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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 August 31, 2008

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

For the transition period from __________ to __________

Commission file number 000-53142

CHANCERY RESOURCES, INC.(Exact name of small business issuer as specified in its
charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

Calle 10 No. 25  103, Apto 110, Medellin,
Colombia(Address of principal executive offices)

57 312 776 5740(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 BANKRUPTCYPROCEEDINGS 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: 30,250,000
common shares issued and outstanding as of October 1, 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
[X]      No [   ]

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

These financial statements have been prepared by Chancery
Resources, Inc. 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 August 31, 2008, and our results of
operations and our cash flows for the nine month period ended August 31, 2008.
The results for this interim period 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.

2

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Chancery Resources, Inc. (An Exploration Stage Company)

August 31, 2008





|                                        | Index
|--------------------------------------- | -----
|                                        |      
|Balance
      Sheets                    | F1  
|                                        |      
|Statements
      of Operations          | F2  
|                                        |      
|Statements
      of Cash Flows          | F3  
|                                        |      
|Notes
      to the Financial Statements | F4  

3

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Chancery Resources, Inc. (An Exploration Stage Company)
Balance Sheets (Expressed in US dollars)

|                                                                             |  | August 31,  |   |  | November 30, |  
|---------------------------------------------------------------------------- |  | ----------- | - |  | ------------ | -
|                                                                             |  | 2008        |   |  | 2007         |  
|                                                                             |  | $           |   |  | $            |  
|                                                                             |  | (unaudited) |   |  |              |  
|ASSETS                                                                       |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Current Assets                                                               |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Cash                                                                         |  | 18,004      |   |  | 98,531       |  
|Prepaid expenses                                                             |  | 225         |   |  | 713          |  
|                                                                             |  |             |   |  |              |  
|Total Assets                                                                 |  | 18,229      |   |  | 99,244       |  
|                                                                             |  |             |   |  |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                               |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Current Liabilities                                                          |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Accounts payable                                                             |  | 15,871      |   |  | 3,720        |  
|Accrued liabilities                                                          |  | 20          |   |  |             |  
|Due
      to related parties (Notes 3(b)and (c))                             |  | 47,302      |   |  | 45,214       |  
|                                                                             |  |             |   |  |              |  
|Total Current Liabilities                                                    |  | 63,193      |   |  | 48,934       |  
|                                                                             |  |             |   |  |              |  
|Loans payable
      (Note 4)                                                 |  | 90,000      |   |  |             |  
|                                                                             |  |             |   |  |              |  
|Total Liabilities                                                            |  | 153,193     |   |  | 48,934       |  
|                                                                             |  |             |   |  |              |  
|Contingencies and Commitments (Note 1 and 5)                                 |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Stockholders Equity (Deficit)                                               |  |             |   |  |              |  
|                                                                             |  |             |   |  |              |  
|Preferred stock, 2,500,000,000 shares
      authorized, $0.00001 par value;  |  |             |   |  |              |  
|No shares issued and
      outstanding                                       |  |            |   |  |             |  
|                                                                             |  |             |   |  |              |  
|Common stock, 2,500,000,000
      shares authorized, $0.00001 par value;     |  |             |   |  |              |  
|32,250,000 and 151,250,000 shares issued and
      outstanding, respectively |  | 322         |   |  | 1,512        |  
|                                                                             |  |             |   |  |              |  
|Additional paid-in capital                                                   |  | 104,728     |   |  | 103,538      |  
|                                                                             |  |             |   |  |              |  
|Donated capital (Note 3(a))                                                  |  | 11,750      |   |  | 7,250        |  
|                                                                             |  |             |   |  |              |  
|Deficit accumulated during the exploration stage                             |  | (251,764    | ) |  | (61,990      | )
|                                                                             |  |             |   |  |              |  
|Total
      Stockholders Equity (Deficit)                                   |  | (134,964    | ) |  | 50,310       |  
|                                                                             |  |             |   |  |              |  
|Total Liabilities
      and Stockholders Equity (Deficit)                   |  | 18,229      |   |  | 99,244       |  

(The accompanying notes are an integral part of these financial
statements)

F-1

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Chancery Resources, Inc. (An Exploration Stage Company)
Statements of Operations (Expressed in US dollars) 
(unaudited)

