---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-QSB

(Mark One)

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

For the quarterly period ended June 30, 2008

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

For the transition period from __________to __________

Commission file number 333-140299

SILVERSTAR MINING
CORP.(Exact name of small business issuer as specified in its
charter)

|Nevada                                                               | Not Applicable                   
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

621 Bank Street, Wallace, Idaho 83873(Address
of principal executive offices)

604.960.0535(Issuer's telephone number)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes[X] No [ ]

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

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 60,834,000
common shares issued and outstanding as of August 11, 2008

Transitional Small Business Disclosure Format (Check one): Yes [
] No[X]

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

---

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

These financial statements have been prepared by Silverstar
Mining Corp. without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (SEC). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted in accordance
with such SEC rules and regulations. In the opinion of management, the
accompanying statements contain all adjustments necessary to present fairly the
financial position of our company as of June 30, 2008, and our results of
operations, stockholders deficit, and our cash flows for the nine month period
ended June 30, 2008. The results for these interim periods are not necessarily
indicative of the results for the entire year. The accompanying financial
statements should be read in conjunction with the financial statements and the
notes thereto filed as a part of our companys Form 10-KSB.

---

Silverstar Mining Corp.(formerly Rose Explorations Inc.)(A
Development Stage Company)

Financial Statements (Expressed in U.S.
Dollars) (Unaudited)30 June 2008

---

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

|                                                                    |          |   | As at 30  |  
|------------------------------------------------------------------- | -------- | - | --------- | -
|                                                                    | As at 30 |   | September |  
|                                                                    | June     |   | 2007      |  
|                                                                    | 2008     |   | (Audited) |  
|                                                                    | $        |   | $         |  
|                                                                    |          |   |           |  
|Assets                                                              |          |   |           |  
|                                                                    |          |   |           |  
|Current                                                             |          |   |           |  
|Cash and cash equivalents                                           | 34,740   |   | 42,170    |  
|Loan receivables (Notes 3 and 6)                                    | 150,560  |   | -         |  
|Prepaid expense                                                     | 400      |   | -         |  
|                                                                    |          |   |           |  
|                                                                    | 185,700  |   | 42,170    |  
|                                                                    |          |   |           |  
|Liabilities                                                         |          |   |           |  
|                                                                    |          |   |           |  
|Current                                                             |          |   |           |  
|Accounts payable and accrued liabilities (Note 5)                   | 21,357   |   | 4,677     |  
|                                                                    |          |   |           |  
|Stockholders equity                                                |          |   |           |  
|Capital stock(Note 7)                                               |          |   |           |  
|Authorized                                                          |          |   |           |  
|225,000,000 of common shares,
      par value $0.001                |          |   |           |  
|Issued and outstanding                                              |          |   |           |  
|30 June 2008  55,500,000
      common shares, par value $0.001     |          |   |           |  
|30 September 2007  55,500,000 common share,
      par value $0.001 | 55,500   |   | 55,500    |  
|Additional paid-in capital                                          | 99,500   |   | 87,500    |  
|Share subscriptions received in advance(Note 7)                     | 237,500  |   | -         |  
|Deficit, accumulated during the
      development stage             | (228,157 | ) | (105,507  | )
|                                                                    |          |   |           |  
|                                                                    | 164,343  |   | 37,493    |  
|                                                                    |          |   |           |  
|                                                                    | 185,700  |   | 42,170    |  

Nature and Continuance of Operations(Note 1),
Commitments (Note 10) and Subsequent Events(Note 11)

On behalf of the Board:

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

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

(1)

---

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

|                                   | For the      |   |            |   |            |   |            |   |            |  
|---------------------------------- | ------------ | - | ---------- | - | ---------- | - | ---------- | - | ---------- | -
|                                   | period from  |   | For the    |   | For the    |   |            |   |            |  
|                                   | the date of  |   | three      |   | three      |   | For the    |   | For the    |  
|                                   | inception on |   | month      |   | month      |   | nine       |   | nine       |  
|                                   | 5 December   |   | period     |   | period     |   | month      |   | month      |  
|                                   | 2003 to 30   |   | ended 30   |   | ended 30   |   | period     |   | period     |  
|                                   | June 2008    |   | June       |   | June       |   | ended 30   |   | ended 30   |  
|                                   |              |   | 2008       |   | 2007       |   | June 2008  |   | June 2007  |  
|                                   | $            |   | $          |   | $          |   | $          |   | $          |  
|                                   |              |   |            |   |            |   |            |   |            |  
|Expenses                           |              |   |            |   |            |   |            |   |            |  
|Acquisition of mineral property    |              |   |            |   |            |   |            |   |            |  
|(Note 4)                           | 6,375        |   | -          |   | -          |   | -          |   | -          |  
|Bank charges and interest          | 978          |   | 565        |   | 87         |   | 598        |   | 244        |  
|Consulting (Note 6)                | 34,967       |   | 27,467     |   | 2,500      |   | 27,467     |   | 7,500      |  
|Exploration and development        |              |   |            |   |            |   |            |   |            |  
|(Note 4)                           | 6,125        |   | -          |   | -          |   | -          |   | -          |  
|Filing fees                        | 3,520        |   | 461        |   | 34         |   | 1,986      |   | 734        |  
|Investor relations                 | 23,423       |   | 23,423     |   | -          |   | 23,423     |   | -          |  
|Legal and accounting               | 66,030       |   | 14,487     |   | 11,385     |   | 34,466     |   | 21,947     |  
|Licences and permits               | 3,416        |   | -          |   | -          |   | 2,316      |   | -          |  
|Management fees (Notes 6, 7 and 9) | 45,000       |   | -          |   | 4,500      |   | 9,000      |   | 13,500     |  
|Office and miscellaneous           | 5,284        |   | 5,284      |   | -          |   | 5,284      |   | -          |  
|Registered agent                   | 400          |   | -          |   | -          |   | -          |   | -          |  
|Rent (Notes 6, 7 and 9)            | 16,200       |   | 1,200      |   | 1,500      |   | 4,200      |   | 4,500      |  
|Transfer agent                     | 6,578        |   | 1,392      |   | 1,345      |   | 4,049      |   | 1,345      |  
|Travel and entertainment           | 3,602        |   | 3,602      |   | -          |   | 3,602      |   | -          |  
|Web site                           | 6,000        |   | 6,000      |   | -          |   | 6,000      |   | -          |  
|                                   |              |   |            |   |            |   |            |   |            |  
|Net loss before other items        | (227,898     | ) | (83,881    | ) | (21,351    | ) | (122,391   | ) | (49,770    | )
|                                   |              |   |            |   |            |   |            |   |            |  
|Other Items                        |              |   |            |   |            |   |            |   |            |  
|Interest income                    | 165          |   | 165        |   | -          |   | 165        |   | -          |  
|Foreign exchange loss              | (424         | ) | (424       | ) | -          |   | (424       | ) | -          |  
|                                   |              |   |            |   |            |   |            |   |            |  
|Net loss for the period            | (228,157     | ) | (84,140    | ) | (21,351    | ) | (122,650   | ) | (49,770    | )
|                                   |              |   |            |   |            |   |            |   |            |  
|Basic and diluted loss per         |              |   |            |   |            |   |            |   |            |  
|common share                       |              |   | (0.002     | ) | (0.001     | ) | (0.002     | ) | (0.001     | )
|                                   |              |   |            |   |            |   |            |   |            |  
|Weighted average number of         |              |   |            |   |            |   |            |   |            |  
|common shares used in per          |              |   |            |   |            |   |            |   |            |  
|share calculations                 |              |   | 55,500,000 |   | 46,353,261 |   | 55,500,000 |   | 35,490,876 |  

