---

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 February 28, 2009or

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

For the transition period from ________________ to
__________________

Commission File Number **000-53142**

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

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

|4400 Westgrove Drive, Suite
      104, Dallas, Texas | 75001     
|---------------------------------------------------- | ----------
|(Address of principal executive offices)             | (Zip Code)

214.288.9897(Registrants telephone number,
including area code)

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

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. 32,250,000
common shares issued and outstanding as of April 17, 2009

---

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

1

---

Chancery Resources, Inc.(An Exploration Stage Company)

February 28, 2009

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

2

---

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

|                                                                                                |  | February 28, |   |  | November 30, |  
|----------------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                                                |  | 2009         |   |  | 2008         |  
|                                                                                                |  | $            |   |  | $            |  
|                                                                                                |  | (Unaudited)  |   |  |              |  
|ASSETS                                                                                          |  |              |   |  |              |  
|Current Assets                                                                                  |  |              |   |  |              |  
|Cash                                                                                            |  | 5,475        |   |  | 1,638        |  
|Prepaid
      expenses (Note 6(a))                                                              |  | 80,463       |   |  | 110,471      |  
|Total Assets                                                                                    |  | 85,938       |   |  | 112,109      |  
|                                                                                                |  |              |   |  |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                           |  |              |   |  |              |  
|Current Liabilities                                                                             |  |              |   |  |              |  
|Bank indebtedness                                                                               |  | 5,918        |   |  | 8,872        |  
|Accounts payable and accrued liabilities                                                        |  | 162,277      |   |  | 159,394      |  
|Loan payable (Note 4(c))                                                                        |  | 44,917       |   |  | 44,917       |  
|Due to
      related parties (Note 3(b) and (c))                                                |  | 24,326       |   |  | 6,680        |  
|Total Current Liabilities                                                                       |  | 237,438      |   |  | 219,863      |  
|Loans payable,
      less unamortized discount of $11,972 (Note 4(a) and (b))                   |  | 78,028       |   |  | 75,923       |  
|Total Liabilities                                                                               |  | 315,466      |   |  | 295,786      |  
|Contingencies and Commitments (Notes 1, 5 and 6)                                                |  |              |   |  |              |  
|Stockholders Deficit                                                                           |  |              |   |  |              |  
|Preferred stock: 2,500,000,000 shares authorized,
      $0.00001 par value;                     |  |              |   |  |              |  
|no shares issued and outstanding
      (November 30, 2008  None issued)                        |  |             |   |  |             |  
|Series A convertible preferred stock: 40,000,000
      shares authorized, $0.00001 par value;   |  |              |   |  |              |  
|31,000,000 shares issued and
      outstanding (November 30, 2008  31,000,000 shares) (Note 8) |  | 310          |   |  | 310          |  
|Common stock: 2,500,000,000 shares authorized,
      $0.00001 par value;                        |  |              |   |  |              |  
|32,250,000 shares issued and
      outstanding (November 30, 2008  32,250,000 shares) (Note 7) |  | 322          |   |  | 322          |  
|Additional paid-in capital                                                                      |  | 1,088,418    |   |  | 1,088,418    |  
|Donated capital (Notes 3(a) and (b))                                                            |  | 15,000       |   |  | 13,500       |  
|Accumulated other comprehensive loss                                                            |  | (45          | ) |  |             |  
|Deficit accumulated during the exploration stage                                                |  | (1,333,533   | ) |  | (1,286,227   | )
|Total
      Stockholders Deficit                                                               |  | (229,528     | ) |  | (183,677     | )
|Total Liabilities and Stockholders Deficit                                                     |  | 85,938       |   |  | 112,109      |  

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

F-1

---

|Chancery Resources, Inc.             
|-------------------------------------
|(An Exploration Stage Company)       
|Consolidated Statements of Operations
|(Expressed in US dollars)            
|(Unaudited)                          

