UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  
 FORM
10-K
 
 (Mark
One)
 x
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
Fiscal Year Ended January 31, 2009
 
 o
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from _______________ to ________________
 
 Commission
File Number 000-52055
 
 RED
METAL RESOURCES LTD.
 (Exact
name of registrant as specified in its charter)
 
 Nevada
              
              20-2138504(State
      or other jurisdictionof

                  incorporation
      or organization)
              
              (I.R.S.
      Employer
                Identification
      No.)
 
 195
Park Avenue Thunder
Bay, Ontario P7B 1B9
 (Address
of principal executive offices)
 
 Registrant’s
telephone number, including area code: (807) 345-5380
 
 Securities
registered pursuant to Section 12(b) of the Act:
 
 Title
      of each class
              
              Name
      of each exchangeon
                which
      each is registeredN/A
              
              N/A
 
 Securities
registered pursuant to Section 12(g) of the Act:  Common Stock, $0.001
par value
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes
[   ] No [X]
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes
[   ] No [X]
 
 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. Yes [X] No [   ]
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this
chapter) during the preceeding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [   ] No
[   ]
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
  Large accelerated
      filer [   ]
              
              Accelerated
      filer                  
      [   ]Non-accelerated
      filer   [   ]
              
              Smaller reporting
      company [X](Do not check if a
      smaller reporting company)
  Indicate
by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes [  ] No [X]
 
 State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter.  As of July 31, 2008, the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold was $19,361,196.
 
 Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.  The number of shares of the
registrant’s common stock, $0.001 par value per share, outstanding as of April
28, 2009 was 58,183,333.
  1
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None
 TABLE
OF CONTENTS
 
 PagePART
      IITEM
      1.
              BUSINESS
              4ITEM
      1A.
              RISK
      FACTORS
              9ITEM
      1B
              UNRESOLVED
      STAFF COMMENTS
              13ITEM
      2.
              PROPERTIES
              13ITEM
      3.
              LEGAL
      PROCEEDINGS
              13ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
              13PART
      IIITEM
      5.
              MMARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
              14ITEM
      6.
              SELECTED
      FINANCIAL DATA
              14ITEM
      7.
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
              15ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              33ITEM
      8.
              CONSOLIDATED
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
              34ITEM
      9.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              35ITEM
      9A(T).
              CONTROLS
      AND PROCEDURES
              35ITEM
      9B.
              OTHER
      INFORMATION
              36PART
      IIIITEM
      10.
              DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
              36ITEM
      11.
              EXECUTIVE
      COMPENSATION
              38ITEM
      12.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
              49ITEM
      13.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
              40ITEM
      14.
              PRINCIPAL
      ACCOUNTING FEES AND SERVICES
              41ITEM
      15.
              EXHIBITS
              43
  2
  Note
Regarding Forward-Looking Statements
 
 This
annual report on Form 10-K contains “forward-looking
statements”.  These forward-looking statements are based on our
current expectations, assumptions, estimates and projections about our business
and our industry.  Words such as “believe,” “anticipate,” “expect,”
“intend,” “plan,” “may,” and other similar expressions identify forward-looking
statements.  In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements.  These forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in the forward-looking
statements.  Factors that might cause such a difference include, but
are not limited to, those discussed in the sections of this annual report titled
“Risk Factors”, “Business” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations”, as well as the
following:
 
 ·
              general
      economic conditions, because they may affect our ability to raise
      money,
 ·
              our
      ability to raise enough money to continue our
  operations,
 ·
              changes
      in regulatory requirements that adversely affect our
    business,
 ·
              changes
      in the prices for minerals that adversely affect our
    business,
 ·
              political
      changes in Chile, which could affect our interests there,
    and
 ·
              other
      uncertainties, all of which are difficult to predict and many of which are
      beyond our control.
 
 You are
cautioned not to place undue reliance on these forward-looking statements, which
relate only to events as of the date on which the statements are
made.  We undertake no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date of this annual report.  You should refer to and carefully
review the information in future documents we file with the Securities and
Exchange Commission.
  3
  PART
I
 
 ITEM
1. BUSINESS
 
 Red Metal
Resources Ltd. was incorporated in Nevada on January 10, 2005 as Red Lake
Exploration, Inc.  We changed our name to Red Metal Resources Ltd. on
August 27, 2008.
 
 On August
21, 2007, we formed Minera Polymet Limitada, a limited liability company
(“Polymet”), under the laws of the Republic of Chile.  We own a 99%
interest in Polymet, which holds our Chilean mineral property
interests.  Under Chilean law, a resident of Chile must be a
shareholder in a limitada.  To meet this requirement, 1% of Polymet is
owned by a Chilean resident, an experienced manager who has organized an office
and other resources for us and is Polymet’s legal representative in
Chile.
  Our
resident agent’s office is at 711 S Carson Street, Carson City, Nevada,
89701.  Our business office is at 195 Park Avenue, Thunder Bay,
Canada, P7B 1B9.  Our telephone number is (807) 345-5380; our email
address is info@redmetalresources.com;
and our web address is www.redmetalresources.com.  Information
on our web site is not a part of this report.
 
 We are a
startup exploration stage company without operations.  We are in the
business of acquiring and exploring mineral resources.  We own five
mineral properties and have one letter of intent and one option to purchase
mineral concessions in Chile. The two properties to be purchased will add
ground to one of our already-owned properties.  We had options to
purchase the Santa Rosa and the Camila properties.  We allowed these
options to expire in November and December, 2008. We abandoned the Camila
property after our intial exploration program indicated more prospective ground
lay to the northeast. We abandoned the Santa Rosa property as we considered the
price too high in today’s market. We had claims in Ontario, Canada, but were not
encouraged by the results of the work that we conducted on them and allowed them
to expire on November 27, 2007. All of our properties are in Chile.
 
 In Chile
we have acquired title to mining claims, locally called mensuras, and staked or
acquired exploration claims, locally called pedimentos. A mensura gives the
holder title and the right to mine the property. A pedimento gives the holder
the right to explore a mineral property for two years. The holder can apply to
convert a pedimento to a mensura at any time during the two
years.  The application process takes 220 days.
 
 We have
not determined whether our mineral properties contain mineral reserves that are
economically recoverable and cannot assure you that an economically viable
mineral deposit exists on any of our mineral properties.  We must
conduct more exploration before we can evaluate the economic and legal
feasibility of our mineral properties.
 
 Farellón
Group of Properties
 
 The
Farellón group of properties consists of the Farellón Alto Uno al Ocho mining
claims and the Cecil 1 – 49, Cecil and Burghley I mining claims.
 
 farellón
property
 
 The
Farellón property is the first mineral property interest that we acquired in
Chile. It consists of the mining claims known as the Farellón Alto Uno al Ocho
covering 66 hectares (163 acres) located in Province of Huasco, Commune of
Huasco, III Region of Atacama, Chile.
  4
 
 We
acquired the property through an assignment agreement between Polymet and Minera
Farellón Limitada dated September 25, 2007 and amended on November 20,
2007.  Under the assignment agreement, Minera Farellón agreed to
assign to Polymet its option to buy the Farellón property for $250,000 payable
by April 30, 2008.  We paid Minera Farellón for the assignment on
April 25, 2008, and assumed all of Minera Farellón’s rights and obligations
under the Farellón option agreement on the same day. We exercised the option and
bought the property from the vendor for $300,000 on April 25, 2008. We continue
to owe a royalty equal to 1.5% of the net that we receive from the processor to
a maximum of $600,000, payable monthly and subject to a monthly minimum of
$1,000 when we start exploiting the minerals we extract from the
property.  We can pay any unpaid balance of the royalty at any time.
We have not yet exploited the property.
 
 location
and means of access to the farellón property
 
 The
Farellón property is centered about 309,150 east and 6,888,800 south UTM PSAD56
Zone 19.  The area is approximately 40 kilometres west of the
Pan-American Highway, about one hour and 15 minutes by vehicle from the town of
Vallenar, Chile, which has a population of 40,000 and modern
facilities.  High-tension power lines and a fiber-optic communications
line run along the highway and both power and rail are connected to the Cerro
Colorado iron ore mine only 20 kilometres from the Farellón
property.
 
 The area
is serviced from Copiapó, Chile, a city of 70,000 with daily air and bus
services to Santiago, Chile, and other centers.
 
 The
Farellón property can be accessed by driving approximately 20 kilometres north
on the Pan-American Highway from Vallenar then turning northwest towards Canto
del Agua.  From Canto del Agua, the Farellón property is approximately
10 kilometres along a well-maintained gravel road.  There are numerous
gravel roads in the area, so a guide is necessary to access the property the
first time.  All of the roads are well maintained and can support
large machinery necessary to transport drills, backhoes and
bulldozers.  Water is readily available in Canto del Agua and could
probably be found on the Farellón property where all of the historic drill holes
intersected water.
 
 exploration
history of the farellón property
  The
Farellón property is in the Carrizal Alto mining district and lies five
kilometres along strike south of the center of the historic Carizzal Alto
copper-gold mine.  Veins of the Farellon property were exploited as
part of the Carizzal Alto mines. No hard data summarizing all of the past mining
activity has been located, but tailings, slag dumps and the size of the shafts
and some of the shallow surface workings are evidence of significant mining
history.  Some reports state that the Carrizal Alto mines went to
depths of up to 600 metres, and that the area once produced more than 3 million
tonnes of mainly copper ore at 5% to 15% copper.
 
 Mine
workings of various sizes are all along the Farellón property, but only one
modern exploration program has been completed.  In 1996, the Farellón
and two other veins, the Fortuna and the Theresa, were explored by an Australian
junior mining company under the name Minera Stamford S.A.  Their
exploration included a large mapping and surface sampling program followed up by
a 34-hole reverse circulation (RC) drilling program.  Out of these 34
drill holes, 23 were drilled on the Farellón property.  The RC
drilling program on the Farellón property consistently intersected
mineralization in both oxide and sulphide facies and outlined a
two-kilometre-long zone covering the Farellón property and strike extents to the
south.  Mineralization is 2 to 35 metres wide with an average width of
five metres.  The mineralized zone consists of one or more discrete
veins and, in places, stockwork veining and mineralization.  While
drilling covered the length of the property, gaps up to 350 metres are untested
and infill drilling is required to confirm an economic ore body.
  5
 
 geology
of the farellón property
 
 The
Farellón area has two major lithological units: Palaeozoic metamorphic sediments
consisting of schists, phyllites and quartzites; and the Franja Central
diorites.  The metamorphosed sediments outcrop in the western part of
the property and have been metamorphosed to lower greenschist facies and then
extensively overprinted by hydrothermal alteration.  Hydrothermal
alteration is directly associated with the shear zone.  The diorite
underlies the eastern part of the project area and has been extensively intruded
by northeasterly trending intermediate mafic dykes.  At the Farellón
property, a small stock-like felsic body named Pan de Azucar intrudes the
diorite.  The intrusive relationship between the diorite and
metamorphic sediments always appear to be tectonic.  Within the
property and at the main Carrizal Alto workings to the north, the major
mineralization is intimately related to the south-southwest trending mylonitic
sheared contact between the metamorphic sediments and the
diorite.  The shear is considered a splay of the main Atacama Fault
Zone and dips 30o to 65o west. This contact parallels the regional geological
trend and coincides with a major lineament which extends for hundreds of
kilometres.  The sheared contact is 50 metres to 200 metres wide over
the 1.7-kilometre strike length of the Farellón property.  Veins are
typically 3 to 15 metres wide, striking south-southwest and dipping
approximately 65o degrees to the northwest.
 
 mineralization
of the farellón property
 
 The
Farellón property lies within the Candelaria iron oxide-copper-gold (IOCG) belt
of Chile.  The IOCG belt is host to many major deposits such as the
Candelaria Mine and the Mantos Verde Mine.  Ore bodies in the belt
occur in veins, breccias, stringer bodies and layer parallel replacement bodies
and are typically associated with north-south trending faults related to the
Atacama Fault Zone.  All IOCG deposits have a strong association with
iron oxides in the form of hematite or magnetite.  In the Candelaria
region, larger ore bodies are located where the fault zones intersect a
lithological contact with significant rheological contrast such as a sedimentary
and volcanic intrusive contact.
 
 Economic
IOCG deposits are generally polymetallic and can include iron, copper, gold,
zinc, lead, uranium and cobalt among others.  The Farellón property
has been historically exploited for copper and lesser gold.  Cobalt
mineralization was observed during the 1996-97 exploration work, but we have
found no records of cobalt extraction.
 
 cecil
properties
 
 On
September 17, 2008, we completed our purchase of the Cecil 1 – 49, Cecil and
Burghley I mining claims for $20,000 and $1,391 in legal and transfer costs. The
Cecil claims cover 730 hectares and consist of 500 hectares of exploration
claims and 230 hectares of titled mining claims centered around 311,500 east and
6,890,000 south UTM PSAD56 Zone 19and lie approximately 1.7 kilometres north of
the Farellon property border.  The claims cover a 1.8 kilometre strike
length of a mineralized vein interpreted to be part of the same mineralizing
system as the Farellon vein. An investigation completed during the Farellon
acquisition uncovered a broad regional sampling program completed in 1996
showing results from the areas covered by the Cecil claims. Results from the
1996 sampling show copper and gold grades similar to grades returned from the
Farellon vein, with up to 13.5 grams per tonne gold with 1.27% copper and 2.27
grams per tonne gold with 1.68% copper while the cobalt grades are stronger with
samples of up to 0.68% and 0.51% cobalt. All samples are from waste dumps
surrounding historical artisanal mine workings.
 
 Mateo
Group of Properties
 
 The Mateo
group consists of five mensura mining concessions—the Margarita (one mining
concession), Che (two mining concessions) and Irene (two mining
concessions)  properties—and eleven pedimento exploration licenses. We
bought the Margarita at a public auction on November 27, 2008. We have an option
dated October 10, 2008 to buy the Che Uno and Dos properties and we have a
letter of intent dated February 2, 2009 to buy the Irene Uno and Dos
properties.
 
 We bought
the Margarita mining claim on November 27, 2008 for $16,072 and owe the
outstanding taxes of 616,879 Chilean pesos (approximately $1,000).
  6
 
 We
acquired the option on the Che Uno and Dos properties for consideration of $444.
To exercise the option, we must pay $20,000 by October 10, 2009.
 
 To
formalize our right to buy the Irene Uno and Dos properties, we must enter into
an agreement with the owner. The purchase price is 21,000,000 Chilean pesos
(approximately $35,000) and the legal and transfer costs.
 
 location
and means of access to the mateo group
 
 The Mateo
properties are centered about 337,675 east and 6,837,600 south UTM PSAD56 Zone
19 approximately 10 kilometres east of Vallenar with the highest point at
approximately 1,050 metres above sea level.  A well-used road leads
from the city of Vallenar and crosses through the middle of the west half of the
properties and along the southern border of the east half of the
properties.  Many unmarked dirt roads in the area provide reliable
access to most areas of Mateo.
 
 description
of the mateo group
 
 The Mateo
group is a copper-gold-silver project that lies in the highly prospective but
under-explored Candelaria IOCG belt in the Chilean Coastal
Cordillera.  The Mateo properties have undergone limited modern
exploration including surface and underground RC drilling and artisanal mining
on three separate mine sites, the Irene, Margarita and Santa Theresa
mines.  We have reviewed all available records of work completed to
date, including some records of the mining activity.  Interpretation
of the work completed to date indicates the potential for an economic ore body
in high-grade mineralized mantos and skarn-style mineralization associated with
IOCG deposits.  The Mateo group is considered an advanced exploration
property with potential for a large-scale, multi-million-tonne
copper-gold-silver deposit.
 
 exploration
history of the mateo group
 
 Historical
work includes several drill programs completed by different Chilean private and
public companies.  Records exist from eight drillholes completed in
1994 on the Irene mine and include two full reports written by ENAMI (the
Chilean national mining company) with interpretation of mineralization and
recommendations for further exploration and mining work.
 
 The Irene
mine was investigated by ENAMI in 1994.  Work completed during this
time included surface RC drilling, including 490 metres in four RC drillholes
and underground diamond drilling, including 220 meters in four drillholes. The
drilling defined an inferred resource (non NI-43-101 compliant) of 68,000 tonnes
with 3.6% copper, 78 grams per tonne silver and 0.7 grams per tonne gold. We
obtained ENAMI’s reports of mining activities from 1994 through 1997.
Approximately 11,875 tonnes of rock were mined in that time averaging 4.3%
copper, 61.9 grams per tonne silver, and 1.01 grams per tonne gold.
  A private
Chilean company, Minera Taurus, drilled 16 RC drillholes on the east end of the
Irene property, but we have no record from this drilling.  An unknown
company built a portal 250 meters long and approximately three meters wide by
three meters high. The portal leads to three mined-out chimneys connected to
surface providing ventilation channels. On a recent property visit with ENAMI’s
geologists, we found an extension of the mineralized zone at the base of the
tunnel below showing the potential for increased reserves.
  geology
of the mateo group
 
 Geologically,
the Mateo property is located within the brittle-ductile north-south-trending
Atacama Fault System that is known to host many of the major deposits in the
Candelaria IOCG belt.  Known mineralization is hosted in an andesitic
volcaniclastic sequence assigned to the Bandurrias Formation. Widespread iron
oxide and potassic alteration indicate an IOCG mineralizing system further
supported by significant amounts of economic grade mineralization.
  7
 
 Other
Properties
 
 We bought
100% of three other properties–the Estrella, Cañas and Caminada properties, all
in the Candelaria IOCG belt in Chile’s Coastal Cordillera—at the auction on
November 27, 2008.  All three properties are considered grassroots
exploration properties.  We completed our initial due diligence on the
properties before we bought them, but have yet to complete a full evaluation of
their potential.  None of the properties has existing records of
modern exploration although drilling is evident on one of the
properties.  All of the properties have historical artisanal mining
workings.
 
 The
Estrella property consists of three blocks of claims containing eleven mining
concessions covering 1,383 hectares of ground.  The property is
centered about 325,000 east and 6,807,000 south UTM PSAD56 Zone
19.  Numerous drill sites are visible on the Estrella, but we have
found no drill result records. We paid approximately $11,000 for the Estrella
property and owe outstanding taxes of approximately 55 million Chilean pesos
(approximately $90,000)
 
 The Cañas
property consists of three mining concessions covering 700 hectares of
ground.  The property is centered about 338,172 east and 6,810,500
south UTM PSAD56 Zone 19. We paid approximately $4,000 for the Cañas property
and owe outstanding taxes of approximately 28 million Chilean pesos
(approximately $45,000).
 