Accumulated from
      
      
      For the
      
      
      For the
      
      
      For the
      
      
      For theSeptember 12, 2006
      
      
      Three Months
      
      
      Three Months
      
      
      Nine Months
      
      
      Nine Months(Date of Inception)
      
      
      Ended
      
      
      Ended
      
      
      Ended
      
      
      Endedto August 31,
      
      
      August 31,
      
      
      August 31,
      
      
      August 31,
      
      
      August 31,2008
      
      
      2008
      
      
      2007
      
      
      2008
      
      
      2007$
      
      
      $
      
      
      $
      
      
      $
      
      
      $Revenue
      
      
      
      
      
      
      
      
      
      
      
      
      
      ExpensesGeneral and administrative
      
      110,617
      
      
      28,027
      
      
      17,248
      
      
      63,480
      
      
      41,177Management services (Note 3(a))
      
      11,750
      
      
      1,500
      
      
      1,500
      
      
      4,500
      
      
      4,500Impairment of
        mineral property costs
      
      123,700
      
      
      70,000
      
      
      
      
      
      120,000
      
      
      Mineral property costs
      
      75
      
      
      -
      
      
      
      
      
      -
      
      
      Rent (Note 3(a))
      
      5,622
      
      
      
      
      
      849
      
      
      1,794
      
      
      2,403Total Expenses
      
      251,764
      
      
      99,527
      
      
      19,597
      
      
      189,774
      
      
      48,080Net Loss for the Period
      
      (251,764
      )
      
      (99,527
      )
      
      (19,597
      )
      
      (189,774
      )
      
      (48,080
      )Net Loss Per Share  Basic and Diluted
      
      
      
      
      
      
      
      
      
      
      
      
      
      (0.01
      )Weighted Average Common Shares Outstanding
      
      
      32,250,000
      
      
      125,000,000
      
      
      109,557,000
      
      
      125,000,000


(The accompanying notes are an integral part of these financial
statements)

F-2

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Chancery Resources, Inc. (An Exploration Stage Company)
Statements of Cash Flows (Expressed in US dollars) 
(unaudited)

|                                                                                  |  | For the     |   |  | For the     |  
|--------------------------------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                                                  |  | Nine Months |   |  | Nine Months |  
|                                                                                  |  | Ended       |   |  | Ended       |  
|                                                                                  |  | August 31,  |   |  | August 31,  |  
|                                                                                  |  | 2008        |   |  | 2007        |  
|                                                                                  |  | $           |   |  | $           |  
|Operating Activities                                                              |  |             |   |  |             |  
|                                                                                  |  |             |   |  |             |  
|Net loss for the period                                                           |  | (189,774    | ) |  | (48,080     | )
|                                                                                  |  |             |   |  |             |  
|Adjustments to reconcile net loss to net cash
      used in operating activities: |  |             |   |  |             |  
|Donated services                                                                  |  | 4,500       |   |  | 4,500       |  
|Impairment of mineral property costs                                              |  | 120,000     |   |  |            |  
|                                                                                  |  |             |   |  |             |  
|Changes in operating assets and liabilities:                                      |  |             |   |  |             |  
|Prepaid expenses                                                                  |  | 488         |   |  | 15,000      |  
|Accounts payable                                                                  |  | 12,151      |   |  | 5,789       |  
|Accrued liabilities                                                               |  | 20          |   |  |            |  
|Due to related party                                                              |  | 2,088       |   |  | 50          |  
|                                                                                  |  |             |   |  |             |  
|Net Cash Used In Operating
      Activities                                       |  | (50,527     | ) |  | (22,741     | )
|                                                                                  |  |             |   |  |             |  
|Investing Activities                                                              |  |             |   |  |             |  
|                                                                                  |  |             |   |  |             |  
|Mineral
      property costs                                                      |  | (50,000     | ) |  |            |  
|                                                                                  |  |             |   |  |             |  
|Net Cash Used In Investing
      Activities                                       |  | (50,000     | ) |  |            |  
|                                                                                  |  |             |   |  |             |  
|Financing Activities                                                              |  |             |   |  |             |  
|                                                                                  |  |             |   |  |             |  
|Advances from related party                                                       |  | 20,000      |   |  | 10,009      |  
|Proceeds from common stock subscribed                                             |  |            |   |  | 50,000      |  
|                                                                                  |  |             |   |  |             |  
|Net Cash Provided
      By Financing Activities                                   |  | 20,000      |   |  | 60,009      |  
|                                                                                  |  |             |   |  |             |  
|Increase (Decrease) in Cash                                                       |  | (80,527     | ) |  | 37,268      |  
|                                                                                  |  |             |   |  |             |  
|Cash - Beginning
      of Period                                                  |  | 98,531      |   |  | 16,290      |  
|                                                                                  |  |             |   |  |             |  
|Cash - End of
      Period                                                        |  | 18,004      |   |  | 53,558      |  
|                                                                                  |  |             |   |  |             |  
|Supplemental Disclosures                                                          |  |             |   |  |             |  
|Interest paid                                                                     |  |            |   |  |            |  
|Income taxes paid                                                                 |  |            |   |  |            |  

