UNITED STATESSECURITIES AND EXCHANGE
COMMISSION
  Washington,
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 December
31, 2009
  Commission
File Number  333-140299
   SILVERSTAR
MINING CORP.
 (Exact
name of registrant as specified in its charter)
  Nevada
              98-04256287(State
      or other jurisdiction of incorporation or organization)
              (IRS
      Employer Identification No.)164-997 Hornby Street, Vancouver, BC, Canada
      V6Z 1V3
              V6Z
      1V3(Address
      of principal executive offices)
              (Zip
      Code)
  604-960-0523
 (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 SecuritiesExchange 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 has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). [ ] YES
[X] 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
  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 42,168,837 shares of $0.001 par value common stock issued and
outstanding as of December 31, 2009 and as of the date of the filing of this
quarterly report.
    1
    PART
1 – FINANCIAL INFORMATION
   Item
1. Financial Statements.
   Our
unaudited interim consolidated financial statements for the three month
period ended December 31, 2009 immediately follow and are a integral part
of this quarterly report. They are stated in United States Dollars (US$) and are
prepared in accordance with United States generally accepted accounting
principles.











































2



































Silverstar
Mining Corp.


(A
Development Stage Company)





Consolidated
Financial Statements


(Expressed
in U.S. Dollars)


(Unaudited)


31
December 2009












































3


Silverstar
Mining Corp.


(A
Development Stage Company)


Consolidated
Balance Sheets
 (Expressed
in U.S. Dollars)
 (Unaudited)





As
      at 31 December
              2009
            
            As
      at 30 September 2009
              (audited)$
            
            $AssetsCurrentCash
      and cash equivalents
            
            9,288
            
            1,0139,288
            
            1,013LiabilitiesCurrentAccounts
      payable and accrued liabilities (Note 6)
            
            10,179
            
            16,501Convertible
      debentures (Note 7)
            
            15,994
            
            15,616Demand
      loan (Note 8)
            
            30,345
            
            -Due
      to related parties (Note 9)
            
            1,000
            
            8,50057,518
            
            40,617Stockholders’
      deficiencyCapital stock (Note
      10)Authorized225,000,000
      of common shares, par value $0.001Issued
      and outstanding31
      December 2009 – 42,168,837 common shares, par value $0.00130
      September 2009 – 42,168,837 common shares, par value
$0.001
            
            42,169
            
            42,169Additional
      paid-in capital
            
            1,303,852
            
            1,297,852Deficit,
      accumulated during the development stage
            
            (1,394,251)
            
            (1,379,625)(48,230)
            
            (39,604)9,288
            
            1,013





Nature, Basis of Presentation and
Continuance of Operations(Note 1) and Subsequent Event (Note
14)





On
behalf of the Board:





“Lawrence
Siccia”  Director


Lawrence Siccia








4




Silverstar
Mining Corp.


(A
Development Stage Company)


Consolidated
Statements of Operations


(Expressed
in U.S. Dollars)
 (Unaudited)







For
      the period from the date of inception on 5 December 2003 to 31 December
      2009
            
            For
      the three month period ended 31 December
              2009
            
            For
      the three month period ended 31 December
              2008$
            
            $
            
            $ExpensesBank
      charges and interest (Notes 7, 8 and 13)
            19,381
            
            1,703
            
            379Consulting
            138,467
            
            -
            
            53,500Exploration
      and development (Note 5)
            13,028
            
            -
            
            2,459Filing
      fees
            15,890
            
            678
            
            2,559Investor
      relations
            84,992
            
            -
            
            28,100Legal
      and accounting (Notes 9 and 10)
            160,251
            
            5,746
            
            20,385Licences
      and permits
            3,415
            
            -
            
            -Management
      fees (Notes 10 and 13)
            71,500
            
            4,500
            
            -Rent
      (Notes 10 and 13)
            28,200
            
            1,500
            
            43Transfer
      agent fees
            17,647
            
            825
            
            2,400Travel,
      entertainment and office (recovery)
            23,184
            
            (326)
            
            1,408Write-down
      of mineral property acquisition costs (Note 5)
            811,696
            
            -
            
            4,142Write-down
      of website development costs (Note 4)
            6,600
            
            -
            
            -Net
      loss for the period
            (1,394,251)
            
