---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2009

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to
______________

Commission File Number 333-140299

SILVERSTAR MINING CORP.(Exact name of registrant as specified in its charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|621 Bank Street, Wallace, Idaho                                      | 83873                            
|(Address of principal executive offices)                             | (Zip Code)                       

604.960.0535(Registrants telephone number,
including area code)

N/A(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.

[ X ] YES [ ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act

|Large accelerated filer | [ ] |                                               | Accelerated filer         | [ ]  
|----------------------- | --- | --------------------------------------------- | ------------------------- | -----
|Non-accelerated filer   | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [ X ]

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

[ ] YES [ X ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.

[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. Our
company had 43,018,837 common shares issued and outstanding as of May 13, 2009

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2

PART 1  FINANCIAL INFORMATION

Item 1. Financial Statements.

Our unaudited interim consolidated financial statements for the
six month period ended March 31, 2009 form part of this quarterly report. They
are stated in United States Dollars (US$) and are prepared in accordance with
United States generally accepted accounting principles.

---

3

Silverstar Mining Corp.(A Development Stage Company)

Consolidated Financial Statements(Expressed in U.S. Dollars)(Unaudited)31 March 2009

---

4

|Silverstar Mining Corp.      
|-----------------------------
|(A Development Stage Company)
|Consolidated Balance Sheets  
|(Expressed in U.S. Dollars)  
|(Unaudited)                  

|                                                                     |  | As at     |   |  | As at 30       |  
|-------------------------------------------------------------------- |  | --------- | - |  | -------------- | -
|                                                                     |  | 31 March  |   |  | September 2008 |  
|                                                                     |  | 2009      |   |  | (Audited)      |  
|                                                                     |  | **$**     |   |  | **$**          |  
|                                                                     |  |           |   |  |                |  
|Assets                                                               |  |           |   |  |                |  
|                                                                     |  |           |   |  |                |  
|Current                                                              |  |           |   |  |                |  
|Cash and cash equivalents                                            |  | 1,035     |   |  | 89,819         |  
|Prepaid expenses                                                     |  | 800       |   |  | 800            |  
|                                                                     |  |           |   |  |                |  
|                                                                     |  | 1,835     |   |  | 90,619         |  
|                                                                     |  |           |   |  |                |  
|Mineral property costs(Note 5)                                       |  | 805,321   |   |  | 805,321        |  
|Website development costs(Note 4)                                    |  | 6,600     |   |  | 6,600          |  
|                                                                     |  |           |   |  |                |  
|                                                                     |  | 813,756   |   |  | 902,540        |  
|                                                                     |  |           |   |  |                |  
|Liabilities                                                          |  |           |   |  |                |  
|                                                                     |  |           |   |  |                |  
|Current                                                              |  |           |   |  |                |  
|Accounts payable and accrued liabilities (Note 6)                    |  | 8,580     |   |  | 45,622         |  
|                                                                     |  |           |   |  |                |  
|Stockholders equity                                                 |  |           |   |  |                |  
|Capital stock(Note 8)                                                |  |           |   |  |                |  
|Authorized                                                           |  |           |   |  |                |  
|225,000,000 of common shares,
      par value $0.001                 |  |           |   |  |                |  
|Issued and outstanding                                               |  |           |   |  |                |  
|31 March 2009  43,018,837
      common shares, par value $0.001     |  |           |   |  |                |  
|30 September 2008  44,834,000 common shares,
      par value $0.001 |  | 43,019    |   |  | 44,834         |  
|Additional paid-in capital                                           |  | 1,270,002 |   |  | 759,011        |  
|Share subscriptions received in advance                              |  | -         |   |  | 422,176        |  
|Deficit, accumulated during the
      development stage              |  | (507,845  | ) |  | (369,103       | )
|                                                                     |  |           |   |  |                |  
|                                                                     |  | 805,176   |   |  | 856,918        |  
|                                                                     |  |           |   |  |                |  
|                                                                     |  | 813,756   |   |  | 902,540        |  

Nature, Basis of Presentation and Continuance of Operations(Note 1), Commitments (Note 11) and Subsequent Event(Note 12)

On behalf of the Board:

|Donald James
      MacKenzie | Director
|------------------------------ | --------
|Donald James MacKenzie         |         

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

---

5

|Silverstar Mining Corp.              
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Operations
|(Expressed in U.S. Dollars)          
|(Unaudited)                          

|                                              |  | For the period  |            |   |               |            |   |               |            |   |              |            |   |              |  
|--------------------------------------------- |  | --------------- | ---------- | - | ------------- | ---------- | - | ------------- | ---------- | - | ------------ | ---------- | - | ------------ | -
|                                              |  | from the date   |            |   | For the three |            |   | For the three |            |   | For the six  |            |   | For the six  |  
|                                              |  | of inception on |            |   | month         |            |   | month         |            |   | month        |            |   | month        |  
|                                              |  | 5 December      |            |   | period ended  |            |   | period ended  |            |   | period ended |            |   | period ended |  
|                                              |  | 2003 to 31      |            |   | 31 March      |            |   | 31 March      |            |   | 31 March     |            |   | 31 March     |  
|                                              |  | March 2009      |            |   | 2009          |            |   | 2008          |            |   | 2009         |            |   | 2008         |  
|                                              |  | **$**           |            |   | **$**         |            |   | **$**         |            |   | **$**        |            |   | **$**        |  
|                                              |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|Expenses                                      |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|Bank charges and interest                     |  | 1,740           |            |   | 138           |            |   | 34            |            |   | 517          |            |   | 34           |  
|Consulting (Note 7)                           |  | 143,467         |            |   | 3,500         |            |   | -             |            |   | 57,000       |            |   | -            |  
|Exploration and                               |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|development (Note 5)                          |  | 15,829          |            |   | -             |            |   | -             |            |   | 2,459        |            |   | -            |  
|Filing fees                                   |  | 10,851          |            |   | 2,302         |            |   | 525           |            |   | 4,861        |            |   | 1,525        |  
|Investor relations                            |  | 97,492          |            |   | 10,000        |            |   | -             |            |   | 38,100       |            |   | -            |  
|Legal and accounting                          |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|(Note 7)                                      |  | 128,135         |            |   | 11,778        |            |   | 14,582        |            |   | 32,163       |            |   | 19,979       |  
|Licences and permits                          |  | 3,415           |            |   | -             |            |   | 2,316         |            |   | -            |            |   | 2,316        |  
|Management fees (Notes                        |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|7, 8 and 10)                                  |  | 58,000          |            |   | 13,000        |            |   | 4,500         |            |   | 13,000       |            |   | 9,000        |  
|Office and miscellaneous                      |  | 8,466           |            |   | 362           |            |   | -             |            |   | 405          |            |   | -            |  
|Rent (Notes 7, 8 and 10)                      |  | 22,900          |            |   | 1,500         |            |   | 1,500         |            |   | 3,900        |            |   | 3,000        |  
|Transfer agent                                |  | 14,684          |            |   | 1,687         |            |   | 1,906         |            |   | 3,095        |            |   | 2,656        |  
|Travel and entertainment                      |  | 17,391          |            |   | -             |            |   | -             |            |   | 4,142        |            |   | -            |  
|Write-down of mineral                         |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|property acquisition costs                    |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|(Note 5)                                      |  | 6,375           |            |   | -             |            |   | -             |            |   | -            |            |   | -            |  
|Recovery of expenses                          |  | (20,900         | )          |   | (20,900       | )          |   | -             |            |   | (20,900      | )          |   | -            |  
|                                              |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|Net loss for the period                       |  | (507,845        | )          |   | (23,367       | )          |   | (25,363       | )          |   | (138,742     | )          |   | (38,510      | )
|                                              |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|Basic and diluted loss per
      common share |  |                 | (0.001     | ) |               | (0.001     | ) |               | (0.003     | ) |              | (0.001     | )
|                                              |  |                 |            |   |               |            |   |               |            |   |              |            |   |              |  
|Weighted average number of
      common       |  |                 |            |   |               |            |   |               |            |   |              |            |  
|shares used in per share calculations         |  |                 | 44,939,816 |   |               | 55,500,000 |   |               | 44,864,898 |   |              | 55,500,000 |  

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

---

6

|Silverstar Mining Corp.              
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Cash Flows
|(Expressed in U.S. Dollars)          
|(Unaudited)                          

|                                          |  | For the      |   |  |             |   |  |             |   |  |             |   |  |             |  
|----------------------------------------- |  | ------------ | - |  | ----------- | - |  | ----------- | - |  | ----------- | - |  | ----------- | -
|                                          |  | period from  |   |  | For the     |   |  | For the     |   |  | For the six |   |  | For the six |  
|                                          |  | the date of  |   |  | three month |   |  | three month |   |  | month       |   |  | month       |  
|                                          |  | inception on |   |  | period      |   |  | period      |   |  | period      |   |  | period      |  
|                                          |  | 5 December   |   |  | ended 31    |   |  | ended 31    |   |  | ended 31    |   |  | ended 31    |  
|                                          |  | 2003 to 31   |   |  | March       |   |  | March       |   |  | March       |   |  | March       |  
|                                          |  | March 2009   |   |  | 2009        |   |  | 2008        |   |  | 2009        |   |  | 2008        |  
|                                          |  | **$**        |   |  | **$**       |   |  | **$**       |   |  | **$**       |   |  | **$**       |  
|Cash flows used in operating activities   |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Net loss for the period                   |  | (507,845     | ) |  | (23,367     | ) |  | (25,363     | ) |  | (138,742    | ) |  | (38,510     | )
|Adjustments to reconcile loss to net cash |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|used by operating activities              |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Contributions to capital by related       |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|parties (Notes 7, 8 and 10)               |  | 113,500      |   |  | 53,500      |   |  | 6,000       |   |  | 53,500      |   |  | 12,000      |  
|Write-down of mineral property            |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|acquisition costs (Note 5)                |  | 6,375        |   |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Changes in operating assets and           |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|liabilities                               |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Increase in accounts receivable           |  |              |   |  | -           |   |  | (3,000      | ) |  | -           |   |  | (3,000      | )
|Increase in prepaid expenses              |  | (800         | ) |  | -           |   |  | (2,100      | ) |  | -           |   |  | (2,100      | )
|Increase (decrease) in accounts           |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|payable and accrued
      liabilities     |  | 8,580        |   |  | (51,435     | ) |  | 11,334      |   |  | (37,042     | ) |  | 10,109      |  
|                                          |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|                                          |  | (380,190     | ) |  | (21,302     | ) |  | (13,129     | ) |  | (122,284    | ) |  | (21,501     | )
|Cash flows used investing activities      |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Acquisition of Silverdale, net of cash    |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|received (Note 3)                         |  | (140,221     | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Mineral property acquisition costs (Note  |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|5)                                        |  | (21,375      | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Website development costs (Note 4)        |  | (6,600       | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|                                          |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|                                          |  | (168,196     | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Cash flows from financing activities      |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Share subscriptions received in advance   |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|(Note 8)                                  |  | -            |   |  | (218,176    | ) |  | -           |   |  | (422,176    | ) |  | -           |  
|Share issue costs                         |  | (1,255       | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|Common shares issued for cash             |  | 550,677      |   |  | 218,176     |   |  | -           |   |  | 455,676     |   |  | -           |  
|Common shares redeemed                    |  | (1           | ) |  | -           |   |  | -           |   |  | -           |   |  | -           |  
|                                          |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|                                          |  | 549,421      |   |  | -           |   |  | -           |   |  | 33,500      |   |  | -           |  
|Increase (decrease) in cash and cash      |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|equivalents                               |  | 1,035        |   |  | (21,302     | ) |  | (13,129     | ) |  | (88,784     | ) |  | (21,501     | )
|                                          |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Cash and cash equivalents, beginning      |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|of period                                 |  | -            |   |  | 22,337      |   |  | 33,798      |   |  | 89,819      |   |  | 42,170      |  
|                                          |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|Cash and cash equivalents, end of         |  |              |   |  |             |   |  |             |   |  |             |   |  |             |  
|period                                    |  | 1,035        |   |  | 1,035       |   |  | 20,669      |   |  | 1,035       |   |  | 20,669      |  