 The
Caminada property consists of one mining concession covering 40 hectares of
ground.  The property is centered about 359,209 east and 6,868,819
south UTM PSAD56 Zone 19.  We paid approximately $1,000 for the
Caminada property and owe outstanding taxes of approximately 1.5 million Chilean
pesos (approximately $2,000).
 
 Abandoned
Properties
 
 We
abandoned three properties during the last year, the Camila Breccia and the
Santa Rosa mining claims and the Costa Rica exploration claims.
 
 Competition
 
 The
mineral exploration business is an extremely competitive industry.  We
are competing with many other exploration companies looking for
minerals.  We are one of the smallest exploration companies and a very
small participant in the mineral exploration business.  Being a junior
mineral exploration company, we compete with other similar companies for
financing and joint venture partners, and for resources such as professional
geologists, camp staff, helicopters and mineral exploration contractors and
supplies.
 
 Raw
Materials
 
 The raw
materials for our exploration programs include camp equipment, hand exploration
tools, sample bags, first aid supplies, groceries and propane.  All of
these types of materials are readily available from a variety of
suppliers.
 
 Dependence
on Major Customers
 
 We have
no customers.  Our first customer likely will be ENAMI, which refines
and smelts copper from the ore that it buys from Chile’s small- and medium-scale
miners.  ENAMI is located in Vallenar.  We could also
deliver our ore to a private smelter located about fifty kilometers south of
Vallenar.
  8
 
 Patents/Trademarks/Licenses/Franchises/Concessions/Royalty
Agreements or Labor Contracts
 
 We have
no intellectual property such as patents or trademarks, and, other than the
royalties that we must pay if we begin to exploit our Chilean properties, no
royalty agreements or labor contracts.  We were receiving a 5% royalty
from Minera Farellon, which had the right to mine our Santa Rosa properties, but
on October 27, 2008 Minera Farellon ceased mining operations on the Santa Rosa
property and stopped paying the royalty revenue. On November 18, 2008, we
decided to terminate our option agreement to purchase the Santa
Rosa.
 
 Government
Controls and Regulations
 
 Our
business is subject to various levels of government controls and regulations,
which are supplemented and revised from time to time.  We cannot
predict what additional legislation or revisions might be proposed that could
affect our business or when any proposals, if enacted, might become
effective.  Such changes, however, could require more operating
capital and expenditures and could prevent or delay some of our
operations.
 
 The
various levels of government controls and regulations address, among other
things, the environmental impact of mining and mineral processing
operations.  For mining and processing, legislation and regulations in
various jurisdictions establish performance standards, air and water quality
emission standards and other design or operational requirements for various
components of operations, including health and safety
standards.  Legislation and regulations also establish requirements
for decommissioning, reclaiming and rehabilitating mining properties following
the cessation of operations, and may require that some former mining properties
be managed for long periods of time.  In certain jurisdictions, we are
subject to foreign investment controls and regulations governing our ability to
remit earnings abroad.
 
 We
believe that we are in substantial compliance with all material government
controls and regulations at each of our mineral properties.
 
 Costs
and Effects of Compliance with Environmental Laws
 
 We have
incurred no costs to date for compliance with environmental laws for our
exploration programs on any of our properties
 
 Expenditures
on Research and Development during the Last Two Fiscal Years
 
 We have
incurred no research or development costs since our inception on January 10,
2005.
 
 Number
of Total Employees and Number of Full Time Employees
 
 Red Metal
does not have any employees.  Caitlin Jeffs and Michael Thompson, both
of whom are directors and officers, John daCosta, who is an officer, and Kevin
Mitchell, who is Polymet’s legal representative and manager in Chile, all
provide their services to the company as independent
consultants.  Polymet has one part-time and two full-time employees
who provide administration, prospecting and land management
services.  We intend to contract for the services of geologists,
prospectors and other consultants as we require them to conduct our exploration
programs.
 
 ITEM
1A.         RISK FACTORS
 
 In
addition to the factors discussed elsewhere in this report, the following risks
and uncertainties could materially adversely affect our business, financial
condition and results of operations.  Additional risks and
uncertainties not presently known to us or that we currently deem immaterial
also may impair our business operations and financial condition.
  9
 
 During
the fiscal year ended January 31, 2009 we earned $15,658 in royalty revenue
while our operating expenses totaled $1,378,415.  If we do not find
sources of financing as and when we need it, we may be required to cease our
operations.
  Mineral
exploration and development is very expensive.  During the fiscal year
that ended on January 31, 2009, we earned a total of $15,658 in royalty revenue,
while our operating expenses totaled $1,378,415.  Our net loss for the
year ended January 31, 2009 was $1,383,884.  We have limited financial
resources.  As of January 31, 2009 we had cash of
$26,115.  Since our inception we have sold our securities and borrowed
money to fund our operations.  Our ability to continue our operations,
including exploring and developing our properties, will depend on our ability to
generate operating revenue or obtain additional financing.  If
additional financing is not available, we may have to postpone the development
of our mineral properties or sell them, or we may be required to cease our
operations.
 
 Our
auditors have expressed substantial doubt about our ability to continue as a
going concern; as a result we could have difficulty finding additional
financing.
 
 Our
financial statements have been prepared assuming that we will continue as a
going concern.   Except for approximately $16,000 of royalty income
that we received from Minera Farellón, we have not generated any revenue since
inception and have accumulated losses.  As a result, our auditors have
expressed substantial doubt about our ability to continue as a going
concern.  Our ability to continue our operations depends on our
ability to complete equity or debt financings or generate profitable
operations.  Such financings may not be available or may not be
available on reasonable terms.  Our financial statements do not
include any adjustments that could result from the outcome of this
uncertainty.
 
 If
we fail to make required payments on our mineral properties, we could lose our
rights to the properties.
 
 To retain
our interests in our mineral properties for the next 12 months, we have to pay
$20,000 to the property owner to acquire the Che mineral property; 21,000,000
pesos ($34,000) to purchase the Irene property; and approximately $140,000 in
back property taxes on the Caminada, Canas, Estrella and Margarita
properties.  If we fail to make these payments we may lose our
interests in six of our properties.
 
 Our
business was formed in January 2005 and our operations, to date, have earned
only minimal revenues.  Due to the high costs of acquiring and
exploring properties, we may never be profitable.  We expect to
continue to incur operating losses during the fiscal year that will end on
January 31, 2010.
 
 We were
incorporated on January 10, 2005 and to date have been involved primarily in
organizational activities, acquiring and exploring mineral properties and
obtaining financing.  We have earned minimal revenues and we are not
profitable.  Whether we will be successful as a mining company must be
considered in light of the costs, difficulties, complications and delays
associated with our proposed exploration programs.  These potential
problems include, but are not limited to, finding properties with mineral
deposits that can be cost-effectively mined, the costs associated with acquiring
the properties and the unavailability of human or equipment
resources.  We have a very short history and had no more than minimal
operations until April 25, 2008 when we acquired the mining concessions known as
Farellon Alter Uno al Ocho in Chile.  We cannot assure you that we
will ever generate significant revenue from our operations or realize a
profit.  We expect to continue to incur operating losses during the
fiscal year that will end on January 31, 2010.
 
 If
we do not find a joint venture partner for the development of our mineral
properties, we may not be able to develop them.
  If our exploration programs are
successful, we may try to form a joint venture with a partner for further
exploration and development of our mineral properties.  We would face
competition from other junior mineral resource exploration companies who have
properties that they believe have more potential for higher economic returns and
lower investment costs.  If we entered into a joint venture, we would
probably have to assign a percentage of our interest in our mineral properties
to the joint venture partner.  If we are unable to find a suitable
joint venture partner, we could fail to find the required funding for further
exploration and eventual production.
  10
 
 In
some instances members of the board of directors or an officer may be liable for
losses incurred by holders of our common stock.  If a shareholder were
to prevail in such an action in the U.S., it may be difficult for the
shareholder to enforce the judgment against any of our directors or officers,who
are not U.S. residents.
  In
certain instances, such as trading securities based on material non-public
information, a director may incur liability to shareholders for losses sustained
by the shareholders as a result of the director’s or officer’s illegal or
negligent activity.  However, all of our directors and officers live
and maintain a substantial portion of their assets outside the
U.S.  As a result it may be difficult or impossible to effect service
of process within the U.S. upon these directors and officers or to enforce in
the courts any judgment obtained here against them predicated upon any civil
liability provisions of the U.S. federal securities laws.
  Foreign
courts may not entertain original actions predicated solely upon U.S. federal
securities laws against these directors; and judgments predicated upon any civil
liability provisions of the U.S. federal securities laws may not be directly
enforceable in foreign countries.
  As a
result of the foregoing, it may be difficult or impossible for a shareholder to
recover from any of these directors or officers if, in fact, the shareholder is
damaged as a result of the negligent or illegal activity of an officer or
director.
 
 Mineral
exploration is highly speculative and risky: we might not find mineral deposits
that can be extracted cost effectively on our properties.
 
 Exploration
for mineral deposits is a speculative venture involving substantial
risk.  Problems such as unusual and unexpected rock formations often
result in unsuccessful exploration efforts.  We cannot assure you that
our properties contain mineral deposits that can be extracted cost
effectively.
 
 Mineral
exploration is hazardous.  We could incur liability or damages as we
conduct our business due to the dangers inherent in mineral
exploration.
 
 The
search for minerals is hazardous.  We could become liable for hazards
such as pollution, cave-ins and other hazards against which we cannot insure or
against which we may elect not to insure.  We have no insurance for
these kinds of hazards, nor do we expect to get such insurance for the
foreseeable future.  If we were to suffer from such a hazard, the
costs of rectifying it could exceed our asset value and require that we
liquidate our assets.
 
 We
must comply with government regulations affecting mineral exploration, which
could adversely affect our business, the results of our operations and our
financial condition.
 
 Our
business is subject to various levels of government control and regulation,
which are supplemented and revised from time to time.  We cannot
predict what legislation or revisions might be proposed that could affect our
business or when any such proposals, if enacted, might become
effective.  Currently, our exploration activities are subject to laws
and regulations governing the protection of the environment, waste disposal,
worker safety, and protection of endangered and other special status
species.  Although the cost of complying with these regulations has
not been burdensome to date, in the future we could be required to spend
significant amounts to comply.  This could materially adversely affect
our business, the results of our operations and our financial
condition.
  11
 
 If we do
not comply with applicable environmental and health and safety laws and
regulations, we could be fined, enjoined from continuing our operations, have
our permits suspended or revoked, and suffer other
penalties.  Although we make every attempt to comply with these laws
and regulations, we cannot assure you that we have fully complied or will always
fully comply with them.
 
 We
might not be able to market any minerals that we find on our mineral properties
due to market factors that are beyond our control.
  Even if
we discover minerals that can be extracted cost-effectively, we may not be able
to find a ready market for our minerals.  Many factors beyond our
control affect the marketability of minerals.  These factors include
market fluctuations, the proximity and capacity of natural resource markets and
processing equipment, government regulations, including regulations relating to
prices, taxes, royalties, land tenure, land use, importing and exporting
minerals and environmental protection.  We cannot accurately predict
the effect of these factors, but any combination of these factors could result
in an inadequate return on invested capital.
 
 We
are not certain that we can successfully compete in the mineral exploration
business.  We do not represent a significant presence in this
industry.
 
 The
mineral exploration business is an extremely competitive industry.  We
are competing with many other exploration companies looking for
minerals.  We are one of the smallest exploration companies and we do
not represent a significant presence in the mineral exploration
business.  Being a junior mineral exploration company, we compete with
other similar companies for financing and joint venture partners, and for
resources such as professional geologists, camp staff, helicopters and mineral
exploration contractors and supplies.  We may not have the means to
compete successfully for these resources.
 
 We
conduct operations in a foreign jurisdiction, and are subject to certain risks
that may limit or disrupt our business operations.
 
 Our head
office is in Canada; and our mining operations are in Chile.  Mining
investments are subject to the risks normally associated with the conduct of any
business in foreign countries including uncertain political and economic
environments; wars, terrorism and civil disturbances; changes in laws or
policies, including those relating to imports, exports, duties and currency;
cancellation or renegotiation of contracts; royalty and tax increases or other
claims by government entities, including retroactive claims; risk of
expropriation and nationalization; delays in obtaining or the inability to
obtain or maintain necessary governmental permits; currency fluctuations;
restrictions on the ability of local operating companies to sell gold, copper or
other minerals offshore for U.S. dollars, and on the ability of such companies
to hold U.S. dollars or other foreign currencies in offshore bank accounts;
import and export regulations, including restrictions on the export of gold,
copper or other minerals; limitations on the repatriation of earnings; and
increased financing costs.
 
 These
risks could limit or disrupt our exploration programs, restrict the movement of
funds, cause us to spend more than we expected, deprive us of contract rights or
result in our operations being nationalized or expropriated without fair
compensation, and could materially adversely affect our financial position or
the results of our operations.  If a dispute arises from our
activities in Chile, we could be subject to the exclusive jurisdiction of courts
outside North America, which could adversely affect the outcome of the
dispute.
 
 We
sometimes hold a significant portion of our cash in United States dollars, which
could weaken our purchasing power in other currencies and limit our ability to
conduct our exploration programs.
 
 Currency
fluctuations could affect the costs of our operations and affect our operating
results and cash flows.  Gold and copper are sold throughout the world
based principally on the U.S. dollar price, but most of our operating expenses
are incurred in local currencies, such as the Canadian dollar and the Chilean
peso.  The appreciation of other currencies against the U.S. dollar
can increase the costs of our operations.
  12
 
 We
sometimes hold a significant portion of our cash in U.S.
dollars.  Currency exchange rate fluctuations can result in conversion
gains and losses and diminish the value of our U.S. dollars.  If the
U.S. dollar declined significantly against the Canadian dollar or the Chilean
peso, our U.S.-dollar purchasing power in Canadian dollars and Chilean pesos
would also significantly decline and we would not be able to afford to conduct
our mineral exploration programs.  We have not entered into derivative
instruments to offset the impact of foreign exchange fluctuations.
 
 We
do not expect to declare or pay dividends in the foreseeable
future.
 
 We have
never paid cash dividends on our common stock and have no plans to do so in the
foreseeable future. We intend to retain any earnings to develop, carry on, and
expand our business.
 
 “Penny
stock” rules may make buying or selling our common stock difficult, and severely
limit its marketability and liquidity.
 
 Trading
in shares of our common stock is subject to regulations adopted by the SEC
commonly known as the “penny stock” rules.   The additional burdens
imposed upon broker-dealers by the penny stock rules could discourage
broker-dealers from participating in transactions involving shares of our common
stock, which could severely limit its marketability and
liquidity.  Under the penny stock rules, broker-dealers participating
in penny-stock transactions must first deliver to their customer a risk
disclosure document describing the risks associated with penny stocks, the
broker-dealer’s duties in selling the stock, the customer’s rights and remedies,
and certain market and other information.  The broker-dealer must
determine the customer’s suitability for penny- stock transactions based on the
customer’s financial situation, investment experience and
objectives.  Broker-dealers must also disclose these restrictions in
writing to the customer, obtain specific written consent from the customer, and
provide monthly account statements to the customer.  The effect of
these restrictions can decrease broker-dealers’ willingness to make a market in
our shares of common stock, decrease the liquidity of our common stock, and
increase transaction costs for sales and purchases of our common stock as
compared to other securities.
  ITEM
1B.         UNRESOLVED STAFF
COMMENTS.
 
 As a
smaller reporting company we are not required to provide this
information.
 
 ITEM
2. PROPERTIES.
 
 Our
executive offices are located at 195 Park Avenue, Thunder Bay, Ontario, Canada,
P7B 1B9.  Our president, Caitlin Jeffs, provides this space free of
charge although she is under no obligation to do so.  We also have a
field and administrative officein Vallenar, Chile,which we rent from month
to month at the rate of 550,000 Chilean pesos (approximately $1,000) per
month.   We believe that these properties are suitable and
adequate for our business operations.
 
 We have
interests in five mineral properties in Chile, which we have described above in
Item 1.
 
 ITEM
3. LEGAL
PROCEEDINGS
 
 We are
not a party to any pending legal proceedings and, to the best of our knowledge,
none of our property or assets are the subject of any pending legal
proceedings.
  ITEM
4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS.
 
 During
the fourth quarter of the fiscal year, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.
  13
 
 PART
II
 
 ITEM
5. MARKET FOR
REGISTRANT’S COMMON EQUITY, RELATED STOCHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES.
 
 Since
September 16, 2008 our common stock has been quoted on the OTC Bulletin Board
under the symbol“RMET”.  From
January 16, 2007 to September 16, 2008, our symbol was “RLKX”. Table 1 sets
forth the range of high and low bid quotes of our common stock for each quarter
for the last two fiscal years as reported by the Pink OTC
Markets.  The bid prices represent inter-dealer quotations, without
adjustments for retail mark-ups, markdowns or commissions and may not
necessarily represent actual transactions.
  Table
      1: High and Low BidsHigh
              LowFiscal
      Year Ended January 31, 2009First
      Quarter
              $0.37
              $0.24Second
      Quarter
              $0.69
              $0.32Third
      Quarter
              $0.51
              $0.15Fourth
      Quarter
              $0.20
              $0.10Fiscal
      Year Ended January 31, 2008First
      Quarter
              $0.145
              $0.035Second
      Quarter
              $0.480
              $0.095Third
      Quarter
              $0.400
              $0.200Fourth
      Quarter
              $0.380
              $0.260
 
 As of
April 28, 2009, we had approximately 15 shareholders of record according to a
register of shareholders list provided by our transfer agent as of that
date.  This number does not include an indeterminate number of
shareholders whose shares are held by brokers in street name. Our transfer agent
is Empire Stock Transfer, 2470 St. Rose Pkwy, Suite 304, Henderson, Nevada,
89074 and their phone number is 702-818-5898.
 
 Dividends
 
 We have
not paid any cash dividends on our common stock since our inception and do not
anticipate paying any cash dividends in the foreseeable future.  We plan to
retain our earnings, if any, to provide funds for the expansion of our
business.
 
 Securities
Authorized for Issuance under Equity Compensation Plans
 
 We have
no securities authorized for issuance under equity compensation
plans.
 