            (14,626)
            
            (115,375)Basic
      and diluted loss per common share
            
            
            (0.0003)
            
            (0.0025)Weighted
      average number of common shares used in per share
    calculations
            
            
            42,168,837
            
            44,791,609





The
accompanying notes are an integral part of these consolidated financial
statements.
 5


Silverstar
Mining Corp.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows


(Expressed
in U.S. Dollars)
 (Unaudited)





For
      the period from the date of inception on 5 December 2003 to 31
      December  2009
            
            For
      the three month period
              ended
              31
      December
              2009
            
            For
      the three month period
              ended
              31
      December
              2008$
            
            $
            
            $Cash
      flows used in operating activitiesNet
      loss for the period
            (1,394,251)
            
            (14,626)
            
            (115,375)Adjustments
      to reconcile loss to net cash used by operating activitiesAccrued
      interest (Notes 7 and 8)
            16,339
            
            723
            
            -Contributions
      to capital by related parties (Notes 10 and 13)
            131,500
            
            6,000
            
            -Write-down
      of mineral property acquisition costs (Note 5)
            811,696
            
            -
            
            -Write-down
      of website development costs  (Note 4)
            6,600
            
            -
            
            -Changes
      in operating assets and liabilitiesIncrease (decrease) in accounts
      payable and accrued liabilities
            10,179
            
            (6,322)
            
            -Increase (decrease) in due to
      related parties
            1,000
            
            (7,500)
            
            14,393(416,937)
            
            (21,725)
            
            (100,982)Cash
      flows used in investing activitiesAcquisition
      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 activitiesConvertible
      debenture
            15,000
            
            -
            
            -Demand
      loan
            30,000
            
            30,000
            
            -Share
      subscriptions received in advance
            -
            
            -
            
            (204,000)Share
      issue costs
            (1,255)
            
            -
            
            -Common
      shares issued for cash (Note 11)
            550,677
            
            -
            
            237,500Common
      shares redeemed (Note 11)
            (1)
            
            -
            
            -594,421
            
            30,000
            
            33,500Increase
      (decrease) in cash and cash equivalents
            9,288
            
            8,275
            
            (67,482)Cash
      and cash equivalents, beginning of period
            -
            
            1,013
            
            89,819Cash
      and cash equivalents, end of period
            9,288
            
            9,288
            
            22,337





Supplemental Disclosures with Respect
to Cash Flows(Note 13)


The
accompanying notes are an integral part of these consolidated financial
statements.
 6


Silverstar
Mining Corp.


(A
Development Stage Company)


Consolidated
Statements of Changes in Stockholders’ Equity (Deficiency)


(Expressed
in U.S. Dollars)
 (Unaudited)





Number
      of shares issued
            Capital
      stock
            Share
      subscription received in advance / Additional paid in
    capital
            Deficit,
      accumulated during the development stage
            Stockholders’
      equity (deficiency)$
            
            $
            
            $
            
            $Balance
      at 5 December 2003 (inception)
            -
            
            -
            
            -
            
            -
            
            -Common
      share issued for cash ($0.33 per share) (Note 11)
            3
            
            -
            
            1
            
            -
            
            1Net
      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 11)
            30,000,000
            
            30,000
            
            (20,000)
            
            -
            
            10,000Common
      shares redeemed – cash ($0.33 per share) (Note 11)
            (3)
            
            -
            
            (1)
            
            -
            
            (1)Contributions
      to capital by   related parties – expenses (Notes 10 and
      13)
            -
            
            -
            
            24,000
            
            -
            
            24,000Net
      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 10 and 13)
            -
            
            -
            
            24,000
            
            -
            
            24,000Common
      shares issued for cash ($0.0033 per share) (Note 11)
            25,500,000
            
            25,500
            
            59,500
            
            -
            
            85,000Net
      loss for the year
            -
            
            -
            
            -
            
            (64,567)
            
            (64,567)Balance
      at 30 September 2007
            55,500,000
            
            55,500
            
            87,500
            
            (105,507)
            
            37,493Contributions
      to capital by related parties – expenses (Notes 10 and 13)
            -
            
            -
            
            12,000
            
            -
            
            12,000Share
      subscriptions received in advance (Note 11)
            -
            
            -
            
            422,176
            
            -
            
            422,176Share
      issue costs
            -
            
            -
            
            (1,255)
            
