SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB




(Mark
                      one)x
                    
                    Annual
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the Fiscal Year October 31, 2008, or ̈
                    
                    Transition
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





Commission
File Number 000-52495





PACIFIC
COPPER CORP.


(Exact
name of registrant as specified in its charter)





Delaware
              
              98-0504006(State
      or other jurisdiction of
              
              (I.R.S.
      Employerincorporation
      or organization)
              
              Identification
      No.)





Head
Office:  3430 E. Sunrise Dr., Ste 160, Tucson, AZ 85718





(Address of principal
executive offices) (Zip Code)





Registrant's
telephone number, including area code: (520) 989-0021; FAX (520)
623-3326





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





YES x                                                       
NO  ̈





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





YES  ̈                                                       
NO x





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 October 31, 2008Common
      Shares $ .0001 par value
                      
                      
                      44,561,600





Transitional
Small Business Disclosure Format


YES  ̈                                                       
NO x







Indicate
by check mark whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes x   No  ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not be contained, to the
best of issuer’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.   ̈




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




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




The
issuer had no revenue in the year ended October 31, 2008.




The
aggregate market value of the Common Stock held by non-affiliates of the issuer,
as of October 31, 2008 was approximately $3,204,219 based upon a share valuation
of $0.09 per share.  This share valuation is based upon the 10-day
trailing average price of the Company’s shares as of October 31,
2008.  For purposes of this disclosure, shares of Common Stock held by
persons who the issuer believes beneficially own more than 5% of the outstanding
shares of Common Stock and shares held by officers and directors of the issuer
have been excluded because such persons may be deemed to be affiliates of the
issuer.




As of
October 31, 2008, 44,561,600shares of the issuer’s
Common Stock were outstanding.




Transitional
Small Business Disclosure    Yes  ̈
Nox







TABLE
OF CONTENTS




PagePart
      I
                  1Item
      1.
                  Description
      of Business and Risk Factors
                  1Item
      2.
                  Description
      of Property
                  4Item
      3.
                  Legal
      Proceedings
                  16Item
      4.
                  Submission
      of Matters to a Vote of Securities Holders
                  16Part
      II
                  17Item
      5.
                  Market
      For Common Equity, Related Stockholder Matters and Small Business Issuer
      Purchase of Equity Securities
                  17Item
      6.
                  Management’s
      Discussion and Analysis or Plan of Operation
                  22Item
      7.
                  Financial
      Statements
                  28Item
      8.
                  Change
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
                  28Item
      8A.
                  Controls
      and Procedures
                  28Item
      8B.
                  Other
      Information
                  29Part
      III
                  30Item
      9.
                  Directors,
      Executive Officers, Promoters and Control Persons; Compliance With Section
      16(a) of the Exchange Act
                  30Item
      10.
                  Executive
      Compensation
                  33Item
      11.
                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                  36Item
      12.
                  Certain
      Relationships and Related Transactions
                  38Item
      13.
                  Exhibits
                  40Item
      14.
                  Principal
      Accountant Fees and Services
                  41




iii


PART
I





This
Annual Report on Form 10-KSB contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which
include, without limitation, statements about our explorations, development,
efforts to raise capital, expected financial performance and other aspects of
our business identified in this Annual Report, as well as other reports that we
file from time to time with the Securities and Exchange Commission.  Any
statements about our business, financial results, financial condition,
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.




Our name isPacific 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 3430 E. Sunrise Dr., Ste 160, Tucson,
Arizona 85718   Our telephone number is(520) 989-0021;
FAX (520) 623-3326




RISK
FACTORS





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





Currently,
the Company has no source of revenue, and no commitments to obtain additional
financing.  The Company will require 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 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.


1





2.
            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.





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





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 one other exploration stage mining company
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.





4.       
     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.  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.





5.          
  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.


2





6.
            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.





7.
            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.





8.
            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. 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.




9.            
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, 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.







10.           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. The Company
is negatively affected by the current decline in commodity
prices.


3





11.           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.





Item
2.  Description of Property


PROPERTIES





Property
Locations and Descriptions





Pacific
Copper holds, or is in the process of acquiring, mineral claims in Chile and
Peru.  Pacific Copper’s subsidiary, Sociedad Pacific Copper Chile
Limitada (a Chilean limited liability partnership,), holds or is in the process
of acquiring mining concessions in the 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 or is in
the process of acquiring claims in the Medalla Milagrosa district of Peru (the
“Peru Claims”).  There is no assurance that commercially viable
mineralized material exist on any of our mineral claims and further exploration
will be required before a final evaluation as to economic feasibility is
determined.  We do not consider the Chile Claims or the Peru Claims
material at this time.





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 will 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 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.





Pacific
LTDA holds title to, certain mineral claims located in the Carrizal, Cerro
Blanco and Carrera Pinto mining districts in Chile (the “Chile
Claims”).  As of the date of this Report, the Company does not
consider the Chile Claims to be material assets.  That assessment may
change after further exploration of 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.  Under the terms of the Closing Agreement Pacific LTDA was
required to obtain title and all licensing and regulatory approval necessary for
the transfer of the Chile Claims.





The
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 must satisfy
the following post closing items:




(a)  Pacific
LTDA must deliver within ninety (90) days of the closing date (January 8, 2008)
the following documents in addition to the documentation for the mining claims
delivered at closing:




(i)
            A
      complete authorized copy of the judicial constitution files of the Chile
      Claims.




(ii)
            A
      certificate granted by the Secretary of the authorized Court of Justice
      Room certifying that the referred Chile Claims are not subject to
      outstanding litigation.


5




(iii)
            An
      authorized copy of the registration of the judicial awards of the Chile
      Claims in the Registry of Discovery of the authorized Registry of
      Mines.




(iv)
            Original
      copies of the Official Mining Gazette in which the rights of Pacific LTDA
      are published.




(v)
            Official
      copies of the Mining Service Reports on the Chile
  Claims.




(vi)
            Certificates
      of payments of Good Standing Fees to the National Treasury Office and
      formal documentation evidencing the payment of Mining Levies of each
      individual Chile Claim to the Chilean National Treasury
      Office.




(b)  Pacific
LTDA must obtain and provide proper documentation showing that it has acquired
the necessary permits to access the Chile Claims and that all necessary mining
and environmental permits have been obtained, including the permits and
authorizations needed to perform an environmental impact assessment and, if
warranted, mining activities.




(c)  The
execution, publication and registration in law of the public deed to be entered
between Pacific Copper and Pacific LTDA modifying Pacific LTDA’s Bylaws and
Articles of Incorporation to reflect the retention of the 1% partnership
interest held by Mr. Eduardo Esteffan Marco must be completed.




(d)  Pacific
LTDA must provide financial records, including receipts for incorporation costs
and all other expenditures incurred since the date of inception of Pacific
LTDA.




The
Company may waive the requirement to complete any of the foregoing post closing
items in its sole discretion.  In the event that Pacific LTDA fails to
satisfy the terms of the Closing Agreement by December 31, 2008, it may be
considered in breach and the Company may require the return of some or all of
the Consideration Shares to the Company.  As of the date of this
Report, the Consideration Shares remain in escrow and the Company has not
elected to waive any of the Closing Conditions.





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 Chile Consideration Shares remain in escrow.  However,
Pacific LTDA holds tile to the mining concession listed below in the Table
entitled “Pacific LTD Concessions”





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 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.  The Company dos not consider this property to be material,
however, the Company’s assessment may change after further exploration is
completed.


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 Chile Copper Oxide Properties





In July
and October of 2008, the Company, through Pacific LTDA, entered into Letters of
Intent to acquire the interests of Gareste, Ltda., a private Chilean entity
which is owned, in part, by a Director of the Company, in the El Corral/La
Mofralla copper properties, which are adjacent to one another, in Atacama Region
III, Chile.  These properties consist of approximately 3,900 hectares
of exploration concessions, are road accessible and located roughly 60
kilometers south of the city of Copiapo.  The Corral property was
acquired for 2 million shares of the Company’s common stock and a 2% net smelter
return (“NSR”) royalty interest.  One half of such royalty can be
repurchased for the sum of $2 million at any time prior to the commencement of
production.  Mofralla was purchased for 1 million shares of the
Company’s common stock.  The Company and the seller are proceeding to
negotiate and execute a definitive purchase agreement and the seller has
transferred title to the Mofralla and El Corral properties to Pacific LTDA in
anticipation of closing the transaction.  .  The Company dos
not consider these properties to be material, however, the Company’s assessment
may change after further exploration is completed.


7





EL
      CORRAL Y LA MOFRALLA PROPERTY





Claims
      List
              
              
              
              
              
              Pacific
      LTDANAME
              
              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.
              
              300
              
              Exploration
      Concession





Venado/Venapai
Copper Oxide Property





In July
of 2008, the Company, through Pacific LTDA, entered into a Letter of Intent to
acquire the interests of Gareste, Ltda., a private Chilean entity which is
owned, in part, by a Director of the Company, in the Venado copper property in
Atacama Region III, Chile, also referred to as the Venapai
property.  This property consists of approximately 5,000 hectares of
exploration concessions, is road accessible, and located roughly 45 kilometers
northeast of the city of Copiapo.  The Venado property was acquired
for 4 million shares of the Company’s common stock and a 2% net smelter return
(“NSR”) royalty interest, one half of which can be repurchased for the sum of $3
million at any time prior to the commencement of production.  The
Company and Gareste, Ltda are proceeding to negotiate and execute a definitive
purchase agreement and Gareste, Ltda has transferred title to the Venado
property to Pacific LTDA in anticipation of closing the
transaction.  The Company dos not consider this property to be
material, however, the Company’s assessment may change after further exploration
is completed.





VENAPAI
      PROPERTY





Claims
      List
                      
                      
                      
                      
                      
                      Pacific
      LTDANAME
                      
                      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
                      
                      
                      
                      5000





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.





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 claims, 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 land should 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 property 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 would control roughly 70% upon
closing of the Chile Agreement.  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 property, 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 property on the smaller western target, with
additional acreage filed, upon closing of the Chile Agreement.


10





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.


11




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





Pacific
LTD Concessions





CARRERA
PINTO TURKEZA PROJECT





Initial hect.Property Name
                                        
                                        Location
                                        
                                        Property
                                          Type
                                        
                                        UTM
                                          North
                                        
                                        UTM East
                                        
                                        Registration
                                        
                                        Title
                                        
                                        No
                                        
                                        Mine Office
                                        
                                        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





Initial hect.Property Name
                                                    
                                                    Location
                                                    
                                                    Property
                                                      Type
                                                    
                                                    UTM
                                                      North
                                                    
                                                    UTM East
                                                    
                                                    Registration
                                                    
                                                    Title
                                                    
                                                    No
                                                    
                                                    Mine Office
                                                    
                                                    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


12





CERRO
BLANCO PROJECT





Initial hect.Property Name
                                      
                                      Location
                                      
                                      Property
                                        Type
                                      
                                      UTM
                                        North
                                      
                                      UTM East
                                      
                                      Registration
                                      
                                      Title
                                      
                                      No
                                      
                                      Mine Office
                                      
                                      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





Initial hect.Property Name
                                      
                                      Location
                                      
                                      Property
                                        Type
                                      
                                      UTM
                                        North
                                      
                                      UTM East
                                      
                                      Registration
                                      
                                      Title
                                      
                                      No
                                      
                                      Mine Office
                                      
                                      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





Initial hect.Property Name
                              
                              Location
                              
                              Property
                                Type
                              
                              UTM
                                North
                              
                              UTM East
                              
                              Registration
                              
                              Title
                              
                              No
                              
                              Mine Office
                              
                              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
                              
                              801605,000


13


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, 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.  Mr. 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,


14




(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, 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 dos not consider this property to be
material, however, the Company’s assessment may change if further exploration is
undertaken.





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 will 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


15





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 is
limited to the Province of British Columbia.  By its terms, the CTO was
issued for not filing a technical report 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.  The Company has engaged counsel in British Columbia and
is in the process of obtaining and filing the reports and information required
by the BCSC and otherwise satisfying the requirements of British Columbia
law.  As of the date of this report, this matter has not been resolved
and the CTO is in effect.





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





None.


16




PART
II




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




As of
October 31, 2008, there are 44,561,600 shares of common stock outstanding (a
“share” or “shares”), held by 627 shareholders of record.





