)
                                                        
                                                        
                                                        17,315,932
                                                        
                                                        
                                                        
                                                        1,732
                                                        
                                                        
                                                        
                                                        979,189
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (657,374
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        323,547Common
      shares issued for cash
                                                        
                                                        
                                                        660,000
                                                        
                                                        
                                                        
                                                        66
                                                        
                                                        
                                                        
                                                        65,934
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        66,000Common
      shares issued for cash
                                                        
                                                        
                                                        2,000,000
                                                        
                                                        
                                                        
                                                        200
                                                        
                                                        
                                                        
                                                        199,800
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        200,000Common
      shares issued for cash
                                                        
                                                        
                                                        4,520,000
                                                        
                                                        
                                                        
                                                        452
                                                        
                                                        
                                                        
                                                        2,259,548
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        2,260,000Stock
      subscription received
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        30,000
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        30,000Stock
      Issuance cost
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (72,800
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (72,800
                                                        )Common
      shares issued for stock subscriptions received
                                                        
                                                        
                                                        60,000
                                                        
                                                        
                                                        
                                                        6
                                                        
                                                        
                                                        
                                                        (6
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -Common
      shares issued for cash
                                                        
                                                        
                                                        1,590,000
                                                        
                                                        
                                                        
                                                        159
                                                        
                                                        
                                                        
                                                        794,841
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        795,000Common
      shares issued for services
                                                        
                                                        
                                                        3,000,000
                                                        
                                                        
                                                        
                                                        300
                                                        
                                                        
                                                        
                                                        1,499,700
                                                        
                                                        
                                                        
                                                        (1,062,499
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        437,501Stock
      based compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        294,574
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        294,574Compensation
      expense on issue of warrants
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        21,093
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        21,093Stock
      Issuance cost
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (43,750
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (43,750
                                                        )Net
      Loss
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (2,940,779
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (2,940,779
                                                        )Balance
      October 31, 2007 (audited)
                                                        
                                                        
                                                        29,145,932
                                                        
                                                        
                                                        
                                                        2,915
                                                        
                                                        
                                                        
                                                        6,028,123
                                                        
                                                        
                                                        
                                                        (1,062,499
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (3,598,153
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1,370,386Common
      stock issued on acquisition of Peru subsidiary
                                                        
                                                        
                                                        4,850,000
                                                        
                                                        
                                                        
                                                        485
                                                        
                                                        
                                                        
                                                        2,424,515
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        2,425,000Common
      stock issued on acquisition of Chile subsidiary
                                                        
                                                        
                                                        6,088,452
                                                        
                                                        
                                                        
                                                        608
                                                        
                                                        
                                                        
                                                        3,043,617
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        3,044,225Common
      shares issued for cash (net)
                                                        
                                                        
                                                        3,157,143
                                                        
                                                        
                                                        
                                                        316
                                                        
                                                        
                                                        
                                                        1,027,334
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (175,000
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        852,650Common
      shares issued for cash (net)
                                                        
                                                        
                                                        743,572
                                                        
                                                        
                                                        
                                                        75
                                                        
                                                        
                                                        
                                                        246,805
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        246,880Stock
      subscription received
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        175,000
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        175,000Common
      shares issued for cash (net)
                                                        
                                                        
                                                        576,501
                                                        
                                                        
                                                        
                                                        57
                                                        
                                                        
                                                        
                                                        201,228
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        201,285Stock
      based compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        679,971
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        679,971Compensation
      expense on issue of warrants
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        235,982
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        235,982,Amortization
      of deferred stock compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        916,666
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        916,666Beneficial
      conversion feature of the convertible note financing
      transaction
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        5,625
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        5,625Foreign
      currency translation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1,064
                                                        
                                                        
                                                        
                                                        1,064
                                                        
                                                        
                                                        
                                                        1,064Net
      Loss for the year  ended October  31,
    2008
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (10,579,162
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (10,579,162
                                                        )
                                                        
                                                        
                                                        (10,579,162
                                                        )Balance
      October 31, 2008 (audited)
                                                        
                                                        
                                                        44,561,600
                                                        
                                                        
                                                        
                                                        4,456
                                                        
                                                        
                                                        
                                                        13,893,200
                                                        
                                                        
                                                        
                                                        (145,833
                                                        )
                                                        
                                                        
                                                        0
                                                        
                                                        
                                                        
                                                        (14,177,315
                                                        )
                                                        
                                                        
                                                        1,064
                                                        
                                                        
                                                        
                                                        (424,428
                                                        )
                                                        
                                                        
                                                        (10,578,098
                                                        )Stock
      based compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        256,091
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        256,091Compensation
      expense on issue of warrants
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        85,855
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        85,855Amortization
      of deferred stock compensation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        145,833
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        145,833Beneficial
      conversion feature of convertible debt
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        55,950
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        55,950Fair
      value of warrants issued
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        52,099
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        52,099Common
      shares issued for acquisition of interestsin mineral
      claims
                                                        
                                                        
                                                        5,000,000
                                                        
                                                        
                                                        
                                                        500
                                                        
                                                        
                                                        
                                                        749,500
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        750,000Foreign
      currency translation
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        1,879
                                                        
                                                        
                                                        
                                                        1,879
                                                        
                                                        
                                                        
                                                        1,879Net
      Loss for the year ended October 31, 2009
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (2,993,591
                                                        )
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (2,993,591
                                                        )
                                                        
                                                        
                                                        (2,993,591
                                                        )Balance
      October 31, 2009
                                                        
                                                        
                                                        49,561,600
                                                        
                                                        
                                                        
                                                        4,956
                                                        
                                                        
                                                        
                                                        15,092,695
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        
                                                        (17,170,906
                                                        )
                                                        
                                                        
                                                        2,943
                                                        
                                                        
                                                        
                                                        (2,070,312
                                                        )
                                                        
                                                        
                                                        (2,991,712
                                                        )


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


F-5




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statement of Cash Flows for the


Years
ended Oct 31, 2009 and, 2008 and the Period from Inception (May 18, 1999) to
October 31, 2009


(Amounts
expressed in US Dollars)


CumulativeSince
                  
                  
                  Oct 31,
                  
                  
                  Oct 31,Inception
                  
                  
                  2009
                  
                  
                  2008$
                  
                  
                  $
                  
                  
                  $Cash
      Flows from Operating ActivitiesNet
      Loss
                  
                  
                  (17,170,906
                  )
                  
                  
                  (2,993,591
                  )
                  
                  
                  (10,579,162
                  )Adjustment
      for:Amortization
                  
                  
                  89,207
                  
                  
                  
                  46,549
                  
                  
                  
                  41,949Stock
      based compensation
                  
                  
                  1,230,636
                  
                  
                  
                  256,091
                  
                  
                  
                  679,971Compensation
      expense on issue of warrants
                  
                  
                  342,930
                  
                  
                  
                  85,855
                  
                  
                  
                  235,982Expenses
      credited (debited) to Additional Paid-in Capital
                  
                  
                  7,932
                  
                  
                  
                  (1,989
                  )
                  
                  
                  -Impairment
      charges on mineral claims
                  
                  
                  6,719,225
                  
                  
                  
                  750,000
                  
                  
                  
                  5,469,225Amortization
      of deferred stock compensation
                  
                  
                  1,500,000
                  
                  
                  
                  145,833
                  
                  
                  
                  916,666Interest
      on loans
                  
                  
                  54,594
                  
                  
                  
                  47,395
                  
                  
                  
                  7,199Fair
      value adjustment to compound derivative
                  
                  
                  16,250
                  
                  
                  
                  11,875
                  
                  
                  
                  4,375Fair
      value adjustment to additional investment rights
                  
                  
                  (55,000
                  )
                  
                  
                  (90,000
                  )
                  
                  
                  35,000Amortization
      of debt discount
                  
                  
                  33,157
                  
                  
                  
                  32,949
                  
                  
                  
                  208Changes
      in non-cash working capitalPrepaid
      expenses
                  
                  
                  (5,782
                  )
                  
                  
                  29,375
                  
                  
                  
                  36,991Deferred
      financing costs
                  
                  
                  (4,023
                  )
                  
                  
                  (4,023
                  )Advances
      to related parties
                  
                  
                  (36,000
                  )
                  
                  
                  139,000
                  
                  
                  
                  (175,000
                  )Accounts
      payable
                  
                  
                  350,832
                  
                  
                  
                  53,462
                  
                  
                  
                  (16,677
                  )Accrued
      liabilities
                  
                  
                  84,208
                  
                  
                  
                  (1,644
                  )
                  
                  
                  42,587Due
      to related parties
                  
                  
                  1,055,033
                  
                  
                  
                  1,055,033Minority
      Interest
                  
                  
                  54,804
                  
                  
                  
                  (146
                  )
                  
                  
                  54,950Net
      cash used in operating activities
                  
                  
                  (5,732,903
                  )
                  
                  
                  (437,976
                  )
                  
                  
                  (3,245,736
                  )Cash
      Flows from Investing ActivitiesAcquisition
      of plant and equipment
                  
                  
                  (198,101
                  )
                  
                  
                  -
                  
                  
                  
                  (159,186
                  )Acquisition
      of mineral claims
                  
                  
                  (900
                  )
                  
                  
                  (300
                  )
                  
                  
                  (600
                  )Net
      cash used in investing activities
                  
                  
                  (199,001
                  )
                  
                  
                  (300
                  )
                  
                  
                  (159,786
                  )Cash
      Flows from Financing ActivitiesIssuance
      of common shares for cash (net)
                  
                  
                  5,181,265
                  
                  
                  
                  -
                  
                  
                  
                  1,475,815Advances
      from non-related parties
                  
                  
                  470,545
                  
                  
                  
                  148,500
                  
                  
                  
                  252,045Advances
      from related parties
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  70,000Convertible
      notes
                  
                  
                  286,500
                  
                  
                  
                  186,500
                  
                  
                  
                  100,000Net
      cash provided by financing activities
                  
                  
                  5,938,310
                  
                  
                  
                  335,000
                  
                  
                  
                  1,897,860Effect
      of foreign currency exchange rate changes
                  
                  
                  2,943
                  
                  
                  
                  1,879
                  
                  
                  
                  1,064Net
      increase (decrease) in Cash
                  
                  
                  9,349
                  
                  
                  
                  (101,397
                  )
                  
                  
                  (1,506,598
                  )Cash-
      beginning of period
                  
                  
                  -
                  
                  
                  
                  110,746
                  
                  
                  
                  1,617,344Cash
      - end of period
                  
                  
                  9,349
                  
                  
                  
                  9,349
                  
                  
                  
                  110,746Supplemental
      Cash Flow InformationInterest
      paid
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Income
      taxes paid
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -


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




F-6





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




1.
            Nature
      of Business and Operations




The
Company was incorporated on May 18, 1999 as Gate-1 Financial, Inc. under the
laws of the State of Delaware.  On August 17, 2006, Gate-1 Financial, Inc.
changed its name to Pacific Copper Corp.  The Company operates with
the intent of exploration and, if feasible, extraction of minerals and is
currently primarily engaged in copper exploration in South America.




