UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form
10-Q/A




(Mark
One)




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




For the
quarterly period endedMay 31,
2009 or




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




For the
transition period from ________________ to __________________




Commission
File Number000-53142




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.)








4400
      Westgrove Drive, Suite 104, Dallas, Texas
              75001(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 o 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 filero
            
            Accelerated
      fileroNon-accelerated
      filero
            (Do
      not check if a smaller reporting company)
            Smaller
      reporting companyx




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act




o 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.




o YES o 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 July 16,
2009







EXPLANATORY
NOTE








This Form
10-Q/A is being filed to amend and restate the May 31, 2009 balance sheet for an
error in recording certain share-based compensation transactions. The
share-based transaction was originally recorded as a prepaid asset on the date
of grant and reported as a component of current assets. In addition, there was
an error in determining the fair value of the award, which resulted in
additional compensation expense. See footnote 3 in the accompanying financial
statements. This Amendment No.1 amends the Company’s unaudited financial
statements for the quarter ended March 31, 2009 to include the required review
of financial information by the Company’s independent registered public
accounting firm in accordance with professional standards for conducting such
reviews.










Report
of Independent Registered Public Accounting Firm







The Board
of Directors and Shareholders


Chancery
Resources, Inc.




We have
reviewed the accompanying interim consolidated balances sheets of Chancery
Resources, Inc. as of May 31, 2009 and the statements of
operation and cash flows for three and six months ended May 30, 2009. These
financial statements are the responsibility of the Company’s
management.




We
conducted our reviews in accordance with standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit in accordance with
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is to express an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.




Based on
our reviews, we are not aware of any material modifications that should be made
to the accompanying interim financial statements for them to be in conformity
with accounting principles generally accepted in the United States of
America.











Very
Truly Yours,











Malone
& Bailey, PC









1




PART
I - FINANCIAL INFORMATION




Item
1. Financial Statements.









Chancery
Resources, Inc.


(An
Exploration Stage Company)




May 31,
2009




IndexConsolidated
      Balance Sheets
                          
                          
                          F–1Consolidated
      Statements of Expenses
                          
                          
                          F–2Consolidated
      Statements of Cash Flows
                          
                          
                          F–3Notes
      to the Consolidated Financial Statements
                          
                          
                          F–4




2




Chancery
Resources, Inc.


(An
Exploration Stage Company)


Consolidated
Balance Sheets


May 31,
2009


(Unaudited)





May
      31,2009
                      (restated)
                    
                    
                    November
      30,
                      2008ASSETSCurrent
      AssetsCash
                    
                    $
                    389
                    
                    
                    $
                    1,638Total
      Assets
                    
                    $
                    389
                    
                    
                    $
                    1,638LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      LiabilitiesBank
      indebtedness
                    
                    $
                    0
                    
                    
                    $
                    8,872Accounts
      payable and accrued liabilities
                    
                    
                    165,711
                    
                    
                    
                    159,394Loan
      payable, less unamortized discount of $9,821and
      $14,077
                    
                    
                    44,917
                    
                    
                    
                    44,917Due
      to related parties
                    
                    
                    26,610
                    
                    
                    
                    6,680Total
      Current Liabilities
                    
                    
                    237,238
                    
                    
                    
                    219,863Loans
      payable
                    
                    
                    80,179
                    
                    
                    
                    75,923Total
      Liabilities
                    
                    
                    317,417
                    
                    
                    
                    295,786Commitments
      and ContingenciesStockholders’
      DeficitPreferred
      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
                    
                    
                    
                    310Common
      stock: 2,500,000,000 shares authorized, $0.00001 par value;
                      32,250,000
      shares issued and outstanding
                    
                    
                    322
                    
                    
                    
                    322Additional
      paid-in capital
                    
                    
                    1,101,175
                    
                    
                    
                    977,947Donated
      capital
                    
                    
                    16,500
                    
                    
                    
                    13,500Accumulated
      other comprehensive loss
                    
                    
                    (72
                    )
                    
                    
                    –Deficit
      accumulated during the exploration stage
                    
                    
                    (1,435,263
                    )
                    
                    
                    (1,286,227
                    )Total
      Stockholders’ Deficit
                    
                    
                    (317,028
                    )
                    
                    
                    (294,148
                    )Total
      Liabilities and Stockholders’ Deficit
                    
                    $
                    389
                    
                    
                    $
                    1,638






(The
Accompanying Notes are an Integral Part of These Financial
Statements)
  F-1


Chancery
Resources, Inc.


