UNITED STATES SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549





FORM
10-Q





xQUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF
1934


For the quarterly period ended September
30, 2010





 ̈TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF
1934





Commission File Number:
000-52641





INFRASTRUCTURE
MATERIALS
CORP.


(Exact name of registrant as specified
in its charter)





Delaware
              
              98-0492752(State of
      incorporation)
              
              (I.R.S. Employer Identification
      No.)





1135 Terminal Way, Suite
207B


Reno, NV  89502 
USA


(Address
of Principal Executive Offices) (Zip Code)





775-322-4448


(Registrant’s
telephone number, including area code)




With a copy to:


Jonathan H. Gardner


Kavinoky Cook LLP


726 Exchange St., Suite
800


Buffalo, NY 14210





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


YesþNo ̈





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


YesþNo ̈





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





Large accelerated filer ̈
            
            Accelerated filer ̈
            
            Non-accelerated filer ̈
              (Do not check if a smaller
      reporting company)
            
            Smaller reporting companyþ





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


Yes ̈Noþ





The number of shares of registrant’s
common stock outstanding as of September 30,2010was 68,243,457.





INFRASTRUCTURE MATERIALS
CORP.





FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED SEPTEMBER
30, 2010


TABLE OF CONTENTS





PAGEPART 1 – FINANCIAL
      INFORMATIONItem 1.
                
                Financial Statements(Unaudited)
                
                3Item 2.
                
                Management’s Discussion and
      Analysis of Financial Condition and Results of
      Operations
                
                24Item 3.
                
                Quantitative and Qualitative
      Disclosures About Market Risk
                
                33Item 4T.
                
                Controls and
      Procedures
                
                33PART II – OTHER
      INFORMATIONItem 1.
                
                Legal
      Proceedings
                
                35Item 1A.
                
                Risk
Factors
                
                35Item 2.
                
                Unregistered Sale of Equity
      Securities and Use of Proceeds
                
                38Item 3.
                
                Defaults Upon Senior
      Securities
                
                38Item 4.
                
                Submission of Matters to a Vote of
      Security Holders
                
                38Item 5.
                
                Other
      Information
                
                38Item 6.
                
                Exhibits and Reports on Form
      8-K
                
                38SIGNATURES
                
                39


- 2
-


PART 1 – FINANCIAL
INFORMATION





ITEM
1           Financial Statements





INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGEMININGCOMPANY)




INTERIMCONSOLIDATEDFINANCIAL STATEMENTS




September 30, 2010




(Amounts expressed in US
Dollars)




(Unaudited-Prepared by
Management)





CONTENTS





Interim Consolidated Balance
      Sheets as of September 30, 2010 (unaudited) and June 30, 2010
      (audited)
                    4Interim Consolidated Statements of
      Operations for the three months ended September 30, 2010 and September 30,
      2009, and for the period from inception to September 30,
      2010
                    5Interim Consolidated Statements of
      Changes in Stockholders' Equity for the three months ended September 30,
      2010 and for the period from inception to September 30,
      2010
                    6Interim Consolidated Statements of
      Cash Flows for the three months ended September 30, 2010 and September 30,
      2009, and for the period from inception to September 30,
      2010
                    7Condensed Notes to Interim
      Consolidated Financial Statements
                    8-23


- 3
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


InterimConsolidatedBalance Sheets as at


September 30, 2010 andJune 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by Management)





Sept. 30,
                
                
                June 30,2010
                
                
                2010$
                
                
                $(unaudited)
                
                
                (audited)ASSETSCurrentCash and cash
      equivalents
                
                
                611,405
                
                
                
                1,598,248Short term
      investments
                
                
                587,565
                
                
                
                586,745Prepaid expenses and other
      receivables
                
                
                178,739
                
                
                
                122,343Total Current
      Assets
                
                
                1,377,709
                
                
                
                2,307,336Plant and
      Equipment, net(Note
      4)
                
                
                934,493
                
                
                
                971,280Mineral
      Property Interests(Note 5)
                
                
                514,525
                
                
                
                514,525Total
Assets
                
                
                2,826,727
                
                
                
                3,793,141LIABILITIESCurrentAccounts
      payable
                
                
                432,236
                
                
                
                93,410Accrued
      liabilities
                
                
                105,215
                
                
                
                117,152Total Current
      Liabilities
                
                
                537,451
                
                
                
                210,562Commitments and
      Contingencies(Note
      9)Subsequent
      Events(Note
      11)Related Party
      Transactions(Note
      10)STOCKHOLDERS'
      EQUITYCapital Stock (Note
      6)Common stock, $0.0001 par value,
      100,000,000 shares authorized, 68,243,457 issued and outstanding (June 30,
      2010 – 68,193,457)
                
                
                6,824
                
                
                
                6,819Additional Paid‐in
      Capital
                
                
                20,546,072
                
                
                
                20,511,458Deficit Accumulated During the
      Exploration Stage
                
                
                (18,263,620
                )
                
                
                (16,935,698
                )Total
      Stockholders' Equity
                
                
                2,289,276
                
                
                
                3,582,579Total Liabilities and
      Stockholders' Equity
                
                
                2,826,727
                
                
                
                3,793,141





See Condensed Notes to the Interim
Consolidated Financial Statements


- 4
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


InterimConsolidatedStatements of
Operations


For the three months endedSeptember 30, 2010 andSeptember 30, 2009


and the Period from Inception (June 3,
1999)toSeptember 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by Management)





For the
                
                
                For thethree months
                
                
                three monthsCumulative
                
                
                ended
                
                
                endedsince
                
                
                Sept. 30,
                
                
                Sept. 30,inception
                
                
                2010
                
                
                2009$
                
                
                $
                
                
                $Operating
      ExpensesGeneral and
      administration
                
                
                8,377,838
                
                
                
                198,759
                
                
                
                449,197Project
      expenses
                
                
                9,493,647
                
                
                
                1,093,390
                
                
                
                785,770Amortization
                
                
                925,501
                
                
                
                36,787
                
                
                
                45,255Total Operating
      Expenses
                
                
                18,796,986
                
                
                
                1,328,936
                
                
                
                1,280,222Loss from
      Operations
                
                
                (18,796,986
                )
                
                
                (1,328,936
                )
                
                
                (1,280,222
                )Other
      income-interest
                
                
                385,174
                
                
                
                1,014
                
                
                
                14,353Other income-gain on bargain
      purchase (Note 5)
                
                
                238,645
                
                
                
                -
                
                
                
                -Interest  Expense
                
                
                (90,453
                )
                
                
                -
                
                
                
                -Loss and Comprehensive Loss before
      Income Taxes
                
                
                (18,263,620
                )
                
                
                (1,327,922
                )
                
                
                (1,265,869
                )Provision for income
      taxes
                
                
                -
                
                
                
                -
                
                
                
                -Net Loss and Comprehensive
      Loss
                
                
                (18,263,620
                )
                
                
                (1,327,922
                )
                
                
                (1,265,869
                )Loss per Weighted Average Number
      of Shares Outstanding-Basic and Fully
      Diluted
                
                
                
                
                
                
                (0.02
                )
                
                
                (0.02
                )Weighted Average Number of Shares
      Outstanding During the Periods-Basic and Fully
      Diluted
                
                
                
                
                
                
                68,194,000
                
                
                
                60,198,500





See CondensedNotes to the InterimConsolidatedFinancial
Statements


- 5
-


INFRASTRUCTURE MATERIALSCORP.


(AN EXPLORATION STAGE MINING
COMPANY)


InterimConsolidatedFinancial Statements of Changes in
Stockholders’ Equity


From Inception(June 3, 1999)toSeptember 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by Management)





DeficitAccumulatedCommon
      Stock
                
                
                Additional
                
                
                Deferred
                
                
                during
      the
                
                
                TotalNumber
                
                
                
                
                
                Paid-in
                
                
                Stock
                
                
                Exploration
                
                
                Stockholders'of
      Shares
                
                
                Amount
                
                
                Capital
                
                
                Compensation
                
                
                Stage
                
                
                Equity$
                
                
                $
                
                
                $
                
                
                $
                
                
                $For
      the period from inception (June 3, 1999) through July 1,
      2004
                
                
                1
                
                
                
                -
                
                
                
                5,895
                
                
                
                
                
                
                (5,895
                )
                
                
                -Net
      (loss)
                
                
                -
                
                
                
                -
                
                
                
                910
                
                
                
                
                
                
                (910
                )
                
                
                -Balance,
      June 30, 2005 (audited)
                
                
                1
                
                
                
                -
                
                
                
                6,805
                
                
                
                -
                
                
                
                (6,805
                )
                
                
                -Contribution
      to additional paid‐in capital
                
                
                -
                
                
                
                -
                
                
                
                3,024
                
                
                
                
                
                
                
                
                
                
                
                3,024Cancelled
      shares
                
                
                (1
                )
                
                
                -
                
                
                
                (1
                )
                
                
                
                
                
                
                
                
                
                
                (1
                )Common
      shares issued for nil consideration
                
                
                14,360,000
                
                
                
                1,436
                
                
                
                (1,436
                )
                
                
                
                
                
                
                -
                
                
                
                -Common
      shares issued for cash
                
                
                2,050,000
                
                
                
                205
                
                
                
                414,795
                
                
                
                
                
                
                
                -
                
                
                
                415,000Subscription
      for stock
                
                
                
                
                
                
                
                
                
                
                300,000
                
                
                
                
                
                
                
                -
                
                
                
                300,000Stock
      issuance cost
                
                
                -
                
                
                
                -
                
                
                
                (24,500
                )
                
                
                
                
                
                
                -
                
                
                
                (24,500
                )Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                
                
                
                
                (87,574
                )
                
                
                (87,574
                )Balance,
      June 30, 2006 (audited)
                
                
                16,410,000
                
                
                
                1,641
                
                
                
                698,687
                
                
                
                -
                
                
                
                (94,379
                )
                
                
                605,949Common
      shares issued for cash
                
                
                3,395,739
                
                
                
                340
                
                
                
                548,595
                
                
                
                
                
                
                
                -
                
                
                
                548,935Common
      shares issued to agents in lieu of commission for placement of common
      shares and convertible debentures
                
                
                1,064,000
                
                
                
                106
                
                
                
                265,894
                
                
                
                
                
                
                
                -
                
                
                
                266,000Common
      shares issued for acquisition of interests in mineral
      claims
                
                
                3,540,600
                
                
                
                354
                
                
                
                884,796
                
                
                
                
                
                
                
                -
                
                
                
                885,150Common
      shares issued for acquisition of interests in mineral
      claims
                
                
                1,850,000
                
                
                
                185
                
                
                
                462,315
                
                
                
                
                
                
                
                -
                
                
                
                462,500Common
      shares issued for acquisition interests in a
      refinery
                
                
                88,500
                
                
                
                9
                
                
                
                22,116
                
                
                
                
                
                
                
                -
                
                
                
                22,125Common
      shares issued for purchase of a mill with capital
      equipments
                
                
                6,975,000
                
                
                
                697
                
                
                
                1,743,053
                
                
                
                
                
                
                
                -
                
                
                
                1,743,750Stock
      issuance cost
                
                
                
                
                
                
                
                
                
                
                (59,426
                )
                
                
                
                
                
                
                
                
                
                
                (59,426
                )Stock
      based compensation
                
                
                
                
                
                
                
                
                
                
                30,026
                
                
                
