UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.
20549





FORM 10-Q





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


SECURITIES
EXCHANGE ACT OF 1934


For
the quarterly period ended December 31, 2010





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


SECURITIES
EXCHANGE ACT OF 1934





Commission
File Number: 000-52641





INFRASTRUCTURE MATERIALS CORP.


(Exact
name of registrant as specified in its charter)





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





1135
Terminal Way, Suite 207B


Reno,
NV  89502  USA


(Address
of Principal Executive Offices) (Zip Code)





775-322-4448


(Registrant’s
telephone number, including area code)




With a
copy to:


Jonathan
H. Gardner


Kavinoky
Cook LLP


726
Exchange St., Suite 800


Buffalo,
NY 14210





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


Yes þ No o





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


Yes þ No o





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





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





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





The
number of shares of registrant’s common stock outstanding as of January 31,
2011 was 68,243,457.





INFRASTRUCTURE
MATERIALS CORP.





FORM
10-Q


FOR
THE QUARTERLY PERIOD ENDED DECEMBER 31, 2010


TABLE
OF CONTENTS





PAGEPART
      1 – FINANCIAL INFORMATIONItem
      1.
                  Financial
      Statements (Unaudited)
                  
                  3Item
      2.
                  Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                  
                  24Item
      3.
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  
                  34Item
      4T.
                  Controls
      and Procedures
                  
                  35PART
      II – OTHER INFORMATIONItem
      1.
                  Legal
      Proceedings
                  
                  36Item
      1A.
                  Risk
      Factors
                  
                  36Item
      2.
                  Unregistered
      Sale of Equity Securities and Use of Proceeds
                  
                  39Item
      3.
                  Defaults
      Upon Senior Securities
                  
                  39Item
      4.
                  Submission
      of Matters to a Vote of Security Holders
                  
                  39Item
      5.
                  Other
      Information
                  
                  39Item
      6.
                  Exhibits
      and Reports on Form 8-K
                  
                  39SIGNATURES
                  
                  40


- 2
-


PART
1 – FINANCIAL INFORMATION





ITEM
1          Financial
Statements




INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)




INTERIM
CONSOLIDATED FINANCIAL STATEMENTS




December
31, 2010




(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





CONTENTS





Interim
      Consolidated Balance Sheets as of December 31, 2010 (unaudited) and June
      30, 2010 (audited)
                        
                        4Interim
      Consolidated Statements of Operations and Comprehensive Loss for the six
      monthsand
      three months ended December 31, 2010 and December 31,
2009,and
      for the period from inception to December 31, 2010
                        
                        5Interim
      Consolidated Statements of Changes in Stockholders' Equity for the six
      months endedDecember
      31, 2010 and for the period from inception to December 31,
      2010
                        
                        6Interim
      Consolidated Statements of Cash Flows for the six months ended December
      31, 2010and
      December 31, 2009, and for the period from inception to December 31,
      2010
                        
                        7Condensed
      Notes to Interim Consolidated Financial Statements
                        
                        8 -
      23


- 3
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Interim
Consolidated Balance Sheets as at


December
31, 2010 and June 30, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





December
      31,
                        
                        
                        June
      30,2010
                        
                        
                        2010$
                        
                        
                        $(unaudited)
                        
                        
                        (audited)ASSETSCurrentCash
      and cash equivalents
                        
                        
                        99,964
                        
                        
                        
                        1,598,248Short
      term investments
                        
                        
                        388,092
                        
                        
                        
                        586,745Prepaid
      expenses and other receivables
                        
                        
                        174,437
                        
                        
                        
                        122,343Total
      Current Assets
                        
                        
                        662,493
                        
                        
                        
                        2,307,336Plant and Equipment, net
      (Note 4)
                        
                        
                        897,706
                        
                        
                        
                        971,280Mineral Property Interests(Note 5)
                        
                        
                        514,525
                        
                        
                        
                        514,525Total
      Assets
                        
                        
                        2,074,724
                        
                        
                        
                        3,793,141LIABILITIESCurrentAccounts
      payable
                        
                        
                        64,821
                        
                        
                        
                        93,410Accrued
      liabilities
                        
                        
                        71,882
                        
                        
                        
                        117,152Total
      Current Liabilities
                        
                        
                        136,703
                        
                        
                        
                        210,562Commitments and
      Contingencies (Note 9)Related Party
      Transactions (Note 10)Subsequent Events (Note
      11)STOCKHOLDERS'
      EQUITYCapital Stock (Note
      6)Preferred
      stock, $0.0001 par value, 50,000,000 shares authorized, none
      issuedand
      outstanding
                        
                        
                        -
                        
                        
                        
                        -Common
      stock, $0.0001 par value, 100,000,000 shares authorized, 68,243,457
      issuedand
      outstanding (June 30, 2010 – 68,193,457)
                        
                        
                        6,824
                        
                        
                        
                        6,819Additional
      Paid-in Capital
                        
                        
                        20,579,879
                        
                        
                        
                        20,511,458Deficit
      Accumulated During the Exploration Stage
                        
                        
                        (18,648,682
                        )
                        
                        
                        (16,935,698
                        )Total
      Stockholders' Equity
                        
                        
                        1,938,021
                        
                        
                        
                        3,582,579Total
      Liabilities and Stockholders' Equity
                        
                        
                        2,074,724
                        
                        
                        
                        3,793,141





See
Condensed Notes to the Interim Consolidated Financial
Statements


- 4
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Interim
Consolidated Statements of Operations and Comprehensive Loss


For the
six months and three months ended December 31, 2010 and December 31,
2009


and the
Period from Inception (June 3, 1999) to December 31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





For
      the
                            
                            
                            For
      the
                            
                            
                            For
      the
                            
                            
                            For
      thesix
      months
                            
                            
                            six
      months
                            
                            
                            three
      months
                            
                            
                            three
      monthsCumulative
                            
                            
                            ended
                            
                            
                            ended
                            
                            
                            ended
                            
                            
                            endedsince
                            
                            
                            December
      31,
                            
                            
                            December
      31,
                            
                            
                            December
      31,
                            
                            
                            December
      31,inception
                            
                            
                            2010
                            
                            
                            2009
                            
                            
                            2010
                            
                            
                            2009$
                            
                            
                            $
                            
                            
                            $
                            
                            
                            $
                            
                            
                            $Operating
      ExpensesGeneral
      and administration
                            
                            
                            8,580,352
                            
                            
                            
                            401,272
                            
                            
                            
                            878,310
                            
                            
                            
                            202,514
                            
                            
                            
                            429,114Project
      expenses
                            
                            
                            9,640,002
                            
                            
                            
                            1,239,746
                            
                            
                            
                            1,346,853
                            
                            
                            
                            146,355
                            
                            
                            
                            561,082Depreciation
                            
                            
                            962,288
                            
                            
                            
                            73,574
                            
                            
                            
                            90,368
                            
                            
                            
                            36,787
                            
                            
                            
                            45,113Total
      Operating Expenses
                            
                            
                            19,182,642
                            
                            
                            
                            1,714,592
                            
                            
                            
                            2,315,531
                            
                            
                            
                            385,656
                            
                            
                            
                            1,035,309Loss
      from Operations
                            
                            
                            (19,182,642
                            )
                            
                            
                            (1,714,592
                            )
                            
                            
                            (2,315,531
                            )
                            
                            
                            (385,656
                            )
                            
                            
                            (1,035,309
                            )Other
      income-interest
                            
                            
                            385,768
                            
                            
                            
                            1,608
                            
                            
                            
                            25,651
                            
                            
                            
                            594
                            
                            
                            
                            11,298Other
      income-gain on bargain purchase (Note 5)
                            
                            
                            238,645
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Interest  Expense
                            
                            
                            (90,453
                            )
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Loss
      and Comprehensive Lossbefore
      Income Taxes
                            
                            
                            (18,648,682
                            )
                            
                            
                            (1,712,984
                            )
                            
                            
                            (2,289,880
                            )
                            
                            
                            (385,062
                            )
                            
                            
                            (1,024,011
                            )Provision
      for income taxes
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      Loss and Comprehensive Loss
                            
                            
                            (18,648,682
                            )
                            
                            
                            (1,712,984
                            )
                            
                            
                            (2,289,880
                            )
                            
                            
                            (385,062
                            )
                            
                            
                            (1,024,011
                            )Loss
      per Weighted Average Numberof
      Shares Outstanding-Basic
      and Fully Diluted
                            
                            
                            
                            
                            
                            
                            (0.03
                            )
                            
                            
                            (0.04
                            )
                            
                            
                            (0.01
                            )
                            
                            
                            (0.02
                            )Weighted
      Average Number ofShares
      Outstanding During the Periods-Basic
      and Fully Diluted
                            
                            
                            
                            
                            
                            
                            68,218,729
                            
                            
                            
                            60,198,500
                            
                            
                            
                            68,243,457
                            
                            
                            