Supplemental Disclosures with Respect to Cash Flows(Note 10)

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

---

7

|Silverstar Mining Corp.                                                      
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|Consolidated Statements of Changes in Stockholders Equity
      (Deficiency)
|(Expressed in U.S. Dollars)                                                  
|(Unaudited)                                                                  

|                                                  |  |               |   |  |               |   |  | Share           |   |  |             |   |  |               |  
|------------------------------------------------- |  | ------------- | - |  | ------------- | - |  | --------------- | - |  | ----------- | - |  | ------------- | -
|                                                  |  |               |   |  |               |   |  | subscription    |   |  | Deficit,    |   |  |               |  
|                                                  |  |               |   |  |               |   |  | received in     |   |  | accumulated |   |  |               |  
|                                                  |  |               |   |  |               |   |  | advance /       |   |  | during the  |   |  | Stockholders |  
|                                                  |  | Number of     |   |  |               |   |  | additional paid |   |  | development |   |  | equity        |  
|                                                  |  | shares issued |   |  | Capital stock |   |  | in capital      |   |  | stage       |   |  | (deficiency)  |  
|                                                  |  |               |   |  | **$**         |   |  | **$**           |   |  | **$**       |   |  | **$**         |  
|Balance at 5 December 2003
      (inception)      |  | -             |   |  | -             |   |  | -               |   |  | -           |   |  | -             |  
|Common share issued for cash ($0.33 per           |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|share) (Note 8)                                   |  | 3             |   |  | -             |   |  | 1               |   |  | -           |   |  | 1             |  
|Net loss for the period                           |  | -             |   |  | -             |   |  | -               |   |  | (450        | ) |  | (450          | )
|Balance at 30 September 2004                      |  | 3             |   |  | -             |   |  | 1               |   |  | (450        | ) |  | (449          | )
|Net loss for the year                             |  | -             |   |  | -             |   |  | -               |   |  | (300        | ) |  | (300          | )
|Balance at 30 September 2005                      |  | 3             |   |  | -             |   |  | 1               |   |  | (750        | ) |  | (749          | )
|Common shares issued for cash ($0.0003            |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|per share) (Note 8)                               |  | 30,000,000    |   |  | 30,000        |   |  | (20,000         | ) |  | -           |   |  | 10,000        |  
|Common shares redeemed  cash ($0.33              |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|per share) (Note 8)                               |  | (3            | ) |  | -             |   |  | (1              | ) |  | -           |   |  | (1            | )
|Contributions to capital by related parties       |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
| expenses (Notes 7, 8 and 10)                    |  | -             |   |  | -             |   |  | 24,000          |   |  | -           |   |  | 24,000        |  
|Net loss for the year                             |  | -             |   |  | -             |   |  | -               |   |  | (40,190     | ) |  | (40,190       | )
|                                                  |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|Balance at 30 September 2006                      |  | 30,000,000    |   |  | 30,000        |   |  | 4,000           |   |  | (40,940     | ) |  | (6,940        | )
|Contributions to capital by
      related parties |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
| expenses (Notes 7, 8 and 10)                    |  | -             |   |  | -             |   |  | 24,000          |   |  | -           |   |  | 24,000        |  
|Common shares issued for cash
      ($0.0033      |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|per share) (Note 8)                               |  | 25,500,000    |   |  | 25,500        |   |  | 59,500          |   |  | -           |   |  | 85,000        |  
|Net loss for the year                             |  | -             |   |  | -             |   |  | -               |   |  | (64,567     | ) |  | (64,567       | )
|Balance at 30 September 2007                      |  | 55,500,000    |   |  | 55,500        |   |  | 87,500          |   |  | (105,507    | ) |  | 37,493        |  
|Contributions to capital by
      related parties |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
| expenses (Notes 7, 8 and 10)                    |  | -             |   |  | -             |   |  | 12,000          |   |  | -           |   |  | 12,000        |  
|Share subscriptions received
      in advance     |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|(Note 8)                                          |  | -             |   |  | -             |   |  | 422,176         |   |  | -           |   |  | 422,176       |  
|Share issue costs                                 |  | -             |   |  | -             |   |  | (1,255          | ) |  | -           |   |  | (1,255        | )
|Common shares issued for business                 |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|acquisition ($0.15 per share)
      (Notes 3, 8   |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|and 10)                                           |  | 4,334,000     |   |  | 4,334         |   |  | 645,766         |   |  | -           |   |  | 650,100       |  
|Common shares returned to
      treasury and      |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|cancelled (Notes 8 and 10)                        |  | (15,000,000   | ) |  | (15,000       | ) |  | 15,000          |   |  | -           |   |  | -             |  
|Net loss for the year                             |  | -             |   |  | -             |   |  | -               |   |  | (263,596    | ) |  | (263,596      | )
|                                                  |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|Balance at 30 September 2008                      |  | 44,834,000    |   |  | 44,834        |   |  | 1,181,187       |   |  | (369,103    | ) |  | 856,918       |  
|Contributions to capital by related parties       |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
| expenses (Notes 7, 8 and 10)                    |  | -             |   |  | -             |   |  | 53,500          |   |  | -           |   |  | 53,500        |  
|Share subscriptions received in advance           |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|(Note 8)                                          |  | -             |   |  | -             |   |  | (422,176        | ) |  | -           |   |  | (422,176      | )
|Common shares issued for cash ($0.25              |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|per share) (Note 8)                               |  | 950,000       |   |  | 950           |   |  | 236,550         |   |  | -           |   |  | 237,500       |  
|Common shares issued for cash ($0.45              |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|per share) (Note 8)                               |  | 484,837       |   |  | 485           |   |  | 217,691         |   |  | -           |   |  | 218,176       |  
|Common shares returned to treasury and            |  |               |   |  |               |   |  |                 |   |  |             |   |  |               |  
|cancelled (Notes 8 and 10)                        |  | (3,250,000    | ) |  | (3,250        | ) |  | 3,250           |   |  | -           |   |  | -             |  
|Net loss for the period                           |  | -             |   |  | -             |   |  | -               |   |  | (138,742    | ) |  | (138,742      | )
|Balance at 31 March 2009                          |  | 43,018,837    |   |  | 43,019        |   |  | 1,270,002       |   |  | (507,845    | ) |  | 805,176       |  

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

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

8

|1. | Nature, Basis of Presentation and Continuance of
      Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Silverstar Mining Corp. (the Company) was incorporated
      under the laws of the State of Nevada on 5 December 2003. On 4 March 2008,
      the Company completed a merger with its wholly-owned subsidiary,
      Silverstar Mining Corp., which was incorporated by the Company solely to
      effect the name change of the Company to Silverstar Mining Corp. The
      Company was incorporated for the purpose to promote and carry on any
      lawful business for which a corporation may be incorporated under the laws
      of the State of Nevada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The accompanying consolidated financial statements
      include the accounts of the Company and its wholly-owned subsidiary,
      Silverdale Mining Corp. (Silverdale) from 24 July 2008, the date of
      acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company is an development stage company, as defined
      in Financial Accounting Standards Board (FASB) Statement of Financial
      Accounting Standards (SFAS) No. 7 Accounting and Reporting by
      Development Stage Enterprises, and Industry Guide 7 of the Securities
      Exchange Commission Industry Guide. The Company is devoting all of its
      present efforts in securing and establishing a new business, and its
      planned principle operations have not commenced, and, accordingly, no
      revenue has been derived during the organization period.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The consolidated financial statements of the Company have
      been prepared in accordance with accounting principles generally accepted
      in the United States of America (GAAP) applicable to development stage
      enterprises, and are expressed in U.S. dollars. The Companys fiscal year
      end is 30 September.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | These consolidated financial statements as at 31 March
      2009 and for the three and six month periods then ended have been prepared
      on a going concern basis, which contemplates the realization of assets and
      the settlement of liabilities and commitments in the normal course of
      business. The Company has a loss for the three month period of $23,367
      (2008  loss $25,363) and a loss for the six month period of $138,742
      (2008  loss $38,510, cumulative  loss $507,845) and has working capital
      deficit of $6,745 at 31 March 2009 (30 September 2008 - working capital of
      $44,997).                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Management cannot provide assurance that the Company will
      ultimately achieve profitable operations or become cash flow positive, or
      raise additional debt and/or equity capital. Management believes that the
      Company will be able to raise additional capital to continue operating and
      maintaining its business strategy during the fiscal year ending 30
      September 2009. However, if the Company is unable to raise additional
      capital in the near future, due to the Companys liquidity problems,
      management expects that the Company will need to curtail operations,
      liquidate assets, seek additional capital on less favourable terms and/or
      pursue other remedial measures. These consolidated financial statements do
      not include any adjustments related to the recoverability and
      classification of assets or the amounts and classification of liabilities
      that might be necessary should the Company be unable to continue as a
      going concern.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

9

At 31 March 2009, the Company had
suffered losses from development stage activities to date. Although management
is currently attempting to implement its business plan, and is seeking
additional sources of equity or debt financing, there is no assurance these
activities will be successful. Accordingly, the Company must rely on its
president to perform essential functions without compensation until a business
operation can be commenced. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The following is a summary of significant accounting
      policies used in the preparation of these consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Principles of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | All inter-company transactions and balances have been
      eliminated in these consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents include highly liquid
      investments with original maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company has been in the development stage since its
      formation on 5 December 2003 and has not yet realized any revenues from
      its planned operations. It is primarily engaged in the acquisition and
      exploration of mining properties.                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property acquisition costs are initially
      capitalized as tangible assets when purchased. At the end of each fiscal
      quarter end, the Company assesses the 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,
      costs will be amortized using the units-of- production method over the
      estimated life of the probable reserve.                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property exploration costs are expensed as
      incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Estimated future removal and site restoration costs, when
      determinable are provided over the life of proven reserves on a
      units-of-production basis. Costs, which include production equipment
      removal and environmental remediation, are estimated each period by
      management based on current regulations, actual expenses incurred, and
      technology and industry standards. Any charge is included in exploration
      expense or the provision for depletion and depreciation during the period
      and the actual restoration expenditures are charged to the accumulated
      provision amounts as incurred.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

10

As of the date of these consolidated
financial statements, the Company has not established any proven or probable
reserves on its mineral properties and incurred only acquisition and exploration
costs (Note 5).