On
December 17, 2007, Pacific Copper completed the acquisition of  Peru
SRL pursuant to the Share Exchange Agreement among the Company, Peru SRL and the
former partners of Peru SRL dated as of April 11, 2007, as amended (the “Peru
Agreement”).





Pursuant
to the Peru Agreement, the Company issued 4,850,000 shares of the Company’s
common stock (the “Peru Consideration Shares”) to the partners of Peru SRL as
consideration for the acquisition of 99% of Peru SRL.  As a result of
the acquisition, Peru SRL became a subsidiary of the Company.  The Peru
Consideration Shares were issued in escrow subject to a Closing and Escrow
Agreement dated December 14, 2007 among the Company, Peru SRL and the former
partners of Peru SRL (the “Closing Agreement”).  Pursuant to the terms
of the Closing Agreement, the former partners of Peru SRL must satisfy certain
post-closing items, prior to the release of the Peru Consideration Shares from
escrow.  As of the date of this report, the Peru Consideration Shares
remain in escrow.





On
January 8, 2008, Pacific Copper acquired Sociedad Pacific Copper Chile Limitada,
a limited liability partnership organized under the laws of Chile (“Pacific
LTDA”) pursuant to a Share Exchange Agreement entered into as of April 11, 2007
(the “Chile Agreement”), as amended, between the Company and the former partners
of Pacific LTDA.  Pursuant to the Chile Agreement the Company issued
6,088,452 of its common shares (the “Chile Consideration Shares”) to the former
partners of Pacific LTDA as consideration for the acquisition of 99% of Pacific
LTDA.  The 1% minority interest was credited with $30,750.  As a
result of the acquisition, Pacific LTDA became a subsidiary of the Company.
 The Chile Consideration Shares were issued in escrow subject to a Closing
and Escrow Agreement dated January 8, 2008 among the Company, Pacific LTDA and
the former partners of Pacific LTDA (the “Closing
Agreement”).  Pursuant to the terms of the Closing Agreement, the
former partners of Pacific LTDA had to satisfy certain post-closing items prior
to the release of the Chile Consideration Shares from escrow. The conditions
under the Closing Agreement have been satisfied or waived, and the Chile
Consideration shares have been issued to the former partners of Pacific
LTDA.





The
consolidated financial statements include the accounts of Pacific Copper Corp.
(the “Company”) and its subsidiaries, Pacific Copper Peru SRL, a limited
liability partnership (99% owned by the Company) (“Peru SRL”) and Sociedad
Pacific Copper Chile Limitada, a limited liability partnership (99% owned by the
Company) (“Pacific LTDA”).  All material inter-company accounts and
transactions have been eliminated.


F-7




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




2.
            Going
      Concern





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 has no source for operating revenue and
expects to incur significant expenses before establishing operating revenue. The
Company has a need for equity capital and financing for working capital and
exploration of its properties. Because of continuing operating losses, negative
working capital and cash outflows from operations, the Company’s continuance as
a going concern is dependent upon its ability to obtain adequate financing and
to reach profitable levels of operation. The Company’s future success is
dependent upon its continued ability to raise sufficient capital, not only to
maintain its operating expenses, but to explore for reserves. There is no
guarantee that such capital will continue to be available on acceptable terms,
if at all or if the Company will attain profitable levels of operation.
Management’s plans to mitigate these conditions are described
below.




The
Company is in the exploration stage and has not yet realized revenues from any
operations.  The Company has incurred a loss of $2,993,591for the year
ended October 31, 2009.  This loss includes a non-cash stock based
compensation expense for $256,091 and non-cash compensation expense for
issue of warrants for $ 85,855. At October 31, 2009, the Company had an
accumulated deficit during the exploration stage of
$17,170,906.  During the year ended October 31, 2008 the Company
raised capital of $1,475,815 (net of offering costs). Further, during the year
ended October 31, 2008 the Company raised an additional $100,000 being
subscription for convertible notes (See note 15-“Convertible Note Financing
Transaction”). The Company raised an additional $186,500 during the year ended
October 31, 2009 from issue of convertible notes. Management's plan is to
continue raising capital through future equity or debt financing until it
achieves profitable operations from mineral extraction activities.




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:




F-8




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





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




a)
            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 acquisition costs are initially
capitalized when incurred. The Company assesses the carrying costs for
impairment under Accounting Standards 930 Extractive Activities – Mining (AS
930) at each fiscal quarter end. An impairment is recognized when the sum of the
expected undiscounted future cash flows is less than the carrying amount of the
mineral property. Impairment losses, if any, are measured as the excess of the
carrying amount of the mineral property over its estimated fair value. When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the proven and probable
reserves. If mineral properties are subsequently abandoned or impaired, any
capitalized costs will be charged to operations.




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.




b)
              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 methodOperating equipment
                30%
                declining balance method




c)
              Impairment
      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.




F-9




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




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




d)
              Asset
      Retirement Obligations




Asset
retirement obligations are recorded as a liability in the period in which
the company incurs the obligation.




e)
              Revenue
      Recognition




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




f)
              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.




g)
            Earnings
      (Loss) Per Share





Basic
earnings (loss) per share are computed by dividing net income (loss) by the
weighted average number of common shares outstanding for the year. Diluted loss
per share is computed by dividing net 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 October 31, 2009 and 2008 that have been included in dilutive
loss per share calculation as the effects would have been anti-dilutive. At
October 31, 2009, there were 4,881,652 exercisable stock options and
5,661,604 exercisable warrants outstanding. At October 31, 2008, there were
3,916,660 exercisable stock options and 6,864,704 exercisable warrants
outstanding.


F-10




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




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





h)
            Financial
      Instruments


Financial
instruments consist of cash, evidence of ownership in an entity, and contracts
that both (i) impose on one entity a contractual obligation to deliver cash or
another financial instrument to a second entity, or to exchange other financial
instruments on potentially unfavorable terms with the second entity, and (ii)
conveys to that second entity a contractual right (a) to receive cash or another
financial instrument from the first entity, or (b) to exchange other financial
instruments on potentially favorable terms with the first entity. The Company’s
financial instruments consist of cash and cash equivalents, accounts receivable,
accounts payable, accrued liabilities, secured convertible debentures, and
derivative financial instruments.





The
Company carries cash and cash equivalents, accounts receivable, accounts payable
and accrued liabilities at historical costs since their respective estimated
fair values approximate carrying values due to their current nature. The Company
also carries convertible notes at historical cost. However, the fair values of
debt instruments are estimated for disclosure purposes (below) based upon the
present value of the estimated cash flows at market interest rates applicable to
similar instruments.





As of
October 31, 2009, estimated fair values and respective carrying values of the
convertible notes are as follows:





FinancialInstrument
              
              Note
              
              
              Fair
                Value
              
              
              Carrying
                Value$100,000
      6% Convertible Note
              
              
              15
              
              
              $
              97,381
              
              
              $
              57,191$166,500
      12% Convertible Note
              
              
              15
              
              
              
              200,984
              
              
              
              76,892$20,000
      12% Convertible Note
              
              
              15
              
              
              
              24,142
              
              
              
              8,036322,507
              
              
              
              142,119





Derivative
financial instruments, as defined in Financial Accounting Standard No. 133,
Accounting for Derivative Financial Instruments and Hedging Activities (ASC
Topic 815), consist of financial instruments or other contracts that contain a
notional amount and one or more underlying (e.g. interest rate, security price
or other variable), require no initial net investment and permit net settlement.
Derivative financial instruments may be free-standing or embedded in other
financial instruments. Further, derivative financial instruments are initially,
and subsequently, measured at fair value and recorded as liabilities or, in rare
instances, assets.





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


F-11




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




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




The
derivative liabilities as of October 31, 2009 consisted of the
following:





DerivativeFinancialInstrument
                
                AmountCompound
      Embedded Derivative
                
                $
                23,125Additional
      Investment Right (AIR)
                
                
                -$
                23,125





The
following table summarizes the effects on income (loss) associated with changes
in the fair values of the derivative financial instruments by type for the year
ended October 31, 2009:





DerivativeFinancialInstrumentCompound
      Embedded Derivative
                
                $
                11,875Additional
      Investment Right
                
                
                (90,000
                )$
                (78,125
                )





The fair
values of derivative financial instruments are measured using certain techniques
(principally Monte Carlo Simulations) that reflect the combined risks of the
features and instruments. These risks include credit risk, interest risk and
redemption behavior estimates. Significant assumptions used in these techniques
include trading stock price and estimates of credit standing. Significant
changes in these, and other assumptions, will result in changes in the fair
value of these instruments, which changes are required to be reflected in
earnings until the arrangement is ultimately settled.


F-12


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




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





i)
            Fair
      Value measurements




Fair
value measurement requirements are embodied in certain accounting standards
applied in the preparation of the financial statements. Significant fair value
measurements resulted from the application of ASC Topic 815 to the convertible
note financing transaction is described in Note 15.





Fair
Value Measurements defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles, and expands disclosures
about fair value measurements. It is effective for fiscal years beginning on
November 1, 2008. This Statement applies under other accounting pronouncements
that require or permit fair value measurements, the FASB having previously
concluded in those accounting pronouncements that fair value is the relevant
measurement attribute. Accordingly, this new standard will not require any new
fair value measurements. The Company does not believe that this standard will
result in a material financial affect. However, the Company will be required to
expand the disclosures, commencing with the quarterly period ending January 31,
2009, in areas where other accounting principles require fair value measurements
to provide information related to the hierarchy of fair value
inputs.