|                                                    |  | Accumulated from    |   |  | For the      |   |  | For the      |  
|--------------------------------------------------- |  | ------------------- | - |  | ------------ | - |  | ------------ | -
|                                                    |  | September 12, 2006  |   |  | Three Months |   |  | Three Months |  
|                                                    |  | (Date of Inception) |   |  | Ended        |   |  | Ended        |  
|                                                    |  | to February 28,     |   |  | February 28, |   |  | February 29, |  
|                                                    |  | 2009                |   |  | 2009         |   |  | 2008         |  
|                                                    |  | $                   |   |  | $            |   |  | $            |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Revenue                                             |  |                    |   |  |             |   |  |             |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Expenses                                            |  |                     |   |  |              |   |  |              |  
|                                                    |  |                     |   |  |              |   |  |              |  
|General and
      administrative                    |  | 145,762             |   |  | 15,362       |   |  | 22,117       |  
|Consulting fees (Note 6)                            |  | 40,000              |   |  | 30,000       |   |  |             |  
|Management
      services (Note 3(a))               |  | 12,750              |   |  |             |   |  | 1,500        |  
|Impairment of mineral property
      costs (Note 5) |  | 1,121,074           |   |  | 444          |   |  |             |  
|Mineral property
      costs                        |  | 6,075               |   |  |             |   |  |             |  
|Rent (Note 3(a) and (b))                            |  | 7,872               |   |  | 1,500        |   |  | 899          |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Total Expenses                                      |  | 1,333,533           |   |  | 47,306       |   |  | 24,516       |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Net Loss                                            |  | (1,333,533          | ) |  | (47,306      | ) |  | (24,516      | )
|                                                    |  |                     |   |  |              |   |  |              |  
|Other Comprehensive Loss                            |  |                     |   |  |              |   |  |              |  
|Foreign currency translation
      adjustment       |  | (45                 | ) |  | (45          | ) |  |             |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Total Comprehensive Loss                            |  | (1,333,578          | ) |  | (47,351      | ) |  | (24,516      | )
|                                                    |  |                     |   |  |              |   |  |              |  
|Net Loss Per Share  Basic and Diluted              |  |                     |   |  |             |   |  |             |  
|                                                    |  |                     |   |  |              |   |  |              |  
|Weighted Average Common Shares Outstanding          |  |                     |   |  | 32,250,000   |   |  | 151,250,000  |  

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

F-2

---

|Chancery Resources, Inc.             
|-------------------------------------
|(An Exploration Stage Company)       
|Consolidated Statements of Cash Flows
|(Expressed in US dollars)            
|(Unaudited)                          

|                                                                      |  | For the      |   |  | For the      |  
|--------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                      |  | Three Months |   |  | Three Months |  
|                                                                      |  | Ended        |   |  | Ended        |  
|                                                                      |  | February 28, |   |  | February 29, |  
|                                                                      |  | 2009         |   |  | 2008         |  
|                                                                      |  | $            |   |  | $            |  
|Operating Activities                                                  |  |              |   |  |              |  
|Net loss for the period                                               |  | (47,306      | ) |  | (24,516      | )
|Adjustments to reconcile net loss to
      net cash used in operating |  |              |   |  |              |  
|activities:                                                           |  |              |   |  |              |  
|Donated services
      and expenses                                   |  | 1,500        |   |  | 1,500        |  
|Impairment of mineral property
      costs                            |  | 444          |   |  |             |  
|Shares issued
      for services                                      |  | 30,000       |   |  |             |  
|Changes in operating assets and liabilities:                          |  |              |   |  |              |  
|Prepaid expenses                                                      |  | 8            |   |  |             |  
|Accounts payable and accrued
      liabilities                        |  | 2,883        |   |  | 12,521       |  
|Loan payable                                                          |  | 2,105        |   |  |             |  
|Due to related party                                                  |  | 1,250        |   |  | 600          |  
|Net Cash Used In Operating Activities                                 |  | (9,116       | ) |  | (9,895       | )
|Investing Activities                                                  |  |             |   |  |             |  
|Mineral property costs                                                |  | (444         | ) |  |             |  
|Net Cash Used In
      Investing Activities                           |  | (444         | ) |  |             |  
|Financing Activities                                                  |  |              |   |  |              |  
|Advances from related party                                           |  | 16,396       |   |  |             |  
|Bank indebtedness                                                     |  | (2,954       | ) |  |             |  
|Net Cash Provided
      By Financing Activities                       |  | 13,442       |   |  |             |  
|Effect of Exchange Rate Changes on Cash                               |  | (45          | ) |  |             |  
|Increase (Decrease) in Cash                                           |  | 3,837        |   |  | (9,895       | )
|Cash - Beginning of Period                                            |  | 1,638        |   |  | 98,531       |  
|Cash - End of
      Period                                            |  | 5,475        |   |  | 88,636       |  
|Supplemental Disclosures                                              |  |              |   |  |              |  
|Interest paid                                                         |  |             |   |  |             |  
|Income taxes paid                                                     |  |             |   |  |             |  
|Non-Cash Financing and Investing Activities                           |  |              |   |  |              |  
|Common stock issued for services                                      |  | 30,000       |   |  |             |  

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

F-3

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

|1. | Nature of Operations and Continuance of
Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Chancery Resources, Inc. (the Company) was incorporated
      in the State of Nevada on September 12, 2006. The Company is an
      Exploration Stage Company as defined by Statement of Financial Accounting
      Standard (SFAS) No. 7, Accounting and Reporting for Development
      Stage Enterprises.The Company has acquired a mineral property
      located in the province of British Columbia, Canada, and has not yet
      determined whether this property contains reserves that are economically
      recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company incorporated a wholly-owned subsidiary
      Chancery Mining Canada Ltd. (Chancery Canada) on November 12, 2008 in
      the province of British Columbia, Canada, and incorporated another
      wholly-owned subsidiary Minera Chancery Colombia (Chancery Colombia) on
      January 30, 2009 in Medellin, Colombia. Both subsidiaries will focus on
      mining activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | These consolidated financial statements have been
      prepared on a going concern basis, which implies the Company will continue
      to realize its assets and discharge its liabilities in the normal course
      of business. The Company has not generated any revenue since inception and
      has never paid any dividends and is unlikely to pay dividends or generate
      earnings in the immediate or foreseeable future. The continuation of the
      Company as a going concern is dependent upon the continued financial
      support from its shareholders, the ability of the Company to obtain
      necessary equity financing to continue operations, and the attainment of
      profitable operations. As at February 28, 2009, the Company has a working
      capital deficit of $151,500 and has accumulated losses of $1,333,533 since
      inception. These factors raise substantial doubt regarding the Companys
      ability to continue as a going concern. These consolidated financial
      statements do not include any adjustments to the recoverability and
      classification of recorded asset amounts and classification of liabilities
      that might be necessary should the Company be unable to continue as a
      going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-4