 Recent
Issuances of Unregistered Securities
 
 We did
not issue any unregistered securities during the last quarter of our fiscal
year, nor did we or any affiliate purchaser purchase any of our securities
during the last quarter of our fiscal year.
 
 ITEM
6. SELECTED FINANCIAL
DATA.
 
 As a
smaller reporting company we are not required to provide this
information.
  14
 
 ITEM
7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
 Overview
 
 We were
incorporated on January 10, 2005 in the state of Nevada as Red Lake Exploration,
Inc. and are based in Thunder Bay, Ontario, Canada.  We are in the
business of acquiring, exploring and developing mineral
resources.
 
 Our
Business
  On August
22, 2008, our shareholders approved an amendment to our articles of
incorporation to change our name from Red Lake Exploration, Inc. to Red Metal
Resources Ltd. to reflect our shift in focus from the Red Lake area of Ontario,
Canada, to Chile, and to increase our authorized capital from 75 million shares
of common stock to 500 million shares of common stock. The amendment was
effective on August 27, 2008 when it was filed with the Nevada Secretary of
State.
  Our
principal business is acquiring, exploring and developing mineral properties in
Chile. As of the date of this report we have:
  ·
                purchased
      the Farellon properties,
 ·
                purchased
      the Cecil properties,
 ·
                staked
      the Eva (formerly Jova) exploration
claims,
 ·
                staked
      and abandoned the Costa Rica exploration
  claims,
 ·
                staked
      the Mateo exploration claims,
 ·
                acquired
      an option to purchase the Che
properties,
 ·
                purchased
      the Cañas properties,
 ·
                purchased
      the Estrella properties,
 ·
                purchased
      the Caminada property,
 ·
                purchased
      the Margarita property,
 ·
                signed
      a letter of intent to purchase the Irene properties,
  and
 ·
                terminated
      our options on the Santa Rosa and Camila
  properties.
 
 All of
our properties are located in the III Region of Atacama, Chile and are
accessible by vehicle from the city of Vallenar, Chile.
 
 We have
not determined whether our properties contain mineral reserves that are
economically recoverable.  We have not begun significant operations
and are considered an exploration stage company as defined by SEC Guide 7 with
reference to Statement of Financial Accounting Standard No.7 Accounting and Reporting by
Development Stage Enterprises.
 
 The
address of our website is www.redmetalresources.com.  Information
included on our website is not a part of this report.
 
 Analysis
of Consolidated Statements of Operations
 
 Our
operating results for the years ended January 31, 2009 and 2008 and the changes
in our operating results between those years are summarized in Table
2.
  15
  Table
      2: Changes in Operating ResultsYears ended January 31,
                
                
                Increase
      (decrease) between the
                  years
      ended January 31,2009
                
                
                2008
                
                
                2009
      and 2008Royalties
                
                $
                15,658
                
                
                $
                -
                
                
                $
                15,658Operating
      ExpensesAdministration
                
                
                101,905
                
                
                
                -
                
                
                
                101,905Advertising
      and promotion
                
                
                154,038
                
                
                
                4,837
                
                
                
                149,201Automobile
                
                
                19,234
                
                
                
                -
                
                
                
                19,234Bank
      charges and interest
                
                
                4,731
                
                
                
                263
                
                
                
                4,468Computer
      consulting
                
                
                1,501
                
                
                
                -
                
                
                
                1,501Consulting
      fees
                
                
                114,174
                
                
                
                56,368
                
                
                
                57,806Donated
      rent
                
                
                -
                
                
                
                750
                
                
                
                (750
                )Donated
      service fees
                
                
                -
                
                
                
                1,500
                
                
                
                (1,500
                )Mineral
      exploration costs
                
                
                483,339
                
                
                
                54,345
                
                
                
                428,994Office
                
                
                12,665
                
                
                
                2,061
                
                
                
                10,604Professional
      fees
                
                
                163,176
                
                
                
                72,747
                
                
                
                90,429Rent
                
                
                11,556
                
                
                
                -
                
                
                
                11,556Regulatory
                
                
                9,579
                
                
                
                9,830
                
                
                
                (251
                )Travel
      and entertainment
                
                
                87,636
                
                
                
                29,131
                
                
                
                58,505Salaries,
      wages and benefits
                
                
                28,803
                
                
                
                -
                
                
                
                28,803Foreign
      exchange (gain) loss
                
                
                (922
                )
                
                
                667
                
                
                
                (1,589
                )Write-down
      of unproven mineral properties
                
                
                187,000
                
                
                
                -
                
                
                
                187,000Total
      operating expenses
                
                
                1,378,415
                
                
                
                232,499
                
                
                
                1,145,916Net
      operating loss
                
                
                (1,362,757
                )
                
                
                (232,499
                )
                
                
                (1,130,258
                )Interest
      on notes payable
                
                
                (20,864
                )
                
                
                -
                
                
                
                (20,864
                )Net
      loss for the year before income tax
                
                
                (1,383,621
                )
                
                
                (232,499
                )
                
                
                (1,151,122
                )Income
      tax
                
                
                (263
                )
                
                
                -
                
                
                
                (263
                )Net
      loss for the year
                
                $
                (1,383,884
                )
                
                $
                (232,499
                )
                
                $
                (1,151,385
                )
 
 Revenue
 
 Our
revenue for the year ended January 31, 2009 was $15,658 compared to $0 for the
year ended January 31, 2008.
 
 All of
the revenue was the result of a 5% royalty from Minera Farellon which had the
right to mine our Santa Rosa properties.  On October 27, 2008, Minera
Farellon ceased mining operations on the Santa Rosa property and stopped paying
the royalty revenue. On November 18, 2008, we decided to terminate our option
agreement to purchase the Santa Rosa. Due to the nature of our
business—exploring for rather than producing minerals—we do not expect to have
operating revenue within the next year.
  16
 
 Operating
Expenses
  Our operating expenses
increased by $1,145,916 or 499% from $232,499 for the year ended January 31,
2008 to $1,378,415, for the year ended January 31, 2009.  This
increase was primarily due to increases of approximately $430,000
in  the cost of the exploration programs that we conducted in Chile;
$150,000 in advertising and promotion costs associated with raising capital;
$100,000 in administration, accounting and project generation costs in Chile;
$90,000 in professional fees for regulatory compliance; $60,000 in travel and
entertainment costs for our professional geologists to travel to Chile; $60,000
for our outsourced administrative and accounting services; $19,000 in automobile
expenses associated with mineral exploration in Chile; $30,000 in salaries,
wages and benefits for our employees in Chile; and$187,000 in
unproven mineral property costs that we wrote-off when we abandoned our Santa
Rosa and Camila properties.
  Over the
next twelve months we expect our net operating expenses to be about the
same.
  Interest
Expense
  During
the year ended January 31, 2009 we issued $580,000 in notes payable to the
father of our president and accrued $20,864 in interest on these notes
payable.
  Net
Loss
  We had a
net loss of $1,383,884 for the year ended January 31, 2009 compared to a net
loss of $232,499 for the year ended January 31, 2008.  The $1,151,385
increase in net loss was due primarily to acquiring and exploring our properties
in Chile.
  Liquidity
and Capital Resources
  Going
Concern
 
 The
consolidated financial statements included in this report have been prepared on
a going concern basis, which implies we will continue to realize our assets and
discharge our liabilities in the normal course of business. We have not
generated any significant revenues from mineral sales since inception, have
never paid any dividends and are unlikely to pay dividends or generate
significant earnings in the immediate or foreseeable future. Our continuation as
a going concern is dependent upon the continued financial support of our
shareholders, our ability to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. Our ability to achieve
and maintain profitability and positive cash flows is dependent upon our ability
to locate profitable mineral properties, generate revenues from mineral
production and control production costs. Based upon our current plans, we expect
to incur operating losses in future periods. We plan to mitigate these operating
losses through controlling our operating costs.  We plan to obtain
sufficient working capital through additional debt or equity financing and
private loans.  At January 31, 2009, we had a working capital deficit
of $975,070 and accumulated losses of $1,673,456 since inception. These factors
raise substantial doubt regarding our ability to continue as a going concern.
There is no assurance that we will be able to generate significant revenues in
the future. Our consolidated financial statements do not give any effect to any
adjustments that would be necessary should we be unable to continue as a going
concern and therefore be required to realize our assets and discharge our
liabilities in other than the normal course of business and at amounts different
from those reflected in our financial statements.
  At
January 31, 2009, we had a cash balance of $26,115 and negative cash flow from
operations of
$893,673.Since February 1, 2008 we have funded our
operations through the issuance of $686,000 in notes payable and $1,300,000 in
shares of common stock.
  17
 
 Sources
and Uses of Cash
 
 Table 3
summarizes our sources and uses of cash for the years ended January 31, 2009 and
2008.
 
 Table
      3:  Summary of Sources and Uses of CashJanuary
      312009
                
                
                2008Net
      cash provided by financing activities
                
                $
                1,880,000
                
                
                $
                100,000Net
      cash used in operating activities
                
                
                (893,673
                )
                
                
                (113,576
                )Net
      cash used in investing activities
                
                
                (940,519
                )
                
                
                -Effect
      of foreign currency exchange
                
                
                (21,594
                )
                
                
                -Net
      increase (decrease) in cash
                
                $
                24,214
                
                
                $
                (13,576
                )
  Net
cash used in operating activities
 
 We used
net cash of $893,673 in operating activities during the year ended January 31,
2009.  We used $1,383,884 to cover
operating costs, $16,571 to prepay expenses and deposits, primarily for
advertising and marketing, our other receivable increased by $29 due to an
overpayment to the Government of Chile and we took a write-down on our unproven
mineral properties of $187,000.These uses of cash were offset by net
increases in; accounts payable of $29,698; accrued liabilities of $3,615 and
accrued professional fees of $15,412; accrued mineral  property costs
of $140,000 to acquire the Canas, Estrella, Caminata and Margarida
properties; accounts payable of $110,222  to related parties
for administration, consulting, advertising and promotion, mineral exploration
office, entertainment, automobile, rental and travel expenses; and accrued
interest on our notes payable to a related party of $20,864.
 
 We used
$113,576 net cash in operating activities during the year ended January 31,
2008, and $232,499 to cover operating costs.  These costs were offset
by increases in accounts payable of $43,420, accrued professional fees of
$32,018, amounts due to related parties of $41,235, and donated services and
rent of $2,250.
 
 Net
cash used in investment activities
 
 During
the year ended January 31, 2009, we spent $940,519 acquiring mining properties,
exploration claims and options to acquire mineral properties.
 
 We had no
investment activities during the year ended January 31, 2008.
 
 Net
cash provided by financing activities
 
 During
the year ended January 31, 2009, we issued 4,999,999 units of our common stock
for $1.3 million.
 
 During
the year ended January 31, 2009, we borrowed $580,000 in cash from the father of
a director and secured the repayment with notes payable.
 
 During
the year ended January 31, 2008 we issued 333,334 units of our common stock for
$100,000 cash.
 
 Mineral
Properties
  On
November 27, 2007 we abandoned our mineral claims in the Red Lake Mining
District, Ontario, Canada, and focused our business on mineral exploration in
Chile.
  18
  In
anticipation of acquiring mineral properties in Chile, on August 21, 2007 we
formed Minera Polymet Limitada, a Chilean limited liability company, to hold our
Chilean property interests.  We have a 99% interest in
Polymet. Polymet had no assets, liabilities or operations when we formed
it.
 
 Since
then, we have acquired title to mining claims, locally called mensuras, and
staked or acquired exploration claims, locally called pedimentos. A mensura
gives the holder title and the right to mine the property. A pedimento gives the
holder the right to explore a mineral property for two years. The holder can
apply to convert a pedimento to a mensura at any time during the two
years.  The application process takes 220 days.
 
 We cannot
guarantee that any of our pedimento properties will convert to mensura
properties. Some of our pedimento properties are still in the registration
process. We may decide, for geologic, economic or other reasons, not to complete
a registration or to abandon a claim after it is registered. Some of our
pedimentos we have laid down over other owners’ properties. Our pedimento rights
in these properties won’t crystallize unless the owners of the underlying claims
fail to pay their taxes or otherwise forfeit their interests in their
properties.
 
 Our
property interests as of the date of this filing are set out in Table
4.
  Table
      4: PropertiesDate
      acquired
                Name
      of property
                Percentage
      and type of interest
                HectaresApril
      25, 2008
                Farellon
                100%
      , mensura
                66September
      17, 2008
                Cecil
      1 – 49
                100%
      , mensura
                230September
      15, 2008
                Cecil
      and Burghley I
                100%,
      pedimento
                500November
      2, 2008
                Mateo
      4 – 11
                100%,
      pedimento
                2,200November
      27, 2008
                Cañas
                100%
      , mensura
                700November
      27, 2008
                Estrella
                100%
      , mensura
                1,383November
      27, 2008
                Caminada
                100%
      , mensura
                40November
      27, 2008
                Margarita
                100%
      , mensura
                56December
      2, 2008
                Che
                Option
      for 100%, mensura
                76January
      30, 2009
                Mateo
      12 – 14
                100%,
      pedimento
                700February
      2, 2009
                Irene
                Letter
      of intent, 100%, mensura
                60April
      7, 2009
                Eva
      1 – 17*
                100%,
      pedimento
                3,5009,511*Includes
      former Jova 1 – 15
 
 All of
these properties are in III Region of Atacama, Chile, and are accessible by road
from Vallenar.
 
 On
November 20, 2007, we acquired an option to buy the Farellon property. On April
25, 2008 we exercised this option and purchased the property. In September 2008
we acquired the Cecil properties to increase our interest in the same
area.
 
 On
February 1, 2008, we acquired options to purchase the Camila and Santa Rosa
properties covering a total of 880 hectares in the III Region of Chile. We
completed drilling programs on both properties. After reviewing our exploration
results and considering the acquisition costs, we decided to terminate our
options in November and December 2008. We remain interested in these areas and
obtained the Che and Mateo properties near the Camila property and the Eva
properties near the Santa Rosa property.
 
 We
acquired the Farellon, Camila, Santa Rosa, Che and Irene property interests from
Minera Farellon Limitada, a company controlled by Kevin Mitchell, a significant
shareholder, and Richard N. Jeffs, the father of our president, also a
significant shareholder.
  19
 
 On
November 27, 2008 we attended a government auction of mineral properties and
acquired the Cañas, Estrella, Caminada and Margarita properties described in
Table 4.  The purchase price for each property was equal to the fiscal
tax unpaid for the years 1997 to 1999 inclusive and a six percent commission,
both payable to the government of Chile. Taxes for the years 2000 to 2008
inclusive of approximately $140,000 could still be outstanding, but we haven’t
yet confirmed the amounts with the Chilean taxing authority.
 
 We
continue to conduct groundwork on and discuss terms for the purchase of other
properties of interest to us in Chile. Over the next year we plan to concentrate
on exploring and developing our properties in Chile.
  Through
Minera Farellon, we have contracted for the services of Kevin Mitchell, an
experienced manager resident in Chile who has organized our office, reviews
potential properties, and expedites other resources for us. He also acts as the
legal representative for Polymet.
  During
the last twelve months we have conducted groundwork on numerous properties of
interest to us in the same area. We have acquired several of these properties,
have options to acquire others, and have staked claims in the same areas. These
properties are described below. We are continuing to compile data on and review
other properties and discuss terms with various owners.
  Farellon
Mineral Properties
 
 farellon
alto uno al ocho
  On
September 25, 2007, Minera Farellon agreed to assign to us its option to buy the
Farellon Alto Uno al Ocho properties. The Farellón property is centered about
309,150 east and 6,888,800 south UTM PSAD56 Zone 19.
 
 We agreed
to pay Minera Farellon $250,000 when the assignment was recorded with the
Conservator of Mines in Freirina, Chile. The assignment was recorded on
November 20, 2007. Minera Farellon granted us an extension for the payment
of $250,000 until April 30, 2008. On April 25, 2008, we paid Minera Farellon
$250,000 to exercise our option and paid the vendor $300,000 to acquire the
property. We owe the vendor a royalty equal to 1.5% of the net sales of minerals
extracted from the property for a total of $600,000.  The royalty
payments are due monthly once exploitation begins, and are subject to a minimum
monthly payment of $1,000.  We can pay any remainder due on the
royalty at any time. We have not begun exploiting the property.
 
 The
Farellon property is located in Chile's III Region in the highly prospective
Candelaria iron-oxide-copper-gold (IOCG) belt, home of the Phelps Dodge
Candelaria Mine.  The Candelaria copper mine has been in production
since 1993 and has reported proven reserves of 283 million tonnes grading 0.64%
copper.  Recent surface sampling on the Farellon property has returned
values of up to 6.7% copper, and ICP analysis of surface samples indicates
mineralogy assemblages consistent with classic IOCG deposits. Historic drilling
on the property intersected sulphide and oxide mineralization to a depth of 150
metres and outlined a 1.7-kilometre strike length. Four significant
intersections are summarized in Table 5.
 
 Table
      5: Farellon Significant IntersectionsMetres
                
                Gold
                  (grams/tonne)
                
                Copper
                  (%)
                
                Cobalt
                  (%)9
                
                3.72
                
                2.49
                
                .063
                
                4.17
                
                5.29
                
                .1110
                
                1.53
                
                1.31
                
                .0420
                
                .97
                
                1.22
                
                .02
  20
  cecil
 
 On
September 17, 2008, we completed our purchase of the Cecil 1 – 49, Cecil and
Burghley I mining claims for $20,000 and $1,391 in legal and transfer costs. The
Cecil claims cover 730 hectares and consist of 500 hectares of exploration
claims and 230 hectares of titled mining claims centered around 311,500 east and
6,890,000 south UTM PSAD56 Zone 19 and lie approximately 1.7 kilometres north of
the Farellon property border.  The claims cover a 1.8 kilometre strike
length of a mineralized vein interpreted to be part of the same mineralizing
system as the Farellon vein. An investigation completed during the Farellon
acquisition uncovered a broad regional sampling program completed in 1996
showing results from the areas covered by the Cecil claims. Results from the
1996 sampling show copper and gold grades similar to grades returned from the
Farellon vein, with up to 13.5 grams per tonne gold with 1.27% copper and 2.27
grams per tonne gold with 1.68% copper while the cobalt grades are stronger with
samples of up to 0.68% and 0.51% cobalt. All samples are from waste dumps
surrounding historical artisanal mine workings.
 