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

(2)

---

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

|                                                                  | For the      |   |               |   |               |   |            |   |            |  
|----------------------------------------------------------------- | ------------ | - | ------------- | - | ------------- | - | ---------- | - | ---------- | -
|                                                                  | period from  |   | For the three |   | For the three |   | For the    |   | For the    |  
|                                                                  | the date of  |   | month         |   | month         |   | nine month |   | nine month |  
|                                                                  | inception on |   | period        |   | period        |   | period     |   | period     |  
|                                                                  | 5 December   |   | ended 30      |   | ended 30      |   | ended 30   |   | ended 30   |  
|                                                                  | 2003 to 30   |   | June          |   | June          |   | June       |   | June       |  
|                                                                  | June 2008    |   | 2008          |   | 2007          |   | 2008       |   | 2007       |  
|                                                                  | $            |   | $             |   | $             |   | $          |   | $          |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Cash flows from operating activities                              |              |   |               |   |               |   |            |   |            |  
|Net loss for the period                                           | (228,157     | ) | (84,140       | ) | (21,351       | ) | (122,650   | ) | (49,770    | )
|Adjustments to reconcile loss to net                              |              |   |               |   |               |   |            |   |            |  
|cash used by operating activities                                 |              |   |               |   |               |   |            |   |            |  
|Contributions to capital by related                               |              |   |               |   |               |   |            |   |            |  
|parties (Notes 6, 7 and 9)                                        | 60,000       |   | -             |   | 6,000         |   | 12,000     |   | 18,000     |  
|Changes in operating assets and                                   |              |   |               |   |               |   |            |   |            |  
|liabilities                                                       |              |   |               |   |               |   |            |   |            |  
|Decrease in accounts receivable                                   | -            |   | 3,000         |   | -             |   | -          |   | -          |  
|(Increase) decrease in prepaid                                    |              |   |               |   |               |   |            |   |            |  
|expenses                                                          | (400         | ) | 1,700         |   | -             |   | (400       | ) | -          |  
|Increase (decrease) in accounts                                   |              |   |               |   |               |   |            |   |            |  
|payable and accrued liabilities                                   | 21,357       |   | 6,571         |   | (22,739       | ) | 16,680     |   | (6,320     | )
|                                                                  |              |   |               |   |               |   |            |   |            |  
|                                                                  | (147,200     | ) | (72,869       | ) | (38,090       | ) | (94,370    | ) | (38,090    | )
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Cash flows from investing activities                              |              |   |               |   |               |   |            |   |            |  
|Loan receivable from Silverdale Mining                            |              |   |               |   |               |   |            |   |            |  
|Corp. (Notes 3 and 6)                                             | (150,560     | ) | (150,560      | ) | -             |   | (150,560   | ) | -          |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Cash flows from financing activities                              |              |   |               |   |               |   |            |   |            |  
|Share subscriptions received in                                   |              |   |               |   |               |   |            |   |            |  
|advance (Note 7)                                                  | 237,500      |   | 237,500       |   | -             |   | 237,500    |   | -          |  
|Common shares issued for cash (Note 7)                            | 95,001       |   | -             |   | 85,000        |   | -          |   | 85,000     |  
|Common shares redeemed                                            | (1           | ) | -             |   | -             |   | -          |   | -          |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|                                                                  | 332,500      |   | 237,500       |   | 85,000        |   | 237,500    |   | 85,000     |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Increase (decrease) in cash and cash                              |              |   |               |   |               |   |            |   |            |  
|equivalents                                                       | 34,740       |   | 14,071        |   | 46,910        |   | (7,430     | ) | 46,910     |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Cash and cash equivalents,                                        |              |   |               |   |               |   |            |   |            |  
|beginning of period                                               | -            |   | 20,669        |   | 3,000         |   | 42,170     |   | 3,000      |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Cash and cash equivalents, end of                                 |              |   |               |   |               |   |            |   |            |  
|period                                                            | 34,740       |   | 34,740        |   | 49,910        |   | 34,740     |   | 49,910     |  
|                                                                  |              |   |               |   |               |   |            |   |            |  
|Supplemental Disclosures with
      Respect to Cash Flows(Note 9) |              |   |               |   |               |   |           

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

(3)