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

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

F-5

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

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

| | j) | Financial Instruments and Fair Value Measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | SFAS No. 157 Fair Value Measurementsrequires an
      entity to maximize the use of observable inputs and minimize the use of
      unobservable inputs when measuring fair value. SFAS No. 157 establishes a
      fair value hierarchy based on the level of independent, objective evidence
      surrounding the inputs used to measure fair value. A financial
      instruments categorization within the fair value hierarchy is based upon
      the lowest level of input that is significant to the fair value
      measurement. SFAS No. 157 prioritizes the inputs into three levels that
      may be used to measure fair value:                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 1 applies to assets or
      liabilities for which there are quoted prices in active markets for
      identical assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 2 applies to assets or
      liabilities for which there are inputs other than quoted prices that are
      observable for the asset or liability such as quoted prices for similar
      assets or liabilities in active markets; quoted prices for identical
      assets or liabilities in markets with insufficient volume or infrequent
      transactions (less active markets); or model-derived valuations in which
      significant inputs are observable or can be derived principally from, or
      corroborated by, observable market data.                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Level 3 applies to assets or
      liabilities for which there are unobservable inputs to the valuation
      methodology that are significant to the measurement of the fair value of
      the assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Our financial instruments consist principally of cash,
      accounts payable, amounts due to a related party, and loans payable.
      Pursuant to SFAS No. 157, the fair value of our cash equivalents is
      determined based on Level 1 inputs, which consist of quoted prices in
      active markets for identical assets. We believe that the recorded values
      of all of our other financial instruments approximate their current fair
      values because of their nature and respective maturity dates or
      durations.                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Companys operations are in Canada, which results in
      exposure to market risks from changes in foreign currency rates. The
      financial risk is the risk to the Companys operations that arise from
      fluctuations in foreign exchange rates and the degree of volatility of
      these rates. Currently, the Company does not use derivative instruments to
      reduce its exposure to foreign currency risk.                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company accounts for income taxes using the asset and
      liability method in accordance with SFAS No. 109, Accounting for
      Income Taxes.The asset and liability method provides that deferred
      tax assets and liabilities are recognized for the expected future tax
      consequences of temporary differences between the financial reporting and
      tax bases of assets and liabilities, and for operating loss and tax credit
      carry-forwards. Deferred tax assets and liabilities are measured using the
      currently enacted tax rates and laws that will be in effect when the
      differences are expected to reverse. The Company records a valuation
      allowance to reduce deferred tax assets to the amount that is believed
      more likely than not to be realized.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | l) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Companys functional and reporting currency is the
      United States dollar. Occasional transactions may occur in Canadian
      dollars and management has adopted SFAS No. 52 Foreign Currency
      Translation.Monetary assets and liabilities denominated in foreign
      currencies are translated using the exchange rate prevailing at the
      balance sheet date. Non-monetary assets and liabilities denominated in
      foreign currencies are translated at rates of exchange in effect at the
      date of the transaction. Average monthly rates are used to translate
      revenues and expenses. Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      included in the determination of income.                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | m) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company records stock-based compensation in
      accordance with SFAS No. 123R, Share Based Payments,using the
      fair value method. All transactions in which goods or services are the
      consideration received for the issuance of equity instruments are
      accounted for based on the fair value of the consideration received or the
      fair value of the equity instrument issued, whichever is more reliably
      measurable.                                                                                                                                                                                                                                                                                                                                                             