                            60,198,500





See
Condensed Notes to the Interim Consolidated Financial
Statements


- 5
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Interim
Consolidated Financial Statements of Changes in Stockholders’
Equity


From
Inception (June 3, 1999) to December 31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





DeficitAccumulatedCommon
      Stock
                                                                              
                                                                              
                                                                              Additional
                                                                              
                                                                              
                                                                              Deferred
                                                                              
                                                                              
                                                                              during
      the
                                                                              
                                                                              
                                                                              TotalNumber
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              Paid-in
                                                                              
                                                                              
                                                                              Stock
                                                                              
                                                                              
                                                                              Exploration
                                                                              
                                                                              
                                                                              Stockholders'of
      Shares
                                                                              
                                                                              
                                                                              Amount
                                                                              
                                                                              
                                                                              Capital
                                                                              
                                                                              
                                                                              Compensation
                                                                              
                                                                              
                                                                              Stage
                                                                              
                                                                              
                                                                              Equity$
                                                                              
                                                                              
                                                                              $
                                                                              
                                                                              
                                                                              $
                                                                              
                                                                              
                                                                              $
                                                                              
                                                                              
                                                                              $For
      the period from inception (June 3, 1999) through July 1,
      2004
                                                                              
                                                                              
                                                                              1
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              5,895
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (5,895
                                                                              )
                                                                              
                                                                              
                                                                              -Net
      (loss)
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              910
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (910
                                                                              )
                                                                              
                                                                              
                                                                              -Balance,
      June 30, 2005 (audited)
                                                                              
                                                                              
                                                                              1
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              6,805
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (6,805
                                                                              )
                                                                              
                                                                              
                                                                              -Contribution
      to additional paid-in capital
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              3,024
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              3,024Cancelled
      shares
                                                                              
                                                                              
                                                                              (1
                                                                              )
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (1
                                                                              )
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (1
                                                                              )Common
      shares issued for nil consideration
                                                                              
                                                                              
                                                                              14,360,000
                                                                              
                                                                              
                                                                              
                                                                              1,436
                                                                              
                                                                              
                                                                              
                                                                              (1,436
                                                                              )
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -Common
      shares issued for cash
                                                                              
                                                                              
                                                                              2,050,000
                                                                              
                                                                              
                                                                              
                                                                              205
                                                                              
                                                                              
                                                                              
                                                                              414,795
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              415,000Subscription
      for stock
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              300,000
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              300,000Stock
      issuance cost
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (24,500
                                                                              )
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (24,500
                                                                              )Net
      loss
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (87,574
                                                                              )
                                                                              
                                                                              
                                                                              (87,574
                                                                              )Balance,
      June 30, 2006 (audited)
                                                                              
                                                                              
                                                                              16,410,000
                                                                              
                                                                              
                                                                              
                                                                              1,641
                                                                              
                                                                              
                                                                              
                                                                              698,687
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (94,379
                                                                              )
                                                                              
                                                                              
                                                                              605,949Common
      shares issued for cash
                                                                              
                                                                              
                                                                              3,395,739
                                                                              
                                                                              
                                                                              
                                                                              340
                                                                              
                                                                              
                                                                              
                                                                              548,595
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              548,935Common
      shares issued to agents in lieuof
      commission for placement of commonshares
      and convertible debentures
                                                                              
                                                                              
                                                                              1,064,000
                                                                              
                                                                              
                                                                              
                                                                              106
                                                                              
                                                                              
                                                                              
                                                                              265,894
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              266,000Common
      shares issued for acquisitionof
      interests in mineral claims
                                                                              
                                                                              
                                                                              3,540,600
                                                                              
                                                                              
                                                                              
                                                                              354
                                                                              
                                                                              
                                                                              
                                                                              884,796
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              885,150Common
      shares issued for acquisitionof
      interests in mineral claims
                                                                              
                                                                              
                                                                              1,850,000
                                                                              
                                                                              
                                                                              
                                                                              185
                                                                              
                                                                              
                                                                              
                                                                              462,315
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              462,500Common
      shares issued for acquisitioninterests
      in a refinery
                                                                              
                                                                              
                                                                              88,500
                                                                              
                                                                              
                                                                              
                                                                              9
                                                                              
                                                                              
                                                                              
                                                                              22,116
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              22,125Common
      shares issued for purchase ofa
      mill with capital equipments
                                                                              
                                                                              
                                                                              6,975,000
                                                                              
                                                                              
                                                                              
                                                                              697
                                                                              
                                                                              
                                                                              
                                                                              1,743,053
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              1,743,750Stock
      issuance cost
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (59,426
                                                                              )
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (59,426
                                                                              )Stock
      based compensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              30,026
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              30,026Net
      loss for the year ended June 30, 2007
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (2,845,424
                                                                              )
                                                                              
                                                                              
                                                                              (2,845,424
                                                                              )Balance,
      June 30, 2007 (audited)
                                                                              
                                                                              
                                                                              33,323,839
                                                                              
                                                                              
                                                                              
                                                                              3,332
                                                                              
                                                                              
                                                                              
                                                                              4,596,056
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (2,939,803
                                                                              )
                                                                              
                                                                              
                                                                              1,659,585Common
      stock issued to consultants
                                                                              
                                                                              
                                                                              3,000,000
                                                                              
                                                                              
                                                                              
                                                                              300
                                                                              
                                                                              
                                                                              
                                                                              2,249,700
                                                                              
                                                                              
                                                                              
                                                                              (1,875,000
                                                                              )
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              375,000Stock
      based compensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              139,272
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              139,272Warrant
      modification expense
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              844,423
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              844,423Conversion
      of convertible debentures withaccrued
      interest
                                                                              
                                                                              
                                                                              7,186,730
                                                                              
                                                                              
                                                                              
                                                                              719
                                                                              
                                                                              
                                                                              
                                                                              3,590,801
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              3,591,520Common
      shares issued for acquisitionof
      interests in mineral claims
                                                                              
                                                                              
                                                                              175,000
                                                                              
                                                                              
                                                                              
                                                                              18
                                                                              
                                                                              
                                                                              
                                                                              104,982
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              105,000Common
      stock issued to a consultant
                                                                              
                                                                              
                                                                              100,000
                                                                              
                                                                              
                                                                              
                                                                              10
                                                                              
                                                                              
                                                                              
                                                                              57,990
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              58,000Amortization
      of deferred stockcompensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              562,500
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              562,500Net
      loss for the year
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (4,635,465
                                                                              )
                                                                              
                                                                              
                                                                              (4,635,465
                                                                              )Balance
      June 30, 2008 (audited)
                                                                              
                                                                              
                                                                              43,785,569
                                                                              
                                                                              
                                                                              
                                                                              4,379
                                                                              
                                                                              
                                                                              
                                                                              11,583,224
                                                                              
                                                                              
                                                                              
                                                                              (1,312,500
                                                                              )
                                                                              
                                                                              
                                                                              (7,575,268
                                                                              )
                                                                              
                                                                              
                                                                              2,699,835Common
      shares issued for cash (net)
                                                                              
                                                                              
                                                                              7,040,000
                                                                              
                                                                              
                                                                              
                                                                              704
                                                                              
                                                                              
                                                                              
                                                                              3,372,296
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              3,373,000Common
      stock issued to a consultant
                                                                              
                                                                              
                                                                              75,000
                                                                              
                                                                              
                                                                              
                                                                              7
                                                                              
                                                                              
                                                                              
                                                                              43,493
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              43,500Common
      stock issued on acquisition of asubsidiary
                                                                              
                                                                              
                                                                              397,024
                                                                              
                                                                              
                                                                              
                                                                              40
                                                                              
                                                                              
                                                                              
                                                                              31,722
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              31,762Common
      shares issued on warrantexercises
                                                                              
                                                                              
                                                                              8,900,907
                                                                              
                                                                              
                                                                              
                                                                              890
                                                                              
                                                                              
                                                                              
                                                                              2,224,337
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              2,225,227Stock
      based compensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              814,050
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              814,050Warrant
      modification expense
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              346,673
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              346,673Amortization
      of deferred stockcompensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              1,125,000
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              1,125,000Net
      loss for the year
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (6,045,477
                                                                              )
                                                                              
                                                                              
                                                                              (6,045,477
                                                                              )Balance
      June 30, 2009 (audited)
                                                                              
                                                                              
                                                                              60,198,500
                                                                              
                                                                              
                                                                              
                                                                              6,020
                                                                              
                                                                              
                                                                              
                                                                              18,415,795
                                                                              
                                                                              
                                                                              
                                                                              (187,500
                                                                              )
                                                                              
                                                                              
                                                                              (13,620,745
                                                                              )
                                                                              
                                                                              
                                                                              4,613,570Common
      shares issued for cash
                                                                              
                                                                              
                                                                              6,973,180
                                                                              
                                                                              
                                                                              
                                                                              697
                                                                              
                                                                              
                                                                              
                                                                              1,603,134
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              1,603,831Common
      stock issued on acquisition of asubsidiary
                                                                              
