UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
DC 20549







FORM
10-Q




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





For the
quarterly period ended September 30, 2009




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




For the
transition period from ________ to ____________




Commission
file number 333-141505










VOLCAN
      HOLDINGS, INC.(Exact
      Name of Registrant as Specified in Its Charter)  Delaware
            
            98-0554790(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            
            (I.R.S.
      Employer
              Identification
      No.)  Level
      34, 50 Bridge Street
              Sydney,
      Australia
            
            2000(Address
      of Principal Executive Offices)
            
            (Zip
      Code)  +61-2-8216-0777(Registrant’s
      Telephone Number, Including Area Code)
  (Former
      Name, Former Address and Former Fiscal Year, if Changed Since Last
      Report)





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




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


(Do not
check if a smaller reporting company)




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




As of
November 20, 2009, 103,995,765 shares of the issuer’s common stock, $0.001 par
value per share, were outstanding.








VOLCAN
HOLDINGS, INC.




Table
of Contents




PagePART I
            FINANCIAL INFORMATIONItem
1.
            Financial Statements
            1Condensed Consolidated Balance Sheets
            1Condensed Consolidated Statements of
      Operations  (Unaudited)
            2Consolidated Statement of Stockholders’ Equity
            3Condensed Consolidated Statements of Cash Flows
            4Notes to Condensed Consolidated Financial Statements
    (Unaudited)
            5Item
2.
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            17Item
    4T.
            Controls and Procedures
            22PART II
            OTHER INFORMATIONItem
2.
            Unregistered Sales of Equity Securities and Use of ProceedsItem
6.
            Exhibits
            23








PART
I – FINANCIAL INFORMATION




Item
1.                      Financial
Statements.







VOLCAN
HOLDINGS, INC.
 (An
Exploration Stage Company)
 Consolidated
Balance Sheets
 
 September
      30,
              
              
              June
      302009

                  (Unaudited)
              
              
              2009ASSETSCurrent
      Assets:Cash
      and cash equivalents
              
              $
              -
              
              
              $
              92,062Other
      receivables
              
              
              161,738
              
              
              
              131,602Deposit
              
              
              124,446
              
              
              
              115,080Total
      current assets
              
              
              286,184
              
              
              
              338,744Intangible
      assets
              
              
              1,694,669
              
              
              
              1,473,189TOTAL
      ASSETS
              
              $
              1,980,853
              
              
              $
              1,811,933LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
              
              $
              1,811,073
              
              
              $
              1,564,199Advances
      from stockholder
              
              
              130,978
              
              
              
              86,258Common
      stock to be issued
              
              
              13,300
              
              
              
              13,300Total
      current liabilities
              
              
              1,955,351
              
              
              
              1,663,757Stockholders'
      Equity:Common
      stock: $0.001 par value; 300,000,000 shares authorized; 103,995,765 shares
      issued and outstanding,
              
              
              103,996
              
              
              
              103,996Additional
      paid-in capital
              
              
              1,588,953
              
              
              
              1,588,953Deferred
      compensation
              
              
              -
              
              
              
              (87,500
              )Deficit
      accumulated during exploration stage
              
              
              (1,657,287
              )
              
              
              (1,433,240
              )Accumulated
      other comprehensive income (loss):Foreign
      currency translation gain (loss)
              
              
              (10,160
              )
              
              
              (24,033
              )Total
      stockholder’s equity
              
              
              25,502
              
              
              
              148,176TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              1,980,853
              
              
              $
              1,811,933
  See
accompanying notes to the financial statements.
 1
 
 VOLCAN
HOLDINGS, INC.
 (An
Exploration Stage Company)
 Consolidated
Statements of Operations
 (Unaudited)
 Period
      FromFor
      The
              
              
              For
      The
              
              
              June
      11, 2008Three
      Months
              
              
              Three
      Months
              
              
              (Inception)Ended
              
              
              Ended
              
              
              ThroughSeptember
      30,
              
              
              September
      30,
              
              
              September
      30,2009
              
              
              2008
              
              
              2009Stock-based
      compensation
              
              $
              87,500
              
              
              $
              420,000
              
              
              $
              507,500Professional
      fees
              
              
              98,589
              
              
              
              189,370
              
              
              
              633,003General
      and administrative
              
              
              34,424
              
              
              
              105,769
              
              
              
              522,352Total
      operating expenses
              
              
              220,513
              
              
              
              715,139
              
              
              
              1,662,855Other
      (income) expenses:(Gain)
      loss on foreign exchange
              
              
              4,598
              
              
              
              (4,185
              )
              
              
              1,054Interest
      (income)
              
              
              (1,064
              )
              
              
              (1,951
              )
              
              
              (6,622
              )Net
      loss
              
              $
              (224,047
              )
              
              $
              (709,003
              )
              
              $
              (1,657,287
              )Net
      loss per common share - basic and diluted
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              (0.02
              )Weighted
      average number of common shares outstanding – basic and
      diluted
              
              
              103,995,765
              
              
              
              100,749,969
              
              
              
              103,031,709
  See
accompanying notes to the financial statements.
 2
 
 VOLCAN
HOLDINGS, INC.
 (An
Exploration Stage Company)
 Consolidated
Statement of Stockholders’ Equity (Deficit)
 For
the Period from June 11, 2008 (Inception) through September 30,
2009
 (Unaudited)
  Other
                Comprehensive
                Income
      (Loss)Common
                Shares
              
              
              Amount
              
              
              Additional
      Paid-in Capital
              
              
              Deferred
                Compensation
              
              
              Deficit
                Accumulated
                During
      the
                Exploration
                Stage
              
              
              Foreign
                Currency
                Translation
                Gain
      (Loss)
              
              
              TotalBalance,
      June 11, 2008 (inception)
              
              
              5,620,000
              
              
              $
              5,620
              
              
              $
              19,380
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              25,000Effect
      of 1 for 6.1728395 forward stock split
              
              
              29,071,358
              
              
              
              29,071
              
              
              
              (29,071
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -Issuance
      of common stock in connection with reverse acquisition
              
              
              90,000,000
              
              
              
              90,000
              
              
              
              (114,904
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (24,904
              )Cancellation
      of common stock in connection with reverse acquisition
              
              
              (24,691,358
              )
              
              
              (24,691
              )
              
              
              24,691
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -Comprehensive
      lossNet
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (214,909
              )
              
              
              
              
              
              
              (214,909
              )Foreign
      currency translation loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (3,345
              )
              
              
              (3,345
              )Total
      comprehensive loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (218,254
              )Balance
      June 30, 2008
              
              
              100,000,000
              
              
              
              100,000
              
              
              
              (99,904
              )
              
              
              -
              
              
              
              (214,909
              )
              