                
                
                
                
                
                
                
                
                30,026Net
      loss for the year ended June 30, 2007
                
                
                
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,845,424
                )
                
                
                (2,845,424
                )Balance,
      June 30, 2007 (audited)
                
                
                33,323,839
                
                
                
                3,332
                
                
                
                4,596,056
                
                
                
                -
                
                
                
                (2,939,803
                )
                
                
                1,659,585Common
      stock issued to consultants
                
                
                3,000,000
                
                
                
                300
                
                
                
                2,249,700
                
                
                
                (1,875,000
                )
                
                
                -
                
                
                
                375,000Stock
      based compensation
                
                
                
                
                
                
                -
                
                
                
                139,272
                
                
                
                
                
                
                
                -
                
                
                
                139,272Warrant
      modification expense
                
                
                
                
                
                
                
                
                
                
                844,423
                
                
                
                
                
                
                
                
                
                
                
                844,423Conversion
      of convertible debentures with accrued
    interest
                
                
                7,186,730
                
                
                
                719
                
                
                
                3,590,801
                
                
                
                -
                
                
                
                -
                
                
                
                3,591,520Common
      shares issued for acquisition of interests in mineral
      claims
                
                
                175,000
                
                
                
                18
                
                
                
                104,982
                
                
                
                
                
                
                
                
                
                
                
                105,000Common
      stock issued to a consultant
                
                
                100,000
                
                
                
                10
                
                
                
                57,990
                
                
                
                
                
                
                
                
                
                
                
                58,000Amortization
      of deferred stock compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                562,500
                
                
                
                
                
                
                
                562,500Net
      loss for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (4,635,465
                )
                
                
                (4,635,465
                )Balance
      June 30, 2008 (audited)
                
                
                43,785,569
                
                
                
                4,379
                
                
                
                11,583,224
                
                
                
                (1,312,500
                )
                
                
                (7,575,268
                )
                
                
                2,699,835Common
      shares issued for cash (net)
                
                
                7,040,000
                
                
                
                704
                
                
                
                3,372,296
                
                
                
                -
                
                
                
                -
                
                
                
                3,373,000Common
      stock issued to a consultant
                
                
                75,000
                
                
                
                7
                
                
                
                43,493
                
                
                
                -
                
                
                
                -
                
                
                
                43,500Common
      stock issued on acquisition of a subsidiary
                
                
                397,024
                
                
                
                40
                
                
                
                31,722
                
                
                
                -
                
                
                
                -
                
                
                
                31,762Common
      shares issued on warrant exercises
                
                
                8,900,907
                
                
                
                890
                
                
                
                2,224,337
                
                
                
                -
                
                
                
                -
                
                
                
                2,225,227Stock
      based compensation
                
                
                
                
                
                
                
                
                
                
                814,050
                
                
                
                
                
                
                
                
                
                
                
                814,050Warrant
      modification expense
                
                
                
                
                
                
                
                
                
                
                346,673
                
                
                
                
                
                
                
                
                
                
                
                346,673Amortization
      of deferred stock compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                1,125,000
                
                
                
                
                
                
                
                1,125,000Net
      loss for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (6,045,477
                )
                
                
                (6,045,477
                )Balance
      June 30, 2009 (audited)
                
                
                60,198,500
                
                
                
                6,020
                
                
                
                18,415,795
                
                
                
                (187,500
                )
                
                
                (13,620,745
                )
                
                
                4,613,570Common
      shares issued for cash
                
                
                6,973,180
                
                
                
                697
                
                
                
                1,603,134
                
                
                
                
                
                
                
                
                
                
                
                1,603,831Common
      stock issued on acquisition of a subsidiary
                
                
                1,021,777
                
                
                
                102
                
                
                
                275,778
                
                
                
                
                
                
                
                
                
                
                
                275,880Stock
      based compensation
                
                
                
                
                
                
                
                
                
                
                216,751
                
                
                
                
                
                
                
                -
                
                
                
                216,751Amortization
      of deferred stock compensation
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                187,500
                
                
                
                
                
                
                
                187,500Net
      loss for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (3,314,953
                )
                
                
                (3,314,953
                )Balance
      June 30, 2010 (audited)
                
                
                68,193,457
                
                
                
                6,819
                
                
                
                20,511,458
                
                
                
                -
                
                
                
                (16,935,698
                )
                
                
                3,582,579Stock
      based compensation
                
                
                
                
                
                
                
                
                
                
                27,119
                
                
                
                
                
                
                
                -
                
                
                
                27,119Common
      stock options exercised
                
                
                50,000
                
                
                
                5
                
                
                
                7,495
                
                
                
                
                
                
                
                -
                
                
                
                7,500Net
      loss for the three month period
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (1,327,922
                )
                
                
                (1,327,922
                )Balance
      Sept. 30, 2010 (unaudited)
                
                
                68,243,457
                
                
                
                6,824
                
                
                
                20,546,072
                
                
                
                -
                
                
                
                (18,263,620
                )
                
                
                2,289,276





See CondensedNotes to the InterimConsolidatedFinancial
Statements


- 6
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


InterimConsolidatedStatements of Cash
Flows


For thethreemonths endedSeptember 30, 2010 andSeptember 30, 2009


and for the period from Inception (June
3, 1999) to September 30, 2010.


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by Management)





Cumulative
                
                
                For the
    three
                
                
                For the
    threeSince
                
                
                months
ended
                
                
                months
endedInception
                
                
                Sept. 30,
    2010
                
                
                Sept. 30,
    2009Cash Flows from Operating
      ActivitiesNet loss
                
                
                (18,263,620
                )
                
                
                (1,327,922
                )
                
                
                (1,265,869
                )Adjustment
    for:Depreciation
                
                
                925,501
                
                
                
                36,787
                
                
                
                45,255Amortization of debt issuance
      cost
                
                
                247,490
                
                
                
                -
                
                
                
                -Loss on disposal of plant and
      equipment
                
                
                10,524
                
                
                
                -Gain on Bargain Purchase (Note
      5)
                
                
                (238,645
                )
                
                
                -
                
                
                
                -Stock based
      compensation
                
                
                1,227,218
                
                
                
                27,119
                
                
                
                86,947Warrant modification
      expense
                
                
                1,191,096
                
                
                
                -
                
                
                
                -Shares issued for mineral claims,
      as part of project expenses
                
                
                1,452,650
                
                
                
                -
                
                
                
                -Shares issued for consultant
      services expensed
                
                
                2,351,500
                
                
                
                -
                
                
                
                187,500Shares issued on acquisition of
      subsidiary
                
                
                31,762
                
                
                
                -
                
                
                
                -Interest on convertible
      debentures
                
                
                90,453
                
                
                
                -
                
                
                
                -Changes in non-cash working
      capitalPrepaid
      expenses
                
                
                (178,739
                )
                
                
                (56,396
                )
                
                
                (9,880
                )Accounts
      payable
                
                
                432,236
                
                
                
                338,826
                
                
                
                22,803Accrued
      liabilities
                
                
                105,656
                
                
                
                (11,937
                )
                
                
                (6,749
                )Net cash used in operating
      activities
                
                
                (10,614,918
                )
                
                
                (993,523
                )
                
                
                (939,993
                )Cash Flows from Investing
      ActivitiesDecrease (Increase) in Short‐term
      investments
                
                
                (587,565
                )
                
                
                (820
                )
                
                
                793,633Acquisition of plant and equipment
      for cash
                
                
                (106,977
                )
                
                
                -
                
                
                
                (5,431
                )Proceeds from sale of plant and
      equipment
                
                
                2,500
                
                
                
                -
                
                
                
                -Net cash provided (used) in
      investing activities
                
                
                (692,042
                )
                
                
                (820
                )
                
                
                788,202Cash Flows from Financing
      ActivitiesIssuance of common shares for
      cash
                
                
                6,394,571
                
                
                
                -
                
                
                
                -Issuance of common shares for
      warrant exercises
                
                
                2,225,227
                
                
                
                -
                
                
                
                -Issuance of common shares for
      option exercise
                
                
                7,500
                
                
                
                7,500Issuance of convertible debentures
      subsequently converted to cash
                
                
                3,501,067
                
                
                
                -
                
                
                
                -Stock and debenture placement
      commissions paid in cash
                
                
                (210,000
                )
                
                
                -
                
                
                
                -Net cash provided by financing
      activities
                
                
                11,918,365
                
                
                
                7,500
                
                
                
                -Net Change in
      Cash
                
                
                611,405
                
                
                
                (986,843
                )
                
                
                (151,791
                )Cash- beginning of
      period
                
                
                -
                
                
                
                1,598,248
                
                
                
                420,266Cash - end of
      period
                
                
                611,405
                
                
                
                611,405
                
                
                
                268,475Supplemental Cash Flow
      Information:Interest
    Paid
                
                
                -
                
                
                
                -
                
                
                
                -Income taxes
      paid
                
                
                -
                
                
                
                -
                
                
                
                -





See CondensedNotes to the InterimConsolidatedFinancial
Statements


- 7
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





1.
            Basis of
      Presentation





The accompanying unaudited condensed
consolidated financial statementsofInfrastructure Materials
Corp. (the
“Company”),have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with U.S.
generally accepted accounting principles (GAAP); however, such information
reflects all adjustmentsthatare, in the opinion of management,
necessary for a fair statement of the results for the interim
periods.  The condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and Notes thereto
together with management’s discussion and analysis of financial condition and
results of operations contained in the Company’s annual report on Form 10-K for
the year ended June 30,2010. In the opinion of management, the
accompanying condensed consolidated financial statements reflect all adjustments
of a normal recurring nature considered necessary to fairly state the financial
position of the Company atSeptember 30, 2010 and June 30, 2010, the results of its operations for the
three-month periods endedSeptember 30, 2010 andSeptember 30, 2009, and its cash flows for thethree-month periods endedSeptember 30, 2010 andSeptember 30, 2009. In addition, some of the Company’s
statements in this quarterly report on Form 10-Q may be considered
forward-looking and involve risks and uncertainties that could significantly
impact expected results. The results of operations for thethree-month period endedSeptember 30, 2010 are not necessarily indicative of
results to be expected for the full year.





The consolidated financial statements
include the accounts of the Company and its subsidiaries, Infrastructure
Materials Corp US(“IMC
US”),Silver Reserve
Corp.(“SRC” or “Silver
Reserve”) and Canadian Infrastructure Corp. (“CIC”).All material inter-company
accounts and transactions have been eliminated.





2.
            Exploration Stage
      Activities





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




The Company is in the exploration stage
and has not yet realized revenues from its planned operations.  The
Company has incurred a cumulative loss of $18,263,620from inception toSeptember 30, 2010.  The Company has
funded operations through the issuance of capital stock and convertible
debentures.  In May and June of 2006, the Company closed a private
placement of its common stock for gross proceeds of $415,000.  During
the year ended June 30, 2007 the Company raised $848,935 (including $300,000
received in the prior year as stock subscriptions) through private placement of
its common stock for cash.  The Company also issued Convertible
Debentures in the amount of $1,020,862 during the year ended June 30, 2006 and
issued Convertible Debentures in the amount of $2,480,205 during the year ended
June 30, 2007.   During the three-month period ended September
30, 2008 the Company completed private placements of common stock for proceeds
of $3,373,000 net of cash expenses. During the three-month period ended March
31, 2009 as a result of warrant exercises the Company issued common stock for
proceeds of $2,225,227.During the year ended June 30, 2009, the
Company issued common stock as a result of warrant exercises for proceeds of$2,225,227.In June 2010the Company closed a private placement
of its common stock for gross proceeds of$1,603,831.Management's plan is to continue raising
additional funds through future equity or debt financing until it achieves
profitable operations from production of minerals or metals on its properties,
if feasible.


