UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended May
31, 2011 or

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

For the transition period from ________________
to __________________

Commission File Number 000-53142

CHANCERY
RESOURCES, INC.(Exact name of registrant as specified in its charter)



|Nevada                                                         | 26-4567259                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)



|3erd Floor, 422 Richards Street, Vancouver, BC | V6B2Z3    
|---------------------------------------------- | ----------
|(Address of principal executive offices)       | (Zip Code)

972-655-9870(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
[X] YES [ ] NO

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



|Large accelerated filer [ ] |                                               | Accelerated filer [ ]        
|--------------------------- | --------------------------------------------- | -----------------------------
|Non-accelerated filer [ ]   | (Do not check if a smaller reporting company) | Smaller reporting company [X]

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

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

Check whether the registrant has filed
all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
[ ] YES [X ] NO









APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding
of each of the issuer’s classes of common stock, as of the latest practicable date. 32,250,000 common shares issued and outstanding
as of May 31, 2011

























|Chancery Resources, Inc                                                                                                                 |      
|--------------------------------------------------------------------------------------------------------------------------------------- | -----
|(An Exploration Stage Company)                                                                                                          |      
|                                                                                                                                        |      
|May 31, 2011                                                                                                                            |      
|                                                                                                                                        | Index
|Consolidated Balance Sheets ........................................................................................................... | F–1  
|Consolidated Statements of Expenses ..............................................................................................      | F–2  
|Consolidated Statements of Cash Flows ..........................................................................................        | F–3  
|Notes to the Consolidated Financial Statements ...............................................................................          | F–4  
|                                                                                                                                        |      



























































































2

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Chancery Resources, Inc.

(An Exploration Stage Company)

Consolidated Balance Sheets

(Unaudited)



|                                                                                                                                                                 | May 31,
        2011 | November 30,
        2009
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | -------------------------
|ASSETS                                                                                                                                                           |                      |                          
|                                                                                                                                                                 |                      |                          
|Current Assets                                                                                                                                                   |                      |                          
|                                                                                                                                                                 |                      |                          
|Cash                                                                                                                                                             | $          355       | $        1,638           
|Prepaid expenses                                                                                                                                                 | -                    | 110,471                  
|                                                                                                                                                                 |                      |                          
|Total Assets                                                                                                                                                     | $         355        | $     112,109            
|                                                                                                                                                                 |                      | ,                        
|                                                                                                                                                                 |                      |                          
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                            |                      |                          
|                                                                                                                                                                 |                      |                          
|Current Liabilities                                                                                                                                              |                      |                          
|                                                                                                                                                                 |                      |                          
|Bank indebtedness                                                                                                                                                | $           225      | $        8,872           
|Accounts payable and accrued liabilities                                                                                                                         | 190,275              | 159,394                  
|Loan payable, less unamortized discount of $7,670 and $14,077                                                                                                    | 44,917               | 44,917                   
|Due to related parties                                                                                                                                           | 54,310               | 6,680                    
|                                                                                                                                                                 |                      |                          
|Total Current Liabilities                                                                                                                                        | 289,727              | 219,863                  
|                                                                                                                                                                 |                      |                          
|Loans payable                                                                                                                                                    | 82,330               | 75,923                   
|                                                                                                                                                                 |                      |                          
|Total Liabilities                                                                                                                                                | 372,057              | 295,786                  
|                                                                                                                                                                 |                      |                          
|Commitments and Contingencies                                                                                                                                    |                      |                          
|                                                                                                                                                                 |                      |                          
|Stockholders’ Deficit                                                                                                                                            |                      |                          
|                                                                                                                                                                 |                      |                          
|Preferred stock:
        2,500,000,000 shares authorized, $0.00001 par value;
        no shares issued
        and outstanding (November 30, 2008 – None issued) | –                    | –                        
|                                                                                                                                                                 |                      |                          
|Series A convertible
        preferred stock: 40,000,000 shares authorized, $0.00001 par value;
        31,000,000 shares
        issued and outstanding         | 310                  | 310                      
|                                                                                                                                                                 |                      |                          
|Common stock: 2,500,000,000 shares
        authorized, $0.00001 par value;
        32,250,000 shares issued and outstanding                                      | 322                  | 322                      
|                                                                                                                                                                 |                      |                          
|Additional paid-in capital                                                                                                                                       | 1,163,227            | 1,088,418                
|                                                                                                                                                                 |                      |                          
|Donated capital                                                                                                                                                  | 18,000               | 13,500                   
|                                                                                                                                                                 |                      |                          
|Accumulated other comprehensive loss                                                                                                                             | (165)                | –                        
|                                                                                                                                                                 |                      |                          
|Deficit accumulated during the exploration stage                                                                                                                 | (1,553,396)          | (1,286,227)              
|                                                                                                                                                                 |                      |                          
|Total Stockholders’ Deficit                                                                                                                                      | (371,702)            | (183,677)                
|                                                                                                                                                                 |                      |                          
|Total Liabilities and Stockholders’ Deficit                                                                                                                      | $          355       | $    112,109             
|                                                                                                                                                                 |                      |                          





(The Accompanying Notes are an Integral Part of
These Consolidated Unaudited Financial Statements)

F-1

---







Chancery Resources, Inc.