              
              (3,345
              )
              
              
              (218,158
              )Issuance
      of common stock for cash (net of costs of $125,666)
              
              
              3,745,765
              
              
              
              3,746
              
              
              
              1,145,038
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,148,784Issuance
      of warrants in connection with common stock
              
              
              
              
              
              
              
              
              
              
              36,569
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              36,569Options
      issued for services
              
              
              
              
              
              
              
              
              
              
              420,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              420,000Common
      stock issued forFuture
      services
              
              
              250,000
              
              
              
              250
              
              
              
              87,250
              
              
              
              (87,500
              )
              
              
              
              
              
              
              
              
              
              
              -Comprehensive
      lossNet
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,218,331
              )
              
              
              
              
              
              
              (1,218,331
              )Foreign
      currency translation loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (20,688
              )
              
              
              (20,688
              )Total
      comprehensive loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,239,019
              )Balance,
      June 30, 2009
              
              
              103,995,765
              
              
              
              103,996
              
              
              
              1,588,953
              
              
              
              (87,500
              )
              
              
              (1,433,240
              )
              
              
              (24,033
              )
              
              
              148,176Amortization
      of deferredcompensation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              87,500
              
              
              
              
              
              
              
              
              
              
              
              87,500Comprehensive
      lossNet
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (224,047
              )
              
              
              
              
              
              
              (224,047
              )Foreign
      currency translation gain
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              13,873
              
              
              
              13,873Total
      comprehensive loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (210,174
              )Balance,
      September 30, 2009
              
              
              103,995,765
              
              
              $
              103,996
              
              
              $
              1,588,953
              
              
              $
              -
              
              
              $
              (1,657,287
              )
              
              $
              (10,160
              )
              
              $
              25,502
 
 See
accompanying notes to the financial statements.
  3
  VOLCAN
HOLDINGS, INC.
 (An
Exploration Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 (Unaudited)
 
 For
      ThePeriod
      FromFor
      The
              
              
              For
      The
              
              
              June
      11, 2008Three
      Months
              
              
              Three
      Months
              
              
              (Inception)Ended
              
              
              Ended
              
              
              ThroughSeptember
      30,
              
              
              September
      30,
              
              
              September
      30,2009
              
              
              2008
              
              
              2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (224,047
              )
              
              $
              (709,003
              )
              
              $
              (1,657,287
              )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activitiesStock
      compensation
              
              
              87,500
              
              
              
              420,000
              
              
              
              507,500Changes
      in operating assets and liabilitiesDeposit
              
              
              (22,151
              )
              
              
              -
              
              
              
              (137,231
              )Other
      receivables
              
              
              (44,757
              )
              
              
              (25,342
              )
              
              
              (199,610
              )Accounts
      payable
              
              
              407,877
              
              
              
              (87,434
              )
              
              
              1,129,228Common
      stock to be issued
              
              
              -
              
              
              
              -
              
              
              
              13,300Net
      Cash Provided By (Used In) Operating Activities
              
              
              204,422
              
              
              
              (401,779
              )
              
              
              (344,100
              )CASH
      FLOWS FROM INVESTING ACTIVITIESExploration
      and prospecting
              
              
              (385,151
              )
              
              
              (98,702
              )
              
              
              (953,296
              )CASH
      FLOWS FROM FINANCING ACTIVITIESSale
      of common stock, net of costs
              
              
              -
              
              
              
              1,145,335
              
              
              
              1,185,353Loan
      payable shareholder
              
              
              54,303
              
              
              
              61,124
              
              
              
              140,561Net
      Cash Provided By Financing  Activities
              
              
              54,303
              
              
              
              1,206,459
              
              
              
              1,325,914EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
              
              
              34,364
              
              
              
              (15,407
              )
              
              
              (28,518
              )NET
      INCREASE (DECREASE) IN CASH
              
              
              (92,062
              )
              
              
              690,571
              
              
              
              -CASH
      AT BEGINNING OF YEAR
              
              
              92,062
              
              
              
              96
              
              
              
              -CASH
      AT END OF YEAR
              
              $
              -
              
              
              $
              690,667
              
              
              $
              -
  
 4
  VOLCAN
HOLDINGS, INC.
 (An
Exploration Stage Company)
 September
30, 2009 and 2008
 Notes
to the Financial Statements
 (Unaudited)
 
 NOTE
1 - ORGANIZATION AND OPERATIONS
 
 Volcan
Holdings, Inc. (formerly Dunn Mining, Inc.) (the “Company”) was incorporated on
April 4, 2006 in the State of Nevada, for the purpose of acquiring and exploring
mineral properties for economically recoverable reserves. On September 11, 2008,
Dunn Mining was merged with and into Volcan Holdings, Inc., a Delaware
corporation (the "Company"), for the purpose of changing its state of
incorporation to Delaware from Nevada, changing its name and effectuating a
1-for-6.1728395 forward stock-split, all pursuant to a Certificate of Ownership
and Merger and Articles of Merger, each dated September 11, 2008 and approved by
stockholders on September 11, 2008.
 
 On
September 12, 2008, the Company entered into a Share Exchange Agreement (the
"Exchange Agreement") by and among the Company, Volcan Australia Corporation Pty
Ltd, an Australian proprietary company ("VAC"), and L'Hayyim Pty Ltd as trustee
for The L'Hayyim Trust, the holder of all of the outstanding capital stock of
VAC (the "VAC Shareholder"). Upon closing of the transaction contemplated under
the Exchange Agreement (the "Share Exchange"), on September 12, 2008, the VAC
Shareholder transferred all of the issued and outstanding capital stock of VAC
to the Company in exchange for 90,000,000 newly issued shares of common stock of
the Company and a right to receive $1,500,000 in cash at the end of any fiscal
quarter in which the Company has cash on hand of at least $5,000,000. Such Share
Exchange caused VAC to become a wholly owned subsidiary of the
Company.
 
 Following
the Share Exchange, under the terms of an Agreement of Conveyance, Transfer and
Assignment of Assets and Assumption of Obligations, the Company transferred all
of its pre-Share Exchange assets and liabilities to its wholly owned subsidiary,
Dunn Mining Holdings, Inc., a Delaware corporation ("SplitCo"). Thereafter,
pursuant to a stock purchase agreement, the Company transferred all of the
outstanding capital stock of SplitCo to its former president in exchange for
cancellation of an aggregate of 24,691,358 shares of the Company’s common stock
held by such person (the "Split-Off").
 
 As a
result of the ownership interest of the former shareholder of VAC, for financial
statement reporting purposes, the merger between the Company and VAC has been
treated as a reverse acquisition with VAC deemed the accounting acquirer and the
Company deemed the accounting acquiree under the purchase method of accounting
in accordance with paragraph 805-40-05-2 of the FASB Accounting Standards
Codification.  The reverse merger is deemed a capital transaction and
the net assets of VAC (the accounting acquirer) are carried forward to the
Company (the legal acquirer and the reporting entity) at their carrying value
before the combination.
 