Private
Placements





Private Placements for the
Fiscal Year Ended October 31, 2007





In May
2007, the Company received $795,000 in connection with subscriptions for
1,590,000 “units” at $0.50 per unit.  Each unit consists of one common
share and one half a common share purchase warrant.  Each full common
share purchase warrant is exercisable for one common share at $0.75 per share on
or before April 30, 2009.  The Company paid an agent $43,750 and
issued a warrant to purchase 87,500 common shares at $0.50 per share on or
before April 30, 2009 as finder’s fees.  The private placement was
exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”) pursuant to an exemption afforded by Regulation S promulgated
thereunder (“Regulation S”).





On April
30, 2007, the Company received $2,290,000 in connection with subscriptions for
4,580,000 “units” at a price of $0.50 per unit. Each unit entitles the holder
thereof to one share of the Company’s common stock and one-half of a common
share purchase warrant. Each full common share purchase warrant is exercisable
for one common share of Pacific Copper at a price of $0.75 per share on or
before April 30, 2009. The Company paid agents $72,800 and issued warrants to
purchase 145,600 common shares at $0.50 per share on or before April 30,
2009.  The private placement was exempt from registration under the
Securities Act pursuant to an exemption afforded by Regulation S.





The
shares issued in April and May 2007  were subject to a lock-up
agreement which provided that one-third of the shares held by a selling
shareholder may be resold on the effective date of a registration statement on
Form SB-2 filed with the SEC which was made effective on August 16, 2007 (the
“effective date”), one-third may be re-sold 90 days from the effective date and
one–third may be re-sold 180 days from the effective date.





On March
15, 2007, the Company completed a private placement of 1,000,000 restricted
shares of the Company’s common stock at a price of $0.10 per share with a single
non-U.S. investor, for gross proceeds of $100,000. The private placement was
exempt from registration under the Securities Act pursuant to an exemption
afforded by Regulation S.





As of
March 9, 2007 the Company completed a private placement of 1,000,000 shares of
the Company’s common stock at a price of $0.10 per share with a single non-U.S.
investor, for gross proceeds of $100,000. These shares are subject to a lock-up
agreement pursuant to which 250,000 of the shares may be resold on the effective
date of a registration statement on Form SB-2 filed with the
SEC  which was made effective on April 4, 2007 (the “effective date”);
250,000 shares may be re-sold following the six-month anniversary of the
effective date;  250,000 shares may be re-sold following the
twelve-month anniversary of the effective date; and 250,000 shares may be
re-sold following the eighteen-month anniversary of the effective date. The
private placement was exempt from registration under the Securities Act pursuant
to an exemption afforded by Regulation S.





In
January, 2007, the Company issued 660,000 common shares to a single accredited
investor at a price of $0.10 per share through a private placement, for gross
proceeds of $66,000. Said shares are subject to a lock-up agreement which
provides that 25% could be resold on the effective date of a registration
statement on Form SB-2 filed with the SEC which was made effective on February
16, 2007 (the “effective date”), 25% may be resold six months from the effective
date, 25% may be resold twelve months from the effective date and 25% may be
resold eighteen months from the effective date. The private placement was exempt
from registration under the Securities Act pursuant to an exemption afforded by
Regulation S.


17





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.





Other
Sales or Issuances of Unregistered Securities





Year ended October 31,
2007





On June
1, 2007 the Company entered into an agreement with Sweetwater Capital
Corporation (“Sweetwater”) for a term of 24 months to provide financial public
relations, business promotion, business growth and development, including
consultation regarding mergers and acquisitions, and general business
consultation.  The Company will pay Sweetwater $4,000.00 per month
plus 1,000,000 restricted shares that will be earned in equal installments of
250,000 shares on each of December 1, 2007, March 1, 2008, June 1, 2008 and
September 1, 2008.  Such shares were issued in the form of one stock
certificate on June 1, 2007. The consultant must return any unearned shares in
the event of an early termination of the agreement.


18


On June
1, 2007 the Company entered into a consulting agreement with Greatrek Trust SA
(“Greatrek”) for a term of fifteen months to provide advice on financial
matters, business growth and development, and general business
consultation.  The Company will pay Greatrek 1,000,000 restricted
shares that will be earned in equal installments of 250,000 shares on each of
December 1, 2007, March 1, 2008, June 1, 2008 and September 1, 2008. Such shares
were issued in the form of one stock certificate on June 1, 2007.  The
consultant must return any unearned shares in the event of an early termination
of the agreement.





On June
1, 2007 the Company entered into a consulting agreement with Scharfe Holdings
Inc. (“Scharfe”) for a term of fifteen months to provide advice on financial
matters, business growth and development, and general business
consultation.  The Company will pay Scharfe 1,000,000 restricted
shares that will be earned in equal installments of 250,000 shares on each of
December 1, 2007, March 1, 2008, June 1, 2008 and September 1, 2008. Such shares
were issued in the form of one stock certificate on June 1, 2007. The consultant
must return any unearned shares in the event of an early termination of the
agreement.





Each of
Sweetwater, Greatrek and Scharfe are non-U.S. Persons.  Sweetwater and
Scharfe are Canadian entities doing business in North
America.  Greatrek is based in Liechtenstein and doing business in
Europe. The shares issued under the foregoing agreements were exempt from
registration under the Securities Act pursuant to Regulation S promulgated
thereunder.





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 any of such
concessions to be material assets at this time, but our assessment may change
after further work is done on the properties.


19





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 year ended
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.


20


FISCAL
      YEAR 2008
                    
                    HIGH
                    
                    
                    LOWFirst
      Quarter
                    
                    $
                    0.53
                    
                    
                    $
                    0.30Second
      Quarter
                    
                    
                    0.45
                    
                    
                    
                    0.35Third
      Quarter
                    
                    
                    0.60
                    
                    
                    
                    0.35Fourth
      Quarter
                    
                    
                    0.49
                    
                    
                    
                    0.04FISCAL
      YEAR 2007Fourth
      Quarter
                    
                    
                    0.80
                    
                    
                    
                    0.25




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 600,000 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.


21





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
                  equitycompensation plans
                  (excluding securities
                  reflected in column (a))(a)
                
                
                (b)
                
                
                (c)Equity
      compensation plans approved by security holders
                
                
                5,230,000
                
                
                $
                0.49
                
                
                
                -Equity
      compensation plans not approved by securities holders
                
                
                N/A
                
                
                
                N/A
                
                
                
                N/ATotal
                
                
                5,230,000
                
                
                $
                0.49
                
                
                
                -





The
following summarized options outstanding under the Plan as of October 31,
2008:




Option Price
            
            
            Number of sharesExpiry Date
            
            Per Share
            
            
            2008
            
            
            2007February
      28, 2010
              May
      15, 2010
              May
      14, 2012
            
            
            0.40
              0.35
              0.50
            
            
            
            250,000
              200,000
              1,750,000
            
            
            
            -
              -
              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
              September
      24, 2013
            
            
            0.50
              0.50
            
            
            
            380,000
              50,000
            
            
            
            -
              -5,230,000
            
            
            
            4,350,000Weighted
      average exercise price at end of year
            
            
            
            0.49
            
            
            
            0.50




Item 6.   Management’s
Discussion and Analysis





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, 2008





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, 2008, we had accumulated losses of $14,177,315.  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.


22





As
described in greater detail below, the Company’s major endeavor over the
twelve-month period ended October 31, 2008 has been its effort to raise
additional capital to pursue further acquisitions and carry out exploration
activities on its mineral claims.





SELECTED
INFORMATION





Twelve months ended
                        
                        
                        Twelve months endedOctober 31, 2008
                        
                        
                        October 31, 2007Revenues
                        
                        $
                        Nil
                        
                        
                        $
                        NilNet
      Loss
                        
                        $
                        (10,579,162
                        )
                        
                        $
                        (2,940,779
                        )Loss
      per share-basic and diluted
                        
                        $
                        (0.26
                        )
                        
                        $
                        (0.12
                        )





As at
                    
                    
                    As atOctober 31, 2008
                    
                    
                    October 31, 2007Total
      Assets
                    
                    $
                    476,946
                    
                    
                    $
                    1,727,698Total
      Liabilities
                    
                    $
                    846,424
                    
                    
                    $
                    357,312Cash
      dividends declared per share
                    
                    Nil
                    
                    
                    Nil





The total
assets for the twelve-month period ended October 31, 2008, 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.  For the year ended October 31, 2007, total
assets include cash and cash equivalents for $1,617,344, prepaid expenses for
$72,148 and capital assets for $38,206.  The current assets reduced
significantly from $1,689,492 on October 31, 2007 to $320,903 on October 31,
2008.  The reduction in current assets is primarily due to increased
cash outflow from operating activities of $3,245,736 during the twelve month
period ended October 31, 2008, as compared to cash outflow of operating
activities of $1,958,302 during the twelve months ended October 31, 2007 and a
reserve for doubtful receivable created for $222,000 as of October 31, 2008
(Prior year $Nil).





Revenues





No
revenue was generated by the Company’s operations during the twelve month period
ended October 31, 2008 and October 31, 2007.





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, 2008 is
general and administrative expense of $2,966,670, as compared with $1,388,014
for the twelve month period ended October 31, 2007.  General and
administrative expense represents approximately 28.2% of the total operating
expense for the twelve-month period ended October 31, 2008 and approximately
46.4% of the total operating expense for the twelve month period ended October
31, 2007.  The increase in expenses in 2008 is mainly due to non-cashcompensation expense
relating to the issue of options and warrants for $915,953 in 2008 (2007:
$315,667), non-cash expense relating to the amortization of deferred stock
compensation relating to issue of stock to consultants for $916,666 in 2008
(2007: $437,501) and reserve against receivables for $222,000 in 2008 (2007:
$Nil).


23





(b) Project
Expense





Included
in operating expenses for the year ended October 31, 2008 is project expenses of
$2,000,180 as compared with $1,606,564 for the year ended October 31,
2007.  Project expense represents approximately 19% of the total
operating expense for the twelve month period ended October 31, 2008 and
approximately 53.6% of the total operating expense for the twelve month period
ended October 31, 2007. This includes expenses related to mineral claim fees,
drilling and project consulting.





Liquidity
and Capital Resources





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





October 31, 2008
                  
                  
                  October 31, 2007Cash
      and cash equivalent
                  
                  $
                  110,746
                  
                  
                  $
                  1,617,344Cash
      used in operating activities
                  
                  $
                  3,245,736
                  
                  
                  $
                  1,958,302Cash
      used in investing activities
                  
                  $
                  159,786
                  
                  
                  $
                  37,783Cash
      provided by financing activities
                  
                  $
                  1,897,860
                  
                  
                  $
                  3,234,450





As at
October 31, 2008 the Company had working capital (deficit) of
$(492,813).  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, 2008 and October 31, 2007 are $ 155,443 and
$38,206 respectively.





Advances
to Related Parties





Advances
to a related party include an amount of $175,000, net of a reserve for doubtful
receivable for $222,000 advanced interest free against demand promissory notes
to Zoro Mining Corp., a company related to Pacific Copper through common
directors and an officer.  The Company opted to create a reserve for
$222,000 as a matter of prudence and caution due to the current unfavorable and
challenging economic conditions.  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.


24





Acquisition,
Exploration and Evaluation Expenditures




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




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




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





Off-Balance
Sheet Arrangement





The
Company had no off-balance sheet arrangements as of October 31, 2008 and October
31, 2007.





Contractual
Obligations and Commercial Commitments





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 will pay Sweetwater $4,000 per month plus
1,000,000 restricted shares of the Company's common stock that will be earned in
equal installments of 250,000 shares on December 1, 2007, March 1, 2008, June 1,
2008 and September 1, 2008.  The said 1,000,000 shares of restricted
Common stock of the Company were tendered in one certificate on June 1,
2007.  The consultant must return any unearned shares upon early
termination of the agreement.  Either the consultant or the Company
may terminate the agreement with or without cause upon sixty (60) days written
notice to the other provided that the Company may not give notice of
cancellation before January 1, 2007.





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.


25





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 has a two-year term that
commenced on August 1, 2007 and will continue until August 1, 2009 unless
terminated earlier pursuant to the terms of the Employment
Agreement.  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.  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, 2008, would be $238,834
in the event of a lease default with full acceleration of rent. Kriyah’s
Manager, Andrew A. Brodkey, is also the President and CEO of the
Company.