 Mateo
Group of Mineral Properties
 
 We have
assembled a group of properties in the vicinity of the Camila property that we
abandoned at the end of 2008. They are the Che Uno and Che Dos mining claims,
the Mateo exploration claims, the Margarita mining claim, and the Irene Uno and
Irene Dos mining claims. The Mateo claims overlap the Che, Margarita and Irene
properties.  We acquired all of these properties for the same
geological reasons and consider them one property and call it the Mateo
property.
 
 che
uno and che dos
 
 On
October 10, 2008, Minera Farellon granted us the option to purchase the Che Uno
and Dos properties. The Che properties cover 76 hectares centered about 339,002
east and 6,838,450 south UTM PSAD56 Zone 19. They are in the northwest corner of
the Mateo properties.  On December 2, 2008 we paid $444 to acquire the
option, $303 in legal and transfer costs and agreed to pay $20,000 by April 10,
2009 to exercise the option and complete our acquisition of the properties. On
April 7, 2009, Minera Farellon agreed to extend the exercise term to October 10,
2009.
 
 Minera
Farellon agreed to pay the former owner a royalty equal to 1% of the net
proceeds from the sale of ore to a maximum of $100,000 with no monthly minimum.
We will assume this royalty obligation if we exercise our option and complete
the purchase of the property from Minera Farellon.
 
 mateo
 
 On
November 2, 2008, we staked eight exploration claims around the Che properties
covering 2,200 hectares centered about 337,675 east and 6,837,600 south UTM
PSAD56 Zone 19. On January 30, 2009, we staked three more exploration claims
covering 700 hectares.
 
 We can
explore these claims for two years before applying to convert them to mining
claims. We cannot guarantee that we will be able to convert all of these
exploration claims into mining claims.
  The Mateo
claims cover a five-kilometre strike length of intensely altered volcanics with
siginificant massive sulphide mineralization. Grab samples from artisanal
mining dumps have returned assays of up to 6.89% copper and 3.47 grams per tonne
gold.
 
 margarita
  We bought
the Margarita mining claim on November 27, 2008 through a public auction for
$16,072 and owe outstanding taxes of 616,879 Chilean pesos (approximately
$1,000).  The Margarita claim covers 56 hectares centered around
340,353 east and 6,838,347 south UTM PSAD56 Zone 19 located within the northeast
corner of the Mateo exploration claim.
  21
  irene
uno and irene dos
  We can
buy the Irene Uno and Dos properties according to a letter of intent that we
signed on February 2, 2009.  To complete our purchase, we must pay
21,000,000 Chilean pesos (approximately $34,000) plus legal and transfer
costs.  The Irene mining claims cover 60 hectares centered about
341,002 east and 6,838,101 south UTM PSAD56 Zone 19, are located within the
northeast corner of the Mateo exploration claims, and share their western border
with the Margarita mining claim.
  Eva
Mineral Properties
 
 On
September 28, 2008, we staked 13 exploration claims around the Santa Rosa
property covering 2,600 hectares. We called these claims Jova. On November 17,
2008, we added two more exploration claims to the Jova claims. On April 7, 2009,
we consolidated these claims, added two more and re-staked them all as the Eva 1
– 17. They cover 3,500 hectares. We can explore these claims for up to two years
before applying to convert them to mining claims. We cannot guarantee that we
will be able to convert all of these exploration claims into mining
claims.
  Other
Properties
  We bought
100% of three other properties–the Estrella, Cañas and Caminada properties, all
in the Candelaria IOCG belt in Chile’s Coastal Cordillera—at the auction in
November 2008.  All three properties are considered grassroots
exploration properties.  We completed our initial due diligence on the
properties before we bought them, but have yet to complete a full evaluation of
their potential.  None of the properties has existing records of
modern exploration although drilling is evident on one of the
properties.  All of the properties have historical artisanal mining
workings.
  The
Estrella property consists of three blocks of claims containing eleven mining
claims covering 1,390 hectares of ground.  The property is centered
about 325,000 east and 6,807,000 south UTM PSAD56 Zone 19.  Numerous
drill sites are visible on the Estrella, but we have found no record of drill
results. We paid approximately $11,000 and owe outstanding taxes of
approximately 55 million Chilean pesos (approximately $90,000) for the Estrella
property.
  The Cañas
property consists of three mining claims covering 700 hectares of
ground.  The property is centered about 338,172 east and 6,810,500
south UTM PSAD56 Zone 19. We paid approximately $4,000 and owe outstanding taxes
of approximately 28 million Chilean pesos (approximately $45,000) for the Cañas
property.
  The
Caminada property consists of one mining claim covering 40 hectares of ground
acquired at the auction. The property is centered about 359,209 east and
6,868,819 south UTM PSAD56 Zone 19.  We paid approximately $1,000 and
owe outstanding taxes of approximately 1.5 million Chilean pesos (approximately
$2,000) for the Caminada property.
  While we
intend to concentrate our efforts on exploring and developing the properties
that we have, we are reviewing other interesting properties in the same general
area and discussing terms with various owners.    We have
contracted with geologists to analyze the rock samples, perform due diligence
investigations, evaluate and analyze their findings, and prepare geological
reports. If our initial evaluation results are promising, we intend to acquire
additional Chilean mineral properties.
  Our
acquisition and exploration of our Chilean properties are subject to our ability
to obtain the necessary funding. To assist us with our funding efforts, we
have retained the services of a number of consultants.
  22
  On May 2,
2008, we entered into a letter agreement with a brokerage house for the private
placement of up to $6 million of units of our common stock and common stock
purchase warrants on a best efforts basis.  We agreed to pay the
brokerage house a commission equal to 9% of the total financing and issue
warrants equal to 10% of the total number of units issued.  We paid a
non-refundable work fee of $25,000 which is deductable from the
commission.  The contract is effective until May 19,
2009.  We did not agree to register the units under the Securities Act
of 1933, as amended, and they may not be offered or sold in the United States
without registration or an applicable exemption from the registration
requirements.
  On
October 21, 2008, we entered into a letter agreement with an independent
investor relations specialist. We have agreed to pay him a monthly fee of $4,500
for an investor relations program that will provide information about us to
institutional and individual investors. The letter agreement is not subject to
fixed terms and can by terminated by either party.
  On March
18, 2009, we entered into a one-year agreement with a broker-dealer whereby the
broker-dealer agreed to use its best efforts to raise funds for us or find a
buyer for our Farellon property. Either party can terminate the agreement or
extend its term with five days’ written notice. We have agreed to pay the
broker-dealer commissions in the following circumstances:
  ·
                10%
      of the gross proceeds from a public offering, private placement, or other
      sale of our securities to a third party whom the broker-dealer introduces
      to us,
 ·
                10%
      of the gross proceeds of any financing if, within a year of the
      termination of the contract, we enter into a financing agreement with a
      third party whom the broker-dealer introduced to the us during the term of
      this contract,
 ·
                1
      million shares of our common stock when the Farellon property goes into
      production if we have formed a joint venture for the development of the
      Farellon property with a party whom the broker-dealer company introduced
      to us,
 ·
                8%
      of the proceeds from the sale of the Farellon property and 250,000 shares
      of our common stock if we enter any agreement during the term of the
      contract (whether consummated during the term or afterward) for the sale
      of the Farellon property.
  Any
securities offered will not be registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
  Abandoned
Properties
  We
abandoned three properties during the last year, the Camila Breccia and the
Santa Rosa mining claims and the Costa Rica exploration claims.
  camila
breccia
 
 On
February 1, 2008, Minera Farellon granted us an option to acquire its option to
buy the Camila properties centered about 335,500 east and 6,835,500 south UTM
PSAD56 Zone 19. Under the option agreement, the acquisition price was $455,000
payable in stages on various dates between February 1, 2008 and December 7,
2009. The option agreement included a royalty equal to 6% of the net sales of
minerals extracted from the property to a maximum of $1 million payable monthly
once exploitation began and payable in full by December 7, 2011. The option was
exercisable on December 1, 2008. We reviewed the results of the 2008 drilling
program and reconnaissance mapping in the area and decided that better potential
for a mineralized ore body lies to the northeast of the Camila claims where we
have staked claims. We did not exploit the property or exercise the option and
have written off $55,000 in acquisition costs.
  23
  santa
rosa uno and porfiada uno
 
 On
February 1, 2008, Minera Farellon granted us an option to acquire its option to
buy the Santa Rosa properties. The acquisition price was $419,500 payable in
stages between February 1, 2008 and June, 2011, and included a royalty equal to
1.5% of the net sales of minerals extracted from the property to a maximum of
$590,000.
 
 Minera
Farellon’s maintained the right to mine the property and paid us a royalty equal
to 5% of the net proceeds from the sale of ore while we were making minimum
monthly payments to the vendor. On October 27, 2008, Minera Farellon ceased
mining operations on the Santa Rosa and ended all of our royalty obligations.
During the year ended January 31, 2008 Minera Farellon paid us approximately
$16,000 on account of the royalty.
  The Santa
Rosa property is made up of two mining and exploration claims totaling 110
hectares centered about 305,575 east and 6,858,150 south UTM PSAD56 Zone 19.
Exploration by others in 2004 identified multiple mineralized structures with
significant alteration indicators of IOCG systems. The ore from MineraFarellon’s
mining operation returned grades of up to 19.78% copper and 13.9 grams per tonne
gold, indicating the potential for a consistently mineralized ore
body.
 
 In the
summer of 2008, we completed three diamond drill holes totaling 311
metres.  Significant results are summarized in Table 6.
 
 Table
      6: Santa Rosa Significant IntersectionsDDH
                Metres
                Copper
                  (%)
                Gold
                  (grams/tonne)SRA-08-002
                1.05
                1.37
                0.17SRA-08-002
                1.00
                1.32
                0.15SRA-08-003
                7.40
                1.07
                0.14
 
 We
considered the purchase price too high, given today’s market, and terminated the
agreement in November 2008, writing off $132,000 in acquisition costs that we
had paid to maintain the option.  We remain interested in the property
and are continuing to negotiate terms with the owner. In the meantime, we staked
the Eva exploration claims in the area.
 
 costa
rica claims
 
 On
October 16, 2008, we staked two exploration claims centered around 322,000 east
and 6,907,095 south UTM PSAD56 Zone 19. These claims cover 600 hectares with
total acquisition costs of $1,248. We had the right to explore these claims for
220 days after the registration date and to upgrade them to mensura status at
the end of 200 days and before the end of 220 days. As very limited data exist
for the claims’ mineralization, we have decided not to maintain these claims to
save costs and will lose them on May 1, 2009 when the maintenance fees are
due.
 
 Chilean
Subsidiary
 
 On August
21, 2007, we formed Minera Polymet Limitada, a limited liability company, under
the laws of the Republic of Chile.  We own a 99% interest in this company,
which holds our Chilean property interests.  The 1% interest that we
don’t own is held for us by a Chilean resident as required by Chilean law. 
He is an experienced manager who has organized an office and expedites other
resources for us.  We have agreed to pay him $2,000 per month to act
as the legal representative and manager.
 
 Equity
Financing
 
 To
generate working capital during the last twelve months, we have issued shares
and warrants under Regulation S promulgated under the Securities Act of 1933 as
set out in Table 7.
  24
 
 Table
      7: Equity FinancingShares
                
                
                Warrants*Date
      of issue
                
                Number
                
                Price
                
                Proceeds
                
                
                Number
                
                Price
                ExpiryAugust
      13, 2007
                
                
                333,334
                
                $
      0.30
                
                $
                100,000
                
                
                
                166,667
                
                $
      0.50
                August
      13, 2009April
      21, 2008
                
                
                4,000,000
                
                $
      0.25
                
                
                1,000,000
                
                
                
                4,000,000
                
                $
      0.35
                April
      21, 2010May
      14, 2008
                
                
                999,999
                
                $
      0.30
                
                
                300,000
                
                
                
                999,999
                
                $
      0.50
                May
      14, 2010†5,333,333
                
                
                
                $
                1,400,000
                
                
                
                5,166,666*The warrants can be exercised
      any time before their expiry.
                  †These
      warrants must be exercised if our stock trades at $0.80 per share for 30
      consecutive trading days.
 
 Based on
our operating plan, we anticipate incurring operating losses in the foreseeable
future and will require additional equity capital to support our operations and
develop our business plan.  If we succeed in completing future equity
financing, the issuance of additional shares will result in dilution to our
existing shareholders.
 
 Debt
Financing
 
 As of the
date of filing, we have borrowed $686,000 from Richard N. Jeffs, the father of
our president, to whom we issued demand promissory notes to secure the repayment
of the principal sum together with interest at 8%.
  Challenges
and Risks
  Although
we have raised $1,986,000 since January 31, 2008, our cash position as of the
date of this report is inadequate to satisfy our working capital needs for the
next twelve months.  Over the next twelve months we will need to raise
capital to cover our operating costs, fulfill the obligations we may incur under
our property agreements and cover any property taxes, exploration or development
costs on our properties.
  We expect
our general and administrative expenses to remain about the same. These costs
include exploring and developing our mineral properties and sourcing additional
mineral properties and exploration claims.  We are reviewing other
mineral properties and could decide to buy or stake more mineral properties or
to acquire an option to buy more properties, which would require that we raise
more capital.
  We do not
anticipate generating any revenue over the next twelve months. We plan to fund
our operations through any combination of equity financing from the sale of our
securities, private loans, joint ventures or through the sale of a part interest
in our mineral properties.  Other than the letter agreements we signed on
May 2, 2008, October 21, 2008 and March 18, 2009 relating to the private
placement of our securities, we do not have any financing
arranged.  We cannot assure you that we can raise significant funds
through this offering.  Although we have succeeded in raising funds as
we have needed them, we cannot assure you that we will be able to raise
sufficient funds in order to cover our general and administrative expenses
and acquire and develop properties. The downturn in the United States economy
could affect potential investors’ willingness to invest in risky ventures such
as ours.
  We may
consider entering into a joint venture partnership with a more senior resource
company to provide the funding that we need to complete a mineral exploration
program in Chile.  Although we have not attempted to locate a joint
venture partner, if we enter into a joint venture arrangement, we would likely
have to assign a percentage of our interest in our mineral property to our joint
venture partner in exchange for the funding.
  25
 
 Foreign
Exchange
  We are
subject to foreign exchange risk for transactions denominated in foreign
currencies.  Foreign currency risk arises from the fluctuation of
foreign exchange rates and the degree of volatility of these rates relative to
the United States dollar.  We do not believe that we have any material
risk due to foreign currency exchange.
 
 Other
Trends, Events or Uncertainties that may Impact Results of Operations or
Liquidity
  The
economic crisis in the United States and the resulting economic uncertainty and
market instability may make it harder for us to raise capital as and when we
need it and have made it difficult for us to assess the impact of the crisis on
our operations or liquidity and to determine if the prices we will receive on
the sale of minerals will exceed the cost of mineral exploitation.  If
we are unable to raise cash, we may be required to cease our
operations.  Other than as discussed in this annual report, we know of
no other trends, events or uncertainties that have or are reasonably likely to
have a material impact on our short-term or long-term liquidity.
 
 Income
Taxes
  Income
tax expense has not been recognized for the years ended January 31, 2009 and
2008 and no taxes were payable at January 31, 2009 or 2008, because we have
incurred losses since our inception. Red Metal is subject to United States
federal and state taxes and Polymet is subject to Chilean tax
law.
  The
components of our net operating losses for the years ended January 31, 2009 and
2008 are set out in Table 8.
  Table
      8:  Net Operating Losses2009
                
                
                2008United
      States
                
                $
                (429,972
                )
                
                $
                (231,882
                )Chile
                
                
                (951,019
                )
                
                
                238$
                (1,380,991
                )
                
                $
                (231,644
                )
  At
January 31, 2009 and 2008, our deferred tax assets primarily relate to net
operating losses.  We have established a 100% valuation allowance, as we
believe it is more likely than not that the deferred tax assets will not be
realized.
  The
components of our deferred tax assets for the years ended January 31, 2009 and
2008 are set out in Table 9.
  Table
      9:  Deferred Tax Assets2009
                
                
                2008Federal
      loss carryforwards (effective rate 34%)
                
                $
                230,511
                
                
                $
                84,321Foreign
      loss carryforwards
                
                
                161,713
                
                
                
                (40
                )Less:
      valuation allowance
                
                
                (392,224
                )
                
                
                (84,281
                )$
                -
                
                
                $
                -
  Our
valuation allowance increased during 2009 and 2008 by $307,943 and $78,800,
respectively.
  The
components of our net operating loss carryforwards (NOLs) for the years ended
January 31, 2009 and 2008 are set out in Table 10.
  26
  Table
      10: Net Operating Loss Carryforwards2009
                
                
                2008United
      States
                
                $
                677,974
                
                
                $
                247,764Chile
                
                
                950,781
                
                
                
                (238
                )$
                1,628,755
                
                
                $
                247,526
  The
federal NOLs expire through January 31, 2029. As we are domiciled in Nevada, we
are not subject to state taxes.  The Chilean tax losses can be carried
forward indefinitely.
  Off-Balance
Sheet Arrangements
 
 We have
no off-balance sheet arrangements and no non-consolidated, special-purpose
entities.
 
 Contingencies
and Commitments
  We had no
contingencies at January 31, 2009.
 
 We have
the following long-term contractual obligations and commitments:
 
 Farellon royalty.We are
committed to paying the vendor a royalty equal to 1.5% on the net sales of
minerals extracted from the Farellon property up to a total of
$600,000.  The royalty payments are due monthly once exploitation
begins, and are subject to minimum payments of $1,000 per month.  We
have no obligation to pay the royalty if we do not commence
exploitation.  We have not commenced exploitation.
 
 Che option. Under the terms
of our option agreement with Minera Farellon, we must pay $20,000 by October 10,
2009 to exercise the option and purchase the Che properties.  If we
exercise our option, then we must pay a royalty equal to 1% of the net sales of
minerals extracted from the property to a maximum of $100,000 to the former
owner. The royalty payments are due monthly once exploitation begins, and are
not subject to minimum payments.
 
 Investor relations. On
October 21, 2008, we entered into a letter agreement with an independent
investor relations specialist who agreed to provide us with an investor
relations program for a flat monthly fee of $4,500. The letter agreement can by
terminated without cause by either party at any time.
 