            -
            
            (1,255)Common
      shares issued for business acquisition ($0.15 per share) (Notes 3, 11 and
      13)
            4,334,000
            
            4,334
            
            645,766
            
            -
            
            650,100Common
      shares returned to treasury and cancelled (Notes 11 and
13)
            (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





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)





Number
      of shares issued
            Capital
      stock
            Share
      subscriptions received in advance / Additional paid-in
    capital
            Deficit,
      accumulated during the development stage
            Stockholders’
      equity
              (deficiency)$
            
            $
            
            $
            
            $Balance
      at 30 September 2008
            
            44,834,000
            
            44,834
            
            1,181,187
            
            (369,103)
            
            856,918Contributions
      to capital by related parties – expenses (Notes 10 and 13)
            
            -
            
            -
            
            65,500
            
            -
            
            65,500Share
      subscriptions received in advance
            
            -
            
            -
            
            (422,176)
            
            -
            
            (422,176)Common
      shares issued for cash ($0.25 per share) (Note 11)
            
            950,000
            
            950
            
            236,550
            
            -
            
            237,500Common
      shares issued for cash ($0.45 per share) (Note 11)
            
            484,837
            
            485
            
            217,691
            
            -
            
            218,176Common
      shares returned to treasury and cancelled (Notes 11 and
13)
            
            (4,100,000)
            
            (4,100)
            
            4,100
            
            -
            
            -Intrinsic
      value of beneficial conversion feature (Note 7)
            
            -
            
            -
            
            15,000
            
            -
            
            15,000Net
      loss for the year
            
            -
            
            -
            
            -
            
            (1,010,522)
            
            (1,010,522)Balance
      at 30 September 2009
            
            42,168,837
            
            42,169
            
            1,297,852
            
            (1,379,625)
            
            (39,604)Contributions
      to capital by related parties – expenses (Notes 10 and 13)
            
            -
            
            -
            
            6,000
            
            -
            
            6,000Net
      loss for the period
            
            -
            
            -
            
            -
            
            (14,626)
            
            (14,626)Balance
      at 31 December 2009
            
            42,168,837
            
            42,169
            
            1,303,852
            
            (1,394,251)
            
            (48,230)



















The
accompanying notes are an integral part of these consolidated financial
statements.
 8
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


1.
            Nature, Basis of Presentation and Continuance of
      Operations





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.
  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 a development stage enterprise, as defined in Accounting Standards
Codification (the “Codification” or “ASC”) 915-10, “Development Stage Entities”.
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 applicable to development stage enterprises (“GAAP”), and are expressed
in U.S. dollars.  The Company’s fiscal year end is 30
September.







These
consolidated financial statements as at 31 December 2009 and for the three month
period 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
of $14,626 (2008 - $115,375, cumulative - $1,394,251) and has working capital
deficit of $48,230 at 31 December 2009 (30 September 2009 -
$39,604).





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’s capital resources
should be adequate to continue operating and maintaining its business strategy
during the fiscal year ending 30 September 2010.  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.





At 31
December 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.










9
 10
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009
 
 1.
                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 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, 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.





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.




11
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009





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 tim


Long-lived assets





Long-term
assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in ASC 360-10-35-15, “Impairment or Disposal of
Long-Lived Assets”.





Management
considers assets to be impaired if the carrying value exceeds the future
projected cash flows from related operations (undiscounted and without interest
charges). If impairment is deemed to exist, the assets will be written down to
fair value. Fair value is generally determined using a discounted cash flow
analysis.




Financial
instruments





The
carrying value of cash and cash equivalents, accounts payable, convertible
debentures, demand loans and due to related parties 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.





Website
development costs





The costs
of computer software developed or obtained for internal use, during the
preliminary project phase, as defined under ASC 350-40, “Internal-Use Software”, will
be expensed as incurred.  The costs of website development during the
planning stage, as defined under ASC 350-50, “Website Development Costs”,
will also be expensed as incurred.





Computer
software, website development incurred during the application and infrastructure
development stage, including external direct costs of materials and services
consumed in developing the software and creating graphics and website content,
will be capitalized and amortized over the estimated useful life, beginning when
the software is ready for use and after all substantial testing is completed and
the website is operational.