The Fair
Value Option for Financial Assets and Financial Liabilities permits entities to
choose to measure many financial instruments and certain other items at fair
value. It is effective for fiscal year beginning on November 1, 2008. At this
time, the Company does not intend to reflect any of its current financial
instruments at fair value (expect that derivative financial instruments have to
be measured at fair value). However, the Company will consider the
appropriateness of recognizing financial instruments at fair value on a case by
case basis as they arise in future periods.





j)
              Stock
      Based Compensation





All
awards granted to employees and non-employees after October 31, 2005 are valued
at fair value 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  using 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.


F-13




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





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


j)
                Stock
      Based Compensation
(cont'd)




As of
October 31, 2009 there was $28,243of 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 October 31, 2009 and 2008 was $256,091and $679,971
respectively.




k)
              Concentration
      of Credit Risk




The
Company does not have significant off-balance sheet risk or credit
concentration.





l)
              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, estimates for calculation for stock based
compensation and valuation of derivatives.





m)
              Comprehensive
      income or loss




The
Company reports  comprehensive income or loss in its 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.




n)
              Foreign
      Currency Translation




The Company maintains its books and
records in US Dollars, the reporting currency.The Company has
subsidiaries in Peru and Chile and which maintain their books in their local
currency (the functional currency). The subsidiary’s financial statements are
converted to US dollars for consolidation purposes. The translation method used
is the current rate method. Under the current rate method all assets and
liabilities are translated at the current rate, stockholders’ equity accounts
are translated at historical rates and revenues and expenses are translated at
average rates for the year.  Due to the fact that items in the
financial statements are being translated at different rates according to their
nature, a translation adjustment is created. This translation adjustment has
been included in Accumulated Other Comprehensive Income (Loss).




o)
            Recent
      Accounting Pronouncements




FASB ASC TOPIC 805 – “Business
Combinations.” The objective of this topic is to enhance the information that an
entity provides in its financial reports about a business combination and its
effects. The Topic mandates: (i) how the acquirer recognizes and measures the
assets acquired, liabilities assumed and any non-controlling interest in the
acquiree; (ii) what information to disclose in its financial reports and; (iii)
recognition and measurement criteria for goodwill acquired. This Topic is
effective for any acquisitions made on or after December 15, 2008. The adoption
of this Topic did not have a material impact on the Company’s financial
statements and disclosures.




F-14




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)


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




o)
            Recent
      Accounting Pronouncements-Cont’d




FASB ASC TOPIC 810 –
“Noncontrolling Interests.” The objective of this Topic is to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements by
establishing accounting and reporting standards that require: (i) the ownership
interests in subsidiaries held by parties other than the parent be clearly
identified, labeled, and presented in the consolidated statement of financial
position within equity, but separate from the parent's equity; (ii) the amount
of consolidated net income attributable to the parent and to the noncontrolling
interest be clearly identified and presented on the face of the consolidated
statement of income; (iii) changes in a parent's ownership interest while the
parent retains its controlling financial interest in its subsidiary be accounted
for consistently; (iv) when a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. The gain or loss on the deconsolidation of the subsidiary is
measured using the fair value of any noncontrolling equity investment rather
than the carrying amount of that retained investment and; (v) entities provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
Topic is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. Earlier adoption is prohibited.
The adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 815 –
“Derivatives and Hedging.” The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
This Topic requires enhanced disclosures about an entity's derivative and
hedging activities and thereby improves the transparency of financial reporting.
This Topic is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The adoption of this Topic is not expected to have a material impact
on the Company’s financial statements and disclosures.




FASB ASC TOPIC 944 –
“Financial Services – Insurance.” Diversity exists in practice in accounting for
financial guarantee insurance contracts by insurance enterprises. That diversity
results in inconsistencies in the recognition and measurement of claim
liabilities because of differing views about when a loss has been incurred. This
Topic requires that an insurance enterprise recognize a claim liability prior to
an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Topic is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years, except for
some disclosures about the insurance enterprise's risk-management activities.
The adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 855 -
“Subsequent Events.” In
May 2009, the FASB issued Topic 855, which establish general standards of
accounting and disclosure of events that occur after the balance sheet date but
before financial statements are issued or are available to be issued. In
particular, this Topic sets forth : (i) the period after the balance sheet date
during which management of a reporting entity should evaluate events or
transactions that may occur for potential recognition or disclosure in the
financial statements, (ii) the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, (iii) the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. This Topic
should be applied to the accounting and disclosure of subsequent events. This
Topic does not apply to subsequent events or transactions that are within the
scope of other applicable accounting standards that provide different guidance
on the accounting treatment for subsequent events or transactions. This Topic
was effective for interim and annual periods ending after June 15, 2009, which
was October 31, 2009 for the Company. The adoption of this Topic did not have a
material impact on the Company’s financial statements and
disclosures.




F-15




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)


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




o)
            Recent
      Accounting Pronouncements-Cont’d




FASB ASC TOPIC 105 - “The FASB
Accounting Standard Codification and the Hierarchy of Generally Accepted
Accounting Principles.”In June 2009, the FASB
issued Topic 105, which became the source of authoritative GAAP recognized by
the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the SEC under authority of federal securities laws are also sources
of authoritative GAAP for SEC registrants. On the effective date of this Topic,
the Codification will supersede all then-existing non-SEC accounting and
reporting standards. All other non-SEC accounting literature not included in the
Codification will become non-authoritative. This Topic identifies the sources of
accounting principles and the framework for selecting the principles used in
preparing the financial statements of nongovernmental entities that are
presented in conformity with GAAP and arranged these sources of GAAP in a
hierarchy for users to apply accordingly. This Topic is effective for financial
statements issued for interim and annual periods ending after September 15,
2009. The adoption of this topic did not have a material impact on the Company’s
disclosure of the financial statements.




FASB ASC TOPIC 320 -
“Recognition and Presentation of Other-Than-Temporary Impairments.”In April 2009, the FASB
issued Topic 320 amends the other-than-temporary impairment guidance in GAAP for
debt securities to make the guidance more operational and to improve the
presentation and disclosure of other-than-temporary impairments on debt and
equity securities in the financial statements. This Topic does not amend
existing recognition and measurement guidance related to other-than-temporary
impairments of equity securities. The Topic is effective for interim and annual
reporting periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. Earlier adoption for periods ending before
March 15, 2009, is not permitted. This Topic does not require disclosures for
earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, this Topic requires comparative disclosures only
for periods ending after initial adoption. The adoption of this Topic did not
have a material impact on the Company’s financial statements and
disclosures.




FASB ASC TOPIC 860 -
“Accounting for Transfer of Financial Assets and Extinguishment of Liabilities.”
In June 2009, the FASB issued additional guidance under Topic 860 which improves
the relevance, representational faithfulness, and comparability of the
information that a reporting entity provides in its financial statements about a
transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor’s continuing
involvement, if any, in transferred financial assets. This additional guidance
requires that a transferor recognize and initially measure at fair value all
assets obtained (including a transferor’s beneficial interest) and liabilities
incurred as a result of a transfer of financial assets accounted for as a sale.
Enhanced disclosures are required to provide financial statement users with
greater transparency about transfers of financial assets and a transferor’s
continuing involvement with transferred financial assets. This additional
guidance must be applied as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. This additional guidance
must be applied to transfers occurring on or after the effective date. The
adoption of this Topic is not expected to have a material impact on the
Company’s financial statements and disclosures.


F-16




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)


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




o)
            Recent
      Accounting Pronouncements-Cont’d




FASB ASC TOPIC 810 -
“Consolidation of Variables Interest and Special Purpose Entities.” In June
2009, the FASB issued Topic 810, which requires an enterprise to perform an
analysis to determine whether the enterprise’s variable interest or interests
give it a controlling financial interest in a variable interest entity. This
analysis identifies the primary beneficiary of a variable interest entity as the
enterprise that has both of the following characteristics: (i) The power to
direct the activities of a variable interest entity that most significantly
impact the entity’s economic performance and (ii) The obligation to absorb
losses of the entity that could potentially be significant to the variable
interest entity or the right to receive benefits from the entity that could
potentially be significant to the variable interest entity. Additionally, an
enterprise is required to assess whether it has an implicit financial
responsibility to ensure that a variable interest entity operates as designed
when determining whether it has the power to direct the activities of the
variable interest entity that most significantly impact the entity’s economic
performance. This Topic requires ongoing reassessments of whether an enterprise
is the primary beneficiary of a variable interest entity and eliminate the
quantitative approach previously required for determining the primary
beneficiary of a variable interest entity, which was based on determining which
enterprise absorbs the majority of the entity’s expected losses, receives a
majority of the entity’s expected residual returns, or both. This Topic is
effective as of the beginning of each reporting entity’s first annual reporting
period that begins after November 15, 2009, for interim periods within that
first annual reporting period, and for interim and annual reporting periods
thereafter. Earlier application is prohibited. The adoption of this Topic is not
expected to have a material impact on the Company’s financial statements and
disclosures.




FASB ASC TOPIC 820 - “Fair
Value measurement and Disclosures”, an Accounting Standard Update. In September
2009, the FASB issued this Update to amendments to Subtopic 82010, “Fair Value Measurements and
Disclosures”. Overall, for the fair value measurement of investments in
certain entities that calculates net asset value per share (or its equivalent).
The amendments in this Update permit, as a practical expedient, a reporting
entity to measure the fair value of an investment that is within the scope of
the amendments in this Update on the basis of the net asset value per share of
the investment (or its equivalent) if the net asset value of the investment (or
its equivalent) is calculated in a manner consistent with the measurement
principles of Topic 946 as of the reporting entity’s measurement date, including
measurement of all or substantially all of the underlying investments of the
investee in accordance with Topic 820. The amendments in this Update also
require disclosures by major category of investment about the attributes of
investments within the scope of the amendments in this Update, such as the
nature of any restrictions on the investor’s ability to redeem its investments
at the measurement date, any unfunded commitment, and the investment strategies
of the investees. The major category of investment is required to be determined
on the basis of the nature and risks of the investment in a manner consistent
with the guidance for major security types in GAAP on investments in debt and
equity securities in paragraph 320-10-50-lB. The disclosures are required for
all investments within the scope of the amendments in this Update regardless of
whether the fair value of the investment is measured using the practical
expedient. The amendments in this Update apply to all reporting entities that
hold an investment that is required or permitted to be measured or disclosed at
fair value on a recurring or non recurring basis and, as of the reporting
entity’s measurement date, if the investment meets certain criteria The
amendments in this Update are effective for the interim and annual periods
ending after December 15, 2009. Early application is permitted in financial
statements for earlier interim and annual periods that have not been issued. The
adoption of this Update is not expected to have a material impact on the
Company’s financial statements and disclosures.




