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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____

COMMISSION FILE NUMBER000-52626

PENGRAM CORPORATION(Exact
name of registrant as specified in its charter)

|NEVADA                                                               | 68-0643436                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|1200 Dupont Street, Suite 2J                                         |                                     
|Bellingham, WA                                                       | 98225                               
|(Address of principal executive offices)                             | (Zip Code)                          

(360) 255-3436(Registrant's telephone number,
including area code)

Not Applicable(Former name, former address and
former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).[
] Yes[ ] No

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

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

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

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
October 20, 2010, the Issuer had 55,187,144 Shares of Common Stock
outstanding.

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PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three and nine months ended August
31, 2010 are not necessarily indicative of the results that can be expected for
the year ending November 30, 2010.

As used in this Quarterly Report, the terms "we, "us, "our,
Pengram and the Company mean Pengram Corporation and its subsidiaries,
unless otherwise indicated. All dollar amounts in this Quarterly Report are in
U.S. dollars unless otherwise stated.

2

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PENGRAM CORPORATION(An Exploration Stage Company)

THIRD QUARTER CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)(Stated in U.S. Dollars)

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS(Unaudited)(Stated in U.S. Dollars)

|                                                                                                                     |   | AUGUST 31 |   |   | NOVEMBER 30 |  
|-------------------------------------------------------------------------------------------------------------------- | - | --------- | - | - | ----------- | -
|                                                                                                                     |   | 2010      |   |   | 2009        |  
|                                                                                                                     |   |           |   |   |             |  
|ASSETS                                                                                                               |   |           |   |   |             |  
|                                                                                                                     |   |           |   |   |             |  
|Current                                                                                                              |   |           |   |   |             |  
|Cash                                                                                                                 | $ | 15,692    |   | $ | 3,711       |  
|Marketable securities (Note 12)                                                                                      |   | 10,367    |   |   | 10,367      |  
|Prepaid expenses                                                                                                     |   | 6,000     |   |   | -           |  
|Total Current Assets                                                                                                 |   | 32,059    |   |   | 14,078      |  
|                                                                                                                     |   |           |   |   |             |  
|Computer Equipment(Note 3)                                                                                           |   | -         |   |   | 253         |  
|Mineral Property Acquisition Costs(Note 4)                                                                           |   | 461,575   |   |   | 440,100     |  
|                                                                                                                     |   |           |   |   |             |  
|Total Assets                                                                                                         | $ | 493,634   |   | $ | 454,431     |  
|                                                                                                                     |   |           |   |   |             |  
|LIABILITIES                                                                                                          |   |           |   |   |             |  
|                                                                                                                     |   |           |   |   |             |  
|Current                                                                                                              |   |           |   |   |             |  
|Accounts
      payable and accrued liabilities                                                                       | $ | 266,345   |   | $ | 172,333     |  
|Amounts due to related
      parties                                                                                 |   | 42,000    |   |   | 24,000      |  
|Amount
      due to shareholder                                                                                      |   | 1,920     |   |   | 1,920       |  
|Promissory notes payable
      (Notes 4 and 5)                                                                       |   | 139,399   |   |   | 65,913      |  
|Promissory notes payable to related parties (Note 6)                                                                 |   | 25,403    |   |   | 23,901      |  
|Loan payable (Note 7)                                                                                                |   | 6,881     |   |   | 6,476       |  
|Convertible notes (Note 9)                                                                                           |   | 136,498   |   |   | 61,662      |  
|Unit subscriptions
      received (Note 10)                                                                          |   | -         |   |   | 18,860      |  
|Total Current Liabilities                                                                                            |   | 618,446   |   |   | 375,065     |  
|                                                                                                                     |   |           |   |   |             |  
|STOCKHOLDERS EQUITY (DEFICIENCY)                                                                                    |   |           |   |   |             |  
|                                                                                                                     |   |           |   |   |             |  
|Capital Stock(Note 8)                                                                                                |   |           |   |   |             |  
|Authorized:                                                                                                          |   |           |   |   |             |  
|100,000,000
      preferred stock with a par value of
      $0.001 
                            
      per share     |   |           |   |   |             |  
|300,000,000
      common voting stock with a par value
      of 
                            
      $0.001 per share |   |           |   |   |             |  
|                                                                                                                     |   |           |   |   |             |  
|Issued:                                                                                                              |   |           |   |   |             |  
|55,187,144 common shares as at
      August 31, 2010                                                                 |   | 55,187    |   |   | 54,207      |  
|                                                                                                                     |   |           |   |   |             |  
|Share Subscriptions Received In Advance(Note 10)                                                                     |   | 36,283    |   |   | 2,500       |  
|Additional Paid-In Capital                                                                                           |   | 696,244   |   |   | 582,595     |  
|Share Purchase Warrants(Note 8)                                                                                      |   | 57,450    |   |   | 83,179      |  
|Deficit Accumulated During The Exploration Stage                                                                     |   | (969,976  | ) |   | (643,115    | )
|Total Stockholders Equity (Deficiency)                                                                              |   | (124,812  | ) |   | 79,366      |  
|                                                                                                                     |   |           |   |   |             |  
|Total Liabilities And Stockholders Equity                                                                           | $ | 493,634   |   | $ | 454,431     |  

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

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(Stated in U.S. Dollars)

|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   | CUMULATIVE  |  
|----------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   | PERIOD FROM |  
|                                                                                                |   | THREE      |   |   | NINE       |   |   | INCEPTION  |  
|                                                                                                |   | MONTHS     |   |   | MONTHS     |   |   | APRIL 28   |  
|                                                                                                |   | ENDED      |   |   | ENDED      |   |   | 2006 TO    |  
|                                                                                                |   | AUGUST 31  |   |   | AUGUST 31  |   |   | AUGUST 31  |  
|                                                                                                |   | 2010       |   |   | 2009       |   |   | 2010       |   |   | 2009       |   |   | 2010        |  
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|Expenses                                                                                        |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|Bank
      charges
      and 
                   
      interest                                | $ | 2,417      |   | $ | 4,333      |   | $ | 13,705     |   | $ | 11,245     |   | $ | 32,219      |  
|Consulting fees                                                                                 |   | 14,800     |   |   | -          |   |   | 14,800     |   |   | -          |   |   | 17,150      |  
|Depreciation expense                                                                            |   | -          |   |   | 127        |   |   | 253        |   |   | 379        |   |   | 1,516       |  
|Filing and regulatory                                                                           |   | 1,241      |   |   | 2,019      |   |   | 2,290      |   |   | 4,769      |   |   | 17,538      |  
|Finance
      charges                                                                           |   | 31,154     |   |   | 23,105     |   |   | 76,863     |   |   | 30,764     |   |   | 130,482     |  
|Incorporation costs                                                                             |   | -          |   |   | -          |   |   | -          |   |   | 1,262      |   |   | 3,382       |  
|Investor
      relations                                                                        |   | -          |   |   | 4,200      |   |   | 1,000      |   |   | 4,200      |   |   | 10,800      |  
|Management fees                                                                                 |   | 9,508      |   |   | 9,000      |   |   | 27,508     |   |   | 27,000     |   |   | 120,108     |  
|Mineral property 
                   
      exploration costs                                   |   | 33,124     |   |   | 40,686     |   |   | 34,693     |   |   | 50,414     |   |   | 96,123      |  
|Office 
                   
      and administrative                                            |   | 6,311      |   |   | 1,379      |   |   | 15,939     |   |   | 6,888      |   |   | 59,153      |  
|Professional fees                                                                               |   | 57,044     |   |   | 35,168     |   |   | 139,044    |   |   | 113,330    |   |   | 461,158     |  
|Recovery
      on 
                   
      mineral property                                   |   | (8,494     | ) |   | -          |   |   | (8,494     | ) |   | -          |   |   | (8,494      | )
|Travel                                                                                          |   | 2,760      |   |   | -          |   |   | 2,760      |   |   | -          |   |   | 16,341      |  
|Website design                                                                                  |   | -          |   |   | -          |   |   | 3,500      |   |   | -          |   |   | 3,500       |  
|Write-off
      of
      mineral 
                   
      property costs                      |   | -          |   |   | -          |   |   | 3,000      |   |   | -          |   |   | 9,000       |  
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|Net Loss For The Period                                                                         | $ | (149,865   | ) | $ | (120,017   | ) | $ | (326,861   | ) | $ | (250,251   | ) | $ | (969,976    | )
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|Basic And Diluted
      Loss 
             Per Share                                            | $ | (0.01      | ) | $ | (0.01      | ) | $ | (0.01      | ) | $ | (0.01      | ) |   |             |  
|                                                                                                |   |            |   |   |            |   |   |            |   |   |            |   |   |             |  
|Weighted Average
             Number Of
        Common 
             Shares
        Outstanding |   | 54,420,405 |   |   | 54,166,057 |   |   | 54,362,910 |   |   | 53,937,071 |   |   |             |  

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

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)(Stated in U.S. Dollars)