                                                                              
                                                                              1,021,777
                                                                              
                                                                              
                                                                              
                                                                              102
                                                                              
                                                                              
                                                                              
                                                                              275,778
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              275,880Stock
      based compensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              216,751
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              216,751Amortization
      of deferred stockcompensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              187,500
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              187,500Net
      loss for the year
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (3,314,953
                                                                              )
                                                                              
                                                                              
                                                                              (3,314,953
                                                                              )Balance
      June 30, 2010 (audited)
                                                                              
                                                                              
                                                                              68,193,457
                                                                              
                                                                              
                                                                              
                                                                              6,819
                                                                              
                                                                              
                                                                              
                                                                              20,511,458
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (16,935,698
                                                                              )
                                                                              
                                                                              
                                                                              3,582,579Stock
      based compensation
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              60,926
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              60,926Common
      stock options exercised
                                                                              
                                                                              
                                                                              50,000
                                                                              
                                                                              
                                                                              
                                                                              5
                                                                              
                                                                              
                                                                              
                                                                              7,495
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              7,500Net
      loss for the three month period
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              
                                                                              (1,712,984
                                                                              )
                                                                              
                                                                              
                                                                              (1,712,984
                                                                              )Balance
      December 31, 2010 (unaudited)
                                                                              
                                                                              
                                                                              68,243,457
                                                                              
                                                                              
                                                                              
                                                                              6,824
                                                                              
                                                                              
                                                                              
                                                                              20,579,879
                                                                              
                                                                              
                                                                              
                                                                              -
                                                                              
                                                                              
                                                                              
                                                                              (18,648,682
                                                                              )
                                                                              
                                                                              
                                                                              1,938,021





See
Condensed Notes to the Interim Consolidated Financial
Statements


- 6
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Interim
Consolidated Statements of Cash Flows


For the
six months ended December 31, 2010 and December 31, 2009


and for
the period from Inception (June 3, 1999) to December 31, 2010.


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





Cumulative
                                    
                                    
                                    For
      the six
                                    
                                    
                                    For
      the sixSince
                                    
                                    
                                    months
      ended
                                    
                                    
                                    months
      endedInception
                                    
                                    
                                    December
      31, 2010
                                    
                                    
                                    December
      31, 2009$
                                    
                                    
                                    $
                                    
                                    
                                    $Cash
      Flows from Operating ActivitiesNet
      loss
                                    
                                    
                                    (18,648,682
                                    )
                                    
                                    
                                    (1,712,984
                                    )
                                    
                                    
                                    (2,289,880
                                    )Adjustment
      for:Depreciation
                                    
                                    
                                    962,288
                                    
                                    
                                    
                                    73,574
                                    
                                    
                                    
                                    90,368Amortization
      of debt issuance cost
                                    
                                    
                                    247,490
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Loss
      on disposal of plant and equipment
                                    
                                    
                                    10,524
                                    
                                    
                                    
                                    -Gain
      on Bargain Purchase (Note 5)
                                    
                                    
                                    (238,645
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Stock
      based compensation
                                    
                                    
                                    1,261,025
                                    
                                    
                                    
                                    60,926
                                    
                                    
                                    
                                    167,322Warrant
      modification expense
                                    
                                    
                                    1,191,096
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Shares
      issued for mineral claims, as part of project expenses
                                    
                                    
                                    1,452,650
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Shares
      issued for consultant services expensed
                                    
                                    
                                    2,351,500
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    187,500Shares
      issued on acquisition of subsidiary
                                    
                                    
                                    31,762
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Interest
      on convertible debentures
                                    
                                    
                                    90,453
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Changes
      in non-cash working capitalPrepaid
      expenses and other receivables
                                    
                                    
                                    (174,437
                                    )
                                    
                                    
                                    (52,094
                                    )
                                    
                                    
                                    14,291Accounts
      payable
                                    
                                    
                                    64,821
                                    
                                    
                                    
                                    (28,589
                                    )
                                    
                                    
                                    (56,503
                                    )Accrued
      liabilities
                                    
                                    
                                    72,323
                                    
                                    
                                    
                                    (45,270
                                    )
                                    
                                    
                                    72,805Net
      cash used in operating activities
                                    
                                    
                                    (11,325,832
                                    )
                                    
                                    
                                    (1,704,437
                                    )
                                    
                                    
                                    (1,814,097
                                    )Cash
      Flows from Investing ActivitiesDecrease
      (Increase) in Short-term investments
                                    
                                    
                                    (388,092
                                    )
                                    
                                    
                                    198,653
                                    
                                    
                                    
                                    1,582,656Acquisition
      of plant and equipment for cash
                                    
                                    
                                    (106,977
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (5,431
                                    )Proceeds
      from sale of plant and equipment
                                    
                                    
                                    2,500
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Net
      cash provided by (used in) investing activities
                                    
                                    
                                    (492,569
                                    )
                                    
                                    
                                    198,653
                                    
                                    
                                    
                                    1,577,225Cash
      Flows from Financing ActivitiesIssuance
      of common shares for cash
                                    
                                    
                                    6,394,571
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Issuance
      of common shares for warrant exercises
                                    
                                    
                                    2,225,227
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Issuance
      of common shares for option exercise
                                    
                                    
                                    7,500
                                    
                                    
                                    
                                    7,500Issuance
      of convertible debentures subsequently converted to cash
                                    
                                    
                                    3,501,067
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Stock
      and debenture placement commissions paid in cash
                                    
                                    
                                    (210,000
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Net
      cash provided by financing activities
                                    
                                    
                                    11,918,365
                                    
                                    
                                    
                                    7,500
                                    
                                    
                                    
                                    -Net
      Change in Cash
                                    
                                    
                                    99,964
                                    
                                    
                                    
                                    (1,498,284
                                    )
                                    
                                    
                                    (236,872
                                    )Cash-
      beginning of period
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,598,248
                                    
                                    
                                    
                                    420,266Cash
      - end of period
                                    
                                    
                                    99,964
                                    
                                    
                                    
                                    99,964
                                    
                                    
                                    
                                    183,394Supplemental
      Cash Flow Information:Interest
      Paid
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Income
      taxes paid
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -





See
Condensed Notes to the Interim Consolidated Financial
Statements


- 7
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





1.
            Basis
      of Presentation





The
accompanying unaudited condensed consolidated financial statements of
Infrastructure Materials Corp. (the “Company”), have been prepared in accordance
with the instructions to Form 10-Q and therefore do not include all information
and footnotes necessary for a fair presentation of financial position, results
of operations and cash flows in conformity with U.S. generally accepted
accounting principles (GAAP); however, such information reflects all adjustments
that are, in the opinion of management, necessary for a fair statement of the
results for the interim periods.  The condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and Notes thereto together with management’s discussion and analysis
of financial condition and results of operations contained in the Company’s
annual report on Form 10-K for the year ended June 30, 2010. In the opinion of
management, the accompanying condensed consolidated financial statements reflect
all adjustments of a normal recurring nature considered necessary to fairly
state the financial position of the Company at December 31, 2010 and June
30, 2010, the results of its operations for the six-month periods ended
December 31, 2010 and December 31, 2009, and its cash flows for the six-month
periods ended December 31, 2010 and December 31, 2009. In addition, some of
the Company’s statements in this quarterly report on Form 10-Q may be considered
forward-looking and involve risks and uncertainties that could significantly
impact expected results. The results of operations for the six-month period
ended December 31, 2010 are not necessarily indicative of results to be expected
for the full year.





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





2.
            Exploration
      Stage Activities





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





The
Company is in the exploration stage and has not yet realized revenues from its
planned operations.  The Company has incurred a cumulative loss of
$18,648,682 from inception to December 31, 2010.  The Company has
funded operations through the issuance of capital stock and convertible
debentures.  In May and June of 2006, the Company closed a private
placement of its common stock for gross proceeds of $415,000.  During the
year ended June 30, 2007 the Company raised $848,935 (including $300,000
received in the prior year as stock subscriptions) through private placement of
its common stock for cash.  The Company also issued Convertible Debentures
in the amount of $1,020,862 during the year ended June 30, 2006 and issued
Convertible Debentures in the amount of $2,480,205 during the year ended June
30, 2007.   During the three-month period ended September 30, 2008 the
Company completed private placements of common stock for proceeds of $3,373,000
net of cash expenses. During the three-month period ended March 31, 2009 as a
result of warrant exercises the Company issued common stock for proceeds of
$2,225,227. During the year ended June 30, 2009, the Company issued common stock
as a result of warrant exercises for proceeds of $2,225,227. In June 2010
the Company closed a private placement of its common stock for gross proceeds of
$1,603,831. Management's plan is to continue raising additional funds through
future equity or debt financing until it achieves profitable operations from
production of minerals or metals on its properties, if feasible. Also see
Note 11, Subsequent Events.