FASB ASC TOPIC 740 - “Income
Taxes”, an Accounting Standard Update. In September 2009, the FASB issued this
Update to address the need for additional implementation guidance on accounting
for uncertainty in income taxes. For entities that are currently applying the
standards for accounting for uncertainty in income taxes, the guidance and
disclosure amendments are effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The adoption of this Update
did not have a material impact on the Company’s financial statements and
disclosures.


F-17




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




4.
            Plant
      and Equipment, Net




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 methodOperating equipment
              30%
              declining balance method


October 31, 2009
                  
                  
                  October 31, 2008Accumulated
                  
                  
                  
                  
                  
                  AccumulatedCost
                  
                  
                  Depreciation
                  
                  
                  Cost
                  
                  
                  Depreciation$
                  
                  
                  $
                  
                  
                  $
                  
                  
                  $Office,
      furniture and fixtures
                  
                  
                  386
                  
                  
                  
                  124
                  
                  
                  
                  386
                  
                  
                  
                  58Computer
      equipment
                  
                  
                  6,529
                  
                  
                  
                  3,212
                  
                  
                  
                  6,529
                  
                  
                  
                  1,790Operating
      Equipment
                  
                  
                  191,185
                  
                  
                  
                  85,870
                  
                  
                  
                  191,185
                  
                  
                  
                  40,735198,100
                  
                  
                  
                  89,206
                  
                  
                  
                  198,100
                  
                  
                  
                  42,657Net
      carrying amount
                  
                  $
                  108,894
                  
                  
                  
                  
                  
                  
                  $
                  155,443Amortization
      expense
                  
                  $
                  46,549
                  
                  
                  
                  
                  
                  
                  $
                  41,949


F-18




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




5.
              Issuance
      of Common Shares
 
 Year ended October 31,
2008
 
 On
December 17, 2007, Pacific Copper completed the acquisition of Peru SRL pursuant
to the Share Exchange Agreement among the Company, Peru SRL and the former
partners of Peru SRL dated as of April 11, 2007 (the “Peru
Agreement”). Pursuant to the Peru Agreement, the Company issued 4,850,000
shares of the Company’s common stock (the
“Peru Consideration Shares”) to the partners of Peru SRL as consideration for
the acquisition of 99% of Peru SRL.  As a result of the acquisition,
Peru SRL became a subsidiary of the Company.  The Peru Consideration
Shares were issued in escrow subject to a Closing and Escrow Agreement dated
December 14, 2007 among the Company, Peru SRL and the former partners of Peru
SRL (the “Peru Closing Agreement”).  Pursuant to the terms of the Peru
Closing Agreement, the former partners of Peru SRL must satisfy certain
post-closing items, prior to the release of the Peru Consideration Shares from
escrow, which has not yet occurred.  The Company capitalized $200 and
recognized an impairment charge of $2,424,800 relating to the issue of shares
for acquisition of mineral properties of Peru SRL, calculated at $0.50 per share
(See Note 8, “Mining Claims”, below).  As of the date of this report,
the Peru Consideration Shares remain in escrow.





On
January 8, 2008, Pacific Copper acquired Pacific LTDA pursuant to a Share
Exchange Agreement entered into as of April 11, 2007 (the “Chile Agreement”)
between the Company and the former partners of Pacific LTDA. Pursuant to the
Chile Agreement the Company issued 6,088,452 of its common shares (the “Chile
Consideration Shares”) to the former partners of Pacific LTDA as consideration
for the acquisition of 99% of Pacific LTDA.  As a result of the
acquisition, Pacific LTDA became a subsidiary of the Company.  The
Chile Consideration Shares were issued in escrow subject to a Closing and Escrow
Agreement dated January 8, 2008 among the Company, Pacific LTDA and the former
partners of Pacific LTDA (the “Chile Closing Agreement”).  Pursuant to
the terms of the Chile Closing Agreement, the former partners of Pacific LTDA
must satisfy certain post-closing items prior to the release of the Chile
Consideration Shares from escrow, which has not yet occurred.  The
Company capitalized $400 and recognized an impairment charge of $3,043,826
relating to the acquisition of mineral properties of Pacific LTDA as project
expense, calculated at $0.50 per share (See Note 8 “Mining Claims”,
below).  Conditions under the Closing Agreement have been satisfied or
waived, and the Chile Consideration shares have been issued to the former
partners of Pacific LTDA.





The
Company, through private placements, issued 3,157,143 units at a price of $0.35
per unit. Each unit consisted of one common share and one half a common share
purchase warrant.  Each full warrant is exercisable for one common
share at $0.50 per share on or before April 30, 2010.  The private
placement was exempt from registration under the Securities Act of 1933 as
amended (the “Securities Act”) pursuant to Regulation S promulgated thereunder
(“Regulation S”)..  The Company accrued share issuance expense of
$77,350 as a finder’s fee for introduction to subscribers who purchased
3,157,143 units for a total investment of $1,105,000 in the above private
placements. The Company also issued to the finder a warrant to purchase 45,000
shares at $0.50 per share on or before April 30, 2010.





The
Company, through private placements, issued 743,572 units at a price of $0.35
per unit during the months of June and July 2008. Each unit consisted of one
common share and one half a common share purchase warrant. Each full warrant is
exercisable for one common share at $0.50 per share for a period of 2 years from
the date of issuance.  The private placement was exempt from
registration under the Securities Act pursuant to Regulation S. The Company
expensed share issuance expense of $13,370 being total finder’s
fees. The Company also issued to the finders a warrant to purchase 13,000
shares at $0.50 per share on or before two years from date of
issuance.


F-19


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




5.
            Issuance
      of Common Shares –Cont’d





The
Company, through private placements, issued 576,501 units at a price of $0.35
per unit during the months of September and October 2008. Each unit consisted of
one common share and one half a common share purchase warrant. Each full warrant
is exercisable for one common share at $0.50 per share for a period of two years
from the date of issuance. The private placement was exempt from registration
under the Securities Act pursuant to Regulation S.





Year ended October 31,
2009





As of
February 27, 2009 Pacific Copper, through its wholly owned subsidiary Pacific
LTDA, entered into a definitive mineral property acquisition agreement (the
“Gareste Agreement”) with Gareste pursuant to which the Company acquired a
100% interest in the following copper oxide properties located in Atacama Region
III, Chile: the “Venado Property” (also known as the “Venapai Property”)
consisting of approximately 3600 hectares of exploration concessions, located
roughly 45 kilometers from the city of Copiapo, the “El Corral Property”,
consisting of approximately 4000 hectares of exploration concessions, located
roughly 60 kilometers from the city of Copiapo, and the adjacent “La Mofralla
Property”, consisting of approximately 250 hectares of exploration concessions
also located roughly 60 kilometers from the City of Copiapo.  These
properties were subject to separate letters of intent entered into during July
and October of 2008, as previously disclosed. Under the Gareste Agreement the
Company issued a total of 5,000,000 shares of its common stock to Gareste on
October 12, 2009, allocable as follows: 2,000,000 shares of common stock as
consideration for the Venado Property, 2,000,000 shares of common stock as
consideration for the El Corral Property and 1,000,000 shares of common stock as
consideration for the La Mofralla Property (collectively, the “Gareste Oxide
Shares”).  The Company recognized an impairment charge of $749,700,
relating to the issue of 5,000,000 common shares calculated at $0.15 per common
share net of capitalization for $300 for mineral property
claims.  Property acquisition costs relating to the exploration
properties are being expensed until the economic viability of the project is
determined and proven and probable reserves quantified.  In the
absence of proven and probable reserves, the Company is unable to allocate any
economic values to the claims groups acquired in the
transaction


F-20


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





6.
            Stock
      Purchase Warrants





Number of
                            Warrants
                            Granted
                          
                          
                          Exercise
                            Prices$
                          
                          
                          Expiry DateOutstanding
      at October 31, 2007 and average exercise price
                          
                          
                          4,318,100
                          
                          
                          
                          0.70Granted
      in year 2008
                          
                          
                          1,623,571
                          
                          
                          
                          0.50
                          
                          
                          4/30/2010Granted
      in year 2008
                          
                          
                          175,857
                          
                          
                          
                          0.50
                          
                          
                          6/6/2010Granted
      in year 2008
                          
                          
                          208,928
                          
                          
                          
                          0.50
                          
                          
                          7/30/2010Granted
      in year 2008
                          
                          
                          253,248
                          
                          
                          
                          0.50
                          
                          
                          9/12/2010Granted
      in year 2008
                          
                          
                          500,000
                          
                          
                          
                          0.50
                          
                          
                          9/23/2013Granted
      in year 2008
                          
                          
                          35,000
                          
                          
                          
                          0.50
                          
                          
                          10/24/2010Outstanding
      at October 31, 2008 and average exercise price
                          
                          
                          7,114,704
                          
                          
                          
                          0.62Granted
      in year 2009
                          
                          
                          1,865,000
                          
                          
                          
                          0.25
                          
                          
                          7/27/2011Expired
      in year 2009
                          
                          
                          (3,085,000
                          )
                          
                          
                          0.75Expired
      in year 2009
                          
                          
                          (233,100
                          )
                          
                          
                          0.50Outstanding
      at October 31, 2009 and average exercise price
                          
                          
                          5,661,604
                          
                          
                          
                          0.43


The
warrants do not confer upon the holders any rights or interest as a shareholder
of the Company. At October 31, 2009 and October 31, 2008, the weighted average
contractual term of the total outstanding, and the total exercisable warrants
were as follows:


October 31, 2009Weighted-AverageRemaining ContractualTermTotal
      outstanding options
                      
                      1.8
      yearsTotal
      exercisable options
                      
                      1.8
      years
 
 October 31, 2008Weighted-AverageRemaining ContractualTermTotal
      outstanding options
                
                1.8
      yearsTotal
      exercisable options
                
                1.6
      years


F-21


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





Year ended October 31,
2008





During
the year ended October 31, 2008, on August 13, 2008, the Company entered into an
advisory consulting agreement with Jesup & Lamont Sec. Corp. (the
“Consultant”).  Pursuant to this agreement, the Consultant agreed to
provide and perform for the benefit of the Company certain consulting services.
The Company issued to the consultant a warrant to purchase 500,000 common shares
at a price of $0.50 per share and exercisable for a period of five years.
 The term of this agreement was for a period of 6 months.  The Company
expensed the entire compensation cost for the issue of these warrants for
$129,034 which vested during the year ended October 31, 2008.  The fair
value of the warrants was estimated on the grant date using the Black-Scholes
option-pricing model.





