UNITED STATES

SECURITIES 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 | June 30, 2012
|------------------------------ | -------------



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                                                         |  | 98-0425627                       
|-------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|2500 Plaza 5, 25th Floor,
    Harborside Financial Center, Jersey City, NJ |  | 07311     
|-------------------------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                                   |  | (Zip Code)



|201.633.4716                                        
|----------------------------------------------------
|(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 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).

[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 [  ]   | 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: 169,171 shares of Common Stock as of August 15, 2012.


















TABLE OF CONTENTS



|PART I. - FINANCIAL INFORMATION
|-------------------------------
|Item 1.                        
|Item 2.                        
|Item 3.                        
|Item 4.                        
|PART
    II - OTHER INFORMATION
|Item 1.                        
|Item 1A.                       
|Item 2.                        
|Item 3.                        
|Item 4.                        
|Item 5.                        
|Item 6.                        



2







PART 1 – FINANCIAL INFORMATION



Item 1. Financial Statements.



Our unaudited interim consolidated financial statements
for the nine months period ended June 30, 2012 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.



Silverstar Mining Corp.

(A Development Stage Company)



Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



3







Silverstar Mining Corp.

(A Development Stage Company)

Consolidated
Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)



|                                                        |  | As at30 June 2012 |            |   | As at30 September 2011 (Audited) | 
|------------------------------------------------------- |  | ----------------- | ---------- | - | -------------------------------- | 
|                                                        |  | $                 |            |   | $                                | 
|Assets                                                  |  |                   |            |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Current                                                 |  |                   |            |   |                                  | 
|Cash and cash equivalents                               |  |                   | 3,921      |   |                                  | 
|Prepaid expense                                         |  |                   | 10,249     |   |                                  | 
|Total Current Assets                                    |  |                   | 14,170     |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Other                                                   |  |                   |            |   |                                  | 
|Investment in Mineral Properties (Note 5)               |  |                   | 14,360     |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Total Assets                                            |  |                   | 28,530     |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Liabilities and Stockholder’s Deficit                   |  |                   |            |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Current Liabilities                                     |  |                   |            |   |                                  | 
|Accounts payable and accrued liabilities (Note 6)       |  |                   | 7,338      |   |                                  | 
|Due to related parties (Note 9)                         |  |                   | -          |   |                                  | 
|Convertible debentures (Note 7)                         |  |                   | 19,746     |   |                                  | 
|Demand Loans                                            |  |                   | 15,090     |   |                                  | 
|Shareholder’s demand loans (Note 8)                     |  |                   | 128,751    |   |                                  | 
|Share issuance liability                                |  |                   | 7,500      |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Total Current Liabilities                               |  |                   | 178,425    |   |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Stockholders’ Deficit                                   |  |                   |            |   |                                  | 
|Capital stock (Note 11)                                 |  |                   |            |   |                                  | 
|Authorized                                              |  |                   |            |   |                                  | 
|225,000 of common shares, par value $1.00               |  |                   |            |   |                                  | 
|Issued and outstanding                                  |  |                   |            |   |                                  | 
|2012 – 169,171 common shares, par value $1.00 (Note 11) |  |                   |            |   |                                  | 
|2011 – 42,171 common shares, par value $1.00            |  |                   | 169,171    |   |                                  | 
|Additional paid-in capital                              |  |                   | 1,287,170  |   |                                  | 
|Deficit, accumulated during the development stage       |  |                   | (1,606,236 | ) |                                  | 
|                                                        |  |                   |            |   |                                  | 
|                                                        |  |                   | (149,895   | ) |                                  | 
|                                                        |  |                   |            |   |                                  | 
|Total liabilities and Stockholders’ Deficit             |  |                   | 28,530     |   |                                  | 



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



F-1







Silverstar Mining Corp.

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed
in U.S. Dollars)

(Unaudited)



|                                                                        |  | For the period
from the date ofinception on5 December 2003
to
30 June 2012 |            |   | For the three
month period
ended
30 June 2012 |  |         | For the three
month period
ended
30 June 2011 |  |  | For the nine
month period
ended
30 June 2012 |   |  | For the nine
month period
ended
30 June 2011 |        
|----------------------------------------------------------------------- |  | -------------------------------------------------------------------------- | ---------- | - | --------------------------------------------- |  | ------- | --------------------------------------------- |  |  | -------------------------------------------- | - |  | -------------------------------------------- | -------
|                                                                        |  | $                                                                          |            |   | $                                             |  |         | $                                             |  |  | $                                            |   |  | $                                            |        
|                                                                        |  |                                                                            |            |   |                                               |  |         |                                               |  |  |                                              |   |  |                                              |        
|Expenses                                                                |  |                                                                            |            |   |                                               |  |         |                                               |  |  |                                              |   |  |                                              |        
|Bank charges and interest (Note 7, 8 and 13)                            |  |                                                                            | 49,133     |   |                                               |  | 3,195   |                                               |  |  | 2,288                                        |   |  |                                              | 9,867  
|Consulting                                                              |  |                                                                            | 138,467    |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | -      
|Exploration and development (Note 5)                                    |  |                                                                            | 13,028     |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | -      
|Filing fees                                                             |  |                                                                            | 23,005     |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | 374    
|Investor relations                                                      |  |                                                                            | 84,992     |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | -      
|Legal and accounting (Note 9 and 10)                                    |  |                                                                            | 254,792    |   |                                               |  | 5,153   |                                               |  |  | 8,288                                        |   |  |                                              | 31,515 
|Licences and permits                                                    |  |                                                                            | 3,616      |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | 200    
|Management fees (Notes 10, 11 and 13)                                   |  |                                                                            | 116,500    |   |                                               |  | 4,500   |                                               |  |  | 4,500                                        |   |  |                                              | 13,500 
|Rent (Notes 10, 11 and 13)                                              |  |                                                                            | 44,761     |   |                                               |  | 2,247   |                                               |  |  | 1,500                                        |   |  |                                              | 6,061  
|Transfer agent fees                                                     |  |                                                                            | 30,646     |   |                                               |  | 1,538   |                                               |  |  | 750                                          |   |  |                                              | 4,698  
|Travel, entertainment and office                                        |  |                                                                            | 28,947     |   |                                               |  | 492     |                                               |  |  | 133                                          |   |  |                                              | 2,296  
|Foreign exchange loss                                                   |  |                                                                            | 53         |   |                                               |  | -       |                                               |  |  | 53                                           |   |  |                                              | -      
|Write-down of mineral property acquisition costs (Note 5)               |  |                                                                            | 811,696    |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | -      
|Write-down of website development costs (Note 4)                        |  |                                                                            | 6,600      |   |                                               |  | -       |                                               |  |  | -                                            |   |  |                                              | -      
|                                                                        |  |                                                                            |            |   |                                               |  |         |                                               |  |  |                                              |   |  |                                              |        
|Net loss for the period                                                 |  |                                                                            | (1,606,236 | ) |                                               |  | (17,125 | )                                             |  |  | (17,512                                      | ) |  |                                              | (68,511
|                                                                        |  |                                                                            |            |   |                                               |  |         |                                               |  |  |                                              |   |  |                                              |        
|Basic and diluted loss per common share                                 |  |                                                                            |            |   |                                               |  | (0.101  | )                                             |  |  | (0.415                                       | ) |  |                                              | (0.522 
|                                                                        |  |                                                                            |            |   |                                               |  |         |                                               |  |  |                                              |   |  |                                              |        
|Weighted average number of common shares used in per share calculations |  |                                                                            |            |   |                                               |  | 169,171 |                                               |  |  | 42,171                                       |   |  |                                              | 131,164