12
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009




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 ASC 740, “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 losses 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 income (loss) per share in accordance with ASC 260 “Earnings per
Share”.  ASC 260 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 income (loss)
available to common shareholders (numerator) by the weighted average number of
shares outstanding (denominator) during the period.  Diluted EPS gives
effect to all dilutive potential 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
excluded all dilutive potential shares if their effect is
anti-dilutive.





Comprehensive
loss





ASC 220,
“Comprehensive Income”,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements.  As at 31 December 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





ASC 280,
“Segment Reporting”
establishes guidance 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.  ASC 280 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 Codification and does not believe it is applicable at this
time.





13
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


Start-up
expenses





The
Company has adopted ASC 720-15, “Start-Up Costs”, 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
December 2009.





Foreign
currency translation





The
Company’s functional and reporting currency is U.S. dollars.  The
consolidated financial statements of the Company are translated to U.S. dollars
in accordance with ASC 830, “Foreign Currency
Matters”.  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.





Comparative
figures





Certain
comparative figures have been adjusted to conform to the current period’s
presentation.





Changes
in accounting policy





In August
2009, the FASB issued ASU No. 2009-05, “Fair Value Measurement and
Disclosure (Topic 820) – Measuring Liabilities at Fair Value”, which
provides valuation techniques to measure fair value in circumstances in which a
quoted price in an active market for the identical liability is not
available.  The guidance provided in this update is effective 1
October 2009.  The adoption of this guidance did not have a material
impact on the Company’s consolidated financial statements.





In April
2008, the FASB issued new guidance for determining the useful life of an
intangible assets, the new guidance, which is now part of ASC 350, “Intangibles – Goodwill and
Other”.  In determining the useful life of intangible assets,
ASC 350 removes the requirement to consider whether an intangible asset can be
renewed without substantial cost of material modifications to the existing terms
and conditions and, instead, requires an entity to consider its own historical
experience in renewing similar arrangements.  ASC 350 also requires
expanded disclosure related to the determination of intangible asset useful
lives.  The new guidance was effective for financial statements issued
for fiscal years beginning after 15 December 2008.  The adoption of
this guidance did not have a material impact on the Company’s consolidated
financial statements.










14
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009






Recent
accounting pronouncements




From June
2009 to October 2009, the FASB issued various other updates, ASU No. 2009-2
through ASU No. 2009-15, which contain technical corrections to existing
guidance or affect guidance to specialized industries or entities.  These
updates have no current applicability to the Company or their effect on the
consolidated financial statements would not have been significant.




In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”.  SFAS No. 167, which amends ASC 810-10, “Consolidation”, prescribes a
qualitative model for identifying whether a company has a
controlling financial interest in a variable interest entity (“VIE”) and
eliminates the quantitative model.  The new model identifies two
primary characteristics of a controlling financial interest: (1) provides a
company with the power
to direct significant activities of the VIE, and (2) obligates a company to
absorb losses of and/or provides rights to receive benefits from the
VIE.  SFAS 167 requires a company to reassess on an ongoing
basis whether
it holds a controlling financial interest in a VIE.  A company
that holds a controlling financial interest is deemed to be the primary
beneficiary of the VIE and is required to consolidate the VIE.  SFAS
No. 167, which is referenced
in ASC 105-10-65, has not yet been adopted into the Codification and remains
authoritative.  SFAS No. 167 is effective 1 October
2010.  The Company does not expect that the adoption of SFAS No. 167
will have a material
impact on its consolidated financial statements.





In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfer of Financial
Assets – an amendment of FASB Statement”.  SFAS No. 166 removes
the concept of a qualifying special-purpose entity from ASC 860-10, “Transfers and Servicing”, and
removes the exception from applying ASC 810-10, “Consolidation”. This
statement also clarifies the requirements for isolation and limitations on
portions of financial assets that are eligible for sale
acconting.  SFAS No. 166, which is referenced in ASC 105-10-65, has
not yet been adopted into the Codification and remains
authoritative.  This statement is effective 1 October
2010.  The Company does not expect that the adoption of SFAS No. 166
will have a material impact on its consolidated financial
statements.