Year ended October 31,
2009





On July
27, 2009 and October 26, 2009, the Company issued 12% convertible notes to
multiple investors with an aggregate face value of $186,500. In conjunction
with the offering the Company issued warrants to the investors indexed to
1,865,000 shares of common stock with an exercise price of $.25 per share and
exercisable for a period of 2 years.




7.
            Stock
      based compensation





On August
8, 2006, the Board of Directors approved 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.  Options may have a term of up to 10
years.  The
aggregate number of shares of common stock originally authorized under the plan
was 5,000,000. Since adoption of the Plan an additional900,000shares were authorized for
issuance pursuant to the Plan’s “evergreen share reserve increase”
provision.




During the year ended
October 31, 2008, the Board granted the following stock
options:





a)
            On
      February 20, 2008, stock options to purchase 250,000 common shares at an
      exercise price of $0.40 per share were issued to a
      consultant.  These options were granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest immediately
      on date of grant.  These options were granted for a term of 2
      years.




b)
            In
      March 1, 2008, the Board granted stock options to a consultant to purchase
      100,000 common shares and to another two consultants to purchase 10,000
      common shares each.  The Board also granted stock options to
      employees of Kriyah Consultants LLC (“Kriyah”), who perform administrative
      and geological services for the Company in the following amounts: two
      persons received options to purchase 70,000 common shares each, three
      persons received options to purchase 50,000 common shares each and two
      persons received options to purchase 40,000 common shares each. The
      foregoing option grants totaled 490,000 options.  The exercise
      price for all these options was $0.50 per share.  These options
      were granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and shall vest 50% at the end of year one commencing grant of
      options and the balance 50% at the end of year two commencing grant of the
      options.




F-22


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




7.
            Stock
      based compensation-Cont’d





c)
            On
      May 15, 2008, stock options to purchase 200,000 common shares at an
      exercise price of $0.35 per share were issued to a
      consultant.  These options were granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest on the third
      month from the date granted. These options were granted for a term of 2
      years.




d)
            On
      September 24, 2008 stock options to purchase 50,000 common shares at an
      exercise price of $0.50 per share were issued to an employee of Kriyah,
      who performs administrative and geological services for the Company.
       These options were granted in accordance with the terms of the
      Company’s 2006 Stock Option Plan and shall vest 50% at the end of year one
      commencing grant of options and the balance 50% at the end of year two
      commencing grant of the options.




During the year ended
October 31, 2009, no options were granted.




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.


For the
year ended October 31, 2009, the Company has recognized in its 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.





Date of grant
                                                        
                                                        14-May
                                                        
                                                        
                                                        20-Jul
                                                        
                                                        
                                                        1-Aug
                                                        
                                                        
                                                        9-Aug
                                                        
                                                        
                                                        20-Feb
                                                        
                                                        
                                                        1-Mar
                                                        
                                                        
                                                        15-May
                                                        
                                                        
                                                        24-Sep2007
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2007
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        TotalRisk
      free rate
                                                        
                                                        
                                                        4.50
                                                        %
                                                        
                                                        
                                                        4.50
                                                        %
                                                        
                                                        
                                                        4.50
                                                        %
                                                        
                                                        
                                                        4.50
                                                        %
                                                        
                                                        
                                                        5.00
                                                        %
                                                        
                                                        
                                                        5.00
                                                        %
                                                        
                                                        
                                                        5.00
                                                        %
                                                        
                                                        
                                                        2.95
                                                        %Volatility
      factor
                                                        
                                                        
                                                        50
                                                        %
                                                        
                                                        
                                                        50
                                                        %
                                                        
                                                        
                                                        50
                                                        %
                                                        
                                                        
                                                        50
                                                        %
                                                        
                                                        
                                                        100
                                                        %
                                                        
                                                        
                                                        98
                                                        %
                                                        
                                                        
                                                        86
                                                        %
                                                        
                                                        
                                                        84
                                                        %Expected
      dividends
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %Forfeiture
      rate
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %
                                                        
                                                        
                                                        0
                                                        %Expected
      life
                                                        
                                                        5
      years
                                                        
                                                        
                                                        5
      years
                                                        
                                                        
                                                        5
      years
                                                        
                                                        
                                                        5
      years
                                                        
                                                        
                                                        2
      years
                                                        
                                                        
                                                        5
      years
                                                        
                                                        
                                                        5
      years
                                                        
                                                        
                                                        5
      yearsExercise
      price
                                                        
                                                        $
                                                        0.50
                                                        
                                                        
                                                        $
                                                        0.50
                                                        
                                                        
                                                        $
                                                        0.50
                                                        
                                                        
                                                        $
                                                        0.51
                                                        
                                                        
                                                        $
                                                        0.40
                                                        
                                                        
                                                        $
                                                        0.50
                                                        
                                                        
                                                        $
                                                        0.35
                                                        
                                                        
                                                        $
                                                        0.50Total
      number of options granted
                                                        
                                                        
                                                        1,750,000
                                                        
                                                        
                                                        
                                                        250,000
                                                        
                                                        
                                                        
                                                        1,700,000
                                                        
                                                        
                                                        
                                                        650,000
                                                        
                                                        
                                                        
                                                        250,000
                                                        
                                                        
                                                        
                                                        490,000
                                                        
                                                        
                                                        
                                                        200,000
                                                        
                                                        
                                                        
                                                        50,000
                                                        
                                                        
                                                        
                                                        5,340,000Total
      number of options forfeited/cancelled/Expired/Exercised
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (110,000
                                                        )
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (110,000
                                                        )Grant
      date fair value
                                                        
                                                        $
                                                        0.24
                                                        
                                                        
                                                        $
                                                        0.24
                                                        
                                                        
                                                        $
                                                        0.24
                                                        
                                                        
                                                        $
                                                        0.24
                                                        
                                                        
                                                        $
                                                        0.22
                                                        
                                                        
                                                        $
                                                        0.27
                                                        
                                                        
                                                        $
                                                        0.25
                                                        
                                                        
                                                        $
                                                        0.13Stock-based
      compensation cost expensed during the year  ended October 31,
      2009
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        8,599
                                                        
                                                        
                                                        $
                                                        192,400
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        51,808
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        3,284
                                                        
                                                        
                                                        $
                                                        256,091Unexpended  Stock
      -based compensation cost deferred over the vesting period
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        8,018
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        17,283
                                                        
                                                        
                                                        $
                                                        nil
                                                        
                                                        
                                                        $
                                                        2,942
                                                        
                                                        
                                                        $
                                                        28,243




F-23


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




7.
            Stock
      based compensation-Cont’d


As of
October 31, 2009 there was $28,243 of unrecognized expenses related to
non-vested stock-based compensation arrangements granted.  The
stock-based compensation expense for the year ended October 31, 2009 and October
31, 2008 was $256,091 and $679,971 respectively.


The
following table summarizes the options outstanding as at October 31,
2009:





Option Price
                            
                            
                            Number of sharesExpiry Date
                            
                            Per Share
                            
                            
                            2009
                            
                            
                            2008February
      28, 2010
                            
                            
                            0.40
                            
                            
                            
                            250,000
                            
                            
                            
                            250,000May
      15, 2010
                            
                            
                            0.35
                            
                            
                            
                            200,000
                            
                            
                            
                            200,000May
      14, 2012
                            
                            
                            0.50
                            
                            
                            
                            1,650,000
                            
                            
                            
                            1,750,000July
      20, 2012
                            
                            
                            0.50
                            
                            
                            
                            250,000
                            
                            
                            
                            250,000August
      1, 2012
                            
                            
                            0.50
                            
                            
                            
                            1,700,000
                            
                            
                            
                            1,700,000August
      9, 2012
                            
                            
                            0.51
                            
                            
                            
                            650,000
                            
                            
                            
                            650,000March
      1, 2013
                            
                            
                            0.50
                            
                            
                            
                            380,000
                            
                            
                            
                            380,000September
      24, 2013
                            
                            
                            0.50
                            
                            
                            
                            50,000
                            
                            
                            
                            50,0005,130,000
                            
                            
                            
                            5,230,000Weighted
      average exercise price at end of year
                            
                            
                            
                            0.49
                            
                            
                            
                            0.49







Number
      of Shares2009
                  
                  
                  2008Outstanding,
      beginning of year
                  
                  
                  5,230,000
                  
                  
                  
                  4,350,000Granted
                  
                  
                  -
                  
                  
                  
                  990,000Expired
                  
                  
                  
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Forfeited
                  
                  
                  (100,000
                  )
                  
                  
                  (110,000
                  )Cancelled
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      end of year
                  
                  
                  5,130,000
                  
                  
                  
                  5,230,000Exercisable,
      end of year
                  
                  
                  4,881,652
                  
                  
                  
                  3,916,660





At
October 31, 2009 and October 31, 2008, the weighted average contractual term of
the total outstanding, and the total exercisable options under the Stock Option
Plan were as follows:


October 31, 2009Weighted-AverageRemaining ContractualTermTotal
      outstanding options
                    