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



F-2







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 30 June 2012 |            |   | For the nine month period
ended 30 June 2012 |  |         | For the nine month period
ended 30 June 2011 | 
|---------------------------------------------------------------------- |  | ---------------------------------------------------------------------------- | ---------- | - | -------------------------------------------- |  | ------- | -------------------------------------------- | 
|                                                                       |  | $                                                                            |            |   | $                                            |  |         | $                                            | 
|Cash flows from operating activities                                   |  |                                                                              |            |   |                                              |  |         |                                              | 
|Net loss for the period                                                |  |                                                                              | (1,606,236 | ) |                                              |  | (68,511 | )                                            | 
|Adjustments to reconcile loss to net cash used by operating activities |  |                                                                              |            |   |                                              |  |         |                                              | 
|Accrued interest – convertible debentures (Note 7)                     |  |                                                                              | 19,746     |   |                                              |  | 1,128   |                                              | 
|Accrued interest – shareholder demand loan  (Note 8)                   |  |                                                                              | 24,567     |   |                                              |  | 7,790   |                                              | 
|Accrued interest – demand loan  (Note 8)                               |  |                                                                              | 91         |   |                                              |  | 91      |                                              | 
|Contributions to capital by related parties (Notes 10, 11 and 13)      |  |                                                                              | 191,500    |   |                                              |  | 18,000  |                                              | 
|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 liabilities                            |  |                                                                              |            |   |                                              |  |         |                                              | 
|Prepaids and Mining property                                           |  |                                                                              | (10,249    | ) |                                              |  | (10,249 | )                                            | 
|Increase (decrease) in accounts payable and accrued liabilities        |  |                                                                              | 4,838      |   |                                              |  | (6.962  | )                                            | 
|Increase in due to related parties                                     |  |                                                                              | 2,500      |   |                                              |  | -       |                                              | 
|                                                                       |  |                                                                              | (554,947   | ) |                                              |  | (58,713 | )                                            | 
|Cash flows from investing activities                                   |  |                                                                              |            |   |                                              |  |         |                                              | 
|Acquisition of Silverdale, net of cash received (Note 3)               |  |                                                                              | (140,221   | ) |                                              |  | -       |                                              | 
|Mineral property acquisition costs (Note 5)                            |  |                                                                              | (35,735    | ) |                                              |  | (4,360  | )                                            | 
|Website development costs (Note 4)                                     |  |                                                                              | (6,600     | ) |                                              |  | -       |                                              | 
|                                                                       |  |                                                                              | (182,556   | ) |                                              |  | (4,360  | )                                            | 
|Cash flows from financing activities                                   |  |                                                                              |            |   |                                              |  |         |                                              | 
|Convertible debenture                                                  |  |                                                                              | 15,000     |   |                                              |  | -       |                                              | 
|Shareholder Demand Loan                                                |  |                                                                              | 111,683    |   |                                              |  | -       |                                              | 
|Demand Loans                                                           |  |                                                                              | 15,000     |   |                                              |  | 15,000  |                                              | 
|Share issue costs                                                      |  |                                                                              | (1,255     | ) |                                              |  | -       |                                              | 
|Common shares issued for cash (Note 11)                                |  |                                                                              | 600,996    |   |                                              |  | 50,320  |                                              | 
|                                                                       |  |                                                                              | 741,424    |   |                                              |  | 65,320  |                                              | 
|Increase (decrease) in cash and cash equivalents                       |  |                                                                              | 3,921      |   |                                              |  | 2,247   |                                              | 
|Cash and cash equivalents, beginning of period                         |  |                                                                              | -          |   |                                              |  | 1,674   |                                              | 
|Cash and cash equivalents, end of period                               |  |                                                                              | 3,921      |   |                                              |  | 3,921   |                                              | 



Supplemental Disclosures with Respect to Cash Flows(Note 13)