|                                                                        |   |           |   |   |           |   |   | CUMULATIVE  |  
|----------------------------------------------------------------------- | - | --------- | - | - | --------- | - | - | ----------- | -
|                                                                        |   |           |   |   |           |   |   | PERIOD FROM |  
|                                                                        |   | NINE      |   |   | INCEPTION |  
|                                                                        |   | MONTHS    |   |   | APRIL 28  |  
|                                                                        |   | ENDED     |   |   | 2006 TO   |  
|                                                                        |   | AUGUST 31 |   |   | AUGUST 31 |  
|                                                                        |   | 2010      |   |   | 2009      |   |   | 2010        |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Cash (Used In) Operating Activities                                     |   |           |   |   |           |   |   |             |  
|Net loss
      for the period                                           | $ | (326,861  | ) | $ | (250,251  | ) | $ | (969,976    | )
|Adjustment for items not
      affecting cash:                          |   |           |   |   |           |   |   |             |  
|Depreciation                                                            |   | 253       |   |   | 379       |   |   | 1,516       |  
|Finance charges on convertible notes                                    |   | 76,863    |   |   | 30,764    |   |   | 130,482     |  
|Foreign exchange                                                        |   | 438       |   |   | (1,025    | ) |   | 9,751       |  
|Accrued interest payable                                                |   | 12,756    |   |   | 10,584    |   |   | 29,502      |  
|Write-off of mineral property costs                                     |   | 3,000     |   |   | -         |   |   | 9,000       |  
|Changes in non-cash
      operating working capital items:              |   |           |   |   |           |   |   |             |  
|Accounts payable and accrued liabilities                                |   | 94,012    |   |   | 47,053    |   |   | 262,629     |  
|Amounts due to related parties                                          |   | 18,000    |   |   | 12,000    |   |   | 42,000      |  
|Prepaid expenses                                                        |   | (6,000    | ) |   | -         |   |   | (6,000      | )
|                                                                        |   | (127,539  | ) |   | (150,496  | ) |   | (491,096    | )
|Cash Used In Investing
      Activities                                 |   |           |   |   |           |   |   |             |  
|Advances                                                                |   | -         |   |   | 50,000    |   |   | (10,367     | )
|Mineral
      property acquisition costs                                |   | (68,125   | ) |   | (10,000   | ) |   | (84,125     | )
|Recovery of mineral
      property costs                                |   | 50,050    |   |   | -         |   |   | 50,050      |  
|Purchase
      of computer equipment                                    |   | -         |   |   | -         |   |   | (1,516      | )
|                                                                        |   | (18,075   | ) |   | 40,000    |   |   | (45,958     | )
|Cash Provided By Financing Activities                                   |   |           |   |   |           |   |   |             |  
|Issuance of convertible
      notes                                     |   | -         |   |   | 70,000    |   |   | 137,500     |  
|Issuance
      of common stock                                          |   | 70,000    |   |   | -         |   |   | 278,981     |  
|Finders fees                                                           |   | (5,042    | ) |   | -         |   |   | (5,042      | )
|Units and
      share subscriptions received in advance                 |   | 22,465    |   |   | -         |   |   | 43,825      |  
|Promissory note payable                                                 |   | 75,000    |   |   | -         |   |   | 75,000      |  
|Repayment
      of promissory note                                      |   | (4,828    | ) |   | -         |   |   | (4,828      | )
|Promissory note payable
      to related party                          |   | -         |   |   | 7,000     |   |   | 27,000      |  
|Repayment
      of promissory notes payable to related parties          |   | -         |   |   | -         |   |   | (7,000      | )
|Loan payable                                                            |   | -         |   |   | -         |   |   | 5,390       |  
|Amount
      due to shareholder                                         |   | -         |   |   | 920       |   |   | 1,920       |  
|Bank indebtedness                                                       |   | -         |   |   | 2,650     |   |   | -           |  
|                                                                        |   | 157,595   |   |   | 80,570    |   |   | 552,746     |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Increase (Decrease) In Cash                                             |   | 11,981    |   |   | (29,926   | ) |   | 15,692      |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Cash, Beginning Of Period                                               |   | 3,711     |   |   | 29,926    |   |   | -           |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Cash, End Of Period                                                     | $ | 15,692    |   | $ | -         |   | $ | 15,692      |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Supplemental Disclosure Of Cash Flow
      Information                  |   |           |   |   |           |   |   |             |  
|Cash paid during the
      period for:                                  |   |           |   |   |           |   |   |             |  
|Interest                                                                | $ | -         |   | $ | -         |   | $ | -           |  
|Income taxes                                                            | $ | -         |   | $ | -         |   | $ | -           |  
|                                                                        |   |           |   |   |           |   |   |             |  
|Non-Cash Financing And Investing Activities                             |   |           |   |   |           |   |   |             |  
|Shares
      received from Solfotara Minerals Corp. (Note 10)           | $ | -         |   | $ | 10,367    |   | $ | 10,367      |  
|Shares issued for mineral
      property acquisition costs (Note 4)     | $ | 6,400     |   | $ | 373,500   |   | $ | 342,400     |  
|Promissory note payable for mineral property acquisition costs (Note 4) | $ | -         |   | $ | 56,600    |   | $ | 56,600      |  
|Conversion of convertible notes                                         | $ | 10,000    |   | $ | -         |   | $ | 10,000      |  

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

---

PENGRAM CORPORATION(AnExplorationStageCompany)

STATEMENTOFSTOCKHOLDERSEQUITY(DEFICIENCY)

PERIODFROMINCEPTIONAPRIL 28, 2006 TOAUGUST31, 2010(Unaudited)(Stated
    in U.S. Dollars)

|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   | DEFICIT     |   |   |          |  
|-------------------------------------------------------- |  | ------------ |  | - | -------- |  | - | ---------------- | - | - | ---------- |  | - | ----------- | - | - | ----------- | - | - | -------- | -
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   | ACCUMULATED |   |   |          |  
|                                                         |  |              |  |   |          |  |   | SHARE            |   |   |            |  |   |             |   |   | DURING      |   |   |          |  
|                                                         |  |              |  |   |          |  |   | SUBSCRIPTIONS    |   |   | ADDITIONAL |  |   | SHARE       |   |   | THE         |   |   |          |  
|                                                         |  | COMMON STOCK |  |   | RECEIVED |  |   | PAID-IN          |   |   | PURCHASE   |  |   | EXPLORATION |   |   |             |  
|                                                         |  | SHARES       |  |   | AMOUNT   |  |   | IN
      ADVANCE |   |   | CAPITAL    |  |   | WARRANTS    |   |   | STAGE       |   |   | TOTAL    |  
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|Balance, November 30, 2007                               |  | 44,997,144   |  | $ | 44,997   |  | $ | -                |   | $ | 83,984     |  | $ | -           |   | $ | (128,496    | ) | $ | 485      |  
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|September 4, 2008  units issued for cash
      at $0.03 |  | 3,000,000    |  |   | 3,000    |  |   | -                |   |   | 41,300     |  |   | 35,700      |   |   | -           |   |   | 80,000   |  
|Net loss for the year                                    |  | -            |  |   | -        |  |   | -                |   |   | -          |  |   | -           |   |   | (139,039    | ) |   | (139,039 | )
|Balance, November 30, 2008                               |  | 47,997,144   |  |   | 47,997   |  |   | -                |   |   | 125,284    |  |   | 35,700      |   |   | (267,535    | ) |   | (58,554  | )
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|Stock issued for mineral property                        |  | 6,000,000    |  |   | 6,000    |  |   | -                |   |   | 294,000    |  |   | -           |   |   | -           |   |   | 300,000  |  
|Relative fair value allocation of convertible notes      |  | -            |  |   | -        |  |   | -                |   |   | 90,021     |  |   | 47,479      |   |   | -           |   |   | 137,500  |  
|Stock issued under assignment agreement                  |  | 150,000      |  |   | 150      |  |   | -                |   |   | 37,350     |  |   | -           |   |   | -           |   |   | 37,500   |  
|Stock issued pursuant to extension agreement             |  | 60,000       |  |   | 60       |  |   | -                |   |   | 35,940     |  |   | -           |   |   | -           |   |   | 36,000   |  
|Share subscriptions received in advance                  |  | -            |  |   | -        |  |   | 2,500            |   |   | -          |  |   | -           |   |   | -           |   |   | 2,500    |  
|Net loss for the year                                    |  | -            |  |   | -        |  |   | -                |   |   | -          |  |   | -           |   |   | (375,580    | ) |   | (375,580 | )
|Balance, November 30, 2009                               |  | 54,207,144   |  |   | 54,207   |  |   | 2,500            |   |   | 582,595    |  |   | 83,179      |   |   | (643,115    | ) |   | 79,366   |  
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|Units issued for cash at $0.10                           |  | 600,000      |  |   | 600      |  |   | -                |   |   | 37,650     |  |   | 21,750      |   |   | -           |   |   | 60,000   |  
|Exercise of warrants                                     |  | 150,000      |  |   | 150      |  |   | (2,500           | ) |   | 12,350     |  |   | -           |   |   | -           |   |   | 10,000   |  
|Expiry of warrants                                       |  | -            |  |   | -        |  |   | -                |   |   | 47,479     |  |   | (47,479     | ) |   | -           |   |   | -        |  
|Conversion of convertible notes                          |  | 200,000      |  |   | 200      |  |   | -                |   |   | 9,800      |  |   | -           |   |   | -           |   |   | 10,000   |  
|Stock issued under assignment agreement                  |  | 30,000       |  |   | 30       |  |   | -                |   |   | 6,370      |  |   | -           |   |   | -           |   |   | 6,400    |  
|Share subscriptions received in advance                  |  | -            |  |   | -        |  |   | 22,465           |   |   | -          |  |   | -           |   |   | -           |   |   | 22,465   |  
|Finder’s fee                                             |  | -            |  |   | -        |  |   | (5,042           | ) |   | -          |  |   | -           |   |   | -           |   |   | (5,042   | )
|Reclassified from current liabilities                    |  | -            |  |   | -        |  |   | 18,860           |   |   | -          |  |   | -           |   |   | -           |   |   | 18,860   |  
|Net loss for the period                                  |  | -            |  |   | -        |  |   | -                |   |   | -          |  |   | -           |   |   | (326,861    | ) |   | (326,861 | )
|                                                         |  |              |  |   |          |  |   |                  |   |   |            |  |   |             |   |   |             |   |   |          |  
|Balance, August 31, 2010                                 |  | 55,187,144   |  | $ | 55,187   |  | $ | 36,283           |   | $ | 696,244    |  | $ | 57,450      |   | $ | (969,976    | ) | $ | (124,812 | )

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

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|1. | BASIS OF PRESENTATION AND NATURE OF
      OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The unaudited financial information furnished herein
      reflects all adjustments, all of which are of a normal recurring nature,
      which in the opinion of management are necessary to fairly state the
      interim consolidated financial position of Pengram Corporation (the
      Company) and the results of its operations for the periods presented.
      This report on Form 10-Q should be read in conjunction with the Companys
      financial statements and notes thereto included in the Companys Form 10-K
      for the fiscal year ended November 30, 2009. The Company assumes that the
      users of the interim financial information herein have read or have access
      to the audited financial statements for the preceding fiscal year and that
      the adequacy of additional disclosure needed for a fair presentation may
      be determined in that context. Accordingly, footnote disclosure, which
      would substantially duplicate the disclosure contained in the Companys
      Form 10-K for the fiscal year ended November 30, 2009, has been omitted.
      The results of operations for the nine month period ended August 31, 2010
      are not necessarily indicative of results for the entire fiscal year
      ending November 30, 2010.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These consolidated financial statements include the
      accounts of Pengram Corporation (the Company) and its wholly owned
      subsidiaries, Magellan Acquisition Corp. (Nevada) (MAC) and Clisbako
      Minerals Inc. (British Columbia) (CMI). All intercompany balances have
      been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company was incorporated in the State of Nevada,
      U.S.A., on April 28, 2006. The Companys principal executive offices are
      in Bellingham, Washington, U.S.A. The Companys year end is November
      30.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Exploration Stage Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company has been in the exploration stage since its
      formation and has not yet realized any revenues from its planned
      operations. The Company was formed for the purpose of acquiring
      exploration and development stage natural resource properties. The Company
      has not commenced business operations. The Company is an exploration stage
      company as defined in the Securities and Exchange Commission (S.E.C.)
      Industry Guide No. 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Forward Stock Split                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended November 30, 2009, the Company completed a three-for-one forward stock split of its common stock. The Companys authorized common stock was increased from 100,000,000 shares with a par value of
      $0.001 per share to 300,000,000 shares with a par value of $0.001. Share and per share amounts (except par value) for the periods presented have been adjusted to reflect the effects of this stock split.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The accompanying financial statements have been prepared assuming the Company will continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | As shown in the accompanying financial statements, the Company has incurred a net loss of $969,976 for the period from April 28, 2006 (inception) to August 31, 2010, and has no revenues. These factors raise substantial doubt
      about the Companys ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its natural resource properties. Management
      has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of
      and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future
      events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The financial statements have, in managements opinion, been properly prepared within the framework of the significant accounting policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | b)                                        
|   |                                           
|   |                                           
|   |                                           
|   | c)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | c)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | d)                                        
|   |                                           
|   |                                           
|   |                                           
|   | e)                                        
|   |                                           
|   |                                           
|   |                                           
|   | f)                                        
|   |                                           
|   |                                           
|   |                                           
|   | g)                                        
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | h)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | i)                                        
|   |                                           
|   |                                           
|   |                                           
|   | j)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

AUGUST 31
      
      
      August 312010
      
      
      2009Convertible notes
      
      2,890,582
      
      
      2,842,300Share purchase warrants
      
      3,600,000
      
      
      4,650,000


---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | k)                                        
|   |                                           
|   |                                           
|   |                                           
|   | l)                                        
|   |                                           
|   |                                           
|   |                                           
|   | m)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | n)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | o)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | p)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

| | Level 1: | Observable inputs such as quoted prices in active
      markets;                                                                        
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                         
| | Level 2: | Inputs, other than the quoted prices in active markets,
      that are observable either directly or indirectly; and                    
| |          |                                                                                                                                         
| | Level 3: | Unobservable inputs in which there is little or no market
      data, which require the reporting entity to develop its own assumptions.