(The accompanying notes are an integral part of these financial
statements)

F-3

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|1. | Nature of Operations and Continuance of
Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Chancery Resources, Inc. (the "Company") was incorporated
      in the State of Nevada on September 12, 2006. The Company is an
      Exploration Stage Company as defined by Statement of Financial Accounting
      Standard ("SFAS") No. 7, "Accounting and Reporting for Development
      Stage Enterprises". The Company has acquired a mineral property
      located in the province of British Columbia, Canada, and has not yet
      determined whether this property contains reserves that are economically
  recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has not generated any revenue since inception and has never paid
      any dividends and is unlikely to pay dividends or generate earnings in the
      immediate or foreseeable future. The continuation of the Company as a
      going concern is dependent upon the continued financial support from its
      shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations, and the attainment of profitable
      operations. As at August 31, 2008, the Company has a working capital
      deficiency of $44,964 and has accumulated losses of $251,764 since
      inception. These factors raise substantial doubt regarding the Companys
      ability to continue as a going concern. These financial statements do not
      include any adjustments to the recoverability and classification of
      recorded asset amounts and classification of liabilities that might be
      necessary should the Company be unable to continue as a going
    concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On June 8, 2007, the Company filed an amended SB-2
      Registration Statement with the United States Securities and Exchange
      Commission that was declared effective on June 12, 2007 to offer up to
      50,000,000 shares of common stock at $0.004 per share to raise proceeds of
      $200,000. On September 20, 2007, the Company issued 26,250,000 shares of
      common stock at $0.004 per share for gross proceeds of $105,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2. | Summary of Significant Accounting
  Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| | a) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | These financial statements and related notes are
      presented in accordance with accounting principles generally accepted in
      the United States, and are expressed in US dollars. The Companys fiscal
      year-end is November 30.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | b) | Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | These interim unaudited financial statements have been
      prepared in accordance with accounting principles generally accepted in
      the United States for interim financial information and with the
      instructions to Securities and Exchange Commission (SEC) Form 10-QSB.
      They do not include all of the information and footnotes required by
      generally accepted accounting principles for complete financial
      statements. Therefore, these financial statements should be read in
      conjunction with the Companys audited financial statements and notes
      thereto for the year ended November 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | The financial statements included herein are unaudited;
      however, they contain all normal recurring accruals and adjustments that,
      in the opinion of management, are necessary to present fairly the
      Companys financial position at August 31, 2008, and the results of its
      operations and cash flows for the three month and nine month periods ended
      August 31, 2008 and 2007. The results of operations for the period ended
      August 31, 2008 are not necessarily indicative of the results to be
      expected for future quarters or the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | The preparation of financial statements in conformity
      with US generally accepted accounting principles requires management to
      make estimates and assumptions that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. The Company regularly evaluates
      estimates and assumptions related to the recoverability of mineral
      property costs, donated expenses and deferred income tax asset valuation
      allowances. The Company bases its estimates and assumptions on current
      facts, historical experience and various other factors that it believes to
      be reasonable under the circumstances, the results of which form the basis
      for making judgments about the carrying values of assets and liabilities
      and the accrual of costs and expenses that are not readily apparent from
      other sources. The actual results experienced by the Company may differ
      materially and adversely from the Companys estimates. To the extent there
      are material differences between the estimates and the actual results,
      future results of operations will be affected.