- 8
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





3.
            Nature of
      Operations





The Company’s focus is on the
exploration and development, if feasible, of limestone, silver and other metals
from its claims in the States of Nevada and Arizona and the Canadian province of
Manitoba.





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 mineral properties. Mineral property acquisition costs are
initially capitalized in accordance with ASC 805-20-55-37, previously referenced
as the FASB Emerging Issues Task Force ("EITF") Issue 04-2.  The
Company assesses the carrying costs for impairment under ASC 930 at each fiscal
quarter end.  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.  The Company has determined that, except for the amount
capitalized as Mineral Property Interests for $514,525 (See Note 5), all
property payments are impaired and accordingly the Company has written off the
acquisition costs to project expenses.  Once capitalized, such costs
will be amortized using the units-of-production method over the estimated life
of the probable reserve.





To date,
mineral property exploration costs have been expensed as incurred.  To
date the Company has not established any proven or probable reserves on its
mineral properties.





The Company’s limestone subsidiary,IMC US,controls 12 limestone Projects in
Nevada, made up of800
mineral claims covering 16,528 acres. IMC US has acquired 100% of the
Mineral Rights on an additional 1,120 acres, 50% of the Mineral Rights on 7,400
acres, and 25% of the Mineral Rights on 160 acres. IMC USalso holds 20 mineral exploration
permits covering11,419 acres at two projects in the state
of Arizona.The Company
does not consider the claims, exploration permitsor mineral rights to be material at
this time and has expensedrelatedcoststo project expense.  The
Company’s assessment of the claims, exploration permitsand mineral rights may change after
exploration of the claims.





On December 18, 2008, the Company
incorporated a second wholly owned subsidiary in the State of Delaware under its
former name, “Silver Reserve Corp.”and referred to herein as “SRC.”The Company assigned all
fourteen of its silver/base metal projects in Nevada to this subsidiary.As of June 1, 2010,Silver Reserve
Corp.terminated its
interests in one of the projects.  Theremaining thirteenclaim groups contain347claims covering7,159acres which include10patented claims and 2 leased patented
claims.





SRCalso has a milling facility located in
Mina, Nevada on six mill site claims covering 30 acres.





InDecember2009, the Companyfurther expanded its limestone
exploration activities by acquiringlimestonequarry leaseslocated in Manitoba,
Canada.  The CompanypurchasedCanadian Infrastructure Corp. (“CIC”),
a Canadian corporation, pursuant to a Share Exchange Agreement (the “CIC
Agreement”) between the Company, CIC and Todd D. Montgomery dated as of December
15, 2009. Mr. Montgomery was the sole shareholder of CIC.  Because Mr. Montgomery is
also the Company’s Chief Executive Officer and a member of its Board of
Directors, the CIC
Agreement was approved by the disinterested members of the Company’s Board of
Directors on November 27, 2009, after obtaining an independent
appraisal and market study for the properties.  Under the terms of the CIC
Agreement, the Company acquired all of the issued and outstanding stock of CIC
in exchange for 1,021,777 shares of the Company.  The CIC
Agreement closed on February 9, 2010.  CIC controls 95 quarry leases
issued by the Province of Manitoba, Canada, covering 6,090 hectares (15,049
acres).  The Companyaccountedfor the acquisition of CIC as a
business combination under the acquisition method as discussed in FASB ASC Topic
805.


- 9
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





3.
            Nature of Operations–Cont’d




ASC 805 requires acquisition-date fair
value measurement of identifiable assets, liabilities assumed and
non-controlling interests in the acquiree.  The only assets acquired
were CIC’S quarry leases having a fair value of $514,525 (CAD $550,000) thatwererecorded as an asset, “Mineral Property
Interests,” on the date of acquisition.  The stock of the Company
traded at $0.27 per share on February 9, 2010, and the Company recorded a
$275,880 increase in shareholders’ equity reflecting the issuance of 1,021,777
common shares of the Company in exchange for all issued and outstanding shares
of CIC.  There were no liabilities assumed by the Company and no
non-controlling interests in CIC, resulting in a bargain purchase price of
$238,645 thatwasrecorded as Other Income in the
Company’s Consolidated Statements of Operations.Also see Note 5, Mineral Property
Interests.


- 10
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





4.
            Plant and Equipment,
      Net




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





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





Sept. 30,
    2010
                                      
                                      
                                      June 30,
    2010Accumulated
                                      
                                      
                                      
                                      
                                      
                                      AccumulatedCost
                                      
                                      
                                      Depreciation
                                      
                                      
                                      Cost
                                      
                                      
                                      Depreciation$
                                      
                                      
                                      $
                                      
                                      
                                      $
                                      
                                      
                                      $Office, furniture and
      fixtures
                                      
                                      
                                      3,623
                                      
                                      
                                      
                                      1,745
                                      
                                      
                                      
                                      3,623
                                      
                                      
                                      
                                      1,646Computer
      equipment
                                      
                                      
                                      14,448
                                      
                                      
                                      
                                      2,777
                                      
                                      
                                      
                                      14,448
                                      
                                      
                                      
                                      1,831Plant and
      Machinery
                                      
                                      
                                      1,514,511
                                      
                                      
                                      
                                      731,025
                                      
                                      
                                      
                                      1,514,511
                                      
                                      
                                      
                                      700,499Tools
                                      
                                      
                                      6,725
                                      
                                      
                                      
                                      4,317
                                      
                                      
                                      
                                      6,725
                                      
                                      
                                      
                                      4,157Vehicles
                                      
                                      
                                      76,928
                                      
                                      
                                      
                                      37,078
                                      
                                      
                                      
                                      76,928
                                      
                                      
                                      
                                      34,981Consumables
                                      
                                      
                                      64,197
                                      
                                      
                                      
                                      60,101
                                      
                                      
                                      
                                      64,197
                                      
                                      
                                      
                                      59,516Molds
                                      
                                      
                                      900
                                      
                                      
                                      
                                      686
                                      
                                      
                                      
                                      900
                                      
                                      
                                      
                                      668Mobile
      Equipment
                                      
                                      
                                      73,927
                                      
                                      
                                      
                                      43,768
                                      
                                      
                                      
                                      73,927
                                      
                                      
                                      
                                      42,181Factory
      Buildings
                                      
                                      
                                      74,849
                                      
                                      
                                      
                                      14,118
                                      
                                      
                                      
                                      74,849
                                      
                                      
                                      
                                      13,3491,830,108
                                      
                                      
                                      
                                      895,615
                                      
                                      
                                      
                                      1,830,108
                                      
                                      
                                      
                                      858,828Net carrying
      amount
                                      
                                      
                                      
                                      
                                      
                                      
                                      934,493
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      971,280Depreciation
      charges
                                      
                                      
                                      
                                      
                                      
                                      
                                      36,787
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      177,321


- 11
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





5.
            Mineral Property
      Interests





The
Company entered into an agreement to acquire CIC as a wholly-owned subsidiary,
pursuant to a Share Exchange Agreement (the “CIC Agreement”) between the
Company, CIC and Todd D. Montgomery dated as of December 15,
2009.  Under the terms of the CIC Agreement, the Company acquired all
of the issued and outstanding stock of CIC in exchange for 1,021,777 shares of
the Company.  The CIC Agreement closed on February 9,
2010.  The Company accounted for the acquisition of CIC as a business
combination under the acquisition method as discussed in FASB ASC Topic
805.





ASC 805 requires acquisition-date fair
value measurement of identifiable assets, liabilities assumed and
non-controlling interests in the acquiree.  There were no liabilities
recorded in the financial records of CIC as of February 9, 2010, the date of
acquisition.  Further, the Company acquired all the issued and
outstanding shares of CIC, resulting in the absence of non-controlling interests
in the acquiree.





Amounts recognized as assets as of the
acquisition date:





Mineral Property Interests, being
      quarry leases in the province of Manitoba, Canada at fair value (CAD $
      550,000)
                  
                  $
                  514,525Total consideration transferred
      included the following:Fair value as of the acquisition
      date of 1,021,777 common shares of the Company issued in exchange for all
      issued and outstanding shares of CIC
                  
                  $
                  275,880Gain on bargain purchase, being
      the excess of the fair value of net assets acquired over the purchase
      price, and recognized in the statement of
operations
                  
                  $
                  238,645





6.
            Issuance of
      common shares and warrants





Threemonth
period endedSeptember
30,
2010





On September 30, 2010, the Company
issued 50,000 shares pursuant to the exercise of options granted in accordance
with itsemployee stock option plan.  Also see Note7,Stock Based Compensation.


- 12
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





6.
            Issuance of common shares and
      warrants–Cont’d





Year ended June 30,
2010





The Company entered into an agreement to
acquireCICas a wholly-owned subsidiary, pursuant
to a Share Exchange Agreement (the “CIC Agreement”) between the Company, CIC and
Todd D. Montgomery dated as of December 15, 2009. Also see Note5, Mineral Property
Interests.  Under the terms of the CIC Agreement, the Company acquired
all of the issued and outstanding stock of CIC in exchange for 1,021,777 shares
of the Company.  TheCICAgreement closed on February 9,
2010.





On June 25, 2010, the Company completed
a private placement of 6,973,180 shares of the Company’s common stock at a price
of $0.23 per share for total consideration of $1,603,831. The private placement
was exempt from registration under the Securities Act of 1933, as amended,
pursuant to an exemption afforded by Regulation S promulgated
thereunder.  Each investor that participated in the private placement
was a non-“U.S. Person” as that term is defined under Regulation
S.





Warrants





On August 22, 2008, the Company completed the private
placements of 7,040,000 “Units” at $0.50 per Unit.  Each Unit
consisted of oneshare and one half-share purchase warrant (a
“Warrant”).  Each full Warrant entitledthe holder to purchase one share at
$0.75 on or before September 1, 2010.In connection with the private
placement,the Company paid a commission of $147,000
and issued 294,000 broker warrants, also expiring onSeptember 1, 2010,to purchase Units at $0.50 per
Unit.  The Unitsto be issued upon exercise of the broker
warrantshadthe same terms as those sold to
investors.





On December 11, 2008, the Board of
Directors approved a one time offer to all warrant holders to reduce the
exercise price of all unexercised warrants from $0.75 to $0.25 pershare, if the warrants were exercised
prior to February 28, 2009.Of the 3,520,000 Warrants issued on
August 22, 2008,the Company received elections to
purchase2,820,000common shares under the exercise of
warrants at $0.25 per share.





The 700,000 unexercised Warrants issued
on August 22, 2008 with an exercise price of $0.75 per share, and the
294,000broker warrantsissued during the year
ended June 30, 2009atan exercise price of $0.50
per Unitexpired on September 1,
2010.


- 13
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





7.
            Stock Based
      Compensation





In April of 2006, the Board of Directors
approved an employee stock option plan ("2006 Stock Option Plan"), the purpose
of which is to enhance the Company's stockholder value and financial performance
by attracting, retaining and motivating the Company's officers, directors, key
employees, consultants and its affiliates and to encourage stock ownership by
such individuals by providing them with a means to acquire a proprietary
interest in the Company's success through stock ownership.