 Internal
and External Sources of Liquidity
  To date
we have funded our operations by selling our securities and borrowing funds
secured with promissory notes, and from mining royalties.
 
 Critical
Accounting Policies and Judgments
  An
appreciation of our critical accounting judgments is necessary to understand our
financial results.  These policies may require that we make difficult
and subjective judgments regarding uncertainties, and as a result, such
estimates may significantly impact our financial results.  The
precision of these estimates and the likelihood of future changes depend on a
number of underlying variables and a range of possible
outcomes.  Other than our accounting for the fair value of our
unproved mineral properties, accruals for accounting, auditing, legal expenses
and mineral property costs our critical accounting policies do not involve the
choice between alternative methods of accounting.  We have applied our
critical accounting judgments consistently.
 
 Reclassifications
  Certain
prior period amounts in the accompanying consolidated financial statements have
been reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the consolidated results of operations or
financial position for any period presented.
  27
  Accounting
Estimates
  The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.
  Our
consolidated financial statements are based on a number of estimates, including
accruals for estimated accounting, auditing, legal expenses and mineral property
costs and impairment of unproved mineral properties.
  Financial
Instruments
  foreign
exchange risk
  We are
subject to foreign exchange risk for sales and purchases denominated in foreign
currencies. The functional currency for Polymet is the Chilean peso. Foreign
currency risk arises from the fluctuation of foreign exchange rates and the
degree of volatility of these rates relative to the United States
dollar.  We do not believe that we have any material risk to our
foreign currency exchange.
  fair
value of financial instruments
  Our
financial instruments include cash, accounts receivable, accounts payable,
accrued liabilities, accrued professional fees and accrued mineral property
costs. The fair value of these financial instruments approximates their carrying
values due to their short maturities.
  concentration
of credit risk
  Financial
instruments that potentially subject us to significant concentrations of credit
risk consist principally of cash and withholding and value added taxes in Canada
and Chile.
  At
January 31, 2009 and 2008, we had approximately $1,700 and $1,300, respectively
in cash that was not insured.  This cash is on deposit with a major
chartered Canadian bank.  As part of our cash management process, we
perform periodic evaluations of the relative credit standing of this financial
institution.  We have not experienced any losses in cash balances and
do not believe we are exposed to any significant credit risk on our
cash.
  Our
operations involve dealing with uncertainties and judgments in application of
complex tax regulations in Canada and Chile.  The final taxes paid are
dependent upon many factors including negotiations with tax authorities in
various jurisdictions.  We record potential withholding tax and value
added tax liabilities based on our estimate of whether and the extent to which
taxes may be refunded or deemed payable.
  Long-lived
Assets
  In
accordance with Statement of Financial Accounting Standard (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, the carrying value of long-lived assets is
reviewed on a regular basis for the existence of facts or circumstances that may
suggest impairment. We recognize impairment when the sum of the expected
undiscounted future cash flows is less than the carrying amount of the asset.
Impairment losses, if any, are measured as the excess of the carrying amount of
the asset over its estimated fair value. Our only long-lived asset is our
unproven mineral property interests. At January 31, 2009 and 2008 we did not
record any impairment charges with respect to any of our unproven mineral
interests.
  28
  Investment
in and Expenditures on Mineral Interests
  Realization
of our investment in and expenditures on mineral properties is dependent upon
the establishment of legal ownership, the attainment of successful production
from the properties or from the proceeds of their disposal.
  Title to
mineral properties involves certain inherent risks due to the difficulties of
determining the validity of certain claims as well as the potential for problems
arising from the frequently ambiguous conveyancing history characteristic of
many mineral properties. To the best of our knowledge we believe all of our
unproved mineral interests are in good standing and that we have title to all of
these mineral interests.
  Unproved
Mineral Property Costs
  We
have been in the exploration stage since our inception on January 10, 2005 and
have not yet realized any revenues from our operations. We are primarily engaged
in acquiring and exploring mining properties. Mineral property exploration costs
are expensed as incurred. Mineral property acquisition costs are initially
capitalized when incurred using the guidance in Emerging Issues Task Force
(EITF) 04-02, Whether Mineral
Rights Are Tangible or Intangible Assets. We assess the carrying costs
for impairment under SFAS No. 144, Accounting for Impairment or
Disposal of Long Lived Assets at each fiscal quarter end. When it has
been determined that a mineral property can be economically developed as a
result of establishing proven and probable reserves, the costs then incurred to
develop such property are capitalized. Such costs will be amortized using the
units-of-production method over the estimated life of the probable reserve. If
mineral properties are subsequently abandoned or impaired, any capitalized costs
will be charged to operations.
  At
January 31, 2009 and 2008 $187,000 and $0 in capitalized costs were written off
when we abandoned the Camilla and Santa Rosa properties.
  Asset
Retirement Obligations
  SFAS No.
143, Accounting for Asset
Retirement Obligations addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. Specifically, SFAS No. 143 requires that the
fair value of a liability for an asset retirement obligation be recognized in
the period in which it is incurred if a reasonable estimate of fair value can be
made. In addition, the asset retirement cost is capitalized as part of the
asset’s carrying value and amortized over the life of the related
asset.  Reclamation costs are periodically adjusted to reflect changes
in the estimated present value resulting from the passage of time and revisions
to the estimates of the reclamation and abandonment costs.  The asset
retirement obligation is based on when spending for an existing environmental
disturbance will occur.  Asset retirement obligations are reviewed by
us on an annual basis, unless otherwise deemed necessary.  At January
31, 2009 and 2008, we did not have any asset retirement
obligations.
  Recently
Adopted and Recently Issued Accounting Standards and Pronouncements
  In
September 2006, the Financial Accounting Standards Board (FASB) issued SFAS
158 (SFAS 158), Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans, an
amendment of FASB Statements No. 87, 88, 106, and
132(R). This statement requires an employer to recognize the
over funded or under funded status of a defined benefit postretirement plan as
an asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity. This statement also requires an
employer to measure the funded status of a plan as of the date of its year end
statement of financial position, with limited exceptions. We are required to
initially recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after December 15, 2006.  The requirement to measure plan assets
and benefit obligations as of the date of the employer’s fiscal year end
statement of financial position is effective for fiscal years ending after
December 15, 2008. The adoption of SFAS 158 did not have a material impact
on our consolidated financial statements.
  29
  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. SFAS 159 permits measurement of certain financial
assets and financial liabilities at fair value.  If the fair value
option is elected, the unrealized gains and losses are reported in earnings at
each reporting date.  Generally, the fair value option may be elected
on an instrument-by-instrument basis, as long as it is applied to the instrument
in its entirety.  The fair value option election is irrevocable,
unless a new election date occurs.  SFAS 159 was effective for us on
February 1, 2008. The adoption of SFAS 159 did not have a material impact
on our consolidated financial statements as we did not elect the fair value
option for any of our consolidated financial assets or liabilities.
  In
June 2007, the EITF of the FASB reached a consensus on Issue
No. 07-3, Accounting for
Nonrefundable Advance Payments for Goods or Services Received for Use in Future
Research and Development Activities(EITF 07-3). EITF 07-3 requires that
non-refundable advance payments for goods or services that will be used or
rendered for future research and development activities should be deferred and
capitalized. As the related goods are delivered or the services are performed,
or when the goods or services are no longer expected to be provided, the
deferred amounts would be recognized as an expense. This Issue is effective for
financial statements issued for fiscal years beginning after December 15,
2007 and earlier application is not permitted. This consensus is to be applied
prospectively for new contracts entered into on or after the effective
date.  EITF 07-03 was effective for us on February 1,
2008.  The pronouncement did not have a material effect on our
consolidated financial statements.
  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations(SFAS
141(R)), which replaces SFAS 141, Business Combinations, and
which requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at the acquisition
date, measured at their fair values as of that date, with limited exceptions.
This statement also requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquiree, at the full amounts of their fair
values. SFAS 141(R) makes various other amendments to authoritative literature
intended to provide additional guidance or to confirm the guidance in that
literature to that provided in this statement. This statement 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.  This statement was effective for us on
February 1, 2009.  We expect SFAS 141(R) will have an impact on our
accounting for future business combinations once adopted, but the effect is
dependent upon the acquisitions that are made in the future.
  In
December 2007, the EITF of the FASB reached a consensus on Issue
No. 07-1, Accounting for
Collaborative Arrangements(EITF 07-1). The EITF concluded on the
definition of a collaborative arrangement and that revenues and costs incurred
with third parties in connection with collaborative arrangements would be
presented gross or net based on the criteria in EITF 99-19 and other accounting
literature. Based on the nature of the arrangement, payments to or from
collaborators would be evaluated and its terms, the nature of the entity’s
business, and whether those payments are within the scope of other accounting
literature would be presented. Companies are also required to disclose the
nature and purpose of collaborative arrangements along with the accounting
policies and the classification and amounts of significant financial-statement
amounts related to the arrangements. Activities in the arrangement conducted in
a separate legal entity should be accounted for under other accounting
literature; however required disclosure under EITF 07-1 applies to the entire
collaborative agreement. This issue is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years, and is to be applied retrospectively to all periods
presented for all collaborative arrangements existing as of the effective date.
EITF 07-1 was effective for us on February 1, 2009.  We do not expect
the adoption of EITF 07-1 to have a significant impact on our consolidated
financial statements.
  30
  In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, which amends Accounting Research
Bulletin No. 51, Consolidated Financial
Statements, to improve the relevance, comparability, and transparency of
the financial information that a reporting entity provides in its consolidated
financial statements. SFAS 160 establishes accounting and reporting standards
that require the ownership interests in subsidiaries not held by the parent to
be clearly identified, labeled and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity. This
statement also requires the amount of consolidated net income attributable to
the parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income. Changes in a
parent’s ownership interest while the parent retains its controlling financial
interest must be accounted for consistently, and when a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary must be initially measured at fair value. The gain or loss on the
deconsolidation of the subsidiary is measured using the fair value of any
non-controlling equity investment. The statement also requires entities to
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
statement applies prospectively to all entities that prepare consolidated
financial statements and applies prospectively for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
This statement was effective for us on February 1, 2009.  We do not
expect the adoption of SFAS 160 to have a significant impact on our consolidated
financial statements.
  On
February 1, 2008, we adopted SFAS No. 157, Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the FASB issued FASB Staff Position
(FSP) No. FAS 157-2, Effective
Date of FASB Statement No. 157, which delayed the effective date of
SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until January 1, 2009 for calendar year-end
entities. Also in February 2008, the FASB issued FSP No. FAS 157-1, Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13, which states that SFAS No. 13, Accounting for Leases, and
other accounting pronouncements that address fair value measurements for
purposes of lease classification or measurement under SFAS 13 are excluded from
the provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations, or
SFAS No. 141 (revised 2007), Business
Combinations.
  SFAS 157
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited exceptions.
The adoption of SFAS 157, as it relates to financial assets and financial
liabilities had no impact on our consolidated financial statements.
  SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
giving the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (level 1) and the lowest priority to
unobservable inputs (level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:
  31
  •
                Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities.•
                Level
      2 - Inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly or indirectly,
      including quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      markets that are not active; inputs other than quoted prices that are
      observable for the asset or liability (e.g., interest rates); and inputs
      that are derived principally from or corroborated by observable market
      data by correlation or other means.•
                Level
      3 - Inputs that are both significant to the fair value measurement and
      unobservable.
  In
March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No.
133. This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring 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 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. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  This statement was effective for
us on February 1, 2009.  We do not expect this statement to have a
material impact on our consolidated financial statements.
  In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets. FSP 142-3 amends the factors to be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets. Its intent is to improve the consistency between the useful life
of an intangible asset and the period of expected cash flows used to measure its
fair value. This FSP is effective prospectively for intangible assets acquired
or renewed after February 1, 2009. We do not expect FSP 142-3 to have a material
impact on our accounting for future acquisitions of intangible
assets.
  In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP. This statement was effective for us on
November 15, 2008 and did not have a material impact on our consolidated
financial statements.
  On May 9,
2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement).FSP APB 14-1 clarifies that convertible debt instruments
that may be settled in cash upon conversion (including partial cash settlement)
are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants.  Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account
for the liability and equity components in a manner that will reflect the
entity’s nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB14-1 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. FSP APB 14-1 was effective for us on February 1,
2009.  The adoption of FSP APB 14-1 is not expected to have a material
impact on our consolidated results of operations or financial
position.
  On June
16, 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
to address the question of whether instruments granted in share-based payment
transactions are participating securities prior to vesting. FSP EITF 03-6-1
indicates that unvested share-based payment awards that contain rights to
dividend payments should be included in earnings per share calculations. The
guidance will be effective for fiscal years beginning after December 15, 2008.
FSP EITF 03-6-1 was effective for us on February 1, 2009.  The
adoption of FSP EITF 03-6-1 is not expected to have a material impact on our
consolidated results of operations or financial position.
  32
  In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own
Stock.  EITF No. 07-5 is effective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early application is not permitted. Paragraph 11(a)
of SFAS No. 133 Accounting for
Derivatives and Hedging Activities, specifies that a contract that would
otherwise meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the statement
of financial position would not be considered a derivative financial instrument.
EITF 07-5 provides a new two-step model to be applied in determining whether a
financial instrument or an embedded feature is indexed to an issuer’s own stock
and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception.  EITF 07-5 was effective for us on February 1,
2009.  The adoption of EITF 07-5 is not expected to have a material
impact on our consolidated financial statements.
  In June
2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities.
FSP 03-6-1 clarifies that unvested share-based payment awards that contain
nonforfeitable rights to dividends or dividend equivalents (whether paid or
unpaid) are participating securities and are to be included in the computation
of earnings per share under the two-class method described in SFAS No. 128,
Earnings Per
Share.  This FSP was effective for us on February 1, 2009 and
requires that all prior-period earnings-per-share data that are presented be
adjusted retrospectively. We do not expect FSP 03-6-1 to have a material impact
on our earnings per share calculations.
  In
October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active. FSP 157-3
clarifies the application of SFAS 157 in a market that is not active and
provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. As it relates to our financial assets and liabilities recognized or
disclosed at fair value in our financial statements on a recurring basis (at
least annually), the adoption of FSP 157-3 did not have a material impact on our
consolidated financial statements.
  In
November 2008, the EITF reached consensus on Issue No. 08-6, Equity Method Investment Accounting
Considerations (EITF 08-6), which clarifies the accounting for
certain transactions and impairment considerations involving equity method
investments. The intent of EITF 08-6 is to provide guidance on
(i) determining the initial carrying value of an equity method investment,
(ii) performing an impairment assessment of an underlying indefinite-lived
intangible asset of an equity method investment, (iii) accounting for an
equity method investee’s issuance of shares, and (iv) accounting for a
change in an investment from the equity method to the cost method.
EITF 08-6 is effective for our fiscal year beginning February 1, 2009
and is to be applied prospectively.  We are evaluating the potential
impact of adopting this statement on our consolidated financial position or
results of operations.
 In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities
(Enterprises) About Transfers of Financial Assets and Interest in Variable
Interest Entities. FSP 140-4 requires additional disclosure about
transfers of financial assets and an enterprise’s involvement with variable
interest entities. FSP 140-4 was effective for the first reporting period
ending after December 15, 2008. The adoption of FSP 140-4 did not have
a material impact on our consolidated financial statements.
  In
December 2008, the FASB issued FSP No.132 (R)-1, Employers’ Disclosures about
Pensions and Other Postretirement Benefits. FSP 132R-1 requires enhanced
disclosures about the plan assets of a Company’s defined benefit pension and
other postretirement plans. The enhanced disclosures required by this FSP are
intended to provide users of financial statements with a greater understanding
of: (1) how investment allocation decisions are made, including the factors
that are pertinent to an understanding of investment policies and strategies;
(2) the major categories of plan assets; (3) the inputs and valuation
techniques used to measure the fair value of plan assets; (4) the effect of
fair value measurements using significant unobservable inputs (Level 3) on
changes in plan assets for the period; and (5) significant concentrations
of risk within plan assets. This FSP is effective for us for the fiscal year
beginning February 1, 2009 and is not expected to have a material impact on our
consolidated financial statements.
  ITEM
7A.         QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.
 
 As a
smaller reporting company we are not required to provide this
information.
  33
 
 ITEM
8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA.
   RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 
 CONSOLIDATED
FINANCIAL STATEMENTS
  AT
JANUARY 31, 2009 AND 2008,
 FOR
THE YEARS ENDED JANUARY 31, 2009 AND 2008 AND FOR THE
 PERIOD
FROM JANUARY 10, 2005 (INCEPTION) TO JANUARY 31, 2009
   PageReport
      of Independent Registered Public Accounting Firm
                F-1Consolidated
      Balance Sheets
                F-2Consolidated
      Statements of Operations
                F-3Consolidated  Statement
      of Stockholders’ Deficit and Comprehensive Loss
                F-4Consolidated  Statements
      of Cash Flows
                F-5Notes
      to Consolidated  Financial Statements
                F-6




34




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To the
Board of Directors and Stockholders
 Red Metal
Resources Ltd.
 (Formerly,
Red Lake Exploration, Inc.)
 