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 August
16, 2007, the Company entered into an agreement with Hydro Geophysics Inc.
(“HGI”).  Pursuant to this agreement, HGI provided certain mineral
exploration, analytical and consulting services to the Company, as requested
from time to time, with respect t the Company’s South American
projects..  This contract will expire on February 16,
2009.  The Company remains obligated for the payment of an aggregate
of $89,212 of unpaid invoices under this contract.





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.


26


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.





On
February 28, 2008 the Company entered into an agreement with Michael A. McClave
(‘Consultant’).  Pursuant to this agreement, Consultant will provide
certain mineral exploration, geological and consulting services to the Company,
as requested from time to time.  Pacific Copper  will be
invoiced on a monthly basis for services rendered on the
projects.  Either party can terminate this agreement by giving 30 days
notice with or without cause.





On May
15, 2008, the Company entered into a consulting and professional services
agreement with Jehcorp Inc. (‘Consultant’).  Pursuant to this
agreement, Consultant agrees to provide and perform for the benefit of the
Company certain expert technical consulting services, specifically including,
but not limited to, the preparation of a Canadian National Instrument NI-43-101
Technical Report for various properties owned or controlled by the Company and
its subsidiaries in Peru and Chile.  The Company will be invoiced on a
monthly basis for services rendered and the Consultant was advanced
$5,000.





The
Company, through Pacific LTDA, also executed a letter of intent dated
September 9, 2008 with a single vendor, Gareste, Ltda. 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, Gareste, Ltda., is a Chilean entity which is owned in part by a Director
of the Company.  The vendor 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.





On June
10, 2008 the Company executed an agreement with Eagle Mapping Ltd. for providing
services for a total consideration payable for $52,200.





Recent
Accounting Pronouncements




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


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





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




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


27




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




In May
2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies
that convertible debt instruments that may be settled in cash upon either
mandatory or optional conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants."




Additionally,
FSP APB 14-1 specifies that issuers of such instruments should separately
account for the liability and equity components in a manner that will reflect
the entity's nonconvertible debt borrowing rate when interest cost is recognized
in subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years.  The Company will adopt FSP APB 14-1 beginning in
the first quarter of 2010, and this standard will be applied on a retrospective
basis.  The Company is evaluating the impact which the adoption of FSP
APB 14-1 will have on the consolidated financial statements and expects to
record higher interest expense relating to the convertible note.





Item
7.  Financial Statements





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





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





None.





Item
8A.  Controls and Procedures





Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period
covered by this report.  Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that, as of October 31, 2008,
these disclosure controls and procedures were effective to ensure that all
information required to  be disclosed by us in the reports that we
file or submit under the Exchange Act is: (i) recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rule and
forms; and (ii) accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.





There
have been no changes in internal control over financial reporting that occurred
during the fourth fiscal quarter that have materially affected, or are
reasonably likely to materially affect the Company’s internal control over
financial reporting.


28





Management’s
Annual Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is a process designed by, or under the supervision of, the Principal
Executive Officer and Principal Financial Officer and effected by our 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 generally accepted
accounting principles.





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.





Our
evaluation of internal control over financial reporting includes using the COSO
framework, an integrated framework for the evaluation of internal controls
issued by the Committee of Sponsoring Organizations of the Treadway Commission,
to identify the risks and control objectives related to the evaluation of our
control environment.




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




Based on
our evaluation under the frameworks described above, our management has
concluded that our internal control over financial reporting was effective as of
September 30, 2008.





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 requirements by the company’s
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the company to provide only management’s
report in this annual report.





Audit
Committee





As of
October 31, 2008, the Audit Committee is comprised of three directors and one
officer:  Donald Padgett (resigned subsequent to the year end on
November 20, 2008), Elden Schorn, George Orr and Rakesh Malhotra, the Company’s
Chief Financial Officer.  There have been three Audit Committee
meetings held in the fiscal year ended October 31, 2008 and a fourth held
subsequent to the year end related to this report.





On
January 28 2009, the Audit Committee, consisting of two directors and the
Company’s Chief Financial Officer, reviewed the financial statements of the
Company included with this report on Form 10-KSB for the year ended October 31,
2008 and recommended to the board of directors that such financial statements be
adopted and included in this report.





Item
8B.   Other Information





None.


29




Part
III




Item
9.   Directors and Executive Officers of the Registrant




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





Andrew
      Brodkey
              Director,
      Chairman of the BoardWilliam
      Timmins
              DirectorM.
      Elden Schorn
              DirectorHarold
      Gardner
              DirectorDavid
      Hackman
              DirectorGeorge
      Orr
              Director





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





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





Andrew
      Brodkey
              Chief
      Executive Officer and PresidentJodi
      Henderson
              SecretaryRakesh
      Malhotra
              Chief
      Financial Officer





Pacific
Copper has  an Audit Committee that is appointed by the Board of
Directors.  There is no formal charter for the Audit
Committee.  The Audit Committee reviews our quarterly and annual
financial statements and meets 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 recommends to the
board the independent auditors to be retained; reviews the engagement of the
independent auditors, including the scope, extent and procedures of the audit
and the compensation to be paid therefore; assists and interacts with the
independent auditors in order that they may carry out their duties in the most
efficient and cost effective manner; and reviews and approves all professional
services provided to the Company by the independent auditors and considers the
possible effect of such services on the independence of the
auditors.  The Audit Committee will make 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.  In
addition, the Audit Committee will undertake those specific duties and
responsibilities as the board of directors from time to time
prescribe.





The Audit
Committee is comprised of two directors and the Company’s Chief Financial
Officer.  The members are Elden Schorn, George Orr and Rakesh
Malhotra.  Mr. Orr and Mr. Malhotra are both financial
experts.  Mr. ASchorn is an independent director.  During
the fiscal year ended October 31, 2008, there were three meetings of the Audit
Committee, and a fourth meeting was held subsequent to the end of the period
covered by this report.


30





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





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 52
years old.





William Timmins,Director





Mr.
Timmins has been a Director of Oilsands Quest since November 2004. Mr. Timmins
has also served as Director and Corporate Secretary of CanWest Petroleum
Corporation since July 1998. Through his private company, WGT Consultants Ltd.
he has been a geological consultant for numerous mining companies in Canada, the
United States, Central and South America, Australia and New Zealand. Mr. Timmins
is 71 years old.





M. Elden Schorn,Director





Mr.
Schorn held senior positions in the Federal and Provincial Governments in Canada
in the areas of social, education and economic program delivery and in
environmental regulation. Prior to leaving government in 1996, he held the
positions of Consul, Senior Investment Advisor, Government of Canada at the
Canadian Consulate in New York, New York, British Columbia Administrator
Northern Pipeline Agency, Director General Western Diversification Canada,
Assistant to the Assistant deputy ministry of Indian Affairs and Northern
Development, Executive Director Northern Development Government of Alberta,
Director Indian Education Alberta for the Federal Government and Manager of Oil
and Gas, development for the North-West territories, Canada. In addition, Mr.
Schorn has had ten years in the private sector in socio-economic consulting,
business management, and the structuring of project financing. Mr. Schorn is 69
years old.





Harold Gardner,
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 52 years old.


31





David Hackman,
Director





Mr.
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 67 years old.





George Orr,
Director





Mr. Orr
is a self-employed Chartered Accountant with over fifteen years of accounting
and consulting experience in private and public company administration,
governance, audit procedures and reporting requirements. On July 23, 2005, Mr.
Orr was appointed Secretary and a director, and in November 2005, he was
appointed Chief Financial Officer of Valcent Products Inc. On December 21, 2006,
Mr. Orr was appointed a director, Chief Financial Officer and Secretary, until
March 12, 2007, of Mega West Energy Corp. Mr. Orr holds a Bachelor of Commerce
from St. Mary’s University, Halifax. Mr. Orr was also the Company’s Chief
Financial Officer from August 29, 2006 to April 30, 2007, when he resigned and
was replaced by Rakesh Malhotra. Mr. Orr is 47 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 52 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 35 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, 2008,
no Section 16 reports were filed late


32





Item
10.   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 2, 2007, unless
terminated earlier, pursuant to the terms of the Employment
Agreement.  Mr. Brodkey’s base salary is $132,000 per
year.  Mr. Brodkey also received 1,700,000 stock options, the terms of
which are as set forth below.  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.





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.





Options
and Stock Appreciation Rights (SARs)





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





Stock
options granted to the named executive officers and directors during the fiscal
year ended October 31, 2007 and October 31, 2008 are provided in the table
below:


33





Year ended October 31,
2007





Name
      of Option
                                          Holder
                                        
                                        Number
      of Outstanding
                                          Options Held
                                        
                                        Date of Grant
                                        
                                        Exercise Price
                                          of
      Options
                                        
                                        Expiry DateStafford
      Kelley
                                        
                                        
                                        250,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012Rakesh
      Malhotra
                                        
                                        
                                        250,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012Todd
      Montgomery
                                        
                                        
                                        250,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012George
      Orr
                                        
                                        
                                        100,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012150,000
                                        *
                                        8/09/2007
                                        
                                        $
                                        0.51
                                        
                                        8/08/2012Donald
      Padgett
                                        
                                        
                                        250,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012Elden
      Schorn
                                        
                                        
                                        100,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012150,000
                                        *
                                        7/20/2007
                                        
                                        $
                                        0.50
                                        
                                        7/19/2012William
      G. Timmins
                                        
                                        
                                        250,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012Brent
      Walter
                                        
                                        
                                        100,000
                                        *
                                        5/14/2007
                                        
                                        $
                                        0.50
                                        
                                        5/14/2012Andrew
      Brodkey**
                                        
                                        
                                        1,700,000
                                        **
                                        8/9/2007
                                        
                                        $
                                        0.50
                                        
                                        8/1/2012David
      Hackman
                                        
                                        
                                        250,000
                                        *
                                        8/9/2007
                                        
                                        $
                                        0.51
                                        
                                        8/19/2012Harold
      Gardner
                                        
                                        
                                        250,000
                                        *
                                        8/9/2007
                                        
                                        $
                                        0.51
                                        
                                        8/19/2012Jodi
      Henderson
                                        
                                        
                                        100,000
                                        ***
                                        7/20/2007
                                        
                                        $
                                        0.50
                                        
                                        7/19/2012Year
      ended October 31, 2008Jodi
      Henderson
                                        
                                        
                                        50,000
                                        ****
                                        3/1/2008
                                        
                                        $
                                        0.50
                                        
                                        3/1/2013





* These
options vest at the rate of 1/12th per
month from the date granted





** These
options have a term of five years commencing on August 1, 2007, and vest as
follows: 200,000 options vested as of August 1, 2007 and the balance will vest
at the rate of 66,666 options per month commencing on January 1,
2008.





*** These
options vest at the rate of 50,000 options on July 20, 2008 and 50,000 options
on July 20, 2009.


34





****
These options vest at the rate of 25,000 options on March 1, 2009 and 50,000
options on March 1, 2010.





No stock
options were exercised during the fiscal year ended October 31, 2007 or October
31, 2008.





Mr.
Donald Padgett resigned as a director of the Company on November 20,
2008.





Equity
Awards





The following table provides certain
information concerning equity awards held by the named executive officers as of
October 31, 2008.





35





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
                                    Ince
                                    ntive Plan
                                    Awards:
                                    Number of
                                    Unearned
                                    Shares, Units
                                    Or Other
                                    Rights That
                                    Have Not
                                    Vested(#)Andrew
      Brodkey
                                  
                                  
                                  866,660
                                  
                                  
                                  
                                  833,340
                                  
                                  
                                  $
                                  0.50
                                  
                                  8/1/2012
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-Rakesh
      Malhotra
                                  
                                  
                                  250,000
                                  
                                  
                                  
                                  -0-
                                  
                                  
                                  $
                                  0.50
                                  
                                  5/14/2012
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-Jodi
      Henderson
                                  
                                  
                                  50,000
                                  
                                  
                                  
                                  50,000
                                  
                                  
                                  $
                                  0.50
                                  
                                  7/19/2012
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-Jodi
      Henderson
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  50,000
                                  
                                  
                                  $
                                  0.50
                                  
                                  3/1/2013
                                  
                                  
                                  -0-
                                  
                                  
                                  
                                  -0-





Compensation
of Directors or Other Arrangements





See
above





Indebtedness
of Directors and Executive Officers





None.





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





SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT





We have
44,561,600 shares of common stock issued and outstanding as of October 31,
2008.  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.