---

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

|                                        |               |   |               |  |            |   | Deficit,    |   |               |  
|--------------------------------------- | ------------- | - | ------------- |  | ---------- | - | ----------- | - | ------------- | -
|                                        |               |   |               |  |            |   | accumulated |   |               |  
|                                        |               |   |               |  | Additional |   | during the  |   | Stockholders |  
|                                        | Number of     |   |               |  | paid-in    |   | development |   | equity        |  
|                                        | shares issued |   | Capital stock |  | capital    |   | stage       |   | (deficiency)  |  
|                                        |               |   | $             |  | $          |   | $           |   | $             |  
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 5 December 2003              |               |   |               |  |            |   |             |   |               |  
|(inception)                             | -             |   | -             |  | -          |   | -           |   | -             |  
|Common share issued for cash            |               |   |               |  |            |   |             |   |               |  
|($1 per share) (Note 7)                 | 3             |   | -             |  | 1          |   | -           |   | 1             |  
|Net loss for the period                 | -             |   | -             |  | -          |   | (450        | ) | (450          | )
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 30 September 2004            | 3             |   | -             |  | 1          |   | (450        | ) | (449          | )
|Net loss for the year                   | -             |   | -             |  | -          |   | (300        | ) | (300          | )
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 30 September 2005            | 3             |   | -             |  | 1          |   | (750        | ) | (749          | )
|Common shares issued for cash           |               |   |               |  |            |   |             |   |               |  
|($0.001 per share) (Note 7)             | 30,000,000    |   | 30,000        |  | (20,000    | ) | -           |   | 10,000        |  
|Common shares redeemed  cash           |               |   |               |  |            |   |             |   |               |  
|($1 per share) (Note 7)                 | (3            | ) | -             |  | (1         | ) | -           |   | (1            | )
|Contributions to capital by             |               |   |               |  |            |   |             |   |               |  
|related parties  expenses
      (Notes |               |   |               |  |            |   |             |   |               |  
|6 and 9)                                | -             |   | -             |  | 24,000     |   | -           |   | 24,000        |  
|Net loss for the year                   | -             |   | -             |  | -          |   | (40,190     | ) | (40,190       | )
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 30 September 2006            | 30,000,000    |   | 30,000        |  | 4,000      |   | (40,940     | ) | (6,940        | )
|Contributions to capital by             |               |   |               |  |            |   |             |   |               |  
|related parties  expenses
      (Notes |               |   |               |  |            |   |             |   |               |  
|6 and 9)                                | -             |   | -             |  | 24,000     |   | -           |   | 24,000        |  
|Common shares issued for cash           |               |   |               |  |            |   |             |   |               |  
|($0.001 per share) (Note 7)             | 25,500,000    |   | 25,500        |  | 59,500     |   | -           |   | 85,000        |  
|Net loss for the year                   | -             |   | -             |  | -          |   | (64,567     | ) | (64,567       | )
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 30 September 2007            | 55,500,000    |   | 55,500        |  | 87,500     |   | (105,507    | ) | 37,493        |  
|Contributions to capital by             |               |   |               |  |            |   |             |   |               |  
|related parties  expenses
      (Notes |               |   |               |  |            |   |             |   |               |  
|6, 7 and 9)                             | -             |   | -             |  | 12,000     |   | -           |   | 12,000        |  
|Share subscriptions received
      in   |               |   |               |  |            |   |             |   |               |  
|advance (Note 7)                        | -             |   | -             |  | 237,500    |   | -           |   | 237,500       |  
|Net loss for the period                 | -             |   | -             |  | -          |   | (122,650    | ) | (122,650      | )
|                                        |               |   |               |  |            |   |             |   |               |  
|Balance at 30 June 2008                 | 55,500,000    |   | 55,500        |  | 337,000    |   | (228,157    | ) | 164,343       |  

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

(4)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

|1. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Silverstar Mining Corp. (the Company) was incorporated
      under the laws of the State of Nevada on 5 December 2003. The Company
      changed its name to Silverstar Mining Corp. from Rose Explorations Inc. on
      4 March 2008 and changed its name to Rose Explorations Inc. from Computer
      Maid, Inc. on 13 February 2006. The Company was incorporated for the
      purpose to promote and carry on any lawful business for which a
      corporation may be incorporated under the laws of the State of
    Nevada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company is a development stage enterprise, as defined
      in Financial Accounting Standards Board No. 7. The Company is devoting all
      of its present efforts in securing and establishing a new business, and
      its planned principle operations have not commenced, and, accordingly, no
      revenue has been derived during the organization period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Companys financial statements as at 30 June 2008 and
      for the three and nine month periods then ended have been prepared on a
      going concern basis, which contemplates the realization of assets and the
      settlement of liabilities and commitments in the normal course of
      business. The Company has a loss of $84,140 for the three month period
      ended 30 June 2008 (30 June 2007 - $21,351). The Company has a loss of
      $122,650 for the nine month period ended 30 June 2008 (30 June 2007 
      $49,770, cumulative $228,157) and has working capital of $164,343 at 30
      June 2008 (30 September 2007  $37,493).                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On 4 March 2008, the Company effected a three (3) for one
      (1) forward stock split of all outstanding common shares and a
      corresponding forward increase in the Companys authorized common stock.
      The effect of the forward split was to increase the number of the
      Companys common shares issued and outstanding from 18,500,000 to
      55,500,000 and to increase the Companys authorized common shares from
      75,000,000 shares par value $0.001 to 225,000,000 shares par value $0.001.
      The financial statements have been retroactively adjusted to reflect this
      stock split.                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Management cannot provide assurance that the Company will
      ultimately achieve profitable operations or become cash flow positive, or
      raise additional debt and/or equity capital. Management believes that the
      Companys capital resources should be adequate to continue operating and
      maintaining its business strategy during the fiscal year ending 30
      September 2008. However, if the Company is unable to raise additional
      capital in the near future, due to the Companys liquidity problems,
      management expects that the Company will need to curtail operations,
      liquidate assets, seek additional capital on less favourable terms and/or
      pursue other remedial measures. These financial statements do not include
      any adjustments related to the recoverability and classification of assets
      or the amounts and classification of liabilities that might be necessary
      should the Company be unable to continue as a going
  concern.

(5)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

At 30 June 2008, the Company had
suffered losses from development stage activities to date. Although management
is currently attempting to implement its business plan, and is seeking
additional sources of equity or debt financing, there is no assurance these
activities will be successful. Accordingly, the Company must rely on its
president to perform essential functions without compensation until a business
operation can be commenced. These factors raise substantial doubt about the
ability of the Company to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The following is a summary of significant accounting
      policies used in the preparation of these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The financial statements of the Company have been
      prepared in accordance with accounting principles generally accepted in
      the United States of America applicable to development stage enterprises,
      and are expressed in U.S. dollars. The Companys fiscal year end is 30
      September.                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Cash and cash equivalents include highly liquid
      investments with original maturities of three months or less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company has been in the exploration stage since its
      formation on 5 December 2003 and has not yet realized any revenues from
      its planned operations. It is primarily engaged in the acquisition and
      exploration of mining properties.                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property acquisition costs are initially
      capitalized as tangible assets when purchased. At the end of each fiscal
      quarter end, the Company assesses the carrying costs for impairment. If
      proven and probable reserves are established for a property and it has
      been determined that a mineral property can be economically developed,
      costs will be amortized using the units-of-production method over the
      estimated life of the probable reserve.                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Mineral property exploration costs are expensed as
      incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Estimated future removal and site restoration costs, when
      determinable are provided over the life of proven reserves on a
      units-of-production basis. Costs, which include production equipment
      removal and environmental remediation, are estimated each period by
      management based on current regulations, actual expenses incurred, and
      technology and industry standards. Any charge is included in exploration
      expense or the provision for depletion and depreciation during the period
      and the actual restoration expenditures are charged to the accumulated
      provision amounts as incurred.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | As of the date of these financial statements, the Company
      has not established any proven or probable reserves on its mineral
      properties and incurred only acquisition and exploration costs (Note
      4).                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Although the Company has taken steps to verify title to
      mineral properties in which it has an interest, according to the usual
      industry standards for the stage of exploration of such properties, these
      procedures do not guarantee the Companys title. Such properties may be
      subject to prior agreements or transfers and title may be affected by
      undetected defects.                                                                                                                                                                                                                                          

(6)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

Reclamation costs

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

Long-lived assets

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

Financial instruments

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

Derivative financial
instruments

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

Income taxes

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

Basic and diluted net loss per
share

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

(7)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

purchased from the exercise of stock
options or warrants. Diluted EPS excludes all potentially dilutive shares if
their effect is anti-dilutive.