 5
 
 
 The
acquisition process utilizes the capital structure of the Company and the assets
and liabilities of VAC which are recorded at historical cost.  The
equity of the Company is the historical equity of VAC retroactively restated to
reflect the number of shares issued by the Company in the
transaction.
 
 VAC is an
exploration stage company and its principal operation is the conducting of
exploration for Bauxite and other minerals in Australia. The current focus is on
the exploration for bauxite and other mineral deposits on tenements near
Inverell and Cooma in New South Wales, Australia. VAC has not determined whether
these tenements contain reserves that are economically recoverable. The
recoverability of costs incurred for acquisition and exploration of the property
will be dependent upon the discovery of economically recoverable reserves,
confirmation of VAC’s interests in the underlying properties, the ability of VAC
to obtain the necessary financing to satisfy the expenditure requirements and to
complete the development of the property and upon future production or proceeds
for the sale thereof.
 
 As a
result of the Share Exchange and Split Off, the Company succeeded to the
business of VAC as its sole line of business.
 
 NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of
presentation
 
 The
accompanying unaudited interim financial statements and related notes have been
prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) for interim financial information, and
with the rules and regulations of the United States Securities and Exchange
Commission (“SEC”) to Form 10-Q and Article 8 of Regulation
S-X.  Accordingly, they do not include all of the information and
footnotes required by U.S. GAAP for complete financial
statements.  The unaudited interim financial statements furnished
reflect all adjustments (consisting of normal recurring accruals) which are, in
the opinion of management, necessary to a fair statement of the results for the
interim periods presented.  Unaudited interim results are not
necessarily indicative of the results for the full year.  These
unaudited interim financial statements should be read in conjunction with the
financial statements of the Company for the fiscal year ended June 30, 2009 and
notes thereto contained in the information filed as part of the Company’s Annual
Report on Form 10-K filed on August 7, 2009.
 
 Exploration stage
company
 
 The
Company is an exploration stage company as defined by section 915-10-20 of the
FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced.  All losses accumulated since
inception have been considered as part of the Company’s exploration stage
activities.
 
 Use of
estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 6
 
 Fiscal year
end
 
 The
Company elected June 30 as its fiscal year ending date.
 
 Cash
equivalents
 
 The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents.
 
 Mineral property and related
mineral rights - bauxite claims
 
 The
Company follows topic 930 and subtopic 720-15 of the FASB Accounting Standards
Codification for its mineral property and related mineral rights - bauxite
claims.  Mineral property and related mineral rights acquisition costs
are capitalized pending determination of whether the drilling has found proved
reserves.  If a mineral ore body is discovered, capitalized costs will
be amortized on a unit-of-production basis following the commencement of
production.  Otherwise, capitalized acquisition costs are expensed
when it is determined that the mineral property has no future economic
value.  Exploration costs, including rights of access to lands for
geophysical work and salaries, equipment, and supplies for geologists and
geophysical crews are expensed as incurred.  When it is determined
that a mining deposit can be economically and legally extracted or produced
based on established proven and probable reserves, further exploration costs and
development costs as well as interest costs relating to exploration and
development projects that require greater than six (6) months to be readied for
their intended use incurred after such determination will be
capitalized.  The establishment of proven and probable reserves is
based on results of final feasibility studies which indicate whether a property
is economically feasible.  Upon commencement of commercial production,
capitalized costs will be transferred to the appropriate asset categories and
amortized on a unit-of-production basis.  Capitalized costs, net of
salvage values, relating to a deposit which is abandoned or considered
uneconomic for the foreseeable future will be written off.  Upon
becoming fully amortized, the related cost and accumulated amortization are
removed from the accounts.  The sale of a partial interest in a proved
property is accounted for as a cost recovery and no gain or loss is recognized
as long as this treatment does not significantly affect the unit-of-production
amortization rate.  A gain or loss will be recognized for all other
sales of proved properties and will be classified in other operating
revenues.  Maintenance and repairs are charged to expense, and
renewals and betterments are capitalized to the appropriate property and
equipment accounts.
 
 7
 
 The
provision for depreciation, depletion and amortization (“DD&A”) of mineral
properties is calculated on a property-by-property basis using the
unit-of-production method.  Taken into consideration in the
calculation of DD&A are estimated future dismantlement, restoration and
abandonment costs, which are net of estimated salvage values.
 
 Impairment of long-lived
assets
 
 The
Company has adopted paragraph 360-10-35-17 of the FASB Accounting Standards
Codification for its long-lived assets.  The Company’s long-lived
assets, which include mineral property and related mineral rights, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
 
 The
Company assesses the recoverability of its long-lived assets by comparing the
projected undiscounted net cash flows associated with the related long-lived
asset or group of long-lived assets over their remaining estimated useful lives
against their respective carrying amounts. Impairment, if any, is based on the
excess of the carrying amount over the fair value of those
assets.  Fair value is generally determined using the asset’s expected
future discounted cash flows or market value, if readily
determinable.  If long-lived assets are determined to be recoverable,
but the newly determined remaining estimated useful lives are shorter than
originally estimated, the net book values of the long-lived assets are
depreciated over the newly determined remaining estimated useful
lives.
 
 The
Company periodically reviews its proved mineral properties for impairment
whenever events and circumstances indicate a decline in the recoverability of
their carrying value may have occurred.  The Company estimates the
expected undiscounted future cash flows of its mineral properties and compares
such undiscounted future cash flows to the carrying amount of the mineral
properties to determine if the carrying amount is recoverable.  If the
carrying amount exceeds the estimated undiscounted future cash flows, the
Company will adjust the carrying amount of the mineral properties to fair
value.  The factors used to determine fair value include, but are not
limited to, recent sales prices of comparable properties, estimates of proved
reserves, future commodity pricing, future production estimates, anticipated
capital expenditures, and a discount rate commensurate with the risk associated
with realizing the expected cash flows projected.
 
 Unevaluated
properties are assessed periodically on a property-by-property basis and any
impairment in value is charged to expense.  If the unevaluated
properties are subsequently determined to be productive, the related costs are
transferred to proved mineral properties.  Proceeds from sales of
partial interests in unproved leases are accounted for as a recovery of cost
without recognizing any gain until all costs are recovered.
 
 The Company determined that there were
no impairments of long-lived assets as of September 30, 2009 or
2008.
 