- 8
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





3.
            Nature
      of Operations





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





The
Company is an exploration stage mining company and has not yet realized any
revenue from its operations. It is primarily engaged in the acquisition and
exploration of mineral properties. Mineral property acquisition costs are
initially capitalized in accordance with ASC 805-20-55-37, previously referenced
as the FASB Emerging Issues Task Force ("EITF") Issue 04-2.  The Company
assesses the carrying costs for impairment under ASC 930 at each fiscal quarter
end.  When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property will be capitalized.  The
Company has determined that, except for the amount capitalized as Mineral
Property Interests for $514,525 (See Note 5, Mineral Property Interests), all
property payments are impaired and accordingly the Company has written off the
acquisition costs to project expenses.  Once capitalized, such costs will
be amortized using the units-of-production method over the estimated life of the
probable reserve.





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





The
Company’s limestone subsidiary, IMC US, controls 12 limestone Projects in
Nevada, made up of 782 mineral claims covering 16,156 acres. IMC US has acquired
100% of the Mineral Rights on an additional 1,120 acres, 50% of the Mineral
Rights on 7,400 acres, and 25% of the Mineral Rights on 160 acres. IMC US also
holds 20 mineral exploration permits covering 11,419 acres at two projects in
the state of Arizona. The Company has not yet determined that any of its claims
or mineral rights can be economically developed and has expensed related costs
to project expense.  The Company’s assessment of the claims, exploration
permits and mineral rights may change after exploration of the
claims.





On
December 18, 2008, the Company incorporated a second wholly owned subsidiary in
the State of Delaware under its former name, “Silver Reserve Corp.” The
Company assigned all fourteen of its silver/base metal projects in Nevada to
this subsidiary. As of June 1, 2010, Silver Reserve Corp. terminated its
interests in one of the projects.  The remaining thirteen claim groups
contain 347 claims covering 7,159 acres which include 10 patented claims and 2
leased patented claims.





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


- 9
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





3.
            Nature
      of Operations – Cont’d





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





In
December 2009, the Company further expanded its limestone exploration activities
by acquiring limestone quarry leases located in Manitoba, Canada.  The
Company acquired CIC, its wholly-owned Canadian subsidiary, pursuant to a Share
Exchange Agreement (the “CIC Agreement”) between the Company, CIC and Todd D.
Montgomery dated as of December 15, 2009. Mr. Montgomery was the sole
shareholder of CIC.  Because Mr. Montgomery is also the Company’s Chief
Executive Officer and a member of its Board of Directors, the CIC Agreement was
approved by the disinterested members of the Company’s Board of Directors on
November 27, 2009, after obtaining an independent appraisal and market study for
the properties.





Under the
terms of the CIC Agreement, the Company acquired all of the issued and
outstanding stock of CIC in exchange for 1,021,777 shares of the Company. 
The CIC Agreement closed on February 9, 2010.  CIC controls 95 quarry
leases issued by the Province of Manitoba, Canada, covering 6,090 hectares
(15,049 acres).  The Company accounted for the acquisition of CIC as a
business combination under the acquisition method as discussed in FASB ASC Topic
805.





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


- 10
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





4.
            Plant
      and Equipment, Net





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





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





December 31, 2010
                  
                  
                  June 30, 2010Accumulated
                  
                  
                  
                  
                  
                  AccumulatedCost
                  
                  
                  Depreciation
                  
                  
                  Cost
                  
                  
                  Depreciation$
                  
                  
                  $
                  
                  
                  $
                  
                  
                  $Computer
      equipment
                  
                  
                  14,448
                  
                  
                  
                  3,723
                  
                  
                  
                  14,448
                  
                  
                  
                  1,831Office,
      furniture and fixtures
                  
                  
                  3,623
                  
                  
                  
                  1,844
                  
                  
                  
                  3,623
                  
                  
                  
                  1,646Plant
      and Machinery
                  
                  
                  1,514,511
                  
                  
                  
                  761,550
                  
                  
                  
                  1,514,511
                  
                  
                  
                  700,499Tools
                  
                  
                  6,725
                  
                  
                  
                  4,478
                  
                  
                  
                  6,725
                  
                  
                  
                  4,157Vehicles
                  
                  
                  76,928
                  
                  
                  
                  39,176
                  
                  
                  
                  76,928
                  
                  
                  
                  34,981Consumables
                  
                  
                  64,197
                  
                  
                  
                  60,686
                  
                  
                  
                  64,197
                  
                  
                  
                  59,516Molds
                  
                  
                  900
                  
                  
                  
                  703
                  
                  
                  
                  900
                  
                  
                  
                  668Mobile
      Equipment
                  
                  
                  73,927
                  
                  
                  
                  45,355
                  
                  
                  
                  73,927
                  
                  
                  
                  42,181Factory
      Buildings
                  
                  
                  74,849
                  
                  
                  
                  14,887
                  
                  
                  
                  74,849
                  
                  
                  
                  13,3491,830,108
                  
                  
                  
                  932,402
                  
                  
                  
                  1,830,108
                  
                  
                  
                  858,828Net
      carrying amount
                  
                  
                  
                  
                  
                  
                  897,706
                  
                  
                  
                  
                  
                  
                  
                  971,280Depreciation
      charges
                  
                  
                  
                  
                  
                  
                  73,574
                  
                  
                  
                  
                  
                  
                  
                  177,321


- 11
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





5.
            Mineral
      Property Interests





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





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





Mineral
      Property Interests, being quarry leases in the province of Manitoba,
      Canadaat
      fair value (CDN $ 550,000), and amount recognized as
assetsas
      of the acquisition date
                              
                              $
                              514,525Fair
      value, as of the acquisition date, of 1,021,777 common shares of the
      Companyissued
      as consideration for all issued and outstanding shares of
    CIC
                              
                              $
                              275,880Gain
      on bargain purchase, being the excess of the fair value of net assets
      acquiredover
      the purchase price, and recognized as Other Incomein
      the Statement of Operations
                              
                              $
                              238,645





6.
            Capital
      stock and warrants





Sixmonth period endedDecember
31,
2010





On
September 30, 2010, the Company issued 50,000 shares of its common stock
pursuant to the exercise of options granted in accordance with its employee
stock option plan (the “2006 Stock Option Plan”).  Also see Note 7, Stock
Based Compensation.


- 12
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





6.
            Capital
      stock and warrants – Cont’d





Year ended June 30,
2010





The
Company entered into an agreement to acquire CIC as a wholly-owned subsidiary,
pursuant to a Share Exchange Agreement (the “CIC Agreement”) between the
Company, CIC and Todd D. Montgomery dated as of December 15, 2009. Also see Note
3, Nature of Operations, and Note 5, Mineral Property Interests.  Under the
terms of the CIC Agreement, the Company acquired all of the issued and
outstanding stock of CIC in exchange for 1,021,777 shares of the Company’s
common stock.  The CIC Agreement closed on February 9, 2010.





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





Warrants





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





On
December 11, 2008, the Board of Directors approved a one time offer to all
warrant holders to reduce the exercise price of all unexercised warrants from
$0.75 to $0.25 per share, if the warrants were exercised prior to February 28,
2009.  Of the 3,520,000 Warrants issued on August 22, 2008, the Company
received elections to purchase 2,820,000 common shares under the exercise of
warrants at $0.25 per share.





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




Number
      ofWarrants
                      
                      
                      ExerciseIssued
                      
                      
                      Prices
                      
                      Expiry Date$Outstanding
      at June 30, 2010 and average exercise price
                      
                      
                      994,000
                      
                      
                      
                      0.66
                      
                      September
      1, 2010Issued
      in six months ended December 31, 2010
                      
                      
                      -
                      
                      
                      
                      -Exercised
      in six months ended December 31, 2010
                      
                      
                      -
                      
                      
                      
                      -Expired
      in six months ended December 31, 2010 (issued in 2008)
                      
                      
                      (700,000
                      )
                      
                      
                      0.75Expired
      in six months ended December 31, 2010 (issued in 2008)
                      
                      
                      (294,000
                      )
                      
                      
                      0.50Cancelled
      in six months ended December 31, 2010
                      
                      
                      -
                      
                      
                      
                      -Outstanding
      at December 31, 2010
                      
                      
                      -




- 13
-




INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





7.
            Stock
      Based Compensation





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





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





Six month periodendedDecember 31, 2010





On
September 30, 2010, 50,000 options issued in accordance with the Company’s 2006
Stock Option Plan were exercised and 200,000 options expired.





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





On
November 18, 2010, the Company granted options to a consultant to purchase up to
250,000 common shares at an exercise price of $0.16 per share.  These
options were granted in accordance with the terms of the Company’s 2006 Stock
Option Plan and vest at a rate of 1/12 each month until fully vested.  The
options granted have a term of 5 years.





On
November 24, 2010, the Company granted options to a consultant to purchase
up to 150,000 common shares at an exercise price of $0.16 per share.  These
options were granted in accordance with the terms of the Company’s 2006 Stock
Option Plan and vest at a rate of 1/12 each month until fully vested.  The
options granted have a term of 5 years.