Comprehensive loss

SFAS No. 130, Reporting
Comprehensive Income, establishes standards for the reporting and display of
comprehensive loss and its components in the financial statements. As at 30 June
2008, the Company has no items that represent a comprehensive loss and,
therefore, has not included a schedule of comprehensive loss in the financial
statements.

Segments of an enterprise and
related information

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

Start-up expenses

The Company has adopted Statement of
Position No. 98-5, Reporting the Costs of Start-up Activities, which
requires that costs associated with start-up activities be expensed as incurred.
Accordingly, start-up costs associated with the Companys formation have been
included in the Companys general and administrative expenses for the period
from the date of inception on 5 December 2003 to 30 June 2008.

Foreign currency translation

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

Use of estimates

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

(8)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

Recent accounting
pronouncements

In February 2007, the Financial
Accounting Standards Board (the FASB) issued SFAS No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities (SFAS 159). SFAS 159
allows the company to choose to measure many financial assets and financial
liabilities at fair value. Unrealized gains and losses on items for which the
fair value option has been elected are reported in earnings. SFAS 159 is
effective for fiscal years beginning after November 15, 2007. The Company is
currently evaluating the requirements of SFAS 159 and the potential impact on
the Companys financial statements.

In September 2006, the Financial
Accounting Standards Board (the FASB) issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an
amendment of FASB Statements No. 87, 88, 106 and 132(R) (SFAS 158). SFAS
158 requires an employer that sponsors one or more single-employer defined
benefit plans to (a) recognize the overfunded or underfunded status of a benefit
plan in its statement of financial position, (b) recognize as a component of
other comprehensive income, net of tax, the gains or losses and prior service
costs or credits that arise during the period but are not recognized as
components of net periodic benefit cost pursuant to SFAS 87, Employers
Accounting for Pensions, or SFAS 106, Employers Accounting for
Postretirement Benefits Other Than Pensions, (c) measure defined benefit
plan assets and obligations as of the date of the employers fiscal year-end,
and (d) disclose in the notes to financial statements additional information
about certain effects on net periodic benefit cost for the next fiscal year that
arise from delayed recognition of the gains or losses, prior service costs or
credits, and transition asset or obligation. SFAS 158 is effective for the
Companys fiscal year ending December 31, 2007. The Company is currently
reviewing the impact of this statement.

In September 2006, the FASB issued SFAS
No. 157, "Fair Value Measurement" ("SFAS 157"). The Statement provides
guidance for using fair value to measure assets and liabilities. The Statement
also expands disclosures about the extent to which companies measure assets and
liabilities at fair value, the information used to measure fair value, and the
effect of fair value measurement on earnings. This Statement applies under other
accounting pronouncements that require or permit fair value measurements. This
Statement does not expand the use of fair value measurements in any new
circumstances. Under this Statement, fair value refers to the price that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants in the market in which the entity
transacts. SFAS 157 is effective for the Company for fair value measurements and
disclosures made by the Company in its fiscal year beginning on January 1, 2008.
The Company is currently reviewing the impact of this statement.

In March 2006, the FASB issued SFAS No.
156, Accounting for Servicing of Financial Assets, which amends SFAS
No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities. SFAS No. 156 may be adopted as early as 1
January 2006, for calendar year-end entities, provided that no interim financial
statements have been issued. Those not choosing to early adopt are required to
apply the provisions as of the beginning of the first fiscal year that begins
after 15 September 2006 (e.g. 1 January 2007, for calendar year-end entities).
The intention of the new statement is to simplify accounting for separately
recognized servicing assets and liabilities, such as those common with mortgage
securitization activities, as well as to simplify efforts to obtain hedge-like
accounting. Specifically, the FASB said SFAS No. 156 permits a service using
derivative financial instruments to report both the derivative financial
instrument and related servicing asset or liability by using a consistent
measurement attribute, or fair value. The adoption of SFAS No. 156 is not
expected to have a material impact on the Companys financial position, results
of operations or cash flows.

In February 2006, the FASB issued SFAS
  No. 155, Accounting for Certain Hybrid Financial Instruments,
  which amends SFAS No. 133, Accounting for Derivative Instruments and
  Hedging Activities and SFAS No. 140. SFAS No. 155 permits fair value
  measurement for any hybrid financial instrument that contains an embedded derivative
  that otherwise would require bifurcation, establishes a

(9)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

|   | requirement to evaluate interests in securitized
      financial assets to identify interests that are freestanding derivatives
      or hybrid financial instruments containing embedded derivatives. The
      adoption of SFAS No. 155 is not expected to have a material impact on the
      Companys financial position, results of operations or cash
  flows.                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | Loan Receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The loan receivables of $150,560 is due from Silverdale
        Mining Corp. and bears interest at 8% per annum, is unsecured and repayable
        on 1 August 2008. Silverdale Mining Corp. is related to the Company by
        way of a director and shareholder in common (Note 6).                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | Mineral Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On 21 February 2006 the Company acquired an interest in a
      mineral claim located in Clark County, Nevada (the Rose Prospect Lode
      Mining Claim). In May 2006 the Company commissioned a geological
      evaluation report of the Rose Prospect Lode Mining Claim and in June 2006
      commissioned a Phase I work program as recommended by an evaluation
      report. During the Phase I work program the Company staked a second claim
      adjacent to the west of the Rose Lode Claim to cover other indicated
      mineralized zones observed in that area (the Rose Prospect II Lode Mining
      Claim).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company made no expenditures on its Mining Claim
        property for the nine month period ended 30 June 2008 (30 June 2007 -
        $Nil, cumulative - $12,500).                                                                                                                                                                                                                                                                                                                                                                                                                                                            