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



F-3







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 |         |   | Share capital |  |         | Share subscriptions
received in advance
/ Additional paid-in
capital |  |  | Deficit,
accumulated
during the
development stage |   |  | Stockholder’s
equity |         
|----------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ------------- |  | ------- | -------------------------------------------------------------------- |  |  | ------------------------------------------------- | - |  | -------------------- | --------
|                                                                                    |  |                         |         |   | $             |  |         | $                                                                    |  |  | $                                                 |   |  | $                    |         
|Balance at 5 December
    2003 (inception)                                          |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Common shares issued for cash ($333 per share) (Note 11)                            |  |                         | 0.003   |   |               |  | -       |                                                                      |  |  | 1                                                 |   |  |                      | -       
|Net loss for the period                                                             |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (450    
|                                                                                    |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Balance at 30 September 2004                                                        |  |                         | 0.003   |   |               |  | -       |                                                                      |  |  | 1                                                 |   |  |                      | (450    
|Net loss for the year                                                               |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (300    
|                                                                                    |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Balance at 30 September 2005                                                        |  |                         | 0.003   |   |               |  | -       |                                                                      |  |  | 1                                                 |   |  |                      | (750    
|Common shares issued for cash ($1 per share) (Note 11)                              |  |                         | 30,000  |   |               |  | 30,000  |                                                                      |  |  | (20,000                                           | ) |  |                      | -       
|Common shares redeemed – cash ($333 per share) (Note 11)                            |  |                         | (0.003  | ) |               |  | -       |                                                                      |  |  | (1                                                | ) |  |                      | -       
|Contributions to capital by related parties – expenses (Notes 10, 11 and 13)        |  |                         | -       |   |               |  | -       |                                                                      |  |  | 24,000                                            |   |  |                      | -       
|Net loss for the year                                                               |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (40,190 
|                                                                                    |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Balance at 30 September 2006                                                        |  |                         | 30,000  |   |               |  | 30,000  |                                                                      |  |  | 4,000                                             |   |  |                      | (40,940 
|Contributions to capital by related parties – expenses                              |  |                         | -       |   |               |  | -       |                                                                      |  |  | 24,000                                            |   |  |                      | -       
|Common shares issued for cash ($3.33 per share) (Note 11)                           |  |                         | 25,500  |   |               |  | 25,500  |                                                                      |  |  | 59,500                                            |   |  |                      | -       
|Net loss for the year                                                               |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (64,567 
|                                                                                    |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Balance at 30 September 2007                                                        |  |                         | 55,500  |   |               |  | 55,500  |                                                                      |  |  | 87,500                                            |   |  |                      | (105,507
|Contributions to capital by related parties – expenses (Notes 10, 11 and 13)        |  |                         | -       |   |               |  | -       |                                                                      |  |  | 12,000                                            |   |  |                      | -       
|Share subscriptions received in advance                                             |  |                         | -       |   |               |  | -       |                                                                      |  |  | 422,176                                           |   |  |                      | -       
|Share issue costs                                                                   |  |                         | -       |   |               |  | -       |                                                                      |  |  | (1,255                                            | ) |  |                      | -       
|Common shares issued for business acquisition ($150 per share) (Notes 3, 11 and 13) |  |                         | 4,334   |   |               |  | 4,334   |                                                                      |  |  | 645,766                                           |   |  |                      | -       
|Common shares returned to treasury and cancelled (Notes 11 and 13)                  |  |                         | (15,000 | ) |               |  | (15,000 | )                                                                    |  |  | 15,000                                            |   |  |                      | -       
|Net loss for the year                                                               |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (263,596
|                                                                                    |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |         
|Balance at 30 September 2008                                                        |  |                         | 44,834  |   |               |  | 44,834  |                                                                      |  |  | 1,181,187                                         |   |  |                      | (369,103



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



F-4







Silverstar Mining Corp.

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’
Equity (Deficiency) contd.

(Expressed
in U.S. Dollars)

(Unaudited)



|                                                                                     |  | Number of
shares issued |         |   | Share capital |  |         | Share subscriptions
received in advance
/ Additional paid-in
capital |  |  | Deficit,
accumulated
during the
development stage |   |  | Stockholder’s
equity |           
|------------------------------------------------------------------------------------ |  | ----------------------- | ------- | - | ------------- |  | ------- | -------------------------------------------------------------------- |  |  | ------------------------------------------------- | - |  | -------------------- | ----------
|                                                                                     |  | $                       |         |   | $             |  |         | $                                                                    |  |  | $                                                 |   |  | $                    |           
|Balance at 30 September 2008                                                         |  |                         | 44,834  |   |               |  | 44,834  |                                                                      |  |  | 1,181,187                                         |   |  |                      | (369,103  
|Contributions to capital by related parties – expenses (Notes 10, 11 and 13)         |  |                         | -       |   |               |  | -       |                                                                      |  |  | 65,500                                            |   |  |                      | -         
|Share subscriptions received in advance                                              |  |                         | -       |   |               |  | -       |                                                                      |  |  | (422,176                                          | ) |  |                      | -         
|Common shares issued for cash ($250 per share) (Note 11)                             |  |                         | 950     |   |               |  | 950     |                                                                      |  |  | 236,550                                           |   |  |                      | -         
|Common shares issued for cash ($448 per share) (Note 11)                             |  |                         | 487     |   |               |  | 487     |                                                                      |  |  | 217,689                                           |   |  |                      | -         
|Common shares returned to treasury and cancelled (Notes 11 and 13)                   |  |                         | (4,100  | ) |               |  | (4,100  | )                                                                    |  |  | 4,100                                             |   |  |                      | -         
|Intrinsic value of beneficial conversion feature (Note 11)                           |  |                         | -       |   |               |  | -       |                                                                      |  |  | 15,000                                            |   |  |                      | -         
|Net loss for the year                                                                |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (1,010,522
|                                                                                     |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |           
|Balance at 30 September 2009                                                         |  |                         | 42,171  |   |               |  | 42,171  |                                                                      |  |  | 1,297,850                                         |   |  |                      | (1,379,625
|Contributions to capital by related parties – expenses (Notes 10 and 13)             |  |                         | -       |   |               |  | -       |                                                                      |  |  | 24,000                                            |   |  |                      | -         
|Net loss for the year                                                                |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (85,165   
|                                                                                     |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |           
|Balance at 30 September 2010                                                         |  |                         | 42,171  |   |               |  | 42,171  |                                                                      |  |  | 1,321,850                                         |   |  |                      | (1,464,790
|Reverse split 1,000:1 (Note 11)                                                      |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | -         
|Contributions to capital by related parties – expenses (Notes 10 and 13)             |  |                         | -       |   |               |  | -       |                                                                      |  |  | 24,000                                            |   |  |                      | -         
|Net loss for the year                                                                |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (72,935   
|                                                                                     |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |           
|Balance at 30 September 2011                                                         |  |                         | 42,171  |   |               |  | 42,171  |                                                                      |  |  | 1,345,850                                         |   |  |                      | (1,537,725
|Contributions to capital by related parties – expenses (Notes 10 and 13)             |  |                         | -       |   |               |  | -       |                                                                      |  |  | 18,000                                            |   |  |                      | -         
|Common shares issued for business acquisition ($0.16 per share) (Notes 3, 11 and 13) |  |                         | 2,000   |   |               |  | 2,000   |                                                                      |  |  | (1,680                                            | ) |  |                      | -         
|Common shares issued for cash ($0.40 per share) (Note 11)                            |  |                         | 125,000 |   |               |  | 125,000 |                                                                      |  |  | (75,000                                           | ) |  |                      | -         
|Net loss for the period                                                              |  |                         | -       |   |               |  | -       |                                                                      |  |  | -                                                 |   |  |                      | (68,511   
|                                                                                     |  |                         |         |   |               |  |         |                                                                      |  |  |                                                   |   |  |                      |           
|Balance at 30 June 2012                                                              |  |                         | 169,171 |   |               |  | 169,171 |                                                                      |  |  | 1,287,170                                         |   |  |                      | (1,606,236