The Company measured their marketable
  securities using Level 3 fair value assumptions as at August 31, 2010. The fair
  value of the common shares received (see Note 12) was determined as the
  difference between the Companys cash advances paid and the cash advances to be
  recovered from Solfotara Minerals Corp. The Company did not have any fair value
  adjustments for assets and liabilities measured at fair value on a nonrecurring
  basis during the nine month period ended August 31, 2010.

The following table presents
  information about the Companys financial instruments that have been measured at
  fair value as of August 31, 2010, and indicates the fair value hierarchy of the
  valuation inputs utilized to determine such fair values:

| |                                                        |   |            |  |   | QUOTED    |  |   | SIGNIFICANT |  |   |              | 
| | ------------------------------------------------------ | - | ---------- |  | - | --------- |  | - | ----------- |  | - | ------------ | 
| |                                                        |   | FAIR VALUE |  |   | PRICES    |  |   | OTHER       |  |   |              | 
| |                                                        |   | AT         |  |   | IN ACTIVE |  |   | OBSERVABLE  |  |   | UNOBSERVABLE | 
| |                                                        |   | AUGUST 31  |  |   | MARKETS   |  |   | INPUTS      |  |   | INPUTS       | 
| | DESCRIPTION                                            |   | 2010       |  |   | (LEVEL 1) |  |   | (LEVEL 2)   |  |   | (LEVEL 3)    | 
| |                                                        |   |            |  |   |           |  |   |             |  |   |              | 
| |                                                        |   |            |  |   |           |  |   |             |  |   |              | 
| | Assets:                                                |   |            |  |   |           |  |   |             |  |   |              | 
| | Cash                                                   | $ | 15,692     |  | $ | 15,692    |  | $ | -           |  | $ | -            | 
| | Marketable securities                                  |   | 10,367     |  |   | -         |  |   | -           |  |   | 10,367       | 
| | Assets measured at fair value
      at August 31, 2010 | $ | 26,059     |  | $ | 15,692    |  | $ | -           |  | $ | 10,367       | 

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | q)                                        
|   |                                           
|   |                                           
|   |                                           
|   | r)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|3. | COMPUTER EQUIPMENT
|-- | ------------------

| |                    |   |       |  |   | AUGUST 31    |  |   |          |  |   | NOVEMBER 30 | 
| | ------------------ | - | ----- |  | - | ------------ |  | - | -------- |  | - | ----------- | 
| |                    |   |       |  |   | 2010         |  |   |          |  |   | 2009        | 
| |                    |   |       |  |   | ACCUMULATED  |  |   | NET BOOK |  |   | NET BOOK    | 
| |                    |   | COST  |  |   | AMORTIZATION |  |   | VALUE    |  |   | VALUE       | 
| |                    |   |       |  |   |              |  |   |          |  |   |             | 
| | Computer Equipment | $ | 1,516 |  | $ | 1,516        |  | $ | -        |  | $ | 253         | 

|4. | MINERAL PROPERTY ACQUISITION
      COSTS
|-- | ----------------------------------------

| |                        |   |             |  |   |           |  |   |            |   |   |          |   |   | RECOVERY        |  |   |           | 
| | ---------------------- | - | ----------- |  | - | --------- |  | - | ---------- | - | - | -------- | - | - | --------------- |  | - | --------- | 
| |                        |   | NOVEMBER 30 |  |   |           |  |   | ABANDONED, |   |   |          |   |   | RECOGNIZED      |  |   | AUGUST 31 | 
| |                        |   | 2009        |  |   | ADDITIONS |  |   | IMPAIRED   |   |   | RECOVERY |   |   | AS
      INCOME |  |   | 2010      | 
| | Mineral Property       |   |             |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |           | 
| |                        |   |             |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |           | 
| | Clisbako claims (a)    | $ | 392,600     |  | $ | 6,450     |  | $ | -          |   | $ | -        |   | $ | -               |  | $ | 399,050   | 
| | Eureka claims (b)      |   | 47,500      |  |   | 15,025    |  |   | -          |   |   | -        |   |   | -               |  |   | 62,525    | 
| | Manado Gold claims (c) |   | -           |  |   | 50,050    |  |   | -          |   |   | (58,544  | ) |   | 8,494           |  |   | -         | 
| | June claims (d)        |   | -           |  |   | 3,000     |  |   | (3,000     | ) |   | -        |   |   | -               |  |   | -         | 
| |                        |   |             |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |           | 
| |                        | $ | 440,100     |  | $ | 74,525    |  | $ | (3,000     | ) | $ | (58,544  | ) | $ | 8,494           |  | $ | 461,575   | 

| |                     |   | NOVEMBER 30 |  |   |           |  |   | ABANDONED, |  |   | NOVEMBER 30 | 
| | ------------------- | - | ----------- |  | - | --------- |  | - | ---------- |  | - | ----------- | 
| |                     |   | 2008        |  |   | ADDITIONS |  |   | IMPAIRED   |  |   | 2009        | 
| | Mineral Property    |   |             |  |   |           |  |   |            |  |   |             | 
| |                     |   |             |  |   |           |  |   |            |  |   |             | 
| | Clisbako claims (a) | $ | -           |  | $ | 392,600   |  | $ | -          |  | $ | 392,600     | 
| | Eureka claims (b)   |   | -           |  |   | 47,500    |  |   | -          |  |   | 47,500      | 
| |                     |   |             |  |   |           |  |   |            |  |   |             | 
| |                     | $ | -           |  | $ | 440,100   |  | $ | -          |  | $ | 440,100     | 

| | a) | Clisbako Claims                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | On December 16, 2008, the Company entered into a purchase
      agreement to acquire an undivided 100% interest in a group of ten mineral
      claims (collectively known as the Clisbako claims) located in the
      Cariboo Mining Division of British Columbia, Canada. Consideration for the
      claims was 6,000,000 shares (issued  see Note 8(a)) of the Companys
      common stock with a value of $300,000 and the issuance to the vendor of a
      promissory note in the amount of $56,600 payable June 30, 2009. On July
      23, 2009, the Company reached an agreement with the vendor to extend the
      deadline of the promissory note to December 31, 2009. In consideration of
      the extension of the deadline, the Company issued 60,000 common shares to
      the vendor with a fair value of $36,000. The promissory note is unsecured
      and free of interest.

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|4. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | a)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | b)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|4. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | i)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | ii)                                          
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   | iii)                                         
|   |                                              
|   |                                              
|   |                                              
|   |                                              

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|4. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------

| | c) | Manado Gold Claims(Continued)
| | -- | -----------------------------

| | iv) | An additional 34% interest on completion of a scoping
      study on the claims.                                                                                                                                                                                                                                                                                                                                                    
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Upon the Company earning an 85% interest as outlined
      above, the vendor shall be carried and shall not be obligated to pay their
      proportionate share of the costs to complete a feasibility study and to
      place the claims into commercial production. On completion of the
      feasibility study, the Company shall have the option to acquire the
      remaining 15% interest for a cash payment of $5,000,000.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | Futhermore, in August 2010, the Company entered into an agreement with Manado Gold Corp (“the Assignee”) to assign a 75% undivided interest in the original option agreement. The consideration for the assignment is:                                                                                                                                                                                                              

| | (a) | The reimbursement by the Assignee of $80,000 in
      expenditures incurred by the Company in connection with the original
      option agreement payable as follows:
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

(i) $40,000 on execution of this
  Agreement (received); 
  (ii) $40,000 on or before September 15, 2010 ($18,544
  received as at August 31, 2010; Cdn $10,000 subsequently received).

| | (b) | The Assignee incurring expenditures to complete
      exploration on or place into production the Manado Gold Property as
      follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------

(i) $250,000 within the first year of
  the Acquisition Agreement; 
  (ii) $500,000 prior to the secondanniversary of the Acquisition Agreement; and 
  (iii) $1,000,000 prior
  to the thirdanniversary of the execution of the Acquisition
  Agreement.

| | (c) | Following completion of the expenditures set out in (b)
      above, the Assignee making the expenditures necessary to complete a
      scoping study on the Manado Gold Property.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                   
| | (d) | The Assignee issuing 950,000 shares of its common stock
      to the Company, as follows:                                                                                         

(i) 150,000 shares on execution of the
  Acquisition Agreement; 
  (ii) 300,000 shares prior to the firstanniversary the Acquisition Agreement; and 
  (iii) 500,000 shares prior
  to the secondanniversary of the Acquisition Agreement.

| | (e) | The Assignee making payments to the Concession Owners as
      follows:
| | --- | -----------------------------------------------------------------------

(i) $75,000 on execution of the
  Acquisition Agreement; 
  (ii) $100,000 on the firstanniversary of
  the execution of the Acquisition Agreement; and 
  (iii) $200,000 on the
  secondanniversary of the execution of the Acquisition Agreement.

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|4. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              

| | (a) | 7.5% undivided interest upon completion of the items set
      out in (a), (b)(i), (d)(i) and (e)(i) above;                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                             
| | (b) | 11.25% undivided interest upon completion of the items
      set out in paragraphs (b)(ii), (d)(ii) and (e)(iii) above;     
| |     |                                                                                                                             
| | (c) | 19.5% undivided interest upon completion of the items set
      out in paragraphs (b)(iii), (d)(iii) and (e)(iii) above; and
| |     |                                                                                                                             
| | (d) | 25.5% undivided interest on completing the scoping study
      described in paragraph (c) above.                            

| |    | If the Assignee exercises its rights under the Agreement,
      the Company will be carried through the first $1,750,000 of expenditures
      and through completion of a scoping study. Thereafter the Company will be
      responsible for its proportionate share. The Company will remain
      responsible to issue up to 950,000 of its common shares to the Concession
      Holders under the formal agreement.                                              
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | In the event the Company elects to exercise its option to
      purchase the Concession Owners 15% carried interest, the Assignee will
      have the right to participate as to 75% in the exercise of that
      option.                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Assuming that the Assignee exercise all its options under
      the Agreement, the Assignee will have acquired 63.75% undivided interest
      in the Manado Gold Property and the Company will retain an 11.25% interest
      in the Manado Gold Property, In the even the option acquire the Concession
      Holders carried interest is exercised, the Assignee will hold a 75%
      undivided interest and the Company will hold a 25% undivided
      interest
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | d) | June Claims                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | On February 5, 2010, the Company entered into an option
      agreement to acquire an undivided 100% interest in a series of mineral
      claims (collectively known as the June claims) situated in the Alberni
      Mining Division of British Columbia, Canada. Consideration for the claims
      is as follows:                                                                                                                                               

| | i) | Payment of $3,000 due on February 5, 2010
      (paid);
| | -- | -------------------------------------------------------

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|4. | MINERAL PROPERTY AND ACQUISITION COSTS(Continued)
|-- | -------------------------------------------------
|   |                                                  
|   | d)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  

|   | During the period ended August 31, 2010, the Company
      abandoned and wrote off all costs incurred with respect to the June
      property.                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|5. | PROMISSORY NOTE PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company entered into a promissory note agreement
      whereby it borrowed $75,000 from an arms length party. The note bears
      interest at 10% per annum, is unsecured and repayable on demand. As at
      August 31, 2010, a total of $2,877 has been accrued as interest on this
      note.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|6. | PROMISSORY NOTES PAYABLE TO RELATED
      PARTIES                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On December 19, 2007, the Company entered into a
      promissory note whereby it borrowed $20,000. The note is unsecured,
      repayable on demand and bears interest at 10% per annum, payable annually.
      As at August 31, 2010, a total of $5,403 has been accrued as interest
      payable on the loan. During the year ended November 30, 2008, the owner of
      the company holding the promissory note became an officer and director of
      the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|7. | LOAN PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On October 1, 2008, the Company received a loan from an
      arms length party of $10,000. The loan is unsecured, repayable on demand
      and bears interest at 10% per annum, payable annually. During the year
      ended November 30, 2009, the Company paid back $4,610 of this balance. As
      at August 31, 2010, a total of $1,491 has been accrued as interest payable
      on the loan.                                                                   

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|8. | CAPITAL STOCK
|-- | -------------
|   |              
|   | a)           
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|8. | CAPITAL STOCK(Continued)
|-- | ------------------------
|   |                         
|   | b)                      
|   |                         
|   |                         

NUMBER OF
      EXERCISEWARRANTS
      PRICE
      EXPIRY DATE3,000,000
      $0.033
      September 4, 2010*100,000
      $ 0.15
      July 26, 2012500,000
      $ 0.15
      August 10, 20123,600,000


* Expired subsequent to the nine month
  period ended August 31, 2010.