F-6

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

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

| | n) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In June 2008, the Financial Accounting Standards Board
      (FASB) issued FASB Staff Position EITF 03-6-1, Determining Whether
      Instruments Granted in Share-Based Payment Transactions Are Participating
      Securities.FSP EITF 03-6-1 addresses whether instruments granted in
      share-based payment transactions are participating securities prior to
      vesting, and therefore need to be included in the computation of earnings
      per share under the two-class method as described in FASB Statement of
      Financial Accounting Standards No. 128, Earnings per Share.FSP
      EITF 03-6-1 is effective for financial statements issued for fiscal years
      beginning on or after December 15, 2008 and earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Companys consolidated financial
  statements.                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In May 2008, the FASB issued SFAS No. 162, The
      Hierarchy of Generally Accepted Accounting Principles.SFAS No. 162
      identifies the sources of accounting principles and the framework for
      selecting the principles to be used in the preparation of financial
      statements of nongovernmental entities that are presented in conformity
      with generally accepted accounting principles in the United States. It is
      effective 60 days following the SECs approval of the Public Company
      Accounting Oversight Board amendments to AU Section 411, The Meaning
      of Present Fairly in Conformity With Generally Accepted Accounting
      Principles.The adoption of this statement is not expected to have a
      material effect on the Companys consolidated financial
  statements.                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In March 2008, the FASB issued SFAS No. 161,
      Disclosures about Derivative Instruments and Hedging Activities  an
      amendment to FASB Statement No. 133.SFAS No. 161 is intended to
      improve financial standards for derivative instruments and hedging
      activities by requiring enhanced disclosures to enable investors to better
      understand their effects on an entity's financial position, financial
      performance, and cash flows. Entities are required to provide enhanced
      disclosures about: (a) how and why an entity uses derivative instruments;
      (b) how derivative instruments and related hedged items are accounted for
      under SFAS No. 133 and its related interpretations; and (c) how derivative
      instruments and related hedged items affect an entitys financial
      position, financial performance, and cash flows. SFAS No. 161 is effective
      for financial statements issued for fiscal years beginning after November
      15, 2008, with early adoption encouraged. The adoption of this statement
      did not have a material effect on the Company's consolidated financial
      statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In December 2007, the FASB issued SFAS No. 141 (revised
      2007), Business Combinations.SFAS No. 141 (revised 2007)
      establishes principles and requirements for how the acquirer of a business
      recognizes and measures in its financial statements the identifiable
      assets acquired, the liabilities assumed, and any non-controlling interest
      in the acquiree. The statement also provides guidance for recognizing and
      measuring the goodwill acquired in the business combination and determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business combination.
      SFAS No. 141 (revised 2007) applies prospectively to business combinations
      for which the acquisition date is on or after the beginning of the first
      annual reporting period beginning on or after December 15, 2008. The
      adoption of this statement is not expected to have a material effect on
      the Company's consolidated financial statements.                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In December 2007, the FASB issued SFAS No. 160,
      Non-controlling Interests in Consolidated Financial Statements
      Liabilities  an Amendment of ARB No. 51.This statement amends ARB
      51 to establish accounting and reporting standards for the Non-controlling
      interest in a subsidiary and for the deconsolidation of a subsidiary. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008, and earlier
      adoption is prohibited. The adoption of this statement is not expected to
      have a material effect on the Companys consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-7

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

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

|   | n)                         | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                            | In February 2007, the FASB issued SFAS No. 159, The
      Fair Value Option for Financial Assets and Financial Liabilities 
      Including an Amendment of FASB Statement No. 115.This statement
      permits entities to choose to measure many financial instruments and
      certain other items at fair value. Most of the provisions of SFAS No. 159
      apply only to entities that elect the fair value option. However, the
      amendment to SFAS No. 115 Accounting for Certain Investments in Debt
      and Equity Securitiesapplies to all entities with available-for-sale
      and trading securities. SFAS No. 159 is effective as of the beginning of
      an entitys first fiscal year that begins after November 15, 2007. Early
      adoption is permitted as of the beginning of a fiscal year that begins on
      or before November 15, 2007, provided the entity also elects to apply the
      provision of SFAS No. 157, Fair Value Measurements.The adoption
      of this statement did not have a material effect on the Company's
      consolidated financial statements.
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                            | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements.The objective of SFAS No. 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS No. 157 defines fair
      value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements. SFAS No. 157 applies under other accounting pronouncements
      that require or permit fair value measurements and does not require any
      new fair value measurements. The provisions of SFAS No. 157 are effective
      for fair value measurements made in fiscal years beginning after November
      15, 2007. The adoption of this statement did not have a material effect on
      the Company's consolidated financial statements.                                                                                                                                                                                                      
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3. | Related Party Transactions
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a)                         | For the three months ended February 28, 2009, the Company
      recognized $Nil (February 29, 2008 - $1,500) for donated services provided
      by the former President of the Company and incurred $Nil (February 29,
      2008 - $899) in rent to a company controlled by the former President of
      the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b)                         | For the three months ended February 28, 2009, the Company
      incurred $1,500 (February 29, 2008 - $Nil) in donated rent to a company
      controlled by the President of the Company, and is indebted to the
      President for $21,796 (November 30, 2008 - $4,150) for advances and
      expenses paid for on behalf of the Company, which is non-interest bearing,
      unsecured and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | c)                         | As at February 28, 2009, the Company is indebted to the
      Chief Executive Officer of the Company for $2,530 (November 30, 2008 -
      $2,530) for expenses paid for on behalf of the Company, which is
      non-interest bearing, unsecured and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | d)                         | On November 6, 2008, the Company entered into a
      consulting agreement with the President of the Company for services and
      was issued 1,000,000 shares of restricted common stock with a fair value
      of $120,000. (Refer to Note 6(a)).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4. | Loans Payable             
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | a)                         | On July 25, 2008, the Company received a $70,000 loan for
      a mineral property acquisition, which is non-interest bearing, unsecured
      and due on July 25, 2010. As at February 28, 2009, an implicit interest
      rate of 15% was recognized resulting in an unamortized discount of $11,972
      (November 30, 2008 - $14,077).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | b)                         | On August 8, 2008, the Company received a $20,000 loan
      which is non-interest bearing, unsecured and due on August 8,
  2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | c)                         | As at February 28, 2009, the Company is indebted to the
      former President of the Company for $44,917 (November 30, 2008 - $44,917)
      for cash advances and expenses paid for on behalf of the Company, which is
      non-interest bearing, unsecured and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-8