 8
 
 Fair value of financial
instruments
 
 The
Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph
820-10-35-37”) to measure the fair value of its financial instruments. Paragraph
820-10-35-37 establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America (U.S. GAAP), and
expands disclosures about fair value measurements.  To increase
consistency and comparability in fair value measurements and related
disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into
three (3) broad levels.  The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active markets for identical assets or
liabilities and the lowest priority to unobservable inputs.  The three
(3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are
described below:
 
 Level
      1
              
              Quoted
      market prices available in active markets for identical assets or
      liabilities as of the reporting date.Level
      2
              
              Pricing
      inputs other than quoted prices in active markets included in Level 1,
      which are either directly or indirectly observable
                as
      of the reporting date.Level
      3
              
              Pricing
      inputs that are generally observable inputs and not corroborated by market
      data.
 
 The
carrying amounts of the Company’s financial assets and liabilities, such as cash
and accrued expenses, approximate their fair values because of the short
maturity of these instruments.
 
 The
Company does not have any assets or liabilities measured at fair value on a
recurring or a non-recurring basis, consequently, the Company did not have any
fair value adjustments for assets and liabilities measured at fair value at
September 30, 2009 or 2008, nor gains or losses are reported in the statement of
operations that are attributable to the change in unrealized gains or losses
relating to those assets and liabilities still held at the reporting date for
the interim period ended September 30, 2009, 2008 or for the period from June
11, 2008 (inception) through September 30, 2009.
 
 Revenue
recognition
 
 The
Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition.  The Company recognizes revenue
when it is realized or realizable and earned less estimated future doubtful
accounts.  The Company considers revenue realized or realizable and
earned when all of the following criteria are met: (i) persuasive evidence of an
arrangement exists, (ii) the product has been shipped or the services have been
rendered to the customer, (iii) the sales price is fixed or determinable, and
(iv) collectability is reasonably assured.
 
 The
Company will derive its revenue from sales contracts with customers with
revenues being generated upon the shipment of mineral ores upon the Company
commencing exploration operations.
 
 9
 
 
 Persuasive
evidence of an arrangement is demonstrated via invoice, product delivery is
evidenced by warehouse shipping log as well as a signed bill of lading from the
trucking company or third party carrier and title transfers upon shipment, based
on free on board (“FOB”) warehouse; the sales price to the customer is fixed
upon acceptance of the purchase order and there is no separate sales rebate,
discount, or volume incentive.
 
 Stock-based compensation for
obtaining employee servicesand equity instruments
issued to parties other than employees for acquiring goods or
services
 
 The Company accounts for its stock
based compensation in which the Company obtains employee services in share-based
payment transactions under the recognition and measurement principles of the
fair value recognition provisions of section 718-10-30 of the FASB Accounting
Standards Codification and accounts for equity instruments issued to parties
other than employees for acquiring goods or services under guidance of section
505-50-30 of the FASB Accounting Standards Codification. Pursuant to paragraph
718-10-30-6 of the FASB Accounting Standards Codification, all transactions in
which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.  The measurement date used to
determine the fair value of the equity instrument issued is the earlier of the
date on which the third-party performance is complete or the date on which it is
probable that performance will occur.
 
 Income
taxes
 
 The
Company accounts for income taxes under Section 740-10-30 of the FASB Accounting
Standards Codification.  Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to
reverse.  Deferred tax assets are reduced by a valuation allowance to
the extent management concludes it is more likely than not that the assets will
not be realized.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in the statements of operations in the period that includes the
enactment date.
 
 The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification
(“Section 740-10-25”).  Section 740-10-25 addresses the determination
of whether tax benefits claimed or expected to be claimed on a tax return should
be recorded in the financial statements.  Under Section 740-10-25, the
Company may recognize the tax benefit from an uncertain tax position only if it
is more likely than not that the tax position will be sustained on examination
by the taxing authorities, based on the technical merits of the
position.  The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a
greater than fifty percent (50%) likelihood of being realized upon ultimate
settlement.
 
 10
 
 
 Section
740-10-25 also provides guidance on de-recognition, classification, interest and
penalties on income taxes, accounting in interim periods and requires increased
disclosures.  The Company had no material adjustments to its
liabilities for unrecognized income tax benefits according to the provisions of
Section 740-10-25.
 
 Net loss per common
share
 
 Net loss
per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification.  Basic net loss per share is
computed by dividing net loss by the weighted average number of shares of common
stock outstanding during the period.  Diluted net loss per share is
computed by dividing net loss by the weighted average number of shares of common
stock and potentially outstanding shares of common stock during each
period.  There were 20,000,000 options and 3,745,767 warrants
outstanding as of September 30, 2009, which were excluded from the calculation
because their effect would be anti-dilutive.
 
 Recently issued accounting
pronouncements
 
 In
June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules
under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended
by SEC Release No. 33-9072 on October 13, 2009.  Commencing with its
annual report for the year ending June 30, 2010, the Company will be required to
include a report of management on its internal control over financial reporting.
The internal control report must include a statement:
  ·
              of
      management’s responsibility for establishing and maintaining adequate
      internal control over its financial
reporting;
 ·
              of
      the framework used by management to evaluate the effectiveness of the
      Company’s internal control over financial reporting;
  and
 ·
              of
      management’s assessment of the effectiveness of its internal control over
      financial reporting as of year end.
 
 Furthermore,
it is required to file the auditor’s attestation report separately on
the
 Company’s
internal control over financial reporting on whether it believes that the
Company has maintained, in all material respects, effective internal control
over financial reporting.
 
 In
June 2009, the FASB approved the “FASB Accounting Standards Codification”
(the “Codification”) as the single source of authoritative nongovernmental U.S.
GAAP to be launched on July 1, 2009.  The Codification does not
change current U.S. GAAP, but is intended to simplify user access to all
authoritative U.S. GAAP by providing all the authoritative literature related to
a particular topic in one place.  All existing accounting standard
documents will be superseded and all other accounting literature not included in
the Codification will be considered non-authoritative. The Codification is
effective for interim and annual periods ending after September 15,
2009.  The adoption of this standard did not have a material impact on
its consolidated financial position, results of operations or cash
flows.
  11
  In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-04 “Accounting for
Redeemable Equity Instruments - Amendment to Section 480-10-S99” which
represents an update to section 480-10-S99, distinguishing liabilities from
equity, per EITF Topic D-98, Classification and Measurement of
Redeemable Securities.  The Company does not expect the
adoption of this update to have a material impact on its consolidated financial
position, results of operations or cash flows.
 