A summary of changes in share purchase
  warrants for the year ended November 30, 2009 and for the nine month period
  ended August 31, 2010 is presented below:

NUMBER OF
      
      
      WEIGHTED AVERAGEWARRANTS
      
      
      EXERCISE PRICEBalance, November 30, 2008
      
      3,000,000
      
      $
      0.033Issued (Note 9)
      
      1,650,000
      
      $
      0.083Balance, November 30, 2009
      
      4,650,000
      
      $
      0.05Granted
      
      600,000
      
      $
      0.15Exercised
      
      (150,000
      )
      $
      (0.083
      )Expired (Note 9)
      
      (1,500,000
      )
      $
      (0.083
      )Balance, August 31, 2010
      
      3,600,000
      
      $
      0.05


The fair value ofwarrants issue the
  warrants issued in connection with the private placement during the period ended
  August 31, 2010 was measured at the award date using the Black-Scholes option
  pricing model with the following weighted average assumptions: expected dividend
  yield of 0%; average risk free interest rate of 1.46%; expected volatility of
  168% and a term of 2 years. Of the total proceeds, $21,750 was allocated to
  share purchase warrants.

The fair value of the d during the
  year ended November 30, 2009 was measured as disclosed in Note 9.

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|8. | CAPITAL STOCK(Continued)
|-- | ------------------------
|   |                         
|   | c)                      
|   |                         
|   |                         

|9. | CONVERTIBLE NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On April 30, 2009, the Company issued 55, $2,500 Convertible Notes (the notes) in the aggregate amount of $137,500 due and payable on or before October 31, 2010, with interest charged at the rate of 10% per
      annum payable annually. Attached to the Notes were 550,000 share purchase warrants (10,000 attached to each of the 55 notes). Each warrant entitles the holder to purchase three shares of the Companys common stock for a period expiring one year
      from the date of issuance of the notes at an exercise price of $0.25 ($0.083 per share). At the election of the holder, the notes and interest accrued thereon are convertible into such number of shares of the Companys common stock as
      shall be equal to the principal amount of the convertible note to be converted divided by $0.05. Conversion of the notes does not affect the warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During the year ended November 30, 2008, the Company had received $67,500 towards the convertible notes offering. During the year end November 30, 2009, the Company received the remaining $70,000 towards this offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has allocated the proceeds received between the notes and the detachable warrants on a relative fair value basis. The fair value of the warrants was estimated using the Black-Scholes option pricing model at the date of
      issue with the following weighted average assumptions: expected dividend yield of 0%; average risk free interest rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The fair value of the notes was estimated by multiplying the number
      of shares that would result from an immediate exercise of the conversion option, by the market price on the date of issue. The relative fair values of the notes and the warrants determine the debt discount attributable to the warrants. The result
      was $47,479 of the proceeds being allocated to the warrants and $90,021 being allocated to the notes. The resulting discount on the notes is amortized over the term of the notes to maturity such that, in the absence of any conversions, the
      carrying value of the notes at maturity would be equal to the face amount of $137,500. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized discount as of the date of
      conversion is immediately charged to operations.

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|9.  | CONVERTIBLE NOTES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In accordance with the provisions of ASC 470  20, the
      Company determines the intrinsic value of the beneficial conversion
      feature on the notes by comparing the market price of the Companys common
      stock at issuance of the notes to the effective conversion price of the
      notes, as determined by dividing the proceeds allocated to the notes by
      the number of shares that would result from an immediate exercise of the
      conversion option. The initial beneficial conversion feature was
      determined to be $734,250; however, in accordance with the provisions of
      ASC 470  20, it is limited to the proceeds allocated to the notes, being
      $90,021. This beneficial conversion feature is recorded as an immediate
      charge to additional paid-in capital and a further discount on the
      convertible note carrying value. This further discount is amortized over
      the term of the notes to maturity. In the event of a conversion of any, or
      all, of the face amount of the notes, the proportionate amount of the
      unamortized beneficial conversion feature as of the date of conversion is
      immediately charged to operations.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | During the nine month period ended August 31, 2010, the
      Company recorded as finance charges, $31,094 of amortization of the
      discount resulting from the allocation of proceeds to the warrants and a
      further $45,769 of the intrinsic value of the beneficial conversion
      feature, leaving total unamortized amounts of $9,148.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | During the nine month period ended August 31, 2010,
      $10,000 of principal was converted into 200,000 shares of the Companys
      common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10. | UNIT AND SHARE SUBSCRIPTIONS RECEIVED IN
      ADVANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|10. | UNIT AND SHARE SUBSCRIPTIONS RECEIVED IN ADVANCE(Continued)
|--- | -----------------------------------------------------------
|    |                                                            
|    | b)                                                         
|    |                                                            
|    |                                                            
|    |                                                            
|    |                                                            

|11. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | During the nine month period ended August 31, 2010, the
      Company paid or accrued management fees for services performed in the
      amount of $27,000 (2009 - $27,000) to the board of directors of
      MAC.                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | These transactions with related parties were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the parties. The amounts due to related parties are non-interest bearing with no fixed terms of repayment.                                            
|    |                                                                                                                                                                                                                                                                                                                                                           
|12. | MARKETABLE SECURITIES AND ADVANCES                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | The Company entered into a letter of intent dated August
      6, 2008 with Magellan Copper and Gold PLC (Magellan) to acquire 100% of
      the issued and outstanding shares of Magellan Resources PTE Ltd. and St.
      Anthony Resources PTE Ltd. (Magellan Subsidiaries). Consideration for
      the transaction will consist of the following:
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | •                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | •                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                           
|    | •                                                                                                                                                                                                                                                                                                                                                         

Pending the closing of the transaction,
  the Company will advance $35,000 per month to Magellan for payment of expenses
  related to the mineral properties held by Magellan subsidiaries. During the year
  ended November 30, 2008, the Company advanced a total of $110,367 to Magellan in
  connection with the letter of intent.

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|12. | MARKETABLE SECURITIES AND ADVANCES(Continued)                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                      
|    | On December 15, 2008, the Company decided not to pursue
      with the letter of intent and entered into an agreement with Solfotara
      Minerals Corp., a private Canadian company, whereby the Company would
      transfer their option to acquire the Magellan Subsidiaries for
      consideration as follows:
|    |                                                                                                                                                                                                                                                                                                                      
|    | •                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                      
|    | •                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                      
|    | •                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                      
|    | •                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                      
|    | The total value attributed to the common stock received
      from Solfotara Minerals Corp. was $10,367, or approximately $0.04 per
      share.                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                      
|13. | COMMITMENTS AND CONTRACTUAL OBLIGATIONS                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                      
|    | The Company has no significant commitments or contractual
      obligations with any parties respecting executive compensation, consulting
      arrangements or other matters. Rental of premises and investor relations
      services are provided on a month-to-month basis.                                     
|    |                                                                                                                                                                                                                                                                                                                      
|14. | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                      
|    | The Company has one reportable operating segment, being
      the acquisition and exploration of mineral properties. Details of
      identifiable assets by geographic segments are as
      follows:                                                                                                               

MINERALCAPITAL
      
      
      PROPERTYASSETS
      
      
      INTERESTSAugust 31, 2010USA
      $
      -
      
      $
      62,525Canada
      
      -
      
      
      399,050Indonesia
      
      -
      
      
      -$
      -
      
      $
      461,575


---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|14. | SEGMENT INFORMATION(Continued)
|--- | ------------------------------

MINERALCAPITAL
      
      
      PROPERTYASSETS
      
      
      INTERESTSNovember 30, 2009USA
      $
      -
      
      $
      47,500Canada
      
      253
      
      
      392,600$
      253
      
      $
      440,100


|15. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | On September 15, 2010, the Company, through its wholly
      owned subsidiary, CMI., entered into an option agreement (the "Clisbako
      Option Agreement") with Manado Gold Corp. whereby the Company granted
      Manado Gold Corp. the sole and exclusive right and option to acquire a 75%
      undivided interest in the Clisbako Property. Under the terms of the Option
      Agreement, Manado Gold Corp. will exercise its option upon completing the
      following:
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

PENGRAM CORPORATION(An
      Exploration Stage Company)

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AUGUST 31, 2010(Unaudited)

|15. | SUBSEQUENT EVENTS(Continued)
|--- | ----------------------------
|    |                             
|    | 3.                          
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             
|    |                             

Manado Gold Corp. will also be
  responsible to make all government payments required to keep the claims in good
  standing.

---

|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF
      FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------------

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

Certain statements contained in this Quarterly Report
constitute "forward-looking statements. These statements, identified by words
such as plan, "anticipate, "believe, "estimate, "should, "expect" and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Part II - Item 1A. Risk
Factors and elsewhere in this Quarterly Report. We advise you to carefully
review the reports and documents we file from time to time with the United
States Securities and Exchange Commission (the SEC), particularly our periodic
reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the
Exchange Act).

OVERVIEW

We were incorporated on April 28, 2006 under the laws of the
State of Nevada.

Our business plan is to assemble a portfolio of mineral
properties with gold potential and to engage in the exploration and development
of these properties. We currently own a 100% interest in our mineral property
called the Clisbako Property and have an option to acquire: (i) a 100%
interest in the Golden Snow Project," the Fish Project and the CPG Project"
(collectively referred to as the Eureka Optioned Properties); and (ii) up to
an 85% interest in the Manado Gold Property.

On August 24, 2010, we entered into an assignment agreement
(the Manado Assignment Agreement) with Manado Gold Corp. (Manado Corp.)
whereby we assigned 75% of our interest in the option agreement (the Manado
Agreement) dated November 2, 2009, as amended, between us and Agus Abidin on
behalf of the owners of the K.P. corporations holding the mineral properties
(the Concession Owners) located in Northern Sulawesi, Indonesia (the Manado
Gold Property). Under the terms of the Manado Agreement, we acquired the right
to enter into an agreement (the Acquisition Agreement) to acquire up to 85% in
the Manado Gold Property. See Manado Gold Property.