(An
Exploration Stage Company)


Consolidated
Statements of Expenses


(Unaudited)




For
      the
                              Three
      Months
                              EndedMay 31,2009
                            (restated)
                          
                          
                          For
      the
                              Three
      Months
                              EndedMay 31,2008
                          
                          
                          For
      the
                              Six Months
                              EndedMay 31,2009
                            (restated)
                          
                          
                          For
      the
                              Six
      Months
                              EndedMay 31,2008
                          
                          
                          Accumulated
      from
                              September
      12, 2006
                              (Date
      of Inception)to May 31,2009
                            (restated)ExpensesGeneral
      and administrative
                          
                          $
                          5,345
                          
                          
                          $
                          13,336
                          
                          
                          $
                          18,579
                          
                          
                          $
                          35,453
                          
                          
                          $
                          148,979Consulting
      fees
                          
                          
                          92,757
                          
                          
                          
                          –
                          
                          
                          
                          122,757
                          
                          
                          
                          –
                          
                          
                          
                          132,757Management
      services
                          
                          
                          –
                          
                          
                          
                          1,500
                          
                          
                          
                          –
                          
                          
                          
                          3,000
                          
                          
                          
                          12,750Impairment
      of mineral property costs
                          
                          
                          –
                          
                          
                          
                          50,000
                          
                          
                          
                          444
                          
                          
                          
                          50,000
                          
                          
                          
                          1,121,074Mineral
      property costs
                          
                          
                          –
                          
                          
                          
                          –
                          
                          
                          
                          –
                          
                          
                          
                          –
                          
                          
                          
                          6,075Rent
                          
                          
                          1,500
                          
                          
                          
                          895
                          
                          
                          
                          3,000
                          
                          
                          
                          1,794
                          
                          
                          
                          9,372Total
      Operating Expenses
                          
                          
                          99,602
                          
                          
                          
                          65,731
                          
                          
                          
                          144,780
                          
                          
                          
                          90,247
                          
                          
                          
                          1,431,007Interest
      Expense
                          
                          
                          2,128
                          
                          
                          
                          
                          
                          
                          
                          4,256
                          
                          
                          
                          -
                          
                          
                          
                          4,256Net
      Loss
                          
                          
                          (101,730
                          )
                          
                          
                          
                          
                          
                          
                          (149,036
                          )
                          
                          
                          (90,247
                          )
                          
                          
                          (1,435,263
                          )Net
      Loss Per Share – Basic and Diluted
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.00
                          )
                          
                          
                          N/AWeighted
      Average Common Shares Outstanding
                          
                          
                          32,250,000
                          
                          
                          
                          146,076,000
                          
                          
                          
                          32
      ,250,000
                          
                          
                          
                          148,635,000
                          
                          
                          
                          N/AStatement
      of Other Comprehensive Loss:Net
      Loss
                          
                          
                          (101,730
                          )
                          
                          
                          (65,731
                          )
                          
                          
                          (149,036
                          )
                          
                          
                          (90,247
                          )
                          
                          
                          (1,435,263
                          )Foreign
      currency translation adjustment
                          
                          
                          (27
                          )
                          
                          
                          
                          
                          
                          
                          (72
                          )
                          
                          
                          
                          
                          
                          
                          (72
                          )Total
      Comprehensive Loss
                          
                          $
                          (101,757
                          )
                          
                          $
                          (65,731
                          )
                          
                          $
                          (149,108
                          )
                          
                          $
                          (90,247
                          )
                          
                          $
                          (1,435,335
                          )






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




F-2




Chancery
Resources, Inc.