 In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-05 “Fair Value
Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair
Value”, which provides amendments to subtopic 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities.  This Update provides clarification that in circumstances
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: 1. A valuation technique that uses: a. The
quoted price of the identical liability when traded as an asset b. Quoted prices
for similar liabilities or similar liabilities when traded as assets. 2. Another
valuation technique that is consistent with the principles of topic 820; two
examples would be an income approach, such as a present value technique, or a
market approach, such as a technique that is based on the amount at the
measurement date that the reporting entity would pay to transfer the identical
liability or would receive to enter into the identical liability. The amendments
in this Update also clarify that when estimating the fair value of a liability,
a reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The amendments in this Update also clarify that both
a quoted price in an active market for the identical liability when traded as an
asset in an active market when no adjustments to the quoted price of the asset
are required are Level 1 fair value measurements.  The Company does
not expect the adoption of this update to have a material impact on its
consolidated financial position, results of operations or cash
flows.
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-08 “Earnings Per Share –
Amendments to Section 260-10-S99”,which represents technical corrections
to topic 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share
for a Period that includes a Redemption or an Induced Conversion of a Portion of
a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of
Earnings per Share for the Redemption or Induced Conversion of Preferred
Stock. The Company does not expect the adoption of this update to have a
material impact on its consolidated financial position, results of operations or
cash flows.
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-09 “Accounting for
Investments-Equity Method and Joint Ventures and Accounting for Equity-Based
Payments to Non-Employees”.  This Update represents a
correction to Section 323-10-S99-4, Accounting by an Investor for
Stock-Based Compensation Granted to Employees of an Equity Method
Investee. Additionally, it adds observer commentAccounting Recognition for Certain
Transactions Involving Equity
 
 12
 
 
 Instruments Granted to Other Than
Employees to the Codification. The Company does not expect the adoption
to have a material impact on its consolidated financial position, results of
operations or cash flows.
 
 In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-12 “Fair Value
Measurements and Disclosures Topic 820 – Investment in Certain Entities That
Calculate Net Assets Value Per Share (or Its Equivalent)”, which provides
amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall,
for the fair value measurement of investments in certain entities that calculate
net asset value per share (or its equivalent). The amendments in this Update
permit, as a practical expedient, a reporting entity to measure the fair value
of an investment that is within the scope of the amendments in this Update on
the basis of the net asset value per share of the investment (or its equivalent)
if the net asset value of the investment (or its equivalent) is calculated in a
manner consistent with the measurement principles of Topic 946 as of the
reporting entity’s measurement date, including measurement of all or
substantially all of the underlying investments of the investee in accordance
with Topic 820. The amendments in this Update also require disclosures by major
category of investment about the attributes of investments within the scope of
the amendments in this Update, such as the nature of any restrictions on the
investor’s ability to redeem its investments a the measurement date, any
unfunded commitments (for example, a contractual commitment by the investor to
invest a specified amount of additional capital at a future date to fund
investments that will be make by the investee), and the investment strategies of
the investees. The major category of investment is required to be determined on
the basis of the nature and risks of the investment in a manner consistent with
the guidance for major security types in U.S. GAAP on investments in debt and
equity securities in paragraph 320-10-50-1B. The disclosures are required for
all investments within the scope of the amendments in this Update regardless of
whether the fair value of the investment is measured using the practical
expedient. The Company does not expect the adoption to have a material impact on
its consolidated financial position, results of operations or cash
flows.
 
 Management
does not believe that any other recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying financial statements.
 
 NOTE
3 - GOING CONCERN
 
 As
reflected in the accompanying financial statements, the Company had a deficit
accumulated during the exploration stage of $1,657,287 and a working capital
deficit of $1,669,167 at September 30, 2009, respectively, and had a and a net
loss of $224,047 for the interim period ended September 30, 2009, with no
revenues since inception.
 
 While the
Company is attempting to commence operations and generate revenues, the
Company’s cash position may not be significant enough to support the Company’s
daily operations.  Management intends to raise additional funds by way
of a public or private offering.  Management believes that the actions
presently being taken to further
 
 13
 
 
 implement
its business plan and generate revenues provide the opportunity for the Company
to continue as a going concern.  While the Company believes in the
viability of its strategy to generate revenues and in its ability to raise
additional funds, there can be no assurances to that effect.  The
ability of the Company to continue as a going concern is dependent upon the
Company’s ability to further implement its business plan and generate
revenues.
 
 The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.
  NOTE
4 - STOCKHOLDERS’ EQUITY
 
  Common
stock
 On
September 11, 2008, the shareholders of the Company authorized a 1 for 6.1728395
forward stock split. All share and per share data in the financial statements
and related notes have been restated to give retroactive effect to the reverse
stock split.
 
 Issuance of common stock for
financing
 
 On
September 12, 2008, the Company completed a private placement, pursuant to which
3,631,430 shares of common stock and five-year warrants to purchase 3,631,430
shares of common stock were issued at an initial exercise price of $1.00 per
share for aggregate net proceeds of $1,271,000 (the Private Placement”). All
costs associated with the Share Exchange, other than financing related costs in
connection with Private Placement, were expensed as incurred.
  Stock
options
  On
September 12, 2008, stockholders of the Company approved, by majority written
consent, the adoption of the 2008 Stock Incentive Plan (the “Plan”). Under the
Plan, 40,000,000 shares of common stock are reserved for the issuance of
incentive stock options, non-qualified stock options, stock appreciation rights,
performance shares, restricted stock and long term incentive awards. The purpose
of the plan is to provide an incentive to attract and retain officers,
consultants, advisors and employees whose services are considered valuable, as
well as to stimulate an active interest of such persons into our development and
financial success.
  On
September 12, 2008, Holdings granted to Australian Gemstone Mining Services Pty
Ltd, its management services company ("AGM"), immediately vesting five-year
options to purchase an aggregate of 20,000,000 shares of Holdings' common stock,
at an exercise price of $1.00 per share, under such plan. In addition, Holdings
has agreed to grant to L'Hayyim Pty Ltd warrants (the "Management Incentive
Warrants") to purchase up to an aggregate of 100,000,000 shares of Holdings'
common stock upon achieving certain major milestones. The Management Incentive
Warrants shall vest, with
 
 14
 
 
 respect
to 20% of the shares, upon independent verification of inferred resources of at
least 100 million, 200 million, 300 million, 400 million and 500 million tons of
bauxite at VAC's tenement in accordance with standards prescribed in Australia
by the Joint Ore Reserves Committee ("JORC"). To the extent vested, the
Management Incentive Warrants will be exercisable for five years after the
applicable vesting date at an exercise price of $1.00 per
share.
  The fair
value of the options issued to AGM, valued using the Black-Scholes valuation
model, on the date of issuance, was $420,000.
 
 NOTE
5 - COMMITMENTS AND CONTINGENCIES
 
 The
Company has an obligation to pay the vendors of Volcan Australia Pty Ltd an
amount of $1,500,000 as additional consideration in relation to the acquisition
of that entity.
 