For the
six month period ended December 31, 2010, the Company recognized in the
financial statements, stock-based compensation costs as reflected in the
following table.  The fair value of each option used for the purpose of
estimating the stock compensation is based on the grant date using the
Black-Scholes option pricing model with the following weighted average
assumptions.





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


- 14
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





7.
            Stock
      Based Compensation – Cont’d




Date
      of grant
                                          
                                          Risk
      free
                                            rate
                                          
                                          
                                          Volatility
                                            factor
                                          
                                          
                                          Expected
                                            Dividends
                                          
                                          
                                          Forfeiture
                                            rate
                                          
                                          
                                          Expected
                                            life
                                          
                                          Exercise
                                            price
                                          
                                          
                                          Total
      number of
                                            options
      granted
                                          
                                          
                                          Grant
      date
                                            fair
      value
                                          
                                          
                                          Stock-based
                                            compensation
                                            cost
      expensed
                                            during
      the six
                                            month
      period
                                            ended
      December
                                            31,
      2010
                                          
                                          
                                          Unexpended
                                            Stock-based
                                            compensation
                                            cost
      deferred
                                            over
      the vesting
                                            period15-Jan-2010
                                          
                                          
                                          2.61
                                          %
                                          
                                          
                                          137.23
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          5
      years
                                          
                                          $
                                          0.25
                                          
                                          
                                          
                                          250,000
                                          
                                          
                                          $
                                          0.22
                                          
                                          
                                          $
                                          27,808
                                          
                                          
                                          $
                                          4,53417-Feb-2010
                                          
                                          
                                          2.61
                                          %
                                          
                                          
                                          138.74
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          5
      years
                                          
                                          $
                                          0.28
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          $
                                          0.25
                                          
                                          
                                          $
                                          12,512
                                          
                                          
                                          $
                                          3,19626-Apr-2010
                                          
                                          
                                          2.61
                                          %
                                          
                                          
                                          145.58
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          5
      years
                                          
                                          $
                                          0.23
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          $
                                          0.23
                                          
                                          
                                          $
                                          5,714
                                          
                                          
                                          $
                                          3,5711-Jun-2010
                                          
                                          
                                          2.61
                                          %
                                          
                                          
                                          145.23
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          15
      months
                                          
                                          $
                                          0.25
                                          
                                          
                                          
                                          250,000
                                          
                                          
                                          $
                                          0.07
                                          
                                          
                                          $
                                          8,204
                                          
                                          
                                          $
                                          6,73218-Nov-2010
                                          
                                          
                                          3.00
                                          %
                                          
                                          
                                          150.47
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          5
      years
                                          
                                          $
                                          0.16
                                          
                                          
                                          
                                          250,000
                                          
                                          
                                          $
                                          0.15
                                          
                                          
                                          $
                                          4,407
                                          
                                          
                                          $
                                          32,14724-Nov-2010
                                          
                                          
                                          3.00
                                          %
                                          
                                          
                                          149.47
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          
                                          0
                                          %
                                          
                                          5
      years
                                          
                                          $
                                          0.16
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          $
                                          0.15
                                          
                                          
                                          $
                                          2,281
                                          
                                          
                                          $
                                          19,627Total
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          
                                          1,050,000
                                          
                                          
                                          
                                          
                                          
                                          
                                          $
                                          60,926
                                          
                                          
                                          $
                                          69,807





The
following table summarizes the options outstanding at December 31,
2010:





Outstanding,
      beginning of year (audited)
                  
                  
                  4,850,000Granted
                  
                  
                  400,000Expired
                  
                  
                  (500,000
                  )Exercised
                  
                  
                  (50,000
                  )Forfeited
                  
                  
                  -Outstanding
      at December 31, 2010
                  
                  
                  4,700,000Exercisable
      at December 31, 2010
                  
                  
                  4,174,999





As of
December 31, 2010, there was $69,807 of unrecognized expenses related to
non-vested stock-based compensation arrangements granted. The stock-based
compensation expense for the six-month period ended December 31, 2010 was
$60,926.


- 15
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





8.
            Fair
      Value of Financial Instruments





The fair
values of financial assets and financial liabilities measured in the balance
sheet as of December 31, 2010 are as follows:





Balance sheet
                    classification and nature
                  
                  Carrying
                    Amount
                    $
                  
                  
                  Quotedprices
                    inactive
                    markets for
                    identicalassets
                    (Level 1)
                    $
                  
                  
                  Significant
                    observable
                    inputs
                    (Level 2)
                    $
                  
                  
                  Unobservable
                    inputs
                    (Level 3)
                    $AssetsCash
      and cash equivalents
                  
                  
                  99,964
                  
                  
                  
                  99,964Short
      Term Investments
                  
                  
                  388,092
                  
                  
                  
                  388,092Prepaid
      expenses and other receivables
                  
                  
                  174,437
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  174,437LiabilititesAccounts
      Payable
                  
                  
                  64,821
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  64,821Accrued
      Liabilities
                  
                  
                  71,882
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  71,882




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





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





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


- 16
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies





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





On
September 14, 2007, the Company engaged Lumos & Associates, Inc. (“Lumos”)
to complete the regulatory permitting process for the Company’s Mill in Mina,
Nevada.  The total consideration to be paid under the contract is
approximately $350,000.  The permitting process is being carried out in
twelve stages. The completion date has not been determined. The Company is
required to authorize in writing each stage of the work before the work
proceeds. In December 2010 this contract was assigned by Lumos to Tetra Tech,
Inc. by mutual agreement of the Company, Lumos, and Tetra Tech, Inc.  As
of December 31, 2010, the Company had recorded $323,924 for this contract
(June 30, 2010 - $318,832).





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


- 17
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies – Cont’d





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





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





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





The Edgar
Lease Agreement covers 100% of the mineral rights on 1,120 acres of the Edgar
Property (“Property A”) and 50% of the mineral rights on 6,720 acres of the
Edgar Property (“Property B”).  Edgar is entitled to receive a royalty of
$0.50 per ton for material mined and removed from Property A and $0.25 per ton
for material mined and removed from Property B during the term of the Edgar
Lease Agreement and any renewal thereof.





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


- 18
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies – Cont’d





On May
20, 2009, IMC US engaged Lumos to conduct base line studies for the Blue Nose
Project located in Lincoln County, Nevada with the intention of determining if a
suitable plant site can be located.  The study includes analysis of rail
and road access and environmental considerations that could impede
development.  The total consideration to be paid under the contract is
approximately $74,500.  On September 28, 2009, the contract was amended to
add an environmental assessment and plan of operations for an additional amount
of approximately $62,000.  The Company has to authorize each phase of the
work.  In December 2010 this contract was assigned by Lumos to Tetra Tech,
Inc. by mutual agreement of the Company, Lumos, and Tetra Tech, Inc.  As of
December 31, 2010, the Company had recorded total expenses of $130,101
pertaining to this contract with Lumos (June 30, 2010 -
$114,576).





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





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





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





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


- 19
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies – Cont’d





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





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





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





On March
25, 2010, IMC US engaged Lumos to conduct the second phase of base line studies
for the Blue Nose Project located in Lincoln County, Nevada with the intention
of determining if a suitable plant site can be located with emphasis on
transportation access and environmental considerations that could impede
development.  The total consideration to be paid under the contract is
approximately $55,300. The Company is to authorize each phase of work before the
work proceeds. In December 2010 this contract was assigned by Lumos to Tetra
Tech, Inc. by mutual agreement of the Company, Lumos, and Tetra Tech, Inc. 
As of December 31, 2010, the Company had recorded total expenses of $50,669
pertaining to this contract with Lumos (June 30, 2010 - $36,011).





On May
19, 2010, IMC US engaged Mine Development Associates, Inc. (“MDA”) to complete a
Resource Estimate, Pit Optimization and Canadian National Instrument 43-101
Report for the Blue Nose Project located in Lincoln County, Nevada.  In its
proposal, MDA estimated the cost of these services to be $43,000 plus travel
expenses.  The Company is to authorize each phase of work before the
work proceeds. As of December 31, 2010, the Company had recorded total expenses
of $23,619 pertaining to this engagement (June 30, 2010 - $0).


- 20
-




INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies – Cont’d





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





On
October 6, 2010, IMC US engaged Tetra Tech, Inc. to complete exploration
permitting activities fortheBlye Canyon Project
located near Seligman, Arizona.  The estimated total consideration to
be paid under the contract is $18,720. As of December 31, 2010, the Company had
not incurred any expenses pertaining to this contract.





The
Company has entered into operating leases for its office space and certain
office furniture and equipment. Rent payments associated with those leases for
the six month periods ended December 31, 2010, and December 31, 2009, were
$15,863 and $9,419, respectively.  As of December 31, 2010, the
Company’s estimated future minimum cash payments under non-cancelable operating
leases for the years ending June 30, 2011, June 30, 2012, and June 30, 2013, are
$15,755, $16,572, and $338, respectively.