Although the Company has taken steps to
verify title to mineral properties in which it has an interest, according to the
usual industry standards for the stage of exploration of such properties, these
procedures do not guarantee the Companys title. Such properties may be subject
to prior agreements or transfers and title may be affected by undetected
defects.

Reclamation costs

The Companys policy for recording
reclamation costs is to record a liability for the estimated costs to reclaim
mined land by recording charges to production costs for each tonne of ore mined
over the life of the mine. The amount charged is based on managements
estimation of reclamation costs to be incurred. The accrued liability is reduced
as reclamation expenditures are made. Certain reclamation work is performed
concurrently with mining and these expenditures are charged to operations at
that time.

Long-lived assets

In accordance with SFAS No. 144,
Accounting for Impairment or Disposal of Long-Lived Assets, the
carrying value of long-lived assets is reviewed on a regular basis for the
existence of facts or circumstance that may suggest impairment. The Company
recognized an impairment when the sum if the expected undiscounted future cash
flows is less than the carrying amount of the asset. Impairment losses, if any,
are measured as the excess of the carrying amount of the asset over its
estimated fair value.

Financial instruments

The carrying value of cash and cash
equivalents and accounts payable and accrued liabilities approximates their fair
value because of the short maturity of these instruments. The Companys
operations are in Nevada and virtually all of its assets and liabilities are
giving rise to significant exposure to market risks from changes in foreign
currency rates. The Companys financial risk is the risk that arises from
fluctuations in foreign exchange rates and the degree of volatility of these
rates. Currently, the Company does not use derivative instruments to reduce its
exposure to foreign currency risk.

Derivative financial instruments

The Company has not, to the date of
these consolidated financial statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

11

Website development costs

The costs of website development during
the planning stage, as defined under Emerging Issued Task Force (EITF) No.
00-2 Accounting for Web Site Development Costs, will be expensed as
incurred. Website development incurred during the development stage, including
external direct costs of creating graphics and website content, will be
capitalized and amortized over the estimated useful life, beginning when the
website is operational.

Income taxes

Deferred income taxes are reported for
timing differences between items of income or expense reported in the
consolidated financial statements and those reported for income tax purposes in
accordance with SFAS No. 109, Accounting for Income Taxes, which
requires the use of the asset/liability method of accounting for income taxes.
Deferred income taxes and tax benefits are recognized for the future tax
consequences attributable to differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and for tax loss and credit carry-forwards. 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 Company provides for deferred taxes for the
estimated future tax effects attributable to temporary differences and
carry-forwards when realization is more likely than not.

Basic and diluted net loss per share

The Company computes net loss per share
in accordance with SFAS No. 128, Earnings per Share. SFAS No. 128
requires presentation of both basic and diluted earnings per share (EPS) on
the face of the consolidated income statement. Basic EPS is computed by dividing
net loss available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all potentially dilutive common shares outstanding during the period
using the treasury stock method and convertible preferred stock using the
if-converted method. In computing diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all potentially
dilutive shares if their effect is anti-dilutive.

Comprehensive loss

SFAS No. 130, Reporting
Comprehensive Income, establishes standards for the reporting and display
of comprehensive loss and its components in the financial statements. As at 31
March 2009, the Company has no items that represent a comprehensive loss and,
therefore, has not included a schedule of comprehensive loss in the consolidated
financial statements.

Segments of an enterprise and related
information.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

12

SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
Financial Reporting for Segments of a BusinessEnterprise. SFAS No. 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.

Start-up expenses

The Company has adopted Statement of
Position No. 98-5, Reporting the Costs of Start-up Activities, which
requires that costs associated with start-up activities be expensed as incurred.
Accordingly, start-up costs associated with the Companys formation have been
included in the Companys general and administrative expenses for the period
from the date of inception on 5 December 2003 to 31 March 2009.

Foreign currency translation

The Companys functional and reporting
currency is in U.S. dollars. The consolidated financial statements of the
Company are translated to U.S. dollars in accordance with SFAS No. 52,
Foreign Currency Translation. Monetary assets and liabilities
denominated in foreign currencies are translated using the exchange rate
prevailing at the balance sheet date. Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are included
in the determination of income. The Company has not, to the date of these
consolidated financial statements, entered into derivative instruments to offset
the impact of foreign currency fluctuations.

Use of estimates

The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions
that affect the amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenditures during the reporting period. Actual results
could differ from these estimates.

Recent accounting pronouncements

In May 2008, FASB issued SFAS No. 163,
Accounting for Financial Guarantee Insurance Contracts  an interpretation
of FASB Statement No. 60. SFAS No. 163 provides enhanced guidance on
the recognition and measurement to be used to account for premium revenue and
claim liabilities and related disclosures and is limited to financial guarantee
insurance (and reinsurance) contracts, issued by enterprises included within the
scope of FASB Statement No. 60, Accounting and Reporting by Insurance
Enterprises.SFAS No. 163 also requires that an insurance enterprise

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

13

recognize a claim liability prior to an
event of default when there is evidence that credit deterioration has occurred
in an insured financial obligation. SFAS No. 163 is effective for financial
statements issued for fiscal years and interim periods beginning after 15
December 2008, with early application not permitted. The adoption of SFAS No.
163 did not have an impact on the consolidated financial statements.

In May 2008, the FASB issued SFAS No.
162, The Hierarchy of Generally Accepted Accounting Principles. SFAS No.
162 is intended to improve financial reporting by identifying a consistent
framework, or hierarchy, for selecting accounting principles to be used in
preparing financial statements that are presented in conformity with GAAP for
nongovernmental entities. Prior to the issuance of SFAS No. 162, GAAP hierarchy
was defined in the American Institute of Certified Public Accountants (AICPA)
Statement on Auditing Standards (SAS) No. 69, The Meaning of Present
Fairly in Conformity with Generally Accepted Accounting Principles.SAS No. 69 has been criticized because it is directed to the auditor rather
than the entity. SFAS No. 162 addresses these issues by establishing that the
GAAP hierarchy should be directed to entities because it is the entity, not its
auditor, that is responsible for selecting accounting principles for financial
statements that are presented in conformity with GAAP. SFAS No. 162 is effective
60 days following the SECs approval of the Public Company Accounting Oversight
Board Auditing amendments to AU Section 411, The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles. The Company
does not expect SFAS No. 162 to have a material effect on its consolidated
financial statements.

In March 2008, the FASB issued SFAS No.
161, Disclosures about Derivative Instruments and Hedging Activities  an
amendment of FASB Statement No. 133.SFAS No. 161 is intended to
improve transparency in financial reporting by requiring enhanced disclosures of
an entitys derivative instruments and hedging activities and their effects on
the entitys financial position, financial performance, and cash flows. SFAS No.
161 applies to all derivate instruments within the scope of SFAS No. 133
Accounting for Derivative Instruments and Hedging Activities.It
also applies to non-derivative hedging instruments and all hedged items
designated and qualifying as hedges under SFAS No. 133. SFAS No. 161 is
effective prospectively for financial statements issued for fiscal years
beginning after 15 November 2008, with early application encouraged. The
adoption of SFAS No. 161 did not have an impact on the Companys consolidated
financial statements.

In December 2007, the FASB issued SFAS
No. 141 (revised 2007), Business Combinations. SFAS No. 141(R)
establishes principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any noncontrolling interest in the acquiree and the
goodwill acquired. SFAS No. 141(R) also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. SFAS No. 141(R) is effective for fiscal years beginning after 15
December 2008. The adoption of SFAS No. 141(R) did not have an impact on the
Companys consolidated financial statements.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

14

In December 2007, the FASB issued SFAS
No. 160, Noncontrolling Interests in Consolidated Financial Statements  an
amendment of Accounting Research Bulletin No. 51. SFAS No. 160 establishes
accounting and reporting standards for ownership interests in subsidiaries held
by parties other than the parent, the amount of consolidated net income
attributable and to the noncontrolling interest, changes in a parents ownership
interest, and the valuation of retained noncontrolling equity investments when a
subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure
requirements that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160 is effective
for fiscal years beginning after 15 December 2008. The adoption of SFAS No. 160
did not have an impact on the Companys consolidated financial statements.

|3. | Acquisition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In accordance with SFAS No. 141, Business
      Combinations, acquisitions are accounted for under the purchase
      method of accounting. Under the purchase method of accounting, assets
      acquired and liabilities assumed are recorded at their estimated fair
      values. Goodwill is recorded to the extent the purchase price
      consideration, including certain acquisition and closing costs, exceeds
      the fair value of the net identifiable assets acquired at the date of the
      acquisition.                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On 24 July 2008, the Company acquired Silverdale. The
      aggregate consideration paid by the Company was $791,860 of which $141,760
      was paid in cash, and the Company issued 4,334,000 common shares of the
      Company valued at $650,100 to acquire 100% of the issued and outstanding
      common shares of Silverdale (Notes 8 and 10). Silverdale was acquired
      pursuant to a Stock Exchange Agreement with Silverdale and the former
      shareholders of Silverdale dated 13 June 2008. The acquisition of
      Silverdale expanded the Companys business of acquiring and exploring
      mineral properties.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | A valuation of certain assets was completed and the
      Company internally determined the fair value of other assets and
      liabilities. In determining the fair value of acquired assets, standard
      valuation techniques were used including the market and income
      approach.                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The purchase price allocation has been determined as
      follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                            |  | **$**   | 
| | -------------------------- |  | ------- | 
| | Assets purchased:          |  |         | 
| | Cash and cash equivalents  |  | 1,539   | 
| | Mineral property interests |  | 790,321 | 
| |                            |  |         | 
| | Total assets acquired      |  | 791,860 | 
| |                            |  |         | 
| | Purchase price             |  | 791,860 | 

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

15

Pro forma information

The following unaudited consolidated
pro forma financial information presents the combined results of operations of
the Company and Silverdale for the six month periods ended 31 March 2009 and
2008 as if the acquisitions had occurred at 1 October 2007, including the
issuance of the Companys common stock as consideration for the acquisition of
Silverdale.

| |                                         |  | Consolidated Pro Forma |  
| | --------------------------------------- |  | ---------------------- | -
| |                                         |  |                        |  
| |                                         |  | 31 March               |  
| |                                         |  | 2009                   |  
| |                                         |  | **$**                  |  
| |                                         |  |                        |  
| | Revenues                                |  | Nil                    |  
| | Net loss                                |  | 138,742                |  
| | Basic and diluted loss per common share |  | (0.003                 | )