F-4

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------
|   |                                                           
|   | d)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | e)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | f)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | g)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | h)                                                        
|   |                                                           
|   |                                                           
|   |                                                           
|   | i)                                                        
|   |                                                           
|   |                                                           

F-5

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------

| | j) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The fair values of financial instruments, which include
      cash, accounts payable, accrued liabilities, and amounts due to related
      party, were estimated to approximate their carrying values due to the
      immediate or short-term maturity of these financial instruments. The
      Companys operations are in Canada, which results in exposure to market
      risks from changes in foreign currency rates. The financial risk is the
      risk to the Companys operations that arise 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company accounts for income taxes using the asset and
      liability method in accordance with SFAS No. 109, "Accounting for
      Income Taxes". The asset and liability method provides that deferred
      tax assets and liabilities are recognized for the expected future tax
      consequences of temporary differences between the financial reporting and
      tax bases of assets and liabilities, and for operating loss and tax credit
      carryforwards. Deferred tax assets and liabilities are measured using the
      currently enacted tax rates and laws that will be in effect when the
      differences are expected to reverse. The Company records a valuation
      allowance to reduce deferred tax assets to the amount that is believed
      more likely than not to be realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | l) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Companys functional and reporting currency is the
      United States dollar. Occasional transactions may occur in Canadian
      dollars and management has adopted 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. Non-monetary assets and liabilities denominated in
      foreign currencies are translated at rates of exchange in effect at the
      date of the transaction. Average monthly rates are used to translate
      revenues and expenses. Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      included in the determination of income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | m) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company records stock-based compensation in
      accordance with SFAS No. 123R, "Share Based Payments", using the
      fair value method. All transactions in which goods or services are the
      consideration received for the issuance of equity instruments are
      accounted for based on the fair value of the consideration received or the
      fair value of the equity instrument issued, whichever is more reliably
    measurable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | n) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | In May 2008, the Financial Accounting Standards Board
      ("FASB") issued SFAS No. 163, "Accounting for Financial Guarantee
      Insurance Contracts - An interpretation of FASB Statement No. 60".
      SFAS No. 163 requires that an insurance enterprise recognize a claim
      liability prior to an event of default when there is evidence that credit
      deterioration has occurred in an insured financial obligation. It also
      clarifies how Statement 60 applies to financial guarantee insurance
      contracts, including the recognition and measurement to be used to account
      for premium revenue and claim liabilities, and requires expanded
      disclosures about financial guarantee insurance contracts. It is effective
      for financial statements issued for fiscal years beginning after December
      15, 2008, except for some disclosures about the insurance enterprise's
      risk-management activities. SFAS No. 163 requires that disclosures about
      the risk-management activities of the insurance enterprise be effective
      for the first period beginning after issuance. Except for those
      disclosures, earlier application is not permitted. The adoption of this
      statement is not expected to have a material effect on the Company's
  financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | In May 2008, the FASB issued SFAS No. 162, "The
      Hierarchy of Generally Accepted Accounting Principles";. SFAS No. 162
      identifies the sources of accounting principles and the framework for
      selecting the principles to be used in the preparation of financial
      statements of nongovernmental entities that are presented in conformity
      with generally accepted accounting principles in the United States. It is
      effective 60 days following the SEC's approval of the Public Company
      Accounting Oversight Board amendments to AU Section 411, "The Meaning
      of Present Fairly in Conformity With Generally Accepted Accounting
      Principles". The adoption of this statement is not expected to have a
      material effect on the Companys financial
statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-6