Maintaining Claims in Good
Standing





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





Under
legislation enacted in Nevada in March 2010, claims owners are required to pay
the State of Nevada an annual fee based upon a tiered system that requires fees
ranging from $70 to $189 per claim, depending upon the total number of claims in
Nevada that an owner holds.  The Company estimates, based upon the
1,123 claims held in Nevada as of December 31, 2010, that its annual fee will be
$85 per claim, for a total of $95,455, with the first such annual fee payable no
later than June 1, 2011.





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





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


- 21
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





9.
            Commitments
      and Contingencies – Cont’d





The
Company holds 20 mineral exploration permits covering 20 sections or
portions of sections in the State of Arizona.  Mineral exploration
permits have a duration of one year from the date of issuance.  The
permits can be renewed for up to four additional one-year terms for a total of
five years and provide the holder of the permit with an exclusive right to
explore for minerals within the state land covered by the permit and to apply
for mineral leases to such land.  The holder of a permit may remove
from the land only the amount of material required for sampling and testing and
is responsible for any damage or destruction caused by the holder’s exploration
activities.  The holder of a permit is entitled to ingress and egress
to the covered site along routes approved by the Arizona State Land
Department.  IMC US has posted a bond required by the State of
Arizona to back any reclamation required as a result of work
performed.  The permit is renewable if the holder has expended
not less than $10.00 per acre during each of the first two year-long periods and
$20.00 per acre during each of the next three year-long periods.  Each
permit fee is $500 per year plus $2.00 per acre for the first two years and
$1.00 per acre per year for the following three years.  Upon
termination of a mineral exploration permit, the State of Arizona is entitled to
information collected by the permit holder.  In the event that a
permit holder discovers a valuable mineral deposit, the permit holder may apply
to the Arizona State Land Department for a mineral lease having a term of 20
years and renewable for an additional 20 years.  A permit holder shall
be the preferred recipient of the mineral lease, provided that all applicable
requirements are met.  A mineral lease entitles the lessee to develop
and establish a mine on the leased premises, provided that a mine plan and all
necessary approvals are obtained.





Each of
the Company’s quarry leases located in Manitoba, Canada is renewable annually
upon payment of rent to the province of Manitoba in the amount of CDN$24 per
hectare or fraction thereof.  During the fiscal year ended June 30,
2010, the Company paid CDN$147,144 in rent for these leases.





10.
            Related
      Party Transactions





There are
no amounts owed to or from related parties as of December 31, 2010,
and June 30, 2010.





The
following transactions were undertaken in the normal course of operations and
are measured at the exchange amount, which is the amount of consideration
established and agreed to by the Company and the related parties.





Sixmonths endedDecember 31, 2010





The
Company’s Corporate Secretary received $27,575 during the six-month period ended
December 31, 2010.





A
corporation owned and operated by the Company’s President who is also a member
of the Company’s Board of Directors, received $51,000 during the six-month
period ended December 31, 2010.





The
Company’s Chief Financial Officer received $11,758 during the six-month period
ended December 31, 2010.


- 22
-


INFRASTRUCTURE
MATERIALS CORP.


(AN
EXPLORATION STAGE MINING COMPANY)


Condensed
Notes to Interim Consolidated Financial Statements


December
31, 2010


(Amounts
expressed in US Dollars)


(Unaudited-Prepared
by Management)





10.
            Related
      Party Transactions – Cont’d





Sixmonths endedDecember 31, 2009





A former
Director of the Company received $85,390 during the six-month period ended
December 31, 2009 in connection with services he performed for the Company as a
senior geologist.





The
former Corporate Secretary received $22,746 during the six-month period
ended December 31, 2009.





A
corporation owned and operated by the Company’s President, who is also a member
of the Company’s Board of Directors, received $51,000 during the six-month
period ended December 31, 2009.





11.
            Subsequent
      Events





On
January 31, 2011, the Company paid CDN$17,712 (US$17,685) in annual rent to the
province of Manitoba for 11 quarry leases that renew in February.  The
Company has decided to forfeit 18 quarry leases covering approximately 1,089
hectares (2,691 acres) at its Spence property, 7 quarry leases covering
approximately 484 hectares (1,196 acres) at its Dauphin property, and 3 quarry
leases covering approximately 200 hectares (493 acres) at its Winnipegosis
property.





On
February 8, 2011, the Company completed a private placement (the “Private
Placement”) of 2,083,333 shares of the Company’s common stock at a price of
$0.24 per share for total consideration of $500,000. The Private Placement was
exempt from registration under the Securities Act pursuant to an exemption
afforded by Regulation S.  The sole investor (the “Investor”)
participating in the private placement was a non-U.S. corporation that is owned
and controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and
a member of its Board of Directors.  The Investor and Mr. Montgomery
are not “U.S. Person(s)” as that term is defined in Regulation
S.


- 23
-





Item
2


MANAGEMENT'S
DISCUSSION AND ANALYSIS OF


FINANCIAL
CONDITION AND RESULTS OF OPERATION





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





Forward-Looking
Statements





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





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





FOR
THE SIX MONTH AND THREE MONTH PERIODS ENDED DECEMBER 31, 2010





PLAN OF
OPERATIONS





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





Discussion
of Operations and Financial Condition





Six
Month and Three Month Periods ended December 31, 2010





The
Company has no source of revenue and we continue to operate at a
loss.  We expect our operating losses to continue for so long as we
remain in an exploration stage and perhaps thereafter.  As
of December 31, 2010, we had accumulated losses since the Company’s
inception of $18,648,682.  Our ability to emerge from the exploration
stage and conduct mining operations is dependent, in large part, upon our
raising additional capital.  We are continuing our efforts to raise
capital and are moving forward with exploration of our projects.





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


- 24
-











During
the six-month period ended December 31, 2010, the Company devoted significant
resources toward the exploration of IMC US’s Blue Nose limestone project (“Blue
Nose”).  Blue Nose consists of 255 unpatented, lode mineral claims
located in Lincoln County, Nevada, and covers approximately 5,268 acres.
 On July 12, 2010, the United States Bureau of Land Management (the “BLM”)
approved the Company’s Plan of Operations for Blue Nose.  On July 14,
2010, the Company posted a reclamation bond in the amount of $240,805 with the
BLM in connection with Blue Nose. The reclamation bond backs the Company’s
obligations under the Plan of Operations to restore the site and correct
environmental damage (if any) caused by the Company’s activities on Blue Nose.
 Under the Plan of Operations, the Company drilled 28 reverse
circulation holes to depths ranging between 150 and 900 feet for a total of
approximately 17,000 feet.  When combined with three earlier drill
programs, a total of 63 reverse circulation holes approximately 30,000 feet have
been completed at Blue Nose.  The Company engaged Mine Development
Associates of Reno, Nevada (“MDA”) to assess the data from these drill
programs.  In a report dated January 5, 2011, MDA stated that two
basic limestone units were defined by the drilling.  The Lower White
limestone unit appeared to contain few impurities and contains relatively
high-grade calcium oxide (CaO).  The Lower White unit is overlain by
another limestone unit that is generally lower grade and contains more
impurities.  MDA’s report concluded that while further study is
required to better define the extent and quality of the units, Blue Nose is
estimated to contain significant levels of fairly high-grade
limestone.





Our
efforts going forward through our current fiscal year ending June 30, 2011, will
be concentrated on further development of Blue Nose and exploratory drilling at
IMC US’s two limestone projects in Arizona.





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


- 25
-





The
Company is also continuing its evaluation of the silver/base metal projects held
by SRC.  The Company has determined that the Silver Queen/Mohawk,
Pansy Lee, Klondyke and Kope Scheelite Projects currently provide the best
opportunity for development of resources that could go to production and plans
exploratory drilling during 2010 at Silver Queen/Mohawk, Klondyke and Kope
Scheelite.  Permitting of the Red Rock mill site at Mina, Nevada is
close to completion. The Company continues to evaluate its options with
respect to the silver properties and milling facility held by Silver
Reserve.  While exploratory drilling programs are being developed, the
Company is also considering offers to purchase the precious metals properties
and/or joint ventures with third parties to further explore and develop, if
warranted, those properties.





Stock Based
Compensation





On April
20, 2006, we adopted the 2006 Stock Option Plan (the "Plan") under which our
officers, directors, consultants, advisors and employees may receive stock
options.  The aggregate number of shares of common stock that may be
issued under the plan is 5,000,000.  The purpose of the Plan is to
assist us in attracting and retaining selected individuals who can contribute to
our success by serving as directors, officers, consultants, advisors, and
employees of the Company, and to achieve long-term objectives that will inure to
the benefit of all shareholders through the additional incentive inherent in the
ownership of our common stock.  Options granted under the plan will be
either "incentive stock options," intended to qualify as such under the
provisions of section 422 of the Internal Revenue Code of 1986 as amended from
time to time, or "unqualified stock options."