36





Name
      and Address
                                                                
                                                                Number
      of Shares
                                                                
                                                                PercentageOf
      Beneficial Owner
                                                                
                                                                of
      Common Stock
                                                                
                                                                Class
      HeldTodd
      D. Montgomery
                                                                
                                                                600,000
                                                                
                                                                1.35%
      of Common SharesFormer
      President1025
      Grayson Cres.Moose
      Jaw, SASK  S6H 4N7Brent
      J. WalterFormer
      Director
                                                                
                                                                200,000
                                                                
                                                                0.45%
      of Common Shares2417
      – 32nd
      Avenue SWCalgary,
      AB  T2T 1X4William
      (Bill) G. Timmins
                                                                
                                                                785,714
                                                                
                                                                1.76%
      of Common Shares#3
      – 950 Lanfranco Rd.Kelowna,
      B.C. V1W 3W8M.
      Elden Schorn
                                                                
                                                                100,000
                                                                
                                                                0.224%
      of Common SharesSuite
      1247 – 235 Keith Rd.West
      Vancouver, B.C.  V7T 1L5Rakesh Malhotra, Chief Financial Officer
                                                                
                                                                60,000
                                                                
                                                                0.134%
      of Common Shares4580
      Beaufort TerraceMississauga,
      ON L5M 3H7Harold
      Gardner (1)
                                                                
                                                                2,425,000
                                                                
                                                                5.44%
      of Common Shares22604
      S. 215th
      StreetQueen
      Creek, AZ 85242David
      Hackman (1)
                                                                
                                                                2,425,000
                                                                
                                                                5.44%
      of Common Shares3430
      E. Sunrise Drive, Ste 160Tucson,
      AZ 85718Eduardo
      Esteffan (1)
      (2)
                                                                
                                                                2,363,452
                                                                
                                                                5.30%
      of Common SharesVan
      Buren 208Copiapo,
      ChileTOTAL
                                                                
                                                                8,959,166
                                                                
                                                                20.11%
      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.”





As a
group management and the directors own or control 20.1% 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 13.57% of the
outstanding shares of the Company.





Donald
Stiles owns approximately 5.44% 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.




37




Item
12.   Certain relationships and Related
Transactions





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.




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.


38




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.Fiscal Year Ended October 31,
      2007A)
              During
      the year ended October 31, 2007, the Board granted the following stock
      options 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 five Officers/ Directors
      of the Company.  These options were granted in accordance with
      the terms of the Company’s 2006 Stock Option Plan and shall vest at the
      rate of 1/12 each month until fully vested. All of the options granted
      were for a term of 5 years.





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 two directors of the
      Company and a former chief financial officer of the
      Company.  These options were granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest at the rate
      of 1/12 each month until fully vested.  The options granted have
      a term of 5 years.





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. The options
      were granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and shall vest at the rate of 1/12 each month until fully
      vested.  The options granted have a term of 5
    years.





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.
      200,000 options vested on August 1, 2007 and the balance options vest at
      66,666 options per month commencing January 1,
  2008.





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 for 250,000 options each, and to one director for 150,000
      options. These options vest at the rate of 1/12 each month until fully
      vested. The options granted have a term of 5
  years.





The above
stock options were measured at fair values and the Company expensed $294,574 as
stock based compensation cost for issue of options during the year ended October
31, 2007.




B)
              During
      the year ended October 31, 2007, the Company expensed $90,000 to Medallion
      Capital Corp., a private corporation owned by an officer of the Company
      for consulting services.C)
              David
      Hackman, a director of the Company has provided consulting services to the
      Company and a total of $37,500 was accrued to his company Sage Associates
      for the year ended October 31, 2007. This amount was paid subsequent to
      the year end. Mr. Hackman was a 50% partner in Peru SRL and received
      2,425,000 share of the Company for his interest in Peru
      SRL.  These shares are currently held in escrow, pending
      satisfaction of certain post-closing conditions.  See PAFICIC
      COPPER IN SOUTH AMERICA –PACIFIC COPPER
      PERU SRL.


39





D)
            Harold
      Gardner a director of the Company has provided consulting services to the
      Company and a total of $37,500 was accrued to his company Pro Business
      Trust for th year ended October 31, 2007.  This amount was paid
      subsequent to the year end.  The Company also loaned $763,000 to
      Gareste LTDA a Chilean company 50% owned by Mr. Gardner for exploration
      work to be carried out on mineral properties being acquired by the
      Company. The Company received expense details relating to these
      exploration expenditures prior to October 31, 2007 in the amount of
      $763,000 and has expensed this amount on the financial statements. Also,
      Mr. Harold Gardner, was a partner of Pacific LTDA and received 2,425,000
      Shares of the Company for his interest in Pacific LTDA.  These
      shares are currently held in escrow, pending satisfaction of certain
      post-closing conditions.  See PAFICIC COPPER IN SOUTH AMERICA
      -SOCIEDAD
      PACIFIC COPPER CHILE LIMITADA.





E)
            Andrew
      A. Brodkey, President, CEO, Director and Chairman of the Board of
      Directors, was paid $11,000 by the Company and $27,276 by Kriyah including
      benefits billed to the Company during the year ended October 31,
      2007.  Mr. Brodkey was assigned 500,000 Warrants, from Kriyah,
      to purchase Common shares of the Company at $0.60 per share on or before
      August 22, 2012.





F)
              Jodi
      Henderson, Assistant Secretary and officer of the Company, is an employee
      of Kriyah and was paid $1,666 by the Company and $3,406 by Kriyah,
      including payroll burden and benefits that was billed to the Company
      during the year ended October 31, 2007.G)
              The
      Company expensed $10,491 for services rendered to the Company by the CFO
      of the Company, during the year ended October 31, 2007.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 $20,000 for the year ended
      October 31, 2007 and also amortized deferred stock compensation expense
      for $104,167 relating to issue of 1,000,000 restricted shares of the
      Company's common stock that was earned during the year ended October 31,
      2007.




Item
13.   Exhibits and Reports on Form 8-K





The
Financials Statements and Report of Schwartz Levitsky Feldman, LLP for the year
ended 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-1




40





In
addition, the following reports are incorporated by
reference:




Current
Report on Form 8-K, “Item 1.01 “Entry into a Material Definitive Agreement,”
dated February 14, 2008;




Current
Report on Form 8-K: “Item 7.01 Regulation FD Disclosure,” dated July 11,
2008;




Current
Report on Form 8-K: “Item 7.01 Regulation FD Disclosure,” dated August 1,
2008;




Current
Report on Form 8-K: “Item 7.01 Regulation FD Disclosure,” dated September 26,
2008




Current
Report on Form 8-K: “Item 8.01 Other Events,” dated October 30, 2008;
and




Current
Report on Form 8-K: “Item 5.02 Departure of Directors or Principal Officers;
Election of Directors; Appointment of Principal Officers”, dated November 24,
2008.




Item
14.   Principal Accountant Fees and Expenses




The
Company appointed Schwartz Levitsky Feldman, LLP as independent auditors to
audit the financial statements of the Company for the fiscal year ended October
31, 2008.





Audit
Fees.  The Company expensed audit and audit related fees for Schwartz
Levitsky Feldman, LLP of approximately $22,922.13. for the fiscal year ended
October 31, 2007.




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,
2008 and October 31, 2007:





Fee
      Category
                  
                  2008
      Fees
                  
                  
                  2007
      FeesAudit
      Fees
                  
                  $
                  20,340
                  
                  
                  $
                  22,922
                  *Audit
      Related Fees
                  
                  $
                  0
                  
                  
                  $
                  0Tax
      Fees
                  
                  $
                  0
                  
                  
                  $
                  0All
      Other Fees
                  
                  $
                  0
                  
                  
                  $
                  0Total
      Fees
                  
                  $
                  20,340
                  
                  
                  $
                  22,250




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.


41




SIGNATURES




Pursuant
to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report on Form 10-KSB
to be signed on its behalf by the undersigned, thereunto duly authorized, on
the 28th day of  January, 2009.





SIGNATURE
                                                      
                                                      TITLE
                                                      
                                                      DATE/s/
      Andrew Brodkey
                                                      
                                                      Director,
      President and CEO
                                                      
                                                      January
      28, 2009Andrew
      BrodkeyWilliam
      Timmins
                                                      
                                                      Director
                                                      
                                                      January
      28, 2009/s/
      M. Elden SchornM.
      Elden Schorn
                                                      
                                                      Director
                                                      
                                                      January
      28, 2009George
      Orr
                                                      
                                                      Director
                                                      
                                                      January
      28, 2009/s/
      Harold GardnerHarold
      Gardner
                                                      
                                                      Director
                                                      
                                                      January
      28, 2009/s/
      David HackmanDavid
      Hackman
                                                      
                                                      Director
                                                      
                                                      January
      28, 2009/s/ Rakesh MalhotraRakesh
      Malhotra
                                                      
                                                      Chief
      Financial Officer
                                                      
                                                      January
      28,
2009




42




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, 2008 and 2007 and the
related consolidated statements of operations and comprehensive loss, cash flows
and stockholders’ equity (deficiency) for the years ended October 31, 2008 and
2007 and for the period from inception (May 18, 1999) to October 31, 2008. 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, 2008 and 2007 and the results of its operations and its cash flows
for the years ended October 31, 2008 and 2007 and for the period from inception
(May 18, 1999) to October 31, 2008 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
      21, 2009
            
            Licensed Public
      Accountants





1167
Caledonia Road


Toronto,
Ontario M6A 2X1


Tel: 416
785 5353


Fax: 416
785 5663




43




PACIFIC
COPPER CORP.


(AN EXPLORATION STAGE
MINING COMPANY)




CONSOLIDATED
FINANCIAL STATEMENTS




YEARS
ENDED OCTOBER 31, 2008 AND 2007




(Amounts
expressed in US Dollars)




CONTENTS




Report
      of Independent Registered Public Accounting Firm
                                            1Consolidated
      Balance Sheets as at October 31, 2008 and October 31, 2007
                                            2Consolidated
      Statements of Operations for the years ended October 31, 2008 and October
      31, 2007 and the period from inception (May 18, 1999) to October 31,
      2008
                                            3Consolidated
      Statements of Stockholders' Equity (Deficiency) for the years ended
      October 31, 2008 and October 31, 2007 and the period from inception (May
      18, 1999) to October 31, 2008
                                            4Consolidated
      Statements of Cash Flows for the years ended October 31, 2008 and October
      31, 2007 and the period from inception (May 18, 1999) to October 31,
      2008
                                            5Notes
      to Financial Statements
                                            6 -
      36









PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consoldated
Balance Sheets as at


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




October
      31,
                                    
                                    
                                    October
      31,2008$
                                    
                                    
                                    
                                    2007$ASSETSCurrentCash
      and cash equivalents
                                    
                                    
                                    110,746
                                    
                                    
                                    
                                    1,617,344Prepaid
      expenses and other receivables
                                    
                                    
                                    35,157
                                    
                                    
                                    
                                    72,148Advances
      to a related party (note 13)
                                    
                                    
                                    175,000
                                    
                                    
                                    
                                    -Total
      Current Assets
                                    
                                    
                                    320,903
                                    
                                    
                                    
                                    1,689,492Plant and Equipment, net
      (note 4)
                                    
                                    
                                    155,443
                                    
                                    
                                    
                                    38,206Mining
      claims (note 8)
                                    
                                    
                                    600
                                    
                                    
                                    
                                    -Total
      Assets
                                    
                                    
                                    476,946
                                    
                                    
                                    
                                    1,727,698LIABILITIESCurrentAccounts
      payable
                                    
                                    
                                    297,370
                                    
                                    
                                    
                                    314,047Accrued
      professional fees
                                    
                                    
                                    20,000
                                    
                                    
                                    
                                    20,000Other
      accrued liabilities
                                    
                                    
                                    65,852
                                    
                                    
                                    
                                    23,265Derivative
      financial instrument (note 3 i)
                                    
                                    
                                    101,250
                                    
                                    
                                    
                                    -Advances
      from non-related party (note 14)
                                    
                                    
                                    259,244
                                    
                                    
                                    
                                    -Advances
      from related party (note 14)
                                    
                                    
                                    70,000
                                    
                                    
                                    
                                    -Total
      Current Liabilities
                                    
                                    
                                    813,716
                                    
                                    
                                    
                                    357,312Convertible
      note (note 15)
                                    
                                    
                                    32,708
                                    
                                    
                                    
                                    -Total
      Liabilities
                                    
                                    
                                    846,424
                                    
                                    
                                    