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



F-5







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



|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 a development stage enterprise, as defined in Financial Accounting Standards Board No. 7. 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, and are expressed in U.S. dollars. The Company’s
fiscal year end is 30 September.



These
consolidated financial statements as at 30 June 2012 and for the nine 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 for the nine months in 2012 of $68,511 (2011 loss - $38,872), cumulative loss - $1,606,236 (2011
cumulative loss - $1,537,725) and has working capital deficit of $164,255 at 30 June 2012 (30 September 2011 deficit - $159,704).



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 2012. 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 favorable 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
30 June 2012, 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.



F-6







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



|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.



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.



F-7







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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



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 and accrued liabilities and convertible debentures 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.



F-8







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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.



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 30 June 2012, 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.



F-9







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



Segments
of an enterprise and related information



SFAS
No. 131, “Disclosures about Segments of an Enterprise and Related Information”, supersedes SFAS No. 14, “Financial
Reporting for Segments of a Business Enterprise.” 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 30 June 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.



Comparative
figures



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



F-10







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



Changes
in Accounting Policy



In
January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2010-02,“Accounting and Reporting for Decreases in Ownership of a Subsidiary - a Scope Clarification”.
ASU No. 2010-02 addresses implementation issues related to the changes in ownership provisions in the Consolidation - Overall
Subtopic (Subtopic 810-10) of the FASB ASC, originally issued as Statement of Financial Accounting Standards (“SFAS”) No.
160, “Non-controlling Interests in Consolidated Financial Statements”. Subtopic 810-10 establishes the accounting
and reporting guidance for non-controlling interests and changes in ownership interests of a subsidiary. An entity is required
to deconsolidate a subsidiary when the entity ceases to have a controlling financial interest in the subsidiary. Upon deconsolidation
of a subsidiary, an entity recognizes a gain or loss on the transaction and measures any retained investment in the subsidiary
at fair value. The gain or loss includes any gain or loss associated with the difference between the fair value of the retained
investment in the subsidiary and its carrying amount at the date the subsidiary is deconsolidated. In contrast, an entity is required
to account for a decrease in ownership interest of a subsidiary that does not result in a change of control of the subsidiary
as an equity transaction. ASU No. 2010-02 was effective for the Company starting 1 January 2010. The Company’s adoption
of ASU No. 2010-02 did not have a material impact on the Company’s consolidated financial statements.



In
January 2010, the FASB issued ASU No. 2010-01, “Equity (ASC Topic 505): Accounting for Distributions to Shareholders
with Components of Stock and Cash”, which clarifies that the stock portion of a distribution to shareholders that allow
them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect
to receive in the aggregate is considered a share issuance that is reflected prospectively in earnings per share and is not considered
a stock dividend for purposes of ASC Topic 505 and ASC Topic 260. ASU No. 2010-01 was effective for the Company starting
1 January 2010. The adoption of the ASU No. 2010-01 did not have a material impact on the Company’s consolidated financial
statements.



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
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 No. 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 was effective 1 January 2010. The adoption of SFAS No. 167 did not have a material impact
on the Company’s consolidated financial statements.



F-11







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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 accounting. SFAS No. 166, which is referenced
in ASC 105-10-65, has not yet been adopted into the Codification and remains authoritative. This statement was effective 1 January
2010. The adoption of SFAS No. 166 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 asset, 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.



Recent
accounting pronouncements



In
February 2010, the FASB issued ASU No. 2010-11, “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded
Credit Derivatives”. ASU No. 2010-11 clarifies the type of embedded credit derivative that is exempt from embedded derivative
bifurcation requirements. Specifically, only one form of embedded credit derivative qualifies for the exemption – one that
is related only to the subordination of one financial instrument to another. As a result, entities that have contracts containing
an embedded credit derivative feature in a form other than such subordination may need to separately account for the embedded
credit derivative feature. The amendments in ASU No. 2010-11 are effective for each reporting entity at the beginning of its first
fiscal quarter beginning after 15 June 2010. Early adoption is permitted at the beginning of each entity’s first fiscal
quarter beginning after 5 March 2010. The adoption of ASC No. 2010-11 is not expected to have a material impact on the Company’s
consolidated financial statements.



In
February 2010, the FASB issued ASU No. 2010-09, “Amendments to Certain Recognition and Disclosure Requirements”,
which eliminates the requirement for Securities and Exchange Commission (“SEC”) filers to disclose the date through
which an entity has evaluated subsequent events.  ASU No. 2010-09 is effective for its fiscal quarter beginning after 15
December 2010.  The adoption of ASU No. 2010-09 is not expected to have a material impact on the Company’s consolidated
financial statements



F-12







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



In
January 2010, the FASB issued ASC No. 2010-06, “Fair Value Measurement and Disclosures (Topic 820): Improving Disclosure
and Fair Value Measurements”, which requires that purchases, sales, issuances, and settlements for Level 3 measurements
be disclosed.  ASU No. 2010-06 is effective for its fiscal quarter beginning after 15 December 2010.  The adoption of
ASU No. 2010-06 is not expected to have a material impact on the Company’s consolidated financial statements.



|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 3, 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.