 We have
audited the accompanying consolidated balance sheets of Red Metal Resources Ltd.
(an exploration stage company), as of January 31, 2009 and 2008 and the related
consolidated statements of operations, changes in stockholders’ deficit and
comprehensive loss and cash flows for the years then ended and for the period
from inception (January 10, 2005) through January 31, 2009. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Red Metal Resources Ltd. (an
exploration stage company) as of January 31, 2009 and 2008 and the results of
its operations and its cash flows for the years then ended and for the period
from inception (January 10, 2005) through January 31, 2009 in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered recurring losses
from operations that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
 Mendoza
Berger & Company, LLP
 /s/
      Mendoza Berger & Company, LLPIrvine,
      California
                    April
      24, 2009




F-1




RED
      METAL RESOURCES LTD.(Formerly
      Red Lake Exploration, Inc.)(AN
      EXPLORATION STAGE COMPANY)CONSOLIDATED
      BALANCE SHEETSAT
      JANUARY 31, 2009 AND 20082009
              
              
              2008ASSETSCurrent
      assets:Cash
              
              $
              26,115
              
              
              $
              1,901Other
      receivable
              
              
              29
              
              
              
              -Prepaid
      expenses and deposits
              
              
              16,571
              
              
              
              -Total
      current assets
              
              
              42,715
              
              
              
              1,901Unproved
      mineral properties
              
              
              753,519
              
              
              
              -Total
      assets
              
              $
              796,234
              
              
              $
              1,901LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payable
              
              $
              74,417
              
              
              $
              44,719Accrued
      liabilities
              
              
              3,615
              
              
              
              -Accrued
      professional fees
              
              
              47,430
              
              
              
              32,018Accrued
      mineral property costs
              
              
              140,000
              
              
              
              -Due
      to related parties
              
              
              151,459
              
              
              
              41,237Notes
      payable to related party, including accrued interest
              
              
              600,864
              
              
              
              -Total
      liabilities
              
              
              1,017,785
              
              
              
              117,974Commitments
      and contingenciesStockholders'
      deficit:Common
      stock, $0.001 par value, authorized 500,000,000,58,183,333
      and 53,183,334 issued and outstanding atJanuary
      31, 2009 and 2008, respectively
              
              
              58,183
              
              
              
              53,183Additional
      paid in capital
              
              
              1,415,316
              
              
              
              120,316Deficit
      accumulated during the exploration stage
              
              
              (1,673,456
              )
              
              
              (289,572
              )Accumulated
      other comprehensive loss
              
              
              (21,594
              )
              
              
              -Total
      stockholders' deficit
              
              
              (221,551
              )
              
              
              (116,073
              )Total
      liabilities and stockholders' deficit
              
              $
              796,234
              
              
              $
              1,901






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




F-2




RED
      METAL RESOURCES LTD.(Formerly
      Red Lake Exploration, Inc.)(AN
      EXPLORATION STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF OPERATIONSFromJanuary
    10,For
      the Years
              
              
              2005
      (Inception)Ended
      January 31,
              
              
              to January 31,2009
              
              
              2008
              
              
              2009Revenue:Royalties
              
              $
              15,658
              
              
              $
              -
              
              
              $
              15,658Operating
      Expenses:Administration
              
              
              101,905
              
              
              
              -
              
              
              
              102,446Advertising
      and promotion
              
              
              154,038
              
              
              
              4,837
              
              
              
              158,875Automobile
              
              
              19,234
              
              
              
              -
              
              
              
              19,234Bank
      charges and interest
              
              
              4,731
              
              
              
              263
              
              
              
              5,638Computer
      consulting
              
              
              1,501
              
              
              
              -
              
              
              
              1,501Consulting
      fees
              
              
              114,174
              
              
              
              56,368
              
              
              
              170,542Donated
      rent
              
              
              -
              
              
              
              750
              
              
              
              4,750Donated
      service fees
              
              
              -
              
              
              
              1,500
              
              
              
              9,500Mineral
      exploration costs
              
              
              483,339
              
              
              
              54,345
              
              
              
              551,637Office
              
              
              12,665
              
              
              
              2,061
              
              
              
              14,726Professional
      fees
              
              
              163,176
              
              
              
              72,747
              
              
              
              254,998Rent
              
              
              11,556
              
              
              
              -
              
              
              
              11,556Regulatory
              
              
              9,579
              
              
              
              9,830
              
              
              
              21,249Travel
      and entertainment
              
              
              87,636
              
              
              
              29,131
              
              
              
              116,767Salaries,
      wages and benefits
              
              
              28,803
              
              
              
              -
              
              
              
              28,803Foreign
      exchange (gain) loss
              
              
              (922
              )
              
              
              667
              
              
              
              (235
              )Write-down
      of unproven mineral properties
              
              
              187,000
              
              
              
              -
              
              
              
              196,000Total
      operating expenses
              
              
              1,378,415
              
              
              
              232,499
              
              
              
              1,667,987Net
      operating loss
              
              
              (1,362,757
              )
              
              
              (232,499
              )
              
              
              (1,652,329
              )Other
      expensesInterest
      on notes payable
              
              
              (20,864
              )
              
              
              -
              
              
              
              (20,864
              )Net
      loss before income tax
              
              
              (1,383,621
              )
              
              
              (232,499
              )
              
              
              (1,673,193
              )Income
      tax
              
              
              (263
              )
              
              
              -
              
              
              
              (263
              )Net
      loss
              
              $
              (1,383,884
              )
              
              $
              (232,499
              )
              
              $
              (1,673,456
              )Net
      loss per share - basic and diluted
              
              $
              (0.02
              )
              
              $
              (0.00
              )Weighted
      average number of sharesoutstanding
      - basic and diluted
              
              
              57,013,934
              
              
              
              62,348,174






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




F-3




RED
      METAL RESOURCES LTD.(Formerly
      Red Lake Exploration, Inc.)(AN
      EXPLORATION STAGE COMPANY)CONSOLIDATED
      STATEMENT OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE
  LOSSFOR
      THE PERIOD FROM JANUARY 10, 2005 (INCEPTION) TO JANUARY 31,
      2009Common
      Stock Issued
              
              
              
              
              
              AccumulatedAdditional
              
              
              
              
              
              OtherNumber
      of
              
              
              
              
              
              Paid-in
              
              
              Accumulated
              
              
              ComprehensiveShares
              
              
              Amount
              
              
              Capital
              
              
              Deficit
              
              
              Income
      (Loss)
              
              
              TotalBalance
      at January 10,  2005 (Inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (825
              )
              
              
              -
              
              
              
              (825
              )Balance
      at January 31, 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (825
              )
              
              
              -
              
              
              
              (825
              )Common
      stock issued for cash
              
              
              77,350,000
              
              
              
              77,350
              
              
              
              (18,100
              )
              
              
              -
              
              
              
              -
              
              
              
              59,250Donated
      services
              
              
              -
              
              
              
              -
              
              
              
              3,000
              
              
              
              -
              
              
              
              -
              
              
              
              3,000Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (12,363
              )
              
              
              
              
              
              
              (12,363
              )Balance
      at January 31, 2006
              
              
              77,350,000
              
              
              
              77,350
              
              
              
              (15,100
              )
              
              
              (13,188
              )
              
              
              -
              
              
              
              49,062Donated
      services
              
              
              -
              
              
              
              -
              
              
              
              9,000
              
              
              
              -
              
              
              
              -
              
              
              
              9,000Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (43,885
              )
              
              
              
              
              
              
              (43,885
              )Balance
      at January 31, 2007
              
              
              77,350,000
              
              
              
              77,350
              
              
              
              (6,100
              )
              
              
              (57,073
              )
              
              
              -
              
              
              
              14,177Donated
      services
              
              
              -
              
              
              
              -
              
              
              
              2,250
              
              
              
              -
              
              
              
              -
              
              
              
              2,250Return
      of common stock to treasury
              
              
              (24,500,000
              )
              
              
              (24,500
              )
              
              
              24,499
              
              
              
              -
              
              
              
              -
              
              
              
              (1
              )Common
      stock issued for cash
              
              
              333,334
              
              
              
              333
              
              
              
              99,667
              
              
              
              -
              
              
              
              -
              
              
              
              100,000Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (232,499
              )
              
              
              -
              
              
              
              (232,499
              )Balance
      at January 31, 2008
              
              
              53,183,334
              
              
              
              53,183
              
              
              
              120,316
              
              
              
              (289,572
              )
              
              
              -
              
              
              
              (116,073
              )Common
      stock issued for cash
              
              
              4,999,999
              
              
              
              5,000
              
              
              
              1,295,000
              
              
              
              -
              
              
              
              -
              
              
              
              1,300,000Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,383,884
              )
              
              
              -
              
              
              
              (1,383,884
              )Foreign
      currency exchange loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (21,594
              )
              
              
              (21,594
              )Comprehensive
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,405,478
              )Balance
      at January 31, 2009
              
              
              58,183,333
              
              
              $
              58,183
              
              
              $
              1,415,316
              
              
              $
              (1,673,456
              )
              
              $
              (21,594
              )
              
              $
              (221,551
              )On
      June 15, 2007, the Company declared a forward split of 13 new shares of
      common stock for every one share of common stock outstanding. All common
      stock amounts have been retroactively adjusted for all periods
      presented.






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




F-4




RED
      METAL RESOURCES LTD.(Formerly
      Red Lake Exploration, Inc.)(AN
      EXPLORATION STAGE COMPANY)CONSOLIDATED
      STATEMENTS OF CASH FLOWSFromJanuary
    10,For
      the Years
              
              
              2005
      (Inception)Ended
      January 31,
              
              
              to
      January 31,2009
              
              
              2008
              
              
              2009Cash
      flows from operating activities:Net
      loss
              
              $
              (1,383,884
              )
              
              $
              (232,499
              )
              
              $
              (1,673,456
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Donated
      services and rent
              
              
              -
              
              
              
              2,250
              
              
              
              14,250Write-down
      of unproven mineral properties
              
              
              187,000
              
              
              
              -
              
              
              
              196,000Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (29
              )
              
              
              -
              
              
              
              (29
              )Prepaid
      expenses and deposits
              
              
              (16,571
              )
              
              
              -
              
              
              
              (16,571
              )Accounts
      payable
              
              
              29,698
              
              
              
              43,420
              
              
              
              74,418Accrued
      liabilities
              
              
              3,615
              
              
              
              -
              
              
              
              3,615Accrued
      professional fees
              
              
              15,412
              
              
              
              32,018
              
              
              
              47,430Accrued
      mineral property costs
              
              
              140,000
              
              
              
              -
              
              
              
              140,000Due
      to related parties
              
              
              110,222
              
              
              
              41,235
              
              
              
              151,457Accrued
      interest on notes payable to related party
              
              
              20,864
              
              
              
              -
              
              
              
              20,864Net
      cash used in operating activities
              
              
              (893,673
              )
              
              
              (113,576
              )
              
              
              (1,042,022
              )Cash
      flows from investing activities:Acquisition
      of unproved mineral properties
              
              
              (940,519
              )
              
              
              -
              
              
              
              (949,519
              )Net
      cash used in investing activities
              
              
              (940,519
              )
              
              
              -
              
              
              
              (949,519
              )Cash
      flows from financing activities:Cash
      received on issuance of notes payable to related party
              
              
              580,000
              
              
              
              -
              
              
              
              580,000Proceeds
      from issuance of common stock
              
              
              1,300,000
              
              
              
              100,000
              
              
              
              1,459,250Net
      cash provided by financing activities
              
              
              1,880,000
              
              
              
              100,000
              
              
              
              2,039,250Effects
      of foreign currency exchange
              
              
              (21,594
              )
              
              
              -
              
              
              
              (21,594
              )Increase
      (decrease) in cash during the period
              
              
              24,214
              
              
              
              (13,576
              )
              
              
              26,115Cash,
      beginning of period
              
              
              1,901
              
              
              
              15,477
              
              
              
              -Cash,
      end of period
              
              $
              26,115
              
              
              $
              1,901
              
              
              $
              26,115Supplemental
      disclosures:Cash
      paid during the period for:Taxes
              
              $
              263
              
              
              $
              -
              
              
              $
              263Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Non-cash
      financing transaction:Acquisition
      of 24,500,000 common shares
              
              $
              -
              
              
              $
              1
              
              
              $
              1


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




F-5


RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008


NOTE
1 – ORGANIZATION AND BASIS OF PRESENTATION
  Nature
of Operations
  Red Metal
Resources Ltd. was incorporated on January 10, 2005 under the laws of the state
of Nevada as Red Lake Exploration, Inc. and changed its name to Red Metal
Resources Ltd. on August 27, 2008.  On August 21, 2007, Red Metal
acquired a 99% interest in Minera Polymet Limitada (Polymet), a limited
liability company formed on August 21, 2007 under the laws of the Republic of
Chile. In these notes, the terms “Red Metal”, “Company”, “we”, “us” or “our”
mean Red Metal Resources Ltd. and its subsidiary, Polymet, whose operations are
included in these consolidated financial statements.
 
 Red Metal
is involved in acquiring and exploring mineral properties in
Chile.  The Company has not determined whether its properties contain
mineral reserves that are economically recoverable.
 
 Exploration
Stage
 
 Red Metal
has not produced any significant revenues from its principal business or
commenced significant operations and is considered an exploration stage company
as defined by SEC Guide 7 with reference to Statement of Financial Accounting
Standard (SFAS) No.7 Accounting and Reporting by
Development Stage Enterprises.
 
 The
Company is in the early exploration stage.  In the exploration stage,
management devotes most of its time to conducting exploratory work and
developing its business.  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 never paid any dividends and is unlikely to
pay dividends or generate earnings in the immediate or foreseeable
future.  The Company’s continuation as a going concern and its ability
to emerge from the exploration stage with any planned principal business
activity is dependent upon the continued financial support of its shareholders
and its ability to obtain the necessary equity financing and attain profitable
operations.
  NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
 
 Principles
of Consolidation
 
 The
Company’s consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States.
  These
consolidated financial statements include the financial statements of Red Metal
and Polymet. All significant intercompany balances and transactions have been
eliminated from the consolidated financial results.
 
 Reclassifications
 
 Certain
prior period amounts in the accompanying consolidated financial statements have
been reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the consolidated results of operations or
financial position for any period presented.
  F-6
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 
 
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Accounting
Estimates
 
 The
preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 The
Company’s consolidated financial statements are based on a number of estimates,
including accruals for estimated accounting, auditing, legal expenses and
mineral property costs and impairment of unproved mineral
properties.
 
 Cash
and Cash Equivalents
 
 For
purposes of the balance sheets and statements of cash flows, the Company
considers all amounts on deposit with financial institutions and highly liquid
investments with maturities of 90 days or less to be cash
equivalents.  At January 31, 2009 and 2008, the Company had no cash
equivalents.
 
 Financial
Instruments
 
 Foreign
Exchange Risk
 
 The
Company is subject to foreign exchange risk for sales and purchases denominated
in foreign currencies. The functional currency for Polymet is the Chilean peso.
Foreign currency risk arises from the fluctuation of foreign exchange rates and
the degree of volatility of these rates relative to the United States
dollar.  The Company does not believe that it has any material risk to
its foreign currency exchange.
 
 Fair
Value of Financial Instruments
 
 The
Company’s financial instruments include cash, accounts receivable, accounts
payable, accrued liabilities, accrued professional fees and accrued mineral
property costs. The fair value of these financial instruments approximates their
carrying values due to their short maturities.
 
 Concentration
of Credit Risk
 
 Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and withholding and value added taxes
in Canada and Chile.
 
 At
January 31, 2009 and 2008, the Company had approximately $1,700 and $1,300,
respectively in cash that was not insured.  This cash is on deposit
with a major chartered Canadian bank.  As part of its cash management
process, the Company performs periodic evaluations of the relative credit
standing of this financial institution.  The Company has not lost any
cash and does not believe its cash is exposed to any significant credit
risk.
 
 The
Company’s operations involve dealing with uncertainties and judgments in
applying complex tax regulations in Canada and Chile.  The final taxes
paid are dependent upon many factors including negotiations with tax authorities
in various jurisdictions.  The Company records potential withholding
tax, value added tax, and mineral property tax liabilities based on its estimate
of whether and the extent to which taxes may be refunded or deemed
payable.
  F-7
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Foreign
Currency Translation and Transaction
 
 The
functional currency for Red Metal’s foreign subsidiary is the Chilean peso.
 Red Metal translates assets and liabilities to US dollars using period-end
exchange rates, translates unproved mineral properties using historical exchange
rates, and translates revenues and expenses using average exchange rates during
the period. Exchange gains and losses arising from the translation of foreign
entity financial statements are included as a component of other comprehensive
loss.
 
 Transactions
denominated in currencies other than the functional currency of the legal entity
are re-measured to the functional currency of the legal entity at the period-end
exchange rates.  Any associated transactional currency re-measurement gains
and losses are recognized in current operations.
 
 Revenue
Recognition
 
 The
Company records revenues and royalties from the sale of minerals when persuasive
evidence of an arrangement exists, the minerals have been delivered to the
customer and the risk of ownership or title has been transferred, and
collectability is reasonably assured.  Interest income is recognized
at the end of each month.
 
 During
the years ended January 31, 2009 and 2008, we received $15,658 and $0
respectively, in royalty revenue.   (Notes 4 and 6)
 
 Long-lived
Assets
  In
accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, the Company regularly reviews the carrying
value of long-lived assets for the existence of facts or circumstances that may
suggest impairment. The Company recognizes impairment when the sum of the
expected undiscounted future cash flows is less than the carrying amount of the
asset. Impairment losses, if any, are measured as the excess of the carrying
amount of the asset over its estimated fair value.   The
Company’s only long-lived asset is its unproven mineral property
interests.   At January 31, 2009 and 2008 the Company did not
record any impairment charges against its unproven mineral
interests.
 
 Investment
in and Expenditures on Mineral Interests
 
 Realization
of the Company's investment in and expenditures on mineral properties is
dependent upon the establishment of legal ownership, the attainment of
successful production from the properties or from the proceeds of their
disposal.
 
 Title to
mineral properties involves certain inherent risks due to the difficulties of
determining the validity of certain claims as well as the potential for problems
arising from the frequently ambiguous conveyancing history characteristics of
many mineral properties. To the best of its knowledge the Company believes all
of its unproved mineral interests are in good standing and that it has title to
all of these mineral interests.
  F-8
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Unproved
Mineral Property Costs
  The
Company has been in the exploration stage since its inception on January 10,
2005 and has not yet realized any significant revenues from its operations. It
is engaged primarily in acquiring and exploring mining properties. It expenses
mineral property exploration costs as it incurs them, and capitalizes mineral
property acquisition costs when it incurs them using the guidance in Emerging
Issues Task Force (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 the end of each fiscal quarter. If it
establishes proven and probable reserves and determines that a mineral property
can be economically developed, it will capitalize the costs it incurs to develop
the property and will amortize them over the estimated life of the probable
reserve using the units-of-production method. If it subsequently abandons or
recognizes any impairment of its mineral properties, it will charge any
capitalized costs to operations.
 
 At
January 31, 2009 and 2008, the Company wrote down $187,000and $0, respectively, in capitalized costs when it abandoned the Camila
and Santa Rosa mineral properties.  (Note 6)
 
 Asset
Retirement Obligations
  SFAS No.
143, Accounting for Asset
Retirement Obligations, addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. Specifically, SFAS No. 143 requires that the
fair value of a liability for an asset retirement obligation be recognized in
the period in which it is incurred if it can reasonably estimate the fair value.
It will capitalize the asset retirement cost as part of the asset’s carrying
value and amortize it over the life of the asset.   Reclamation
costs are periodically adjusted to reflect changes in the estimated present
value resulting from the passage of time and revisions to the estimates of the
reclamation and abandonment costs.  The asset retirement obligation is
based on when spending for an existing environmental disturbance will
occur.  The Company reviews its asset retirement obligations annually
unless it otherwise deems a review necessary.  At January 31, 2009 and
2008, the Company had no asset retirement obligations.
 