(An Exploration Stage Company)

Consolidated Statements of Operations

(Unaudited)





|                                           | For the
        Three Months
        Ended | For the
        Three Months
        Ended | For the
        Nine Months
        Ended | For the
        Nine Months
        Ended | Accumulated from
        September 12, 2006
        (Date of Inception)
|------------------------------------------ | ------------------------------------------ | ------------------------------------------ | ----------------------------------------- | ----------------------------------------- | -----------------------------------------------------------------------
|                                           | May 31,                                    | May31,                                     | August 31,                                | August 31,                                | to August 31,                                                          
|                                           | 2011                                       | 2010                                       | 2010                                      | 2008                                      | 2010                                                                   
|Expenses                                   |                                            |                                            |                                           |                                           |                                                                        
|                                           |                                            |                                            |                                           |                                           |                                                                        
|General and administrative                 | $      38,727                              | $       28,027                             | $      57,306                             | $       63,480                            | $     187,706                                                          
|Consulting fees                            | 62,052                                     | –                                          | 184,809                                   | –                                         | 194,809                                                                
|Management services                        | –                                          | 1,500                                      | –                                         | 4,500                                     | 12,750                                                                 
|Impairment of mineral property costs       | –                                          | 70,000                                     | 444                                       | 120,000                                   | 1,121,074                                                              
|Mineral property costs                     | 13,703                                     | –                                          | 13,703                                    | –                                         | 19,778                                                                 
|Rent                                       | 1,500                                      | -                                          | 4,500                                     | 1,794                                     | 10,872                                                                 
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Total Operating Expenses                   | 115,982                                    | 99,527                                     | 260,762                                   | 189,774                                   | 1,546,989                                                              
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Interest Expense                           | 2,151                                      | -                                          | 6,407                                     | -                                         | 6,407                                                                  
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Net Loss                                   | (118,133)                                  | (99,527)                                   | (267,169)                                 | (189,774)                                 | (1,553,396)                                                            
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Net Loss Per Share – Basic and Diluted     | $       (0.00)                             | $       (0.00)                             | $         (0.01)                          | $       (0.00)                            | N/A                                                                    
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Weighted Average Common Shares Outstanding | 32,250,000                                 | 30,250,000                                 | 32,250,000                                | 109,551,000                               | N/A                                                                    
|                                           |                                            |                                            |                                           |                                           |                                                                        
|                                           |                                            |                                            |                                           |                                           |                                                                        
|                                           |                                            |                                            |                                           |                                           |                                                                        
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Statement of Other Comprehensive Loss:     |                                            |                                            |                                           |                                           |                                                                        
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Net Loss                                   | (118,133)                                  | (99,527)                                   | (267,169)                                 | (189,774)                                 | (1,553,396)                                                            
|Foreign currency translation adjustment    | (93)                                       | –                                          | (165)                                     | –                                         | (165)                                                                  
|                                           |                                            |                                            |                                           |                                           |                                                                        
|Total Comprehensive Loss                   | $    (118,226)                             | $   (99,527)                               | $   (267,334)                             | $ (189,774)                               | $(1,553,561)                                                           
|                                           |                                            |                                            |                                           |                                           |                                                                        





(The Accompanying Notes are an Integral Part of
These Consolidated Unaudited Financial Statements)