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



F-13







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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



|                              |  |      |       |  |                                       |  |        | Net Book Value | 
|----------------------------- |  | ---- | ----- |  | ------------------------------------- |  | ------ | -------------- | 
|                              |  | Cost |       |  | Accumulated amortization / Impairment |  |        | 31 March 2012  | 
|                              |  | $    |       |  | $                                     |  |        | $              | 
|                              |  |      |       |  |                                       |  |        |                | 
|Website and development costs |  |      | 6,600 |  |                                       |  | (6,600 | )              | 
|                              |  |      |       |  |                                       |  |        |                | 
|                              |  |      | 6,600 |  |                                       |  | (6,600 | )              | 



During
the nine months ended 30 June 2012, the Company incurred website development costs of $Nil (2011 - $Nil).





|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.



Expenditures
related to the Rose Prospect Lode Mining Claim property for the nine months ending 30 June 2012 were $Nil (2011 - $Nil, 2010 -
$Nil).



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.



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 restricted common
shares of the Company and the completion of exploration expenditures of $1,000,000 on the claims detailed as follows:



F-14







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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



Expenditures
related to the Pinehurst Properties for the nine months ended 30 June 2012 consist of geology and engineering of $Nil (2011 -
$Nil). During the nine months ended 30 June 2012, the Company recorded a recovery of expenditures related to the Pinehurst Properties
of $Nil (2011 - $Nil).



The
Company is in default under the terms of the option agreement, and 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 the project.



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.



Expenditures
related to the Silver Strand Properties for the nine months ended 30 June 2012 consist of acquisition costs of $Nil (2011 - $Nil).



The
Company is in default under the terms of the option agreement, and 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 the project.



F-15







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



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.



Expenditures
related to the Cobalt Canyon Gold Project for the nine months ended30 June 2012 consist
of acquisition costs of $Nil (2011 - $Nil).



The
Company wrote off its deferred mineral property costs related to the Gold Canyon Gold Project.



AHB
Claims



On
16 May 2011, tthe Company entered into an Agreement of Purchase and Sale with Jaime Mayo to acquire 100% of the AHB claims located
in British Columbia, Canada. The AHB Claims consist of 3 claims (approximately 1,006 ha).



The
Company paid $10,000 cash as a deposit and issued 2,000 common shares upon closing (Note 11) and is subject to a2% NSR
(Net Smelter Royalty). The Company has an option to purchase 1% of the NSR for $1 million and an additional 0.5% of the NSR $500,000.



On
7 February 2012 the Company paid Terracad Geoscience Services $4,040 to restake the claims, which had expired, in the name of
Silverstar Mining Corp.



On
12 June 2012 the Company paid Terracad Geoscience Services $10,000 as a pre-payment against an estimated $15,000 charge to prepare
the National Instrument 43-101 compliant technical report for the Quesnel property, Central British Columbia, Canada. The work
was completed in late July and the Company will be receiving final invoicing for the work in due course.



|6. |  | Accounts Payable and Accrued Liabilities
|-- |  | ----------------------------------------



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



F-16







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



|7. |  | Convertible Debentures
|-- |  | ----------------------



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Balance at 30 June 2012 |        |  | Balance at 30 June 2011 | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------ |  | ----------------------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | $                       |        |  | $                       | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                         |        |  |                         | 
|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 $2.50 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 nine months ended 30 June 2012, the Company accrued interest expense of $1,128 (30 June 2011 – $1,122). The balance as at 30 June 2012 consists of principal of $15,000 (30 June 2011 – $15,000) and accrued interest of $4,746 (30 June 2011 – $3,240), respectively.   The Company recorded a $15,000 interest expense in relation to amortization of debt discount (Note 13) in the year ended 30, September, 2009. |  |                         | 19,746 |  |                         | 