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------

| | n) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In March 2008, the FASB issued SFAS No. 161,
      "Disclosures about Derivative Instruments and Hedging Activities - an
      amendment to FASB Statement No. 133". SFAS No. 161 is intended to
      improve financial standards for derivative instruments and hedging
      activities by requiring enhanced disclosures to enable investors to better
      understand their effects on an entity's financial position, financial
      performance, and cash flows. Entities are required to provide enhanced
      disclosures about: (a) how and why an entity uses derivative instruments;
      (b) how derivative instruments and related hedged items are accounted for
      under SFAS No. 133 and its related interpretations; and (c) how derivative
      instruments and related hedged items affect an entity's financial
      position, financial performance, and cash flows. SFAS No. 161 is effective
      for financial statements issued for fiscal years beginning after November
      15, 2008, with early adoption encouraged. The adoption of this statement
      is not expected to have a material effect on the Company's financial
      statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In December 2007, the FASB issued SFAS No. 141 (revised
      2007), "Business Combinations". SFAS No. 141 (revised 2007)
      establishes principles and requirements for how the acquirer of a business
      recognizes and measures in its financial statements the identifiable
      assets acquired, the liabilities assumed, and any noncontrolling interest
      in the acquiree. The statement also provides guidance for recognizing and
      measuring the goodwill acquired in the business combination and determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business combination.
      SFAS No. 141 (revised 2007) applies prospectively to business combinations
      for which the acquisition date is on or after the beginning of the first
      annual reporting period beginning on or after December 15, 2008. The
      adoption of this statement is not expected to have a material effect on
  the Company's financial statements.                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In December 2007, the FASB issued SFAS No. 160,
      "Noncontrolling Interests in Consolidated Financial Statements
      Liabilities - an Amendment of ARB No. 51". This statement amends ARB
      51 to establish accounting and reporting standards for the Noncontrolling
      interest in a subsidiary and for the deconsolidation of a subsidiary. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008, and earlier
      adoption is prohibited. The adoption of this statement is not expected to
      have a material effect on the Company's financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In February 2007, the FASB issued SFAS No. 159, "The
      Fair Value Option for Financial Assets and Financial Liabilities -
      Including an Amendment of FASB Statement No. 115". This statement
      permits entities to choose to measure many financial instruments and
      certain other items at fair value. Most of the provisions of SFAS No. 159
      apply only to entities that elect the fair value option. However, the
      amendment to SFAS No. 115 "Accounting for Certain Investments in Debt
      and Equity Securities" applies to all entities with available-for-sale
      and trading securities. SFAS No. 159 is effective as of the beginning of
      an entitys first fiscal year that begins after November 15, 2007. Early
      adoption is permitted as of the beginning of a fiscal year that begins on
      or before November 15, 2007, provided the entity also elects to apply the
      provision of SFAS No. 157, "Fair Value Measurements". The adoption
      of this statement did not have a material effect on the Company's
  financial statements.                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In September 2006, the FASB issued SFAS No. 157, "Fair
      Value Measurements". The objective of SFAS No. 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS No. 157 defines fair
      value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any
      new fair value measurements. The provisions of SFAS No. 157 are effective
      for fair value measurements made in fiscal years beginning after November
      15, 2007. The adoption of this statement did not have a material effect on
the Company's financial statements.                                                                                                                                                                                                                                                                                       

F-7

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|2. | Summary of Significant Accounting Policies
    (continued)
|-- | ----------------------------------------------------------

| | n) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In June 2006, the FASB issued FASB Interpretation No. 48,
      "Accounting for Uncertainty in Income Taxes, an interpretation of FASB
      Statements No. 109" ("FIN 48"). FIN 48 clarifies the accounting for
      uncertainty in income taxes by prescribing a two-step method of first
      evaluating whether a tax position has met a more likely than not
      recognition threshold and second, measuring that tax position to determine
      the amount of benefit to be recognized in the financial statements. FIN 48
      provides guidance on the presentation of such positions within a
      classified statement of financial position as well as on derecognition,
      interest and penalties, accounting in interim periods, disclosure, and
      transition. FIN 48 is effective for fiscal years beginning after December
      15, 2006. The adoption of this statement did not have a material effect on
the Company's financial statements.

|3. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | a)                        
|   |                           
|   | b)                        
|   |                           
|   | c)                        
|   |                           
|   | d)                        
|   |                           
|4. | Loans Payable             
|   |                           
|   | a)                        
|   |                           
|   | b)                        
|   |                           
|5. | Mineral Properties        
|   |                           
|   | a)                        

F-8

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Chancery Resources, Inc.(An Exploration Stage Company)
Notes to the Financial Statements August 31, 2008 (Expressed in US
dollars) (Unaudited)

|5. | Mineral Properties (continued)
|-- | ------------------------------
|   |                               
|   | b)                            
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|   |                               
|6. | Common Stock                  
|   |                               
|   | a)                            
|   |                               
|   | b)                            

F-9

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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 "US$"
refer to United States 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",
"our company" and Chancery mean Chancery Resources, Inc., unless otherwise
indicated.

General Overview

We were incorporated in the State of Nevada on September 12,
2006. We are an exploration stage corporation. An exploration stage corporation
is one engaged in the search from mineral deposits or reserves which are not in
either the development or production stage.