F-2

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Chancery Resources, Inc.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

|                                                                            | For the
        Nine Months
        Ended
        May 31,
        2011 | For the
        Nine Months
        Ended
        May31,
        2010 | Accumulated
        from
        September 12, 2006
        (Date of Inception)to
August 31, 2010
|--------------------------------------------------------------------------- | ---------------------------------------------------------------------- | --------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Cash Flows From Operating Activities                                        |                                                                        |                                                                       |                                                                                                  
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Net loss for the period                                                     | $            (267,169)                                                 | $(189,744)                                                            | $(1,553,396)                                                                                     
|Adjustments to reconcile net loss to net cash used in operating activities: |                                                                        |                                                                       |                                                                                                  
|Donated services and expenses                                               | 4,500                                                                  | 4,500                                                                 | 18,000                                                                                           
|Impairment of mineral property costs                                        | 444                                                                    | 120,000                                                               | 1,117,374                                                                                        
|Amortization of discount                                                    | 6,407                                                                  | –                                                                     | 9,103                                                                                            
|Share-based compensation                                                    | 184,809                                                                | –                                                                     | 194,809                                                                                          
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Changes in operating assets and liabilities:                                |                                                                        |                                                                       |                                                                                                  
|Prepaid expenses                                                            | 471                                                                    | 488                                                                   | -                                                                                                
|Accounts payable and accrued liabilities                                    | 30,881                                                                 | 12,171                                                                | 40,275                                                                                           
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Net Cash Used In Operating Activities                                       | (39,657)                                                               | (52,585)                                                              | (173,835)                                                                                        
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Cash Flows From Investing Activities                                        |                                                                        |                                                                       |                                                                                                  
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Mineral property costs                                                      | (444)                                                                  | (50,000)                                                              | (50,444)                                                                                         
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Net Cash Used In Investing Activities                                       | (444)                                                                  | (50,000)                                                              | (50,444)                                                                                         
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Cash Flows From Financing Activities                                        |                                                                        |                                                                       |                                                                                                  
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Advances from related party                                                 | 47,630                                                                 | 22,088                                                                | 119,524                                                                                          
|Bank indebtedness                                                           | (8,647)                                                                | –                                                                     | 225                                                                                              
|Proceeds from the sale of common stock                                      | -                                                                      | -                                                                     | 105,050                                                                                          
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Net Cash Provided By Financing Activities                                   | 38,983                                                                 | 22,088                                                                | 224,799                                                                                          
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Effect of Exchange Rate Changes on Cash                                     | (165)                                                                  | –                                                                     | (165)                                                                                            
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Net Increase (decrease) in Cash                                             | (1,283)                                                                | (80,527)                                                              | 355                                                                                              
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Cash - Beginning of Period                                                  | 1,638                                                                  | 98,531                                                                | -                                                                                                
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Cash - End of Period                                                        | $                355                                                   | $          18,004                                                     | $            355                                                                                 
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Supplemental Disclosures                                                    |                                                                        |                                                                       |                                                                                                  
|                                                                            |                                                                        |                                                                       |                                                                                                  
|Interest paid                                                               | $                    –                                                 | $                  –                                                  | _                                                                                                
|Income taxes paid                                                           | $                    –                                                 | $                  –                                                  | -                                                                                                
|                                                                            |                                                                        |                                                                       |                                                                                                  

(The Accompanying Notes are an Integral Part of
These Consolidated Unaudited Financial Statements)

F-3

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Chancery Resources, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)





1.Basis of Presentation



The accompanying unaudited interim
financial statements of Chancery Resources, Inc., have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with
the audited financial statements and notes thereto contained in Chancery's Annual Report filed with the SEC on Form 10-K. In the
opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have been reflected herein. The results of operations
for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements
which substantially duplicate the disclosure contained in the audited financial statements for fiscal 2008 as reported in the Form
10-K have been omitted.



Effective this quarter, the Company
implemented SFAS No. 165, “Subsequent Events” (“SFAS 165”). This standard establishes general standards
of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued.
The adoption of SFAS 165 did not impact the Company’s financial position or results of operations. The Company evaluated
all events or transactions that occurred after August 31, 2010 up through October 20, 2010, the date the Company issued these consolidated
financial statements. During this period, the Company did not have any material recognizable subsequent events.



We do not expect the adoption of recently
issued accounting pronouncements to have a significant impact on our results of operations, financial position or cash flow.



Certain prior year balances have been
reclassed to conform with the current year presentation.



2.Going Concern



These consolidated 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 or debt financing to continue operations, and the attainment of profitable operations. As at August 31, 2010, the Company
has a working capital deficit of $289,372 and has accumulated losses of $1,553,396 since inception. These factors raise substantial
doubt regarding the Company’s ability to continue as a going concern. These consolidated 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.



3.Related Party Transactions



a)For the nine months ended August 31, 2010, the Company recognized $Nil (August 31, 2008 - $4,500) for donated services provided
by the former President of the Company.



b)For the nine months ended August 31, 2010, the Company incurred $4,500 (August 31, 2008 - $1,794) in donated rent to a company
controlled by the President of the Company, and is indebted to the President for $51,780 (November 30, 2008 - $4,150) for advances
and expenses paid for on behalf of the Company, which is non-interest bearing, unsecured and due on demand.



c)As of August 31, 2010, the Company is indebted to the Chief Executive Officer of the Company for $2,530 (November 30, 2008
- $2,530) for expenses paid for on behalf of the Company, which is non-interest bearing, unsecured and due on demand.