International Financial Reporting
Standards




In November 2008, the
Securities and Exchange Commission ("SEC") issued for comment a proposed roadmap
regarding potential use of financial statements prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board.  Under the proposed roadmap, the
Company would be required to prepare financial statements in accordance with
IFRS in fiscal year 2014, including comparative information also prepared under
IFRS for fiscal 2013 and 2012.   The Company is currently assessing
the potential impact of IFRS on its interim consolidated financial statements
and will continue to follow the proposed roadmap for future
developments.





3.
            Acquisition





In
accordance with ASC 805, 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 5 and 11).
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.









15
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


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
              1,539Mineral
      property interests
              790,321Total
      assets acquired
              791,860Purchase
      price
              791,860





4.
            Website Development
  Costs





Accumulated
      amortization / Impairment
            
            Net
      Book ValueCost
            
            31
      December 2009
            
            30
      September 2009 (audited)$
            
            $
            
            $
            
            $Website
      and development costs
            
            6,600
            
            (6,600)
            
            -
            
            -





During
the three month period ended 31 December 2009, the Company incurred website
development costs of $Nil (2008 - $Nil).












16
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


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 month periods ended 31 December 2009 and
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:





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





During
the year ended 30 September 2009, the Company recorded a write-down of its
deferred mineral property costs $106,400 related to the Pinehurst
Properties.





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





17
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


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.





During
the year ended 30 September 2009, the Company recorded a write-down of its
deferred mineral property costs $532,100 related to the Silver Strand
Properties.





The
Company had no expenditures related to the Silver Strand Properties for the
three month periods ended 31 December 2009 and 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
included numerous small underground mines within the Chief District situated
just north of Caliente, Nevada. The project included 22 unpatented federal lode
claims (approximately 363 acres) and an option to acquire 59 acres in three
patented mining claims.  During the year ended 30 September 2009, the
Company recorded a write-down of its deferred mineral property costs $26,600
related to the Cobalt Canyon Gold Project.





Expenditures
related to the Cobalt Canyon Gold Project for the three month period ended 31
December 2009 consist of staking and line cutting of $Nil (2008 -
$2,458).







6.
            Accounts
      Payable and Accrued Liabilities




Accounts
payable and accrued liabilities are non-interest bearing, unsecured and have
settlement dates within one year.







18
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009





7.
            Convertible
Debentures





Balance
      at
              31
      December
              2009
            
            Balance
      at
              30
      September 2009 (audited)$
            
            $Three
      convertible debentures issued to three unrelated parties bearing interest
      at a rate of 10% per annum on any unpaid principle balances, unsecured,
      and having 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.  During the three month period ended
      31 December 2009, the Company accrued interest expense of $378 (31
      December 2008 – $Nil) (Note 13). The balance as at 31 December 2009
      consists of principal of $15,000 (30 September 2009 – $15,000) and accrued
      interest of $994 (30 September 2009 – $616), respectively.
            
            15,994
            
            15,616





8.
            Demand
      Loan





Balance
      at
              31
      December
              2009
            
            Balance
      at
              30
      September 2009 (audited)$
            
            $A
      demand loan issued to a unrelated party bearing interest at a rate of 10%
      per annum on any unpaid principle and interest balances, secured by the
      general credit of the Company, and having no fixed terms of repayment. The
      Company may repay principal amounts due at any time without premium or
      penalty.  During the three month period ended 31 December 2009,
      the Company accrued interest expense of $345 (31 December 2008 – $Nil)
      (Note 13). The balance as at 31 December 2009 consists of principal
      $30,000 (30 September 2009 – $Nil) and accrued interest of $345 (30
      September 2009 – $Nil), respectively.
            
            30,345
            
            -









19
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009






9.
            Due
      to Related Parties




Amounts
due to related parties are due to individuals or companies controlled by
individuals who are shareholders, directors and/or former directors of the
Company, are non-interest bearing, unsecured and have no fixed terms
 of
repayment.





10.
            Related
      Party Transactions




During
the three month period ended 31 December 2009, the Company paid or accrued
$4,500 to a Company related to the Company by way of a shareholder in common for
accounting services (2008 - $7,500).
  During
the three month period ended 31 December 2009, an officer and director of the
Company made contributions to capital for management fees in the amount of
$4,500 (2008 - $Nil) and rent in the amount of $1,500
(2008 - $Nil) (Note 13).