(An
Exploration Stage Company)


Consolidated
Statements of Cash Flows


(Unaudited)




For
      the
                                Six
      Months
                                Ended
                                May
      31,2009
                                (restated)
                              
                              
                              For
      the
                                Six
      Months
                                Ended
                                May
      31,2008
                              
                              
                              Accumulated
      from
                                September
      12, 2006
                                (Date
      of Inception)
                                to
      May 31,2009
                                (restated)Cash
      Flows From Operating ActivitiesNet
      loss for the period
                              
                              $
                              (149,036
                              )
                              
                              $
                              (90,247
                              )
                              
                              $
                              (1,435,263
                              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Donated
      services and expenses
                              
                              
                              3,000
                              
                              
                              
                              3,000
                              
                              
                              
                              16,500Impairment
      of mineral property costs
                              
                              
                              444
                              
                              
                              
                              50,000
                              
                              
                              
                              1,117,374Amortization
      of Loan discount
                              
                              
                              4,256
                              
                              
                              
                              
                              
                              
                              
                              6,952Share-based
      compensation
                              
                              
                              122,757
                              
                              
                              
                              –
                              
                              
                              
                              132,757Changes
      in operating assets and liabilities:Prepaid
      expenses
                              
                              
                              471
                              
                              
                              
                              (42
                              )
                              
                              
                              0Accounts
      payable and accrued liabilities
                              
                              
                              6,317
                              
                              
                              
                              11,742
                              
                              
                              
                              15,711Net
      Cash Used In Operating Activities
                              
                              
                              (11,791
                              )
                              
                              
                              (25,547
                              )
                              
                              
                              (145,969
                              )Cash
      Flows From Investing ActivitiesMineral
      property costs
                              
                              
                              (444
                              )
                              
                              
                              (50,000
                              )
                              
                              
                              (50,444
                              )Net
      Cash Used In Investing Activities
                              
                              
                              (444
                              )
                              
                              
                              (50,000
                              )
                              
                              
                              (50,444
                              )Cash
      Flows From Financing ActivitiesAdvances
      from related party
                              
                              
                              19,930
                              
                              
                              
                              (297
                              )
                              
                              
                              91,824Proceeds
      from the sale of common stock
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              105,050Bank
      indebtedness
                              
                              
                              (8,872
                              )
                              
                              
                              –
                              
                              
                              
                              -Net
      Cash Provided By (used for) Financing Activities
                              
                              
                              11,058
                              
                              
                              
                              (297
                              )
                              
                              
                              196,874Effect
      of Exchange Rate Changes on Cash
                              
                              
                              (72
                              )
                              
                              
                              –
                              
                              
                              
                              (72
                              )Decrease  in
      Cash
                              
                              
                              (1,249
                              )
                              
                              
                              (75,844
                              )
                              
                              
                              389Cash
      - Beginning of Period
                              
                              
                              1,638
                              
                              
                              
                              98,531
                              
                              
                              
                              0Cash
      - End of Period
                              
                              $
                              389
                              
                              
                              $
                              22,687
                              
                              
                              $
                              389Supplemental
      DisclosuresInterest
      paid
                              
                              $
                              –
                              
                              
                              $
                              –Income
      taxes paid
                              
                              $
                              –
                              
                              
                              $
                              –





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




F-3




Chancery
Resources, Inc.
 (An
Exploration Stage Company)
 Notes to
the Consolidated Financial Statements
 May 31,
2009
 (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.
 
 Recent
Accounting Pronouncements
 
 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 May 31, 2009 up through November 19,
2009, the date the Company issued these consolidated financial statements.
During this period, the Company did not have any material recognizable
subsequent events.
 
 In July
2009, the FASB issued new guidance relating to the “FASB Accounting Standards
Codification” at ASC 105, as the single source of authoritative nongovernmental
U.S. generally accepted accounting principles (GAAP). The Codification is
effective for interim and annual periods ending after September 15, 2009. All
existing accounting standards are superseded as described in ASC 105. All other
accounting literature not included in the Codification is nonauthoritative.
Management is currently evaluating the impact of the adoption of ASC 105 but
does not expect the adoption of ASC 105 to impact the Company’s results of
operations, financial position or cash flows.
 