F-17









Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



|8. |  | Demand Loans
|-- |  | ------------





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Balance at
        30 June
        2012 |  |  | Balance at
        30 June
        2011 | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- |  |  | --------------------------------------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | $                                       |  |  | $                                       | 
|A demand loan issued to a shareholder bearing interest at a rate of 10% per annum on any unpaid principle balances, unsecured, and having no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. In addition, the Company will issue 250 common shares in the Company upon repayment of the loan (Note 14). During the nine months ended 30 June 2012, the Company accrued interest expense of $2,252 (30 June 2011 - $2,340). The balance as at 30 June 2012 consists of principal of $30,000 (30 June 2011 - $30,000) and accrued interest of $7,937 (30 June 2011 - $4,929). |  | 37,937                                  |  |  | 34,929                                  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|A demand loan issued to a shareholder who is also the Company’s sole officer and director bearing interest at a rate of 10% per annum on any unpaid principle balances, unsecured, and having no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $187 (30 June 2011 - $187). The balance as at 30 June 2012 consists of principal of $2,500 (30 June 2011 - $2,500) and accrued interest of $532 (30 June 2011 - $282).                                                                  |  | 3,032                                   |  |  | 2,782                                   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the year ended 30 September 2011, the Company accepted a demand loan from a shareholder bearing interest at a rate of 9% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $1,162 (30 June 2011 – $819) (Note 11). The balance as at 30 June 2012 consists of principal of $17,184 (30 June 2011 – $17,184) and accrued interest of $2,370 (30 June 2011 – $818).                               |  | 19,554                                  |  |  | 18,002                                  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the year ended 30 September 2011, the Company accepted a demand loan from a shareholder bearing interest at a rate of 9% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $1,081 (30 June 2011 – $978) (Note 11). The balance as at 30 June 2012 consists of principal of $16,000 (30 June 2011 – $16,000) and accrued interest of $2,059 (30 June 20112 – $615).                              |  | 18,059                                  |  |  | 16,615                                  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the year ended 30 September 2011, the Company accepted a demand loan from a shareholder bearing interest at a rate of 9% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $1,081 (30 June 2011 – $381) (Note 11). The balance as at 30 June 2012 consists of principal of $16,000 (30 June 2011 – $16,000) and accrued interest of $1,825 (30 June 2011 – $381).                               |  | 17,825                                  |  |  | 16,381                                  | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the year ended 30 September 2011, the Company accepted a demand loan from a shareholder bearing interest at a rate of 9% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $946 (30 June 2011 – $Nil) (Note 11). The balance as at 30 June 2012 consists of principal of $14,000 (30 June 2011 – $Nil) and accrued interest of $1,153 (30 June 2011 – $Nil).                                    |  | 15,153                                  |  |  | -                                       | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the year ended 30 September 2011, the Company accepted a demand loan from a shareholder bearing interest at a rate of 9% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $1,081 (30 June 2011 – $Nil) (Note 11). The balance as at 30 June 2012 consists of principal of $16,000 (30 June 2011 – $Nil) and accrued interest of $1,191 (30 June 2011 – $Nil).                                  |  | 17,191                                  |  |  | -                                       | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|During the quarter ended 30 June 2012, the Company accepted a demand loan from a third part bearing interest at a rate of 10% per annum on any unpaid principle balances. The demand loan is unsecured and has no fixed terms of repayment. The Company may repay principal amounts due at any time without premium or penalty. During the nine months ended 30 June 2012, the Company accrued interest expense of $90 (30 June 2011 – $Nil). The balance as at 30 June 2012 consists of principal of $15,000 (30 June 2011 – $Nil) and accrued interest of $90 (30 June 2011 – $Nil).                                                    |  | 15,090                                  |  |  | -                                       | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |  |  |                                         | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 143,841                                 |  |  | 88,709                                  | 





F-18







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



|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.



A
demand loan issued to the Company’s former President (Note 8) bears interest at 10% p.a. and is payable on demand. At 30
June 2012 the balance owing was $3,032 (30 June 2011 - $2,782); Note (8).



|10. |  | Related Party Transactions
|--- |  | --------------------------



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. The Company paid or accrued $26,000
to the director for these services during the year ended 30 September 2009. This officer and director of the Company resigned
during the year ended 30 September 2009.



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. The Company paid or accrued $17,500 to the
officer for these services during the year ended 30 September 2009. This officer of the Company resigned during the year ended
30 September 2009.



During
the year ended 30 September 2009, the Company paid or accrued $9,000 to a company related to the Company by way of a director
in common for investor relation services.



During
the year ended 30 September 2009, the Company paid or accrued $28,500 to a Company related to the Company by way of a shareholder
in common for accounting services.



F-19







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



During
the year ended 30 September 2009, the Company paid or accrued $4,500 to a shareholder of the Company for management and consulting
services.



During
the year ended 30 September 2009, an officer and director of the Company made contributions to capital for management fees in
the amount of $22,000 and rent in the amount of $4,500 (Notes 11 and 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 (Notes 11 and 13).



During
the year ended 30 September 2011, an officer and director of the Company made contributions to capital for management fees in
the amount of $18,000 (2010 - $18,000) and rent in the amount of $6,000 (2010 - $6,000) (Notes 11 and 13).



During
the nine months ended 30 June 2012, an officer and director of the Company made contributions to capital for management fees in
the amount of $13,500 (30 June 2011 - $13,500) and rent in the amount of $4,500 (30 June 2011 - $4,500) (Notes 11 and 13).



|11. |  | Capital Stock
|--- |  | -------------



Authorized
capital stock consists of 225,000 post reverse split common shares with a par value of $1.00 per common share. The total issued
and outstanding capital stock is 169,171 common shares with a par value of $1.00 per common share.



On
7 September 2011 the Company announced effective 22 September 2011, the Company will complete a reverse split with a 1,000 to
1 ratio thereby reducing issued and outstanding capital stock from 42,168,837 common shares with a par value of $0.001 to 42,171
common shares with a par value of $1.00. Unless otherwise noted, all references herein to number of shares, price per share or
weighted average number of shares outstanding have been adjusted to reflect this reverse stock split on a retroactive basis.



On
3 December 2003, a total of .003 common shares of the Company were issued for cash proceeds of $1.



On
1 January 2006, a total of 30,000 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 .003 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 common shares for total cash proceeds of $85,000.



F-20







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



On
4 March 2008, the Company affected 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 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 common shares related to a public offering of securities in error. A total of 500 of these
common shares were returned to treasury and cancelled. A total of 500 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 30 September 2009.



On
30 September 2008, a former director and officer of the Company returned to treasury 15,000 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 common shares for total cash proceeds of $237,500. As noted above on 24 July
2008, the Company issued 1,000 common shares related to this public offering of securities in error. A total of 500 of these common
shares were returned to treasury and cancelled. A total of 500 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 30 September 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 487 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 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, an officer and director of the Company made contributions to capital for management fees in
the amount of $22,000 (2008 - $9,000, 2007 - $18,000) and rent in the amount of $4,500 (2008 - $3,000, 2007 - $6,000) (Notes 10
and 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 (Notes 10 and 13).



F-21







During
the year ended 30 September 2011, an officer and director of the Company made contributions to capital for management fees in
the amount of $18,000 (2010 - $18,000, 2009 - $22,000, 2008 - $9,000, 2007 - $18,000) and rent in the amount of $6,000 (2010 -
$6,000, 2009 - $4,500, 2008 - $3,000, 2007 - $6,000) (Notes 11 and 13).



During
the quarter ended 31 December 2011, an officer and director of the Company made contributions to capital for management fees in
the amount of $4,500 (31 December 2010 - $4,500) and rent in the amount of $1,500 (31 December 2010 - $1,500) (Notes 11 and 13).



On
22 December 2011 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 125,000 common shares for total cash proceeds of $50,000.