11.
            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 42,168,837 common shares with a par
value of $0.001 per common share.





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





On 1
January 2006, a total of 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, a total of 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.





20
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009





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 (Note 13).




On 24
July 2008, the Company issued 1,000,000 common shares related to a public
offering of securities in error.  A total of 500,000 of these common
shares were returned to treasury and cancelled.  A total of 500,000 of
these common shares remain outstanding and the Company is in the process of
obtaining these common shares for return to treasury and
cancellation.  The Company has placed a trading restriction on these
common shares pending their receipts to treasury and cancellation and has
excluded them from total number of common shares reported as issued and
outstanding at 31 December 2009.




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 13).





On 10
October 2008, 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 950,000 common shares for total cash proceeds of
$237,500.  On 24 July 2008, the Company issued 1,000,000 common shares
related to this public offering of securities in error.  A total of
500,000 of these common shares were returned to treasury and
cancelled.  A total of 500,000 of these common shares remain
outstanding and the Company is in the process of obtaining these common shares
for return to treasury and cancellation.  The Company has placed a
trading restriction on these common shares pending their receipts to treasury
and cancellation and has excluded them from total number of common shares
reported as issued and outstanding at 31 December 2009.





On 15
January 2009, 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 484,837 common shares for total cash proceeds of
$218,176.





During
the year ended 30 September 2009, former directors and officers of the Company
returned to treasury 4,100,000 common shares of the Company for proceeds of
$Nil.  These shares were cancelled during the year ended 30 September
2009 (Note 13).





During
the year ended 30 September 2009, former officer of the Company forgave loans to
the Company totaling $39,000.  This loan forgiveness has been recorded
as contributions to capital (Note 13).





12.
            Income Taxes





The
Company has losses carried forward for income tax purposes to 31 December
2009.  There are no current or deferred tax expenses for the period
ended 31 December 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.






21
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009




The
provision for refundable federal income tax consists of the
following:




For the three month period
      ended 31December2009
            
            For
      the three month period ended 31 December 2008$
            
            $Deferred
      tax asset attributable to:Current
      operations
            
            4,973
            
            39,228Contributions
      to capital by related parties
            
            2,040
            
            -Less:
      Change in valuation allowance
            
            (2,933)
            
            (39,228)Net
      refundable amount
            
            -
            
            -







The
composition of the Company’s deferred tax assets as at 31 December 2009 and 30
September 2009 are as follows:





As
      at 31 December2009
            
            As
      at 30 September 2009
              (audited)$
            
            $Income
      tax operating loss carryforward
            
            1,394,251
            
            1,379,625Statutory
      federal income tax rate
            
            34%
            
            34%Contributed
      rent and services
            
            -22.48%
            
            -22.57%Effective
      income tax rate
            
            0%
            
            0%Deferred
      tax assets
            
            160,626
            
            157,693Less:
      Valuation allowance
            
            (160,626)
            
            (157,693)Net
      deferred tax asset
            
            -
            
            -





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




As at 31
December 2009, the Company has an unused net operating loss carry-forward
balance of approximately $472,430 that is available to offset future taxable
income.  This unused net operating loss carry-forward
balanceexpires
between 2024 and 2030.


22
 Silverstar
Mining Corp.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 (Expressed
in U.S. Dollars)
 (Unaudited)
 31
December 2009


13.
            Supplemental Disclosures with Respect to Cash
      Flows





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





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 (Note 11).





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 11).





On 30
September 2009, a former directors and officers of the Company returned to
treasury 4,100,000 common shares of the Company for proceeds of
$Nil.  These shares were cancelled during the year ended 30 September
2009 (Note 11).





During
the year ended 30 September 2009, former officer of the Company forgave loans to
the Company totaling $39,000.  This loan forgiveness has been recorded
as contributions to capital (Note 11).




During
the three month period ended 31 December 2009, the Company accrued interest of
$723 related to the convertible debentures and a demand loan (Notes 7 and
8).





During the three month period ended 31
December 2009, an officer and director of the Company made contributions to
capital for management fees in the amount of $4,500 (2008 - $Nil) and rent in
the amount of $1,500 (2008 - $Nil) (Note 10).