The unaudited consolidated pro forma
financial information does not include adjustments to remove certain private
company expenses, which may not be incurred in future periods. Similarly, the
unaudited consolidated pro forma financial information does not include
adjustments for additional expenses, such as rent, insurance, and other expenses
that would have been incurred subsequent to the acquisition date. The unaudited
consolidated pro forma financial information does not necessarily reflect the
results of operations that would have occurred had the Company and Silverdale
been a single entity during these periods.

|4. | Website Development
Costs
|-- | -------------------------

| |                               |  |       |  |  |              |  |  | Net Book Value | 
| | ----------------------------- |  | ----- |  |  | ------------ |  |  | -------------- | 
| |                               |  |       |  |  | Accumulated  |  |  | 31 March       | 
| |                               |  | Cost  |  |  | amortization |  |  | 2009           | 
| |                               |  | **$** |  |  | **$**        |  |  | **$**          | 
| |                               |  |       |  |  |              |  |  |                | 
| | Website and development costs |  | 6,600 |  |  | -            |  |  | 6,600          | 

During the six month period ended 31
March 2009, the Company incurred website development costs of $Nil (31 March
2008 - $Nil). The Company has temporarily postponed further development of its
website.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

16

|5. | Mineral Property Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Rose Prospect Lode Mining Claim                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the year ended 30 September 2006, the Company
      acquired an interest in a mineral claim located in Clark County, Nevada
      (the Rose Prospect Lode Mining Claim) for $6,375. In May 2006, the
      Company commissioned a geological evaluation report of the Rose Prospect
      Lode Mining Claim and in June 2006, the Company commissioned a Phase I
      work program as recommended by the evaluation report. During the Phase I
      work program, the Company staked a second claim adjacent to the west of
      the Rose Lode Claim to cover other indicated mineralized zones observed in
      that area (the Rose Prospect II Lode Mining Claim). The acquisition cost
      of $6,375 was initially capitalized as a tangible asset. During the year
      ended 30 September 2006, the Company recorded a write-down of mineral
      property acquisition costs of $6,375 related to the Rose Prospect Lode
      Mining Claim.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company had no expenditures related to the Rose
      Prospect Lode Mining Claim property for the three and six month periods
      ended 31 March 2009 and 31 March 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Pinehurst Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | During the year ended 30 September 2007, the Company
      entered into a mineral property option agreement, through its wholly-owned
      subsidiary, to acquire an undivided 100% right, title and interest in
      eight unpatented mining claims described as the Corby, Cory FR,
      Walker, Linda, Eddie, Smokey, Dorian and Valerine claims (the
      Pinehurst Properties) located near Pinehurst, Shoshone County, Idaho.
      The mineral property option agreement calls for cash payments of
      $1,000,000 ($50,000 paid), the issuance of 1,000,000 restricted common
      shares of the Company and the completion of exploration expenditures of
      $1,000,000 on the claims detailed as follows:                                                                                                                                                                                                                     

| |                                |  |        |  |  |           |  |  |           |  |  | Exploration  | 
| | ------------------------------ |  | ------ |  |  | --------- |  |  | --------- |  |  | ------------ | 
| |                                |  |        |  |  | Payments  |  |  | Shares    |  |  | Expenditures | 
| |                                |  |        |  |  | **$**     |  |  |           |  |  | **$**        | 
| | Upon execution of agreement    |  | (paid) |  |  | 50,000    |  |  | 100,000   |  |  | 100,000      | 
| | On or before 14 September 2009 |  |        |  |  | 100,000   |  |  | 150,000   |  |  | 200,000      | 
| | On or before 14 September 2010 |  |        |  |  | 350,000   |  |  | 250,000   |  |  | 300,000      | 
| | On or before 14 September 2011 |  |        |  |  | 500,000   |  |  | 500,000   |  |  | 400,000      | 
| |                                |  |        |  |  |           |  |  |           |  |  |              | 
| |                                |  |        |  |  | 1,000,000 |  |  | 1,000,000 |  |  | 1,000,000    | 

The Company had no expenditures related
to the Pinehurst Properties for the three month and six month periods ended 31
March 2009 and 31 March 2008.

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

17

Silver Strand Properties

On 1 March 2008, the Company entered
into a mineral property option agreement with New Jersey Mining Company ("NJMC")
to purchase a 50% Joint Venture Interest in mining operations on certain mining
properties collectively known as the Silver Strand Properties, located in
Kootenai County, Idaho. The terms of the option agreement calls for the Company
to make payments as follows:

| | i.   | $120,000 upon the signing of the agreement
  (paid);
| | ---- | ----------------------------------------------------
| | ii.  | $150,000 on or before 30 April 2008 (paid); and     
| | iii. | $230,000 on or before 30 May
2008.                  

The terms of the option agreements call
for the Company to contribute 50% of the reclamation bond held as a treasury
bill, the receipt of which is due on or before 30 May 2008, for the benefit of
the Joint Venture. NJMC will be the operator of the mine.

The Company had no expenditures related
to the Silver Strand Properties for the three and six month periods ended 31
March 2009 and 31 March 2008.

Cobalt Canyon Gold Project

On 8 September 2008, the Company entered
  into a letter of intent with Gold Canyon Properties, LLP to examine and possibly
  acquire 100% of the Cobalt Canyon Gold Project located in Lincoln County, Nevada.
  The Cobalt Canyon properties are located in the Chief Mining District of southeastern
  Nevada. The project includes numerous small underground mines within the Chief
  District situated just north of Caliente, Nevada. The project includes 22 unpatented
  federal lode claims (approximately 363 acres) and an option to acquire 59 acres
  in three patented mining claims. In October 2008, the Company staked sixteen
  claims, the Cobalt Lode Claims in Lincoln County, Nevada. The Company and Gold
  Canyon Properties, LLP are determining the terms related to this letter of intent.

In January 2009, the Company decided
  not to proceed with the Gold Canyon Gold Project. The Company incurred total
  expenditures of $5,859 related to the Cobalt Canyon Gold Project before abandoning
  it.

|6. | Accounts Payable and Accrued Liabilities                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                  
|   | Accounts payable and accrued liabilities are non-interest
      bearing, unsecured and have settlement dates within one year.                    
|   |                                                                                                                                                  
|   | Included in accounts payable and accrued liabilities is
      amount due to related parties of $Nil (30 September 2008 - $24,500) (Note
      7).

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

18

|7. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Included in accounts payable and accrued liabilities is
      amount due to related parties of $Nil (30 September 2008 - $24,500) (Note
      6).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On 1 April 2008, the Company has agreed to pay an officer
      and director of the Company of $6,500 per month for management and
      consulting services commencing 1 March 2008 expiring in 30 days upon
      cancellation notice by either party. On 1 February 2009, the officer and
      director elected to contribute his salary to the Company until further
      notice. The Company paid $26,000 to the officer and director for these
      services during the six month period ended 31 March 2009 (31 March 2008 -
      $6,500, cumulative - $71,500) (Note 11).                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On 1 April 2008, the Company agreed to pay an officer of
      the Company of $3,500 per month for management and consulting services
      commencing 1 March 2008 expiring in 30 days upon cancellation notice by
      either party. The Company accrued $17,500 to the officer and director for
      these services during the six month period ended 31 March 2009 (31 March
      2008 - $3,500, cumulative - $42,000). During the six month period ended 31
      March 2009, the officer resigned, received a $3,000 payment in settlement
      of the balance payable of $42,000, and made a contribution to capital by
      forgiving the remaining balance payable in the amount of $39,000. This
      forgiveness of related party debt has been recorded as an increase in
      contributed surplus (Notes 8 and 11).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six month period ended 31 March 2009, the
      Company paid or accrued $9,000 to a company related to the Company by way
      of a director in common for management and consulting services (31 March
      2008 - $Nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six month period ended 31 March 2009, the
      Company paid or accrued $15,000 to a Company controlled by a former
      officer and director of the Company for accounting services (31 March 2008
      - $Nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six month period ended 31 March 2009, the
      Company paid or accrued $4,500 to an individual related to a director of
      the Company for management and consulting services (31 March 2008 -
      $Nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six month period ended 31 March 2009, an
      officer and director of the Company made contributions to capital for
      management fees in the amount of $13,000 (31 March 2008 - $9,000,
      cumulative - $58,000) and rent in the amount of $1,500 (31 March 2008 -
      $3,000, cumulative - $16,500) (Notes 8 and 10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Authorized capital stock consists of 225,000,000 common
      shares with a par value of $0.001 per common share. The total issued and
      outstanding capital stock is 43,018,837 common shares with a par value of
      $0.001 per common share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

19

On 3 December 2003, 3 common shares of
the Company were issued for cash proceeds of $1.

On 1 January 2006, 30,000,000 common
shares were issued to an officer and director of the Company for cash proceeds
of $10,000.

On 1 January 2006, 3 common shares of
the Company were redeemed for proceeds of $1. These common shares were cancelled
on the same date.

On 3 May 2007, the Company completed a
public offering of securities pursuant to an exemption provided by Rule 504 of
Regulation D, registered in the State of Nevada, and issued 25,500,000 common
shares for total cash proceeds of $85,000.

On 4 March 2008, the Company effected a
three (3) for one (1) forward stock split of all outstanding common shares and a
corresponding forward increase in the Companys authorized common stock. The
effect of the forward split was to increase the number of the Companys common
shares issued and outstanding from 18,500,000 to 55,500,000 and to increase the
Companys authorized common shares from 75,000,000 shares par value $0.001 to
225,000,000 shares par value $0.001. The consolidated financial statements have
been retroactively adjusted to reflect this stock split.

On 24 July 2008, the Company issued
4,334,000 common shares of the Company valued at $650,100 to acquire 100% of the
issued and outstanding common shares of Silverdale (Notes 3 and 10).

On 30 September 2008, a former director
and officer of the Company returned to treasury 15,000,000 common shares of the
Company for proceeds of $Nil. These shares were cancelled during the year ended
30 September 2008 (Note 10).

On 14 October 2008, the Company issued
950,000 common shares of the Company at a price of $0.25 per common share for
total proceeds of $237,500.

On 27 October 2008, the president and a
director of the Company returned to treasury 1,200,000 common shares of the
Company for proceeds of $Nil. These shares were cancelled during the three month
period ended 31 March 2009 (Note 10).

On 19 January 2009, the Company issued
484,837 common shares of the Company at a price of $0.45 per common share for
total proceeds of $218,176.

On 25 March 2009, five directors of the
Companys directors resigned and returned to treasury 400,000 of their 500,000
common shares of the Company for proceeds of $Nil. These shares were cancelled
during the three month period ended 31 March 2009 (Note 10).

On 31 March 2009, the Chief Financial
Officer and the Chairman of the Board of the Companys directors resigned and
returned to treasury 1,650,000 of their 1,800,000 common shares of the

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

20

Company for proceeds of $Nil. These
shares were cancelled during the three month period ended 31 March 2009 (Note
10).