 
 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.
 
 Reclassifications.  Certain
prior year amounts have been reclassified 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 May 31, 2009, the Company has a working capital
deficit of $236,849 and has accumulated losses of $(1,435,263)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.
  F-4
  3.
              Restatement
 
 We
identified an error in the accounting for certain share-based compensation
awards granted on November 6, 2008, which was initially reported on Form 10-Q
for the quarter ended May 31, 2009. The share-based award was initially valued
using a 50% discount due to trading restrictions associated with the granted
award. The award should have been measured using the quoted market price of the
common stock without applying a discount. This resulted in additional
compensation expense of $62,757 for the six months ended May 31, 2009. In
addition, the award was initially recorded as a prepaid asset on the date of
grant and reported as a component of current assets. The grant-date fair value
of the award should have been recorded as an expense and a component of equity
over the requisite service period, which matches the vesting period. There was
also a reclassification of interest expense from general and administrative
expenses.In
addition, we corrected an immaterial error in our November 30, 2008 balance
sheet previously reported in our 2008 Annual Report on Form 10-K filed with the
SEC on March 2, 2009. The error related to share-based compensation that was
erroneously reported as a prepaid asset in the amount of $110,471. The error
also impacted our additional paid in capital. We will correct this immaterial
error for the November 30, 2008 balance sheet reported in this and future
filings in accordance with SAB 108.
  F-5
  The
effects of the restatement on reported amounts for the three and nine months
ended May 31, 2009 are presented below in the following tables
 
 INCOME
STATEMENT:
  Three
      months ended May 31, 2009As Reported
                                                                  
                                                                  
                                                                  Adjustments
                                                                  
                                                                  
                                                                  As RestatedGeneral
      and administrative
                                                                  
                                                                  $
                                                                  7,473
                                                                  
                                                                  
                                                                  $
                                                                  (2,128
                                                                  )
                                                                  
                                                                  $
                                                                  5,345Consulting
      fees
                                                                  
                                                                  
                                                                  30,000
                                                                  
                                                                  
                                                                  
                                                                  62,757
                                                                  
                                                                  
                                                                  
                                                                  92,757Total
      expenses
                                                                  
                                                                  
                                                                  38,973
                                                                  
                                                                  
                                                                  
                                                                  60,629
                                                                  
                                                                  
                                                                  
                                                                  99,602Interest
      expense
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  2,128
                                                                  
                                                                  
                                                                  
                                                                  2,128Net
      loss
                                                                  
                                                                  $
                                                                  (38,973
                                                                  )
                                                                  
                                                                  $
                                                                  (62,757
                                                                  )
                                                                  
                                                                  $
                                                                  (101,730
                                                                  )Net
      loss per share:Basic
      and diluted
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  -
                                                                  
                                                                  
                                                                  $
                                                                  -Weighted
      average common shares outstanding:Basic
      and diluted
                                                                  
                                                                  
                                                                  32,250,000
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  32,250,000
   Six
      months ended May 31, 2009As Reported
                                        
                                        
                                        Adjustments
                                        
                                        
                                        As RestatedGeneral
      and administrative
                                        
                                        $
                                        22,835
                                        
                                        
                                        $
                                        (4,256
                                        )
                                        
                                        $
                                        18,579Management
      Services
                                        
                                        
                                        3,000
                                        
                                        
                                        
                                        (3,000
                                        )
                                        
                                        
                                        -Consulting
      fees
                                        
                                        
                                        60,000
                                        
                                        
                                        
                                        62,757
                                        
                                        
                                        
                                        122,757Total
      expenses
                                        
                                        
                                        89,279
                                        
                                        
                                        
                                        55,501
                                        
                                        
                                        
                                        144,780Interest
      expense
                                        
                                        
                                        -
                                        
                                        
                                        