                    2.6
      yearsTotal
      exercisable options
                    
                    2.4
      years




F-24


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




7.
            Stock
      based compensation-cont’d





October 31, 2008Weighted-AverageRemaining ContractualTermTotal
      outstanding options
                
                3.6
      yearsTotal
      exercisable options
                
                3.4
      years





8.
Mining Claims





(a)          On
December 17, 2007, Pacific Copper acquired Pacific Copper Peru SRL, a
limited liability partnership organized under the laws of Peru pursuant to the
Share Exchange Agreement among the Company, Peru SRL and the former partners of
Peru SRL dated as of April 11, 2007, as amended (the “Peru
Agreement”). Pursuant to the Peru Agreement, the Company issued 4,850,000
shares of the Company’s common stock (the “Peru Consideration Shares”) to the
partners of Peru SRL as consideration for the acquisition of 99% of Peru
SRL.  The 1% minority interest was credited with $24,495.  As a
result of the acquisition, Peru SRL became a subsidiary of the Company. The
Company recognized an impairment charge of $2,449,295, relating to the issue of
4,850,000 common shares calculated at $0.50 per common share and the allocation
of minority interest for $24,495 net of capitalization for $200 for mineral
property claims. Property acquisition costs relating to the exploration
properties were expensed as the assets were considered impaired.  In
the absence of proven and probable reserves, the Company is unable to allocate
any economic values to the claims.  The Company does not consider
either of the mineral claim groups acquired in the transaction (as listed below)
to be material assets at this time, but our assessment may change after further
work is done on the properties.  Pursuant to this acquisition the
Company acquired interests in the following mineral claims which were
capitalized at $100 each:





Tonalia
(subject to the completion of the formal documentation)


Don
Javier (subject to the completion of formal documentation)


F-25


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





8.
Mining Claims-Cont’d





(b)          On
January 8, 2008, Pacific Copper acquired Pacific LTDA, a limited liability
partnership organized under the laws of Chile, pursuant to a Share Exchange
Agreement entered into as of April 11, 2007 (the “Chile Agreement”), as amended,
between the Company and the former partners of Pacific LTDA.  Pursuant
to the Chile Agreement the Company issued 6,088,452 of its common shares (the
“Chile Consideration Shares”) to the former partners of Pacific LTDA as
consideration for the acquisition of 99% of Pacific LTDA.  The 1%
minority interest was credited with $30,750.  As a result of the
acquisition, Pacific LTDA became a subsidiary of the Company.  The Company
recognized an impairment charge of $3,074,576, relating to the issue of
6,088,452 common shares calculated at $0.50 per common share and the allocation
of minority interest for $30,750 net of capitalization for $400 for mineral
property claims. Property acquisition costs relating to the exploration
properties were expensed as the assets were considered impaired.  In
the absence of proven and probable reserves, the Company is unable to allocate
any economic values to the claims groups acquired in the transaction (as listed
below).  The Company does not consider either of the foregoing mineral
claims to be material assets at this time, but our assessment may change after
further work is done on the properties.  Pursuant to this acquisition
the Company acquired interest in the following mineral claims which were
capitalized at $100 each:


Carrera
Pinto


Carrizal


Cerro
Blanco


La
Guanaca





(c)           As
of February 27, 2009 Pacific Copper, through its wholly owned subsidiary Pacific
LTDA, entered into a definitive mineral property acquisition agreement (the
“Gareste Agreement”) with Gareste pursuant to which the Company acquired a
100% interest in the following copper oxide properties located in Atacama Region
III, Chile: the “Venado Property” (also known as the “Venapai Property”)
consisting of approximately 3600 hectares of exploration concessions, located
roughly 45 kilometers from the city of Copiapo, the “El Corral Property”,
consisting of approximately 4000 hectares of exploration concessions, located
roughly 60 kilometers from the city of Copiapo, and the adjacent “La Mofralla
Property”, consisting of approximately 250 hectares of exploration concessions
also located roughly 60 kilometers from the City of Copiapo.  These
properties were subject to separate letters of intent entered into during July
and October of 2008, as previously disclosed. Under the Gareste Agreement the
Company issued a total of 5,000,000 shares of its common stock to Gareste on
October 12, 2009, allocable as follows: 2,000,000 shares of common stock as
consideration for the Venado Property, 2,000,000 shares of common stock as
consideration for the El Corral Property and 1,000,000 shares of common stock as
consideration for the La Mofralla Property (collectively, the “Gareste Oxide
Shares”).  In addition, the Venado Property is subject to a 2% net smelter
return royalty, capped at $10,000,000, 50% of which can be repurchased by
Pacific Copper at any time prior to the commencement of production for
$3,000,000, and the El Corral Property is subject to a 2% net smelter return
royalty, capped at $10,000,000, 50% of which can be repurchased by Pacific
Copper at any time prior to the commencement of production for
$2,000,000.  The Company recognized an impairment charge of $749,700,
relating to the issue of 5,000,000 common shares calculated at $0.15 per common
share net of capitalization for $300 for mineral property
claims.  Property acquisition costs relating to the exploration
properties were expensed as the assets were considered impaired.  In
the absence of proven and probable reserves, the Company is unable to allocate
any economic values to the claims groups acquired in the transaction (as listed
below).  Pursuant to this acquisition the Company acquired interest in
the following mineral claims which were capitalized at $100 each:


Venado


El Corral


La Mofralla


F-26


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





9.
Commitments and Contingencies





On April
19, 2007, the Company executed an agreement dated as of April 11, 2007 with
David Hackman, a director of the Company, on behalf of a corporation to be
formed in Peru which, prior to closing, would then own certain mineral claims
located in Peru.  On December 17, 2007, Pacific Copper completed the
acquisition of Peru SRL, pursuant to the Share Exchange Agreement among the
Company, Peru SRL and the former partners of Peru SRL dated as of April 11,
2007. The 4,850,000 shares of the Company’s common stock issued in connection
with the closing of this transaction are held in escrow subject to the
satisfaction of certain post-closing conditions.




On August
9, 2007 the Company and Andrew A. Brodkey executed an employment agreement
pursuant to which the Company retained Mr. Brodkey as President and Chief
Executive Officer.  The Employment Agreement had an initial two-year term
that commenced on August 1, 2007 and continued through August 1, 2009.
 Under the terms of the Employment Agreement, the term was
automatically renewed on August 1, 2009, for another two years.  Mr.
Brodkey’s base salary is $132,000 per year.  Upon certain events of
termination Mr. Brodkey would be entitled to a maximum of one year’s salary as a
severance payment.  Under the employment agreement, Mr. Brodkey is
permitted to pursue other business opportunities.





On August
22, 2007 the Company entered into an agreement with Kriyah for the performance
of certain administrative and management services.   The
Kriyah Agreement has an initial term of two years and is then automatically
renewable.  Either party may terminate the Kriyah Agreement upon 60 days
prior written notice.  Under the Kriyah Agreement, Kriyah received an
initial payment of $57,504 and will receive payments of $4000 each month
thereafter.  Commencing in January of 2009, this amount was reduced to
$2,500 per month, and as of March, 2009, to $250 per month.  In order
to facilitate the retaining of Kriyah, the Company guaranteed a lease agreement
for the office space used by Kriyah in Tucson, Arizona.  The Company’s
maximum obligation under the lease guarantee, as of July 31, 2009,
is $212,774 in the event of a lease default with full acceleration of
rent. The lease which was executed by War Eagle Mining Corporation, a Canadian
corporation which at the time of execution was related to the Company through
common directors, (“War Eagle”) as Lessee, is now in default and Kriyah
subsequently moved its office location. The War Eagle lease is also guaranteed
by Zoro Mining Corp. (a related Company).  Kriyah’s Manager, Andrew A.
Brodkey, is also the President and CEO of the Company. The potential liability
as a result of this default is not determinable at this time. Expense, if any,
will be recorded in the period in which any liability becomes
known.





On
September 1, 2007, the Company entered into a Payroll Service Agreement with
Kriyah Consultants LLC (“Kriyah”) to administer payroll and health insurance
benefits to Andrew A. Brodkey, President and CEO of the Company, as contemplated
in his Employment Agreement with the Company dated August 1, 2007 (“Employment
Agreement”).  The Company shall reimburse Kriyah monthly for all
direct costs for wages, covered by the Employment Agreement and health benefits
provided by Kriyah and invoiced to the Company for Mr. Brodkey.





On
January 24, 2008, the Company, through its subsidiary Pacific LTDA entered into
an exclusive exploration, mining and exploitation agreement (the "Guanaca
Lease") for the La Guanaca oxide copper project located northeast of the town of
Inca de Oro, Chanaral Province, Atacama Region 3, Chile. This property,
which consists of approximately 300 hectares of exploration concessions, is
road-accessible and was previously explored in the mid-1990's through
geophysical methods, sampling and drilling by Empresa Nacional de Mineria
("ENAMI") a Chilean nationally-owned mining enterprise.  The Guanaca Lease
is for a term of 5 years and is renewable automatically for additional 5-year
periods.  The owners of the La Guanaca property will receive US$2,000 per
month in cash during the term of the agreement.


F-27


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





9.
Commitments and Contingencies





On
February 12, 2008, the Company’s subsidiary, Pacific LTDA, entered into an
Operator Agreement (the “Chile Operator Agreement”) with Gareste Limitada, a
limited liability partnership organized under the laws of Chile (“Gareste”).
 Pursuant to the Chile Operator Agreement Gareste will prepare and submit
proposed annual work programs and accompanying budgets to Pacific LTDA covering
the exploration and, if warranted, development of certain mineral concessions
held by Pacific LTDA.  Gareste will provide comprehensive management
services and contract for  transportation, labor, insurance and logistical
services for all approved programs.  Gareste’s overhead reimbursement and
compensation will be specified in each proposed budget and subject to approval
by Pacific LTDA.  The Chile Operator Agreement is terminable by either
party upon 90-days’ prior notice.  Harold Gardner, a member of the
Company’s board of directors, is a partner in Gareste.