14.
            Subsequent
      Event




There are
no subsequent events from the period from the three month period ended 31
December 2009 to the date the consolidated financial statements are available to
be issued on 12 February 2010.











23


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 a development
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 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.
  24
  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. The Company does
not have any short term prospects for raising the funds needed to complete these
projects and has written off its deferred mineral property costs related to
these projects.
  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
October 10, 2009, we closed a private placement consisting of 950,000 shares of
our common stock at a price of $0.25 per share for aggregate gross proceeds of
$237,500. We issued 570,000 shares to 6 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 380,000 shares to 3 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.
  On
January 15, 2009, we closed a private placement consisting of 484,837 shares of
our common stock at a price of $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.
  On 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.
  Also on
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.
  Furthermore,
on March 25, 2009, Dennis O’Brien, Matt Williams, Howard Lahti and David Rice
resigned as directors of our company.
  On March
31, 2009, we entered into a share cancellation/return to treasury agreement with
David Bond wherein David Bond agreed to the cancellation and return to treasury
of all but 50,000 shares of common stock of our company held by David
Bond.
  Also on
March 31, 2009, we entered into a share cancellation/return to treasury
agreement with John Jardine wherein John Jardine agreed to the cancellation and
return to treasury of all but 100,000 shares of common stock of our company held
by John Jardine.
  In
addition, on March 31, 2009, David Bond resigned as a director and chairman of
the board of our company, John Jardine resigned as chief financial officer,
secretary and treasurer of our company and Lawrence Siccia was elected a
director of our company.
   25
 Effective
June 2, 2009, we entered into a share cancellation/return to treasury agreement
with Jim MacKenzie wherein he has agreed to the cancellation and return to
treasury of 850,000 shares of our common stock. Subsequent to the stock
cancellation, Mr. MacKenzie will hold 150,000 shares of our common
stock.
 On June
2, 2009, Jim MacKenzie resigned as our president, chief executive officer and
director. As a result of Jim MacKenzie’s resignation, Lawrence Siccia was
appointed as our president and chief executive officer.
 On June
2, 2009, Mr. Greg Cowan, a former president, chief executive officer, secretary,
treasurer and director of our company, transferred 5,000,000 restricted shares
of our common stock to Mr. Lawrence Siccia, our current president, chief
executive officer and director. Mr. Siccia purchased the shares from personal
funds in the amount of $500.
  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 focus is to raise funds to conduct exploration activities on our Rose
Lode Claim.
  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.
  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 the Pinehurst
Properties
  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.
   26
  Mineral Property Joint Venture
Agreement between our Company and New Jersey Mining Company
  On March
1, 2008, we 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
$17,458..
  The
Company was unable to conclude an agreement with Gold Canyon Capital Partners
and has written off its deferred mineral property costs related to the
project.
 Purchase of Significant
Equipment
  We do not
intend to purchase any significant equipment over the twelve month period
ending December 31, 2010.
  Off-Balance Sheet
Arrangements
  As of
December 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.
  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.
      27
  Results
of Operations for the Three Months Ended December 31, 2009 as compared to
the Three Months Ended December 31, 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
December 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 December 31, 2009
and 2008 and the changes between those periods for the respective items are
summarized as follows:
  Three Month Period Ended December 31,
      2009
              
              Three Month Period Ended December 31,
      2008
              
              Change Between Three Month Periods
      Ended December 31, 2009 and
      December 31,
      2008Revenue
              $
              Nil
              $
              Nil
              $
              NilBank
      charges and interest
              $
              1,703
              $
              379
              $
              1,324Consulting
              $
              Nil
              $
              53,500
              $
              (53,500)Exploration
      and development
              $
              Nil
              $
              2,459
              $
              (2,459)Filing
      fees
              $
              678
              $
              2,559
              $
              (1,881)Investor
      relations
              $
              Nil
              $
              28,100
              $
              (28,100)Legal
      and accounting
              $
              5,746
              $
              20,385
              $
              (14,639)Management
      fees
              $
              4,500
              $
              Nil
              $
              4,500Rent
              $
              1,500
              $
              43
              $
              1,457Transfer
      agent
              $
              825
              $
              2,400
              $
              (1,575)Travel
      and entertainment (recovery)
              $
              (326)
              $
              1,408
              $
              (1,734)Write-down
      of mineral property acquisition costs
              $
              Nil
              $
              4,142
              $
              (4,142)Net
      loss
              $
              (14,626)
              $
              (115,375)
              $
              100,749Basic
      and diluted loss per share
              $
              (0.0003)
              $
              (0.0025)
              $
              (0.0024)
  Liquidity and
Financial Condition
  Working
Capital
  Three Month Period
      Ended December 31, 2009 ($)
              Year Ended September 30, 2009 ($)
              Change between December 31, 2009 and September 30, 2009
      ($)Current
      Assets
              9,288
              1,013
              8,275Current
      Liabilities
              57,518
              40,617
              16,901Working
      Capital/(Deficit)
              (48,230)
              (39,604)
              (8,626)
  