                                    357,312Minority
      Interest (note 8)
                                    
                                    
                                    54,950
                                    
                                    
                                    
                                    -Going
      Concern (note 2)Related
      Party Transactions (note 10)Commitments and
      Contingencies (note 9)STOCKHOLDERS'
      EQUITY (DEFICIENCY)Capital Stock(note
      5)Preferred
      stock, $0.0001 par value, 50,000,000 shares authorized, Nil issued and
      outstanding (2007 - nil)
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Common
      stock, $0.0001 par value, 200,000,000 shares authorized, 44,561,600 issued
      and outstanding (2007 -29,145,932)
                                    
                                    
                                    4,456
                                    
                                    
                                    
                                    2,915Additional
      Paid-in Capital
                                    
                                    
                                    13,893,200
                                    
                                    
                                    
                                    6,028,123Deferred stock compensation(note 12)
                                    
                                    
                                    (145,833
                                    )
                                    
                                    
                                    (1,062,499
                                    )Accumulated
      Other Comprehensive Income
                                    
                                    
                                    1,064
                                    
                                    
                                    
                                    -Deficit
      Accumulated During the Exploration Stage
                                    
                                    
                                    (14,177,315
                                    )
                                    
                                    
                                    (3,598,153
                                    )Total Stockholders'
      Equity (Deficiency)
                                    
                                    
                                    (424,428
                                    )
                                    
                                    
                                    1,370,386Total Liabilities and
      Stockholders' Equity (Deficiency)
                                    
                                    
                                    476,946
                                    
                                    
                                    
                                    1,727,698




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




- 2
-




PACIFIC COPPER
CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statements of Operations


Years
Ended October 31, 2008 and 2007 and the Period from Inception (May 18, 1999) to
October 31, 2008


(Amounts
expressed in US Dollars)




CumulativeSinceInception
                                                                        $
                                                                      
                                                                      
                                                                      2008$
                                                                      
                                                                      
                                                                      2007$Operating
      ExpensesGeneral
      and administration (note 17)
                                                                      
                                                                      
                                                                      4,419,346
                                                                      
                                                                      
                                                                      
                                                                      2,966,670
                                                                      
                                                                      
                                                                      
                                                                      1,388,014Project
      expenses (note 16)
                                                                      
                                                                      
                                                                      4,199,456
                                                                      
                                                                      
                                                                      
                                                                      2,000,180
                                                                      
                                                                      
                                                                      
                                                                      1,606,564Mining
      claims acquisition cost expense (note 8)
                                                                      
                                                                      
                                                                      5,523,871
                                                                      
                                                                      
                                                                      
                                                                      5,523,871
                                                                      
                                                                      
                                                                      
                                                                      -Amortization
                                                                      
                                                                      
                                                                      42,658
                                                                      
                                                                      
                                                                      
                                                                      41,949
                                                                      
                                                                      
                                                                      
                                                                      709Total
      Operating Expenses
                                                                      
                                                                      
                                                                      14,185,331
                                                                      
                                                                      
                                                                      
                                                                      10,532,670
                                                                      
                                                                      
                                                                      
                                                                      2,995,287Loss
      from Operations
                                                                      
                                                                      
                                                                      (14,185,331
                                                                      )
                                                                      
                                                                      
                                                                      (10,532,670
                                                                      )
                                                                      
                                                                      
                                                                      (2,995,287
                                                                      )Other
      income-interest
                                                                      
                                                                      
                                                                      54,508
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      54,508Other
      expense-Interest
                                                                      
                                                                      
                                                                      (7,473
                                                                      )
                                                                      
                                                                      
                                                                      (7,473
                                                                      )
                                                                      
                                                                      
                                                                      -Other
      expense-Derivative
                                                                      
                                                                      
                                                                      (39,375
                                                                      )
                                                                      
                                                                      
                                                                      (39,375
                                                                      )
                                                                      
                                                                      
                                                                      -Loss
      before Income Taxes
                                                                      
                                                                      
                                                                      (14,177,671
                                                                      )
                                                                      
                                                                      
                                                                      (10,579,518
                                                                      )
                                                                      
                                                                      
                                                                      (2,940,779
                                                                      )Provision
      for income taxes
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -Minority
      Interest
                                                                      
                                                                      
                                                                      356
                                                                      
                                                                      
                                                                      
                                                                      356
                                                                      
                                                                      
                                                                      
                                                                      -Net
      Loss
                                                                      
                                                                      
                                                                      (14,177,315
                                                                      )
                                                                      
                                                                      
                                                                      (10,579,162
                                                                      )
                                                                      
                                                                      
                                                                      (2,940,779
                                                                      )Loss
      per share-Basic and Diluted
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      (0.26
                                                                      )
                                                                      
                                                                      
                                                                      (0.12
                                                                      )Weighted
      Average Common Shares Outstanding
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      40,249,210
                                                                      
                                                                      
                                                                      
                                                                      23,534,425





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




- 3
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statements of Changes in Stockholders’ Equity (Deficiency)


For the
years ended October 31, 2008 and 2007 and from the period of inception (May 18,
1999) to October 31, 2008


(Amounts
expressed in US Dollars)




Deficit
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            AccumulatedAccumulated
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            OtherCommon
      Stock
                                                            
                                                            
                                                            Additional
                                                            
                                                            
                                                            Deferred
                                                            
                                                            
                                                            Stock
                                                            
                                                            
                                                            during
      the
                                                            
                                                            
                                                            Comprehensive
                                                            
                                                            
                                                            Comprehensive
                                                            
                                                            
                                                            TotalPaid-in
                                                            
                                                            
                                                            Stock
                                                            
                                                            
                                                            Subscription
                                                            
                                                            
                                                            Exploration
                                                            
                                                            
                                                            Income
                                                            
                                                            
                                                            Income
                                                            
                                                            
                                                            Stockholders'Number
                                                            
                                                            
                                                            Amount
                                                            
                                                            
                                                            Capital
                                                            
                                                            
                                                            Compensation
                                                            
                                                            
                                                            Receivable
                                                            
                                                            
                                                            Stage
                                                            
                                                            
                                                            (Loss)
                                                            
                                                            
                                                            (Loss)
                                                            
                                                            
                                                            Equityof
      Shares
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $
                                                            
                                                            
                                                            $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
                                                            )
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (8,743Balance,
      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
                                                            )
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (647,453Balance,
      October 31, 2006
                                                            
                                                            
                                                            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
                                                            )
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            (2,940,779Balance
      October 31, 2007
                                                            
                                                            
                                                            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
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            -
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            235,982Amortization
      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
                                                            
                                                            
                                                            44,561,600
                                                            
                                                            
                                                            
                                                            4,456
                                                            
                                                            
                                                            
                                                            13,893,200
                                                            
                                                            
                                                            
                                                            (145,833
                                                            )
                                                            
                                                            
                                                            0
                                                            
                                                            
                                                            
                                                            (14,177,315
                                                            )
                                                            
                                                            
                                                            (10,578,098
                                                            )
                                                            
                                                            
                                                            1,064
                                                            
                                                            
                                                            
                                                            (424,428
                                                            )




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


- 4
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Consolidated
Statement of Cash Flows for the


years
ended Oct 31, 2008 and, 2007 and the Period from Inception (May 18, 1999) to
October 31, 2008


(Amounts
expressed in US Dollars)




CumulativeSince
                                          
                                          
                                          Oct
      31,
                                          
                                          
                                          Oct
      31,Inception
                                            $
                                          
                                          
                                          2008$
                                          
                                          
                                          2007$Cash
      Flows from Operating ActivitiesNet
      Loss
                                          
                                          
                                          (14,177,315
                                          )
                                          
                                          
                                          (10,579,162
                                          )
                                          
                                          
                                          (2,940,779
                                          )Adjustment
      for:Amortization
                                          
                                          
                                          42,658
                                          
                                          
                                          
                                          41,949
                                          
                                          
                                          
                                          709Stock
      based compensation
                                          
                                          
                                          974,545
                                          
                                          
                                          
                                          679,971
                                          
                                          
                                          
                                          294,574Compensation
      expense on issue of warrants
                                          
                                          
                                          257,075
                                          
                                          
                                          
                                          235,982
                                          
                                          
                                          
                                          21,093Expenses
      credited to Additional Paid-in Capital
                                          
                                          
                                          9,921
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Shares
      issued for mineral claims
                                          
                                          
                                          5,969,225
                                          
                                          
                                          
                                          5,469,225
                                          
                                          
                                          
                                          -Amortization
      of deferred stock compensation
                                          
                                          
                                          1,354,167
                                          
                                          
                                          
                                          916,666
                                          
                                          
                                          
                                          437,501Interest
      on loans
                                          
                                          
                                          7,199
                                          
                                          
                                          
                                          7,199
                                          
                                          
                                          
                                          -Fair
      value adjustment to compound derivative
                                          
                                          
                                          4,375
                                          
                                          
                                          
                                          4,375
                                          
                                          
                                          
                                          -Fair
      value adjustment to additional investment rights
                                          
                                          
                                          35,000
                                          
                                          
                                          
                                          35,000
                                          
                                          
                                          
                                          -Amortization
      of debt discount
                                          
                                          
                                          208
                                          
                                          
                                          
                                          208
                                          
                                          
                                          
                                          -Changes
      in non-cash working capitalPrepaid
      expenses
                                          
                                          
                                          (35,157
                                          )
                                          
                                          
                                          36,991
                                          
                                          
                                          
                                          (60,329
                                          )Advances
      to related parties
                                          
                                          
                                          (175,000
                                          )
                                          
                                          
                                          (175,000
                                          )
                                          
                                          
                                          -Accounts
      payable
                                          
                                          
                                          297,370
                                          
                                          
                                          
                                          (16,677
                                          )
                                          
                                          
                                          255,677Accrued
      liabilities
                                          
                                          
                                          85,852
                                          
                                          
                                          
                                          42,587
                                          
                                          
                                          
                                          33,252Minority
      Interest
                                          
                                          
                                          54,950
                                          
                                          
                                          
                                          54,950Net
      cash used in operating activities
                                          
                                          
                                          (5,294,927
                                          )
                                          
                                          
                                          (3,245,736
                                          )
                                          
                                          
                                          (1,958,302
                                          )Cash
      Flows from Investing ActivitiesAcquisition
      of plant and equipment
                                          
                                          
                                          (198,101
                                          )
                                          
                                          
                                          (159,186
                                          )
                                          
                                          
                                          (37,783
                                          )Acquisition
      of mineral claims
                                          
                                          
                                          (600
                                          )
                                          
                                          
                                          (600
                                          )
                                          
                                          
                                          -Net
      cash used in investing activities
                                          
                                          
                                          (198,701
                                          )
                                          
                                          
                                          (159,786
                                          )
                                          
                                          
                                          (37,783
                                          )Cash
      Flows from Financing ActivitiesIssuance
      of common shares for cash (net)
                                          
                                          
                                          5,181,265
                                          
                                          
                                          
                                          1,475,815
                                          
                                          
                                          
                                          3,234,450Advances
      from non-related parties
                                          
                                          
                                          252,045
                                          
                                          
                                          
                                          252,045
                                          
                                          
                                          
                                          -Advances
      from related parties
                                          
                                          
                                          70,000
                                          
                                          
                                          
                                          70,000
                                          
                                          
                                          
                                          -Convertible
      notes
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          -Net
      cash provided by financing activities
                                          
                                          
                                          5,603,310
                                          
                                          
                                          
                                          1,897,860
                                          
                                          
                                          
                                          3,234,450Effect
      of foreign currency exchange rate changes
                                          
                                          
                                          1,064
                                          
                                          
                                          
                                          1,064
                                          
                                          
                                          
                                          -Net
      increase (decrease) in Cash and Cash equivalents
                                          
                                          
                                          110,746
                                          
                                          
                                          
                                          (1,506,598
                                          )
                                          
                                          
                                          1,238,365Cash-
      beginning of period
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,617,344
                                          
                                          
                                          
                                          378,979Cash
      - end of period
                                          
                                          
                                          110,746
                                          
                                          
                                          
                                          110,746
                                          
                                          
                                          
                                          1,617,344Supplemental
      Cash Flow InformationInterest
      paid
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Income
      taxes paid
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -





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




- 5
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(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.




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 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 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 must satisfy certain post-closing items prior to
the release of the Chile Consideration Shares from escrow.  As of the
date of this report, the Chile Consideration Shares remain in
escrow.





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.