Subsequent to our quarter ended August 31, 2010, we entered
into an option agreement (the Clisbako Option Agreement) with Manado Corp.
dated September 15, 2010, whereby we granted Manado Corp. the sole and exclusive
right and option to acquire a 75% undivided interest in the Clisbako Property.
Under the terms of the Clisbako Option Agreement, Manado Corp. will exercise its
option upon paying Clisbako Inc. an aggregate of USD $150,000, issuing 600,000
shares of Manado Corp.s common stock (the Shares) and incurring CAD $650,000
in exploration expenditures on the Clisbako Property in stages over a three year
period. See Clisbako Property.

We anticipate that we will focus our resources on the
exploration of the Eureka Optioned Properties due to their potential and current
state of development.

We are actively reviewing other gold potential mineral
properties for future acquisition.

RECENT CORPORATE DEVELOPMENTS

We experienced the following corporate developments since the
filing of our Quarterly Report on Form 10-Q for the quarter ended May 31, 2010
on July 20, 2010:

Issuances under U.S. Private Placement

During the quarter ended August 31, 2010, we issued the
following units under our U.S. Private Placement Offering:

|1. | On July 20, 2010, we issued 500,000 units (each a Unit)
      at a price of $0.10 per Unit pursuant to Rule 506 of Regulation D
      promulgated under the United States Securities Act of 1933 (the
      Securities Act).
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---

|   | Each Unit consists of one share of our common stock (each
      a Share) and one share purchase warrant (each a Warrant), with each
      warrant entitling the subscriber to purchase an additional share of our
      common stock at an exercise price of $0.15 US per share for a period
      expiring two years from the date of issuance. The subscriber represented
      that it was an Accredited Investor as that term is defined under
      Regulation D of the Securities Act.                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | On August 4, 2010, we issued 100,000 Units at a price of
      $0.10 per Unit pursuant to Rule 506 of Regulation D promulgated under the
      Securities Act. Each Unit consists of one Share of our common stock and
      one Warrant, with each warrant entitling the subscriber to purchase an
      additional share of our common stock at an exercise price of $0.15 US per
      share for a period expiring two years from the date of issuance. The
      subscriber represented that he was an Accredited Investor as that term
      is defined under Regulation D of the Securities
Act.

Assignment of Option to Acquire Manado Gold Property

On August 24, 2010 we entered into the Manado Assignment
Agreement with Manado Corp. See Manado Gold Property.

Clisbako Option Agreement

On September 15, 2010, we, through our wholly owned subsidiary
Clisbako Inc., entered into the Clisbako Option Agreement. See Clisbako
Property.

CLISBAKO PROPERTY

The Clisbako Property covers an area of approximately 3,388
hectares and is located in the Interior Plateau Region of north central British
Columbia. It is composed of ten contiguous mineral claims, situated within the
Cariboo Mining Division. The claims are situated approximately 125 kilometers
west of Quesnel, British Columbia.

Our acquisition of the Clisbako Property was completed under
the terms of a purchase agreement dated December 16, 2008 with Bako Resources
Inc. (Bako). Under the terms of the purchase agreement, we issued to Bako
2,000,000 pre-split (6,000,000 post-split) shares and a promissory note in the
amount of $70,000 CDN ($56,600 USD equivalent to $66,350 USD as at August 31,
2010) payable on June 30, 2009 (the Promissory Note). On July 23, 2009, we
entered into an extension agreement with Bako to extend the due date of the
Promissory Note to December 31, 2009. In consideration of this extension, we
issued 60,000 shares of our common stock to Bako. On January 21, 2010, we
entered into a second extension agreement with Bako, whereby Bako agreed to
extend the Promissory Note from December 31, 2009 to February 15, 2010. In
consideration of the extension, we issued to Bako 10,000 shares of our common
stock. On March 15, 2010, we entered into a third extension agreement dated for
reference February 15, 2010, with Bako, whereby Bako agreed to extend the due
date of the Promissory Note from February 15, 2010 to June 30, 2010. In
consideration of this extension, we paid CDN $5,000 of the Promissory Note and
issued to Bako 20,000 shares of our common stock. Pursuant to a verbal
agreement, Bako agreed to extend the promissory note to July 31, 2010. On
September 17, 2010 we paid $50,000 CDN of the Promissory Note and pursuant to a
verbal agreement have agreed to extend the balance of the Promissory Note, being
$15,000 CDN, to December 31, 2010.

Clisbako Option Agreement

On September 15, 2010, Clisbako Inc., our wholly-owned
subsidiary entered into an option agreement (the "Clisbako Option Agreement")
with Manado Corp. whereby we granted Manado Corp. the sole and exclusive right
and option to acquire a 75% undivided interest of the Clisbako Property. Under
the terms of the Option Agreement, Manado Corp. will exercise its option upon
completing the following:

|1. | Paying to Clisbako Inc. an aggregate of USD $150,000 as
      follows:
|-- | ----------------------------------------------------------------------
|   |                                                                       
|   | (a)                                                                   
|   |                                                                       
|   | (b)                                                                   

4

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|   | (c)                                                                                          | a further USD $50,000 on or before January 31,
    2011.           
|-- | -------------------------------------------------------------------------------------------- | -------------------------------------------------------------------
|   |                                                                                              |                                                                    
|2. | Issuing an aggregate of 600,000 Shares to Clisbako Inc as
      follows:                    
|   |                                                                                              |                                                                    
|   | (a)                                                                                          | 100,000 Shares on or before September 15, 2011;                    
|   |                                                                                              |                                                                    
|   | (b)                                                                                          | a further 200,000 Shares on or before September 15, 2012;
      and
|   |                                                                                              |                                                                    
|   | (c)                                                                                          | a further 300,000 Shares on or before September 15,
      2013.    
|   |                                                                                              |                                                                    
|3. | Incurring Exploration Expenditures of CAD$650,000 on the
      Clisbako Property as follows:
|   |                                                                                              |                                                                    
|   | (a)                                                                                          | $100,000 on or before September 15, 2011;                          
|   |                                                                                              |                                                                    
|   | (b)                                                                                          | a further $300,000 on or before September 15, 2012;
      and      
|   |                                                                                              |                                                                    
|   | (c)                                                                                          | a further $250,000 on or before September 15,
  2013.              

Manado Corp. Will also be responsible to make all government
payments required to keep the claims in good standing.

The agreement is an option only and Manado Corp. may determine
at any time not to proceed in which case it would not be liable to pay any funds
or incur any exploration expenditures beyond the amounts due at the time it
provides notice that it is not proceeding. There is no assurance that Manado
Corp. will exercise the Option.

MANADO GOLD PROPERTY

On January 19, 2010, we entered into an agreement with Agus
Abidin dated for reference November 2, 2009 (the Manado Agreement) to acquire
an option to earn up to an 85% interest in the Manado Gold Property. Under the
terms of the Manado Agreement, we paid $35,000 to the owners of the Manado Gold
Property (the Owners) for the exclusive right to formalize an agreement (the
Acquisition Agreement) to earn up to an 85% undivided interest in the Manado
Gold Property.

Under the terms of the proposed Acquisition Agreement, we will
be able to earn an interest in the Manado Gold Property by making cash payments,
issuing shares and completing work programs at various stages. We will be able
to acquire:

| | (a) | an initial 10% interest in the Manado Gold Property by
      paying $90,000 (of which $15,000 has been paid) and issuing 150,000 shares
      of our common stock to the Owners on execution of the Acquisition
      Agreement, and completing a mineral exploration program at a cost of not
      less than $250,000 prior to the first anniversary of the Acquisition
      Agreement;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | an additional 15% interest in the Manado Gold Property by
      paying $100,000 and issuing 300,000 shares of our common stock to the
      Owners on the first anniversary of the Acquisition Agreement, and
      completing a mineral exploration program at a cost of not less than
      $500,000 prior to the second anniversary of the Acquisition
    Agreement;                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | an additional 26% interest in the Manado Gold Property by
      paying $200,000 and issuing 500,000 shares of our common stock to the
      Owner on the second anniversary of the Acquisition Agreement, and
      completing a mineral exploration program at a cost of not less than
      $1,000,000 prior to the third anniversary of the Acquisition Agreement;
      and           
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | an additional 34% interest in the Manado Gold Property by
      completing a scoping study.                                                                                                                                                                                                                                                                                               

If we acquire an 85% interest in the Manado Gold Property under
the proposed Acquisition Agreement, we will be responsible for the costs of any
feasibility studies and, if warranted, placing the Manado Gold Property into
commercial production. In addition, we will have an option to acquire the
remaining 15% interest in the Manado Gold Property by paying the Owners
$5,000,000.

5

---

Additional terms of the proposed Acquisition Agreement include,
among other things, that we will be responsible for all costs in maintaining the
Manado Gold Property in good standing, and we will have the right to terminate
the Acquisition Agreement on 60 days notice. If the proposed Acquisition
Agreement is terminated, we will be entitled to retain the interest in the
property we earned as of the termination date.

On April 30, 2010, we notified Mr. Abidin that we had elected
to exercise our option to enter into the Acquisition Agreement to acquire up to
an 85% undivided interest in the Manado Gold Property pursuant to the terms of
the Manado Agreement. The entry into the Acquisition Agreement has been delayed
as the Owners of the Manado Gold Property are currently completing changes under
Indonesian law in order to update the companies holding the properties to
compliance under the new Indonesian corporate laws, to convert the tenure under
which the properties are held under the new Indonesian mining laws and to permit
investment by foreign entities in the companies holding the mineral properties.
We have advanced $15,000 of the $90,000 due on execution the Acquisition
Agreement to assist the Owner in making the necessary changes. There is no
assurance that the Owners will be able to complete these changes required under
in order for us to enter into the Acquisition Agreement or earn any interest in
the Manado Gold Property.

Assignment of Option to Acquire Manado Gold Property

On August 24, 2010, we entered into an agreement (the
Agreement) to assign to Manado Corp. a 75% undivided interest in the Manado
Agreement. In consideration of the assignment Manado Corp. agreed to:

|(a) | Reimburse the $80,000 in expenditures we incurred in
      connection with the Manado Agreement payable as follows:       
|--- | --------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                           
|    | (i)                                                                                                                       
|    | (ii)                                                                                                                      
|    |                                                                                                                           
|(b) | Incur expenditures to complete exploration on or place
      into production the Manado Gold Property as follows:         
|    |                                                                                                                           
|    | (i)                                                                                                                       
|    | (ii)                                                                                                                      
|    | (iii)                                                                                                                     
|    |                                                                                                                           
|(c) | Following completion of the expenditures set out in (b)
      above, complete a scoping study on the Manado Gold Property.
|    |                                                                                                                           
|(d) | Issue 950,000 common shares to Clisbako Inc. as
      follows:                                                            
|    |                                                                                                                           
|    | (i)                                                                                                                       
|    | (ii)                                                                                                                      
|    | (iii)                                                                                                                     
|    |                                                                                                                           
|(e) | Paying to the Concession Owners as follows:                                                                               
|    |                                                                                                                           
|    | (i)                                                                                                                       
|    | (ii)                                                                                                                      
|    | (iii)                                                                                                                     

Upon completing the payments expenditures and share issuances
as set out above, Manado Corp. will earn up to 75% of our interest in the Manado
Gold Property as follows:

|(a) | an initial 7.5% undivided interest upon completion of the
      items set out in (a), (b)(i), (d)(i) and (e)(i) above;                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                         
|(b) | an additional 11.25% undivided interest upon completion
      of the items set out in paragraphs (b)(ii), (d)(ii) and (e)(ii)
    above;

6

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|(c) | an additional 19.5% undivided interest upon completion of
      the items set out in paragraphs (b)(iii), (d)(iii) and (e)(iii) above;
      and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                 
|(d) | an additional 25.5% undivided interest on completing the
      scoping study described in paragraph (c) above.                                  