                                        4,256
                                        
                                        
                                        
                                        4,256Net
      loss
                                        
                                        $
                                        (86,279
                                        )
                                        
                                        $
                                        (59,757
                                        )
                                        
                                        $
                                        (149,036
                                        )Net
      loss per share:Basic
      and diluted
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -Weighted
      average common shares outstanding:Basic
      and diluted
                                        
                                        
                                        32,250,000
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        32,250,000
  BALANCE
SHEET:
  May
      31, 2009As Reported
                                    
                                    
                                    Current Year
                                      Adjustments
                                    
                                    
                                    As RestatedASSETSPrepaid
      assets
                                    
                                    $
                                    50,000
                                    
                                    
                                    $
                                    (50,000)
                                    
                                    
                                    $
                                    -Total
      assets
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    (50,000)Stockholders’
      deficitAccumulated
      paid in capital
                                    
                                    
                                    1,088,418
                                    
                                    
                                    
                                    12,757
                                    
                                    
                                    
                                    1,101,175Retained
      earnings (deficit)
                                    
                                    
                                    (1,372,506)
                                    
                                    
                                    
                                    (62,757)
                                    
                                    
                                    
                                    (1,435,263)Total
      stockholders’ deficit
                                    
                                    
                                    (267,028)
                                    
                                    
                                    
                                    (50,000)
                                    
                                    
                                    
                                    (317,028)Total
      liabilities and stockholders’ deficit
                                    
                                    $
                                    50,389
                                    
                                    
                                    $
                                    (50,000)
                                    
                                    
                                    $
                                    389
  F-6
  CASH FLOW
STATEMENT:
  Six
      months ended May 31, 2009As Reported
                                            
                                            
                                            Adjustments
                                            
                                            
                                            As RestatedNet
      loss
                                            
                                            $
                                            (86,279
                                            )
                                            
                                            $
                                            (62,757
                                            )
                                            
                                            $
                                            (149,036
                                            )Share-based
      compensation
                                            
                                            
                                            60,000
                                            
                                            
                                            
                                            62,757
                                            
                                            
                                            
                                            122,757Net
      cash used in operating activity
                                            
                                            
                                            (10,287
                                            )
                                            
                                            
                                            (1,504
                                            )
                                            
                                            
                                            (11,791
                                            )Advances
      from related party
                                            
                                            
                                            18,426
                                            
                                            
                                            
                                            1,504
                                            
                                            
                                            
                                            19,930Net
      cash provided by financing activities
                                            
                                            $
                                            9,554
                                            
                                            
                                            $
                                            1,504
                                            
                                            
                                            $
                                            11,058
 
 
 4.
              Related
      Party Transactions
  a)
              For
      the six months ended May 31, 2009, the Company recognized $Nil (May 31,
      2008 - $3,000) for donated services provided by the former President of
      the Company and incurred $Nil (May 31, 2008 - $1,794) in rent to a company
      controlled by the former President of the
  Company.
  b)
              For
      the six months ended May 31, 2009, the Company incurred $3,000 (May 31,
      2008 - $Nil) in donated rent to a company controlled by the President of
      the Company, and is indebted to the President for $24,080 (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
      at May 31, 2009, 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.
  5.
              Loans
      Payable
  a)
              On
      July 25, 2008, the Company received a $70,000 loan for a mineral property
      acquisition, which is non-interest bearing, unsecured and due on July 25,
      2010. As at May 31, 2009, an implicit interest rate of 15% was recognized
      resulting in an unamortized discount of $9,821 (November 30, 2008 -
      $14,077).
  b)
              On
      August 8, 2008, the Company received a $20,000 loan which is non-interest
      bearing, unsecured and due on August 8,
2010.
  c)
              As
      at May 31, 2009, 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.
  6.
              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 May 31,
      2009, 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.
  
 7.
              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.
 