F-4

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4.Loans Payable



a)As of August 31, 2010, the Company is indebted to the former President of the Company for $44,917 (November 30, 2008 - $44,917)
for cash advances and expenses paid for on behalf of the Company, which is non-interest bearing, unsecured and due on demand.



b)On August 8, 2008, the Company received a $20,000 loan which is non-interest bearing, unsecured and due on August 8, 2009.



c)On July 25, 2008, the Company received a $70,000 loan which is non-interest bearing, unsecured and due on July 25, 2010.
An implicit interest rate of 15% was recognized resulting in an discount of $14,077 on the date of the loan. For the nine-months
ended As at August 31, 2010,



5.Mineral Properties



a)On January 19, 2009, the Company acquired through its wholly-owned subsidiary Chancery Canada, a 100% interest in certain
mineral interests located in British Columbia, Canada known as the Fiddler Creek Property by the purchase of a Free Miner Certificate
for $444 (CDN$500). As at August 31, 2010, the Company recognized an impairment loss of $444, as it has not yet been determined
whether there are proven or probable reserves on the property.



6.Commitments



a)On February 1, 2009, the Company entered into an agreement with a consultant to prepare a technical report of a mining property
in consideration for the lesser of $700 per day or $5,000.



7.Common Stock



a)On February 9, 2009, the Company approved the adoption of the 2009 Stock Option Plan which permits the Company to issue
up to 6,450,000 shares of common stock to directors, officers, employees and consultants of the Company.



b)On November 6, 2008, the Company entered into a consulting agreement with a Director of the Company, for the provision of
management and operational services for a period of one year. In consideration for these services, the Company issued 1,000,000
shares of restricted common stock with a fair value of $240,000. For the nine months ended August 31, 2009, $184,809 (August 31,
2008 - $Nil) was charged to operations.



F-5

---









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

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking
statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors, 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. and our wholly owned subsidiaries Chancery Mining Canada Ltd. and Minera Chancery Columbia, 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 that is 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 is 3erd Floor, 422 Richards Street, Vancouver, B.C V6B2Z3. Our telephone number is (972) 655-9870

Since October 2006, 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. 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 (paid);                
| | --- | --------------------------------------------------------------------------------------
| |     |                                                                                       
| | (b) | $70,000 to be provided within 30 days of signing the acquisition agreement (paid); and
| |     |                                                                                       
| | (c) | $150,000 to be provided within 90 days of signing the acquisition agreement.          

3

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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. There are currently some governmental requirements that
need to be fulfilled for the El Cafetal mining title. These requirements include the present title owner amending a PTO report
to comply with certain specifications and paying certain annual governmental fees, all of which are currently being completed.

As our initial
mining acquisition agreement with Altos de Amador is no longer in good standing due to certain misrepresentation on warranties
and representations made on Altos de Amador’s side, we have signed a Mining Acquisition Agreement on April 14 th
, 2009 directly with the owners of the property, Inversiones Midas Limitada, to continue negotiations. This
agreement has been voided because Chancery Resources now participate on a buy back with Midas. A new agreement Effective Jan 13,
2011, to sell back 100% interest of el Cafetal Mine to Inversiones Midas is in place. As January 15, 2011 Inversiones Midas has
an option open to buy back all rights and to be defined by July 15-2011.

On October 16, 2008, Rafael A. Pinedo
and Jeffrey Fanning were appointed as directors of our company.Subsequent to such appointments, on October 16, 2008, Juan Restrepo
Gutierrez resigned as president and a director of our company and Rafael A. Pinedo was appointed president. Mr. Restrepo remains
as chief executive officer, chief financial officer, secretary and treasurer. In addition, Mr. Fanning was appointed vice president
of exploration. Our board of directors now consists of Rafael A. Pinedo and Jeffery Fanning.

On November 4, 2008, our board of
directors designated 40,000,000 shares of our preferred stock as the Series A Preferred Stock. Each share of Series A Preferred
Stock is convertible into shares of our common stock on the basis of one (1) share of Series A Preferred Stock for one-fifth (1/5)
of one share of our Common Stock;

On November 6, 2008, we entered into
a consulting agreement with Rafael Pinedo, our President. The term of the agreement is for a period of one year and in consideration
for the services to be provided we have agreed to issue 1,000,000 restricted shares of our common stock to Mr. Pinedo.