If Manado Corp. exercises its rights under the Agreement, we
will be carried through the first $1,750,000 of expenditures and through
completion of a scoping study. Thereafter, we will be responsible for our
proportionate share of any additional expenditures necessary to place the Manado
Gold Property into production. We will remain responsible to issue up to 950,000
of our common shares to the Concession Holders under the Acquisition
Agreement.

In the event that we elect to exercise our option to purchase
the Concession Owners 15% carried interest and subject to Manado Corp. being in
good standing under this Manado Assignment Agreement, Manado Corp. will have the
right to participate as to 75% in the exercise of that option.

The Agreement is an option only and Manado Corp. may determine
at any time not to proceed in which case it would not be liable to pay any
funds, incur any exploration expenditures or issue any shares beyond the amounts
due at the time it provides notice that it is not proceeding. There is no
assurance that Manado Corp. will exercise the Option.

Assuming that Manado Corp. exercises all its options under the
Agreement, Manado Corp. will have acquired a 63.75% undivided interest in the
Manado Gold Property and we will retain an 11.25% interest in the Manado Gold
Property. In the event the option to acquire the Concession Holders carried
interest is exercised, Manado Corp. will hold a 75% undivided interest and we
will hold a 25% undivided interest.

GOLDEN SNOW PROJECT, FISH PROJECT AND CPG PROJECT

One May 29, 2009, we acquired an option to acquire a 100%
undivided interest (the Option Agreement) in certain mineral properties known
as the Golden Snow Project in Eureka County, Nevada, the Fish Project in
Esmeralda County, Nevada and the CPG Project in Mineral County, Nevada
(collectively, the Eureka Optioned Properties). Our acquisition of the option
was completed pursuant to the terms and conditions of an assignment agreement
(the Assignment Agreement) dated May 29, 2009 with Portal Resources Ltd.
(PRL) and Portal Resources US Inc.s (the Assignor). Under the terms of the
Assignment Agreement, the Assignor assigned all of its rights and interest in
the an option agreement (the Option Agreement) dated August 28, 2008 among the
Assignor, Claremont Nevada Mines LLC (Claremont), Scoonover Exploration LLC
(Scoonover) and JR Exploration LLC (JR). In consideration of the assignment,
we issued 150,000 shares of common stock to PRL.

In order to maintain and exercise the Option Agreement, we will
be required to:

|(a) | pay to Claremont:                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                        
|    | (i)                                                                                                                                                                                                                                                    
|    | (ii)                                                                                                                                                                                                                                                   
|    | (iii)                                                                                                                                                                                                                                                  
|    | (iv)                                                                                                                                                                                                                                                   
|    | (v)                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                        
|(b) | pay the annual claim maintenance fees for the Eureka
      Optioned Properties during the term of the Option Agreement. The Eureka
      Optioned Properties are in good standing until September 1, 2011;
    and                                     
|    |                                                                                                                                                                                                                                                        
|(c) | pay $1,000 to Claremont in conjunction with the delivery
      to Claremont of a copy of a mine plan of operations in respect of the
      Eureka Optioned Properties, or a final feasibility study in respect of the
      Eureka Optioned Properties.

7

---

Upon our exercising of the Option Agreement, Claremont,
Scoonover and JR will collectively reserve a 3% net smelter royalty on the
Eureka Optioned Properties. We may purchase up to 2% of the royalty for $500,000
per 1% of the royalty.

PLAN OF OPERATION

Over the next twelve months, our plan of operation is to focus
our resources on the exploration of the Eureka Optioned Properties as set out
below:

Golden Snow Project, Fish Project and CPG
Project

Subject to obtaining sufficient financing, in early 2011, we
plan to retain a consulting geologist to conduct a review of these properties in
order to recommend an exploration program to be conducted in summer 2011. Once
our consulting geologist has provided us with their findings, we will determine
whether to proceed with an exploration program on these properties.

During the next twelve months, we will be required to make a
number of payments in order to maintain our options to acquire the Golden Snow
Project, Fish Project and CPG Project. Under the terms of our options to acquire
the Golden Snow Project, Fish Project and CPG Project, in order to keep them in
good standing, we are required to pay to Claremont: (i) an option payment of
$20,000 by August 28, 2011; and (ii) the Bureau of Land Management maintenance
and claim fees of approximately $32,583 by September 1, 2011. If we are unable
to make the payments to Claremont, the Bureau of Land Management or pay the
annual maintenance claim fees, we will lose our interest in the Golden Snow
Project, Fish Project and CPG Project.

These agreements are options only and we may determine at any
time not to proceed in which case we would not be liable to pay any funds beyond
the amounts due at the time we provide notice that we are not proceeding. There
is no assurance that we will exercise these options.

As at August 31, 2010, we had $15,692 cash on hand.
Accordingly, we have insufficient cash on hand to proceed with our exploration
on the Golden Snow Project, Fish Project and CPG Project, and meet our ongoing
operating costs. As such, we will require substantial financing in order to meet
our obligations. There is no assurance that we will be able to acquire such
financing on terms that are acceptable to us, or at all.

RESULTS OF OPERATIONS

Three and Nine Months Summary

|         |   | Three      |   |   | Three      |   |  |            |  |   | Nine       |   |   | Nine       |   |  |            | 
|-------- | - | ---------- | - | - | ---------- | - |  | ---------- |  | - | ---------- | - | - | ---------- | - |  | ---------- | 
|         |   | Months     |   |   | Months     |   |  |            |  |   | Months     |   |   | Months     |   |  |            | 
|         |   | Ended      |   |   | Ended      |   |  | Percentage |  |   | Ended      |   |   | Ended      |   |  | Percentage | 
|         |   | August 31, |   |   | August 31, |   |  | Increase / |  |   | August 31, |   |   | August 31, |   |  | Increase / | 
|         |   | 2010       |   |   | 2009       |   |  | (Decrease) |  |   | 2010       |   |   | 2009       |   |  | (Decrease) | 
|Revenue  | $ | Nil        |   | $ | Nil        |   |  | n/a        |  | $ | Nil        |   | $ | Nil        |   |  | n/a        | 
|         |   |            |   |   |            |   |  |            |  |   |            |   |   |            |   |  |            | 
|Expenses |   | (149,865   | ) |   | (120,017   | ) |  | 24.9%      |  |   | (326,861   | ) |   | (250,251   | ) |  | 30.6%      | 
|         |   |            |   |   |            |   |  |            |  |   |            |   |   |            |   |  |            | 
|Net Loss | $ | (149,865   | ) | $ | (120,017   | ) |  | 24.9%      |  | $ | (326,861   | ) | $ | (250,251   | ) |  | 30.6%      | 

Revenue

We have not earned any revenues to date. We do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such deposits are
discovered, that we will enter into further substantial exploration programs.

8

---

Expenses

Our operating expenses for the three and nine months ended
August 31, 2010 and 2009 consisted of the following:

|                                    |   |                           |   |   |            |  |  |            |  |   | Nine       |   |   | Nine       |  |  |            | 
|----------------------------------- | - | ------------------------- | - | - | ---------- |  |  | ---------- |  | - | ---------- | - | - | ---------- |  |  | ---------- | 
|                                    |   | Three Months Three Months |   |   |            |  |  | Months     |  |   | Months     |   |   |            | 
|                                    |   | Ended                     |   |   | Ended      |  |  | Percentage |  |   | Ended      |   |   | Ended      |  |  | Percentage | 
|                                    |   | August 31,                |   |   | August 31, |  |  | Increase / |  |   | August 31, |   |   | August 31, |  |  | Increase / | 
|                                    |   | 2010                      |   |   | 2009       |  |  | (Decrease) |  |   | 2010       |   |   | 2009       |  |  | (Decrease) | 
|Bank Charges and Interest           | $ | 2,417                     |   | $ | 4,333      |  |  | (44.2)%    |  | $ | 13,705     |   | $ | 11,245     |  |  | 21.9%      | 
|Consulting Fees                     |   | 14,800                    |   |   | -          |  |  | 100%       |  |   | 14,800     |   |   | -          |  |  | 100%       | 
|Depreciation Expense                |   | -                         |   |   | 127        |  |  | (100)%     |  |   | 253        |   |   | 379        |  |  | (33.5)%    | 
|Filing and Regulatory               |   | 1,241                     |   |   | 2,019      |  |  | (38.5)%    |  |   | 2,290      |   |   | 4,769      |  |  | (52.0)%    | 
|Incorporation Costs                 |   | -                         |   |   | -          |  |  | n/a        |  |   | -          |   |   | 1,262      |  |  | (100)%     | 
|Finance Charges                     |   | 31,154                    |   |   | 23,105     |  |  | 34.8%      |  |   | 76,863     |   |   | 30,764     |  |  | 149.8%     | 
|Investor Relations                  |   | -                         |   |   | 4,200      |  |  | (100)%     |  |   | 1,000      |   |   | 4,200      |  |  | 76.2%      | 
|Management Fees                     |   | 9,508                     |   |   | 9,000      |  |  | 5.6%       |  |   | 27,508     |   |   | 27,000     |  |  | 1.9%       | 
|Mineral Property Exploration Costs  |   | 33,124                    |   |   | 40,686     |  |  | (18.6)%    |  |   | 34,693     |   |   | 50,414     |  |  | (31.2)%    | 
|Office and Administrative           |   | 6,311                     |   |   | 1,379      |  |  | 357.7%     |  |   | 15,939     |   |   | 6,888      |  |  | 131.4%     | 
|Professional Fees                   |   | 57,044                    |   |   | 35,168     |  |  | 62.2%      |  |   | 139,044    |   |   | 113,330    |  |  | 22.7%      | 
|Recovery on Mineral                 |   | (8,494                    | ) |   | -          |  |  | 100%       |  |   | (8,494     | ) |   | -          |  |  | 100%       | 
|Property                            |   |                           |   |   |            |  |  |            |  |   |            |   |   |            |  |  |            | 
|Travel                              |   | 2,760                     |   |   | -          |  |  | 100%       |  |   | 2,760      |   |   | -          |  |  | 100%       | 
|Website design                      |   | -                         |   |   | -          |  |  | n/a        |  |   | 3,500      |   |   | -          |  |  | 100%       | 
|Write-off of Mineral Property Costs |   | -                         |   |   | -          |  |  | n/a        |  |   | 3,000      |   |   | -          |  |  | 100%       | 
|Total Operating Expenses            | $ | 149,865                   |   | $ | 120,017    |  |  | 24.9%      |  | $ | 326,861    |   | $ | 250,251    |  |  | 30.6%      | 

Our operating expenses during the quarter ended August 31, 2010
totaled $149,865 compared with $120,017 during the quarter ended August 31,
2009. The increase in our operating expenses was primarily a result of increased
finance charges, professional fees, office and administrative expenses and
consulting fees. This increase was partially offset by a decrease in mineral
property and exploration costs, filing and regulatory, and investor
relations.

During the nine months ended August 31, 2010, our operating
expenses increased to $326,861 from $250,251 during the nine months ended August
31, 2009. The increase in our operating expenses was primarily a result of
increased consulting fees, finance charges, professional fees and office and
administrative expenses This increase was partially offset by a decrease in
filing and regulatory, mineral property exploration costs and investor
relations.