We maintain our statutory registered agent's office at The
Corporation Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada
89511 and our business office and mailing address Calle 10 No. 25  103, Apto
110, Medellin, Colombia. Our telephone number is 57.312.776.5740.

We held the rights to nine Mineral Titles Online cells referred
to as the Hunter property, through Geoffrey Gachallan, a former director and
officer of our company, who held the property for us in trust. The Hunter
property, located in Merritt, British Columbia, Canada, totals 186 acres. On
September 9, 2008, our rights to the claim expired.

On March 19, 2008, we entered into a mining acquisition
agreement with Altos de Amador S.A., wherein we have agreed to purchase a 100%
interest in certain mineral claims in Valparaiso, Antioquia, Colombia, known as
the El Cafetal Mine.

As consideration for the purchase, we have agreed to pay to
Altos de Amador $270,000 cash, to be provided as follows:

| | (a) | $50,000 to be provided on signing of the acquisition
      agreement;                
| | --- | -------------------------------------------------------------------------------------
| |     |                                                                                      
| | (b) | $70,000 to be provided within 30 days of signing the
      acquisition agreement; and

4

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| | (c) | $150,000 to be provided within 90 days of signing the
      acquisition agreement.
| | --- | ----------------------------------------------------------------------------------

In addition, we have agreed to split profits from mining
operations  60% to our company and 40% to the vendor until such time as we have
paid $210,000 of the purchase price, after which, profits shall be split 90% to
our company and 10% to the vendor. We have the right to acquire the vendors 10%
profit interest at any time for $370,000.

Effective April 4, 2008, we entered into an amending agreement
with Altos de Amador wherein the terms of profit split have been amended so
that, upon commencement of mining operations, all profits from the sale of ore
shall be split 60% to our company and 40% to the vendor. Upon our company having
paid a further $210,000, in addition to the funds payable pursuant to the terms
of the mining acquisition agreement, such profits shall then be split 90% to our
company and 10% to the vendor. Our company will have the right to acquire the
vendors 10% profit interest at any time upon payment of an additional $370,000.

Plan of Operation and Cash Requirements

During the twelve months ending August 31, 2009, we intend to
conduct exploration activities on our Hunter and El Cafetal properties. There is
no assurance that a commercially viable mineral deposit exists on the properties
and further exploration will be required before a final evaluation as to the
economic feasibility is determined.

In addition, during the next twelve months, we will seek
alternative asset acquisition opportunities in order to potentially enhance
shareholder value.

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.

Results of Operations for the three months ending August 31,
2008 compared to the three months ended August 31, 2007.

We did not earn any revenues during the three month period
ending August 31, 2008. During the three month period ended August 31, 2008, we
incurred operating expenses in the amount of $99,527, compared to operating
expenses of $19,597 incurred during the same period in fiscal 2007. These
operating expenses were comprised of general and administrative expenses of
$28,027 (2007: $17,248) management services of $1,500 (2007: $1,500), Impairment
of mineral property costs of $70,000 (2007: $Nil)  and rent of $Nil(2007: $849). The increase in operating expenses
during the three months ended August 31, 2008, compared to the same period in
fiscal 2007, was mainly due to an increase in general and administrative costs and
impairment of  mineral property costs.

Results of Operations for the nine months ending August 31,
  2008 compared to the nine months ended August 31, 2007.

We did not earn any revenues during the nine month period
ending August 31, 2008. During the nine month period ended August 31, 2008, we
incurred operating expenses in the amount of $189,774, compared to operating
expenses of $48,080 incurred during the same period in fiscal 2007. These
operating expenses were comprised of general and administrative expenses of
$63,480 (2007: $41,177) management services of $4,500 (2007: $4,500), impairment
of mineral property costs of $120,000 (2007: $Nil)  and rent of $1,794 (2007: $2,403). The increase in operating
expenses during the nine months ended August 31, 2008, compared to the same
period in fiscal 2007, was mainly due to an increase in general and
administrative costs and impairment of mineral property
costs.

In the next twelve months we anticipate spending $500,000 to
$900,000 on mineral exploration costs and processing plant upgrades and $250,000
to $350,000 on mineral property costs, management services and administrative
costs. Our cash on hand at August 31, 2008 was $18,004. We plan to raise
additional capital required to meet immediate short-term needs and to meet the
balance of our estimated funding requirements for the twelve months, primarily

5

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through the private placement of our securities. Included in
our anticipated spending is our required payment of $270,000 to Altos de Amador,
of which we have paid, from cash on hand, $120,000 as part of the agreement with
Altos de Amador. We also anticipate that the $150,000 due on or before June 17,
2008 will be made on or before November 15, 2008 and will be funded by way of
private placement and or an interest free loan from a non-US resident third
party.