On
February 12, 2008 The Company’s subsidiary, Peru SRL entered into an Operator
Agreement (the “Peru Operator Agreement”) with Inversiones Mineras Stiles, a
limited liability partnership organized under the laws of Peru (“Stiles”).
 Pursuant to the Peru Operator Agreement Stiles will prepare and submit
proposed annual work programs and accompanying budgets to Peru SRL covering the
exploration and, if warranted, development of certain mineral concessions held
by Peru SRL.  Stiles will provide comprehensive management services and
contract for transportation, labor, insurance and logistical services for all
approved programs.  Stiles’ overhead reimbursement and compensation will be
specified in each proposed budget and subject to approval by Peru
SRL.





The
Company, through Pacific LTDA, also executed a letter of intent with
Gareste to acquire its interest in the “Yerbas Buenas” oxide copper property
located 130 km southeast of the city of Copiapo, Atacama Region III,
Chile.  Yerbas Buenas is located roughly 20 km from the El Corral
property.  The letter of intent contemplates that Gareste will receive
2 million shares of the Company at closing in exchange for its interest at
Yerbas Buenas, and a 2% NSR royalty, capped at $6 million, 1% of which can be
repurchased for the sum of $2 million at any time prior to commercial production
As of the date of this report, the Company and Gareste have postponed
performance under this letter of intent due to the current copper market
conditions and general economic decline worldwide.





Pacific
Copper Corp. through its Chilean subsidiary Pacific Copper Chile Limitada,
entered into a mineral property acquisition agreement with Gareste Limitada to
purchase the San Enrique property located in Atacama Region III, Chile and
comprising 100 hectares. In consideration Pacific Copper will issue 7 million
shares of its capital stock and shall grant a 2% Net Smelter Return (NSR)
royalty to Gareste Limitada, capped at US$6 million, one half (1/2) of which can
be repurchased by Pacific Copper or its subsidiary at any time prior to
commencement of any commercial production by making a payment of US$2 million to
Gareste Limitada.


F-28


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




10.
              Related
      Party Transactions




2009


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


A)
            During
      the year ended October 31, 2009, the Company expensed stock based
      compensation for $195,036  to its directors and officers
      relating to the vesting of the stock options issued in years 2007 and
      2008





B)
            A
      director of the Company provided consulting geological services to the
      Company and a total of $84,000 was expensed to a private Company with that
      director in common. As of October 31, 2009, $114,000 was owed to this
      private company.





C)
            A
      director of the Company provided consulting services to the Company and a
      total of $90,000 was expensed to a private company with that director in
      common.  As of October 31, 2009, $263,954 was owed to this
      private company which also includes non-reimbursed
    expenses.





D)
            The
      Company expensed $143,829 being the amount payable to Kriyah, including
      benefits charged to the Company, relating to compensation payable to
      the  President, CEO, Director and Chairman of the Board of
      Directors of the Company. As of October 31, 2009, $99,491 was owed which
      also included non-reimbursed
expenses.





E)
            The
      Secretary of the Company is an employee of Kriyah and was paid $31,993 by
      Kriyah, including payroll burden and benefits that was charged to the
      Company.





F)
            The
      Company expensed $20,261 for services rendered to the Company by the CFO
      of the Company. As of October 31, 2009, $7,024 was owed to the
      CFO.





G)
            On
      June 1, 2007, the Company entered into an agreement with Sweetwater for a
      term of 24 months to provide financial public relations, business
      promotion, business growth and development consulting services, including
      consultation regarding mergers and acquisitions, and general business
      consultation.  The Company expensed $138,600 for the year ended
      October 31, 2009 and also amortized deferred stock compensation expense
      for $145,833 relating to issue of 1,000,000 restricted shares of the
      Company's common stock that was earned during the year ended October 31,
      2009. As of October 31, 2009, $118,608 was owed to
    Sweetwater.





H)
            The
      Company incurred a total of $757,450 to a private Chilean company that
      provides exploration services to the Company in Chile, and has a director
      in common, of which $451,956 was owed at October 31, 2009 with such costs
      recorded as project costs.




2008


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




A
            During
      the year ended October 31, 2008, the Company expensed stock based
      compensation for $442,984 relating to the vesting of the following stock
      options issued in year 2007 and 2008 to its directors and
      officers:




F-29


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




10.
              Related
      Party Transactions-Cont’d





a)
            On
      May 14, 2007, stock options to purchase 250,000 common shares at an
      exercise price of $0.50/per share were issued to each of three Officers/
      Directors of the Company.


b)
            On
      May 14, 2007, stock options to purchase 100,000 common shares at an
      exercise price of $0.50 per share were issued to each of two directors of
      the Company, one officer and a former chief financial officer of the
      Company.


c)
            On
      July 20, 2007, stock options to purchase 150,000 common shares at an
      exercise price of $0.50 per share were issued to a
    director.


d)
            On
      August 1, 2007, stock options to purchase 1,700,000 common shares at an
      exercise price of $0.50 per share were issued to the Company’s new
      CEO.





e)
            On
      August 9, 2007, stock options to purchase 650,000 common shares at an
      exercise price of $0.50 per share were issued to the Company’s two
      directors (250,000 options each), and to one director (150,000
      options).


f)
            On
      March 1, 2008, stock options to purchase 50,000 common shares at an
      exercise price of $0.50 per share were issued to the Company’s
      officer.




B)
            During
      the year ended October 31, 2008, the Company paid $22,500 to Medallion
      Capital Corp., a private corporation owned by a former officer of the
      Company for consulting services.





C)
            A
      director of the Company provided consulting services to the Company and a
      total of $90,000 was expensed to his company, Sage Associates, for the
      year ended October 31, 2008.





D)
            A
      director of the Company provided consulting services to the Company and a
      total of $90,000 was expensed to his company, Pro Business Trust, for the
      year ended October 31, 2008.





E)
            The
      President, CEO, Director and Chairman of the Board of Directors of the
      Company, was paid $137,069 by Kriyah, including benefits billed to the
      Company.for the year ended October 31,
2008.





F)
            The
      Secretary of the Company is an employee of Kriyah and was paid $20,523 by
      Kriyah, including payroll burden and benefits that was billed to the
      Company. for the year ended October 31,
2008.





G)
              The
      Company expensed $21,690 for services rendered to the Company by the CFO
      of the Company, for the year ended October 31,
  2008.





H)
            On
      June 1, 2007, the Company entered into an agreement with Sweetwater
      Capital Corporation, a private company with a director in common with the
      Company (“Sweetwater”) for a term of 24 months to provide financial public
      relations, business promotion, business growth and development consulting
      services, including consultation regarding mergers and acquisitions, and
      general business consultation.  The Company expensed $48,000 for
      the year ended October 31, 2008 and also amortized deferred stock
      compensation expense for $250,000 relating to issue of 1,000,000
      restricted shares of the Company's common stock that was earned during the
      year ended October 31, 2008.




F-30


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




11.
            Income
      Taxes





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


2009
                    
                    
                    2008Loss
      before income taxes
                    
                    $
                    (2,993,591
                    )
                    
                    $
                    (10,579,162
                    )Expected
      income tax recovery at the statutory rates of 35% (2008 -
    33%)
                    
                    $
                    (1,047,757
                    )
                    
                    $
                    (3,491,123
                    )Increase
      in income taxes resulting from:Permanent
      differences
                    
                    
                    382,076
                    
                    
                    
                    2,441,371Valuation
      allowance
                    
                    
                    665,681
                    
                    
                    
                    1,049,752Provision
      for income taxes
                    
                    $
                    -
                    
                    
                    $
                    -




The
Company has deferred income tax assets as follows:




2009
                  
                  
                  2008Net
      operating loss carry forward
                  
                  $
                  5,720,599
                  
                  
                  $
                  2,978,374Deferred
      Income tax on loss carry forward
                  
                  $
                  2,002,210
                  
                  
                  
                  982,863Valuation
      allowance for deferred income tax assets
                  
                  $
                  (2,002,210
                  )
                  
                  
                  (982,863
                  )Deferred
      income taxes
                  
                  $
                  -
                  
                  
                  $
                  -




As of
October 31, 2009 the Company has non-capital losses of approximately $5,720,599
available to offset future taxable incomes which expire as follows:




2026
                        
                        $
                        621,0642027
                        
                        $
                        967,8562028
                        
                        $
                        1,389,4542029
                        
                        $
                        2,742,225$
                        5,720,599




F-31


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




12.   Deferred
Stock Compensation





The
Company issued 1,000,000 restricted common shares each to three consultants in
fiscal 2007, for a total of 3,000,000 common shares valued at
$1,500,000.  The Company has expensed the entire consulting expenses
of $1,500,000 as of October 31, 2009.




13.
Advances to related parties




Advances
to a related party include a net receivable of $36,000, after providing a
reserve for doubtful receivable for $160,000, advanced interest free against
demand promissory notes to the Company related through common directors and
management.  The advance was used to cover common business expenses
between the two Companies. The Company opted to create a reserve for $160,000 as
a matter of prudence and caution due to the current unfavorable and challenging
general economic conditions. The Company received $36,000 subsequent to the
year end (see note 19-subsequent events)




14.
Advances from non-related parties




On June
20, 2008, the Company received an advance of $247,000 from a non-related party
which bears interest at an annual rate of eight percent and is due and payable
within ninety days from receipt thereof.  The Company received a
further advance of an additional $5,100 on September 30, 2008 from the same
party.  The Company received additional advances totaling $118,500
from this party during the twelve month period ended October 31, 2009. The total
amount due as of October 31, 2009 is $ 407,673.





On
February 17, 2009, the Company issued a promissory note (the “War Eagle Note”)
to War Eagle Mining Company, Inc. a Canadian Corporation (“War
Eagle”).  War Eagle and the Company no longer share a common
director.  Under the terms of the War Eagle Note, a total of $100,000
has been advanced; all amounts advanced are due and payable on June 30, 2009
with interest at 15% per annum.  The War Eagle Note was to be secured
by a blanket security interest in all real, personal, and intangible interests
of Pacific Copper associated with each of the La Guanaca, El Corral, La Mofralla
and Venado projects (the Company’s South American oxide copper properties, as
described in this report).  In February 2009, War Eagle notified the
Company that it would not fund the full amounts contemplated in the War Eagle
Note, leaving a funding shortfall of $55,000.  The Company has
notified War Eagle that it considers this failure to fully fund the War Eagle
Note to be a breach, has denied the security interest, and has reserved all of
its legal rights.  The total amount due as of October 31, 2009,
including interest is $117,466.