During the six month period ended 31
March 2009, an officer and director of the Company made contributions to capital
for management fees in the amount of $13,000 (31 March 2008 - $9,000, cumulative
- $58,000) and rent in the amount of $1,500 (31 March 2008 - $3,000, cumulative
- $16,500) (Notes 7 and 10).

During the six month period ended 31
March 2009, an officer of the Company resigned and made contribution to capital
by forgiving certain payable in the amount of $39,000 for consulting services
(Notes 7 and 11).

|9. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company has losses carried forward for income tax
      purposes to 31 March 2009. There are no current or deferred tax expenses
      for the period ended 31 March 2009 due to the Companys loss position. The
      Company has fully reserved for any benefits of these losses. The deferred
      tax consequences of temporary differences in reporting items for financial
      statement and income tax purposes are recognized, as appropriate.
      Realization of the future tax benefits related to the deferred tax assets
      is dependent on many factors, including the Companys ability to generate
      taxable income within the net operating loss carryforward period.
      Management has considered these factors in reaching its conclusion as to
      the valuation allowance for financial reporting purposes.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The provision for refundable federal income tax consists
      of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                             |  | For the six  |   |  | For the six  |  
| | ------------------------------------------- |  | ------------ | - |  | ------------ | -
| |                                             |  | month period |   |  | month period |  
| |                                             |  | ended 31     |   |  | ended 31     |  
| |                                             |  | March 2009   |   |  | March 2008   |  
| |                                             |  | **$**        |   |  | **$**        |  
| |                                             |  |              |   |  |              |  
| | Deferred tax asset attributable to:         |  |              |   |  |              |  
| | Current operations                          |  | 47,172       |   |  | 13,094       |  
| | Contributions to capital by related parties |  | (4,930       | ) |  | (4,080       | )
| | Forgiveness of related party payable        |  | (13,260      | ) |  | -            |  
| | Less: Change in valuation allowance         |  | (28,982      | ) |  | (9,014       | )
| |                                             |  |              |   |  |              |  
| | Net refundable amount                       |  | -            |   |  | -            |  

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

21

The composition of the Companys
deferred tax assets as at 31 March 2009 and 30 September 2008 are as follows:

| |                                        |  |            |   |  | As at 30  |  
| | -------------------------------------- |  | ---------- | - |  | --------- | -
| |                                        |  |            |   |  | September |  
| |                                        |  | As at 31   |   |  | 2008      |  
| |                                        |  | March 2009 |   |  | (Audited) |  
| |                                        |  | **$**      |   |  | **$**     |  
| |                                        |  |            |   |  |           |  
| | Income tax operating loss carryforward |  | 507,845    |   |  | 369,103   |  
| |                                        |  |            |   |  |           |  
| | Statutory federal income tax rate      |  | 34%        |   |  | 34%       |  
| | Contributed rent and services          |  | -7.60%     |   |  | -5.53%    |  
| | Effective income tax rate              |  | 0%         |   |  | 0%        |  
| |                                        |  |            |   |  |           |  
| | Deferred tax assets                    |  | 134,077    |   |  | 105,095   |  
| | Less: Valuation allowance              |  | (134,077   | ) |  | (105,095  | )
| |                                        |  |            |   |  |           |  
| | Net deferred tax asset                 |  | -          |   |  | -         |  

The potential income tax benefit of
these losses has been offset by a full valuation allowance.

As at 31 March 2009, the Company has an
unused net operating loss carry-forward balance of approximately $394,345 that
is available to offset future taxable income. This unused net operating loss
carry-forward balance expires between 2024 and 2029.

|10. | Supplemental Disclosures with Respect to Cash
      Flows
|--- | ---------------------------------------------------------

| |                                            |  | For the period  |  |  |              |  |  |              | 
| | ------------------------------------------ |  | --------------- |  |  | ------------ |  |  | ------------ | 
| |                                            |  | from the date   |  |  |              |  |  |              | 
| |                                            |  | of inception on |  |  | For the six  |  |  | For the six  | 
| |                                            |  | 5 December      |  |  | month period |  |  | month period | 
| |                                            |  | 2003 to 31      |  |  | ended 31     |  |  | ended 31     | 
| |                                            |  | March 2009      |  |  | March 2009   |  |  | March 2008   | 
| |                                            |  | **$**           |  |  | **$**        |  |  | **$**        | 
| |                                            |  |                 |  |  |              |  |  |              | 
| | Cash paid during the year for interest     |  | -               |  |  | -            |  |  | -            | 
| | Cash paid during the year for income taxes |  | -               |  |  | -            |  |  | -            | 

During the year ended 30 September
2008, the Company issued 4,334,000 common shares of the Company valued at
$650,100 to acquire 100% of the issued and outstanding common shares of
Silverdale (Notes 3 and 8).

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

22

During the year ended 30 September
2008, a former officer and director of the Company returned to treasury
15,000,000 common shares of the Company for proceeds of $Nil. These shares were
cancelled during the year ended 30 September 2008 (Note 8).

On 27 October 2008, the president and a
director of the Company returned to treasury 1,200,000 common shares of the
Company for proceeds of $Nil. These shares were cancelled during the three month
period ended 31 March 2009 (Note 8).

On 25 March 2009, five directors of the
Companys directors resigned and returned to treasury 400,000 of their 500,000
common shares of the Company for proceeds of $Nil. These shares were cancelled
during the three month period ended 31 March 2009 (Note 8).

On 31 March 2009, the Chief Financial
Officer and the Chairman of the Board of the Companys directors resigned and
returned to treasury 1,650,000 of their 1,800,000 common shares of the Company
for proceeds of $Nil. These shares were cancelled during the three month period
ended 31 March 2009 (Note 8).

During the six month period ended 31
March 2009, an officer and director of the Company made contributions to capital
for management fees in the amount of $13,000 (31 March 2008 - $9,000, cumulative
- $58,000) and rent in the amount of $1,500 (31 March 2008 - $3,000, cumulative
- $16,500) (Notes 7 and 8).

|11. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | On 1 April 2008, the Company has agreed to pay an officer
      and director of the Company of $6,500 per month for management and
      consulting services commencing 1 March 2008 expiring in 30 days upon
      cancellation notice by either party. On 1 February 2009, the officer and
      director elected to contribute his salary to the Company until further
      notice (Note 7).                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | On 1 April 2008, the Company has agreed to pay an officer
      of the Company of $3,500 per month for management and consulting services
      commencing 1 March 2008 expiring in 30 days upon cancellation notice by
      either party. During the three month period ended 31 March 2009 the
      officer resigned and received a $3,000 payment in settlement for services
      provided in the quarter ended 31 March 2009 and in settlement of all
      amounts owed (Notes 7 and 8).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company has outstanding and future commitments under
      mineral property option agreements to pay cash and issue common shares of
      the Company (Note 5).                                                                                                                                                                                                                                                                                                                            

---

|Silverstar Mining Corp.                   
|------------------------------------------
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|(Expressed in U.S. Dollars)               
|(Unaudited)                               
|31 March
      2009                       

23

|12. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | In April 2009, the Company issued two $5,000 convertible
      debentures to two unrelated parties. The convertible debentures bear
      interest at a rate of 10% per annum on any unpaid principle balances, are
      unsecured, and have no fixed terms of repayment. The holders of the
      convertible debentures have the right to convert any portion of the unpaid
      principle and/or accrued interest into restricted common shares of the
      Company at any time within thirty-six months from the issue date on the
      basis of $0.0025 per common share for each dollar of principle and/or
      interest due and payable. The Company may repay principal amounts due at
      any time without premium or penalty.

---

4

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

Forward-Looking Statements

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our unaudited consolidated financial statements are stated in
United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles. The following discussion should be
read in conjunction with our consolidated financial statements and the related
notes that appear elsewhere in this quarterly report. The following discussion
contains forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from those discussed in the
forward looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this quarterly report, particularly in the section entitled "Risk Factors".

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "common
shares" refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise
indicated, the terms "we", "us", "our", Company, and Silverstar mean
Silverstar Mining Corp., a Nevada corporation, unless otherwise indicated and
the term Silverdale means Silverdale Mining Corp., our wholly owned
subsidiary.

Corporate History

We were incorporated under the laws of the State of Nevada on
December 5, 2003 under the name Computer Maid, Inc.. On February 13, 2006, we
changed our name from Computer Maid, Inc. to Rose Explorations Inc..

In February 2006, we acquired the Rose Prospect Lode Mining
Claim in Clark County Nevada and in June 2006, we staked the Rose Prospect II
Lode Mining Claim adjacent to the west of the Rose Lode Claim to cover other
indicated mineralized zones observed in that area. From February 2006, we have
been an exploration stage company engaged in the exploration of mineral
properties.

Effective March 4, 2008, we completed a merger with our
subsidiary, Silverstar Mining Corp., a Nevada corporation. As a result, we have
changed our name from Rose Explorations Inc. to Silverstar Mining Corp. We
changed the name of our company to better reflect the direction and business of
our company.

In addition, effective March 4, 2008 we effected a three (3)
for one (1) forward stock split of our authorized, issued and outstanding common
stock. As a result, our authorized capital has increased from 75,000,000 shares
of common stock with a par value of $0.001 to 225,000,000 shares of common stock
with a par value of $0.001.

On March 31, 2008, we entered into a joint venture agreement
with New Jersey Mining Co. to acquire a 50% interest in the Silver Strand silver
mine located in the Coeur dAlene Mining District. We were unable to close the
joint venture agreement as expected before September 30, 2008. We have not been
notified by NJMC that we are in default.

---

5

Under the terms of the joint venture agreement, we have agreed
to share equally in the production and further development and exploration of
the property.

On June 13, 2008, we entered into a share exchange agreement
with Silverdale Mining Corp., a Nevada corporation, and the shareholders of
Silverdale Mining Corp. The closing of the transactions contemplated in the
share exchange agreement and the acquisition of all of the issued and
outstanding common stock in the capital of Silverdale Mining Corp. occurred on
July 24, 2008. In accordance with the closing of the share exchange agreement,
we issued 4,334,000 shares of our common stock to the former shareholders of
Silverdale Mining Corp. in exchange for the acquisition, by our company, of all
of the 4,334,000 issued and outstanding shares of Silverdale Mining Corp.

On September 2, 2008, we entered into a letter of intent with
Gold Canyon Partners, LLP pursuant to which we have agreed to purchase a 100%
interest in a mining property commonly known as the Cobalt Canyon Gold Project,
in the Chief District, located in Lincoln County, Nevada. The acquisition
contemplated by the letter of intent is subject to the fulfillment of certain
conditions precedent, due diligence and the negotiation of a definitive
agreement.

Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at www.sedar.com

On September 30, 2008, we entered into a share
cancellation/return to treasury agreement with Greg Cowan, a former director and
officer of our company. Pursuant to the agreement, Mr. Cowan has agreed to the
return and cancellation of 15,000,000 shares of our common stock that were held
by him. We did not provide Mr. Cowan with any compensation for such
cancellation.