Finance fees, during the three and nine months ended August 31,
2010 primarily relate to amortization of the discount resulting from the
allocation of proceeds to the warrants and the intrinsic value beneficial
conversion feature.

9

---

Mineral property exploration costs primarily relate to fees
incurred in connection with maintaining our option on the Golden Snow Project,
the Fish Project and CPG Project and maintaining our Clisbako Property in good
standing.

Management fees relate to fees paid or accrued to the directors
of Magellan Acquisition Corp., our wholly owned Nevada subsidiary.

Professional fees primarily relate to costs incurred in
connection with our option to acquire an interest in the Manado Gold Property,
the entry into option agreements with Manado Corp. and meeting our ongoing
reporting requirements under the Exchange Act.

We anticipate our operating expenses will increase if we
implement our exploration program on our mineral properties.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                    |   |   |                   |   |  |                       | 
|----------------------- | - | ------------------ | - | - | ----------------- | - |  | --------------------- | 
|                        |   |                    |   |   | At                |   |  | Percentage            | 
|                        |   | At August 31, 2010 |   |   | November 30, 2009 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 32,059             |   | $ | 14,078            |   |  | 127.7%                | 
|Current Liabilities     |   | (618,446           | ) |   | (375,065          | ) |  | 64.9%                 | 
|Working Capital Deficit | $ | (586,387           | ) | $ | (360,987          | ) |  | 62.4%                 | 

|Cash Flows                                     |   |                   |   |   |                   |  
|---------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                               |   | Nine Months Ended |   |   | Nine Months Ended |  
|                                               |   | August 31, 2010   |   |   | August 31, 2009   |  
|Cash Flows (Used In) Operating Activities      | $ | (127,539          | ) | $ | (150,496          | )
|Cash Flows (Used In) From Investing Activities |   | (18,075           | ) |   | 40,000            |  
|Cash Flows From Financing Activities           |   | 157,595           |   |   | 80,570            |  
|Increase (Decrease) In Cash During Period      | $ | 11,981            |   | $ | (29,926           | )

The increase in our working capital deficit at August 31, 2010
from our year ended November 30, 2009 is a result of the fact that: (i) accounts
payable increased due to our lack of capital to meet ongoing expenditures; and
(ii) we received a loan of $75,000 from a third party. The loan bears interest
at a rate of 10% per annum and is due on demand.

During the nine months ended August 31, 2010, we received $70,000 from the issuance of our securities as follows:

| | (a) | on February 18, 2010, the issuance of 120,000 shares upon the exercise of warrants for proceeds of $10,000;
| | --- | -----------------------------------------------------------------------------------------------------------
| |     |                                                                                                            
| | (b) | on July 20, 2010, the issuance of 500,000 Units for proceeds of $50,000; and                               
| |     |                                                                                                            
| | (c) | on August 4, 2010, the issuance of 100,000 Units for proceeds of $10,000.                                  

Future Financings

As at August 31, 2010, we had $15,692 cash on hand. Currently,
we do not have sufficient financial resources to complete our plan of operation
for the next twelve months. We have not earned any revenues to date and we do
not anticipate earning revenues in the near future. As such, our ability to
complete our plan of operation is dependent upon our ability to obtain
substantial financing in the near term.

Our Board of Directors have approved a foreign private placement offering of up to 3,000,000 Units at a price of $0.10 per Unit and a U.S. private placement offering of up to 5,000,000 Units at a price of $0.10 per Unit.  As at August 31, 2010, we have issued 600,000 units for gross proceeds of $60,000 under our U.S. private placement and have received $22,465 under our foreign private placement but have not yet issued the securities.  There is no assurance that we will be able to complete the sale of any securities under these offerings.  If we are not successful in raising sufficient financing, our business may fail and our shareholders may lose all or part of their investment.

10

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OFF-BALANCE SHEET ARRANGEMENTS

We have no significant 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.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are disclosed in the notes
to our audited financial statements for the year ended November 30, 2009
included in our Annual Report on Form 10-K filed with the SEC on March 16,
2010.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations.

Use of Estimates

The preparation of financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures. Actual results may differ from the estimates.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method
of accounting. Until such properties are acquired and developed, we will
continue to prepare our financial statements and related disclosures in
accordance with entities in the exploration stage.

Mineral Property Interests

We are an exploration stage mining company and have not yet
realized any revenue from our operations. We are primarily engaged in the
acquisition, exploration and development of mining properties. Exploration costs
are expensed as incurred regardless of the stage of development or existence of
reserves. Costs of acquisition are capitalized subject to impairment testing,
when facts and circumstances indicate impairment may exist.

We regularly perform evaluations of any investment in mineral
properties to assess the recoverability and/or the residual value of our
investments in these assets. All long-lived assets are reviewed for impairment
whenever events or circumstances change which indicate the carrying amount of an
asset may not be recoverable.

Management periodically reviews the carrying value of our
investments in mineral leases and claims with internal and external mining
related professionals. A decision to abandon, reduce or expand a specific
project is based upon many factors including general and specific assessments of
mineral deposits, anticipated future mineral prices, anticipated future costs of
exploring, developing and operating a production mine, the expiration term and
ongoing expenses of maintaining mineral properties and the general likelihood
that we will continue exploration on such project. We do not set a
pre-determined holding period for properties with unproven deposits; however,
properties which have not demonstrated suitable metal concentrations at the
conclusion of each phase of an exploration program are re-evaluated to determine
if future exploration is warranted, whether there has been any impairment in
value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that
its carrying value cannot be supported by future production or sale, the related
costs are charged against operations in the year of abandonment or determination
of value. The amounts recorded as mineral leases and claims represent costs to
date and do not necessarily reflect present or future values.

Our exploration activities are subject to various laws and
regulations governing the protection of the environment. These laws are
continually changing, generally becoming more restrictive. We have made, and
expect to make in the future, expenditures to comply with such laws and
regulations.

11

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The accumulated costs of properties that are developed on the
stage of commercial production will be amortized to operations through
unit-of-production depletion.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.
|------- | -----------------------------------------------------------------

Not Applicable.

|ITEM 4T. | CONTROLS AND PROCEDURES.
|-------- | ------------------------

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of August 31, 2010 (the Evaluation Date). This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed in our Annual Report on Form 10-K for the year ended
November 30, 2009 (the 2009 Annual Report).

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in our 2009 Annual Report, we believe that our financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended August 31,
2010 fairly present our financial condition, results of operations and cash
flows in all material respects.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial
reporting that occurred during the quarter ended August 31, 2010 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.

12

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|ITEM 1A. | RISK FACTORS.
|-------- | -------------

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

If we do not obtain additional financing, our business will
fail.

As of August 31, 2010, we had $15,692 cash on hand and a
working capital deficit of $586,387. Our plan of operation calls for significant
expenses in connection with the exploration and development of the Eureka
Optioned Properties. There is no guarantee that we will to exercise the option
or that in the event we do exercise the option that the acquisition will in fact
occur.

Our Board of Directors have approved a foreign private placement offering of up to 3,000,000 Units at a price of $0.10 per Unit and a U.S. private placement offering of up to 5,000,000 Units at a price of $0.10 per Unit.  As at August 31, 2010, we have issued 600,000 units for gross proceeds of $60,000 under our U.S. private placement and have received $22,465 under our foreign private placement but have not yet issued the securities..  There is no assurance that we will be able to complete the sale of any securities under these offerings.  Obtaining financing would be subject to a number of factors outside of our control, including market conditions and additional costs and expenses that might exceed current estimates.  These factors may make the timing, amount, terms or conditions of financing unavailable to us in which case we will be unable to complete our plan of operation on our mineral properties and to meet our obligations under our option agreements.

We have yet to earn revenue and our ability to sustain our
operations is dependent on our ability to raise financing. As a result, our
auditors believe there is substantial doubt about our ability to continue as a
going concern.

We have a cumulative net loss of $969,976 for the period from
our inception on April 28, 2006 to August 31, 2010, and have no revenues to
date. Our future is dependent upon our ability to obtain financing. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern given our accumulated losses. This opinion could materially limit our
ability to raise additional funds by issuing new debt or equity securities or
otherwise. If we fail to raise sufficient capital, we will not be able to
complete our business plan. As a result, we may have to liquidate our business
and investors may lose their investment. Investors should consider our former
auditor's comments when determining if an investment in us is suitable.

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

Investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

We have no known mineral reserves and if we cannot find any,
we will have to cease operations.

We have no mineral reserves. If we do not find a mineral
reserve containing gold or if we cannot explore the mineral reserve, either
because we do not have the money to do it or because it will not be economically
feasible to do it, we will have to cease operations and you will lose your
investment. Mineral exploration, particularly for

13

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gold, is highly speculative. It involves many risks and is
often non-productive. Even if we are able to find mineral reserves on our
properties, our production capability is subject to further risks including:

- Costs of bringing the property into production including exploration work,
  preparation of production feasibility studies, and construction of production
  facilities, all of which we have not budgeted for;
- Availability and costs of financing;
- Ongoing costs of production; and
- Environmental compliance regulations and restraints.

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near our mineral properties, and such other
factors as government regulations, including regulations relating to allowable
production, importing and exporting of minerals, and environmental
protection.

Given the above noted risks, the chances of finding reserves on
our mineral properties are remote and funds expended on exploration will likely
be lost.

Even if we discover proven reserves of precious metals on
our mineral properties, we may not be able to successfully commence commercial
production.

Our mineral properties do not contain any known bodies of ore.
If our exploration programs are successful in discovering proven reserves on our
mineral properties, we will require additional funds in order to place the
mineral properties into commercial production. The expenditures to be made by us
in the exploration of mineral properties in all probability will be lost as it
is an extremely remote possibility that the mineral claims will contain proven
reserves. If our exploration programs are successful in discovering proven
reserves, we will require additional funds in order to place the mineral
properties into commercial production. The funds required for commercial mineral
production can range from several millions to hundreds of millions. We currently
do not have sufficient funds to place our mineral claims into commercial
production. Obtaining additional financing would be subject to a number of
factors, including the market price for gold and the costs of exploring for or
mining these materials. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. Because we will need
additional financing to fund our exploration activities there is substantial
doubt about our ability to continue as a going concern. At this time, there is a
risk that we will not be able to obtain such financing as and when needed.

We face significant competition in the mineral exploration
industry.

We compete with other mining and exploration companies
possessing greater financial resources and technical facilities than we do in
connection with the acquisition of mineral exploration claims and leases on
precious metal prospects and in connection with the recruitment and retention of
qualified personnel. There is significant competition for precious metals and,
as a result, we may be unable to acquire an interest in attractive mineral
exploration properties on terms we consider acceptable on a continuing
basis.

There is no assurance that we will be able to complete our
purchase of the Manado Gold Property or exercise our options to acquire the
Eureka Optioned Properties.

In order to complete the purchase of the Manado Gold Property
and exercise our options to acquire the Eureka Optioned Properties we are
required to make a series of cash payments and meet the annual claim maintenance
fees. In order to meet these payments we will need to obtain substantial
financing. If we are unable to meet these payments, we will lose our options to
acquire these properties.

We may be unable to conduct exploration activities due to
foreign regulations.

We may have trouble obtaining any necessary permits, and
complying with foreign mining law to do our due diligence. We may be prohibited
by mining laws in Indonesia from conducting due diligence or any other activity
on the Manado Gold Property. We have not conducted any research into the
property, mining, or other applicable laws regarding the Manado Gold
Property.