  8.
              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
      six months ended May 31, 2009, $112,757 (May 31, 2008 - $Nil) was charged
      to operations.
  F-7
  Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.
  FORWARD-LOOKING
STATEMENTS
  This
quarterly report contains forward-looking statements. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, that may cause our or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
  Our
unaudited financial statements are stated in United States Dollars (US$) 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 4400 Westgrove Drive, Suite 104, Dallas,
Texas 75001. 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
  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.
  To date,
we have not made the final $150,000 payment as required by the mining
acquisition agreement. We plan to hold such payment until the above title
requirements have been complied with and or alternatively to pay the outstanding
governmental fees due on the El Cafetal mine and deduct these amounts from the
final $150,000 payment. As ourinitial
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 14th, 2009 directly with the
owners of the property, Inversiones Midas Limitada, to continue negotiations,
which has a final payment of $150,000 minus  payments to the
outstanding governmental fees due on the El Cafetal mine with no timeframe
period for payment.
  Effective
April 14, 2009, we entered into an agreement with Inversiones Midas wherein the
terms of profit split 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 720 million Colombian pesos
(estimated value of land and equipment), Inversiones Midas agrees to give and
transfer 50% ownership of the Mining title, 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 additional 780 million Colombian pesos, and then the remaining 50% of the
Title ownership will be transferred to our company.
  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
  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 north-western 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.
  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.
  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
      Date592560
              HCL
              20
              10/04/2009
  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.
  5
  Location
and Access
  The HCL
mineral claim is comprised of 20 contiguous cells totaling 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 fromthe 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:
  
  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.
  6
  Below is
a map of the HCL Property location:
  
  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.
  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.
  7
  The
following is a list of tenure number, claim name, and expiration date of our
claims:
 
 Tenure
      Number
              Claim
      Name
              No.
      MTO Cells
              Expiration
      Date597810
              Fiddler
      Creek
              25
              01/19/2010
  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.
  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.
  8
  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 February 28, 2009 and February 29, 2008
  The
following summary of our results of operations should be read in conjunction
with our financial statements for the quarter ended February 28, 2009 which are
included herein.
  Our
operating results for the three months ended February 28, 2009, for the three
months ended February 29, 2008 and the changes between those periods for the
respective items are summarized as follows:
 
 Six
      Months
                    Ended
                    May
      31,2009
                    (restated)
                  
                  
                  Six
      Months
                    Ended
                    May
      31,2008
                  
                  
                  Change
      Between
                    Six
      Month Period
                    Ended
                    May
      31, 2009
                    and
      May 31, 2008General
      and administrative
                  
                  
                  18,579
                  
                  
                  
                  35,453
                  
                  
                  
                  (16,874
                  )Consulting
      fees
                  
                  
                  122,757
                  
                  
                  -
                  
                  
                  
                  122,757Management
      services
                  
                  
                  -
                  
                  
                  
                  3,000
                  
                  
                  
                  (3,000
                  )Impairment
      of mineral property costs
                  
                  
                  444
                  
                  
                  
                  50,000
                  
                  
                  
                  (49,556
                  )Rent
                  
                  
                  3,000
                  
                  
                  
                  1,794
                  
                  
                  
                  1,206Net
      Loss
                  
                  
                  (144,780
                  )
                  
                  
                  (90,247
                  )
                  
                  
                  (54,533
                  )
  Our
accumulated losses increased to $1,435,263 as of May 31, 2009. Our financial
statements report a net loss of $149,036 for the six month period ended May 31,
2009 compared to a net loss of $90,247 for the six month period ended May 31,
2008. Our losses have increased primarily as a result of an increase in
professional fees and rent.
  As at May
31, 2009, we had $237,238 in current liabilities. Our net cash used in operating
activities for the six months ended May 31, 2009 was $11,791 compared to $25,547
used in the six months ended May 31, 2008.
  Equity Compensation
  We
currently do not have any stock option or equity compensation plans or
arrangements.
  Liquidity
and Financial Condition
  Working
Capital
 
 At
                    
                    
                    AtMay
      31, 2009
                      (restated)
                    
                    
                    November
      30,
                      2008Current
      assets
                    
                    $
                    389
                    
                    
                    $
                    1,638Current
      liabilities
                    
                    
                    237,238
                    
                    
                    