Under the 2006 Stock Option Plan,
officers, directors, employees and consultants who provide services to the
Company may be granted options to acquiresharesof the Company at the fair market value
of the stock on the date of grant.  Options may have a term of up to
10 years.  The total number ofshares reserved for issuance under the
2006 Stock Option Plan is 5,000,000.





Three month
periodendedSeptember
30,
2010





No options were granted during the
threemonthsendedSeptember 30, 2010.  On September
30, 2010, 50,000 options were exercised and
200,000 options expired.





For thethreemonth period endedSeptember 30, 2010, the Company recognized in the
financial statements, stock-based compensation costs asreflected in thefollowing table.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.





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


- 14
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





7.
            Stock Based
      Compensation–
      Cont’d





Date of
      grant
                  
                  Risk
      free
                    rate
                  
                  
                  Volatility
                    factor
                  
                  
                  Expected
                    Dividends
                  
                  
                  Forfeiture
                    rate
                  
                  Expected
                    life
                  
                  Exercise
                    price
                  
                  
                  Totalnumber
                    ofoptions
                    granted
                  
                  
                  Grant
      date
                    fair
      value
                  
                  
                  Stock-based
                    compensation
                    cost
      expensed
                    duringthethree
                    monthperiod
                    endedSept.
      30,
                    2010
                  
                  
                  Unexpended
                    Stock-based
                    compensation
                    costdeferred
                    overthevesting
                    period15-Jan-2010
                  
                  
                  2.61
                  %
                  
                  
                  137.23
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  5
      years
                  
                  $
                  0.25
                  
                  
                  
                  250,000
                  
                  
                  $
                  0.22
                  
                  
                  $
                  13,904
                  
                  
                  $
                  18,43817-Feb-2010
                  
                  
                  2.61
                  %
                  
                  
                  138.74
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  5
      years
                  
                  $
                  0.28
                  
                  
                  
                  100,000
                  
                  
                  $
                  0.25
                  
                  
                  $
                  6,256
                  
                  
                  $
                  9,45226-Apr-2010
                  
                  
                  2.61
                  %
                  
                  
                  145.58
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  5
      years
                  
                  $
                  0.23
                  
                  
                  
                  50,000
                  
                  
                  $
                  0.23
                  
                  
                  $
                  2,857
                  
                  
                  $
                  6,4281-Jun-2010
                  
                  
                  2.61
                  %
                  
                  
                  145.23
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  15 months
                  
                  $
                  0.25
                  
                  
                  
                  250,000
                  
                  
                  $
                  0.07
                  
                  
                  $
                  4,102
                  
                  
                  $
                  10,834Total
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  650,000
                  
                  
                  
                  
                  
                  
                  $
                  27,119
                  
                  
                  $
                  45,152





The
following table summarizes the options outstanding at September 30,
2010:





Outstanding, beginning of
      year
                  
                  
                  4,850,000Granted
                  
                  
                  -Expired
                  
                  
                  (200,000
                  )Exercised
                  
                  
                  (50,000
                  )Forfeited
                  
                  
                  -Outstanding at Sept. 30,
      2010
                  
                  
                  4,600,000Exercisable at Sept. 30,
      2010
                  
                  
                  4,279,166




September 30 , 2010, there was $ 45,152 of unrecognized expenses related to
non-vested stock-based compensation arrangements granted. The stock-based
compensation expense for the three -month period ended September 30 , 2010 was $ 27,119 .




- 15
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)






8.
            Fair Value of Financial
      Instruments





The fair values of financial assets and
financial liabilities measured in the balance sheet as of September 30, 2010 are
as follows:





Balance sheet
                    classification and
      nature
                  
                  Carrying
                    Amount
                    $
                  
                  
                  Quoted prices
                    in actice
                    markets for
                    identical
      assets
                    (Level 1)
                    $
                  
                  
                  Significant
                    observable
                    inputs
                    (Level 2)
                    $
                  
                  
                  Unobservable
                    inputs
                    (Level 3)
                    $AssetsCash and cash
      equivalents
                  
                  
                  611,405
                  
                  
                  
                  611,405Short Term
      Investments
                  
                  
                  587,565
                  
                  
                  
                  587,565Prepaid expenses and other
      receivables
                  
                  
                  178,739
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  178,739LiabilititesAccounts
      Payable
                  
                  
                  432,236
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  432,236Accrued
      Liabilities
                  
                  
                  105,215
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  105,215





The fair values of financial assets and
financial liabilities measured in the balance sheet as of June 30, 2010 are as
follows:





Balance sheet
                    classification and
      nature
                  
                  Carrying
                    Amount
                    $
                  
                  
                  Quoted prices
                    in actice
                    markets for
                    identical
      assets
                    (Level 1)
                    $
                  
                  
                  Significant
                    observable
                    inputs
                    (Level 2)
                    $
                  
                  
                  Unobservable
                    inputs
                    (Level 3)
                    $AssetsCash and cash
      equivalents
                  
                  
                  1,598,248
                  
                  
                  
                  1,598,248Short Term
      Investments
                  
                  
                  586,745
                  
                  
                  
                  586,745Prepaid expenses and other
      receivables
                  
                  
                  122,343
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  122,343LiabilititesAccounts
      Payable
                  
                  
                  93,410
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  93,410Accrued
      Liabilities
                  
                  
                  117,152
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  117,152





Fair value measurements of the
Corporation’s cash and cash equivalents and short term investments are
classified as Level 1 because such measurements are determined using quoted
prices in active markets for identical assets.  Fair value
measurements of prepaid expenses and other receivables, accounts payable and
accrued liabilities are classified as Level 3 because inputs are generally
unobservable and reflect management’s estimates of assumptions that market
participants would use in pricing the asset or
liability.


- 16
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





9.
            Commitments and
      Contingencies





On August 1, 2006, the Company acquired
the Pansy Lee Claims from Anglo Gold Mining Inc. in exchange for 1,850,000
shares of the Company’s common stock pursuant to an Asset Purchase Agreement
dated August 1, 2006 (the “Pansy Lee Purchase Agreement”).  Pursuant
to the Pansy Lee Purchase Agreement, in the event that any one or more claims
becomes a producing claim, our revenue is subject to a 2% net smelter return
royalty where net smelter returns are based upon gross revenue.  Gross
revenue would be calculated after commercial production commences and includes
the aggregate of the following amounts: revenue received by the Company from
arm’s length purchasers of all mineral products produced from the property, the
fair market value of all products sold by the Company to persons not dealing
with the Company at arms length and the Company’s share of the proceeds of
insurance on products.  From such revenue, the Company would be
permitted to deduct:  sales charges levied by any sales agent on the
sale of products; transportation costs for products; all costs, expenses and
charges of any nature whatsoever which are either paid or incurred by the
Company in connection with the refinement and beneficiation of products after
leaving the property and all insurance costs and taxes.  The 2% net
smelter royalty pertains to 8 of the 30 claims in this
group.





On September 14, 2007, the Company
engaged Lumos & Associates, Inc. (“Lumos”) to complete the regulatory
permitting process for the Company’s Mill in Mina, Nevada.  The total
consideration to be paid under the contract is approximately
$350,000.  The permitting process is being carried out in twelve
stages. The completion date has not been determined. The Company is required to
authorize in writing each stage of the work before the work proceeds. AsofSeptember 30, 2010, the Company had recorded
$323,924for this contract (June 30,
2010- $318,832).





The Company obtained 25 mineral claims
(the “Option Claims”), located in Elko County, Nevada pursuant to an option
agreement (the “Option Agreement”) dated as of May 1, 2008 (the “Date of
Closing”) with Nevada Eagle Resources, LLC and Steve Sutherland (together, the
“Optionees”).  The provisions of the Option Agreement included, among
others, payments of specified annual amounts ranging from $10,000 to $80,000 by
the Company to the Optionees over a period of ten years.  Effective
June 1, 2010, the Company and the Optionees agreed to terminate the Company’s
interests in the Option Claims pursuant to (1)payment by the Company of $8,750 to each
of the Optionees, (2) performance by the Company of such reclamation and
remediation as required to discharge the surface management bond posted by the
Company pursuant to a Notice of Intent filed with the BLM prior to undertaking
exploration activity on the Option Claims, and (3) conveyance by the Company to
Nevada Eagle Resources, LLC of the 124 mineral claims staked by the Company
after the Date of Closing that are within the Area of Interest described in the
Option Agreement.As of the date of this report, the
undertakings described in (1) and (3) above have been completed and (2) above is
in progress.The
25 Option Claims together with the 124 mineral claims staked by the Company have
been referred to by the Company as the “Medicine Claim
Group.”


- 17
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





9.
            Commitments and
      Contingencies–
      Cont’d





Effective as of June 23, 2008, the
Company appointed Mason Douglas as the President of the Company. Mr. Douglas is
also a director of the Company. In connection with the appointment, the Company
entered into a consulting services agreement with a corporation that is
controlled by Mr. Douglas (the “Consulting Agreement”). The Consulting Agreement
has a term of one year and is then automatically renewable. Either party may
terminate the Consulting Agreement upon 90 days notice to the other party.
During the term of the Consulting Agreement the Company will pay a fee of $8,500
per month and reimburse related business expenses. Mr. Douglas does not receive
a salary from the Company.





On December 8, 2008 IMC US entered into
a Mineral Rights Lease Agreement (the “Edgar Lease Agreement”) with the Earl
Edgar Mineral Trust (the “Edgar”) to lease certain mineral rights in Elko
County, Nevada described below (the “Edgar Property”).  The term of
the Edgar Lease Agreement is ten years and will automatically renew on the same
terms and conditions for additional ten-year periods, provided IMC US is
conducting exploration, development or mining either on the surface or
underground at the property.  The rent is to be paid each year on
January 1st.$1.00 per net acre was paid upon
execution of the Edgar Lease Agreement.  On January 1 of each year
commencing in 2010 and extending for so long as the Edgar Lease Agreement is in
effect, IMC US is obligated to make the following payments:





2010
              $1.00 per net
      acre2011
              $2.00 per net
      acre2012
              $2.00 per net
      acre2013
              $3.00 per net
      acre2014
              $3.00 per net
      acre2015
              $4.00 per net
      acre2016
              $4.00 per net
      acre2017
              $5.00 per net acre in each year
      for the duration of the Edgar Lease
  Agreement.





The Edgar Lease Agreement covers 100% of
the mineral rights on 1,120 acres of the Edgar Property (“Property A”) and 50%
of the mineral rights on 6,740 acres of the Edgar Property (“Property
B”).  Edgar is entitled to receive a royalty of $0.50 per ton for
material mined and removed from Property A and $0.25 per ton for material mined
and removed from Property B during the term of the Edgar Lease Agreement and any
renewal thereof.





On April 9, 2009,the Company and Edgar entered into an
Amendment to the Edgar Lease Agreement (the “Amendment”), effective as of
December 8, 2008.  The Amendment provides for Standard Steam LLC to
carry out exploration for geothermal energy sources on the Edgar Property after
obtaining the written consent of the Company.  The Amendment also
provides for other cooperation with Standard Steam LLC regarding mineral rights
onProperty B ofthe Edgar
Property.