On November 6, 2008, we entered into
a mineral property acquisition agreement with CB Resources Ltd., BNP Resources LLC and Rafael Pinedo to acquire certain mineral
property interests known as the HCL Property (the HCL Property is comprised in part by our formerly owned Hunter Property). The
closing of the transactions contemplated in the mineral property acquisition agreement occurred on November 6, 2008. In accordance
with the closing of the mineral property acquisition agreement, we agreed to issue 1,000,000 restricted shares of our common stock
to CB Resources Ltd., 25,000,000 restricted shares of our Series A Preferred Stock to Rafael Pinedo and 6,000,000 restricted shares
of our Series A Preferred Stock to BNP Resources LLC. Due to land ownership restrictions under British Columbia laws, we entered
into a trust agreement with CB Resources Ltd., wherein CB Resources Ltd. agreed to hold the mineral property interests in trust
for our company.

4

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On
November 12, 2008, we incorporated a wholly owned subsidiary pursuant to the laws of the Province of British Columbia under the
name Chancery Mining Canada Ltd.

On January 19, 2009, we acquired
through our wholly owned subsidiary, Chancery Mining Canada Ltd., an undivided one hundred percent (100%) interest in certain mineral
interests located in British Columbia, Canada known as the Fiddler Creek Property.

The Fiddler Creek Property is comprised
of 25 mineral claims, totaling 465.74 hectares located within the Omineca Mining Division in northwestern British Columbia. The
acquired block of claims counts with records of a past producer “Fiddler Creek,” which describes the geology of the
Property as an area that is underlain by argillites of the Jurassic to Cretaceous Bowser Lake Group, in which auriferous quartz
veins are probable sources for placer gold along Fiddler Creek (BC Minfile 103I206). The deposit types that historically predominate
in the Fiddler-Doreen area are Silver, Gold, Lead and Zinc. Geophysical, soil, rock and core samples will be analyzed soon; an
exploration program recommended by a qualified geology person will be released when finalized.

On January 30, 2009, we incorporated
a wholly owned subsidiary pursuant to the laws of Columbia under the name Minera Chancery Colombia.



On July 24, 2009, Chancery Resources, Inc.
(the "Company") received a NI 43-101 Canadian Compliant Geological report on the El Cafetal Property as prepared and
submitted by James R. Reeves, Reg., P.Geo., in his capacity as a geological consultant to the Company. Technical Report was formatted
on Canadian National Instrument 43-101 ("NI 43-101"), which is a mineral resource classification scheme that provides
strict guidelines for the public disclosure of scientific and technical information relating to mineral properties.



On
August 3rd, 2009, Vincent Higgins was appointed as independent director of our company.

Subsequent to such appointment, on August 4,
2009, Juan Restrepo Gutierrez resigned as chief executive officer and remains as chief operations officer, secretary and director
of our company and Rafael A. Pinedo was appointed chief executive and ratified as president.



Mr. Higgins, age 43, is recognized international
leader in training, leadership development, and multicultural team building.  Founded the Institute for Effective Leadership.
Served as the Director of the Lumen Institute, Dallas, Texas and founded the Dallas branch.  Trilingual: English, Spanish,
and Italian. Extensive experience in operations and growth of international non-profit organizations including institutional fundraising
and networking. Obtained undergraduate degree in Physics, Summa Cum Laude at the University of Dallas, TX. Doctoral track in High
Energy Physics, at Purdue University, West Lafayette, Indiana and degrees in Philosophy and Theology at the Pontifical University
Regina Apostolorum, in Rome, Italy.



There are no family relationships with any
of our directors and officers.



October 16th , 2009, the Company dismissed
Manning Elliott, as its independent registered public accounting firm and, on October 16 th , 2009, engaged Malone & Bailey,
PC, from Houston Texas as its new independent registered public accounting firm.



Other than as set out herein, we have not been
involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger,
consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Our Current Business

We are an exploration stage mining
company engaged in the exploration of minerals on our properties.

Our current operational focus is
to conduct exploration activities on our HCL Property, to complete the terms of the mining acquisition agreement with Altos de
Amador S.A. for the El Cafetal Mine and to conduct exploration activities on our Fiddler Creek Property.



5

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HCL Property

General Information

The HCL Property is a mining claim
located in Merritt, British Columbia, Canada, and totals 415.04 hectares or 1,026 acres approximately.