 The
Company acquired Volcan Australia Pty Ltd in exchange for  90,000,000
newly issued shares of common stock together with Volcan’s right to receive
$1,500,000 in cash at the end of any fiscal quarter in which the Company has
cash on hand of at least $5,000,000.
 
 Management
Services Agreement
 
 The
Company has entered into a Management Services Agreement with Australian
Gemstone Mining Services Pty Ltd, a company owned and controlled by Pnina
Feldman, a member of the Board.
 
 The
Management Services Agreement was entered into as of 1 July 2008, pursuant to
which 4 individuals (each a key person) provide executive and corporate
services, including geological and technical expertise, to the
Company.
 
 During
the term of the Management Services Agreement the Company will pay a retainer of
$175,000 per annum with respect to each key person, being the two chief
geoscientists and the two executive directors for an aggregate amount of
$700,000 per annum. However, the directors of Australian Gemstone Mining
Services Pty Ltd have agreed not to take any payment for the two executive
directors until further funds are raised and the Project has an independently
verified resource statement completed.
 
 The
Company is not required to pay any additional fees, including director’s fees,
to Australian Gemstone Mining Services Pty Ltd or the key persons personally
with respect to the services to be provided by the key persons.
 
 The
Agreement also requires that Australian Gemstone Mining Services Pty Ltd
provides the Company with suitable fully serviced offices. The Company has
obtained rights to shared office space for an amount of $14,500 per month. The
directors have agreed to accept only 50% of this amount per month until further
funds are raised and the Project has an independently verified resource
statement verified.
 
 15
 
 Australian
Gemstone Mining Services Pty Ltd may also provide additional administrative
services to the Company, such as secretarial, accounting and office management
services. These services will be provided on reasonable arm's-length terms as
approved by the Company's independent directors.
 
 The
directors of Australian Gemstone Mining Services Pty Ltd have agreed to defer
payment of $264,966, the amounts payable to it for the quarter ended September
30, 2009, until the Company raises further funds.
 
 NOTE
6 - SUBSEQUENT EVENTS
 
 The Company has evaluated all events
that occur after the balance sheet date as of September 30, 2009 through
November 19, 2009, the date when the financial statements were issued to
determine if they must be reported.  The Management of the Company
determined that there were no reportable subsequent events to be
disclosed.
 16





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




Reverse
Merger





On
September 12, 2008, we completed a share exchange, pursuant to which we acquired
all of the capital stock of Volcan Australia Corporation Pty Ltd, an Australian
proprietary company (“VAC”) and VAC became our wholly owned subsidiary (the
“Share Exchange”). In connection with the Share Exchange, we discontinued our
former business and succeeded to the business of VAC as our sole line of
business. The Share Exchange is being accounted for as a reverse acquisition and
recapitalization. VAC is the acquiror for accounting purposes and we were the
acquired company. Accordingly, VAC's historical financial statements for periods
prior to the acquisition became our financial statements retroactively restated
for, and giving effect to, the number of shares received in the Share Exchange.
The accumulated deficit of VAC is carried forward after the acquisition.
Operations reported for periods prior to the Share Exchange are those of
VAC.





Overview





We are a
mineral exploration company that intends to explore prospective bauxite deposits
in New South Wales, Australia. We are in the exploration stages with no revenue
being generated now or in the near future. Our inception for accounting purposes
was June 11, 2008.





Critical
Accounting Policies





The
discussion and analysis of our financial condition presented in this section is
based upon our financial statements that have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of our financial statements and related disclosures requires us to make
estimates, assumptions and judgments that affect the reported amount of assets,
liabilities, revenue, costs and expenses, and related disclosures. We believe
that the estimates, assumptions and judgments involved in the accounting
policies described below have the greatest potential impact on our financial
statements and, therefore, consider these to be our critical accounting
policies. On an ongoing basis, we will evaluate our estimates and judgments and
the related financial statement impact.





Among the
estimates we have made in the preparation of the financial statements is an
estimate of our cash flows in making the disclosures about our liquidity in this
report. As an exploration stage company, many variables may affect our estimates
of cash flows that could materially alter our view of our liquidity and capital
requirements as our business develops.





Use of
Estimates.The preparation of financial statements in
conformity with generally accepted accounting principles in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.





Going Concern Consideration.
These financial statements do not include any adjustments relating to the
recovery of the recorded assets or the classification of the liabilities that
might be necessary should we be unable to continue as a going concern. Our
audited financial statements have been prepared assuming we are a “going
concern”. We will continue to implement our business plan, attempt to raise debt
and/or equity based capital from related parties and/or third parties and seek
out the most efficient processes that will allow for the generation of positive
cash flows. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





Income Taxes.We account for
income taxes under the liability method in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”.
Under this method, deferred income tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.





17





We
adopted the provisions of the Financial Accounting Standards Board (the “FASB”)
Interpretation No. 48; “Accounting for Uncertainty in Income Taxes-An
Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 contains a two-step
approach to recognizing and measuring uncertain tax positions. The first step is
to evaluate the tax position for recognition by determining if the weight of
available evidence indicates it is more likely than not that the position will
be sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step is to measure the tax benefit as the largest
amount, which is more than 50% likely of being realized upon ultimate
settlement. We consider many factors when evaluating and estimating our tax
positions and tax benefits, which may require periodic adjustments. We did not
record any liabilities for uncertain tax positions for the three months ended
September 30, 2000 and 2008.




Exploration Stage Company.
Guide 7 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
“Description of Property by Issuers Engaged or to be Engaged in Significant
Mining Operations” requires that mining companies in the exploration stage
should not refer to themselves as development stage companies in their financial
statements, even though such companies should comply with FASB No. 7, if
applicable. We are an exploration stage company under Guide 7 of the Exchange
Act and accordingly, we have not been referred to as a development stage company
in our financial statements. The balance sheet, statement of operations,
statement of equity and statement of cash flows are all presented as those of an
exploration stage company for the three months ended September 30, 2009 and
2008, the fiscal year ended June 30, 2009 and the period from June 11, 2008
(Inception) through September 30, 2009.





Accounting for Mineral Rights,
Mineral Claim Payments and Exploration Costs. We are primarily engaged in
the acquisition, exploration and development of mineral properties. Mineral
property acquisition costs are initially capitalized as tangible assets when
purchased. At each fiscal quarter end, we intend to assess these carrying costs
for impairment. If proven and probable reserves are established for a property
and it has been determined that a mineral property can be economically
developed, capitalized costs will be depleted using the units-of-production
method over the estimated life of the probable reserve.





Currently,
we expense all costs as incurred related to the acquisition and exploration of
mineral properties in which we have secured exploration rights prior to
establishment of proven and probable reserves. These costs include general
exploration costs and costs to maintain rights and leases associated with any
properties under exploration. To date, we have not established the commercial
feasibility of any exploration prospects; therefore, all costs are being
expensed.