On January 15, 2009, we closed a private placement consisting
of 484,837 shares of our common stock at a price of US $0.45 per share for
aggregate gross proceeds of $218,176.65. We issued 454,837 shares to 10 non-US
persons pursuant to an offshore transaction relying on Regulation S and/or
Section 4(2) of the Securities Act of 1933, as amended. We issued 30,000 shares
to 1 US persons pursuant to the exemption from registration provided for under
Rule 506 of Regulation D, promulgated under the United States Securities Act of
1933, as amended.

Plan of Operation

We are an exploration stage mining company engaged in the
exploration of minerals on properties located in Idaho and Nevada.

Our current operational focus is to conduct exploration
activities on our Rose Load Claim, complete the mineral property option
agreement and joint venture agreement held by our subsidiary, Silverdale Mining
Corp and to enter into a definitive agreement with Gold Canyon Partners, LLP to
acquire the Cobalt Canyon Gold Project.

Rose Prospect Lode Mining Claim

In February 2006, we acquired the Rose Prospect Lode Mining
Claim in Clark County Nevada and in June 2006, we staked the Rose Prospect II
Lode Mining Claim adjacent to the west of the Rose Lode Claim to cover other
indicated mineralized zones observed in that area.

The Rose Lode Claim is located in the Goodsprings (Yellow Pine)
Mining District situated within the southwestern comer of the State of Nevada,
U.S.A. The Rose Lode Claim covers some former exploratory workings on a mineral
showing.

The Yellow Pine Mining District is located in the area of the
Spring Mountains of southern Nevada. Although less famous than many of the other
mining districts of the Great Basin it nevertheless ranks second only to Tonopah
in total Nevada lead and zinc production. During World War I this district was
one of the most productive in the West, but by the end of World War II only a
few mines remained in operation. The region is known for its historic production
of lead, zinc, silver and gold.

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6

The Rose Lode Claim is underlain by the Mississippian Monte
Cristo Limestone Formation with the mineralization possibly comprised of copper
minerals hosted by a breccia zone which may be up to 200 feet wide within the
Anchor Limestone Member.

Mineral Property Option Agreement between our Company and
Chuck Stein

On September 14, 2007, our wholly owned subsidiary, Silverdale
Mining Corp. entered into a mineral property option agreement with Chuck Stein
to acquire an undivided 100% right, tile and interest in eight unpatented mining
claims described as the Corby, Cory FR, Walker, Linda, Eddie,
Smokey, Dorian and Valerine claims which are located near Pinehurst,
Shoshone County, Idaho.

In order to exercise this option we have agreed, over a period
of four years, to make a total cash payment of $1,000,000, issue a total of
1,000,000 restricted shares of our common stock and conduct exploration
expenditures of $1,000,000 on the claims.

To date, we have paid $50,000 but have not completed all the
commitments per the agreement. However, we have not received notification from
Chuck Stein of default and continue to explore opportunities to proceed with
this project.

Mineral Property Joint Venture Agreement between our Company
and New Jersey Mining Company

On March 1, 2008, entered into a mineral property option
agreement with New Jersey Mining Company ("NJMC") to purchase a 50% Joint
Venture Interest in mining operations on certain mining property commonly known
as the Silver Strand mine, located in Kootenai County, Idaho.

In order to exercise this Joint Venture Agreement we have
agreed to pay NJMC $500,000 and agreed to reimburse NJMC $60,000 being 50% of
the current reclamation bond held by the U.S. Forest Service. We have also
agreed to issue 50,000 shares of our common stock to NJMC. The NJMC will be the
operator of the mine and will also mill the ore at its mineral processing plant
in Kellogg, Idaho and market saleable products on behalf of the Joint Venture.
Operating costs and revenues will be shared by the Joint Venture partners on an
equal (50:50) basis with no add-ons for corporate general and administrative
costs. To date, we have paid $270,000.

Cobalt Canyon Gold Project

On September 8, 2008, we entered into a letter of intent with
Gold Canyon Properties, LLP to examine and possibly acquire 100% of the Cobalt
Canyon Gold Project located in Lincoln County, Nevada. The Cobalt Canyon
properties are located in the Chief Mining District of southeastern Nevada. The
project includes numerous small underground mines within the Chief District
situated just north of Caliente, Nevada. The project includes 22 unpatented
federal lode claims (approx. 363 acres) and an option to acquire 59 acres in
three patented mining claims. Our company and Gold Canyon Properties, LLP are
determining the terms related to this letter of intent. To date we have paid
$15,000 and were required to make an additional payment of $45,000 to complete
the agreement with Gold Canyon Properties, LLP .We chose not to complete
the agreement and have forfeited the $15,000 initial payment.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve month period ending March 31, 2010.

Off-Balance Sheet Arrangements

As of March 31, 2009, our company had no off-balance sheet
arrangements, including any outstanding derivative financial statements,
off-balance sheet guarantees, interest rate swap transactions or foreign
currency contracts. Our company does not engage in trading activities involving
non-exchange traded contracts.

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7

Employees

We do not expect any significant changes in the number of
employees during the next twelve month period. We presently conduct our business
through agreements with consultants and arms-length third parties.

Results of Operations for the Three Months Ended March 31,
2009 and 2008

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the three
month periods ended March 31, 2009 and 2008.

We have not generated any revenue since inception and are
dependent upon obtaining financing to pursue our business activities. For these
reasons, our auditors believe that there is substantial doubt that we will be
able to continue as a going concern.

Our operating results for the three month periods ended March
31, 2009 and 2008 and the changes between those periods for the respective items
are summarized as follows:

|                            |   | Three Month Period
      Ended March 31, 2009 |   | Three Month Period
      Ended March 31, 2008 |   | Change Between Three Month
      Periods Ended March 31, 2009 and March
      31, 2008
|--------------------------- | - | --------------------------------------------- | - | --------------------------------------------- | - | --------------------------------------------------------------------------------------
|Revenue                     | $ | Nil                                           | $ | Nil                                           | $ | Nil                                                                                   
|Bank Charges and Interest   | $ | 138                                           | $ | 34                                            | $ | 104                                                                                   
|Consulting                  | $ | 3,500                                         | $ | Nil                                           | $ | 3,500                                                                                 
|Exploration and development | $ | Nil                                           | $ | Nil                                           | $ | Nil                                                                                   
|Filing Fees                 | $ | 2,302                                         | $ | 525                                           | $ | 1,777                                                                                 
|Investor Relations          | $ | 10,000                                        | $ | Nil                                           | $ | 10,000                                                                                
|Legal and Accounting        | $ | 11,778                                        | $ | 14,582                                        | $ | (2,804)                                                                               
|Licences and permits        | $ | Nil                                           | $ | 2,316                                         | $ | (2,316)                                                                               
|Management fees             | $ | 13,000                                        | $ | 4,500                                         | $ | 8,500                                                                                 
|Office and miscellaneous    | $ | 362                                           | $ | Nil                                           | $ | 362                                                                                   
|Rent                        | $ | 1,500                                         | $ | 1,500                                         | $ | Nil                                                                                   
|Transfer Agent              | $ | 1,687                                         | $ | 1,906                                         | $ | (219)                                                                                 
|Recovery of expenses        | $ | (20,900)                                      | $ | Nil                                           | $ | (20,900)                                                                              
|Net loss                    | $ | (23,367)                                      | $ | (25,363)                                      | $ | 1,996                                                                                 

Results of Operations for the Six Months Ended March 31,
2009 and 2008

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the six month
periods ended March 31, 2009 and 2008.

We have not generated any revenue since inception and are
dependent upon obtaining financing to pursue our business activities. For these
reasons, our auditors believe that there is substantial doubt that we will be
able to continue as a going concern.

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8

Our operating results for the six month periods ended March 31,
2009 and 2008 and the changes between those periods for the respective items are
summarized as follows:

|                            |   | Six Month Period
      Ended March 31, 2009 |   | Six Month Period
      Ended March 31, 2008 |   | Change Between Six Month
      Periods Ended March 31, 2009 and March
      31, 2008
|--------------------------- | - | ------------------------------------------- | - | ------------------------------------------- | - | ------------------------------------------------------------------------------------
|Revenue                     | $ | Nil                                         | $ | Nil                                         | $ | Nil                                                                                 
|Bank Charges and Interest   | $ | 517                                         | $ | 34                                          | $ | 483                                                                                 
|Consulting                  | $ | 57,000                                      | $ | Nil                                         | $ | 57,000                                                                              
|Exploration and development | $ | 2,459                                       | $ | Nil                                         | $ | 2,459                                                                               
|Filing Fees                 | $ | 4,861                                       | $ | 1,525                                       | $ | 3,336                                                                               
|Investor Relations          | $ | 38,100                                      | $ | Nil                                         | $ | 38,100                                                                              
|Legal and Accounting        | $ | 32,163                                      | $ | 19,979                                      | $ | 12,184                                                                              
|Licences and permits        | $ | Nil                                         | $ | 2,316                                       | $ | (2,316 )                                                                            
|Management fees             | $ | 13,000                                      | $ | 9,000                                       | $ | 4,000                                                                               
|Office and miscellaneous    | $ | 405                                         | $ | Nil                                         | $ | 405                                                                                 
|Rent                        | $ | 3,900                                       | $ | 3,000                                       | $ | 900                                                                                 
|Transfer Agent              | $ | 3,095                                       | $ | 2,656                                       | $ | 439                                                                                 
|Travel and Entertainment    | $ | 4,142                                       | $ | Nil                                         | $ | 4,142                                                                               
|Recovery of expenses        | $ | (20,900 )                                   | $ | Nil                                         | $ | (20,900 )                                                                           
|Net loss                    | $ | (138,742 )                                  | $ | (38,510 )                                   | $ | (100,232 )                                                                          

Liquidity and Financial Condition

Working Capital

|                          | Six Month Period Ended
      March 31, 2009 | Year Ended September 30,
      2008 | Change between March 31,
      2009 and September 30, 2008
|------------------------- | ------------------------------------------- | ----------------------------------- | ----------------------------------------------------------
|Current Assets            | $1,835                                      | $90,619                             | ($88,784)                                                 
|Current Liabilities       | $8,580                                      | $45,622                             | ($37,042)                                                 
|Working Capital/(Deficit) | ($6,745)                                    | $44,997                             | ($51,742)                                                 

Cash Flows

|                                            |   | Six Month
      Period Ended March 31, 2009 |   |   | Six Month
      Period Ended **March 31, 2008** |   |   | Change between Six
      Month Periods Ended March 31, 2009 and
      March 31, 2008 |  
|------------------------------------------- | - | ------------------------------------------- | - | - | ----------------------------------------------- | - | - | ------------------------------------------------------------------------------------ | -
|Cash Flows used in Operating Activities     | $ | (122,284                                    | ) | $ | (21,501                                         | ) | $ | (100,783                                                                             | )
|Cash Flows used in Investing Activities     | $ | Nil                                         |   | $ | Nil                                             |   | $ | Nil                                                                                  |  
|Cash Flows provided by Financing Activities | $ | 33,500                                      |   | $ | Nil                                             |   | $ | 33,500                                                                               |  
|Net Decrease in Cash During Period          | $ | (88,784                                     | ) | $ | (21,501                                         | ) | $ | (67,283                                                                              | )

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9

As of March 31, 2009, our total assets were $813,756 and our
total liabilities were $8,580 and we had a working capital deficit of $6,745.
Our financial statements report a net loss of $138,742 for the six months ended
March 31, 2009, and a net loss of $507,845 for the period from December 5, 2003
(inception) to March 31, 2009.