---

|Chancery Resources, Inc.                      
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|February 28, 2009                             
|(Expressed in US dollars)                     
|(Unaudited)                                   

|5. | Mineral Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|6. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|8. | Convertible Preferred Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On November 6, 2008, the Company issued 25,000,000 shares
      of restricted preferred stock, convertible in common stock at 5:1 ratio,
      with a fair value of $600,000 to the President of the Company, and
      6,000,000 shares of restricted preferred stock, convertible in common
      stock at 5:1 ratio, with a fair value of $144,000 to a company with common
      directors, pursuant to the mineral property acquisition agreement
      described in Note 5(b).

F-9

---

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

FORWARD-LOOKING STATEMENTS

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

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

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

As used in this quarterly report, the terms "we", "us", "our",
"our company" and Chancery mean Chancery Resources, Inc. and our wholly owned
subsidiaries Chancery Mining Canada Ltd. and Minera Chancery Columbia, unless
otherwise indicated.

General Overview

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

We maintain our statutory registered agent's office at The
Corporation Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada
89511 and our business office and mailing address is 4400 Westgrove Drive, Suite
104, Dallas, Texas 75001. Our telephone number is (214) 288-9897.

Since October 2006, we held the rights to nine Mineral Titles
Online cells referred to as the Hunter property, through Geoffrey Gachallan, a
former director and officer of our company, who held the property for us in
trust. On September 9, 2008, our rights to the claim expired.

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

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

| | (a) | $50,000 to be provided on signing of the acquisition
      agreement (paid);                
| | --- | --------------------------------------------------------------------------------------------
| |     |                                                                                             
| | (b) | $70,000 to be provided within 30 days of signing the
      acquisition agreement (paid); and
| |     |                                                                                             
| | (c) | $150,000 to be provided within 90 days of signing the
      acquisition agreement.          

3

---

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

Effective April 4, 2008, we entered into an amending agreement
with Altos de Amador wherein the terms of profit split have been amended so
that, upon commencement of mining operations, all profits from the sale of ore
shall be split 60% to our company and 40% to the vendor. Upon our company having
paid a further $210,000, in addition to the funds payable pursuant to the terms
of the mining acquisition agreement, such profits shall then be split 90% to our
company and 10% to the vendor. Our company will have the right to acquire the
vendors 10% profit interest at any time upon payment of an additional $370,000.
There are currently some governmental requirements that need to be fulfilled for
the El Cafetal mining title. These requirements include the present title owner
amending a PTO report to comply with certain specifications and paying certain
annual governmental fees, all of which are currently being completed.

To date, we have not made the final $150,000 payment as
required by the mining acquisition agreement. We plan to hold such payment until
the above title requirements have been complied with and or alternatively to pay
the outstanding governmental fees due on the El Cafetal mine and deduct these
amounts from the final $150,000 payment. As ourinitial mining acquisition
agreement with Altos de Amador is no longer in good standing due to certain
misrepresentation on warranties and representations made on Altos de Amadors
side, we have signed a Mining Acquisition Agreement on April
14th, 2009 directly with the owners of
the property, Inversiones Midas Limitada, to continue negotiations, which has a
final payment of $150,000 minuspayments to the outstanding governmental
fees due on the El Cafetal mine with no timeframe period for payment.

Effective April 14, 2009, we entered into an agreement with
Inversiones Midas wherein the terms of profit split so that, upon commencement
of mining operations, all profits from the sale of ore shall be split 60% to our
company and 40% to the vendor. Upon our company having paid a further 720
million Colombian pesos (estimated value of land and equipment), Inversiones
Midas agrees to give and transfer 50% ownership of the Mining title, in addition
to the funds payable pursuant to the terms of the mining acquisition agreement,
such profits shall then be split 90% to our company and 10% to the vendor. Our
company will have the right to acquire the vendors 10% profit interest at any
time upon payment of additional 780 million Colombian pesos, and then the
remaining 50% of the Title ownership will be transferred to our company.

On October 16, 2008, Rafael A. Pinedo and Jeffrey Fanning were
appointed as directors of our company.