- 6
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(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 $10,579,162 for the
year ended October 31, 2008.  This loss includes a non-cash loss for
$5,523,871 relating to non-capitalization and expensing of mineral claims
relating to acquisition of Peru SRL and Pacific LTDA (note 8); non-cash expense
of $916,666 relating to the issue of shares to consultants for Investor Relation
services; non-cash stock based compensation expense of $679,971 and non-cash
compensation expense for issue of warrants for $235,982.  At October
31, 2008, the Company had an accumulated deficit during the exploration stage of
$14,177,315.  The Company has funded operations through the issuance
of capital stock.  During the year ended October 31, 2007, the Company
raised $3,234,450.  During the year ended October 31, 2008 the Company
raised an additional $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 (note15) Management's plan is to continue
raising additional funds 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:




Basis of
Presentation




a)
            Cash and Cash Equivalents




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


- 7
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





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




b)           Acquisition,
Exploration and Evaluation Expenditures




The
Company is an exploration stage mining company and has not yet realized any
revenue from its   operations. It is primarily engaged in the
acquisition and exploration of mining properties. Mineral property exploration
costs are expensed as incurred. Mineral property payments are capitalized only
if the Company is able to allocate any economic value beyond proven and probable
reserves. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property will be capitalized. For the purpose
of preparing financial information, the Company is unable to allocate any
economic value beyond proven and probable reserves and hence all property
payments are considered to be impaired and accordingly written off to project
expense. All costs associated with a property that has the potential to add to
the Company’s proven and probable reserves are expensed until a final
feasibility study demonstrating the existence of proven and probable reserves is
completed. No costs have been capitalized in the periods covered by these
financial statements. Once capitalized, such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve.
Mineral property acquisition costs will also be capitalized in accordance with
the FASB Emerging Issues Task Force ("EITF") Issue 04-2 when management has
determined that probable future benefits consisting of a contribution to future
cash inflows have been identified and that adequate financial resources are
available or are expected to be available as required to meet the terms of
property acquisition and budgeted exploration and development expenditures.
Mineral property payments are expensed as incurred if the criteria for
capitalization is not met.




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




c)
            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




d)
            Impairment of Long-lived Assets




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


- 8
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




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




e)
            Asset Retirement Obligation




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




f)
            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.




g)
            Income Taxes




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




h)
            Earnings
      (Loss) Per Share





The
Company adopted Statement of Financial Accounting Standards ("FAS") No. 128,
"Earnings per Share" which requires disclosure in the financial statements of
"basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share
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, 2008 and 2007 that have been included in dilutive loss per share
calculation as the effects would have been anti-dilutive. At October 31, 2008,
there were 3,916,660 exercisable stock options and 6,864,704 exercisable
warrants outstanding. At October 31, 2007, there were 1,075,000 exercisable
stock options and 3,568,100 exercisable warrants outstanding.


- 9
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




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





i)            Financial
Instruments


Financial
instruments, as defined in Financial Accounting Standard No. 107 Disclosures about Fair Value
of Financial Instruments (FAS No. 107), 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, 2008, estimated fair values and respective carrying values of the
convertible notes are as follows:





Financial
      Instrument
              
              Note
              
              
              Fair
                Value
              
              
              Carrying
                Value$100,000
      6% Convertible Note
              
              
              15
              
              
              $
              85,826
              
              
              $
              32,708





Derivative
financial instruments, as defined in Financial Accounting Standard No. 133,
Accounting for
Derivative Financial Instruments and Hedging Activities (FAS No. 133),
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 FAS No. 133, these instruments are required to be carried as
derivative liabilities, at fair value, in the financial statements. the
derivative liabilities as of October 31, 2008 consisted of the
following:


- 10
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




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




Derivative
      Financial Instrument
                
                AmountCompound
      Embedded Derivative
                
                $
                11,250Additional
      Investment Right (AIR)
                
                
                90,000$
                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
period from transaction inception to October 31, 2008:





Derivative
      Financial Instrument
                
                (Credit)
      ChargeCompound
      Embedded Derivative
                
                $
                4,375Additional
      Investment Right
                
                
                35,000$
                39,375





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.





Common
shares indexed to the derivative financial instruments issued in the convertible
note financing transaction are as follows as of October 31, 2008:




SharesCommon
      shares indexed to conversion unit:Common
      shares indexed to note
                              
                              
                              625,000Warrant
      shares indexed to note
                              
                              
                              625,000Common
      shares indexed to AIR:Common
      shares indexed to AIR
                              
                              
                              5,000,000Warrant
      shares indexed to AIR
                              
                              
                              5,000,00011,250,000




- 11
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




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





j)        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 SFAS No. 133 to the convertible
note financing transaction is described in Note 15.





Financial
Accounting Standard No. 157 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.





Financial
Accounting Standard No. 159 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.





k)        Stock
Based Compensation





On
December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued FASB
Statement No.123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”), which is
a revision of FASB Statement No.123, Accounting for Stock-Based Compensation.
The Company had adopted the provisions of SFAS 123 (R) on November 1, 2005. All
awards granted to employees and non-employees after October 31, 2005 are valued
at fair value in accordance with the provisions of SFAS 123 (R) by using the
Black-Scholes option pricing model and recognized on a straight line basis over
the service periods of each award. The Company accounts for equity instruments
issued in exchange for the receipt of goods or services from other than
employees in accordance with SFAS No. 123 and the conclusions reached by the
Emerging Issues Task Force (“EITF”) in Issue No. 96-18, “Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling Goods or Services”.  Costs are measured at
the estimated fair market value of the consideration received or the estimated
fair value of the equity instruments issued, whichever is more reliably
measurable.  The value of equity instruments issued for consideration
other than employee services is determined on the earlier of a performance
commitment or completion of performance by the provider of goods or services as
defined by EITF No. 96-18.


- 12
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)


Summary of Significant Accounting
Policies (cont'd)




As of
October 31, 2008 there was $284,334of 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, 2008 and 2007 was $679,971 and $294,574
respectively.




l)
            Concentration
      of Credit Risk




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




m)
            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.




n)
            Comprehensive
      income or loss




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






o)
            Recent
      Accounting
Pronouncements




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


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


- 13
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)







o)
            Recent
      Accounting
  Pronouncements-Cont’d




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





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




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




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




In May
2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies
that convertible debt instruments that may be settled in cash upon either
mandatory or optional conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants."




- 14
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




o)
            Recent
      Accounting
  Pronouncements-Cont’d




Additionally,
FSP APB 14-1 specifies that issuers of such instruments should separately
account for the liability and equity components in a manner that will reflect
the entity's nonconvertible debt
borrowing rate when interest cost is recognized in subsequent periods. FSP APB
14-1 is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal years. The
Company will adopt FSP APB 14-1 beginning in the first quarter of 2010, and this
standard will be applied on a retrospective basis. The Company is evaluating the
impact which the adoption of FSP APB 14-1 will have on the consolidated
financial statements and expect to record higher interest expense relating to
the convertible note.




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, 2008
                          
                          
                          October
      31, 2007Cost
                            $
                          
                          
                          Accumulated
                            Depreciation
                            $
                          
                          
                          Cost
                            $
                          
                          
                          Accumulated Depreciation
                            $Office,
      furniture and fixtures
                          
                          
                          386
                          
                          
                          
                          132
                          
                          
                          
                          386
                          
                          
                          
                          58Computer
      equipment
                          
                          
                          6,529
                          
                          
                          
                          1,790
                          
                          
                          
                          2,644
                          
                          
                          
                          521Operating
      Equipment
                          
                          
                          191,185
                          
                          
                          
                          40,735
                          
                          
                          
                          35,885
                          
                          
                          
                          130198,100
                          
                          
                          
                          42,657
                          
                          
                          
                          38,915
                          
                          
                          
                          709Net
      carrying amount
                          
                          
                          
                          
                          
                          $
                          155,443
                          
                          
                          
                          
                          
                          
                          $
                          38,206Amortization
      expense
                          
                          
                          
                          
                          
                          $
                          41,949
                          
                          
                          
                          
                          
                          
                          $
                          709




5.
            Issuance
      of Common Shares





2007





Three months ended January
31, 2007





During
the three months ended January 31, 2007, the Company issued 660,000 common
shares through private placements for gross proceeds of $66,000.





Three months ended April 30,
2007





The
Company issued 2,000,000 common shares through a private placement for gross
proceeds of $200,000.  The private placement was undertaken entirely
outside the United States pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the “Securities Act”) afforded by Regulation
S promulgated under the Securities Act (“Regulation S”).


- 15
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





5.
            Issuance
      of Common Shares-Cont’d





The
Company, through private placements, issued 4,520,000 units at a price of $0.50
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 $0.75 per share on or before April 30, 2009.  The
private placement was undertaken entirely outside the United States pursuant to
Regulation S.  The Company filed a registration statement covering the
re-sale of the shares and shares underlying the warrants on August 3,
2007.  The SEC made this registration statement effective on August
16, 2007.





The
Company also received a subscription of $30,000 for 60,000 units at a price of
$0.50 per unit through a private placement undertaken entirely outside the
United States pursuant to an exemption under Regulation S.  Each such
unit consisted of one common share and one half a common share purchase
warrant.  Each full warrant is exercisable for one common share at
$0.75 per share on or before April 30, 2009.  The Company filed a
registration statement covering the re-sale of the shares and shares underlying
the warrants on August 3, 2007.  The SEC made this registration
statement effective on August 16, 2007.





The
Company accrued share issuance expense of $72,800 as a finder’s fee for
introduction to subscribers who purchased 2,080,000 units for a total investment
of $1,040,000 in the above private placements.  The Company
subsequently paid this finder’s fee in cash and also issued to the finder a
warrant to purchase 145,600 shares at $0.50 per share on or before April 30,
2009.





Three months ended July 31,
2007





A private
placement which commenced in the quarter ended April 30, 2007 (disclosed above)
in the amount of $30,000 for 60,000 units at $0.50 per unit was fully closed in
the quarter ended July 31, 2007.  Each unit consists of one common
share and one half a common share purchase warrant.  Each full warrant
is exercisable for one common share at $0.75 per share on or before April 30,
2009.





The
Company, through private placements, issued 1,590,000 units at $0.50 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 $0.75 per share on or before April 30, 2009.





The
Company paid a cash share issuance expense of $43,750 as a finder’s fee for
introduction to subscribers purchasing 1,250,000 units for a total investment of
$625,000 in the above private placements.  The Company also issued to
the finder a warrant to purchase 87,500 shares at $0.50 per share on or before
April 30, 2009.


- 16
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





5.
            Issuance
      of Common Shares-Cont’d





On June
1, 2007, the Company entered into an agreement with Sweetwater Capital
Corporation (“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 will pay Sweetwater $4,000 per
month and issued 1,000,000 restricted shares of the Company's common stock that
will be earned in equal installments of 250,000 shares on December 1, 2007,
March 1, 2008, June 1, 2008 and September 1, 2008.  The said 1,000,000
shares of restricted common stock of the Company were tendered in one
certificate on June 1, 2007 and are deemed to be delivered as of that
date.  The consultant must return any unearned shares upon early
termination of the agreement.





On June
1, 2007, the Company entered into a consulting agreement with Greatrek Trust SA
(“Greatrek”) for a term of fifteen months to provide advice on financial
matters, business growth and development, and general business
consultation.  The Company issued to Greatrek 1,000,000 restricted
shares of the Company's common stock that will be earned in equal installments
of 250,000 shares on December 1, 2007, March 1, 2008, June 1, 2008 and September
1, 2008.  The 1,000,000 shares of restricted Common stock of the
Company were tendered in one certificate on June 1, 2007 and are deemed to be
delivered as of that date.  The consultant must return any unearned
shares upon early termination of the agreement.





On June
1, 2007, the Company entered into a consulting agreement with Scharfe Holdings
Inc. (“Scharfe”) for a term of fifteen months to provide advice on financial
matters, business growth and development, and general business
consultation.  The Company issued to Scharfe 1,000,000 restricted
shares of the Company's common stock that will be earned in equal installments
of 250,000 shares on December 1, 2007, March 1, 2008, June 1, 2008 and September
1, 2008.  The 1,000,000 shares of restricted Common stock of the
Company were tendered in one certificate on June 1, 2007 and are deemed to be
delivered as of that date.  The consultant must return any unearned
shares upon early termination of the agreement.





Three months ended October
31, 2007





The
Company did not raise any capital during the three month period ended October
31, 2007.