F-32


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)





15.Convertible notes




Convertible
notes consist of the following as of October 31, 2009:





Net carrying
                    amounta) 
      $100,000 face value, 6% convertible note, due October 31,
    2010
                  
                  $
                  57,191b) 
      $166,500 face value, 12% convertible note, due July 27,
    2011
                  
                  
                  76,892c) 
      $20,000 face value, 12% convertible note, due October 26,
    2011
                  
                  
                  8,036142,119





a) On
October 27, 2008, the Company issued a $100,000 face value, 6% convertible note,
due October 31, 2010.  The principal amount of the note and interest
is payable on October 31, 2010.  While the note is outstanding, the
investor has the option to convert the principal balance and interest, into
conversion units at a conversion price of $0.16 per unit.  Each
conversion unit is convertible into one share of common stock and one warrant to
purchase one share of common stock.  Further, the terms of the
convertible note provide for certain redemption features. If, in the event of
certain defaults on the terms of the note, certain of which are indexed to
equity risks, the holder can accelerate the payment of outstanding principal and
interest.  The financing transaction also provided the holder with
Additional Investment Rights (“AIR”) to purchase up to $800,000 face value
convertible notes under the same terms and conditions as the $100,000
convertible note.





The
Company has evaluated the terms and conditions of the convertible note and the
AIR under the guidance of ASC 815.  The embedded conversion option, indexed
to a share of stock and a warrant, does not meet the conventional convertible
exemption.  The warrant element of the conversion unit does not otherwise
fall within the scope of the “indexed to the company’s own stock” exemption
provided in ASC 815 and required bifurcation.  Further, certain redemption
features that are indexed to equity risks are not clearly and closely related to
the host debt agreement.  Accordingly, a compound embedded derivative was
bifurcated from the contract and has been recorded as a derivative liability.
 Similarly, the AIR embodies similar features that did not meet equity
classification and accordingly derivative liability classification of the
compound feature is also reflected in liabilities.


F-33


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




15.Convertible notes (Cont’d)





Fair
value of the compound embedded derivative and embedded warrants in the
additional investment right were measured using the Monte Carlo Simulation
technique and in applying this technique the Company was required to develop
certain subjective assumptions.  Information and significant assumptions
embodied in the valuations (including ranges for certain assumptions during the
subject periods that instruments were outstanding) as of October 31, 2009 and
October 31, 2008 are illustrated in the following table:


October 31,
                      2009
                    
                    
                    October 31,
                      2008Conversion
      price
                    
                    $
                    0.29
                    
                    
                    $
                    0.29Volatility
                    
                    
                    157%-
      173
                    %
                    
                    
                    79%-86
                    %Equivalent
      term (years)
                    
                    
                    0.97
                    
                    
                    
                    3.964Credit-risk
      adjusted yield
                    
                    
                    10.29
                    %
                    
                    
                    10.3%-14.0
                    %Interest-risk
      adjusted rate
                    
                    
                    5.02%-6.0
                    %
                    
                    
                    4.8%-5.10
                    %





Since, as
discussed above, the common share element of the conversion option did not
require treatment as derivative financial instruments, the Company was required
to evaluate the feature as potentially embodying a beneficial conversion feature
under ASC 470. A beneficial conversion feature is present when the fair value of
the underlying common share exceeds the effective conversion price of the
conversion option. The effective conversion price is calculated as the basis in
the financing arrangement allocated to the hybrid convertible debt agreement,
divided by the number of shares into which the instrument is indexed. As a
result of this evaluation under the aforementioned standards, the Company
concluded that a beneficial conversion feature was present in the amount of
$5,625 in the $100,000 face value convertible note. The amount is amortized
using the effective interest method.


The
derivative liabilities as of October 31, 2009 and 2008 consisted of the
following:





2009
                      
                      
                      2008Derivative
      financial instrumentCompound
      embedded derivative
                      
                      
                      23,125
                      
                      
                      
                      11,250Additional
      investment rights
                      
                      
                      -
                      
                      
                      
                      90,00023,125
                      
                      
                      
                      101,250





The
following table summarizes the effects on income (loss) associated with changes
in the fair values of the derivative financial instruments by type for the year
ended October 31, 2009 and the period from inception to October 31,
2008:





2009
                          
                          
                          2008Derivative
      financial instrumentCompound
      embedded derivative
                          
                          
                          11,875
                          
                          
                          
                          4,375Additional
      investment rights
                          
                          
                          (90,000
                          )
                          
                          
                          35,000(78,125
                          )
                          
                          
                          39,375




F-34


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




15.      Convertible
notes (Cont’d)





b) On
July 27, 2009, the Company issued 12% convertible notes to multiple investors
with an aggregate face value of $166,500. The principal amount of the notes and
interest is payable on July 27, 2011. While the note is outstanding, the
investor has the option to convert the principal balance and interest, into
common stock at a fixed conversion price of $0.10. In the event of certain
defaults on the terms of the note, certain of which are indexed to equity risks,
the holder can accelerate the payment of outstanding principal and interest (the
“Default Put”).





The
Company evaluated the notes for accounting purposes under ASC 815 and have
determined that the conversion feature meets the conventional-convertible
exemption and, accordingly, bifurcation and fair-value measurement of the
conversion feature is not required. The notes were issued with a beneficial
conversion feature, having a value of $49,950.





In
conjunction with the offering the Company issued warrants to the investors
indexed to 1,665,000 shares of common stock with an exercise price of $0.25 per
share. The fair value of the warrants was determined to be $86,414 using the
Black-Scholes-Merton valuation technique and they were recorded at their
relative fair value of $46,085 in accordance with ASC 470





As a
result of allocating a portion of the proceeds to the warrants and the
beneficial conversion feature, the notes were recorded net of a discount of
$98,024.  The beneficial conversion feature is recorded in paid-in
capital, and the discount on the notes will be amortized through periodic
charges to interest expense over the term of the notes using the effective
interest method. Amortization of debt discounts amounted to $8,416 during the
period from inception to October 31, 2009. Incremental, direct financing costs
of $6,615 were allocated based on the relative fair value of the financial
instruments issued.





c) On
October 26, 2009, the Company issued 12% convertible notes to two investors with
an aggregate face value of $20,000. The principal amount of the notes and
interest is payable on October 26, 2011. While the note is outstanding, the
investor has the option to convert the principal balance and interest, into
common stock at a fixed conversion price of $0.10. In the event of certain
defaults on the terms of the note, certain of which are indexed to equity risks,
the holder can accelerate the payment of outstanding principal and interest (the
“Default Put”).





The
Company evaluated the notes for accounting purposes under ASC 815 and have
determined that the conversion feature meets the conventional-convertible
exemption and, accordingly, bifurcation and fair-value measurement of the
conversion feature is not required. The notes were issued with a beneficial
conversion feature, having a value of $6,000.





In
conjunction with the offering the Company issued warrants to the investors
indexed to 1,665,000 shares of common stock with an exercise price of $0.25 per
share. The fair value of the warrants was determined to be $10,380 using the
Black-Scholes-Merton valuation technique and they were recorded at their
relative fair value of $6,014 in accordance with ASC 470.





As a
result of allocating a portion of the proceeds to the warrants and the
beneficial conversion feature, the notes were recorded net of a discount of
$12,014.  The beneficial conversion feature is recorded in paid-in
capital, and the discount on the notes will be amortized through periodic
charges to interest expense over the term of the notes using the effective
interest method. Amortization of debt discounts amounted to $50 during the
period from inception to October 31, 2009.


F-35


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2009 and 2008


(Amounts
expressed in US Dollars)




16.
Project expenses




During
the year ended October 31, 2009 and 2008, the Company incurred project related
expenses on the following mineral claims in Chile, Peru and USA:


2009
                  
                  
                  2008Don
      Javier (Peru)
                  
                  $
                  9,000
                  
                  
                  $
                  240,344Carrera
      Pinto (Chile)
                  
                  $
                  75,936
                  
                  
                  $
                  576,052Carrizal
      (Chile)
                  
                  $
                  69,798
                  
                  
                  $
                  307,180Cerro
      Blanco (Chile)
                  
                  $
                  8,099
                  
                  
                  $
                  117,014Corral
      (Chile)
                  
                  $
                  20,275
                  
                  
                  
                  -La
      Guanaca (Chile)
                  
                  $
                  13,343
                  
                  
                  $
                  189,218Venapai
      (Chile)
                  
                  $
                  410,500
                  
                  
                  $
                  496,274Yerba
      Buena (Chile)
                  
                  $
                  361,560
                  
                  
                  
                  -Others
                  
                  $
                  17,594
                  
                  
                  $
                  74,098Total
                  
                  $
                  986,105
                  
                  
                  $
                  2,000,180





The above
expenses include consulting, equipment rentals, contract labor, field
wages, drilling and other project related expenses.




17.
General and administration expenses





General
and administration expense for the year ended October 31, 2009 and 2008 include
the following:


2009
                
                
                2008Non-cashcompensation
      expense relating to the issue of options and warrants
                
                $
                341,946
                
                
                $
                915,953Non
      cash expense relating to the amortization of deferred stock compensation
      relating to issue of stock to consultants
                
                $
                145,833
                
                
                $
                916,666Legal
      and audit
                
                $
                163,774
                
                
                $
                127,493Office,
      payroll and other general expenses
                
                $
                534,567
                
                
                $
                1,006,558Total
                
                $
                1,186,120
                
                
                $
                2,966,670





18.   Geographic
location of assets





Except
for Cash and Cash equivalent for $6,153 and $1,651 located in USA and Canada
respectively, and mining claims of $200 located in Peru, all other assets in the
financial statements are located in Chile.





19.   Subsequent
events





The
Company has reviewed subsequent events up to January 19, 2010. Subsequent events
are as follows:





Effective
January 15, 2010, George Orr resigned as a Director of the Company. There were
no disagreements between the Company and Mr. Orr.





Subsequent
to the year, advances receivable from the related party for $36,000 was
repaid.


F-36