14

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Because our sole executive officer does not have formal
training specific to the technicalities of mineral exploration, there is a
higher risk that our business will fail.

Richard W. Donaldson, our sole executive officer, does not have
any formal training as a geologist or in the technical aspects of managing a
mineral exploration company. With the exception of Bryan H. Wilson, a director,
our management may not be fully aware of the specific requirements related to
working within this industry. As such, the loss of Mr. Wilsons services could
cause irreparable harm to our operations, earnings, and ultimate financial
success could suffer irreparable harm due to management's lack of experience in
this industry.

Because the prices of metals fluctuate, if the price of
metals for which we are exploring decreases below a specified level, it may no
longer be profitable to explore for those metals and we will cease
operations.

Prices of metals are determined by such factors as expectations
for inflation, the strength of the United States dollar, global and regional
supply and demand, and political and economic conditions and production costs in
metals producing regions of the world. The aggregate effect of these factors on
metal prices is impossible for us to predict. In addition, the prices of
precious metals are sometimes subject to rapid short-term and/or prolonged
changes because of speculative activities. The current demand for and supply of
these metals affect the metal prices, but not necessarily in the same manner as
current supply and demand affect the prices of other commodities. The supply of
these metals primarily consists of new production from mining. If the prices of
the metals are, for a substantial period, below our foreseeable cost of
production, we could cease operations and investors could lose their entire
investment.

We may conduct further offerings in the future in which case
investors shareholdings will be diluted.

Our Board of Directors has approved a foreign private placement
offering of up to 3,000,000 Units for gross proceeds of $300,000 and a U.S.
private placement offering of up to 5,000,000 Units for gross proceeds of up to
$500,000. Since our inception, we have relied on such equity sales of our common
stock to fund our operations. We may conduct further equity offerings in the
future to finance our current projects or to finance subsequent projects that we
decide to undertake. If common stock is issued in return for additional funds,
the price per share could be lower than that paid by our current stockholders.
We anticipate continuing to rely on equity sales of our common stock in order to
fund our business operations. If we issue additional stock, the interests of
existing shareholders will be diluted.

The quotation price of our common stock may be volatile,
with the result that an investor may not be able to sell any shares acquired at
a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTC Bulletin Board under
the symbol "PNGM. Companies quoted on the OTC Bulletin Board have traditionally
experienced extreme price and volume fluctuations. In addition, our stock price
may be adversely affected by factors that are unrelated or disproportionate to
our operating performance. Market fluctuations, as well as general economic,
political and market conditions such as recessions, interest rates or
international currency fluctuations may adversely affect the market price of our
common stock. As a result of this potential volatility and potential lack of a
trading market, an investor may not be able to sell any of our common stock that
they acquire at a price equal or greater than the price paid by the
investor.

Because our stock is a penny stock, shareholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.
Because our securities constitute penny stocks within the meaning of the
rules, the rules apply to us and to our securities. The rules may further affect
the ability of owners of shares to sell our securities in any market that might
develop for them. As long as the trading price of our common stock is less than
$5.00 per share, the common stock will be subject to Rule 15g-9 under the
Exchange Act. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
prepared by the SEC, that:

15

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|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the brokers or dealers duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customers account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those 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 acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock.

|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS.
|------- | ------------------------------------------------------------------

On July 20, 2010 we issued 500,000 units (each a Unit) at a
price of $0.10 per Unit pursuant to Rule 506 of Regulation D promulgated under
the United States Securities Act of 1933 (the Securities Act). Each Unit
consists of one share of our common stock (each a Share) and one share
purchase warrant (each a Warrant), with each warrant entitling the subscriber
to purchase an additional share of our common stock at an exercise price of
$0.15 US per share for a period expiring two years from the date of issuance.
The subscriber represented that he was an Accredited Investor as that term is
defined under Regulation D of the Securities Act.

On August 4, 2010, we issued 100,000 Units at a price of $0.10
per Unit pursuant to Rule 506 of Regulation D promulgated under the Securities
Act. Each Unit consists of one Share of our common stock and one Warrant, with
each warrant entitling the subscriber to purchase an additional share of our
common stock at an exercise price of $0.15 US per share for a period expiring
two years from the date of issuance. The subscriber represented that he was an
Accredited Investor as that term is defined under Regulation D of the
Securities Act.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

Clisbako Option Agreement

On September 15, 2010, Clisbako Inc., our wholly-owned
subsidiary entered into an option agreement (the "Clisbako Option Agreement")
with Manado Corp. whereby we granted Manado Corp. the sole and exclusive

16

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right and option to acquire a 75% undivided interest of the
Clisbako Property. Under the terms of the Option Agreement, Manado Corp. will
exercise its option upon completing the following:

|1. | Paying to Clisbako Inc. an aggregate of USD $150,000 as
      follows:                      
|-- | --------------------------------------------------------------------------------------------
|   |                                                                                             
|   | (a)                                                                                         
|   |                                                                                             
|   | (b)                                                                                         
|   |                                                                                             
|   | (c)                                                                                         
|   |                                                                                             
|2. | Issuing an aggregate of 600,000 Shares to Clisbako Inc as
      follows:                    
|   |                                                                                             
|   | (a)                                                                                         
|   |                                                                                             
|   | (b)                                                                                         
|   |                                                                                             
|   | (c)                                                                                         
|   |                                                                                             
|3. | Incurring Exploration Expenditures of CAD$650,000 on the
      Clisbako Property as follows:
|   |                                                                                             
|   | (a)                                                                                         
|   |                                                                                             
|   | (b)                                                                                         
|   |                                                                                             
|   | (c)                                                                                         

Manado Corp. Will also be responsible
to make all government payments required to keep the claims in good
standing.

The agreement is an option only and Manado Corp. may determine
at any time not to proceed in which case it would not be liable to pay any funds
or incur any exploration expenditures beyond the amounts due at the time it
provides notice that it is not proceeding. There is no assurance that Manado
Corp. will exercise the Option.

Termination of Agreement with Interior Plateau

On July 23, 2010, Clisbako Inc. our wholly-owned subsidiary,
entered into an option agreement (the "Option Agreement") with Interior Plateau
Mining Corp. ("Interior Plateau") granting Interior Plateau the sole and
exclusive right and option to acquire a 75% undivided interest of the Clisbako
Property. Interior Plateau failed to make its first payment of $50,000 on or
before August 31, 2010 and the Option Agreement has terminated.

|ITEM 6. | EXHIBITS.                                                                                                                                                                             
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                       
|Exhibit |                                                                                                                                                                                       
|Number  | Description of Exhibits                                                                                                                                                               
|3.1     | Articles of Incorporation.(1)                                                                                                                                                         
|3.2     | Certificate of Change Pursuant to NRS 78.209 increasing
      the authorized capital of common stock to 300,000,000 shares, par value
      $0.001 per share.(5)                      
|3.3     | Bylaws, as amended.(1)                                                                                                                                                                
|4.1     | Specimen Stock Certificate.(1)                                                                                                                                                        
|10.1    | Loan Agreement dated December 19, 2007 between the
      Company (as the borrower) and Kahala Financial Corp. (as the
      lender).(2)                                               
|10.2    | Purchase Agreement dated December 15, 2008 among Magellan
      Acquisition Corp., Solfotara Mining Corp. and Magellan Copper and Gold plc
      (Magellan Singapore Subsidiaries).(4)
|10.3    | Purchase Agreement dated December 16, 2008 between the
      Company and Bako Resources Inc. (Clisbako Property).(4)                                                                  
|10.4    | Extension Agreement dated July 23, 2009 between the
      Company and Bako Resources Inc.(7)                                                                                          

17

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|Exhibit |                                                                                                                                                                                     
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                                             
|10.5    | Assignment Agreement
        dated May 29, 2009 among the Company, Portal Resources US Inc. and Portal
        Resources Ltd. (Golden Snow Project, Fish Project and CPG Project)(6)
|10.6    | Agreement dated for reference
        November 2, 2009 executed on January 19, 2010 between the Company and
        Agus Abidin (Manado Gold Property).(8)                          
|10.7    | Second Extension
        Agreement dated January 21, 2010 between the Company and Bako Resources
        Inc. (Clisbako Property).(9)                                               
|10.8    | Extension Agreement Dated January
        21, 2010 between the Company and Agus Abidin (Manado Gold Property).(10)                                                                  
|10.9    | Option agreement
        dated February 5, 2010 between the Company and Larry Sostad (June Claims).
        (8)                                                                     
|10.10   | Third Extension Agreement dated
        March 15, 2010 between the Company and Bako Resources Inc. (Clisbako
        Property).(10)                                                 
|10.11   | Second Extension
        Agreement Dated March 29, 2010 between the Company and Agus Abidin (Manado
        Gold Property).(11)                                                     
|10.12   | Loan Agreement dated January
        11, 2010 between the Company and Laverne Assets Group Corp.(12)                                                                                
|10.12   | Agreement dated
        for reference April 23, 2010 executed on April 28, 2010 between the Company
        and Bull and Bear Financial Report.(13)                                 
|10.13   | Option Agreement dated July 23,
        2010 between the Clisbako Minerals Inc. and Interior Plateau Mining Corp.(14)                                                               
|10.14   | Assignment Agreement
        dated August 24, 2010 between the Company and Manado Gold Corp.(15)                                                                                    
|10.15   | Option
        Agreement dated for September 15, 2010 between Clisbako Minerals Inc.
        and Manado Gold Corp.                                                                  
|14.1    | Code of Ethics.(3)                                                                                                                                                                  
|16.1    | Letter of Williams & Webster,
        P.S. (Former Auditor).(8)                                                                                                                     
|21.1    | List of Subsidiaries.(10)                                                                                                                                                           
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.                          
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.                          

|Notes: |                                                                                                         
|------ | --------------------------------------------------------------------------------------------------------
|(1)    | Previously filed as an exhibit to our
      Registration Statement on Form SB-2 filed on April 24, 2007.
|(2)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on December 26, 2007.      
|(3)    | Previously filed as an exhibit to our Annual
      Report on Form 10-KSB filed on March 6, 2008.        
|(4)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on December 22, 2008.      
|(5)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on April 17, 2009.         
|(6)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on June 2, 2009.           
|(7)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on July 27, 2009.          
|(8)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on January 21, 2010.       
|(9)    | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on January 26, 2010.       
|(10)   | Previously filed as an exhibit to our Annual
      Report on Form 10-K filed on March 16, 2010.         
|(11)   | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on April 6, 2010.          
|(12)   | Previously filed as an exhibit to our Quarterly
      Report on Form 10-Q filed on April 19, 2010.      
|(13)   | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on May 4, 2010.            
|(14)   | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on August 10, 2010.        
|(15)   | Previously filed as an exhibit to our Current
      Report on Form 8-K filed on August 30, 2010.        

18

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SIGNATURES

Pursuant to the requirements 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.

|                       |  |     | PENGRAM CORPORATION                                    
|---------------------- |  | --- | -------------------------------------------------------
|                       |  |     |                                                        
|                       |  |     |                                                        
|                       |  |     |                                                        
|Date: October 20, 2010 |  | By: | /s/
      Richard W. Donaldson                         
|                       |  |     | RICHARD W. DONALDSON                                   
|                       |  |     | Chief Executive Officer, Chief Financial
      Officer,
|                       |  |     | President, Secretary, Treasurer,                       
|                       |  |     | (Principal Executive Officer                           
|                       |  |     | and Principal Accounting Officer)                      

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