On
22 December 2011, the Company issued 2,000 common shares of the Company valued at $320 as part of an Agreement of Purchase and
Sale with Jaime Mayo to acquire 100% of the AHB claims located in British Columbia, Canada. The
AHB Claims consist of 3 claims (approximately 1,006 ha) (Note 5).



|12. |  | Income Taxes
|--- |  | ------------



The
Company has losses carried forward for income tax purposes to 30 June 2012. There are no current or deferred tax expenses for
the period ended 30 June 2012 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 carry-forward 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 nine month period ended
30 June 2012 |         |   | For the nine month period ended
30 June 2011 | 
|------------------------------------------- |  | -------------------------------------------- | ------- | - | -------------------------------------------- | 
|                                            |  | $                                            |         |   | $                                            | 
|                                            |  |                                              |         |   |                                              | 
|Deferred tax asset attributable to:         |  |                                              |         |   |                                              | 
|Current operations                          |  |                                              | 23,294  |   |                                              | 
|Contributions to capital by related parties |  |                                              | (6,120  | ) |                                              | 
|Less: Change in valuation allowance         |  |                                              | (17,174 | ) |                                              | 
|                                            |  |                                              |         |   |                                              | 
|Net refundable amount                       |  |                                              | -       |   |                                              | 



F-22







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



The
composition of the Company’s deferred tax assets as at 30 June 2012 and 30 September 2011 are as follows:



|                                        |  | As at
30 June 2012 |           |   | As at
30 September 2011
(Audited) | 
|--------------------------------------- |  | ------------------ | --------- | - | --------------------------------- | 
|                                        |  | $                  |           |   | $                                 | 
|                                        |  |                    |           |   |                                   | 
|Income tax operating loss carry-forward |  |                    | 1,606,236 |   |                                   | 
|                                        |  |                    |           |   |                                   | 
|Statutory federal income tax rate       |  |                    | 34        | % |                                   | 
|Contributed rent and services           |  |                    | 0         | % |                                   | 
|Effective income tax rate               |  |                    | 0         | % |                                   | 
|                                        |  |                    |           |   |                                   | 
|Deferred tax assets                     |  |                    | 211,119   |   |                                   | 
|Less: Valuation allowance               |  |                    | (211,119  | ) |                                   | 
|                                        |  |                    |           |   |                                   | 
|Net deferred tax asset                  |  |                    | -         |   |                                   | 



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



As
at 30 June 2012, the Company has an unused net operating loss carry-forward balance of approximately $1,606,236 that is available
to offset future taxable income. This unused net operating loss carry-forward balance expires between 2024 and 2030.



|13. |  | Supplemental Disclosures with Respect to Cash Flows
|--- |  | ---------------------------------------------------



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



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



On
30 September 2009, a former directors and officers of the Company returned to treasury 4,100 common shares of the Company for
proceeds of $Nil. These shares were cancelled during the year ended 30 September 2009 (Note 10).



During
the year ended 30 September 2009, an officer and director of the Company made contributions to capital for management fees in
the amount of $22,000 (2008 - $9,000, 2007 - $18,000) and rent in the amount of $4,500 (2008 - $3,000, 2007 - $6,000) (Notes 9
and 10).



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 (Notes 9 and 10).



During
the year ended 30 September 2009, the Company accrued interest of $616 related to the convertible debentures and $15,000 related
to authorization of debt discount (Note 7).



F-23







Silverstar Mining Corp.

(A Development Stage Company)

Notes to Consolidated Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

30 June 2012



During
the year ended 30 September 2010, the Company accrued interest of $4,186 related to the convertible debentures (Note 7) and demand
loans and $7,500 related to the issuance of 250 post reverse share issuance liability (Note 8).



During
the year ended 30 September 2011, the Company accrued interest of $8,093 related to the convertible debentures (Note 7) and demand
loans (Note 8).



During
the year ended 30 September 2011, an officer and director of the Company made contributions to capital for management fees in
the amount of $18,000 (2010 - $18,000, 2009 - $22,000, 2008 - $9,000, 2007 - $18,000) and rent in the amount of $6,000 (2010 -
$6,000, 2009 - $4,500, 2008 - $3,000, 2007 - $6,000) (Note 11).



On
22 December 2011 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 125,000 common shares for total cash proceeds of $50,000.



|14. |  | Commitment
|--- |  | ----------



The
Company is committed to issue 250 common shares of the Company upon repayment of the shareholder’s demand loan in the amount
of $36,441 as of 31 December 2012 (Note 8).



F-24







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



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.



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.



Forward-Looking Statements



Certain statements in this quarterly report on Form
10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Generally, the words “believes”, “anticipates,”
“may,” “will,” “should,” “expect,” “intend,” “estimate,”
“continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking
statements which include, but are not limited to, statements concerning the Company’s expectations regarding its working
capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and
strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. These forward-looking
statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our
actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to,
economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global
competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control.
You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers
are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and
the notes thereto. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake
no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence
of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.



Overview



On
May 16, 2011 our recently formed, wholly owned subsidiary, Silverstar Mining Canada, Inc., (“SMCI”) acquired three
mining claims encompassing approximately 1,006 hectares in British Columbia, Canada. In consideration for the transfer of
the mining claims, we paid the transferor $10,000 and we are required to issue the transferor two million shares of our common
stock.



The mineral claims are located in the Caribou Mining District
in east-central British Columbia, Canada.



4











5











PROPERTY LOCATION AND ACCESS



There is a growing infrastructure in the region
as more of its resources are being exploited by various sized peers and competitors in the area.



The SMCI mineral tenures are located within
65 km northeast of Quesnel, British Columbia, in an area that in part has been logged and re-planted. Access is by forestry
road to the vicinity of the Willow River: the tenures lie both east and west of that river. The bridge across Willow River is located
approximately 1250 metres upstream from the south boundary and a logging branch road follows the east side of Willow River. The
total area is 1006 hectares.



We have not conducted any feasibility studies
on the mining claims. However, contiguous and other properties in the immediate vicinity indicate deposits of gold, silver
and copper.