On January 15, 2009, we closed a private placement consisting
of 484,837 shares of our common stock at a price of US $0.45 per share for
aggregate gross proceeds of $218,176.65. We issued 454,837 shares to 10 non-US
persons pursuant to an offshore transaction relying on Regulation S and/or
Section 4(2) of the Securities Act of 1933, as amended. We issued 30,000 shares
to 1 US persons pursuant to the exemption from registration provided for under
Rule 506 of Regulation D, promulgated under the United States Securities Act of
1933, as amended.

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual consolidated
financial statements for the year ended September 30, 2008, our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern.

We anticipate that additional funding will be required in the
form of equity financing from the sale of our common stock. At this time, we
cannot provide investors with any assurance that we will be able to raise
sufficient funding from the sale of our common stock or through a loan from our
directors to meet our obligations over the next twelve months. We do not have
any arrangements in place for any future debt or equity financing.

Application of Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our consolidated financial statements,
which have been prepared in accordance with the accounting principles generally
accepted in the United States of America. Preparing financial statements
requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue, and expenses. These estimates and
assumptions are affected by managements application of accounting policies. We
believe that understanding the basis and nature of the estimates and assumptions
involved with the following aspects of our consolidated financial statements is
critical to an understanding of our consolidated financial statements.

We regularly evaluate the accounting policies and estimates
that we use to prepare our consolidated financial statements. In general,
management's estimates are based on historical experience, on information from
third party professionals, and on various other assumptions that are believed to
be reasonable under the facts and circumstances. Actual results could differ
from those estimates made by management.

Significant accounting policies used in the preparation of our
consolidated financial statements are set forth in Note 2 to our consolidated
financial statements.

Mineral property costs

Our company is primarily engaged in the acquisition,
exploration and development of mineral properties.

Mineral property acquisition costs are initially capitalized as
tangible assets when purchased. At the end of each fiscal quarter end, our
company assesses the 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, costs will be amortized using
the units-of-production method over the estimated life of the probable reserve.

Mineral property exploration costs are expensed as incurred.

Estimated future removal and site restoration costs, when
determinable are provided over the life of proven reserves on a
units-of-production basis. Costs, which include production equipment removal and
environmental remediation, are estimated each period by management based on
current regulations, actual expenses incurred, and technology and industry
standards. Any charge is included in exploration expense or the provision for
depletion and

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10

depreciation during the period and the actual restoration
expenditures are charged to the accumulated provision amounts as incurred.

As of the date of these consolidated financial statements our
company has not established any proven or probable reserves on its mineral
properties and incurred only acquisition and exploration costs.

Although our company has taken steps to verify title to mineral
properties in which it has an interest, according to the usual industry
standards for the stage of exploration of such properties, these procedures do
not guarantee our companys title. Such properties may be subject to prior
agreements or transfers and title may be affected by undetected defects.

Reclamation costs

Our companys policy for recording reclamation costs is to
record a liability for the estimated costs to reclaim mined land by recording
charges to production costs for each tonne of ore mined over the life of the
mine. The amount charged is based on managements estimation of reclamation
costs to be incurred. The accrued liability is reduced as reclamation
expenditures are made. Certain reclamation work is performed concurrently with
mining and these expenditures are charged to operations at that time.

Long-lived assets

In accordance with SFAS No. 144, Accounting for Impairment
or Disposal of Long-Lived Assets, the carrying value of long-lived assets is
reviewed on a regular basis for the existence of facts or circumstance that may
suggest impairment. Our company recognized an impairment when the sum if the
expected undiscounted future cash flows is less than the carrying amount of the
asset. Impairment losses, if any, are measured as the excess of the carrying
amount of the asset over its estimated fair value.

Financial instruments

The carrying value of cash and accounts payable and accrued
liabilities approximates their fair value because of the short maturity of these
instruments. Our companys operations are in Nevada and virtually all of its
assets and liabilities are giving rise to significant exposure to market risks
from changes in foreign currency rates. Our companys financial risk is the risk
that arises from fluctuations in foreign exchange rates and the degree of
volatility of these rates. Currently, our company does not use derivative
instruments to reduce its exposure to foreign currency risk.

Income taxes

Deferred income taxes are reported for timing differences
between items of income or expense reported in the financial statements and
those reported for income tax purposes in accordance with SFAS No. 109,
Accounting for Income Taxes, which requires the use of the
asset/liability method of accounting for income taxes. Deferred income taxes and
tax benefits are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases, and for tax loss and credit
carry-forwards. 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. Our company
provides for deferred taxes for the estimated future tax effects attributable to
temporary differences and carry-forwards when realization is more likely than
not.

Basic and diluted net loss per share

Our company computes net loss per share in accordance with SFAS
No. 128, Earnings per Share. SFAS No. 128 requires presentation of both
basic and diluted earnings per share (EPS) on the face of the income
statement. Basic EPS is computed by dividing net loss available to common
shareholders (numerator) by the weighted average number of shares outstanding
(denominator) during the period. Diluted EPS gives effect to all potentially
dilutive common shares outstanding during the period using the treasury stock
method and convertible preferred stock using

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11

the if-converted method. In computing diluted EPS, the average
stock price for the period is used in determining the number of shares assumed
to be purchased from the exercise of stock options or warrants. Diluted EPS
excludes all potentially dilutive shares if their effect is anti-dilutive.

Comprehensive loss

SFAS No. 130, Reporting Comprehensive Income,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at March 31, 2009, our company
has no items that represent a comprehensive loss and, therefore, has not
included a schedule of comprehensive loss in the financial statements.

Start-up expenses

Our company has adopted Statement of Position No. 98-5,
Reporting the Costs of Start-up Activities, which requires that costs
associated with start-up activities be expensed as incurred. Accordingly,
start-up costs associated with our companys formation have been included in our
companys general and administrative expenses for the period from the date of
inception on 5 December 2003 to 31 March 2009.

Use of estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenditures during the reporting period. Actual results could differ from these
estimates.

Recent accounting pronouncements

In May 2008, FASB issued SFAS No. 163, Accounting for
Financial Guarantee Insurance Contracts  an interpretation of FASB Statement
No. 60. SFAS No. 163 provides enhanced guidance on the recognition and
measurement to be used to account for premium revenue and claim liabilities and
related disclosures and is limited to financial guarantee insurance (and
reinsurance) contracts, issued by enterprises included within the scope of FASB
Statement No. 60, Accounting and Reporting by Insurance Enterprises. SFAS No.
163 also requires that an insurance enterprise recognize a claim liability prior
to an event of default when there is evidence that credit deterioration has
occurred in an insured financial obligation. SFAS No. 163 is effective for
financial statements issued for fiscal years and interim periods beginning after
15 December 2008, with early application not permitted. The adoption of SFAS.
No. 163 did not have an impact on the consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles. SFAS No. 162 is intended to
improve financial reporting by identifying a consistent framework, or hierarchy,
for selecting accounting principles to be used in preparing financial statements
that are presented in conformity with GAAP for nongovernmental entities. Prior
to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American
Institute of Certified Public Accountants (AICPA) Statement on Auditing
Standards (SAS) No. 69, The Meaning of Present Fairly in Conformity with
Generally Accepted Accounting Principles. SAS No. 69 has been criticized
because it is directed to the auditor rather than the entity. SFAS No. 162
addresses these issues by establishing that the GAAP hierarchy should be
directed to entities because it is the entity, not its auditor, that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS No. 162 is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
Auditing amendments to AU Section 411, The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles. Our company does not
expect SFAS No. 162 to have a material effect on its consolidated financial
statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities  an amendment of FASB
Statement No. 133. SFAS No. 161 is intended to improve transparency in
financial reporting by requiring enhanced disclosures of an entitys derivative
instruments and hedging activities and their effects on the entitys financial
position, financial performance, and cash flows. SFAS No. 161 applies to all

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12

derivate instruments within the scope of SFAS No. 133
Accounting for Derivative Instruments and Hedging Activities. It also
applies to non-derivative hedging instruments and all hedged items designated
and qualifying as hedges under SFAS No. 133. SFAS No. 161 is effective
prospectively for financial statements issued for fiscal years beginning after
15 November 2008, with early application encouraged. The adoption of SFAS. No.
161 did not have an impact on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations. SFAS No. 141(R) establishes principles and
requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill acquired. SFAS No.
141(R) also establishes disclosure requirements to enable the evaluation of the
nature and financial effects of the business combination. SFAS No. 141(R) is
effective for fiscal years beginning after 15 December 2008. The adoption of
SFAS. No. 141 did not have an impact on the consolidated financial
statements.

In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements  an amendment
of Accounting Research Bulletin No. 51. SFAS No. 160 establishes accounting
and reporting standards for ownership interests in subsidiaries held by parties
other than the parent, the amount of consolidated net income attributable and to
the noncontrolling interest, changes in a parents ownership interest, and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS No. 160 is effective for fiscal
years beginning after 15 December 2008. The adoption of SFAS. No. 160 did not
have an impact on the consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Item 4T. Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (our principal executive officer) and our chief
financial officer (our principal financial officer and principle accounting
officer) to allow for timely decisions regarding required disclosure.

As of March 31, 2009, the end of our quarter covered by this
report, we carried out an evaluation, under the supervision and with the
participation of our president and chief executive officer (our principal
executive officer and our principal financial officer and principle accounting
officer), of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on the foregoing, our president and chief
executive officer (our principal executive officer and our principal financial
officer and principle accounting officer) concluded that our disclosure controls
and procedures were effective as of the end of the period covered by this
quarterly report.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended March 31, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

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13

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other forward looking
statements. Such forward looking statements include any projections and
estimates made by us and our management in connection with our business
operations. While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

Risks Associated With Mining

All of our properties are in the exploration stage. There is
no assurance that we can establish the existence of any mineral resource on any
of our properties in commercially exploitable quantities. Until we can do so, we
cannot earn any revenues from operations and if we do not do so we will lose all
of the funds that we expend on exploration. If we do not discover any mineral
resource in a commercially exploitable quantity, our business could fail.

Despite exploration work on our mineral properties, we have not
established that any of them contain any mineral reserve, nor can there be any
assurance that we will be able to do so. If we do not, our business could
fail.