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

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

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

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

4

---

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

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

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

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

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

Our Current Business

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

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

HCL Property

General Information

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

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

Tenure
      Number
    Claim Name
    No. MTO Cells
    Expiration Date592560
    HCL
    20
    10/04/2009


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

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

Location and Access

The HCL mineral claim is comprised of 20 contiguous cells
totaling 415.0483 hectares. The center of the property is located at the
latitude 50o 2' 14" N and the longitude is 120o 47' 1" W. The claim is motor
vehicle accessible from

5

---

the Town of Merritt, B.C. by traveling 19 miles east along
Highway #5 beyond the Village of Quilchena, B.C. to the Minnie Lake cut-off and
then for 18 miles south by gravel ranch roads to the mineral claim.

Below is map of the HCL Claim:



Physiography

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

6

---

Below is a map of the HCL Property location:



Location, History and Land Tenure

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

Requirements for Title

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

7

---

Fiddler Creek Property

General Information

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

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

Tenure
      Number
    Claim Name
    No. MTO Cells
    Expiration Date597810
    Fiddler Creek
    25
    01/19/2010


Below is a map of the Fiddler Creek Property:



Climate and Local Resources

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

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

8

---

El Cafetal Mine

General Information

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

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

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

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

Results of Operations

Three Months Ended February 28, 2009 and February 29,
2008

The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended February
28, 2009 which are included herein.

Our operating results for the three months ended February 28,
2009, for the three months ended February 29, 2008 and the changes between those
periods for the respective items are summarized as follows:

Three Months Ended
      February 28, 2009
    Three Months Ended
      February 29, 2008
    Change Between Three Month
      Period Ended February 28, 2009 and
      February 29, 2008Revenue
    $  Nil
    $  Nil
    $  NilGeneral and
      administrative
    15,362
    22,117
    (67,55)Consulting fees
    30,000
    Nil
    30,000Management
      services
    Nil
    1,500
    (1,500)Impairment of mineral property costs
    444
    Nil
    444Mineral property
      costs
    Nil
    Nil
    NilRent
    1,500
    899
    601Net Loss
    (47,306)
    (24,516)
    22,790


Our accumulated losses increased to $1,333,533 as of February
28, 2009. Our financial statements report a net loss of $47,306 for the three
month period ended February 28, 2009 compared to a net loss of $24,516 for the
three month period ended February 29, 2008. Our losses have increased primarily
as a result of an increase in professional fees and rent.

As at February 28, 2009, we had $237,438 in current
liabilities. Our net cash used in operating activities for the three months
ended February 28, 2009 was $9,116 compared to $9,895 used in the three months
ended February 29, 2008.

9

---

Equity Compensation

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

Liquidity and Financial Condition

Working Capital

At
    
    
    AtFebruary 28,
    
    
    November 30,2009
    
    
    2008Current assets
    $
    85,938
    
    $
    112,109Current liabilities
    
    237,438
    
    
    219,863Working capital
    $
    (151,500
    )
    $
    (107,754
    )


Cash Flows

Three Months EndedFebruary 28,
    
    
    February 29,2009
    
    
    2008Net cash used in operating activities
    $
    (9,116
    )
    $
    (9,895
    )Net cash used in investing activities
    
    (444
    )
    
    NilNet cash provided by financing activities
    
    13,442
    
    
    NilNet increase (decrease) in cash during period
    $
    3,837
    
    $
    (9,895
    )


As of February 28, 2009, our company had working capital
deficiency of $151,500. We estimate our operating
expenses and working capital requirements for the next twelve month period to be
as follows:

Estimated Funding Required During the Twelve Month Period
Ending February 28, 2010

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


We plan to raise additional capital required to meet immediate
short-term needs and to meet the balance of our estimated funding requirements
for the twelve months, primarily through the private placement of our
securities.

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

Future Financings

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

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

10

---

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

Contractual Obligations

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

Going Concern

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

Due to the uncertainty of our ability to meet our current
operating expenses and the capital expenses noted above, in their report on the
annual financial statements for the year ended November 30, 2008, our
independent auditors included an explanatory paragraph regarding the substantial
doubt about our ability to continue as a going concern. Our financial statements
contain additional note disclosures describing the circumstances that lead to
this disclosure by our independent auditors.

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

Off-Balance Sheet Arrangements

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

Application of Critical Accounting Policies

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

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

Mineral Property Costs

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

11

---

using the guidance in EITF 04-02, Whether Mineral Rights Are
Tangible or Intangible Assets. The Company assesses the carrying costs for
impairment under SFAS No. 144, Accounting for Impairment or Disposal of Long
Lived Assets at each fiscal quarter end. When it has been determined that a
mineral property can be economically developed as a result of establishing
proven and probable reserves, the costs then incurred to develop such property,
are capitalized. Such costs will be amortized using the units-of-production
method over the estimated life of the probable reserve. If mineral properties
are subsequently abandoned or impaired, any capitalized costs will be charged to
operations.

Long-lived Assets

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

Financial Instruments

The fair values of financial instruments, which include cash,
accounts payable and accrued liabilities, amounts due to a related party and
loans payable, were estimated to approximate their carrying values due to the
immediate or short-term maturity of these financial instruments. The Companys
operations are in Canada, which results in exposure to market risks from changes
in foreign currency rates. The financial risk is the risk to the Companys
operations that arise from fluctuations in foreign exchange rates and the degree
of volatility of these rates. Currently, the Company does not use derivative
instruments to reduce its exposure to foreign currency risk.