- 18
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





9.
            Commitments and
      Contingencies–
      Cont’d





On May 20, 2009, IMC USengagedLumos to conduct base line studies for
the Blue Nose Project located in Lincoln County, Nevada with the intention of
determining if a suitable plant site can be located.  The study
includes analysis of rail and road access and environmental considerations that
could impede development.  The total consideration to be paid under
the contract is approximately $74,500.  On September 28, 2009, the
contract was amended to add an environmental assessment and plan of operations
for an additional amount of approximately $62,000.  The Company has to
authorize each phase of the work.  As ofSeptember 30, 2010,the Company had recorded total expenses
of $130,081pertaining to this contract with
Lumos(June 30, 2010- $114,576).





By letter dated November 27, 2009, the
U.S. Attorney’s Office asked for contribution from the Company for the cost of
putting out a fire that occurred on May 8, 2008 on approximately 451 acres of
land owned by the BLM.  The cost of putting out the fire and
rehabilitating the burned area was approximately $550,000.  The
Company has denied any responsibility for the fire and has alerted its liability
insurance carrier. The Company has not accrued any costs for this claim in its
financial statements.





On
November 30, 2009, the Company entered into a consulting services agreement with
CLL Consulting, LLC (“CLL”) to provide for business and administrative services.
The Consulting Agreement has a
term of one year and is automatically renewable thereafter. Either party may
terminate the Consulting Agreement upon 60 days notice. During the term of the
Consulting Agreement the Company will pay CLL a fee of $6,083 per month and
reimburse related business expenses





On November 30, 2009,IMC US entered into a Mineral
Rights  Agreement with Perdriau Investment Corp. (“Perdriau”) to
purchase 50% of the mineral rights, including all easements, rights of way and
appurtenant rights of any type that run with the mineral rights in certain
sections of Elko County, Nevada (the “Perdriau Property”).  The
purchase price was $10 per net acre.  IMC US purchased 340 net acres
for a total purchase price of $3,400. Perdriau will be entitled to receive a
royalty of $0.25 per ton for material mined and removed from the Perdriau
Property. Material mined and stored on the Perdriau Property or adjacent
property for reclamation purposes will not be subject to any royalty. Material
removed from the Perdriau Property for the purposes of testing or bulk sampling,
provided it does not exceed 50,000 tons, will also not be subject to any
royalty.  The royalty will be calculated and paid within 45 days after
the end of each calendar quarter.





On January 15, 2010, the Company entered
into an “Independent Contractor Agreement” with Karl Frost. Mr. Frost was given
the title of Chief Geologist of the Company and will be responsible for the
preparation and oversight of all geological programs and activities. The
Independent Contractor Agreement has a term of one year and is automatically
renewable thereafter. Either party may terminate the agreement upon 60 days
notice or in the case of breach or default with 5 days of written notice. During
the term of the agreement the Company will pay Mr. Frost a fee of $12,500 per
month and reimburse him for related business expenses.


- 19
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





9.
            Commitments and
      Contingencies–
      Cont’d





As of January 15, 2010, the Company
entered into a Property Lease Agreement with Eugene M. Hammond (the “Hammond
Lease”) for surface rights on 80 acres in Elko County, Nevada (the “Hammond
Surface Rights”).  The term of the Hammond Lease is five years and the
annual rent is $500.  The Company is responsible for the payment of
all real estate taxes on the Hammond Surface Rights.  During the term
of the Hammond Lease, the Company has the exclusive right to conduct exploration
and development work on the Hammond Surface Rights.  The results of
all drilling and exploration are the property of the Company.  The
Company is responsible for any environmental damage caused by the Company and
any reclamation costs required as a result of drilling and
testing.  The Company has an option to purchase the property covered
by the Hammond Lease for $15,000, less the amount paid in rent during the term
of the Hammond Lease.





Also as of January 15, 2010,
IMCUS entered into a Mineral Rights
Agreement with Eugene M. Hammond (the “Hammond Mineral Rights Agreement”)
pursuant to which the Company purchased a 25% interest in any and all minerals
extracted from 160 acres (the “Hammond Mineral Rights Property”) covered by the
Hammond Mineral Rights Agreement.  The purchase price was
$400.  In addition, the seller is entitled to receive a royalty of
$0.125 per ton on material mined and removed from the Hammond Mineral Rights
Property.  The Hammond Mineral Rights Agreement does not cover
petroleum.





As of February 1, 2010, the Company
entered into a Consulting Services Agreement to provide for receptionist and
administrative services at its Reno, Nevada corporate
headquarters.  Pursuant to this Agreement, the Company will pay
$51,000 per year for such services.





On March 25, 2010, IMC USengagedLumos to conduct the second phase of
base line studies for the Blue Nose Project located in Lincoln County, Nevada
with the intention of determining if a suitable plant site can be located with
emphasis on transportation access and environmental considerations that could
impede development.  The total consideration to be paid under the
contract is approximately $55,300. The Company is to authorize each phase of
work before the work proceeds. As ofSeptember 30, 2010,the Company had recorded total expenses
of $50,669pertaining to this contract with
Lumos(June 30, 2010- $36,011).





On May19, 2010, IMC USengaged Mine Development Associates,
Inc. to complete a Resource Estimate, Pit Optimization and 43-101 Report for the
Blue Nose Project located in Lincoln County, Nevada.The total consideration to be paid under
the contract is approximately $46,000.AsofSeptember30, 2010,the Company had recorded totalexpensesof $2,529pertaining to this contract(June 30, 2010- $0).





As of June 1, 2010, the Company entered
into a Consulting Agreement with Teatyn Enterprises Inc. (“Teatyn”) to provide
business consulting and investor relations consulting.  Under the
agreement, Teatyn will receive a monthly fee of CAD $10,000, subject to monthly
reductions of up to CAD $3,500 if Teatyn enters into one or more agreements to
provide similar services to other companies of which the Company’s Chief
Executive Officer is also a director or officer.  The agreement has an
initial term of one year and can be renewed on such terms as may be agreed upon
between the parties.  The agreement may be terminated at any time by
the Company upon 30-days prior written notice or by Teatyn upon the occurrence
of certain events defined in the agreement.  In addition the Company
granted Teatyn options to purchase up to 250,000 common shares at an exercise
price of $0.25 per share.  These options vest at the rate of 20,833
options per month and expire on the date that is 90 days after the termination
of the Consulting Agreement.  These options were not granted pursuant
to the Company’s 2006 Stock Option Plan.  Upon exercise of the
options, Teatyn will receive restricted shares which cannot be re-sold unless
their re-sale is registered by the Company pursuant to the Securities Act of
1933 or there is an exemption for the re-sale of such shares such as the
exemption afforded by Rule 144.


- 20
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





9.
            Commitments and
      Contingencies–
      Cont’d





The Company has entered into operating
leases for its office space and certain office furniture and equipment. Rent
payments associated with those leases for thethree month periodsendedSeptember30, 2010, andSeptember30, 2009, were $4,197and $7,708, respectively.  As ofSeptember30, 2010, the Company’s estimated
future minimum cash payments under non-cancelable operating leases for the years
ending June 30, 2011, June 30, 2012, and June 30, 2013, are $23,534, $16,572, and $338, respectively.





Maintaining Claims in Good
Standing





The Company is required to pay to the
BLM on or before September 1stof each year, a fee in the amount of
$140 per mineral claim held by the Company.  The total amount paid on
August 31, 2010,was $159,740 for 1,141claims held by the Company at that
date.





Under legislation enacted in Nevada in
March 2010, claims owners are required to pay the State of Nevada an annual fee
based upon a tiered system that requires fees ranging from $70 to $189 per
claim, depending upon the total number of claims in Nevada that an owner
holds.  The Company estimates, based uponthe 1,141claims held in Nevada as ofSeptember1, 2010, that its annual fee will be $85 per
claim, for a total of
$96,985,with the first
such annual fee payable no later than June 1, 2011.





The Company is also required to pay
annual fees to counties in which the claims are held.In October 2010, the Company paid $12,188to nine counties in Nevadafor annual claims-related
fees.





The Company also holds 9 patented claims
and 2 leased patented claims in Nevada.  A patented claim is fee
simple title to the property.  Patented claims are subject to taxes
assessed by the local community based on assessment rates set
annually.





The Companyholds20mineral exploration permits covering20sections or portions of sections in the
State of Arizona.Mineral exploration permits have a
duration of one year from the date of issuance.  The permits can be
renewed for up to four additional one-year terms for a total of five years and
provide the holder of the permit with an exclusive right to explore for minerals
within the state land covered by the permit and to apply for mineral leases to
such land.  The holder of a permit may remove from the land only the
amount of material required for sampling and testing and is responsible for any
damage or destruction caused by the holder’s exploration
activities.  The holder of a permit is entitled to ingress and egress
to the covered site along routes approved by the Arizona State Land
Department.  IMCUS has posted a bond required by the
State of Arizona to back any reclamation required as a result of work
performed.  The permit is renewable if the holder has expended not
less than $10.00 per acre during each of the first two year-long periods and
$20.00 per acre during each of the next three year-long periods.  The
permit fee is $2.00 per acre for the first two years and $1.00 per acre per year
for the following three years.  Upon termination of a mineral
exploration permit, the State of Arizona is entitled to information collected by
the permit holder.  In the event that a permit holder discovers a
valuable mineral deposit, the permit holder may apply to the Arizona State Land
Department for a mineral lease having a term of 20 years and renewable for an
additional 20 years.  A permit holder shall be the preferred recipient
of the mineral lease, provided that all applicable requirements are
met.  A mineral lease entitles the lessee to develop and establish a
mine on the leased premises, provided that a mine plan and all necessary
approvals are obtained.


- 21
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





10.
            Related Party
      Transactions





Threemonths
endedSeptember
30,
2010





The Company’s Corporate Secretary
received $12,875during thethree-month period endedSeptember 30, 2010.





A corporation owned and operated by the
Company’s President who is also a member of the Company’s Board of Directors,
received $25,500during thethree-month period endedSeptember 30, 2010.





The Company’sChief Financial Officer, received
$5.686during thethree-month period endedSeptember 30, 2010.





Threemonths
endedSeptember
30,
2009





A formerDirector of the Company received
$46,125during thethree-month period endedSeptember 30, 2009in connection with services he performed
for the Company as a senior geologist.





The formerCorporate Secretary received
$10,789during thethree-month period endedSeptember 30, 2009.





A corporation owned and operated by the
Company’s President who is also a member of the Company’s Board of Directors,
received $25,500during thethree-month period endedSeptember 30, 2009.





11.
              Subsequent
      Events





On October 14, 2010 SRCsigned a letter of intent with
International Millennium Mining Corp. (“IMMC”) to sell an 85% interest in SRC’s
NL Extension Projects Claim Group (the “NL Project”).  The NL Project
consists of 18 mineral claims located in Esmeralda County, Nevada.Pursuant to the letter of intent, SRC
will receive $350,000 and 1,925,000 shares of IMMC for the NL
Project.  SRC will retain a 15% joint venture interest in the property
as well as a 2% net smelter royalty.  The terms of the sale provide
forthe abovepaymentsof cash and issuances of stockto SRC and to occur over a
five-year period.  If the NL Project reaches feasibility based upon
criteria described in the letter of intent, SRC will be required to fund its
portion of the operating budget in order to retain its 15% joint venture
interest.The
foregoing agreement is subject to SRC and IMMC entering into definitive
agreements and, in the case of IMMC, approval by the TSX-Venture exchange of
Canada.