(10)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

|5. | Accounts Payable and Accrued Liabilities                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | Accounts payable and accrued liabilities are
        non-interest bearing, unsecured and have settlement dates within one year.                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                    
|6. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | On 1 April 2008, the Company entered into
        a contract to pay an officer and director of the Company of $6,500 per
        month for management and consulting services commencing 1 March 2008 (Note
        10). The Company paid $26,000 to the director for these services during
        the nine month period ended 30 June 2008 (30 June 2007 - $Nil).
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | On 12 May 2008, the Company received $3,000
        from a former director of the Company related to an advance receivable.                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | The loan receivables of $150,560 is due from Silverdale Mining
      Corp. and bears interest at 8% per annum, is unsecured and repayable on
      1 August 2008. Silverdale Mining Corp. is related to the Company by way
      of a director and shareholder in common (Note 3).                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | During the nine month period ended 30 June
        2008, the Company paid or accrued $6,000 to a company related to the Company
        by way of a director in common for investor relation services.                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | During the nine month period ended 30 June
        2008, the Company paid or accrued $6,254 to a Company related to the Company
        by way of a shareholder in common for accounting services.                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | During the nine month period ended 30 June 2008, the Company
      paid or accrued $1,467 to a shareholder of the Company for management and
      consulting services.                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | During the nine month period ended 30 June
        2008, an officer and director of the Company made contributions to capital
        for management fees in the amount of $9,000 (30 June 2007 - $13,500, cumulative
        - $45,000) and rent in the amount of $3,000 (30 June 2007 - $4,500, cumulative
        - $15,000) (Notes 7 and 9).                   
|   |                                                                                                                                                                                                                                                                                                                                                                    
|7. | Capital Stock                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | Authorized capital stock consists of 225,000,000
        common shares with a par value of $0.001 per common share. The total issued
        and outstanding capital stock is 55,500,000 common shares with a par value
        of $0.001 per common share.                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | i.                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                    
|   | ii.                                                                                                                                                                                                                                                                                                                                                                

(11)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

| | iii. | On 1 January 2006, 3 common shares of the Company were
        redeemed for proceeds of $1. These common shares were cancelled on the
        same date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | iv.  | On 3 May 2007, the Company completed a public offering
        of securities pursuant to an exemption provided by Rule 504 of Regulation
        D, registered in the State of Nevada, and issued 25,500,000 common shares
        for total cash proceeds of $85,000.                                                                                                                                                                                                                                                                                                                                                                
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | v.   | On 4 March 2008, the Company effected a three (3) for
        one (1) forward stock split of all outstanding common shares and a corresponding
        forward increase in the Companys authorized common stock. The effect
        of the forward split was to increase the number of the Companys
        common shares issued and outstanding from 18,500,000 to 55,500,000 and
        to increase the Companys authorized common shares from 75,000,000
        shares par value $0.001 to 225,000,000 shares par value $0.001. The financial
        statements have been retroactively adjusted to reflect this stock split.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | vi.  | During the nine month period ended 30 June 2008, an officer and director
      of the Company made contributions to capital for management fees in the
      amount of $9,000 (30 June 2007 - $13,500, cumulative - $45,000) and rent
      in the amount of $3,000 (30 June 2007 - $4,500, cumulative - $15,000) (Notes
      6 and 9).                                                                                                                                                                                                                                                                                              

Share subscriptions received in
advance

During the nine month period ended 30
  June 2008, the Company received share subscriptions of $237,500 related to a
  private placement to issue 1,000,000 common shares of the Company at $0.25 per
  common share for a gross proceeds of $250,000 (Notes 10 and 11).

|8. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company has losses carried forward for income tax
      purposes to 30 June 2008. There are no current or deferred tax expenses
      for the period ended 30 June 2008 due to the Companys loss position. The
      Company has fully reserved for any benefits of these losses. The deferred
      tax consequences of temporary differences in reporting items for financial
      statement and income tax purposes are recognized, as appropriate.
      Realization of the future tax benefits related to the deferred tax assets
      is dependent on many factors, including the Companys ability to generate
      taxable income within the net operating loss carryforward period.
      Management has considered these factors in reaching its conclusion as to
      the valuation allowance for financial reporting
purposes.

(12)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

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

| |                                             | For the nine |   | For the nine |  
| | ------------------------------------------- | ------------ | - | ------------ | -
| |                                             | month period |   | month period |  
| |                                             | ended 30     |   | ended 30     |  
| |                                             | June2008     |   | June2007     |  
| |                                             | $            |   | $            |  
| |                                             |              |   |              |  
| | Deferred tax asset attributable to:         |              |   |              |  
| | Current operations                          | 41,701       |   | 16,922       |  
| | Contributions to capital by related parties | (4,080       | ) | (6,120       | )
| | Less: Change in valuation allowance         | (37,621      | ) | (10,802      | )
| |                                             |              |   |              |  
| | Net refundable amount                       | -            |   | -            |  

The composition of the Companys
deferred tax assets as at 30 June 2008 and 30 September 2007 are as follows:

| |                                   |               |   | As at 30       |  
| | --------------------------------- | ------------- | - | -------------- | -
| |                                   | As at 30 June |   | September 2007 |  
| |                                   | 2008          |   | (Audited)      |  
| |                                   | $             |   | $              |  
| |                                   |               |   |                |  
| | Income tax operating loss         |               |   |                |  
| | carryforward                      | 228,157       |   | 105,507        |  
| |                                   |               |   |                |  
| | Statutory federal income tax rate | 34%           |   | 34%            |  
| | Contributed rent and services     | -8.94%        |   | -15.47%        |  
| | Effective income tax rate         | 0%            |   | 0%             |  
| |                                   |               |   |                |  
| | Deferred tax assets               | 57,173        |   | 19,552         |  
| | Less: Valuation allowance         | (57,173       | ) | (19,552        | )
| |                                   |               |   |                |  
| | Net deferred tax asset            | -             |   | -              |  

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

As at 30 June 2008, the Company has an
  unused net operating loss carry-forward balance of approximately $168,157 that
  is available to offset future taxable income. This unused net operating loss
  carry-forward balance expires between 2024 and 2027.

(13)

---

|Silverstar Mining Corp.          
|---------------------------------
|(formerly Rose Explorations Inc.)
|(A Development Stage Company)    
|Notes to Financial Statements    
|(Expressed in U.S. Dollars)      
|(Unaudited)                      
|30 June 2008                     

|9. | Supplemental Disclosures with Respect to Cash
      Flows
|-- | ---------------------------------------------------------

| |                                            | 30 June |  | 30 June | 
| | ------------------------------------------ | ------- |  | ------- | 
| |                                            | 2008    |  | 2007    | 
| |                                            | $       |  | $       | 
| |                                            |         |  |         | 
| | Cash paid during the year for interest     | -       |  | -       | 
| | Cash paid during the year for income taxes | -       |  | -       | 

|    | During the nine month period ended 30 June
        2008, an officer and director of the Company made contributions to capital
        for management fees in the amount of $9,000 (30 June 2007 - $13,500, cumulative
        - $45,000) and rent in the amount of $3,000 (30 June 2007 - $4,500, cumulative
        - $15,000) (Notes 6 and 7).                                                                                                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On 1 April 2008, the Company entered into
        a contract to pay an officer and director of the Company of $6,500 per
        month for management and consulting services commencing 1 March 2008 (Note
        6).                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On 13 June 2008, the Company entered into
        a share exchange agreement with Silverdale Mining Corp., a Nevada corporation,
        and the shareholders of Silverdale Mining Corp. Pursuant to the terms
        of the share exchange agreement, the Company agreed to acquire all of
        the issued and outstanding shares of Silverdale Mining Corp.'s common
        stock in exchange for the issuance by the Company of 4,600,000 common
        shares of the Company to the shareholders of Silverdale Mining Corp. (Note
        11).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | During the nine month period ended 30 June
        2008, the Company received proceeds of $237,500 towards a private placement
        to issue 1,000,000 common shares of the Company at $0.25 per common share
        for the total proceeds of $250,000 (Notes 7 and 11).                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|11. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The following events occurred subsequent to 30 June
      2008:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

(14)

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Item 2. Management's Discussion and Analysis or Plan of
Operation.