- 17
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





5.
            Issuance
      of Common Shares-Cont’d





2008





Three months ended January
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 expensed the balance consideration of $2,424,800
relating to the issue of shares for acquisition of mineral properties of Peru
SRL, calculated at $0.50 per share (note 8).  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 expensed the balance consideration of $3,043,826
relating to the acquisition of mineral properties of Pacific LTDA as project
expense, calculated at $0.50 per share (note 8).  As of the date of
this report, the Chile Consideration Shares remain in escrow.





Three months ended April 30,
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 private
placement was undertaken entirely outside the United States pursuant to
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.


- 18
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





5.
            Issuance
      of Common Shares-Cont’d





Three months ended July 31,
2008





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 private placement was
undertaken entirely outside the United States 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.





Three months ended October
31, 2008




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 private placement
was undertaken entirely outside the United States pursuant to Regulation
S.





6.
            Stock
      Purchase Warrants




On August
22, 2007 the Company entered into an agreement with Kriyah Consultants LLC
("Kriyah") for the performance of certain administrative and management
services.  Upon execution of the Kriyah Agreement, the Company issued
to Kriyah 1,000,000 common share purchase warrants where each warrant is
exercisable into one common share of the Company at the price of $0.60 until
August 22, 2012.  The warrants vest on a schedule that began on August
22, 2007 and continues over a period of two years at the rate of 250,000
Warrants every 6 months.  The fair value of the warrants was estimated
on the grant date using the Black-Scholes option-pricing model.  For
the year ended October 31, 2007, the Company expensed $21,093 as compensation
expense on issue of these warrants.  During the year ended October 31,
2008, the Company expensed $106,948 as compensation expense on issue of these
warrants.  There was $85,854 of unrecognized expense related to
non-vested warrants.




On August
13, 2008, the Company entered into an advisory consulting agreement with Jesup
& Lamont Sec. Corp. (‘Consultant’).  Pursuant to this agreement,
Consultant agrees 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 5 years. The term of this agreement is 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.


- 19
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





6.
            Stock
      Purchase Warrants-Cont’d





Number
      of
                                                                    Warrants
                                                                    Granted
                                                                  
                                                                  
                                                                  Exercise Prices
                                                                  
                                                                  
                                                                  Expiry
      Date$Outstanding
      at October 31, 2006 and average exercise price
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Granted
      in year 2007
                                                                  
                                                                  
                                                                  1,000,000
                                                                  
                                                                  
                                                                  
                                                                  0.60
                                                                  
                                                                  
                                                                  8/22/2012Granted
      in year 2007
                                                                  
                                                                  
                                                                  3,085,000
                                                                  
                                                                  
                                                                  
                                                                  0.75
                                                                  
                                                                  
                                                                  4/30/2009Granted
      in year 2007
                                                                  
                                                                  
                                                                  233,100
                                                                  
                                                                  
                                                                  
                                                                  0.50
                                                                  
                                                                  
                                                                  4/30/2009Exercised
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Forfeited
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Cancelled
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -Outstanding
      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
                                                                  
                                                                  
                                                                  6/06/2010Granted
      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
                                                                  
                                                                  
                                                                  
                                                                  0.62





The
warrants do not confer upon the holders any rights or interest as a shareholder
of the Company




At
October 31, 2008, the weighted average contractual term of the total
outstanding, and the total exercisable warrants were as follows:




Weighted-AverageRemaining ContractualTermTotal outstanding options
                          1.8
      yearsTotal
      exercisable options
                          1.6
      years




- 20
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




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 to10
years.  The
aggregate number of shares of common stock originally authorized under the plan
was 5,000,000.  Since adoption of the Plan an additional 600,000 shares
were authorized for issuance pursuant to the Plan’s “evergreen share reserve
increase” provision.




During the year ended
October 31, 2007, the Board granted the following stock
options:







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 five Officers/ Directors
      of the Company for an aggregate of 1,250,000
    options.




b)
            On
      May 14, 2007, stock options to purchase 50,000 common shares at a price of
      $0.50 per share were issued to two consultants for an aggregate of 100,000
      options.





c)
            On
      May 14, 2007, stock options to purchase 100,000 common shares at a price
      of $0.50 per share were issued to a
consultant.





The above
options described in (a), (b) and (c) were granted in accordance with the terms
of the Company’s 2006 Stock Option Plan and shall vest at the rate of 1/12 each
month until fully vested.  Should any of the above parties leave their
position or be discharged from the Company, no further vesting will take place
as of the date they leave or are discharged.  All of the options
granted were for a term of 5 years.




d)
            On
      May 14, 2007, stock options to purchase 100,000 common shares at an
      exercise price of $0.50 per share were issued to two directors of the
      Company and a former chief financial officer of the Company For an
      aggregate of 300,000 options.  These options were granted in
      accordance with the terms of the Company’s 2006 Stock Option Plan and
      shall vest at the rate of 1/12 each month until fully
      vested.  The options granted have a term of 5
      years.




e)
            On
      July 20, 2007, stock options to purchase 100,000 common shares at a price
      of $0.50 per share were issued to a consultant.  The options
      granted shall vest at the rate of 50,000 options on July 20, 2008 and the
      balance 50,000 options on July 20, 2009.  The options granted
      were for a term of 5 years.





f)
            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.




The
options referred to in f) were granted in accordance with the terms of the
Company’s 2006 Stock Option Plan and shall vest at the rate of 1/12 each month
until fully vested.  The options granted have a term of 5
years.


- 21
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




7.
            Stock
      based compensation-cont’d








g)
            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.
      200,000 options vested on August 1, 2007 and the balance options vest at
      66,666 options per month commencing January 1,
  2008.





h)
            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 for 250,000 options each, and to one director for 150,000
      options. These options vest at the rate of 1/12 each month until fully
      vested. The options granted have a term of 5
  years.




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, 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.


- 22
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(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
      Consultants LLC, 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.





The
Company has adopted SFAS123 (Revised) commencing July 1, 2005.  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 years ended October 31,
2008 and 2007, 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,
      2008
                            
                            $
                            223,699
                            
                            
                            $
                            37,822
                            
                            
                            $
                            160,333
                            
                            
                            $
                            119,059
                            
                            
                            $
                            54,618
                            
                            
                            $
                            34,594
                            
                            
                            $
                            49,504
                            
                            
                            $
                            342
                            
                            
                            $
                            679,971Unexpended  Stock
      -based compensation cost deferred over the vesting period
                            
                            $
                            nil
                            
                            
                            $
                            8,599
                            
                            
                            $
                            200,418
                            
                            
                            $
                            nil
                            
                            
                            $
                            nil
                            
                            
                            $
                            69,091
                            
                            
                            $
                            nil
                            
                            
                            $
                            6,226
                            
                            
                            $
                            284,334




As of
October 31, 2008 there was $284,334 of unrecognized expenses related to
non-vested stock-based  compensation arrangements
granted.  The stock-based compensation expense for the year ended
October 31, 2008 and October 31, 2007 was $679,971 and $294,574
respectively.


- 23
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




7.
            Stock
      based compensation-cont’d





The
      following table summarizes the options outstanding as at October 31,
      2008:





Option Price
                                    
                                    
                                    Number of sharesExpiry Date
                                    
                                    Per Share
                                    
                                    
                                    2008
                                    
                                    
                                    2007February
      28, 2010
                                    
                                    
                                    0.40
                                    
                                    
                                    
                                    250,000
                                    
                                    
                                    
                                    -May
      15, 2010
                                    
                                    
                                    0.35
                                    
                                    
                                    
                                    200,000
                                    
                                    
                                    
                                    -May
      14, 2012
                                    
                                    
                                    0.50
                                    
                                    
                                    
                                    1,750,000
                                    
                                    
                                    
                                    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
                                    
                                    
                                    
                                    -September
      24, 2013
                                    
                                    
                                    0.50
                                    
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    -5,230,000
                                    
                                    
                                    
                                    4,350,000Weighted
      average exercise price at end of year
                                    
                                    
                                    
                                    0.49
                                    
                                    
                                    
                                    0.50




Number of Shares2008
                  
                  
                  2007Outstanding,
      beginning of year
                  
                  
                  4,350,000
                  
                  
                  
                  -Granted
                  
                  
                  990,000
                  
                  
                  
                  4,350,000Expired
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Forfeited
                  
                  
                  (110,000
                  )
                  
                  
                  -Cancelled
                  
                  
                  -
                  
                  
                  
                  -Outstanding,
      end of year
                  
                  
                  5,230,000
                  
                  
                  
                  4,350,000Exercisable,
      end of year
                  
                  
                  3,916,660
                  
                  
                  
                  1,075,000





At
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:




Weighted-AverageRemaining ContractualTermTotal
      outstanding options
                    3.6
      yearsTotal
      exercisable options
                    3.4
      years


- 24
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





8.
Mining Claims




a)  On
December 17, 2007, Pacific Copper acquired 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
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 are being expensed
until the economic viability of the project is determined and proven and
probable reserves, if any, quantified.  In the absence of proven and
probable reserves, the Company is unable to allocate any economic values to the
claims.  Pursuant to this acquisition the Company acquired interest 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)





The
Company does not consider either of the foregoing mineral claims to be material
assets at this time, but this assessment may change after further work is done
on the properties





b)  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 are being expensed
until the economic viability of the project is determined and proven and
probable reserves, if any, quantified.  In the absence of proven and
probable reserves, the Company is unable to allocate any economic values to the
claims.  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





The
Company does not consider the foregoing mineral claims to be material assets at
this time, but this assessment may change after further work is done on the
properties.


- 25
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




9.
            Commitments
      and Contingencies





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 will pay Sweetwater $4,000 per month plus
1,000,000 restricted shares of the Company's common stock that will be earned in
equal installments of 250,000 shares on December 1, 2007, March 1, 2008, June 1,
2008 and September 1, 2008.  The said 1,000,000 shares of restricted
Common stock of the Company were tendered in one certificate on June 1,
2007.  The consultant must return any unearned shares upon early
termination of the agreement.  Either the consultant or the Company
may terminate the agreement with or without cause upon sixty (60) days written
notice to the other provided that the Company may not give notice of
cancellation before January 1, 2007.





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 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.





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 has a two-year term that
commenced on August 1, 2007 and will continue until August 1, 2009 unless
terminated earlier pursuant to the terms of the Employment
Agreement.  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.  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, 2008, would be $238,834 in the event of a
lease default with full acceleration of rent. Kriyah’s Manager, Andrew A.
Brodkey, is also the President and CEO of the Company.


- 26
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




9.
            Commitments
      and Contingencies-Cont’d





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 August
16, 2007, the Company entered into an agreement with Hydro Geophysics Inc.
(“HGI”).  Pursuant to this agreement, HGI provided certain mineral
exploration, analytical and consulting services to the Company, as requested
from time to time, with respect t the Company’s South American
projects.  This contract will expire on February 16, 2009.The Company
remains obligated for the payment of an aggregate of $89,212 of unpaid invoices
under this contract.





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.





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.


- 27
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




9.
            Commitments
      and Contingencies-Cont’d





On
February 28, 2008 the Company entered into an agreement with Michael A. McClave
(‘Consultant’).  Pursuant to this agreement, Consultant will provide
certain mineral exploration, geological and consulting services to the Company,
as requested from time to time.  Pacific Copper  will be
invoiced on a monthly basis for services rendered on the
projects.  Either party can terminate this agreement by giving 30 days
notice with or without cause.





On May
15, 2008, the Company entered into a consulting and professional services
agreement with Jehcorp Inc. (‘Consultant’).  Pursuant to this
agreement, Consultant agrees to provide and perform for the benefit of the
Company certain expert technical consulting services, specifically including,
but not limited to, the preparation of a Canadian National Instrument NI-43-101
Technical Report for various properties owned or controlled by the Company and
its subsidiaries in Peru and Chile.  The Company will be invoiced on a
monthly basis for services rendered and the Consultant was advanced
$5,000.