Income Taxes

The Company accounts for income taxes using the asset and
liability method in accordance with SFAS No. 109, Accounting for Income Taxes.
The asset and liability method provides that deferred tax assets and liabilities
are recognized for the expected future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and for
operating loss and tax credit carry-forwards. Deferred tax assets and
liabilities are measured using the currently enacted tax rates and laws that
will be in effect when the differences are expected to reverse. The Company
records a valuation allowance to reduce deferred tax assets to the amount that
is believed more likely than not to be realized.

Stock-based Compensation

The Company records stock-based compensation in accordance with
SFAS No. 123R, Share Based Payments, using the fair value method. All
transactions in which goods or services are the consideration received for the
issuance of equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable.

Recent Accounting Pronouncements

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

12

---

class method as described in FASB Statement of Financial
Accounting Standards No. 128, Earnings per Share.FSP EITF 03-6-1 is
effective for financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. The adoption of this
statement is not expected to have a material effect on our companys
consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles.SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles in the United States. It is effective 60 days following the SECs
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally
Accepted Accounting Principles. The adoption of this statement is not
expected to have a material effect on our companys consolidated financial
statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities  an amendment to FASB
Statement No. 133. SFAS No. 161 is intended to improve financial standards
for derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity's financial position, financial performance, and cash flows. Entities are
required to provide enhanced disclosures about: (a) how and why an entity uses
derivative instruments; (b) how derivative instruments and related hedged items
are accounted for under SFAS No. 133 and its related interpretations; and (c)
how derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. SFAS No. 161 is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged. The adoption of this statement did not have a
material effect on our company's consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations. SFAS No. 141 (revised 2007) establishes
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any non-controlling interest in the acquiree. The
statement also provides guidance for recognizing and measuring the goodwill
acquired in the business combination and determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial
effects of the business combination. SFAS No. 141 (revised 2007) applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The adoption of this statement is not expected to have a
material effect on our company's consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160,
Non-controlling Interests in Consolidated Financial Statements Liabilities 
an Amendment of ARB No. 51.This statement amends ARB 51 to establish
accounting and reporting standards for the Non-controlling interest in a
subsidiary and for the deconsolidation of a subsidiary. This statement is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008, and earlier adoption is prohibited. The
adoption of this statement is not expected to have a material effect on our
companys consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115. This statement permits entities to
choose to measure many financial instruments and certain other items at fair
value. Most of the provisions of SFAS No. 159 apply only to entities that elect
the fair value option. However, the amendment to SFAS No. 115 Accounting for
Certain Investments in Debt and Equity Securities applies to all entities
with available-for-sale and trading securities. SFAS No. 159 is effective as of
the beginning of an entitys first fiscal year that begins after November 15,
2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to apply
the provision of SFAS No. 157, Fair Value Measurements. The adoption of
this statement did not have a material effect on our company's consolidated
financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS No. 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS No. 157 applies under other
accounting pronouncements that require or permit fair value measurements and
does not require any

13

---

new fair value measurements. The provisions of SFAS No. 157 are
effective for fair value measurements made in fiscal years beginning after
November 15, 2007. The adoption of this statement did not have a material effect
on our company's consolidated financial statements.

Item 3. Quantitative Disclosures About Market Risks

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

Item 4T. Controls and Procedures.

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

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

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors

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

14

---

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

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

RISKS RELATED TO OUR BUSINESS

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

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

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

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

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.

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

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

We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain

15

---

them on reasonable terms. To the extent such approvals are
required and are not obtained, we may be delayed or prohibited from proceeding
with planned exploration or development of our mineral properties.

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

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

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

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

Mineral prices are subject to dramatic and unpredictable
fluctuations.

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

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

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

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

16

---

Risks Related To Our Company

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

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

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

We have not generated any revenue from operations since our
incorporation and we anticipate that we will continue to incur operating
expenses without revenues unless and until we are able to identify a mineral
resource in a commercially exploitable quantity on one or more of our mineral
properties and we build and operate a mine. We had cash in the amount of $5,475
as of February 28, 2009. At February 28, 2009, we had working capital deficit of
$151,500. We incurred a net loss of $47,306 for the three months ended February
28, 2009 and $1,333,533 since inception on September 12, 2006. We estimate our
average monthly operating expenses to be approximately $7,800 to $9,500,
including mineral property costs, management services and administrative costs.
Should the results of our planned exploration require us to increase our current
operating budget, we may have to raise additional funds to meet our currently
budgeted operating requirements for the next 12 months. As we cannot assure a
lender that we will be able to successfully explore and develop our mineral
properties, we will probably find it difficult to raise debt financing from
traditional lending sources. We have traditionally raised our operating capital
from sales of equity and debt securities, but there can be no assurance that we
will continue to be able to do so. If we cannot raise the money that we need to
continue exploration of our mineral properties, we may be forced to delay, scale
back, or eliminate our exploration activities. If any of these were to occur,
there is a substantial risk that our business would fail.