                    219,863Working
      capital
                    
                    $
                    (236,849
                    )
                    
                    $
                    (218,225
                    )
  9
  Cash
Flows
 
 Six
      Months EndedMay
      31, 2009
                      (restated)
                    
                    
                    May
      31,
                      2008Net
      cash used in operating activities
                    
                    $
                    (11,791
                    )
                    
                    $
                    (25,547
                    )Net
      cash used in investing activities
                    
                    
                    (444
                    )
                    
                    
                    (50,000
                    )Net
      cash provided by financing activities
                    
                    
                    11,058
                    
                    
                    (297)Net
      decrease in cash during period
                    
                    $
                    (1,249
                    )
                    
                    $
                    (75,844
                    )
  As of May
31, 2009, our company had working capital deficiency of $236,849. 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, 2010
 
 General
      and administrative
                    
                    $
                    60,000Exploration
      Expenses
                    
                    $
                    449,135Professional
      fees
                    
                    $
                    35,000Total
                    
                    
                    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.
  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, 2008, 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.
  10
  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.
  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
4. 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 theSecurities 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 May 31,
2009.
  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.
  11
  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.
  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.
  12
  We
believe that we are in compliance with all material laws and regulations that
currently apply to our activities but there can be no assurance that we can
continue to remain in compliance. Current laws and regulations could be amended
and we might not be able to comply with them, as amended. Further, there can be
no assurance that we will be able to obtain or maintain all permits necessary
for our future operations, or that we will be able to obtain them on reasonable
terms. To the extent such approvals are required and are not obtained, we may be
delayed or prohibited from proceeding with planned exploration or development of
our mineral properties.
  If
we establish the existence of a mineral resource on any of our properties in a
commercially exploitable quantity, we will require additional capital in order
to develop the property into a producing mine. If we cannot raise this
additional capital, we will not be able to exploit the resource, and our
business could fail.
  If we do
discover mineral resources in commercially exploitable quantities on any of our
properties, we will be required to expend substantial sums of money to establish
the extent of the resource, develop processes to extract it and develop
extraction and processing facilities and infrastructure. Although we may derive
substantial benefits from the discovery of a major deposit, there can be no
assurance that such a resource will be large enough to justify commercial
operations, nor can there be any assurance that we will be able to raise the
funds required for development on a timely basis. If we cannot raise the
necessary capital or complete the necessary facilities and infrastructure, our
business may fail.
  Mineral
exploration and development is subject to extraordinary operating risks. We do
not currently insure against these risks. In the event of a cave-in or similar
occurrence, our liability may exceed our resources, which would have an adverse
impact on our company.
  Mineral
exploration, development and production involve 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.
  13
  In
identifying and acquiring mineral resource properties, we compete with many
companies possessing greater financial resources and technical facilities. This
competition could adversely affect our ability to acquire suitable prospects for
exploration in the future. Accordingly, there can be no assurance that we will
acquire any interest in additional mineral resource properties that might yield
reserves or result in commercial mining operations.
  Risks
Related To Our Company
  We
have a limited operating history on which to base an evaluation of our business
and prospects.
  We have
been in the business of exploring mineral resource properties since September
2006 and we have not yet located any mineral reserve. As a result, we have never
had any revenues from our operations. In addition, our operating history has
been restricted to the acquisition and exploration of our mineral properties and
this does not provide a meaningful basis for an evaluation of our prospects if
we ever determine that we have a mineral reserve and commence the construction
and operation of a mine. We have no way to evaluate the likelihood of whether
our mineral properties contain any mineral reserve or, if they do that we will
be able to build or operate a mine successfully. We anticipate that we will