Emerging
Issues Task Force (“EITF”) No. 04-2, “Whether Mineral Rights are Tangible or
Intangible Assets,” establishes mineral rights as tangible assets, whereby the
aggregate carrying amount of such mineral rights should be reported as a
separate component of property, plant and equipment. At September 30, 2009 and
September 30, 2008, we had no such tangible assets nor any related depletion
expense. The term mineral rights is defined as the legal right to explore,
extract, and retain at least a portion of the benefits from mineral
deposits.





Environmental Remediation Costs.Environmental remediation costs are accrued based on estimates of known
environmental remediation exposure. Such accruals are recorded even if
significant uncertainties exist over the ultimate cost of the remediation. It is
reasonably possible that our estimates of reclamation liabilities, if any, could
change as a result of changes in regulations, extent of environmental
remediation required, means of reclamation or cost estimates. Ongoing
environmental compliance costs, including maintenance and monitoring costs, are
expensed as incurred. There were no environmental remediation costs accrued for
the three months ended September 30, 2009 and 2008.





Financial Statement Impact of these
Critical Accounting Policies and Estimates. We are still in the
exploration stage and have had nominal operations to date. These critical
policies and estimates have not materially impacted our financial statements
given our limited operations.





There has
been no change in any critical policies or estimates since our
inception.





18





Results
of Operations





Period
Ended September 30, 2009





Revenues. For the three
months ended September 30, 2009 and 2008, we did not recognize any
revenue.





Expenses. For the three
months ended September 30, 2009, we incurred $220,513 in expenses, which
consisted of stock compensation of $87,500, professional fees of $98,589 and
general and administrative expenses of $34,424.  For the three months
ended September 30, 2008, we incurred $715,139 in expenses, which consisted
of  stock compensation of $420,000, professional fees of $189,370 and
general and administrative expenses of $105,769.





Income Tax Expense. For the
three months ended September 30, 2009 and September 30, 2008, we did not
recognize any income tax expense.





Accounts Payable. For the
three months ended September 30, 2009, we had other accounts payable of
approximately $1,811,073, as compared to approximately $1,564,199 for the fiscal
year ended June 30, 2009.  The accounts payable for both periods
consisted of amounts due to a related party, Australian Gemstone Mining Services
Pty Ltd (“AGM”), for the purchase of exploration and prospecting information and
administration services.  These amounts largely related to work done
by the geological team in making this current discovery and in identifying this
opportunity for VAC.  The reimbursement of these amounts are important
to retain the geological expertise that is currently available to VAC for VAC's
future development of these projects, which require specialist expert knowledge
of this particular area and geology. The geological team is mindful of the
current cash position of VAC and therefore have agreed to a staggered payment
plan that the directors believe will not materially affect the ability of VAC to
carry out its initial objectives in securing an independent verification of
inferred JORC resources on VAC's tenement. It is the view of the directors, that
such a resource statement should in normal market conditions make VAC eligible
for larger institutional funding.





Liquidity
and Capital Resources





We did
not have any cash or cash equivalents at September 30, 2009. For the fiscal year
ended June 30, 2009, we had cash and cash equivalents of  $92,062.
Based on our cash flow projections, we believe that we have sufficient cash to
satisfy our cash needs for approximately three months. We will need to
raise additional capital of at least $250,000 to enable us to have sufficient
capital liquidity to complete the initial field program to a level where we
should be able to secure an independent resource statement to JORC standard,
which should in ordinary market conditions make VAC eligible for larger
institutional funding. If we are unable to raise additional funds on a timely
basis or at all, any progress with respect to our exploration activities may be
adversely affected.





Over the
next twelve months, we intend to use our cash on hand, together with any cash we
are able to raise in the future, on exploring the geology of our tenement
holdings through:





·
            Aerial
      photo and remote data interpretation. We intend to spend approximately
      $132,000 to conduct and interpret airborne and/or satellite surveys
      of our proposed tenement holdings.





·
            High
      resolution image based mapping and target selection. We intend to spend
      approximately $203,300 to conduct ground-based geological mapping and
      target selection of the bauxite and other mineral deposits on our proposed
      tenement holdings.





·
            Drilling,
      sampling and sub-surface mapping. We intend to spend approximately
      $6,596,993 million to perform drilling and sampling of bauxite
      deposits that we identify on our tenement
  holdings.





·
            Bulk
      sampling of identified bauxite deposits. We intend to spend approximately
      $707,080 to conduct bulk sampling of bauxite deposits that we identify on
      our proposed tenement holdings.





Payment to Shareholder.Pursuant to the terms of the Share Exchange, we have agreed to pay $1.5
million to L'Hayyim Pty Ltd as trustee for The L'Hayyim Trust, our principal
shareholder, at the end of the first fiscal quarter in which we have cash on
hand of at least $5 million. It is unlikely for this to be achieved over the
next twelve months, and therefore unlikely that any such payment will be made in
this initial period.





19





Related Party Transaction. The
directors of AGM have agreed to defer payment of $264,966, the amounts payable
to it for the three months ended September 30, 2009, until we raise further
funds.





Other expected uses of
proceeds. Our other expected uses of cash during the next twelve months
are for our general and administrative expenses, including approximately
$455,000 of payments to AGM pursuant to our Management Services Agreement
for rent, the wages of the expert geological team and their basic office
expenses. In addition, we are obligated to pay AGM an additional $350,000 for
the services of our executive officers. Finally, we are obligated to make
payments to one of our directors in the amount of $50,000 per year. To date, in
light of our current financial situation, AGM has agreed to defer any payments
to it with respect to the services of our officers. In addition, the director
has agreed to defer any payments owed to him until our liquidity situation
improves





To the
extent our cash on hand, together with any cash we are able to raise in the
future, does not cover the amount of our planned expenditures above, the
expenditures listed above will be reduced pro rata.





We do not
expect any purchases of plant and equipment we make during fiscal 2010 to be
material. Nor do we intend to engage in any material sales and marketing efforts
during such period. As our prospects are in the early exploration phase, we do
not anticipate generating any revenues from operations for several years, if
ever. We may also consider selling the project if management determines that an
appropriate price can be obtained.




Off-Balance
Sheet Arrangements





We did
not engage in any off balance sheet arrangements during the three months ended
September 30, 2009 and 2008.




Recent
Accounting Pronouncements





In
June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules
under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended
by SEC Release No. 33-9072 on October 13, 2009.  Commencing with its
annual report for the year ending June 30, 2010, the Company will be required to
include a report of management on its internal control over financial reporting.
The internal control report must include a statement of management’s
responsibility for establishing and maintaining adequate internal control over
its financial reporting; of management’s assessment of the effectiveness of its
internal control over financial reporting as of year end; and of the framework
used by management to evaluate the effectiveness of the Company’s internal
control over financial reporting.