- 22
-


INFRASTRUCTURE MATERIALS
CORP.


(AN EXPLORATION STAGE MINING
COMPANY)


Condensed Notes to Interim Consolidated
Financial Statements


September 30, 2010


(Amounts expressed in US
Dollars)


(Unaudited-Prepared by
Management)





11.
            Subsequent Events–
  Cont’d





On October 15, 2010, 300,000 options
issued in accordance with the Company’s 2006 Stock Option Plan
expired.





In October 2010, the Company paid $12,188to nine counties in Nevadafor annual claims-related
fees.





12.
            Revisions to Financial Statements
      for fiscal years 2009 and
2008





The financial statementsfor the years ended June 30, 2009 and
June 30, 2008 wererevised
to incorporate additional general and administrationexpense relating to warrant
modification expenses
incurredin fiscal years2009and2008, following analyses of
modifications to the Company’s then outstanding warrants.These analyses were conducted in 2010.
None of these financial statement revisions generated any changes to the
comparative amounts for the three-month period ended September 30, 2009, as
disclosed in these interim consolidated financial statements for the three-month
period ended September 30, 2010.


- 23
-


MANAGEMENT'S
DISCUSSION AND ANALYSIS OF


FINANCIAL
CONDITION AND RESULTS OF OPERATION





Our name
isInfrastructure
Materials Corp. and we sometimes refer to ourselves in this report as
“Infrastructure Materials” or “Infrastructure”, or “the Company” or as “we,”
“our,” or “us.”





Forward-Looking
Statements





Except for historical information, this
report contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934.  Such forward-looking statements involve risks and uncertainties,
including, among other things, statements regarding our business strategy,
exploration strategy, future revenues and anticipated costs and expenses.
 Such forward-looking statements include, among others, those statements
including the words “expects,” “anticipates,” “intends,” “believes” and similar
language.  Our actual results may differ significantly from those projected
in the forward-looking statements.  Factors that might cause or contribute
to such differences include, but are not limited to, those discussed herein as
well as in the “RISK FACTORS” section herein.   You are cautioned not
to place undue reliance on the forward-looking statements, which speak only as
of the date of this report.  We undertake no obligation to publicly
release any revisions to the forward-looking statements or reflect events or
circumstances after the date of this document.





Although we believe that the
expectations reflected in these forward-looking statements are based on
reasonable assumptions, there are a number of risks and uncertainties that could
cause actual results to differ materially from such forward-looking
statements.





FOR THE THREE MONTH PERIOD ENDEDSEPTEMBER 30, 2010





PLAN OF
OPERATIONS





We will require additional capital to
implement the further exploration and possible development of our claim
groups.  We expect to raisethis capital through private placements
of our securities or throughdebt financingor some combination of the
foregoing.We
have limited assets and no “reserves”in accordance with the definitions
adopted by the Securities and Exchange Commission, and there is no assurance
that any exploration programs that we undertake will establish
reserves.





Discussion of Operations and Financial
Condition





Three Month Period endedSeptember 30, 2010





The
Company 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 of
September 30, 2010, we had accumulated losses since the Company’s inception of
$18,263,620.  Our ability to emerge from the exploration stage and
conduct mining operations is dependent, in large part, upon our raising
additional capital.  We are continuing our efforts to raise capital
and are moving forward with exploration of our projects.





The following diagram illustrates the
Company’s present structure and ownership of its mineral properties and Milling
Facility:


- 24
-











During the three-month period ended
September 30, 2010, the Company devoted significant resources toward the
exploration of IMC US’s Blue Nose limestone project.The Blue NoseProject(the “Project”)consists of 301 unpatented, lode mineral
claims located in Lincoln County, Nevada,andcovers approximately 6,219 acres.On July 12, 2010, the United States
Bureau of Land Management (the “BLM”) approved the Company’s Plan of Operations
for the Project.On July 14, 2010, the
Company posted a reclamation bond in the amount of $240,805 with the BLM in
connection with the Project. The reclamation bond backs the Company’s
obligations under the Plan of Operations to restore the site and correct
environmental damage (if any) caused by the Company’s activities on the Project.
Under the Plan of Operations, the Company conductedapproximately35 days of grid drilling.  The Company
drilled28 holesto depths ranging between 150 and 900
feetfor a total of
approximately 17,000 feet.As of the date of this report, the
Company has not received all of the assay results.Once the remaining assay results are
received from the laboratory, the Company will proceed with building the cross
sections and assay files for theresource calculations that will beconducted byan independent consultant.





Our efforts going forward through our
current fiscal year ending June 30, 2011, will be concentrated on development of
the Blue Nose Project and the search for other limestone deposits in strategic
locations that can service areas with a shortage of cement
production.





The Companyisalsocontinuingthe evaluation of its silver/base metal
projects andhasdetermined that the Pansy
Lee,Klondike, Silver Queen/MohawkandNL ExtensionProjectscurrentlyprovide the best opportunity for
development of resources that could go to production. Permitting of the Red Rock
mill site at Mina, Nevada is close to completion.  We areseekinga sale of the silver properties and
milling facility held by Silver Reserve.Also see “Subsequent Events”
below.





Stock Based
Compensation





On April 20, 2006, we adopted the 2006
Stock Option Plan (the "Plan") under which our officers, directors, consultants,
advisors and employees may receive stock options.  The aggregate
number of shares of common stock that may be issued under the plan is
5,000,000.  The purpose of the Plan is to assist us in attracting and
retaining selected individuals whocancontribute to our successbyservingas directors, officers, consultants,
advisors, and employees ofthe Company, 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 amended from
time to time,or "unqualified stock
options."


- 25
-


No options were granted during the
threemonthsendedSeptember 30, 2010.  On September
30, 2010, 50,000 options were exercised and
200,000 options expired.





SELECTED
FINANCIAL INFORMATION





Three months
                        
                        
                        Three monthsended
                        
                        
                        endedSept. 30,
    2010
                        
                        
                        Sept. 30, 2009Revenues
                        
                        Nil
                        
                        
                        NilNet (Loss)
                        
                        $
                        (1,327,922
                        )
                        
                        $
                        (1,265,869
                        )(Loss) per share-basic and
      diluted
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.02
                        )As of
                        
                        
                        As ofSept. 30, 2010
                        
                        
                        June 30, 2010Total
Assets
                        
                        $
                        2,826,727
                        
                        
                        $
                        3,793,141Total
      Liabilities
                        
                        $
                        537,451
                        
                        
                        $
                        210,562Cash dividends declared per
      share
                        
                        Nil
                        
                        
                        Nil





Total assets as ofSeptember 30, 2010 include cash and cash equivalents
of $611,405, short term investments of
$587,565, prepaid expenses and other receivables
of $178,739, capital assets of $934,493net of depreciation, and mineral
property interests of $514,525.  As of June 30, 2010total assets includes cash and cash
equivalents of $1,598,248, short-term investments of
$586,745, prepaid expenses of $122,343,capital assets of $971,280, net of depreciationand mineral property interests of
$514,525.





Revenues





No revenue was generated by the
Company’s operations during the three-month periods endedSeptember 30, 2010 andSeptember 30, 2009.The Company is an exploration stage
mining company and has not yet realized any revenue from its
operations.


- 26
-


Net Loss





The
Company’s expenses are reflected in the Statements of Operation under the
category of Operating Expenses.  To meet the criteria of United States
generally accepted accounting principles (“GAAP”), all mineral property
acquisition and exploration costs are expensed as incurred.  Mineral
property acquisition costs are initially capitalized in accordance with ASC
805-20-55-37, previously referenced as FASB Emerging Issues Task Force ("EITF")
Issue 04-2.  The Company assesses the carrying costs for impairment
under ASC 930 at each fiscal quarter end.   The Company has determined
that, except for the amount capitalized as Mineral Property Interests for
$514,525 pursuant to the acquisition of CIC, all property payments are impaired
and accordingly the Company has written off the acquisition costs to project
expenses.  When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property are capitalized.  For the
purpose of preparing financial information, all costs associated with a property
that has the potential to add to the Company's proven and probable reserves are
expensed until a final feasibility study demonstrating the existence of proven
and probable reserve is completed.  Except for the Mineral Property
Interests discussed above, no costs have been capitalized in the periods covered
by these financial statements.  Once capitalized, such costs will be
amortized using the units-of-production method over the estimated life of the
probable reserve.





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





(a) General
and AdministrationExpense





Included in operating expenses for the
three-month period endedSeptember 30, 2010 is general and
administrationexpense of $198,759as compared with $449,197for the three-month period endedSeptember 30, 2009.General and administrationexpenseconsists ofprofessional, consulting, office and
general and other miscellaneous costs.General and administrationexpense represents approximately15% of the total operating expense for thethree-month period endedSeptember 30, 2010 and approximately35% of the total operating expense for thethree-month period endedSeptember 30, 2009.  General and
administrationexpense decreased by $250,438in the currentthreemonth period, as compared to the
similarthreemonth period for the prior year. The
decrease in this expense is mainly due to a decrease in consulting fees of
approximately $182,000, and a decrease in stock based
compensation costs of approximately $60,000.





(b)Project
Expense





Included in operating expenses for the
three-month period endedSeptember 30, 2010 is project expense of
$1,093,390as compared with $785,770for the three-month period endedSeptember 30, 2009. Project expense is a significant
expense and it represents approximately82% of the total operating expense for thethree-month period endedSeptember 30, 2010 and approximately61% of the total operating expense for thethree-month period endedSeptember 30, 2009.


- 27
-


Liquidity and Capital
Resources





The following table summarizes the
Company’s cash flow and cash in hand for thethree-month periods:





Sept. 30,
    2010
                  
                  
                  Sept. 30,
    2009Cash and cash
      equivalents
                  
                  $
                  611,405
                  
                  
                  $
                  268,475Working
    capital
                  
                  $
                  840,258
                  
                  
                  $
                  2,520,052Cash (used) in operating
      activities
                  
                  $
                  (993,523
                  )
                  
                  $
                  (939,993
                  )Cash provided/(used) in investing
      activities
                  
                  $
                  (820
                  )
                  
                  $
                  788,202Cash provided by financing
      activities
                  
                  $
                  7,500
                  
                  
                  nil





AsofSeptember 30, 2010 the Company had working capital
of $840,258as compared to $2,520,052asofSeptember 30, 2009.





Off-Balance Sheet
Arrangements





The Company had no off-balance sheet
arrangements as ofSeptember 30, 2010 andSeptember 30, 2009.





Contractual Obligations and Commercial
Commitments





On August 1, 2006, the Company acquired
the Pansy Lee Claims from Anglo Gold Mining Inc. in exchange for 1,850,000
shares of the Company’s common stock pursuant to an Asset Purchase Agreement
dated August 1, 2006 (the “Pansy Lee Purchase Agreement”).  Pursuant
to the Pansy Lee Purchase Agreement, in the event that any one or more claims
becomes a producing claim, our revenue is subject to a 2% net smelter return
royalty where net smelter returns are based upon gross revenue.  Gross
revenue would be calculated after commercial production commences and includes
the aggregate of the following amounts: revenue received by the Company from
arm’s length purchasers of all mineral products produced from the property, the
fair market value of all products sold by the Company to persons not dealing
with the Company at arms length and the Company’s share of the proceeds of
insurance on products.  From such revenue, the Company would be
permitted to deduct:  sales charges levied by any sales agent on the
sale of products; transportation costs for products; all costs, expenses and
charges of any nature whatsoever which are either paid or incurred by the
Company in connection with the refinement and beneficiation of products after
leaving the property and all insurance costs and taxes.  The 2% net
smelter royalty pertains to 8 of the 30 claims in this
group.