continue to incur operating costs without realizing any revenues during the
period when we are exploring our properties. 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 $389 as of May 31, 2009. At May 31,
2009, we had working capital deficit of $263,849. We incurred a net loss of
$149,036 for the six months ended May 31, 2009 and $1,435,263 since inception on
September 12, 2006. We estimate our average monthly operating expenses to be
approximately $20,000 to $25,000, including mineral property costs, management
services and administrative costs. Should the results of our planned exploration
require us to increase our current operating budget, we may have to raise
additional funds to meet our currently budgeted operating requirements for the
next 12 months. As we cannot assure a lender that we will be able to
successfully explore and develop our mineral properties, we will probably find
it difficult to raise debt financing from traditional lending sources. We have
traditionally raised our operating capital from sales of equity and debt
securities, but there can be no assurance that we will continue to be able to do
so. If we cannot raise the money that we need to continue exploration of our
mineral properties, we may be forced to delay, scale back, or eliminate our
exploration activities. If any of these were to occur, there is a substantial
risk that our business would fail.
  These
circumstances lead our independent registered public accounting firm, in their
report dated May 31, 2009, to comment about our company’s ability to continue as
a going concern. Management has plans to seek additional capital through a
private placement and public offering of its capital stock. These conditions
raise substantial doubt about our company’s ability to continue as a going
concern. Although there are no assurances that management’s plans will be
realized, management believes that our company will be able to continue
operations in the future. The consolidated financial statements do not include
any adjustments relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event our company cannot continue in existence.” We continue to
experience net operating losses.
  14
  Risks
Associated with Our Common Stock
  Trading
on the OTC Bulletin Board may be volatile and sporadic, which could depress the
market price of our common stock and make it difficult for our stockholders to
resell their shares.
  Our
common stock is quoted on the OTC Bulletin Board service of the Financial
Industry Regulatory Authority. Trading in stock quoted on the OTC Bulletin Board
is often thin and characterized by wide fluctuations in trading prices, due to
many factors that may have little to do with our operations or business
prospects. This volatility could depress the market price of our common stock
for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board
is not a stock exchange, and trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities listed on a quotation system
like NASDAQ or a stock exchange like Amex. Accordingly, shareholders may have
difficulty reselling any of their shares.
  Our
stock is a penny stock. Trading of our stock may be restricted by the SEC’s
penny stock regulations and FINRA’s sales practice requirements, which may limit
a stockholder’s ability to buy and sell our stock.
  Our stock
is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9
which generally defines “penny stock” to be any equity security that has a
market price (as defined) less than $5.00 per share or an exercise price of less
than $5.00 per share, subject to certain exceptions. Our securities are covered
by the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
“accredited investors”. The term “accredited investor” refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer’s
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer’s confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser’s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in, and limit the marketability of, our common stock.
  In
addition to the “penny stock” rules promulgated by the Securities and Exchange
Commission, the Financial Industry Regulatory Authority has adopted rules that
require that in recommending an investment to a customer, a 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.
  15
  Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
  None.
  Item 3. Defaults Upon Senior
Securities.
  None.
  Item
4. Submission of Matters to a Vote of Security Holders.
  None.
  Item
5. Other Information
  None.
  Item
6. Exhibits.
  Exhibits
required by Item 601 of Regulation S-K
  Exhibit
                  
                  DescriptionNumber(31)
                  
                  Rule
      13a-14(a)/15d-14(a) Certifications31.1*
                  
                  Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Rafael
      Pinedo31.2*
                  
                  Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Juan Restrepo
      Gutierrez(32)
                  
                  Section
      1350 Certifications32.1*
                  
                  Section
      906 Certification under Sarbanes-Oxley Act of 2002 of Rafael
      Pinedo32.2*
                  
                  Section
      906 Certification under Sarbanes-Oxley Act of 2002 of Juan Restrepo
      Gutierrez
  *
Filed herewith
  16
 
 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:
      November 19, 2009
                          /s/
      Rafael PinedoRafael
      PinedoPresident
      and Director(Principal
      Executive Officer)Dated:
      November 19, 2009
                          /s/
      Juan Restrepo GutierrezJuan
      Restrepo GutierrezSecretary,
      Treasurer and Chief Financial Officer(Principal
      Financial Officer and PrincipalAccounting
      Officer)
 
 17