The following is a list of tenure
numbers, claim, and expiration date of our claims:



|Tenure Number | Claim Name | No. MTO Cells | Expiration Date
|------------- | ---------- | ------------- | ---------------
|752702        | HCL        | 20            | 04/04/2011     

A cell is an area, which appears
electronically on the British Columbia Internet Minerals Titles Online Grid and was formerly called a claim. A claim is a grant
from the Crown of the available land within the cells to the holder to remove and sell minerals. The online grid is the geographical
basis for the cell. Formerly, the claim was established by sticking stakes in the ground to define the area and then recording
the staking information. The staking system is now antiquated in British Columbia and has been replaced with the online grid. The
claim is registered in the name of the CB Resources Ltd. who has agreed to hold the claim in trust on behalf of Chancery Resources.
As October 06, 2008, it’s not yet been determined whether there are proven or probable reserves on the property.

There are no native land claims that
affect title to the property.

Location and Access

The HCL mineral claim is comprised
of 20 contiguous cells totalling 415.0483 hectares. The center of the property is located at the latitude 50o 2' 14" N and
the longitude is 120o 47' 1" W. The claim is motor vehicle accessible from
the Town of Merritt, B.C. by traveling 19 miles east along Highway #5 beyond the Village of Quilchena, B.C. to the Minnie Lake
cut-off and then for 18 miles south by gravel ranch roads to the mineral claim.

Below is map of the HCL Claim:























6

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Physiography

The Town of Merritt, British Columbia
which lies 37 miles by road northwest of the HCL mineral claim offers much of the necessary infrastructure required to base and
carry-out an exploration program (accommodations, communications, equipment and supplies). Merritt B.C. is highway accessible from
Vancouver, B.C. in a few hours by traveling over the Coquihalla (toll section) highway, in the time it takes to travel 200 miles.
The overnight Greyhound bus service is a popular way to send-in samples and to receive additional equipment and supplies. The claim
area ranges in elevation from 2,850 feet to 3,400 feet mean sea level. The physiographic setting of the property can be described
as rounded, open range, plateau terrain that has been surficially altered both by the erosional and the depositional (drift cover)
effects of glaciation. Thickness of drift cover in the valleys may vary considerably. Fresh water lakes and streams are abundant
in the area. Below is a map of the HCL Property location:









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Location, History and Land Tenure

The geology of the HCL mineral claim
may be described as being underlain by units of the Nicola Group. Some or all of these units may be found to host economic mineralization.
The property geological setting offers good underlying possibilities and all overburden areas should be checked if a field program
is undertaken. The deposit types that historically predominate in the general area are, as the larger target, as a porphyry-type
base metal (copper-gold-palladium or copper-molybdenum) occurrence with peripheral base and precious metal occurrences as veins
and/or contact zones of mineralization. The most prolific host in this area is the Nicola Group andesitic tuffs that are often
skarned or altered. Any occurrences of Princeton Group sediments, i.e. shales, sanstone, etc. should be checked thoroughly for
coal occurrences and possibly coal-bed methane gas possibilities.

Requirements for Title

Title to the property has already
been granted CB Resources Ltd., who holds the claim in trust for our company. To obtain a Free Miner's Certificate, which is required
to hold a mining claim in British Columbia, Section 8(1) of the B.C. Mineral Tenure Act (MTA) stipulates that a corporation must
be registered under the British Columbia Business Corporations Act. Section 8(2) of the MTA stipulates that an individual applicant
must either be a resident of Canada or be authorized to work in Canada. As the corporation is not registered in British Columbia
the claim is held in trust for the Company by CB Resources Ltd., a corporation registered under the British Columbia Business Corporations
Act. The mineral title claim has been registered with the Government of British Columbia.

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Fiddler Creek Property

General Information

The Fiddler Creek Property is comprised
of 25 mineral claims, totaling 465.74 hectares located within the Omineca Mining Division in northwestern British Columbia. The
acquired block of claims counts with records of a past producer “Fiddler Creek,” which describes the geology of the
Property as an area that is underlain by argillites of the Jurassic to Cretaceous Bowser Lake Group, in which auriferous quartz
veins are probable sources for placer gold along Fiddler Creek (BC Minfile 103I206). The deposit types that historically predominate
in the Fiddler-Doreen area are Silver, Gold, Lead and Zinc. Geophysical, soil, rock and core samples will be analyzed soon; an
exploration program recommended by a qualify geology person will be released when finalized.

The following is a list of tenure
number, claim name, and expiration date of our claims:



|Tenure Number | Claim Name    | No. MTO Cells | Expiration Date
|------------- | ------------- | ------------- | ---------------
|752682        | Fiddler Creek | 25            | 04/19/2012     

Below is a map of the Fiddler Creek
Property:



Climate and Local Resources

The climate in the area is temperate
with significant coastal influence coming from the west up the Skeena valley as well as from the southwest up the Kitimat valley.
The northern location allows for long hours of daylight during the summer, while significant snowfall occurs during winter season,
which limits fieldwork. Field season is comprised between June and early September.