 Comprehensive
Loss
 
 Comprehensive
loss reflects changes in equity that result from transactions and economic
events from non-owner sources.  The Company had $21,594 and $0 in
accumulated other comprehensive loss for the years ended January 31, 2009 and
2008, respectively, from its foreign currency translation.  As a
result, total other comprehensive loss for the years ended January 31, 2009 and
2008 were $21,594 and $0, respectively.
  F-9
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Basic
and Diluted Net Loss per Common Share
 
 Basic net
loss per share is computed by dividing the net loss attributable to the common
stockholders by the weighted average number of common shares outstanding during
the reporting period.  Diluted net income per common share includes
the dilution that could occur upon the exercise of options and warrants to
acquire common stock, computed using the treasury stock method which assumes
that the increase in the number of shares is reduced by the number of shares
that the Company could have repurchased with the proceeds from the exercise of
options and warrants (which are assumed to have been made at the average market
price of the common shares during the reporting period).
 
 Potential
common shares are excluded from the diluted loss per share computation in net
loss periods as their inclusion would be anti-dilutive.
 
 At
January 31, 2009 and 2008, the Company had 58,183,333 and 53,183,334, shares of
common stock issued and outstanding, respectively, 5,166,666 and 166,667
warrants outstanding, respectively and no outstanding options or convertible
debt. (Notes 7 and 8)
 
 Stock-Based
Compensation
 
 The
Company accounts for stock-based compensation in accordance with the FASB-issued
SFAS No. 123(R), Share-Based
Payment, which requires that expenses for stock compensation be recorded
using the fair-value method.
 
 The
Company uses the “modified prospective method” which requires that compensation
costs for all stock-based payments granted, modified or settled in financial
statements be recognized.
 
 Income
Taxes
 
 Income
tax expense is based on pre-tax financial accounting income.  Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  Deferred income tax expense represents the change
during the period in the deferred tax assets and deferred tax liabilities. The
components of the deferred tax assets and liabilities are individually
classified as current and non-current based on their characteristics. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
  F-10
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements
  In
September 2006, the FASB issued SFAS 158 (SFAS 158), Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106, and 132(R). This statement requires an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity. This
statement also requires an employer to measure the funded status of a plan as of
the date of its year end statement of financial position, with limited
exceptions. The Company is required to initially recognize the funded status of
a defined benefit postretirement plan and to provide the required disclosures as
of the end of the fiscal year ending after December 15,
2006.  The requirement to measure plan assets and benefit obligations
as of the date of the employer’s fiscal year end statement of financial position
is effective for fiscal years ending after December 15, 2008. The adoption
of SFAS 158 did not have a material impact on the Company’s consolidated
financial statements.
 
 In
February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement
No. 115. SFAS 159 permits measurement of certain
financial assets and financial liabilities at fair value.  If the fair
value option is elected, the unrealized gains and losses are reported in
earnings at each reporting date.  Generally, the fair value option may
be elected on an instrument-by-instrument basis, as long as it is applied to the
instrument in its entirety.  The fair value option election is
irrevocable, unless a new election date occurs.  SFAS 159 was
effective for the Company on February 1, 2008. The adoption of SFAS 159 did
not have a material impact on the Company’s financial statements as the Company
did not elect the fair value option for any of its consolidated financial assets
or liabilities.
 
 In
June 2007, the EITF of the FASB reached a consensus on Issue
No. 07-3, Accounting for
Nonrefundable Advance Payments for Goods or Services Received for Use in Future
Research and Development Activities(EITF 07-3). EITF 07-3 requires that
non-refundable advance payments for goods or services that will be used or
rendered for future research and development activities should be deferred and
capitalized. As the related goods are delivered or the services are performed,
or when the goods or services are no longer expected to be provided, the
deferred amounts would be recognized as an expense. This issue is effective for
financial statements issued for fiscal years beginning after December 15,
2007. Earlier application was not permitted. This consensus is to be applied
prospectively for new contracts entered into on or after the effective
date.  EITF 07-03 was effective for the Company on February 1,
2008.  The pronouncement did not have a material effect on our
consolidated financial statements.
  In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations(SFAS
141(R)), which replaces SFAS 141, Business Combinations, and
which requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at the acquisition
date, measured at their fair values as of that date, with limited exceptions.
This statement also requires the acquirer in a business combination achieved in
stages to recognize the identifiable assets and liabilities, as well as the
non-controlling interest in the acquiree, at the full amounts of their fair
values. SFAS 141(R) makes various other amendments to authoritative literature
intended to provide additional guidance or to confirm the guidance in that
literature to that provided in this statement. This statement 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.  This statement will be effective for us on
February 1, 2009.  We expect SFAS 141(R) will have an impact on our
accounting for future business combinations once adopted, but the effect is
dependent upon the acquisitions that are made in the future.
  F-11
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 In
December 2007, the EITF reached a consensus on Issue No. 07-1, Accounting for Collaborative
Arrangements(EITF 07-1). The EITF concluded on the definition of a
collaborative arrangement and that revenues and costs incurred with third
parties in connection with collaborative arrangements would be presented gross
or net based on the criteria in EITF 99-19 and other accounting literature.
Based on the nature of the arrangement, payments to or from collaborators would
be evaluated and its terms, the nature of the entity’s business, and whether
those payments are within the scope of other accounting literature would be
presented. Companies are also required to disclose the nature and purpose of
collaborative arrangements along with the accounting policies and the
classification and amounts of significant financial-statement amounts related to
the arrangements. Activities in the arrangement conducted in a separate legal
entity should be accounted for under other accounting literature; however
required disclosure under EITF 07-1 applies to the entire collaborative
agreement. This issue is effective for financial statements issued for fiscal
years beginning after December 15, 2008, and interim periods within those
fiscal years, and is to be applied retrospectively to all periods presented for
all collaborative arrangements existing as of the effective date. EITF 07-1 will
be effective for the Company on February 1, 2009.  We do not expect
the adoption of EITF 07-1 to have a significant impact on our consolidated
financial statements.
 
 In
December 2007, FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements(SFAS 160), which amends Accounting
Research Bulletin No. 51, Consolidated Financial
Statements, to improve the relevance, comparability, and transparency of
the financial information that a reporting entity provides in its consolidated
financial statements. SFAS 160 establishes accounting and reporting standards
that require the ownership interests in subsidiaries not held by the parent to
be clearly identified, labeled and presented in the consolidated statement of
financial position within equity, but separate from the parent’s equity. This
statement also requires the amount of consolidated net income attributable to
the parent and to the non-controlling interest to be clearly identified and
presented on the face of the consolidated statement of income. Changes in a
parent’s ownership interest while the parent retains its controlling financial
interest must be accounted for consistently, and when a subsidiary is
deconsolidated, any retained non-controlling equity investment in the former
subsidiary must be initially measured at fair value. The gain or loss on the
deconsolidation of the subsidiary is measured using the fair value of any
non-controlling equity investment. The statement also requires entities to
provide sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling owners. This
statement applies prospectively to all entities that prepare consolidated
financial statements and applies prospectively for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008.
This statement will be effective for us on February 1, 2009.  We do
not expect the adoption of SFAS 160 to have a significant impact on our
consolidated financial statements.
  F-12
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 On
February 1, 2008, the Company adopted SFAS No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the FASB issued FASB Staff Position
(FSP) No. FAS 157-2, Effective
Date of FASB Statement No. 157, which delayed the effective date of
SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until January 1, 2009 for calendar year-end
entities. Also in February 2008, the FASB issued FSP No. FAS 157-1, Application of FASB Statement
No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13, which states that SFAS No. 13, Accounting for Leases, (SFAS
13) and other accounting pronouncements that address fair value measurements for
purposes of lease classification or measurement under SFAS 13 are excluded from
the provisions of SFAS 157, except for assets and liabilities related to leases
assumed in a business combination that are required to be measured at fair value
under SFAS No. 141, Business Combinations, (SFAS
141) or SFAS No. 141 (revised 2007), Business Combinations, (SFAS
141(R)).
  SFAS 157
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited exceptions.
The adoption of SFAS 157, as it relates to financial assets and financial
liabilities had no impact on the Company’s consolidated financial
statements.
 
 SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
giving the highest priority to unadjusted quoted prices in active markets for
identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:
  •
              
              Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities
  •
              
              Level
      2 - Inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly or indirectly,
      including quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      markets that are not active; inputs other than quoted prices that are
      observable for the asset or liability (e.g., interest rates); and inputs
      that are derived principally from or corroborated by observable market
      data by correlation or other means
  •
              
              Level
      3 - Inputs that are both significant to the fair value measurement and
      unobservable
 
 F-13
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 In
March 2008, the FASB issued SFAS No. 161 (SFAS 161), Disclosures about Derivative
Instruments and Hedging Activities – An Amendment of FASB Statement No. 133
(SFAS 133). This statement is intended to improve financial
reporting of derivative instruments and hedging activities by requiring 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 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. The provisions of SFAS 161 are effective for fiscal years beginning
after November 15, 2008.  This statement will be effective
for us on February 1, 2009.  Early adoption of this provision is
prohibited. We do not expect this statement to have a material impact on our
consolidated financial statements.
 
 In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3). FSP 142-3 amends the factors to be
considered in developing renewal or extension assumptions used to determine the
useful life of intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets. Its intent is to improve the consistency between the useful life
of an intangible asset and the period of expected cash flows used to measure its
fair value. This FSP is effective prospectively for intangible assets acquired
or renewed after February 1, 2009. We do not expect FSP 142-3 to have a material
impact on our accounting for future acquisitions of intangible
assets.
 
 In May,
2008, FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP. This statement was effective for us on
November 15, 2008 and did not have a material impact on our consolidated
financial statements.
  On May 9,
2008, the FASB issued FSP APB 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement).FSP APB 14-1 clarifies that convertible debt instruments
that may be settled in cash upon conversion (including partial cash settlement)
are not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants.  Additionally, FSP
APB 14-1 specifies that issuers of such instruments should separately account
for the liability and equity components in a manner that will reflect the
entity’s nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB14-1 is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years. FSP APB 14-1 will be effective for the Company on February 1,
2009.  The adoption of FSP APB 14-1 is not expected to have a material
impact on our consolidated results of operations or financial
position.
 
 On June
16, 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
to address the question of whether instruments granted in share-based payment
transactions are participating securities prior to vesting. FSP EITF 03-6-1
indicates that unvested share-based payment awards that contain rights to
dividend payments should be included in earnings per share calculations. The
guidance is effective for fiscal years beginning after December 15, 2008. FSP
EITF 03-6-1 will be effective for the Company on February 1,
2009.  The adoption of FSP EITF 03-6-1 is not expected to have a
material impact on our consolidated results of operations or financial
position.
  F-14
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own
Stock.  EITF 07-5 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. Early application is not permitted. Paragraph 11(a) of SFAS
No. 133 Accounting for
Derivatives and Hedging Activities, specifies that a contract that would
otherwise meet the definition of a derivative but is both (a) indexed to the
Company’s own stock and (b) classified in stockholders’ equity in the statement
of financial position would not be considered a derivative financial instrument.
EITF 07-5 provides a new two-step model to be applied in determining whether a
financial instrument or an embedded feature is indexed to an issuer’s own stock
and thus able to qualify for the SFAS No. 133 paragraph 11(a) scope
exception.  EITF 07-5 will be effective for us on February 1,
2009.  The adoption of EITF 07-5 is not expected to have a material
impact on our consolidated financial statements.
 
 In June
2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating Securities
(FSP 03-6-1). FSP 03-6-1 clarifies that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) are participating securities and are to be included in the
computation of earnings per share under the two-class method described in SFAS
No. 128, Earnings Per
Share.  This FSP will be effective for us on February 1, 2009
and requires that all prior-period earnings-per-share data that are presented be
adjusted retrospectively. We do not expect FSP 03-6-1 to have a material impact
on our earnings per share calculations.
 
 In
October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active (FSP 157-3).
FSP 157-3 clarifies the application of SFAS 157 in a market that is not active
and provides an example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial asset is not
active. As it relates to our financial assets and liabilities recognized or
disclosed at fair value in our financial statements on a recurring basis (at
least annually), the adoption of FSP 157-3 did not have a material impact on our
consolidated financial statements.
 
 In
November 2008, the EITF reached consensus on Issue No. 08-6, Equity Method Investment Accounting
Considerations (EITF 08-6), which clarifies the accounting for
certain transactions and impairment considerations involving equity method
investments. The intent of EITF 08-6 is to provide guidance on
(i) determining the initial carrying value of an equity method investment,
(ii) performing an impairment assessment of an underlying indefinite-lived
intangible asset of an equity method investment, (iii) accounting for an
equity method investee’s issuance of shares, and (iv) accounting for a
change in an investment from the equity method to the cost method.
EITF 08-6 is effective for the Company’s fiscal year beginning
February 1, 2009 and is to be applied prospectively. The Company is
currently evaluating the potential impact of adopting this statement on the
Company’s consolidated financial position or results of
operations.
 
 In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities
(Enterprises) About Transfers of Financial Assets and Interest in Variable
Interest Entities (FSP 140-4). FSP 140-4 requires additional
disclosure about transfers of financial assets and an enterprise’s involvement
with variable interest entities. FSP 140-4 was effective for the first
reporting period ending after December 15, 2008. The adoption of
FSP 140-4 did not have a material impact on our consolidated financial
statements.
  F-15
 
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
 
 Recent
Accounting Pronouncements, continued
 
 In
December 2008, the FASB issued FSP No.132 (R)-1, Employers’ Disclosures about
Pensions and Other Postretirement Benefits (FSP 132R-1). FSP 132R-1
requires enhanced disclosures about the plan assets of a Company’s defined
benefit pension and other postretirement plans. The enhanced disclosures
required by this FSP are intended to provide users of financial statements with
a greater understanding of: (1) how investment allocation decisions are
made, including the factors that are pertinent to an understanding of investment
policies and strategies; (2) the major categories of plan assets;
(3) the inputs and valuation techniques used to measure the fair value of
plan assets; (4) the effect of fair value measurements using significant
unobservable inputs (Level 3) on changes in plan assets for the period; and
(5) significant concentrations of risk within plan assets. This FSP will be
effective for our fiscal year beginning February 1, 2009 and is not expected to
have a material impact on our consolidated financial statements.
  NOTE
3 – GOING CONCERN
 
 These
consolidated financial statements have been prepared on a going-concern basis,
which implies the Company will continue to realize its assets and discharge its
liabilities in the normal course of business. The Company has not generated any
significant revenues from mineral sales since inception, has never paid any
dividends and is unlikely to pay dividends or generate significant earnings in
the immediate or foreseeable future. The continuation of the Company as a going
concern is dependent upon the continued financial support of its shareholders,
the ability of the Company to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. The Company’s ability
to achieve and maintain profitability and positive cash flows is dependent upon
its ability to locate profitable mineral properties, generate revenues from
mineral production and control production costs. Based upon its current plans,
the Company expects to incur operating losses in future periods. The Company
plans to mitigate these operating losses through controlling its operating
costs.  The Company plans to obtain sufficient working capital through
additional debt or equity financing and private loans.  At January 31,
2009, the Company had a working capital deficit of $975,070 and has accumulated
losses of $1,673,456 since inception. These factors raise substantial doubt
regarding the Company’s ability to continue as a going concern. There is no
assurance that the Company will be able to generate significant revenues in the
future. These consolidated financial statements do not give any effect to any
adjustments that would be necessary should the Company be unable to continue as
a going concern and therefore be required to realize its assets and discharge
its liabilities in other than the normal course of business and at amounts
different from those reflected in the accompanying consolidated financial
statements.
  F-16
  RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE 4 – RELATED-PARTY
TRANSACTIONS
  The
following amounts were due to related parties at January 31, 2009 and
2008:
 
 2009
              
              
              2008Due
      to a company owned by an officer (a)
              
              $
              13,552
              
              
              $
              -Due
      to a company controlled by directors (b)
              
              
              130,345
              
              
              
              39,010Due
      to a company owned by a major shareholder and a relative of the president
      (c)
              
              
              5,074
              
              
              
              -Due
      to a major shareholder (d)
              
              
              2,363
              
              
              
              -Due
      to a relative of the president (e)
              
              
              125
              
              
              
              -Due
      to a former president (f)
              
              
              -
              
              
              
              2,227Total
      due to related parties
              
              $
              151,459
              
              
              $
              41,237
  (a)
              During
      the year ended January 31, 2009, the Company paid or has payable a total
      of $123,823 in advertising and promotion, consulting, computer consulting,
      office, and travel and entertainment costs to a company owned by an
      officer.
 (b)
              During
      the year ended January 31, 2009, the Company paid or has payable a total
      of $327,081 in administration, advertising and promotion, mineral
      exploration, office, regulatory and travel and entertainment costs to a
      company controlled by two directors. During the year ended January 31,
      2008, the Company paid or accrued $67,503 in mineral exploration and
      travel and entertainment expenses to the same company.(c)
              During
      the year ended January 31, 2009, the Company received $15,658 in royalty
      income and paid or has payable of $250,869 in unproved mineral property
      costs; $628 in prepaid deposits; and a total of $289,348 in
      administration, automobile, mineral exploration, office, professional
      fees, rental expense and travel and entertainment to a company owned by a
      major shareholder and a relative of the president. During the year
      ended January 31, 2008, the Company had no transactions with this
      company. (Note 2, 6 and 11)(d)
              During
      the years ended January 31, 2009 and 2008, the Company paid or has payable
      $31,292 and $0, respectively, in administration, mineral exploration,
      office, professional fees and travel and entertainment costs to a major
      shareholder.(e)
              During
      the year ended January 31, 2009, the Company owes $125 for regulatory fees
      that a relative of the president paid on behalf of the
      Company.
    (f)
              During
      the year ended January 31, 2008, the Company recognized $750 in donated
      rent and $1,500 in donated services and paid $650 in travel and
      entertainment expenses to their former
  president.
  F-17
  RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
4 – RELATED-PARTY TRANSACTIONS, continued
 