FORWARD-LOOKING STATEMENTS

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

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

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

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

General Overview

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

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

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

In addition, effective March 4, 2008 we effected a three (3)
for one (1) forward stock split of our authorized, issued and outstanding common
stock. As a result, our authorized capital has increased from 75,000,000 shares
of common stock with a par value of $0.001 to 225,000,000 shares of common stock
with a par value of $0.001. As of June 30, 2008 our issued and outstanding share
capital has increased from 18,500,000 shares of common stock to 55,500,000
shares of common stock. As noted below on July 23, 2008, we issued 1,000,000
shares of our common stock to close a private placement consisting of 1,000,000
shares and on July 24, 2008, we issued 4,334,000 shares of our common stock to
the former shareholders of Silverdale Mining Corp in accordance with the closing
of a share exchange agreement. As of the date of this filing we have 60,834,000
shares of common stock issued and outstanding.

4

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On March 31, 2008, we entered into a joint venture agreement
with New Jersey Mining Co. to acquire a 50% interest in the Silver Strand silver
mine located in the Coeur dAlene Mining District. We anticipate closing the
joint venture agreement on or before September 30, 2008.

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

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

Rose Prospect Lode Mining Claim

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

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

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

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

Mineral Property Option Agreement between our Company and
Chuck Stein

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

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

To date, we have paid $50,000 and the mineral property option
agreement remains in good standing.

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

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

5

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

Plan of Operation and Cash Requirements

We are an exploration stage mining company engaged in the
exploration of minerals on properties located in Idaho. Prior to the completion
of the acquisition of Silverdale Mining Corp., we had an interest in the Rose
Prospect Lode Mining Claim.

Over the next twelve months we intend to re-evaluate our Rose
Load Claim, close the joint venture agreement with New Jersey Mining Co. and to
continue to honour the terms of the mineral property option agreement between
our subsidiary Silverdale Mining Corp. and Chuck Stein.

Our principal capital resources have been through the issuance
of common stock, although we may use shareholder loans, advances from related
parties, or borrowing in the future.

On July 23, 2008, we closed a private placement consisting of
1,000,000 shares of our common stock at a price of $0.25 per share for aggregate
gross proceeds of $250,000. We issued the 1,000,000 shares to 9 non-US persons
pursuant to an offshore transaction relying on Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

We anticipate that we will incur expenses of approximately
$1,000,000 over the next twelve months. These expenses include $640,000 on
development of our mineral properties; management fees of $174,000; accounting
and legal of $76,000; and travel, office and miscellaneous of $110,000.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve month period ending June 30, 2009.

Off-Balance Sheet Arrangements

As of June 30, 2008, our company had no off-balance sheet
arrangements, including any outstanding derivative financial statements,
off-balance sheet guarantees, interest rate swap transactions or foreign
currency contracts. Our company does not engage in trading activities involving
non-exchange traded contracts.

Employees

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

Results of Operations for the Quarter Ended June 30, 2008
and 2007

The Companys year end is September 30. The following summary
of our results of operations should be read in conjunction with our unaudited
financial statements for the quarter ended June 30, 2008 and 2007.

We had cash and cash equivalents of $34,740 as of June 30, 2008
compared to cash and cash equivalents of $42,170 as of September 30, 2007. We
had a working capital surplus of $164,343 as of June 30, 2008 compared to
working capital surplus of $37,493 as of September 30, 2007.

6

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

Our operating results for the quarter ended June 30, 2008 and
2007 and the changes between those periods for the respective items are
summarized as follows:

Three Months Ended June 30,
      2008
    
    Three Months Ended June 30,
      2007
    
    Change Between Three Months
      Ended June 30, 2008 and June 30, 2007Revenue
    $
    Nil
    $
    Nil
    $
    NilInterest Income
    
    165
    
    Nil
    
    165Bank Charges and Interest
    
    565
    
    87
    
    478Consulting
    
    27,467
    
    2,500
    
    24,967Filing Fees
    
    461
    
    34
    
    427General and Administrative
    
    5,284
    
    Nil
    
    5,284Investor Relations
    
    23,423
    
    Nil
    
    23,423Legal and Accounting
    
    14,487
    
    11,385
    
    3,102Rent
    
    1,200
    
    1,500
    
    (300)Management fees
    
    Nil
    
    4,500
    
    (4,500)Transfer Agent
    
    1,392
    
    1,345
    
    47Travel and Entertainment
    
    3,602
    
    Nil
    
    3,602Web Site
    
    6,000
    
    Nil
    
    6,000Foreign Exchange (Loss)
    
    (424)
    
    Nil
    
    (424)Net loss
    
    84,140
    
    21,351
    
    62,789


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Liquidity and Financial Condition

Working Capital

|                          |   |               |  |   |               |  |   | Change between | 
|------------------------- | - | ------------- |  | - | ------------- |  | - | -------------- | 
|                          |   |               |  |   |               |  |   | June 30, 2008  | 
|                          |   |               |  |   | September 30, |  |   | and            | 
|                          |   | June 30, 2008 |  |   | 2007          |  |   | September 30,  | 
|                          |   | (unaudited)   |  |   | (audited)     |  |   | 2007           | 
|Current Assets            | $ | 185,700       |  | $ | 42,170        |  | $ | 143,530        | 
|Current
      Liabilities | $ | 21,357        |  | $ | 4,677         |  | $ | 16,680         | 
|Working Capital           | $ | 164,343       |  | $ | 37,493        |  | $ | 126,850        | 

Cash Flows

|                                              |   |               |   |   |               |   |   | Change between    |  
|--------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ----------------- | -
|                                              |   | Three Months  |   |   | Three Months  |   |   | **period ended**  |  
|                                              |   | Ended         |   |   | Ended         |   |   | **June 30, 2008** |  
|                                              |   | June 30, 2008 |   |   | June 30, 2007 |   |   | and June 30,      |  
|                                              |   | (unaudited)   |   |   | (unaudited)   |   |   | 2007              |  
|Cash Flows provided by Operating Activities   | $ | (72,869       | ) | $ | (38,090       | ) | $ | (34,779           | )
|Cash Flows provided by Investing Activities   | $ | Nil           |   | $ | Nil           |   | $ | Nil               |  
|Cash Flows provided by Financing Activities   | $ | 86,940        |   | $ | 85,000        |   | $ | 1,940             |  
|Net Increase (Decrease) in Cash During Period | $ | 14,071        |   | $ | 46,910        |   | $ | (32,839           | )

Going Concern

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual financial
statements for the year ended September 30, 2007, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern.