The closest airport is the Terrace
airport, which receives daily flights from Vancouver and serves as a transportation hub for the area. The Canadian National Railway
and Yellowhead Highway (Highway 16) go through Terrace along the Skeena River and connect the interior of B.C. to the ocean ports
of Prince Rupert and Kitimat.

9

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El
Cafetal Mine

General Information

The El Cafetal Mine is located in
the River basin of the Honda stream, on the Eastern flank of the Western Mountain range, in the municipality of Valparaiso, Antioquia,
Colombia.

The property covers an area of 135
hectares. The geology of the zone includes sedimentary rocks and basaltic lava and Andesite of Tertiary age with several veins
and veins with different thicknesses and sulfide concentrations up to 80%.

The mineralization consists of several
veins with thicknesses between 0.15 and 1.1 m, composed by quartz, pyrite and partly free gold fitted in andesite lava, the strips
of 0.15 m of thickness with great sulfide concentrations are common mainly pyrite up to an 80% with intermediate zones of rock
with scattered sulfides, in the endorsements the salband are common to conform a mineralized zone up to 1.1 m.

We recently completed preliminary
sampling and chemical analyses on the El Cafatel property. Our management is awaiting the results from the preliminary sampling
program and will update shareholders in the near future.

Results of Operations

Three Months Ended May 31,
2011 and May 31, 2010

The following summary of our results
of operations should be read in conjunction with our financial statements for the quarter ended May31, 2011 which are included
herein.

Our operating results for the three
months ended May 31, 2011, for the three months ended and up toMay 31, 2008 and the changes between those periods for the respective
items are summarized as follows:



|                                     | Three Months Ended May 31,
2011 | Three Months Ended
May 31,
2010 | Change Between
Three Month Period
Ended
May31, 2009
and May 31, 2008
|------------------------------------ | ------------------------------- | ------------------------------- | --------------------------------------------------------------------
|Revenue                              | $  Nil                          | $  Nil                          | $  Nil                                                              
|General and administrative           | 38,727                          | 28,027                          | 10,700                                                              
|Consulting fees                      | 62,052                          | -                               | 62,052                                                              
|Management services                  | -                               | 1,500                           | (1,500)                                                             
|Impairment of mineral property costs | -                               | 70,000                          | (70,00)                                                             
|Mineral property costs               | 13,703                          | -                               | 13,703                                                              
|Rent                                 | 1,500                           | -                               | 1,500                                                               
|Net Loss                             | (115,982)                       | (99,527)                        | (16,455)                                                            

Our accumulated losses increased
to $1,553,396 as of May 31, 2011. Our financial statements report a net loss of $267,169 for the nine month period ended May31,
2010 compared to a net loss of $189,774 for the nine month period ended May 31, 2011.

As at May 31, 2011, we had $289,727
in current liabilities. Our net cash at May 31, 2011 was $355 compared to $1,638 at May 31, 2010.







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Equity
Compensation

We currently do not have any stock
option or equity compensation plans or arrangements.

Liquidity and Financial Condition

Working Capital



|                    |   | At       |   |   | At           |  
|------------------- | - | -------- | - | - | ------------ | -
|                    |   | May 31,  |   |   | November 30, |  
|                    |   | 2011     |   |   | 2008         |  
|Current assets      | $ | 355      |   | $ | 112,109      |  
|Current liabilities |   | 289,727  |   |   | 219,863      |  
|Working capital     | $ | (289,372 | ) | $ | (107,754     | )

Cash Flows



|                                              |   | Nine Months Ended |  
|--------------------------------------------- | - | ----------------- | -
|                                              |   | May31,            |  
|                                              |   | 2011              |  
|Net cash used in operating activities         | $ | (39,657           | )
|Net cash used in investing activities         |   | (444              | )
|Net cash provided by financing activities     |   | 38,983            |  
|Net increase (decrease) in cash during period | $ | (1,283)           |  

As of May 31, 2011, our company had
working capital deficiency of $289,372. We estimate our operating expenses and working capital
requirements for the next twelve month period to be as follows:

Estimated Funding Required During
the Twelve Month Period Ending May 31, 2011



|General and administrative | $ | 60,000  | 
|-------------------------- | - | ------- | 
|Exploration Expenses       | $ | 449,135 | 
|Professional fees          | $ | 35,000  | 
|Total                      |   | 544,135 | 

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 through the private placement of our securities.