Furthermore,
it is required to file the auditor’s attestation report separately on the
Company’s internal control over financial reporting on whether it believes that
the Company has maintained, in all material respects, effective internal control
over financial reporting.





In June 2009, the FASB approved
the “FASB Accounting Standards Codification” (the “Codification”) as the single
source of authoritative nongovernmental U.S. GAAP to be launched on July 1,
2009.  The Codification does not change current U.S. GAAP, but is
intended to simplify user access to all authoritative U.S. GAAP by providing all
the authoritative literature related to a particular topic in one
place.  All existing accounting standard documents will be superseded
and all other accounting literature not included in the Codification will be
considered non-authoritative. The Codification is effective for interim and
annual periods ending after September 15, 2009.  The adoption of
this standard did not have a material impact on its consolidated financial
position, results of operations or cash flows.





In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-04 “Accounting for Redeemable Equity Instruments - Amendment to Section
480-10-S99” which represents an update to section 480-10-S99, distinguishing
liabilities from equity, per EITF Topic D-98, Classification and Measurement of
Redeemable Securities.





20
 
 
 The
Company does not expect the adoption of this update to have a material impact on
its consolidated financial position, results of operations or cash
flows.





In
August 2009, the FASB issued the FASB Accounting Standards Update No.
2009-05 “Fair Value Measurement and Disclosures Topic 820 – Measuring
Liabilities at Fair Value”, which provides amendments to subtopic 820-10, Fair
Value Measurements and Disclosures – Overall, for the fair value measurement of
liabilities.  This Update provides clarification that in circumstances
in which a quoted price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using one or
more of the following techniques: 1. A valuation technique that uses: a. The
quoted price of the identical liability when traded as an asset b. Quoted prices
for similar liabilities or similar liabilities when traded as assets. 2. Another
valuation technique that is consistent with the principles of topic 820; two
examples would be an income approach, such as a present value technique, or a
market approach, such as a technique that is based on the amount at the
measurement date that the reporting entity would pay to transfer the identical
liability or would receive to enter into the identical liability. The amendments
in this Update also clarify that when estimating the fair value of a liability,
a reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The amendments in this Update also clarify that both
a quoted price in an active market for the identical liability when traded as an
asset in an active market when no adjustments to the quoted price of the asset
are required are Level 1 fair value measurements.  The Company does
not expect the adoption of this update to have a material impact on its
consolidated financial position, results of operations or cash
flows.





In
September 2009, the FASB issued the FASB Accounting Standards Update No.
2009-08 “Earnings Per Share – Amendments to Section 260-10-S99”,which represents
technical corrections to topic 260-10-S99, Earnings per share, based on EITF
Topic D-53, Computation of Earnings Per Share for a Period that includes a
Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock
and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the
Redemption or Induced Conversion of Preferred Stock. The Company does not expect
the adoption of this update to have a material impact on its consolidated
financial position, results of operations or cash flows.





In
January 2008, the SEC released Staff Accounting Bulletin (“SAB”) No. 110, which
amends SAB No. 107 which provided a simplified approach for estimating the
expected term of a “plain vanilla” option, which is required for application of
the Black-Scholes option pricing model (and other models) for valuing share
options. At the time, the staff of the SEC (the “Staff”) acknowledged that, for
companies choosing not to rely on their own historical option exercise data
(i.e., because such data did not provide a reasonable basis for estimating the
term), information about exercise patterns with respect to plain vanilla options
granted by other companies might not be available in the near term; accordingly,
in SAB No. 107, the Staff permitted use of a simplified approach for estimating
the term of plain vanilla options granted on or before December 31, 2007. The
information concerning exercise behavior that the Staff contemplated would be
available by such date has not materialized for many companies. Thus, in SAB No.
110, the Staff continues to allow use of the simplified rule for estimating the
expected term of plain vanilla options until such time as the relevant data
becomes widely available. We do not expect its adoption of SAB No. 110 to have a
material impact on our financial position, results of operations or cash
flows.





Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date and
are not expected to have a material impact on the financial statements upon
adoption.





Certain
Risks and Uncertainties




Certain
statements in this Quarterly Report on Form 10-Q, including certain statements
contained in “Management’s Discussion and Analysis,” constitute forward-looking
statements.  The words or phrases “can be,” “may,” “could,” “would,”
“expects,” “believes,” “seeks,” “estimates,” “projects” and similar words and
phrases are intended to identify such forward-looking statements. Such
forward-looking statements are subject to various risks and
uncertainties.  Any forward-looking information provided by us or on
our behalf is not a guarantee of future performance. Our actual results could
differ materially from those anticipated by such forward-looking statements due
to a number of factors, some of which are beyond our control. All such
forward-looking statements are current only as of the date on which such
statements were made. We do not undertake any obligation to publicly update any





21
 
 
 forward-looking
statement to reflect events or circumstances after the date on which any such
statement is made or to reflect the occurrence of unanticipated
events.




Item 4T.
            Controls
      and Procedures.




Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Treasurer, we have evaluated the effectiveness of our
disclosure controls and procedures as required by Rule 13a-15(b) of the
Securities Exchange Act of 1934, as amended, as of the end of the period covered
by this report. Based on that evaluation, the Chief Executive Officer and
Treasurer have concluded that these disclosure controls and procedures are
effective. There were no changes in our internal control over financial
reporting during the quarter ended September 30, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.




22





PART
II – OTHER INFORMATION




Item
6.                       
Exhibits.




Exhibit
No.                 Description




31.1*
            Section
      302 Certification by the Principal Executive Officer31.2*
            Section
      302 Certification by the Principal Accounting Officer32.1*
            Section
      906 Certification by the Principal Executive Officer and Principal
      Accounting Officer


________________________


*
Filed herewith




23





SIGNATURES




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







VOLCAN
      HOLDINGS, INC.Date:
            November
      23, 2009
            By:
            /s/
      Pnina FeldmanPnina
      FeldmanPresident
      and Chief Executive Officer(Principal
      Executive Officer)Date:
            November
      23, 2009
            By:
            /s/
      Sholom FeldmanSholom
      FeldmanTreasurer
      and Secretary(Principal
      Accounting Officer)








24


EXHIBIT
INDEX




Exhibit
No.                           Description




31.1*
            Section
      302 Certification by the Principal Executive Officer31.2*
            Section
      302 Certification by the Principal Accounting Officer32.1*
            Section
      906 Certification by the Principal Executive Officer and Principal
      Accounting Officer


________________________


* Filed
herewith