We intend to undertake further geological studies
of the mining claims and will engage an independent geologist to conduct further geological studies which will also include preliminary
drilling on the Property. Initial work would be studying historical information on the area, the trend line and sampling. The
sampling analysis will direct management on subsequent investment of resources.



6







Employees



Neil Kleinman serves as our sole officer, director
and employee. We presently conduct our business through agreements with consultants and arms-length third parties.



Results of Operations for the Three and Nine Months
ended June 30, 2012 and 2011 and from December 5, 2003 (“Inception”) to June 30, 2012



Since our Inception we have not generated any
revenues.



For the three and nine months ended June 30,
2012 total expenses were $17,125 and $68,511 respectively. Total costs and expenses since Inception were $1,606,236 which
consists primarily of a write down of mineral property acquisition costs totaling $811,696, legal and accounting fees totaling
$254,792, consulting services totaling $138,467 and management fees totaling $116,500.



Our principal costs for the three and nine months
ended June 30, 2012 were attributable to legal and accounting fees totaling $5,153 and $31,515. Our legal and accounting fees
since Inception totaled $254,792. Most of these fees are attributable to our ongoing reporting obligations with the Securities
and Exchange Commission. We have also incurred legal expenses associated with the acquisition of the mining claims. We
continue to incur $1,500 in monthly management fees as a result these fees totaled $4,500 and $13,500 respectively. Our
total management fees since Inception were $116,500.



For the three and nine months ended June 30,
2011 total expenses were $17,512 and $38,872. As with the comparable periods in 2012, most of these expenses were attributable
to legal and accounting fees totaling $8,288 and $11,347. We continue to incur $1,500 in monthly management and as such
management fees for the three and nine months ended June 30, 2011 totaled $4,500 and $13,500 respectively.



Bank fees for the three and
nine months ended June 30, 2012 totaled $3,195 and $9,867 as compared to $2,288 and $5,561 in 2011. Total bank fees
since Inception were $49,133.



Except as set forth above, we had no other
significant line item expenses for the three and nine month periods ended June 30, 2012 and 2011.



Our Net Loss for the three and nine months ended
June 30, 2012 was $(17,125) and $(68,511). Net Loss for the comparable periods in 2011 totaled $(17,512) and $(38,872).



Our Net Loss since Inception totaled $(1,606,236).



Our Net Loss per share for the three and nine
months ended June 30, 2012 totaled $(0.101) and $(0.522) as compared to $(0.415) and $(0.922) in 2011.



Until such time as we can generate revenues
from operations, we will continue to incur operating losses. Even if we do generate revenues, there can be no assurance
that we will not continue to operate at a loss.



7







Liquidity and Working Capital



We have limited assets. At June 30, 2012 we had cash
of $3,921 as compared to $1,674 at September 30, 2011. We also have $10,249 in prepaid expenses. Our investment
in our mineral properties totaled $14,360 and total assets at June 30, 2012 were $28,530. At September 30, 2011 our mineral
assets totaled $10,000 and total assets were $11,674.

Current liabilities at June 30, 2012 totaled
$178,425 consisting primarily of a shareholder demand note totaling $128,751, convertible debentures totaling $19,746 a
liability of $7,500 attributable to share issuance and accounts payable totaling $7,338. Current liabilities at September
30, 2011 totaled $161,378 consisting primarily of shareholder demand loans totaling $120,960, convertible debentures totaling
$18,618, accounts payable totaling $11,800 and a liability for share issuance of $7,500.



Our working capital deficit at June 30, 2012
was $164,255 as compared to $159,704.



Unless we secure additional debt or equity financing, of
which there can be no assurance, we will not be able to continue operations and you may lose your entire investment. We currently
do not have any arrangements in place for any future debt or equity financing.



Off-Balance Sheet Arrangements



We are not currently a
party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or
future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.



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,
2011, 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.



Item 3. Quantitative and
Qualitative Disclosure About Market Risk



The Company’s market risk profile has not changed significantly
from its year ended September 30, 2011.



8







Foreign Currency Exchange Rate Risk



The Company holds cash balances in U.S.
dollars. Our operations are located in Canada. As a result, currency exchange fluctuations may impact our operating costs. We
do not manage our foreign currency exchange rate risk through the use of financial or derivative instruments, forward contracts
or hedging activities.



In general, the strengthening of the U.S. dollar
will positively impact our expenses transacted in Canadian dollars. Conversely, any weakening of the U.S dollar will increase
our expenses transacted in Canadian dollars. We do not believe that any weakening of the U.S. dollar as compared to the Canadian
dollar will have an adverse material effect on our operations.



Item 4. Controls and Procedures



(a) Evaluation of Disclosure Controls and Procedures



Our management, with the participation of our
Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure
controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation
considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules
and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.



(b) Changes in Internal Control over Financial Reporting



During the period covered by this Quarterly
Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules
13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.



(c) Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting



Because of its inherent limitations, internal
controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future
periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.



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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



There have been no material changes in our
risk factors from those disclosed in our Annual Report on Form 10-K for the period ended September 30, 2011.



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



None.



Item 3. Defaults Upon Senior Securities



None.



Item 4.  Mine Safety Disclosure.



The information concerning mine safety violations or other
regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and this Item is
included in Exhibit 95 to this Form 10-Q.



Item 5. Other Information



None.



Item 6. Exhibits



ITEM 6. EXHIBITS



The following is a complete list of exhibits filed as part of this
Form 10Q. Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of Regulation S-K.



|Number |  | Description                                                                                        |  |               
|------ |  | -------------------------------------------------------------------------------------------------- |  | --------------
|31.1   |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act     |  | Filed Herewith
|31.2   |  | Certification of Principal Financial Officer pursuant to the Section 302 of the Sarbanes-Oxley Act |  | Filed Herewith
|32.1   |  | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act     |  | Filed Herewith
|32.2   |  | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act     |  | Filed Herewith



10







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: August 21, 2012 | /s/
    Neil Kleinman                                                                      
|                       | Neil Kleinman                                                                              
|                       | President, Chief Executive Officer and Director                                            
|                       | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)



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