We are not aware of any known trends,
demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing
or decreasing in any material way.

Future Financings

We will require additional financing
in order to enable us to proceed with the continued exploration of our current properties, including approximately $95,000 over
the next 12 months to pay for our ongoing operating expenses. These expenses include audit, legal and office expenses. These cash
requirements are in excess of our current cash and working capital resources. Accordingly, we will require additional financing
in order to continue operations and to repay our liabilities. There is no assurance that any party will advance additional funds
to us in order to enable us to sustain our plan of operations or to repay our liabilities.

We anticipate continuing to rely
on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result
in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned business activities



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We
presently do not have any arrangements for additional financing for the expansion of our exploration operations, and no potential
lines of credit or sources of financing are currently available for the purpose of proceeding with our plan of operations.

Contractual Obligations

As a “smaller reporting company”,
we are not required to provide tabular disclosure obligations.

Going Concern

We have suffered recurring losses
from operations. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable
operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery and
classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company
discontinue operations.

Due to the uncertainty of our ability
to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements
for the year ended November 30, 2009, our independent auditors included an explanatory paragraph regarding the substantial doubt
about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances
that lead to this disclosure by our independent auditors.

The continuation of our business
is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would
be available, will increase our liabilities and future cash commitments.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Application of Critical Accounting
Policies

Our financial statements and accompanying
notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses.
These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding
the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements
is critical to an understanding of our financials.

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

Mineral Property Costs

The Company has been in the exploration
stage since its inception and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition
and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition
costs are initially capitalized when incurred

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using
the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible or Intangible Assets”. The Company assesses 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.

Long-lived Assets

In accordance with SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests 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.

Financial Instruments

The fair values of financial instruments,
which include cash, accounts payable and accrued liabilities, amounts due to a related party and loans payable, 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.

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 carry-forwards.
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.

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.

Recent Accounting Pronouncements

In June 2008, the Financial Accounting
Standards Board (“FASB”) issued FASB Staff Position EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions Are Participating Securities”. FSP EITF 03-6-1 addresses whether instruments granted
in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation
of earnings per share under the two-

13

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class
method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF
03-6-1 is effective for financial statements issued for 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 our company’s consolidated 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 our company’s consolidated financial statements.

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 did not have a material effect on our company's consolidated 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 non-controlling 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 our company's consolidated financial statements.

In December 2007, the FASB issued
SFAS No. 160, “Non-controlling 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 Non-controlling 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 our company’s consolidated 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 our company's consolidated 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

14

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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 our company's consolidated financial
statements.

Item 3. Quantitative Disclosures
About Market Risks

As a “smaller reporting company”,
we are not required to provide the information required by this Item.

Item 4T. Controls and Procedures.

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

Under the supervision and with the
participation of our management, including our president (our principal executive officer) our chief financial officer (our principal
financial officer and principal accounting officer), 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 president (our principal executive officer)
our chief financial officer (our principal financial officer and principal accounting officer) concluded as of the evaluation date
that our disclosure controls and procedures were not 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. Management’s
conclusion was based on the fact that the auditors identified several adjustments to our financial statements for the period ended
February, 2010.

Additionally, there were no 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.

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 1A. Risk Factors

Much of the information included
in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such
forward looking statements include any projections or 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.

15

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

Our common shares are considered
speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors
set out below.

RISKS RELATED TO OUR BUSINESS

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 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

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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 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.

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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. 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 $355 as of May 31, 2011. At August 31, 2010, we had working capital
deficit of $289,972. We incurred a net loss of $267,169 for the nine months ended August 31, 2010 and $1,553,396 since inception
on September 12, 2006. We estimate our average monthly operating expenses to be approximately $7,800 to $9,500, 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 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.

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

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

Other Risks

Trends, Risks and Uncertainties

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

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

None.

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Item
3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters
to a Vote of Security Holders.

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibits required by Item 601
of Regulation S-K



|Exhibit | Description                                                                
|------- | ---------------------------------------------------------------------------
|Number  |                                                                            
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                    
|31.1*   | Section 302 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo
|(32)    | Section 1350 Certifications                                                
|32.1*   | Section 906 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo



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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.     
|-------------------- | -----------------------------
|                     | (Registrant)                 
|                     |                              
|                     |                              
|Dated: July 20, 2011 | /s/ Rafael Pinedo            
|                     | Rafael Pinedo                
|                     | President and Director       
|                     | (Principal Executive Officer)
|                     |                              
|                     |                              

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