  28
  Cash
Flows
  ChangebetweenThree
    MonthPeriods
      EndedThree Month
              Three
    Month
              December 31,
      2009Period
    Ended
              Period
    Ended
              and December
      31,December 31,
      2009
              December 31,
      2008
              2008($)
              ($)
              ($)Cash
      Flows used in Operating Activities
              (21,725)
              (100,982)
              79,257Cash
      Flows provided by/(used in) Investing Activities
              Nil
              Nil
              NilCash
      Flows provided by Financing Activities
              30,000
              33,500
              (3,500)Increase
      (decrease) in Cash and Cash Equivalents During Period
              8,275
              (67,482)
              (75,757)
  As of
December 31, 2009, our total assets were $9,288 and our total liabilities
were $57,518. Our financial statements report a net loss of $14,626 for the
three months ended December 31, 2009 as compared to a net loss of $115,375 for
the three months ended December 31, 2008. We have had a net loss of
$1,394,251 for the period from December 5, 2003 (inception) to December 31,
2009.
  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, 2009, 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 debt or
equity capital 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 debt 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.
  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.
    29
  As
of December 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 December 31, 2009 that have materially or are
reasonably likely to materially affect, our internal controls over financial
reporting.
  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”.
  Our
securities are highly speculative and involve a high degree of risk, including
among other items the risk factors described in our annual report on Form 10-K
for the fiscal year ended September 30, 2009, filed on January 4, 2010. You
should carefully consider those risk factors and other information in our annual
report on Form 10-K and this quarterly report before deciding to invest in our
securities. We are unaware of any material changes in or additional risk factors
since the filing of our annual report.
 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
  None.
  Item
3. Defaults Upon Senior Securities
  None.
   30
  Item
4. Submission of Matters to a Vote of Securities Holders
  None.
 Item
5. Other Information
  Effective
June 2, 2009, we entered into a share cancellation/return to treasury agreement
with Jim MacKenzie wherein he has agreed to the cancellation and return to
treasury of 850,000 shares of our common stock. Subsequent to the stock
cancellation, Mr. MacKenzie will hold 150,000 shares of our common
stock.
  Effective
June 2, 2009, Jim MacKenzie resigned as our president, chief executive officer
and director. As a result of Mr. MacKenzie’s resignation, Mr. Lawrence Siccia
was appointed as our president and chief executive officer.
  On June
2, 2009, Mr. Greg Cowan, a former president, chief executive officer, secretary,
treasurer and director of our Company, transferred 5,000,000 restricted shares
of our common stock to Mr. Lawrence Siccia, our current president, chief
executive officer and director. Mr. Siccia purchased the shares from personal
funds in the amount of $500. Mr. Siccia now owns 11.5% of the issued and
outstanding shares of our company.
  Item
6. Exhibits
  Exhibit
      Number
              Description(3)
              Articles of Incorporation and
      Bylaws3.1
              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
      Contracts10.1
              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
      Ethics14.1
              Code
      of Ethics and Business Conduct (incorporated by reference from our Annual
      Report on Form 10-KSB filed on December 29, 2008).(21)
              Subsidiaries of the
      Registrant21.1
              Silverdale
      Mining Corp.(31) *
              Section 302
      Certifications(32) *
              Section 906
      Certification
  *filed
herewith
   31
     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:
      February 15, 2010Lawrence
      SicciaPresident,
      Chief Executive Officer and Director(Principal
      Executive Officer, Principal FinancialOfficer
      and Principal Accounting Officer)
  
                    32