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

Application of Critical Accounting Policies

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

8

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the estimates and assumptions involved with the following
aspects of our financial statements is critical to an understanding of our
financial statements.

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

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

Cash and cash equivalents

Cash and cash equivalents include highly liquid investments
with original maturities of three months or less.

Mineral property costs

The Company has been in the exploration stage since its
formation on 5 December 2003 and has not yet realized any revenues from its
planned operations. It is primarily engaged in the acquisition and exploration
of mining properties.

Mineral property acquisition costs are initially capitalized as
tangible assets when purchased. At the end of each fiscal quarter end, the
Company assesses the carrying costs for impairment. If proven and probable
reserves are established for a property and it has been determined that a
mineral property can be economically developed, costs will be amortized using
the units-of-production method over the estimated life of the probable
reserve.

Mineral property exploration costs are expensed as
incurred.

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

As of the date of these financial statements, the Company has
not established any proven or probable reserves on its mineral properties and
incurred only acquisition and exploration costs (Note 4).

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

Reclamation costs

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

Long-lived assets

In accordance with SFAS No. 144, Accounting for Impairment
or Disposal of Long-Lived Assets, the carrying value of long-lived assets is
reviewed on a regular basis for the existence of facts or circumstance that may
suggest impairment. The Company recognized an impairment when the sum if the
expected undiscounted future cash flows

9

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is less than the carrying amount of the asset. Impairment
losses, if any, are measured as the excess of the carrying amount of the asset
over its estimated fair value.

Financial instruments

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

Derivative financial instruments

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

Income taxes

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

Basic and diluted net loss per share

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

Comprehensive loss

SFAS No. 130, Reporting Comprehensive Income,
establishes standards for the reporting and display of comprehensive loss and
its components in the financial statements. As at 30 June 2008, the Company has
no items that represent a comprehensive loss and, therefore, has not included a
schedule of comprehensive loss in the financial statements.

Segments of an enterprise and related information

SFAS No. 131, Disclosures about Segments of an Enterprise
and Related Information, supersedes SFAS No. 14, Financial Reporting for
Segments of a Business Enterprise. SFAS No. 131 establishes standards for
the way that public companies report information about operating segments in
annual financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components of a company about which separate financial information is

10

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available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.

Start-up expenses

The Company has adopted Statement of Position No. 98-5,
Reporting the Costs of Start-up Activities, which requires that costs
associated with start-up activities be expensed as incurred. Accordingly,
start-up costs associated with the Companys formation have been included in the
Companys general and administrative expenses for the period from the date of
inception on 5 December 2003 to 30 June 2008.

Foreign currency translation

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

Use of estimates

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

Recent accounting pronouncements

In February 2007, the Financial Accounting Standards Board (the
FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS 159). SFAS 159 allows the company to choose to
measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS 159 is effective for fiscal years
beginning after November 15, 2007. The Company is currently evaluating the
requirements of SFAS 159 and the potential impact on the Companys financial
statements.

In September 2006, the Financial Accounting Standards Board
(the FASB) issued SFAS No. 158, Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87,
88, 106 and 132(R) (SFAS 158). SFAS 158 requires an employer that sponsors
one or more single-employer defined benefit plans to (a) recognize the
overfunded or underfunded status of a benefit plan in its statement of financial
position, (b) recognize as a component of other comprehensive income, net of
tax, the gains or losses and prior service costs or credits that arise during
the period but are not recognized as components of net periodic benefit cost
pursuant to SFAS 87, Employers Accounting for Pensions, or SFAS 106,
Employers Accounting for Postretirement Benefits Other Than Pensions,
(c) measure defined benefit plan assets and obligations as of the date of the
employers fiscal year-end, and (d) disclose in the notes to financial
statements additional information about certain effects on net periodic benefit
cost for the next fiscal year that arise from delayed recognition of the gains
or losses, prior service costs or credits, and transition asset or obligation.
SFAS 158 is effective for the Companys fiscal year ending December 31, 2007.
The Company is currently reviewing the impact of this statement.

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurement" ("SFAS 157"). The Statement provides guidance for using fair
value to measure assets and liabilities. The Statement also expands disclosures
about the extent to which companies measure assets and liabilities at fair
value, the information used to measure fair value, and the effect of fair value
measurement on earnings. This Statement applies under other accounting
pronouncements that require or permit fair value measurements. This Statement
does not expand the use of fair value measurements in any new circumstances.
Under this Statement, fair value refers to the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between
market participants in the

11

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market in which the entity transacts. SFAS 157 is effective for
the Company for fair value measurements and disclosures made by the Company in
its fiscal year beginning on January 1, 2008. The Company is currently reviewing
the impact of this statement.

In March 2006, the FASB issued SFAS No. 156, Accounting for
Servicing of Financial Assets, which amends SFAS No. 140 Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities. SFAS No. 156 may be adopted as early as 1 January 2006, for
calendar year-end entities, provided that no interim financial statements have
been issued. Those not choosing to early adopt are required to apply the
provisions as of the beginning of the first fiscal year that begins after 15
September 2006 (e.g. 1 January 2007, for calendar year-end entities). The
intention of the new statement is to simplify accounting for separately
recognized servicing assets and liabilities, such as those common with mortgage
securitization activities, as well as to simplify efforts to obtain hedge-like
accounting. Specifically, the FASB said SFAS No. 156 permits a service using
derivative financial instruments to report both the derivative financial
instrument and related servicing asset or liability by using a consistent
measurement attribute, or fair value. The adoption of SFAS No. 156 is not
expected to have a material impact on the Companys financial position, results
of operations or cash flows.

In February 2006, the FASB issued SFAS No. 155, Accounting
for Certain Hybrid Financial Instruments, which amends SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities and SFAS
No. 140. SFAS No. 155 permits fair value measurement for any hybrid financial
instrument that contains an embedded derivative that otherwise would require
bifurcation, establishes a requirement to evaluate interests in securitized
financial assets to identify interests that are freestanding derivatives or
hybrid financial instruments containing embedded derivatives. The adoption of
SFAS No. 155 is not expected to have a material impact on the Companys
financial position, results of operations or cash flows.