These circumstances lead our independent registered public
accounting firm, in their report dated February 23, 2009, to comment about our
companys ability to continue as a going concern. Management has plans to seek
additional capital through a private placement and public offering of its
capital stock. These conditions raise substantial doubt about our companys
ability to continue as a going concern. Although there are no assurances that
managements plans will be realized, management believes that our company will
be able to continue operations in the future. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event our company cannot continue in
existence. We continue to experience net operating losses.

Risks Associated with Our Common Stock

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

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading

17

---

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

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

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

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

Other Risks

Trends, Risks and Uncertainties

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

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

None.

18

---

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

|Exhibit | Description                                                                                                                                                                                                                                                  
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                              
|(3)     | Articles of Incorporation and
      Bylaws                                                                                                                                                                                                                   
|3.1     | Articles of Incorporation (incorporated
        by reference from our Registration Statement on Form SB-2 filed on March
        20, 2007).                                                                                                                  
|3.2     | By-laws (incorporated
        by reference from our Registration Statement on Form SB-2 filed on March
        20, 2007).                                                                                                                                    
|3.3     | Certificate of Change filed with
        the Secretary of State of Nevada on January 16, 2008 effective January
        18, 2008 (incorporated by reference from our Current Report on Form 8-K
        filed on February 1, 2008).                          
|3.4*    | Certificate
        of Designation of the Series A Preferred Stock                                                                                                                                                                                           
|(4)     | Instruments Defining Rights
        of Security Holders, Including Debentures                                                                                                                                                                                
|4.1     | Specimen Stock
        Certificate (incorporated by reference from our Registration Statement
        on Form SB-2 filed on March 20, 2007).                                                                                                                 
|(10)    | Material Contracts                                                                                                                                                                                                                                           
|10.1    | Trust Agreement
        (incorporated by reference from our Registration Statement on Form SB-2
        filed on March 20, 2007).                                                                                                                            
|10.2    | Mining Acquisition Agreement
        dated March 19, 2008 between our company and Altos de Amador S.A. (incorporated
        by reference from our Current Report on Form 8-K filed on March 25, 2008).                                                      
|10.3    | Amending Agreement
        dated April 4, 2008 between our company and Altos de Amador S.A. (incorporated
        by reference from our Quarterly Report on Form 10-QSB filed on April 18,
        2008).                                                    
|10.4    | Share Cancellation/Return to
        Treasury Agreement (incorporated by reference from our Current Report
        on Form 8-K filed on June 5, 2008).                                                                                                       
|10.5    | Mining Property
        Acquisition Agreement dated November 6, 2008 between our company, CB Resources
        Ltd., BNP Resources LLC and Rafael Pinedo. (incorporated by reference
        from our Current Report on Form 8-K filed on November 13, 2008).

19

---

|Exhibit | Description                                                                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                     
|10.6    | Trust Agreement
        dated November 6, 2008 between our company and CB Resources Ltd. (incorporated
        by reference from our Current Report on Form 8-K filed on November 13,
        2008).
|10.7    | Consulting Agreement dated November
        6, 2008 between our company and Rafael Pinedo. (incorporated by reference
        from our Current Report on Form 8-K filed on November 13, 2008).      
|(14)    | Code of Ethics                                                                                                                                                                                      
|14.1    | Code of Ethics (incorporated
        by reference from our Annual Report on Form 10-KSB filed on February 28,
        2008).                                                                        
|(31)    | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                     
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo                                                                                                                 
|31.2*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Juan Restrepo Gutierrez                                                                                                       
|(32)    | Section 1350 Certifications                                                                                                                                                                         
|32.1*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo                                                                                                                 
|32.2*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Juan Restrepo Gutierrez                                                                                                       
|(99)    | Additional
        Exhibits                                                                                                                                                                         
|99.1    | Audit Committee Charter (incorporated
        by reference from our Annual Report on Form 10-KSB filed on February 28,
        2008).                                                               
|99.2    | Disclosure Committee
        Charter (incorporated by reference from our Annual Report on Form 10-KSB
        filed on February 28, 2008).                                                          

* Filed herewith

20

---

SIGNATURES

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

|                      | CHANCERY RESOURCES, INC.                              
|--------------------- | ------------------------------------------------------
|                      | (Registrant)                                          
|                      |                                                       
|                      |                                                       
|Dated: April 20, 2009 | /s/
      Rafael Pinedo                               
|                      | Rafael Pinedo                                         
|                      | President and Director                                
|                      | (Principal Executive Officer)                         
|                      |                                                       
|                      |                                                       
|Dated: April 20, 2009 | /s/
      Juan Restrepo Gutierrez                     
|                      | Juan Restrepo Gutierrez                               
|                      | Secretary, Treasurer and Chief Financial
      Officer
|                      | (Principal Financial Officer and Principal            
|                      | Accounting Officer)                                   

21

---