Employees

We do not expect any significant changes in the number of
employees during the next twelve month period.

Purchase of Significant Equipment

We do not expect to make any significant equipment purchases
during the next twelve month period.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as of August 31,
2008.

Liquidity and Capital Resources

As at August 31, 2008, our company had $18,229 in current
assets, including $18,004 in cash and $225 in prepaid expenses. As at August 31,
2008, we had working capital deficit of $44,964.

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.

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

Mineral Property Costs

We have been in the exploration stage since our inception and
have not yet realized any revenues from our planned operations. We are primarily
engaged in the acquisition and exploration of mining properties. Mineral
property exploration costs are expensed as incurred. Mineral property
acquisition costs are initially capitalized when incurred using the guidance in
EITF 04-02, Whether Mineral Rights Are Tangible or Intangible Assets. We
assess the carrying costs for impairment under SFAS No. 144, Accounting for
Impairment or Disposal of Long Lived Assets at each fiscal quarter end. When it
has been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property, are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.

6

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Long-lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, we test long-lived assets or asset groups for
recoverability when events or changes in circumstances indicate that their
carrying amount may not be recoverable. Circumstances which could trigger a
review include, but are not limited to: significant decreases in the market
price of the asset; significant adverse changes in the business climate or legal
factors; accumulation of costs significantly in excess of the amount originally
expected for the acquisition or construction of the asset; current period cash
flow or operating losses combined with a history of losses or a forecast of
continuing losses associated with the use of the asset; and current expectation
that the asset will more likely than not be sold or disposed significantly
before the end of its estimated useful life. Recoverability is assessed based on
the carrying amount of the asset and its fair value which is generally
determined based on the sum of the undiscounted cash flows expected to result
from the use and the eventual disposal of the asset, as well as specific
appraisal in certain instances. An impairment loss is recognized when the
carrying amount is not recoverable and exceeds fair value.

RISK FACTORS

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

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

Risks Associated With Mining

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

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

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

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

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors

7

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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.

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

8

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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 September 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. During the twelve months ending August 31, 2009, we expect to spend
approximately $500,000 to $900,000 on mineral exploration costs and processing
plant upgrades and $250,000 to $350,000 on mineral property costs, management
services and administrative costs. We therefore expect to continue to incur
significant losses into the foreseeable future. We recognize that if we are
unable to generate significant revenues from mining operations and any
dispositions of our properties, we will not be able to earn profits or continue
operations. At this early stage of our operation, we also expect to face the
risks, uncertainties, expenses and difficulties frequently encountered by
companies at the start up stage of their business development. We cannot be sure
that we will be successful in addressing these risks and uncertainties and our
failure to do so could have a materially adverse effect on our financial
condition. There is no history upon which to base any assumption as to the
likelihood that we will prove successful and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations.

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

We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a commercially exploitable quantity on one or more of our mineral
properties and we build and operate a mine. We had cash in the amount of $18,004
as of August 31, 2008. At August 31, 2008, we had working capital deficit of
$44,964. We incurred a net loss of $189,774 for the nine month period ended
August 31, 2008 and $251,764 since inception on September 12, 2006. We estimate
our average monthly operating expenses to be approximately $5,800 to $7,500,
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

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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 February 27, 2008, to comment about our
companys ability to continue as a going concern. Management has plans to seek
additional capital through a private placement and public offering of its
capital stock. These conditions raise substantial doubt about our companys
ability to continue as a going concern. Although there are no assurances that
managements plans will be realized, management believes that our company will
be able to continue operations in the future. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event our company cannot continue in
existence. We continue to experience net operating losses.

Risks Associated with Our Common Stock

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

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

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

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

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the Financial Industry Regulatory Authority
has adopted rules that require that in recommending an investment to a customer,
a

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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s 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

Because all of our officers and directors are located in
non-U.S. jurisdictions, you may have no effective recourse against them for
misconduct and you may not be able to enforce judgment and civil liabilities
against our officers, directors, experts and agents.