On
September 30, 2010, 50,000 options issued in accordance with the Company’s 2006
Stock Option Plan were exercised and 200,000 options expired.





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





On
November 18, 2010, the Company granted options to a consultant to purchase up to
250,000 common shares at an exercise price of $0.16 per share.  These
options were granted in accordance with the terms of the Company’s 2006 Stock
Option Plan and vest at a rate of 1/12 each month until fully
vested.  The options granted have a term of 5 years.





On
November 24, 2010, the Company granted options to a consultant to purchase
up to 150,000 common shares at an exercise price of $0.16 per
share.  These options were granted in accordance with the terms of the
Company’s 2006 Stock Option Plan and vest at a rate of 1/12 each month until
fully vested.  The options granted have a term of 5
years.


- 26
-





SELECTED FINANCIAL
INFORMATION





Three months
                                                    
                                                    
                                                    Three monthsended
                                                    
                                                    
                                                    endedDec. 31, 2010
                                                    
                                                    
                                                    Dec. 31, 2009Revenues
                                                    
                                                    Nil
                                                    
                                                    
                                                    NilNet
      (Loss)
                                                    
                                                    $
                                                    (385,062
                                                    )
                                                    
                                                    $
                                                    (1,024,011
                                                    )(Loss)
      per share-basic and diluted
                                                    
                                                    $
                                                    (0.01
                                                    )
                                                    
                                                    $
                                                    (0.02
                                                    )Six months
                                                    
                                                    
                                                    Six monthsended
                                                    
                                                    
                                                    endedDec. 31, 2010
                                                    
                                                    
                                                    Dec. 31, 2009Revenues
                                                    
                                                    Nil
                                                    
                                                    
                                                    NilNet
      (Loss)
                                                    
                                                    $
                                                    (1,712,984
                                                    )
                                                    
                                                    $
                                                    (2,289,880
                                                    )(Loss)
      per share-basic and diluted
                                                    
                                                    $
                                                    (0.03
                                                    )
                                                    
                                                    $
                                                    (0.04
                                                    )As of
                                                    
                                                    
                                                    As ofDec. 31, 2010
                                                    
                                                    
                                                    June 30, 2010Total
      Assets
                                                    
                                                    $
                                                    2,074,724
                                                    
                                                    
                                                    $
                                                    3,793,141Total
      Liabilities
                                                    
                                                    $
                                                    136,703
                                                    
                                                    
                                                    $
                                                    210,562Cash
      dividends declared per share
                                                    
                                                    Nil
                                                    
                                                    
                                                    Nil





Total
assets as of December 31, 2010 include cash and cash equivalents of $99,964,
short term investments of $388,092, prepaid expenses and other receivables of
$174,437, capital assets of $897,706 net of depreciation, and mineral property
interests of $514,525.  As of June 30, 2010 total assets includes cash
and cash equivalents of $1,598,248, short-term investments of $586,745, prepaid
expenses of $122,343, capital assets of $971,280, net of depreciation and
mineral property interests of $514,525.





Revenues





No
revenue was generated by the Company’s operations during the three-month and
six-month periods ended December 31, 2010 and December 31, 2009. The
Company is an exploration stage mining company and has not yet realized any
revenue from its operations.


- 27
-





Net
Loss





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





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





(a)
General and Administration Expense





Included
in operating expenses for the three-month period ended December 31, 2010 is
general and administration expense of $202,514 as compared with $429,114 for the
three-month period ended December 31, 2009.  During the six-month
period ended December 31, 2010, general and administration expense was $401,272
as compared to $878,310 for the six-month period ended December 31,
2009.  General and administration expense consists of professional,
consulting, office and general and other miscellaneous costs.  General
and administration expense represents approximately 23% of the total operating
expense for the six-month period ended December 31, 2010 and approximately 38%
of the total operating expense for the six-month period ended December 31,
2009.  General and administration expense decreased by $477,038 in the
current six month period, as compared to the similar six month period for the
prior year. The decrease in this expense is mainly due to a decrease in
consulting fees and other compensation expenses of approximately $235,000, and a
decrease in stock based compensation costs of approximately
$106,000.





(b)
Project Expense





Included
in operating expenses for the three-month period ended December 31, 2010 is
project expense of $146,355 as compared with $561,082 for the three-month period
ended December 31, 2009. During the six-month period ended December 31, 2010,
project expense was $1,239,746 as compared to $1,346,853 for the six-month
period ended December 31, 2009.  Project expense is a significant expense
and it represents approximately 72% of the total operating expenses for the
six-month period ended December 31, 2010 and approximately 58% of the total
operating expenses for the six-month period ended December 31,
2009.


- 28
-





Liquidity
and Capital Resources





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





Dec. 31, 2010
                    
                    
                    Dec. 31, 2009Cash
      and cash equivalents
                    
                    $
                    99,964
                    
                    
                    $
                    183,394Working
      capital
                    
                    $
                    525,790
                    
                    
                    $
                    1,621,529Cash
      (used) in operating activities
                    
                    $
                    (1,704,437
                    )
                    
                    $
                    (1,814,097
                    )Cash
      provided/(used) in investing activities
                    
                    $
                    198,653
                    
                    
                    $
                    1,577,225Cash
      provided by financing activities
                    
                    $
                    7,500
                    
                    
                    nil





As
of December 31, 2010 the Company had working capital of $525,790 as
compared to $1,621,529 as of December 31, 2009.





Off-Balance
Sheet Arrangements





The
Company had no off-balance sheet arrangements as of December 31, 2010 and
December 31, 2009.





Contractual
Obligations and Commercial Commitments





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





On
September 14, 2007, the Company engaged Lumos & Associates, Inc. (“Lumos”)
to complete the regulatory permitting process for the Company’s Mill in Mina,
Nevada.  The total consideration to be paid under the contract is
approximately $350,000.  The permitting process is being carried out
in twelve stages. The completion date has not been determined. The Company is
required to authorize in writing each stage of the work before the work
proceeds. In December 2010 this contract was assigned by Lumos to Tetra Tech,
Inc. by mutual agreement of the Company, Lumos, and Tetra Tech,
Inc.  As of December 31, 2010, the Company had recorded $323,924
for this contract (June 30, 2010 - $318,832).


- 29
-





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





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





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





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





The Edgar
Lease Agreement covers 100% of the mineral rights on 1,120 acres of the Edgar
Property (“Property A”) and 50% of the mineral rights on 6,720 acres of the
Edgar Property (“Property B”).  Edgar is entitled to receive a royalty
of $0.50 per ton for material mined and removed from Property A and $0.25 per
ton for material mined and removed from Property B during the term of the Edgar
Lease Agreement and any renewal thereof.





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


- 30
-





On May
20, 2009, IMC US engaged Lumos to conduct base line studies for the Blue Nose
Project located in Lincoln County, Nevada with the intention of determining if a
suitable plant site can be located.  The study includes analysis of
rail and road access and environmental considerations that could impede
development.  The total consideration to be paid under the contract is
approximately $74,500.  On September 28, 2009, the contract was
amended to add an environmental assessment and plan of operations for an
additional amount of approximately $62,000.  The Company has to
authorize each phase of the work.  In December 2010 this contract was
assigned by Lumos to Tetra Tech, Inc. by mutual agreement of the Company, Lumos,
and Tetra Tech, Inc.  As of December 31, 2010, the Company had
recorded total expenses of $130,101 pertaining to this contract with
Lumos (June 30, 2010 - $114,576).





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





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





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





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


- 31
-





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





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





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





On March
25, 2010, IMC US engaged Lumos to conduct the second phase of base line studies
for the Blue Nose Project located in Lincoln County, Nevada with the intention
of determining if a suitable plant site can be located with emphasis on
transportation access and environmental considerations that could impede
development.  The total consideration to be paid under the contract is
approximately $55,300. The Company is to authorize each phase of work before the
work proceeds. In December 2010 this contract was assigned by Lumos to Tetra
Tech, Inc. by mutual agreement of the Company, Lumos, and Tetra Tech,
Inc.  As of December 31, 2010, the Company had recorded total expenses
of $50,669 pertaining to this contract with Lumos (June 30, 2010 -
$36,011).





On May
19, 2010, IMC US engaged Mine Development Associates, Inc. (“MDA”) to complete a
Resource Estimate, Pit Optimization and Canadian National Instrument 43-101
Report for the Blue Nose Project located in Lincoln County,
Nevada.  In its proposal, MDA estimated the cost of these services to
be $43,000 plus travel expenses.  The Company is to authorize each
phase of work before the work proceeds. As of December 31, 2010, the Company had
recorded total expenses of $23,619 pertaining to this engagement (June 30, 2010
- $0).





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


- 32
-





On
October 6, 2010, IMC US engaged Tetra Tech, Inc. to complete exploration
permitting activities fortheBlye Canyon Project
located near Seligman, Arizona.  The estimated total consideration to
be paid under the contract is $18,720. As of December 31, 2010, the Company had
not incurred any expenses pertaining to this contract.