Risk Factors

Our business operations are subject to a number of risks and
uncertainties, including, but not limited to those set forth below:

Risks Associated With Mining

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

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

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

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

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure

12

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such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.

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

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

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

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

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

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

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

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Mineral prices are subject to dramatic and unpredictable
fluctuations.

We expect to derive revenues, if any, either from the sale of
our mineral resource properties or from the extraction and sale of precious and
base metals such as gold, silver and copper. The price of those commodities has
fluctuated widely in recent years, and is affected by numerous factors beyond
our control, including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates,
global or regional consumptive patterns, speculative activities and increased
production due to new extraction developments and improved extraction and
production methods. The effect of these factors on the price of base and
precious metals, and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.

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

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

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

Risks Related To Our Company

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

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

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

We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a

14

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commercially exploitable quantity on one or more of our mineral
properties and we build and operate a mine. We had cash and cash equivalents in
the amount of $34,740 as of June 30, 2008. At June 30, 2008, we had a working
capital surplus of $164,343. We incurred a net loss of $84,140 for the three
month period ended June 30, 2008 and $228,157 since inception. We estimate our
average monthly operating expenses to be approximately $80,000 to $100,000,
including mineral property costs, management services and administrative costs.
Should the results of our planned exploration require us to increase our current
operating budget, we may have to raise additional funds to meet our currently
budgeted operating requirements for the next 12 months. As we cannot assure a
lender that we will be able to successfully explore and develop our mineral
properties, we will probably find it difficult to raise debt financing from
traditional lending sources. We have traditionally raised our operating capital
from sales of equity and debt securities, but there can be no assurance that we
will continue to be able to do so. If we cannot raise the money that we need to
continue exploration of our mineral properties, we may be forced to delay, scale
back, or eliminate our exploration activities. If any of these were to occur,
there is a substantial risk that our business would fail.

These circumstances lead our independent registered public
accounting firm, in their report dated November 29, 2007, to comment about our
companys ability to continue as a going concern. Management has plans to seek
additional capital through a private placement and public offering of its
capital stock. These conditions raise substantial doubt about our companys
ability to continue as a going concern. Although there are no assurances that
managements plans will be realized, management believes that our company will
be able to continue operations in the future. The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event our company cannot continue in existence. We continue
to experience net operating losses.

Risks Associated with Our Common Stock

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

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

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

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

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addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the Financial Industry Regulatory Authority believes that there
is a high probability that speculative low-priced securities will not be
suitable for at least some customers. The Financial Industry Regulatory
Authority  requirements make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may limit your ability to buy
and sell our stock.

Other Risks

Trends, Risks and Uncertainties

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

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer) and our chief financial officer (our principal
financial officer and principal accounting officer) to allow for timely
decisions regarding required disclosure. In designing and evaluating our
disclosure controls and procedures, our management recognizes that any controls
and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As of June 30, 2008, the end of our third quarter covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president (also our principal executive officer) and our
secretary, treasurer and chief financial officer (also our principal financial
and accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president (also
our principal executive officer) and our secretary, treasurer and chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this quarterly report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the quarter ended June 30, 2008
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 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

On April 1, 2008, we entered into a consulting agreement with
  Mr. James MacKenzie, our Chief Executive Officer, to provide management and
  consulting services commencing on March 1, 2008. The term of the agreement is
  for a period of twelve (12) months and we agreed to pay to Mr. MacKenzie approximately
  $6,500 per month.

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Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-B

|Exhibit | Description                                                                                                                                                                                                                                                                                                            
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                        
|(3)     | Articles of
        Incorporation and Bylaws                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                        
|3.1     | Articles of Incorporation
        (incorporated by reference from our Registration Statement on Form SB-2
        filed on January 30, 2007).                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                        
|3.2     | By-laws (incorporated
        by reference from our Registration Statement on Form SB-2 filed on January
        30, 2007).                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                        
|3.3     | Articles of Merger
        filed with the Secretary of State of Nevada on February 20, 2008 and which
        is effective March 4, 2008 (incorporated by reference from our Current
        Report on Form 8-K filed on March 5, 2008).                                                                               
|        |                                                                                                                                                                                                                                                                                                                        
|3.4     | Certificate of
        Change filed with the Secretary of State of Nevada on February 20, 2008
        and which is effective March 4, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on March 5, 2008).                                                                            
|        |                                                                                                                                                                                                                                                                                                                        
|(10)    | Material Contracts                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                        
|10.1    | Purchase Agreement
        Rose Prospect Lode Claim (incorporated by reference from our Registration
        Statement on Form SB-2 filed on January 30, 2007).                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                        
|10.2    | Share Exchange
        Agreement dated June 13, 2008, among our company, Silverdale Mining Corp.
        and the selling the shareholders of Silverdale Mining Corp. as set out
        in the share exchange agreement (incorporated by reference from our Current
        Report on Form 8-K filed on June 16, 2008).
|        |                                                                                                                                                                                                                                                                                                                        
|10.3    | Mineral Property
        Option Agreement dated September 14, 2007 between Silverdale Mining Corp.
        and Chuck Stein (incorporated by reference from our Current Report on
        Form 8-K filed on July 28, 2008).                                                                                             
|        |                                                                                                                                                                                                                                                                                                                        
|10.4    | Joint Venture
        Agreement dated March 31, 2008 between our company and New Jersey Mining
        Company (incorporated by reference from our Current Report on Form 8-K
        filed on July 28, 2008).                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                        
|10.5*   | Consulting Agreement dated April
      1, 2008 between our company and Mr. James MacKenzie.                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                        
|(21)    | Subsidiaries
        of the Registrant                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                        
|21.1    | Silverdale Mining
        Corp.                                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                        
|(31)    | Section 302
        Certifications                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                        
|31.1*   | Section
        302 Certification of Principal Executive Officer.                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                        
|31.2*   | Section
        302 Certification of Principal Financial Officer and Principal Accounting
        Officer.                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                        
|(32)    | Section 906
        Certification                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                        
|32.1*   | Section
        906 Certification of Principal Executive Officer.                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                        
|32.2*   | Section
        906 Certification of Principal Financial Officer and Principal Accounting
        Officer.                                                                                                                                                                                                             

*filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

SILVERSTAR MINING CORP.

By: */s/ Jim MacKenzie*Jim
MacKenziePresident, Chief Executive Officer, and Director (Principal
Executive Officer)

Date: August 14, 2008

By: */s/ John Jardine*John JardineChief
Financial Officer, Secretary and Treasurer (Principal Financial Officer and
Principal Accounting Officer)

Date: August 14, 2008

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