All of our directors and officers are nationals and/or
residents of countries other than the United States and all or a substantial
portion of their assets are located outside the United States. As a result, it
may be difficult for investors to enforce within the United States any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any state thereof.

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 principal
executive officer and principal accounting and financial officer (our president)
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.

Under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer (our president), we have conducted an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures, as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934,
as of the end of the period covered by this report. Based on this evaluation,
our principal executive officer and principal financial officer (our president)
concluded as of the evaluation date that our disclosure controls and procedures
were effective such that the material information required to be included in our
Securities and Exchange Commission reports is recorded, processed, summarized
and reported within the time periods specified in SEC rules and forms relating
to our company, particularly during the period when this report was being
prepared.

Additionally, there were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the evaluation date. We have not identified any significant
deficiencies or material weaknesses in our internal controls, and therefore
there were no corrective actions taken.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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 September 12, 2008, Geoffrey Gachallan resigned as a
director of our company.

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 March 20, 2007).                                                                                      
|        |                                                                                                                                                                                                                        
|3.2     | By-laws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on March 20, 2007).                                                                                                        
|        |                                                                                                                                                                                                                        
|3.3     | Certificate of Change filed with the Secretary of State
      of Nevada on January 16, 2008 effective January 18, 2008 (incorporated by
      reference from our Current Report on Form 8-K filed on February 1, 2008).
|        |                                                                                                                                                                                                                        
|(4)     | Instruments Defining Rights of Security Holders,
      Including Debentures                                                                                                                                            
|        |                                                                                                                                                                                                                        
|4.1     | Specimen Stock Certificate (incorporated by reference
      from our Registration Statement on Form SB-2 filed on March 20, 2007).                                                                                     
|        |                                                                                                                                                                                                                        
|(10)    | Material Contracts                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                        
|10.1    | Trust Agreement (incorporated by reference from our
      Registration Statement on Form SB-2 filed on March 20, 2007).                                                                                                
|        |                                                                                                                                                                                                                        
|10.2    | Mining Acquisition Agreement dated March 19, 2008 between
      our company and Altos de Amador S.A. (incorporated by reference from our
      Current Report on Form 8-K filed on March 25, 2008).                    

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|Exhibit | Description                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                          
|        |                                                                                                                                                                                                          
|10.3    | Amending Agreement
        dated April 4, 2008 between our company and Altos de Amador S.A. (incorporated
        by reference from our Quarterly Report on Form 10-QSB filed on April 18,
        2008).
|        |                                                                                                                                                                                                          
|10.4    | Share Cancellation/Return
        to Treasury Agreement (incorporated by reference from our Current Report
        on Form 8-K filed on June 5, 2008).                                                   
|        |                                                                                                                                                                                                          
|(14)    | Code of Ethics                                                                                                                                                                                           
|        |                                                                                                                                                                                                          
|14.1    | Code of Ethics
        (incorporated by reference from our Annual Report on Form 10-KSB filed
        on February 28, 2008).                                                                             
|        |                                                                                                                                                                                                          
|(31)    | Section 302
        Certifications                                                                                                                                                                       
|        |                                                                                                                                                                                                          
|31.1*   | Section
        302 Certification of Principal Executive Officer, Principal Financial
        Officer and Principal Accounting Officer                                                                   
|        |                                                                                                                                                                                                          
|(32)    | Section 906
        Certification                                                                                                                                                                        
|        |                                                                                                                                                                                                          
|32.1*   | Section
        906 Certification of Principal Executive Officer Principal Executive Officer,
        Principal Financial Officer and Principal Accounting Officer                                       
|        |                                                                                                                                                                                                          
|(99)    | Additional
        Exhibits                                                                                                                                                                              
|        |                                                                                                                                                                                                          
|99.1    | Audit Committee
        Charter (incorporated by reference from our Annual Report on Form 10-KSB
        filed on February 28, 2008).                                                                    
|        |                                                                                                                                                                                                          
|99.2    | Disclosure Committee
        Charter (incorporated by reference from our Annual Report on Form 10-KSB
        filed on February 28, 2008).                                                               

*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.

CHANCERY RESOURCES, INC.

By:*/s/ Juan Restrepo Gutierrez*
  Juan Restrepo Gutierrez 
  President, Treasurer and Director 
  (Principal Executive Officer, Principal Financial 
  Officer and Principal Accounting Officer)

Date: October 15, 2008

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