The
Company has entered into operating leases for its office space and certain
office furniture and equipment. Rent payments associated with those leases for
the six month periods ended December 31, 2010, and December 31, 2009, were
$15,863 and $9,419, respectively.  As of December 31, 2010, the
Company’s estimated future minimum cash payments under non-cancelable operating
leases for the years ending June 30, 2011, June 30, 2012, and June 30, 2013, are
$15,755, $16,572, and $338, respectively.





Maintaining
Claims in Good Standing





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





Under
legislation enacted in Nevada in March 2010, claims owners are required to pay
the State of Nevada an annual fee based upon a tiered system that requires fees
ranging from $70 to $189 per claim, depending upon the total number of claims in
Nevada that an owner holds.  The Company estimates, based upon the
1,123 claims held in Nevada as of December 31, 2010, that its annual fee will be
$85 per claim, for a total of $95,455, with the first such annual fee payable no
later than June 1, 2011.





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





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





The
Company holds 20 mineral exploration permits covering 20 sections or
portions of sections in the State of Arizona.  Mineral exploration
permits have a duration of one year from the date of issuance.  The
permits can be renewed for up to four additional one-year terms for a total of
five years and provide the holder of the permit with an exclusive right to
explore for minerals within the state land covered by the permit and to apply
for mineral leases to such land.  The holder of a permit may remove
from the land only the amount of material required for sampling and testing and
is responsible for any damage or destruction caused by the holder’s exploration
activities.  The holder of a permit is entitled to ingress and egress
to the covered site along routes approved by the Arizona State Land
Department.  IMC US has posted a bond required by the State of
Arizona to back any reclamation required as a result of work
performed.  The permit is renewable if the holder has expended
not less than $10.00 per acre during each of the first two year-long periods and
$20.00 per acre during each of the next three year-long periods.  Each
permit fee is $500 per year plus $2.00 per acre for the first two years and
$1.00 per acre per year for the following three years.  Upon
termination of a mineral exploration permit, the State of Arizona is entitled to
information collected by the permit holder.  In the event that a
permit holder discovers a valuable mineral deposit, the permit holder may apply
to the Arizona State Land Department for a mineral lease having a term of 20
years and renewable for an additional 20 years.  A permit holder shall
be the preferred recipient of the mineral lease, provided that all applicable
requirements are met.  A mineral lease entitles the lessee to develop
and establish a mine on the leased premises, provided that a mine plan and all
necessary approvals are obtained.


- 33
-





Each of
the Company’s quarry leases located in Manitoba, Canada is renewable annually
upon payment of rent to the province of Manitoba in the amount of CDN$24 per
hectare or fraction thereof.  During the fiscal year ended June 30,
2010, the Company paid CDN$147,144 in rent for these leases.





Cash
Requirements





At
December 31, 2010, the Company had cash and cash equivalents of $99,964,
short-term investments of $388,092 and prepaid expenses of $174,437for total current assets
of $662,493.





Our
ability to incur planned Project expenses is subject to permitting programs with
the BLM and results of the drilling as it progresses.  As of the date
of this report, the Company has no firm commitment for additional financing and
may not be able to incur planned Project expenses unless further capital is
raised. Also see “Subsequent Events” below.





While
exploratory drilling programs are being developed for the Company’s precious
metal properties, the Company is also considering offers to purchase the
precious metals properties and/or joint ventures with third parties to further
explore and develop, if warranted, those properties.  The proceeds
from any such purchases or joint ventures would be used for exploration and
drilling on the Company’s limestone projects and remaining silver/base metal
projects.





Subsequent
Events





The
following events occurred subsequent to December 31, 2010:





On
January 31, 2011, the Company paid CDN$17,712 (US$17,685) in annual rent to the
province of Manitoba for 11 quarry leases that renew in February.  The
Company has decided to forfeit 18 quarry leases covering approximately 1,089
hectares (2,691 acres) at its Spence property, 7 quarry leases covering
approximately 484 hectares (1,196 acres) at its Dauphin property, and 3 quarry
leases covering approximately 200 hectares (493 acres) at its Winnipegosis
property.





On
February 8, 2011, the Company completed a private placement (the “Private
Placement”) of 2,083,333 shares of the Company’s common stock at a price of
$0.24 per share for total consideration of $500,000. The Private Placement was
exempt from registration under the Securities Act pursuant to an exemption
afforded by Regulation S.  The sole investor (the “Investor”)
participating in the private placement was a non-U.S. corporation that is owned
and controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and
a member of its Board of Directors.  The Investor and Mr. Montgomery
are not “U.S. Person(s)” as that term is defined in Regulation S.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





Not
Applicable.


- 34
-





Item
4. Controls and Procedures





CONTROLS
AND PROCEDURES





Based on
an evaluation, conducted by our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as required by Exchange Act Rule 13a-15(e), they
concluded that our disclosure controls and procedures were effective as of
December 31, 2010, to ensure that information required to be disclosed by us in
the reports that we file or submit under the Exchange Act are:





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




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





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





Changes in Internal
Controls





During
the quarter ended December 31, 2010, there have been no changes to the Company’s
internal controls over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.


- 35
-




PART
II: OTHER INFORMATION




ITEM
      1:
            LEGAL
      PROCEEDINGS:





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





ITEM
      1A:
            RISK
      FACTORS:





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





1.
            THE
      COMPANY HAS NO SOURCE OF OPERATING REVENUE AND EXPECTS TO INCUR
      SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF IT IS
      ABLE TO ESTABLISH AN OPERATING COMPANY AT
ALL.





Currently,
the Company has no source of revenue, limited working capital and no commitments
to obtain additional financing.  The Company will require additional
working capital to carry out its exploration programs.  The Company
has no operating history upon which an evaluation of its future success or
failure can be made.  The ability to achieve and maintain
profitability and positive cash flow is dependent upon:





-
            further
      exploration of our properties and the results of that
      exploration.





-
            raising
      the capital necessary to conduct this exploration and preserve the
      Company’s Properties.





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





Because
the Company has no operating revenue, it expects to incur operating losses in
future periods as it continues to spend funds to explore its
properties.  Failure to raise the necessary capital to continue
exploration could cause the Company to go out of business.


- 36
-




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





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





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





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




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




We have a
history of operating losses, expect to continue to incur losses, and may never
be profitable. Further, we have been dependent on sales of our equity securities
and debt financing to meet our cash requirements.  We have incurred
losses totaling $18,648,682 from inception to December 31, 2010, and incurred
losses of $1,712,984 during the six-month period ended December 31, 2010.
Further, we do not expect positive cash flow from operations in the near
term.  There is no assurance that actual cash requirements will not
exceed our estimates.  In particular, additional capital may be
required in the event that: (i) the costs to acquire additional mineral
exploration claims are more than we currently anticipate; or (ii) exploration
and or future potential mining costs for additional claims increase beyond our
expectations.


- 37
-





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





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





6.
            BECAUSE
      OF THE UNIQUE DIFFICULTIES AND UNCERTAINTIES INHERENT IN MINERAL
      EXPLORATION VENTURES AND CURRENT DETERIORATION IN EQUITY MARKETS, WE FACE
      A HIGH RISK OF BUSINESS FAILURE.





Investors
should be aware of the difficulties normally encountered by new mineral
exploration companies and the high rate of failure of such
enterprises.  Our prospects are further complicated by a pronounced
deterioration in equity markets and constriction in equity capital available to
finance and maintain our exploration activities.  Our likelihood of
success must be considered in light of the problems, expenses, difficulties,
complications and delays encountered in connection with the exploration of the
mineral properties that we plan to undertake and the difficult economy and
market volatility that we are experiencing.  Moreover, most
exploration projects do not result in the discovery of commercial mineable
deposits.





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





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





8.
            THE
      COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING
  DELAYS.





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





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





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


- 38
-





10.
            CURRENT
      LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE
  IMPACTS





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





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





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





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





None.





ITEM
      3:
            DEFAULTS
      UPON SENIOR SECURITIES:





None.





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





None.





ITEM
      5:
            OTHER
      INFORMATION:





None.





ITEM
      6:
            EXHIBITS
      AND REPORTS ON FORM 8-K





(a)
                None.(b)
                31.1
                Rule
      13a-14(a)/15d-14(a) Certificationof Chief
      Executive Officer.31.2
                Rule
      13a-14(a)/15d-14(a) Certificationof Chief
      Financial Officer.32.1
                Certificate
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.(c)
                In
      addition, the following is incorporated by reference:Current
      Report on Form 8-K, “Item 3.02 - Unregistered Sales of Securities”,
      February 8, 2011.




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SIGNATURE





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





INFRASTRUCTURE
      MATERIALS CORP.Dated:  February
      11, 2011
                      By:
                      /s/Anne MackoAnne
      Macko, Secretary




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