On September 14, 2007, the Company
engaged Lumos & Associates, Inc. (“Lumos”) to complete the regulatory
permitting process for the Company’s Mill in Mina, Nevada.  The total
consideration to be paid under the contract is approximately
$350,000.  The permitting process is being carried out in twelve
stages. The completion date has not been determined. The Company is required to
authorize in writing each stage of the work before the work proceeds. AsofSeptember 30, 2010, the Company had recorded
$323,924for this contract (June 30,
2010- $318,832).





The Company obtained 25 mineral claims
(the “Option Claims”), located in Elko County, Nevada pursuant to an option
agreement (the “Option Agreement”) dated as of May 1, 2008 (the “Date of
Closing”) with Nevada Eagle Resources, LLC and Steve Sutherland (together, the
“Optionees”).  The provisions of the Option Agreement included, among
others, payments of specified annual amounts ranging from $10,000 to $80,000 by
the Company to the Optionees over a period of ten years.  Effective
June 1, 2010, the Company and the Optionees agreed to terminate the Company’s
interests in the Option Claims pursuant to (1)payment by the Company of $8,750 to each
of the Optionees, (2) performance by the Company of such reclamation and
remediation as required to discharge the surface management bond posted by the
Company pursuant to a Notice of Intent filed with the BLM prior to undertaking
exploration activity on the Option Claims, and (3) conveyance by the Company to
Nevada Eagle Resources, LLC of the 124 mineral claims staked by the Company
after the Date of Closing that are within the Area of Interest described in the
Option Agreement.As of the date of this report, the
undertakings described in (1) and (3) above have been completed and (2) above is
in progress.The
25 Option Claims together with the 124 mineral claims staked by the Company have
been referred to by the Company as the “Medicine Claim
Group.”


- 28
-


Effective as of June 23, 2008, the
Company appointed Mason Douglas as the President of the Company. Mr. Douglas is
also a director of the Company. In connection with the appointment, the Company
entered into a consulting services agreement with a corporation that is
controlled by Mr. Douglas (the “Consulting Agreement”). The Consulting Agreement
has a term of one year and is then automatically renewable. Either party may
terminate the Consulting Agreement upon 90 days notice to the other party.
During the term of the Consulting Agreement the Company will pay a fee of $8,500
per month and reimburse related business expenses. Mr. Douglas does not receive
a salary from the Company.





On December 8, 2008 IMC US entered into
a Mineral Rights Lease Agreement (the “Edgar Lease Agreement”) with the Earl
Edgar Mineral Trust (the “Edgar”) to lease certain mineral rights in Elko
County, Nevada described below (the “Edgar Property”).  The term of
the Edgar Lease Agreement is ten years and will automatically renew on the same
terms and conditions for additional ten-year periods, provided IMC US is
conducting exploration, development or mining either on the surface or
underground at the property.  The rent is to be paid each year on
January 1st.$1.00 per net acre was paid upon
execution of the Edgar Lease Agreement.  On January 1 of each year
commencing in 2010 and extending for so long as the Edgar Lease Agreement is in
effect, IMC US is obligated to make the following payments:





2010
              $1.00 per net
      acre2011
              $2.00 per net
      acre2012
              $2.00 per net
      acre2013
              $3.00 per net
      acre2014
              $3.00 per net
      acre2015
              $4.00 per net
      acre2016
              $4.00 per net
      acre2017
              $5.00 per net acre in each year
      for the duration of the Edgar Lease
  Agreement.





The Edgar Lease Agreement covers 100% of
the mineral rights on 1,120 acres of the Edgar Property (“Property A”) and 50%
of the mineral rights on 6,740 acres of the Edgar Property (“Property
B”).  Edgar is entitled to receive a royalty of $0.50 per ton for
material mined and removed from Property A and $0.25 per ton for material mined
and removed from Property B during the term of the Edgar Lease Agreement and any
renewal thereof.





On April 9, 2009,the Company and Edgar entered into an
Amendment to the Edgar Lease Agreement (the “Amendment”), effective as of
December 8, 2008.  The Amendment provides for Standard Steam LLC to
carry out exploration for geothermal energy sources on the Edgar Property after
obtaining the written consent of the Company.  The Amendment also
provides for other cooperation with Standard Steam LLC regarding mineral rights
onProperty B ofthe Edgar
Property.


- 29
-


On May 20, 2009, IMC USengagedLumos to conduct base line studies for
the Blue Nose Project located in Lincoln County, Nevada with the intention of
determining if a suitable plant site can be located.  The study
includes analysis of rail and road access and environmental considerations that
could impede development.  The total consideration to be paid under
the contract is approximately $74,500.  On September 28, 2009, the
contract was amended to add an environmental assessment and plan of operations
for an additional amount of approximately $62,000.  The Company has to
authorize each phase of the work.  As ofSeptember 30, 2010,the Company had recorded total expenses
of $130,081pertaining to this contract with
Lumos(June 30, 2010- $114,576).





By letter dated November 27, 2009, the
U.S. Attorney’s Office asked for contribution from the Company for the cost of
putting out a fire that occurred on May 8, 2008 on approximately 451 acres of
land owned by the BLM.  The cost of putting out the fire and
rehabilitating the burned area was approximately $550,000.  The
Company has denied any responsibility for the fire and has alerted its liability
insurance carrier. The Company has not accrued any costs for this claim in its
financial statements.





On
November 30, 2009, the Company entered into a consulting services agreement with
CLL Consulting, LLC (“CLL”) to provide for business and administrative services.
The Consulting Agreement has a
term of one year and is automatically renewable thereafter. Either party may
terminate the Consulting Agreement upon 60 days notice. During the term of the
Consulting Agreement the Company will pay CLL a fee of $6,083 per month and
reimburse related business expenses





On November 30, 2009,IMC US entered into a Mineral
Rights  Agreement with Perdriau Investment Corp. (“Perdriau”) to
purchase 50% of the mineral rights, including all easements, rights of way and
appurtenant rights of any type that run with the mineral rights in certain
sections of Elko County, Nevada (the “Perdriau Property”).  The
purchase price was $10 per net acre.  IMC US purchased 340 net acres
for a total purchase price of $3,400. Perdriau will be entitled to receive a
royalty of $0.25 per ton for material mined and removed from the Perdriau
Property. Material mined and stored on the Perdriau Property or adjacent
property for reclamation purposes will not be subject to any royalty. Material
removed from the Perdriau Property for the purposes of testing or bulk sampling,
provided it does not exceed 50,000 tons, will also not be subject to any
royalty.  The royalty will be calculated and paid within 45 days after
the end of each calendar quarter.





On January 15, 2010, the Company entered
into an “Independent Contractor Agreement” with Karl Frost. Mr. Frost was given
the title of Chief Geologist of the Company and will be responsible for the
preparation and oversight of all geological programs and activities. The
Independent Contractor Agreement has a term of one year and is automatically
renewable thereafter. Either party may terminate the agreement upon 60 days
notice or in the case of breach or default with 5 days of written notice. During
the term of the agreement the Company will pay Mr. Frost a fee of $12,500 per
month and reimburse him for related business expenses.





As of January 15, 2010, the Company
entered into a Property Lease Agreement with Eugene M. Hammond (the “Hammond
Lease”) for surface rights on 80 acres in Elko County, Nevada (the “Hammond
Surface Rights”).  The term of the Hammond Lease is five years and the
annual rent is $500.  The Company is responsible for the payment of
all real estate taxes on the Hammond Surface Rights.  During the term
of the Hammond Lease, the Company has the exclusive right to conduct exploration
and development work on the Hammond Surface Rights.  The results of
all drilling and exploration are the property of the Company.  The
Company is responsible for any environmental damage caused by the Company and
any reclamation costs required as a result of drilling and
testing.  The Company has an option to purchase the property covered
by the Hammond Lease for $15,000, less the amount paid in rent during the term
of the Hammond Lease.


- 30
-


Also as of January 15, 2010,
IMCUS entered into a Mineral Rights
Agreement with Eugene M. Hammond (the “Hammond Mineral Rights Agreement”)
pursuant to which the Company purchased a 25% interest in any and all minerals
extracted from 160 acres (the “Hammond Mineral Rights Property”) covered by the
Hammond Mineral Rights Agreement.  The purchase price was
$400.  In addition, the seller is entitled to receive a royalty of
$0.125 per ton on material mined and removed from the Hammond Mineral Rights
Property.  The Hammond Mineral Rights Agreement does not cover
petroleum.





As of February 1, 2010, the Company
entered into a Consulting Services Agreement to provide for receptionist and
administrative services at its Reno, Nevada corporate
headquarters.  Pursuant to this Agreement, the Company will pay
$51,000 per year for such services.





On March 25, 2010, IMC USengagedLumos to conduct the second phase of
base line studies for the Blue Nose Project located in Lincoln County, Nevada
with the intention of determining if a suitable plant site can be located with
emphasis on transportation access and environmental considerations that could
impede development.  The total consideration to be paid under the
contract is approximately $55,300. The Company is to authorize each phase of
work before the work proceeds. As ofSeptember 30, 2010,the Company had recorded total expenses
of $50,669pertaining to this contract with
Lumos(June 30, 2010- $36,011).





On May19, 2010, IMC USengaged Mine Development Associates,
Inc. to complete a Resource Estimate, Pit Optimization and 43-101 Report for the
Blue Nose Project located in Lincoln County, Nevada.The total consideration to be paid under
the contract is approximately $46,000.AsofSeptember30, 2010,the Company had recorded totalexpensesof $2,529pertaining to this contract(June 30, 2010- $0).





As of June 1, 2010, the Company entered
into a Consulting Agreement with Teatyn Enterprises Inc. (“Teatyn”) to provide
business consulting and investor relations consulting.  Under the
agreement, Teatyn will receive a monthly fee of CAD $10,000, subject to monthly
reductions of up to CAD $3,500 if Teatyn enters into one or more agreements to
provide similar services to other companies of which the Company’s Chief
Executive Officer is also a director or officer.  The agreement has an
initial term of one year and can be renewed on such terms as may be agreed upon
between the parties.  The agreement may be terminated at any time by
the Company upon 30-days prior written notice or by Teatyn upon the occurrence
of certain events defined in the agreement.  In addition the Company
granted Teatyn options to purchase up to 250,000 common shares at an exercise
price of $0.25 per share.  These options vest at the rate of 20,833
options per month and expire on the date that is 90 days after the termination
of the Consulting Agreement.  These options were not granted pursuant
to the Company’s 2006 Stock Option Plan.  Upon exercise of the
options, Teatyn will receive restricted shares which cannot be re-sold unless
their re-sale is registered by the Company pursuant to the Securities Act of
1933 or there is an exemption for the re-sale of such shares such as the
exemption afforded by Rule 144.





The Company has entered into operating
leases for its office space and certain office furniture and equipment. Rent
payments associated with those leases for thethree month periodsendedSeptember30, 2010, andSeptember30, 2009, were $4,197and $7,708, respectively.  As ofSeptember30, 2010, the Company’s estimated
future minimum cash payments under non-cancelable operating leases for the years
ending June 30, 2011, June 30, 2012, and June 30, 2013, are $23,534, $16,572, and $338, respectively.