In July
of 2008, the Company, through Pacific LTDA, entered into a Letter of Intent to
acquire the interests of Gareste, Ltda., a private Chilean entity which is
owned, in part, by a Director of the Company, in the Venado copper property in
Atacama Region III, Chile, also referred to as the Venapai
property.  This property consists of approximately 5,000 hectares of
exploration concessions, is road accessible, and located roughly 45 kilometers
northeast of the city of Copiapo.  The Venado property was acquired
for 4 million shares of the Company’s common stock and a 2% net smelter return
(“NSR”) royalty interest, one half of which can be repurchased for the sum of $3
million at any time prior to the commencement of production.  The
Company and Gareste, Ltda are proceeding to negotiate and execute a definitive
purchase agreement and Gareste, Ltda has transferred title to the Venado
property to Pacific LTDA in anticipation of closing the
transaction.  The Company dos not consider this property to be
material, however, the Company’s assessment may change after further exploration
is completed.





In July
and October of 2008, the Company, through Pacific LTDA, entered into Letters of
Intent to acquire the interests of Gareste, Ltda., a private Chilean entity
which is owned, in part, by a Director of the Company, in the El Corral/La
Mofralla copper properties, which are adjacent to one another, in Atacama Region
III, Chile.  These properties consist of approximately 3,900 hectares
of exploration concessions, are road accessible and located roughly 60
kilometers south of the city of Copiapo.  The Corral property was
acquired for 2 million shares of the Company’s common stock and a 2% net smelter
return (“NSR”) royalty interest.  One half of such royalty can be
repurchased for the sum of $2 million at any time prior to the commencement of
production.  Mofralla was purchased for 1 million shares of the
Company’s common stock.  The Company and the seller are proceeding to
negotiate and execute a definitive purchase agreement and the seller has
transferred title to the Mofralla and El Corral properties to Pacific LTDA in
anticipation of closing the transaction. The Company dos not consider these
properties to be material, however, the Company’s assessment may change after
further exploration is completed.





The
Company, through Pacific LTDA, also executed a letter of intent with a
single vendor, Gareste, Ltda. 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, Gareste, Ltda., is a Chilean
entity which is owned in part by a Director of the Company.  The
vendor 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.


- 28
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




9.
            Commitments
      and Contingencies-Cont’d





On June
10, 2008 the Company executed an agreement with Eagle Mapping Ltd. for providing
services for a total consideration payable for $52,200.





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 is
limited to the Province of British Columbia.  By its terms, the CTO was
issued for not filing a technical report 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.  The Company has engaged counsel in British Columbia and
is in the process of obtaining and filing the reports and information required
by the BCSC and otherwise satisfying the requirements of British Columbia
law.  As of the date of this report, this matter has not been resolved
and the CTO is in effect.




10.
              Related
      Party Transactions




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:




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.


- 29
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




10.
            Related
      Party Transactions-Cont’d





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.




2007




A)
            During
      the year ended October 31, 2007, the Board granted the following stock
      options 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 five Officers/ Directors
      of the Company.


These
      options were granted in accordance with the terms of the Company’s 2006
      Stock Option Plan and shall vest at the rate of 1/12 each month until
      fully vested. All of the options granted were for a term of 5
      years.


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 two directors of the
      Company and a former chief financial officer of the
      Company.  These options were granted in accordance with the
      terms of the Company’s 2006 Stock Option Plan and shall vest at the rate
      of 1/12 each month until fully vested.  The options granted have
      a term of 5 years.





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. The options
      were granted in accordance with the terms of the Company’s 2006 Stock
      Option Plan and shall vest at the rate of 1/12 each month until fully
      vested.  The options granted have a term of 5
    years.





d)
              On
      August 1, 2007, stock options to purchase 1,700,000 common shares at an
      exerciseprice
      of $0.50 per share were issued to the Company’s new CEO. 200,000 options
      vested on August 1, 2007 and the balance options vest at 66,666 options
      per month commencingJanuary
      1, 2008.


- 30
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




10.
            Related
      Party Transactions-Cont’d





e)
              On
      August 9, 2007, stock options to purchase 650,000 common shares at an
      exerciseprice
      of $0.50 per share were issued to the Company’s two directors for 250,000
      options each, and to one director for 150,000 options. These options vest
      at the rate of 1/12 each month until fully vested. The options granted
      have a term of 5 years.


The
      above stock options were measured at fair values and the Company expensed
      $294,574 as stock based compensation cost for issue of options during the
      year ended October 31, 2007.




B)
            During
      the years ended October 31, 2007, the Company expensed $90,000 to
      Medallion Capital Corp., a private corporation owned by an officer of the
      Company for consulting services.





C)
            David
      Hackman, a director of the Company has provided consulting services to the
      Company and a total of $37,500 was accrued to his company Sage Associates
      for the year ended October 31, 2007. This amount was paid subsequent to
      the year end. Mr. Hackman was a 50% partner in Peru SRL and received
      2,425,000 share of the Company for his interest in Peru SRL (refer to note
      8)





D)
              Harold
      Gardner a director of the Company has provided consulting services to the
      Company and a total of $37,500 was accrued to his company Pro Business
      Trust for the year ended October 31,2007.  This
      amount was paid subsequent to the year end.  The Company also
      loaned $763,000 to Gareste LTDA a Chilean company 50% owned by Mr. Gardner
      for exploration work to be carried out on mineral properties being
      acquired by the Company. The Company received expense details relating to
      these exploration expenditures prior to October 31, 2007 in the amount of
      $763,000 and has expensed this amount on the financial statements. Also,
      Mr. Harold Gardner, was a partner of Pacific LTDA and received 2,425,000
      Shares of the Company for his interest in Pacific LTDA (refer to note
      8).





E)
              Andrew
      A. Brodkey, President, CEO, Director and Chairman of the Board of
      Directors, was paid $11,000 by the Company and $27,276 by Kriyah including
      benefits billed to the Company during the year ended October 31,
      2007.  Mr. Brodkey was assigned 500,000 Warrants, from Kriyah,
      to purchase Common shares of the Company at $0.60 per share on or before
      August 22, 2012.





F)
            Jodi
      Henderson, Assistant Secretary and officer of the Company, is an employee
      of Kriyah and was paid $1,666 by the Company and $3,406 by Kriyah,
      including payroll burden and benefits that was billed to the Company
      during the year ended October 31,
2007.





G)
              The
      Company expensed $10,491 for services rendered to the Company by the CFO
      of the Company, during the year ended October 31,
  2007.





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 $20,000 for
      the year ended October 31, 2007 and also amortized deferred stock
      compensation expense for $104,167 relating to issue of 1,000,000
      restricted shares of the Company's common stock that was earned during the
      year ended October 31, 2007.


- 31
-




PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




11.
            Income
      Taxes




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




2008
                          
                          
                          2007Loss
      before income taxes
                          
                          $
                          (10,579,162
                          )
                          
                          $
                          (2,940,779
                          )Add
      back: Non deductible expenses
                          
                          
                          1,137,953
                          
                          
                          
                          1,972,923Loss
      for Income Tax
                          
                          
                          (9,441,209
                          )
                          
                          
                          (967,856
                          )Expected
      income tax recovery at the statutory rates of 33.5% (2006 –
      33.5%)
                          
                          $
                          (3,162,805
                          )
                          
                          $
                          (324,231
                          )Valuation
      allowance
                          
                          
                          3,162,805
                          
                          
                          
                          324,321Provision
      for income taxes
                          
                          $
                          -
                          
                          
                          $
                          -




The
Company has deferred income tax assets as follows:




2008
                            
                            
                            2007Net
      operating loss carry forward
                            
                            $
                            3,695,093
                            
                            
                            $
                            532,288Valuation
      allowance for deferred income tax assets
                            
                            
                            (3,695,093
                            )
                            
                            
                            (532,288
                            )Deferred
      income taxes
                            
                            $
                            -
                            
                            
                            $
                            -





As of
October 31, 2008, the Company had approximately $11,030,129 of net operating
loss carry forwards which are not yet assessed by the taxation authorities,
available to offset future taxable income which expire as follows:




2026
                  
                  $
                  621,0642027
                  
                  $
                  967,8562028
                  
                  $
                  9,441,209Total
                  
                  $
                  11,030,129




12. 
Deferred Stock Compensation





The
Company issued 1,000,000 restricted common shares each to three consultants, for
a total of 3,000,000 common shares valued at $1,500,000.  The Company
expensed proportionate consulting expenses of $1,354,167 and the balance of
$145,833 is reflected as a deferred stock compensation expense under
shareholders’ equity in the balance sheet.


- 32
-


PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




13.
Advances to related parties




Advances
to a  related party include an amount of $175,000, net of a reserve
for doubtful receivable for $222,000 advanced interest free against demand
promissory notes to Zoro Mining Corp., a Company related through common
directors. The Company opted to create a reserve for $222,000 as a matter of
prudence and caution due to the current unfavorable and challenging economic
conditions.




14.
Advances from related and non-related parties




The
Company received an advance of $70,000 from War Eagle Mining Corporation, a
Company related through a common director. This amount was advanced interest
free against demand promissory note.




On June
20, 2008 the Company received an advance of $246,945 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 further received advances
for an additional $5,100 on September 30, 2008. The Company accrued interest
payable for $7,199 for the year ended October 31, 2008.




15.
Convertible note financing transaction





Our
convertible note consisted of the following as of October 31, 2008:





Amount$100,000
      face value, 6% convertible note, due October 31, 2010
                
                $
                32,708





On
October 27, 2008, we 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.


- 33
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




15.
Convertible note financing transaction-Cont’d





The
Company has evaluated the terms and conditions of the convertible note and the
AIR under the guidance of SFAS No. 133 and EITF No. 00-19. 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 SFAS No. 133 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.





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 the inception date and October
31, 2008 are illustrated in the following table:





October 27,
                      2008
                    
                    
                    October 31,
                      2008Conversion
      price
                    
                    $
                    0.29
                    
                    
                    $
                    0.29Volatility
                    
                    
                    78%-84%
                    
                    
                    
                    79%-86%Equivalent
      term (years)
                    
                    
                    3.987
                    
                    
                    
                    3.964Credit-risk
      adjusted yield
                    
                    
                    10.3%-14.0%
                    
                    
                    
                    10.3%-14.0%Interest-risk
      adjusted rate
                    
                    
                    5.0%-5.16%
                    
                    
                    
                    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 EITF No. 98-5 Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios and EITF No. 00-27 Application of Issue No.
98-5 to Certain Convertible Instruments. 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.





Discounts
or (premiums) on the convertible notes arise from (i) the allocation of basis to
other instruments issued in the transaction, (ii) fees paid directly to the
creditor and (iii) initial recognition at fair value, which is lower than face
value. Discounts (premiums) are amortized through charges (credits) to interest
expense over the term of the debt agreement. Amortization of debt discounts
(premiums) amounted to ($208) during the period for inception to October 31,
2008.


- 34
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)




15.
Convertible note financing transaction-Cont’d





The
following table illustrates the initial allocation to the $100,000 convertible
note financing transaction:





$100,000 Financing TransactionConvertible
      note
                  
                  $
                  32,500Compound
      embedded derivative
                  
                  
                  6,875Additional
      investment rights
                  
                  
                  55,000Beneficial
      conversion feature
                  
                  
                  5,625$
                  100,000




16.
Project expenses




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





Don Javier (Peru)
                    
                    $
                    240,344Carrera Pinto (Chile)
                    
                    $
                    576,052Carrizal (Chile)
                    
                    $
                    307,180Cerro Blanco (Chile)
                    
                    $
                    117,014La Guanaca (Chile)
                    
                    $
                    189,218Venapai (Chile)
                    
                    $
                    496,275Others
                    
                    $
                    74,097Total
                    
                    $
                    2,000,180





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




17.
General and administration expenses





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





Non-cashcompensation
      expense relating to the issue of options and warrants
                  
                  $
                  915,953Non
      cash expense relating to the amortization of deferred stock compensation
      relating to issue of stock to consultants
                  
                  $
                  916,666Legal
      and audit
                  
                  $
                  127,493Reserve
      for doubtful receivable (note 13)
                  
                  $
                  222,000Office,
      payroll and other general expenses
                  
                  $
                  784,558Total
                  
                  $
                  2,966,670


- 35
-





PACIFIC
COPPER CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Notes
to Consolidated Financial Statements


October
31, 2008 and 2007


(Amounts
expressed in US Dollars)





18.  Subsequent
Events





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





Subsequent
to the year the company raised $100,000 by way of a promissory note to be repaid
on November 28th, 2009,
with simple interest of 10% per annum..





Subsequent
to the year, advances receivable from the related party for $175,000 was
repaid.





19.   Geographic
location of assets





Except
for Cash and Cash equivalent for $80,742 and $13,931 located in USA and Canada
respectively, all other assets in the financial statements are located in
Chile.


- 36
-