A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a "reserve" that meets the requirements of the
Securities and Exchange Commission's Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any 'reserve' and
any funds that we spend on exploration will probably be lost.

Even if we do eventually discover a mineral reserve on one or
more of our properties, there can be no assurance that we will be able to
develop our properties into producing mines and extract those resources. Both
mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.

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14

Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our properties, our business may fail.

Both mineral exploration and extraction require permits from
various foreign, federal, state, provincial and local governmental authorities
and are governed by laws and regulations, including those with respect to
prospecting, mine development, mineral production, transport, export, taxation,
labour standards, occupational health, waste disposal, toxic substances, land
use, environmental protection, mine safety and other matters. There can be no
assurance that we will be able to obtain or maintain any of the permits required
for the continued exploration of our mineral properties or for the construction
and operation of a mine on our properties at economically viable costs. If we
cannot accomplish these objectives, our business could fail.

We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain them on
reasonable terms. To the extent such approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.

If we establish the existence of a mineral resource on any
of our properties in a commercially exploitable quantity, we will require
additional capital in order to develop the property into a producing mine. If we
cannot raise this additional capital, we will not be able to exploit the
resource, and our business could fail.

If we do discover mineral resources in commercially exploitable
quantities on any of our properties, we will be required to expend substantial
sums of money to establish the extent of the resource, develop processes to
extract it and develop extraction and processing facilities and infrastructure.
Although we may derive substantial benefits from the discovery of a major
deposit, there can be no assurance that such a resource will be large enough to
justify commercial operations, nor can there be any assurance that we will be
able to raise the funds required for development on a timely basis. If we cannot
raise the necessary capital or complete the necessary facilities and
infrastructure, our business may fail.

Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.

Mineral exploration, development and production involves many
risks which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure or against which we may elect not to
insure. Any such event could result in work stoppages and damage to property,
including damage to the environment. We do not currently maintain any insurance
coverage against these operating hazards. The payment of any liabilities that
arise from any such occurrence would have a material adverse impact on our
company.

Mineral prices are subject to dramatic and unpredictable
fluctuations.

We expect to derive revenues, if any, either from the sale of
our mineral resource properties or from the extraction and sale of precious and
base metals such as gold, silver and copper. The price of those commodities has
fluctuated widely in recent years, and is affected by numerous factors beyond
our control, including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates,
global or regional consumptive patterns, speculative activities and increased
production due to new extraction developments and improved extraction and
production methods. The effect of these factors on the price of base and
precious metals,

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15

and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.

The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.

The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.

In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining
operations.

Risks Related To Our Company

We have a limited operating history on which to base an
evaluation of our business and prospects.

We have been in the business of exploring mineral resource
properties since February 2006 and we have not yet located any mineral reserve.
As a result, we have never had any revenues from our operations. In addition,
our operating history has been restricted to the acquisition and exploration of
our mineral properties and this does not provide a meaningful basis for an
evaluation of our prospects if we ever determine that we have a mineral reserve
and commence the construction and operation of a mine. We have no way to
evaluate the likelihood of whether our mineral properties contain any mineral
reserve or, if they do that we will be able to build or operate a mine
successfully. We anticipate that we will continue to incur operating costs
without realizing any revenues during the period when we are exploring our
properties. We therefore expect to continue to incur significant losses into the
foreseeable future. We recognize that if we are unable to generate significant
revenues from mining operations and any dispositions of our properties, we will
not be able to earn profits or continue operations. At this early stage of our
operation, we also expect to face the risks, uncertainties, expenses and
difficulties frequently encountered by companies at the start up stage of their
business development. We cannot be sure that we will be successful in addressing
these risks and uncertainties and our failure to do so could have a materially
adverse effect on our financial condition. There is no history upon which to
base any assumption as to the likelihood that we will prove successful and we
can provide investors with no assurance that we will generate any operating
revenues or ever achieve profitable operations.

The fact that we have not earned any operating revenues
since our incorporation raises substantial doubt about our ability to continue
to explore our mineral properties as a going concern.

We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a commercially exploitable quantity on one or more of our mineral
properties and we build and operate a mine. We had cash and cash equivalents in
the amount of $1,035 as of March 31, 2009. At March 31, 2009, we had a working
capital deficit of $6,745. We incurred a net loss of $138,742 for our quarter
ended March 31, 2009 and have a net loss of $507,845 since inception. Due to
cash shortages we have reduced our average monthly management services and
administrative costs to approximately $5,000 to $10,000. Our planned exploration
requires additional funding and we are exploring ways to raise the funds
required. As we cannot assure a lender that we will be able to successfully
explore and develop our mineral properties, we will probably find it difficult
to raise debt financing from traditional lending sources. We have traditionally
raised our operating capital from sales of equity and debt securities, but there
can be no assurance that we will continue to be able to do so. If we cannot
raise the money that

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16

we need to continue exploration of our mineral properties, we
may be forced to delay, scale back, or eliminate our exploration activities. If
any of these were to occur, there is a substantial risk that our business would
fail.

These circumstances lead our independent registered public
accounting firm, in their report dated November 30, 2008, to comment about our
companys ability to continue as a going concern. Management has plans to seek
additional capital through a private placement and public offering of its
capital stock. These conditions raise substantial doubt about our companys
ability to continue as a going concern. Although there are no assurances that
managements plans will be realized, management believes that our company will
be able to continue operations in the future. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event our company cannot continue in
existence. We continue to experience net operating losses.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like NASDAQ or a stock exchange like Amex. Accordingly,
shareholders may have difficulty reselling any of their shares.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our
stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and

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17

other information. Under interpretations of these rules, the
Financial Industry Regulatory Authority believes that there is a high
probability that speculative low-priced securities will not be suitable for at
least some customers. The Financial Industry Regulatory Authority requirements
make it more difficult for broker-dealers to recommend that their customers buy
our common stock, which may limit your ability to buy and sell our stock.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

On January 15, 2009, we closed a private placement consisting
of 484,837 shares of our common stock at a price of US $0.45 per share for
aggregate gross proceeds of $218,176.65.

We issued 454,837 shares to 10 non-US persons pursuant to an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933, as amended.

We issued 30,000 shares to 1 US persons pursuant to the
exemption from registration provided for under Rule 506 of Regulation D,
promulgated under the United States Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Securities
Holders

None.

Item 5. Other Information

Effective March 25, 2009, we entered into a share
cancellation/return to treasury agreement with each of Dennis OBrien, Matt
Williams, Howard Lahti and David Rice wherein each have agreed to the
cancellation and return to treasury of all but 25,000 shares of common stock of
our company held by each.

Effective March 25, 2009, we entered into a share
cancellation/return to treasury agreement with Grant Brackebusch, wherein Grant
Brackebusch has agreed to the cancellation and return to treasury of all of the
shares of common stock of our company held by Grant Brackebusch.

Effective March 31, 2009, we entered into a share
cancellation/return to treasury agreement with David Bond wherein David Bond has
agreed to the cancellation and return to treasury of all but 50,000 shares of
common stock of our company held by David Bond.

Effective March 31, 2009, we entered into a share
cancellation/return to treasury agreement with John Jardine wherein John Jardine
has agreed to the cancellation and return to treasury of all but 100,000 shares
of common stock of our company held by John Jardine.

Effective March 25, 2009, Dennis OBrien, Matt Williams, Howard
Lahti and David Rice resigned as directors of our company.

Effective March 31, 2009, David Bond resigned as a director and
chairman of the board of our company.

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18

Effective March 31, 2009, John Jardine resigned as chief
financial officer, secretary and treasurer of our company.

Effective March 31, 2009, Lawrence Siccia was elected a
director of our company.

Item 6. Exhibits

|Exhibit |                                                                                                                                                                                                                                                                                                                
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                
|(3)     | Articles of Incorporation
      and Bylaws                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on January 30, 2007).                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                
|3.2     | By-laws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on January 30, 2007).                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                
|3.3     | Articles of Merger filed with the Secretary of State of
      Nevada on February 20, 2008 and which is effective March 4, 2008
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 5, 2008).                                                                             
|        |                                                                                                                                                                                                                                                                                                                
|3.4     | Certificate of Change filed with the Secretary of State
      of Nevada on February 20, 2008 and which is effective March 4, 2008
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 5, 2008).                                                                          
|        |                                                                                                                                                                                                                                                                                                                
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                
|10.1    | Purchase Agreement Rose Prospect Lode Claim (incorporated
      by reference from our Registration Statement on Form SB-2 filed on January
      30, 2007).                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                
|10.2    | Share Exchange Agreement dated June 13, 2008, among our
      company, Silverdale Mining Corp. and the selling the shareholders of
      Silverdale Mining Corp. as set out in the share exchange agreement
      (incorporated by reference from our Current Report on Form 8-K filed on
      June 16, 2008).
|        |                                                                                                                                                                                                                                                                                                                
|10.3    | Mineral Property Option Agreement dated September 14,
      2007 between Silverdale Mining Corp. and Chuck Stein (incorporated by
      reference from our Current Report on Form 8-K filed on July 28, 2008).                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                
|10.4    | Joint Venture Agreement dated March 31, 2008 between our
      company and New Jersey Mining Company (incorporated by reference from our
      Current Report on Form 8-K filed on July 28, 2008).                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                
|10.5    | Consulting Agreement dated April 1, 2008 between our
      company and Mr. James MacKenzie (incorporated by reference from our
      Quarterly Report on Form 10-QSB filed on August 14, 2008).                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                
|10.6    | Share Cancellation/Return to Treasury Agreement with
      Donald James MacKenzie (incorporated by reference from our Current Report
      on Form 8-K filed on October 17, 2008).                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                
|10.7    | Share Cancellation/Return to Treasury Agreement with Greg
      Cowan (incorporated by reference from our Current Report on Form 8-K filed
      on October 17, 2008).                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                
|(14)    | Code of Ethics                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                
|14.1    | Code of Ethics and Business Conduct (incorporated by
      reference from our Annual Report on Form 10-KSB filed on December 29,
      2008).                                                                                                                                                                  

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19

|(21)  | Subsidiaries of the Registrant                                 
|----- | ---------------------------------------------------------------
|      |                                                                
|21.1  | Silverdale Mining Corp.                                        
|      |                                                                
|(31)  | Section 302 Certifications                                     
|      |                                                                
|31.1* | Section
      302 Certification of Principal Executive Officer.
|      |                                                                
|(32)  | Section 906 Certification                                      
|      |                                                                
|32.1* | Section
      906 Certification of Principal Executive Officer.

*filed herewith

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20

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

|                    | SILVERSTAR MINING CORP.                                
|------------------- | -------------------------------------------------------
|                    | (Registrant)                                           
|                    |                                                        
|                    |                                                        
|Dated: May 15, 2009 | */s/ Jim MacKenzie*                                    
|                    | Jim MacKenzie                                          
|                    | President, Chief Executive Officer and Director        
|                    | (Principal Executive Officer, Principal
      Financial
|                    | Officer and Principal Accounting Officer)              

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