- 31
-


Maintaining Claims in Good
Standing





The Company is required to pay to the
BLM on or before September 1stof each year, a fee in the amount of
$140 per mineral claim held by the Company.  The total amount paid on
August 31, 2010,was $159,740 for 1,141claims held by the Company at that
date.





Under legislation enacted in Nevada in
March 2010, claims owners are required to pay the State of Nevada an annual fee
based upon a tiered system that requires fees ranging from $70 to $189 per
claim, depending upon the total number of claims in Nevada that an owner
holds.  The Company estimates, based uponthe 1,141claims held in Nevada as ofSeptember1, 2010, that its annual fee will be $85 per
claim, for a total of
$96,985,with the first
such annual fee payable no later than June 1, 2011.





The Company is also required to pay
annual fees to counties in which the claims are held.In October 2010, the Company paid $12,188to nine counties in Nevadafor annual claims-related
fees.





The Company also holds 9 patented claims
and 2 leased patented claims in Nevada.  A patented claim is fee
simple title to the property.  Patented claims are subject to taxes
assessed by the local community based on assessment rates set
annually.





The Companyholds20mineral exploration permits covering20sections or portions of sections in the
State of Arizona.Mineral exploration permits have a
duration of one year from the date of issuance.  The permits can be
renewed for up to four additional one-year terms for a total of five years and
provide the holder of the permit with an exclusive right to explore for minerals
within the state land covered by the permit and to apply for mineral leases to
such land.  The holder of a permit may remove from the land only the
amount of material required for sampling and testing and is responsible for any
damage or destruction caused by the holder’s exploration
activities.  The holder of a permit is entitled to ingress and egress
to the covered site along routes approved by the Arizona State Land
Department.  IMCUS has posted a bond required by the
State of Arizona to back any reclamation required as a result of work
performed.  The permit is renewable if the holder has expended not
less than $10.00 per acre during each of the first two year-long periods and
$20.00 per acre during each of the next three year-long periods.  The
permit fee is $2.00 per acre for the first two years and $1.00 per acre per year
for the following three years.  Upon termination of a mineral
exploration permit, the State of Arizona is entitled to information collected by
the permit holder.  In the event that a permit holder discovers a
valuable mineral deposit, the permit holder may apply to the Arizona State Land
Department for a mineral lease having a term of 20 years and renewable for an
additional 20 years.  A permit holder shall be the preferred recipient
of the mineral lease, provided that all applicable requirements are
met.  A mineral lease entitles the lessee to develop and establish a
mine on the leased premises, provided that a mine plan and all necessary
approvals are obtained.





Cash
Requirements





AtSeptember 30, 2010, the Company had cash and cash
equivalents of $611,405, short-term investments of
$587,565andprepaid expenses of $178,739for total current assets of
$1,377,709.





Our ability to incur planned Project
expenses is subject to permitting programs with the BLM and results of the
drilling as it progresses.  The Company has no firm commitment for
additional financing and may not be able to incur planned Project expenses
unless further capital is raised.


- 32
-


The Company hopes to be able to sell
part or all of its precious and base metal projects and its Red Rock Mill or its
wholly owned subsidiary, Silver Reserve Corp., that controls these assets, and
use the proceeds for exploration and drilling on the Company’s limestone
projects.





Subsequent Events





The following events occurred subsequent
toSeptember 30, 2010:





On October 14, 2010 SRCsigned a letter of intent with
International Millennium Mining Corp. (“IMMC”) to sell an 85% interest in SRC’s
NL Extension Projects Claim Group (the “NL Project”).  The NL Project
consists of 18 mineral claims located in Esmeralda County, Nevada.Pursuant to the letter of intent, SRC
will receive $350,000 and 1,925,000 shares of IMMC for the NL
Project.  SRC will retain a 15% joint venture interest in the property
as well as a 2% net smelter royalty.  The terms of the sale provide
forthe abovepaymentsof cash and issuances of stockto SRC and to occur over a
five-year period.  If the NL Project reaches feasibility based upon
criteria described in the letter of intent, SRC will be required to fund its
portion of the operating budget in order to retain its 15% joint venture
interest.The
foregoing agreement is subject to SRC and IMMC entering into definitive
agreements and, in the case of IMMC, approval by the TSX-Venture exchange of
Canada.





On October 15, 2010, 300,000 options
issued in accordance with the Company’s 2006 Stock Option Plan
expired.





In October 2010, the Company paid $12,188to nine counties in Nevadafor annual claims-related
fees.





Item
3.  Quantitative and Qualitative Disclosures About Market
Risk





Not
Applicable.





Item
4. Controls and Procedures





CONTROLS AND
PROCEDURES





Based on an evaluation, conducted by our
Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as required by
Exchange Act Rule 13a-15(e), they concluded that our disclosure controls and
procedures were effective as ofSeptember 30, 2010, to ensure that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act are:





1.
            recorded, processed, summarized
      and reported within the time periods specified by the SEC's rules and
      forms, and





2.
            accumulated and communicated to
      management, including the Chief Executive Officer and Chief Financial
      Officer, as appropriate to allow timely decisions regarding required
      disclosure.


- 33
-


Management believes that potential
weaknesses in the Company’s internal controls may arise as a result of a lack of
segregation of duties and the existence of related party
transactions.Management has added compensating
controls to address the lack of segregation of duties and plans to add further
controls in the future.  In connection with related party
transactions, management and the Board have required independent valuations
prior to engaging in related party transactions that are not in the ordinary
course of business.  Management has no evidence of any breakdown in
its internal controls and continues to explore methods of reducing and
minimizing the risk of a material misstatement in the Company’s financial
statements.




Changes in Internal
Controls





During the quarter endedSeptember 30, 2010, there have been no changes to
the Company’s internal controls over financial reporting that have materially
affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.


- 34
-





PART
II: OTHER INFORMATION





ITEM
1:  LEGAL PROCEEDINGS:





The
Company is not a party to any pending legal proceeding or litigation and none of
the Company’s property is the subject of a pending legal
proceeding.





ITEM
1A:                  RISK
FACTORS:





The following are certain risk factors
that could affect our business, financial condition, operating results and cash
flows.  These risk factors should be considered in connection with
evaluating the forward-looking statements because they could cause actual
results to differ materially from those expressed in any forward-looking
statement.  The risk factors highlighted below are not the only ones
we face. If any of these events actually occur, our business, financial
condition, operating results or cash flows could be negatively
affected.





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,
limited working capital and no commitments to obtain additional
financing.  The Company will require additional working capital to
carry out its exploration programs.  The Company has no operating
history upon which anevaluation 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 preserve the Company’s
    Properties.





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





Because the Company has no operating
revenue, it expects to incur operating losses in future periods asit 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.


- 35
-




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




We will require significant additional
financing in order to continue our exploration activities and our assessment of
the commercial viability of our properties.  There can be no assurance
that we will be successful in our efforts to raise these require funds, or on
terms satisfactory to us.  The continued exploration of current and
future mineral properties and the development of our business will depend upon
our ability to establish the commercial viability of our properties and to
ultimately develop cash flow from operations and reach profitable operations. We
currently are in an exploration stage and we have no revenue from operations and
we are experiencing significant cash outflow from operating
activities.  If we are unable to obtain additional financing, we will
not be able to continue our exploration activities and our assessment of the
commercial viability of our precious metal and mineral
properties.




3.
            WE HAVE NO RESERVES AND WE MAY
      FIND THAT OUR PROPERTIES ARE NOT COMMERCIALLY
  VIABLE




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




4.
            WE HAVE A HISTORY OF OPERATING
      LOSSES AND THERE CAN BE NO ASSURANCES WE WILL BE PROFITABLE IN THE
      FUTURE.




We have a history of operating losses,
expect to continue to incur losses, and may never be profitable. Further, we
have been dependent on sales of our equity securities and debt financing to meet
our cashrequirements.  We have
incurred losses totaling $18,263,620from inception toSeptember30, 2010, and incurred losses of
$1,327,922during thethree-month periodendedSeptember30, 2010. Further, we do not expect
positive cash flow from operations in the near term.  There is no
assurance that actual cash requirements will not exceedour estimates.  In
particular, additional capital may be required in the event that: (i) the costs
to acquire additional mineral exploration claims are more than we currently
anticipate; or (ii) exploration and or future potential mining costs for
additional claims increase beyond our expectations.


- 36
-


5.
            THE RISKS ASSOCIATED WITH
      EXPLORATION COULD CAUSE PERSONAL INJURY OR DEATH, ENVIRONMENTAL DAMAGE AND
      POSSIBLE LEGAL LIABILITY.





We are not currently engaged in mining
operations because we are in the exploration phase.  However, our
exploration operations could expose the Company to liability for personal injury
or death, property damage or environmentaldamage.Although wecarry property and liability
insurance, cost effective insurance contains exclusions and limitations on
coverage and may be unavailable in some circumstances.





6.
            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 commercial mineable deposits.





7.
            OUR
      BUSINESS IS AFFECTED BY CHANGES IN COMMODITY
  PRICES.





Our
ability to raise capital and explore our properties and the future profitability
of those operations is directly related to the market price of certain minerals
such as silver and limestone as well as the price and availability of
cement.  The Company is negatively affected by the current decline in
commodity prices





8.
            THE COMPANY COULD ENCOUNTER
      REGULATORY AND PERMITTING
DELAYS.





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





9.
            THERE ARE PENNY STOCK SECURITIES
      LAW CONSIDERATIONS THAT COULD LIMIT YOUR ABILITY TO SELL YOUR
      SHARES.





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


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10.
            CURRENT LEVELS OF MARKET
      VOLATILITY COULD HAVE ADVERSE
IMPACTS





The capital and credit markets have been
experiencing volatility and disruption. If the current levels of market
disruption and volatility continue or worsen, there can be no assurance that the
Company will not experience adverse effects, which may be material. These
effects may include, but are not limited to, difficulties in raising additional
capital or debt and a smaller pool of investors and funding sources. There is
thus no assurance the Company will have access to the equity capital markets to
obtain financing when necessary or desirable.





11.
            WE DO NOT INTEND TO PAY DIVIDENDS
      IN THE FORESEEABLE FUTURE.





We have never declared or paid a
dividend on our common stock. We intend to retain earnings, if any, for use in
the operation and expansion of our business and, therefore, do not anticipate
paying any dividends in the foreseeable future.





ITEM
2: UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS:





None.





ITEM
3:  DEFAULTS UPON SENIOR SECURITIES:





None.





ITEM
4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:





None.





ITEM
5:  OTHER INFORMATION:





None.





ITEM
6:  EXHIBITS AND REPORTS ON FORM 8-K





(a)
                  None.(b)
                  31.1
                  Rule 13a-14(a)/15d-14(a)
      Certification of Chief Executive Officer.31.2
                  Rule 13a-14(a)/15d-14(a)
      Certification of Chief Financial Officer.32.1
                  Certificate of Chief Executive
      Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.(c)
                  In addition, the following is
      incorporated by reference:Current Report on Form 8-K, “Item
      1.01-Entry into a Material Definitive Agreement” dated July 12,
      2010.


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SIGNATURE





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





INFRASTRUCTURE
      MATERIALS CORP.Dated:  November
      12, 2010
              
              By:
              /s/Anne MackoAnne
      Macko, Secretary


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