 During
the years ended January 31, 2009 and 2008 the Company issued a total of
2,333,333 and 333,334 units respectively, to a relative of the
president.  (Notes 7 and 8)
  During
the year ended January 31, 2009 the Company issued 40,000 units to a
director.  (Notes 7 and 8)
  During
the year ended January 31, 2009 the Company issued a total of 866,666 units to
companies controlled by a relative of an affiliate. (Notes 7 and 8)
  During
the year ended January 31, 2009 the Company issued 1,760,000 units to a company
controlled by a relative of the president on the date the units were
issued.  (Notes 7 and 8)
 
 NOTE
5 – NOTES PAYABLE TO RELATED PARTY, INCLUDING ACCRUED INTEREST
  On
January 31, 2009 and 2008 the Company had the following notes payable to a
relative of the president:
 
 January
      31,2009
              
              
              2008Notes
      payable, on demand, unsecured, bearing interest at 8% per annum,
      compounded monthly
              
              $
              580,000
              
              
              $
              -Accrued
      interest
              
              
              20,864
              
              
              
              -Notes
      payable to a related party, including accrued interest
              
              $
              600,864
              
              
              $
              -
  See
Note 11 for additional notes payable issued to this related party.
  F-18
 
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
6 – UNPROVED MINERAL PROPERTIES
  January
      31,2009
                
                
                2008Acquisition
      costs
                
                $
                940,519
                
                
                $
                -Write-down
      of unproven mineral properties
                
                
                (187,000
                )
                
                
                -Unproved
      mineral properties
                
                $
                753,519
                
                
                $
                -
  Farellon
Alto Uno al Ocho Mineral Property
 
 On
September 25, 2007, Polymet entered into an agreement with a related company to
acquire by assignment the option to purchase the Farellon Alto Uno al Ocho
mining claims located in the Commune of Freirina, Province of Huasco, III Region
of Atacama, Chile. The Farellon Alto Uno al Ocho property consists of 66
hectares.  On April 25, 2008, we exercised the option to acquire the
right to purchase the property by paying $250,000 to the optionor.  On
April 25, 2008 we paid $300,000 to the vendor to acquire title to the property.
The property is subject to a 1.5% royalty on the net sales of minerals extracted
from the property to a total of $600,000.  The royalty payments are
due monthly once exploitation begins, and are subject to minimum payments of
$1,000 per month.  The Company has no obligation to pay the royalty if
it does not commence exploitation.  (Notes 4 and 9)
 
 Cecil
Mineral Properties
 
 On
September 5, 2008, Polymet paid $20,000 to acquire the Cecil 1-49 consisting of
230 hectares of titled mining claims and the Cecil and Burghley I consisting of
200 and 300 hectares of exploration claims, respectively.   The
properties are located near the Farellon property in Commune of Freirina,
Province of Huasco, III Region of Atacama, Chile.  The acquisition of
the Cecil properties was completed on September 17, 2008. At January 31, 2009
the Company had spent a total of $21,391 on the acquisition of these
claims.
 
 Camila
Mineral Properties
 
 On
February 1, 2008, Polymet entered into an option agreement with a related
company to acquire an option to purchase the Camila, Camila Dos, Camila Tres and
Camila Cuatro mining claims located in the Commune of Vallenar, Province of
Huasco, III Region of Atacama, Chile. Under the terms of the agreement, we paid
$5,000 on February 1, 2008 and $50,000 on May 23, 2008.  In December
2008 we allowed our option to expire and wrote-off $55,000 in mineral property
costs at January 31, 2009. (Notes 2 and 4)
  F-19
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
6 – UNPROVED MINERAL PROPERTIES, continued
 
 Mateo
Exploration Claims
 
 On
November 2, 2008, Polymet staked and registered the Mateo 4-11 exploration
claims covering 2,200 hectares.  At January 31, 2009 the Company had
spent a total of $1,784 on these claims.
 
 On
January 30, 2009, Polymet staked and registered the Mateo 12-14 exploration
claims covering 700 hectares.  At January 31, 2009 the Company had
spent a total of $490 on these claims.
  All of
the Mateo claims are located in the Commune of Vallenar, Province of Huasco, III
Region of Atacama, Chile.  Under Chile’s mining and land tenure policies,
the Mateo claims are exploration claims (pedimento stage claims) and can be
explored for a period of up to two years. After two years, the Company can apply
to convert them into exploration concession stage properties.
 
 Che
Mineral Claims
 
 On
October 10, 2008 Polymet entered into an option to purchase contract with a
related company to acquire an option to purchase the Che Uno 1-8 and Che Dos
1-10 mining claims covering 76 hectares in the Commune of Vallenar, Province of
Huasco, III Region of Atacama. Under the terms of the option to purchase
contract we agreed to pay $444 on October 10, 2008 as consideration for the
option agreement and $20,000 by April 10, 2009 to acquire the Che
claims.  On October 10, 2008 the Company signed an amendment to the
option to purchase contract extending the consideration payment date to December
2, 2008. On December 2, 2008 the Company paid $444 and acquired the option
agreement.
 
 The
claims are subject to a 1% royalty on the net sales of minerals extracted from
the property to a total of $100,000.  The royalty payments are due
monthly once exploitation begins and are not subject to minimum
payments.  The Company has no obligation to pay the royalty if it does
not commence exploitation.  At January 31, 2009 the Company had paid a
total of $747 in option acquisition and legal costs for these
claims.  (Notes 4, 9 and 11)
 
 Santa
Rosa Mineral Properties
 
 On
February 1, 2008, Polymet entered into an option agreement with a related
company to acquire an option to purchase the Santa Rosa Uno Al Seis and Porfiada
Uno Al Diez mining claims, located in the Commune of Freirina, Province of
Huasco, III Region of Atacama in Chile. The Santa Rosa properties consist
of two mining claims covering 110 hectares.  In December 2008, we allowed
the option to expire and wrote-off $132,000 in mineral property costs at January
31, 2009. (Notes 2 and 4)
 
 A related
company conducted exploitation work from October 2007 to October 27, 2008 and
paid us a royalty equal to 5% of the net proceeds it received from the
processor. During the year ended January 31, 2009, we received $15,658 in
royalties from this related company.  (Notes 2 and 4)
  F-20
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
6 – UNPROVED MINERAL PROPERTIES, continued
 
 Jova
Exploration Concessions
 
 On
September 28, 2008, Polymet staked and registered the Jova 1-13 exploration
claims covering 2,600 hectares.
 
 On
November 17, 2008, Polymet staked and registered the Jova 14 and 15 exploration
claims covering 500 hectares.
 
 The Jova
exploration concessions are located in the Commune of Freirina, Province of
Huasco, III Region of Atacama, Chile.  The claims surround the Santa
Rosa mineral properties to the north, south, east and west.
 
 At
January 31, 2009 the Company had spent $3,976 and $688 in acquisition costs on
the Jova 1-13 and Jova 14 and 15 claims, respectively.  (Note
11)
 
 Costa
Rica Exploration Concessions
 
 On
October 16, 2008, Polymet staked and registered the Costa Rica Dos and Costa
Rica Tres exploration claims covering 600 hectares located in
the  Province of Copiapo, III Region of Atacama, Chile.  At
January 31, 2009 the Company had spent $1,248 in acquisition costs on these
claims.  (Note 11)
 
 Cañas
Mineral Properties
 
 On
November 27, 2008, Polymet purchased the Cañas mining claims for $4,656 and owes
outstanding taxes of approximately 28 million Chilean pesos (approximately
$45,000). The Cañas properties are located in the Province of Huasco, III Region
of Atacama, Chile and consist of three mining concessions Canas 1-30, Canas I
1-20 and Canas II 1-20 covering 700 hectares.
 
 Estrella
Mineral Properties
 
 On
November 27, 2008, Polymet purchased the Estrella mining claims for $11,423 and
owes outstanding taxes of approximately 55 million Chilean pesos (approximately
$90,000). The Estrella properties are located in Province of Huasco, III Region
of Atacama, Chile and consist of three blocks of claims containing eleven claims
covering 1,383 hectares.
 
 Caminada
Mineral Property
 
 On
November 27, 2008, Polymet purchased the Caminada mining claims for $1,062 and
owes outstanding taxes of approximately 1.5 million Chilean pesos (approximately
$2,000).  The Caminada property is located in the Province of Huasco,
III Region of Atacama, Chile and covers 40 hectares.
 
 Margarita
Mineral Property
 
 On
November 27, 2008, Polymet purchased the Margarita 1-4 mining claims for $16,072
and owes outstanding taxes of approximately 600,000 Chilean pesos (approximately
$1,000).  The Margarita property is located in the Commune of
Vallenar, Province of Huasco, III Region of Atacama, Chile and covers 56
hectares.
 
 See
Note 11 for additional mineral property acquisitions and
dispositions.
  F-21
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
7 – COMMON STOCK
 
 On August
27, 2008, our authorized common stock increased from 75,000,000 shares to
500,000,000 shares with a par value of $0.001 per share.
 
 On May
14, 2008, the Company issued 999,999 units at $0.30 per unit in a private
placement for cash of $300,000.  Each unit consists of one share of
common stock and one warrant entitling the holder to purchase one share of
common stock for $0.50.   (Notes 4 and 8)
 
 On April
21, 2008, the Company issued 4,000,000 units at $0.25 per unit in a private
placement for cash of $1,000,000.  Each unit consists of one share of
common stock and one warrant entitling the holder to purchase one share of
common stock for $0.35.  (Notes 4 and 8)
 
 On August
13, 2007, the Company issued 333,334 units at $0.30 per unit in a private
placement for cash of $100,000. Each unit consists of one common share and 1⁄2 of
one warrant (a total of 166,667 warrants).  (Notes 4 and
8)
 
 On June
20, 2007 the Company acquired 24,500,000 shares of its own common stock
from its former president for consideration of $1.  The Company
cancelled these shares.
 
 On June
15, 2007, the Company declared a forward stock split of 13 shares for every one
share of common stock.   All issued shares were retroactively
adjusted for all periods presented.
  On
January 31, 2006, the Company issued 10,850,000 shares of common stock (adjusted
to reflect the forward split) at $0.0035714 per share for proceeds of
$38,750.
  On
October 28, 2005, the Company issued 24,500,000 shares of common stock (adjusted
to reflect the forward split) at $0.0007143 per share for proceeds of
$17,500.
  On
October 3, 2005, the Company issued 42,000,000 shares of common stock (adjusted
to reflect the forward split) to its president at $0.00007143 per share for
proceeds of $3,000.
  F-22
  RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
      8 – WARRANTS
 
 On May
14, 2008, the Company issued 999,999 share purchase warrants which entitle the
holder to purchase up to 999,999 shares of the Company’s common stock at $0.50
per share.  The warrants have a term of two years and will expire on
May 14, 2010.  The warrants are required to be exercised if, at any
time after November 14, 2008, the Company’s shares trade at $0.80 per share for
30 consecutive days. At January 31, 2009 none of these warrants had been
exercised. (Notes 4 and 7)
  On April
21, 2008, the Company issued 4,000,000 share purchase warrants which entitle the
holder to purchase up to 4,000,000 shares of the Company’s common stock at $0.35
per share. The warrants have a term of two years and will expire on April 21,
2010.   At January 31, 2009 none of these warrants had been
exercised. (Notes 4 and 7)
 
 On August
15, 2007, the Company issued 333,334 share purchase warrants which entitle the
holder to purchase up to 166,667 shares of the Company’s common stock at $0.50
per share.  Two warrants entitle the holder to purchase one share of
common stock for $0.50. The warrants have a two-year term and will expire on
August 13, 2009.  At October 31, 2008 none of these warrants had been
exercised.  (Notes 4 and 7)
 
 All of
the Company’s warrants were issued in units that included shares of common
stock.  When the units were issued, the Company allocated 25% of the
proceeds of the issuance to the estimated fair value of the
warrants.  The Company considers the fair value amount to be
reasonable and has consistently allocated this percentage of the proceeds to
estimate the fair value of the warrants.  At January 31, 2009 and 2008
the Company had allocated $325,000 and $25,000 respectively, of the proceeds
from the issuance of the units as the estimated fair value of the
warrants.
  Warrants
Outstanding
 
 At
January 31, 2009, the following share purchase warrants were
outstanding:
 
 Number
      of
                Shares
              
              Exercise
      Price

                Per
      Share
              
              Expiry

                Date166,667
              
              $
      0.50
              
              August
      13, 20094,000,000
              
              $
      0.35
              
              April
      21, 2010999,999
              
              $
      0.50
              
              May
      14, 20105,166,666
  F-23
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
9 – COMMITMENTS
 
 Financing
 
 On May 2,
2008, the Company entered into a letter agreement with a brokerage house whereby
the brokerage house agreed to privately place up to $6,000,000 of units of the
Company’s common stock and common stock purchase warrants.  The
Company has agreed to pay the brokerage house a commission equal to 9% of the
total financing and issue warrants equal to 10% of the total number of units
issued.  The Company paid a non-refundable work fee of $25,000 which
will be deducted from the commission.  The contract is effective until
May 19, 2009.
 
 Investor
Relations
 
 On
October 21, 2008, the Company entered into a letter agreement with an
independent investor relations specialist who agreed to manage our investor
relations program.  The Company has agreed to pay him a monthly flat
fee of $4,500. The letter agreement can be terminated without cause by either
party at any time.
 
 Commitments
 
 At
January 31, 2009, the Company had the following contractual obligations under
the Farellon and Che agreements.  (Note 6)
 
 Future
      minimum payments
              
              Option
                payment
              
              
              Royalty
                payments
      (a)2010
              
              $
              20,000
              
              
              $
              -2011
              
              
              -
              
              
              
              -2012
              
              
              -
              
              
              
              -2013
              
              
              -
              
              
              
              -2014
              
              
              -
              
              
              
              -After
      2014
              
              
              -
              
              
              
              700,000Total
      future minimum payments
              
              $
              20,000
              
              
              $
              700,000
 
 (a) These
royalty payments are due only if the Company exploits the
properties.
 
 See
Note 11 for additional commitments.
  F-24
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
10 – INCOME TAXES
 
 Income
tax expense has not been recognized for the years ended January 31, 2009 and
2008 and no taxes were payable at January 31, 2009 or 2008, because the Company
has incurred losses since its inception. Red Metal is subject to United
States federal and state taxes and Polymet is subject to Chilean tax
law.
  The
components of the Company’s net operating losses for the years ended January 31,
2009 and 2008 were:
 
 2009
              
              
              2008United
      States
              
              $
              (429,972
              )
              
              $
              (231,882
              )Chile
              
              
              (951,019
              )
              
              
              238$
              (1,380,991
              )
              
              $
              (231,644
              )
 
 At
January 31, 2009 and 2008, the Company had the following deferred tax assets
that primarily relate to net operating losses.  The Company established a
100% valuation allowance, as management believes it is more likely than not that
the deferred tax assets will not be realized.
 
 2009
              
              
              2008Federal
      loss carryforwards (effective rate 34%)
              
              $
              230,511
              
              
              $
              84,321Foreign
      loss carryforwards
              
              
              161,713
              
              
              
              (40
              )Less:
      valuation allowance
              
              
              (392,224
              )
              
              
              (84,281
              )$
              -
              
              
              $
              -
 
 The
Company’s valuation allowance increased during 2009 and 2008 by $307,943 and
$78,800, respectively.
  The
Company had the following net operating loss carryforwards (NOLs)
at January 31:
 
 2009
              
              
              2008United
      States
              
              $
              677,974
              
              
              $
              247,764Chile
              
              
              950,781
              
              
              
              (238
              )$
              1,628,755
              
              
              $
              247,526
  The
federal NOLs expire through January 31, 2029.  The Company is a Nevada
corporation and is not subject to state taxes.  The Chilean tax losses
can be carried forward indefinitely.
  F-25
 
 RED
METAL RESOURCES LTD.
 (Formerly
Red Lake Exploration, Inc.)
 (AN
EXPLORATION STAGE COMPANY)
 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
 JANUARY
31, 2009 AND 2008
 NOTE
11 – SUBSEQUENT EVENTS
 
 Irene
Property
 
 On
February 2, 2009, the Company entered into a letter of intent to purchase two
properties known as the Irene properties from a related company for 21,000,000
Chilean pesos (approximately $34,000).  The Irene properties consist
of Irene Una al Dos and Irene II Uno al Diez mineral holdings are located in the
Commune of Vallenar, Province  of Huasco, III Region of Atacama, and
cover a total of 60 hectares.  (Notes 4, 6 and 9)
 
 Che
Mineral Claims
 
 On April
7, 2009, the Company entered into Amendment No.2 to the October 10, 2008 option
to purchase agreement for the Che Mineral Claims.  Amendment No. 2
extends the $20,000 payment date to October 10, 2009.  (Notes 4, 6 and
9)
 
 Jova
Mineral Claims
 
 On April
7, 2009, the Company identified the potential for two more claims contiguous to
the Jova claims, consolidated them with the Jova claims and re-staked them all
as the Eva 1 – 17 claims. They cover 3,500 hectares.  (Note
6)
 
 Financing
 
 On March
18, 2009, the Company entered into a one–year, non-exclusive financing agreement
and agreed to pay a consultant the following fees for assisting the company with
any of the following transactions; a 10% commission upon consummation of any
financing transactions; issuance of 1,000,000 shares of the Company’s common
stock if the Company enters into a joint venture agreement and production
commences on the Farellon property; and/or an 8% commission and issuance of
250,000 shares of the Company’s common stock upon the sale of the Farellon
property.  This agreement can be terminated or extended by either
party with five days written notice.  (Note 9)
 
 Consulting
Contract
 
 On April
1, 2009 the Company entered into a consulting contract with a related company
whereby the Company will pay US$5,600 (3,450,000 Chilean pesos) per month for
professional and other services.  The contract is for nine months
commencing on April 1, 2009.  (Notes 4 and 9)
 
 Mineral
Claims
 
 Subsequent
to January 31, 2009 the Company decided to abandon the Costa Rica Dos and Tres
mineral claims.  (Note 6)
 
 Notes
Payable to Related Party
 
 Subsequent
to January 31, 2009, the Company issued a total of $106,000 in notes payable to
a related party. The notes payable are payable on demand, unsecured and bear
interest at 8% per annum, compounded monthly. (Note 5)


F-26


ITEM
9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
 
 Not
applicable.
 
 ITEM
9A(T).    CONTROLS AND PROCEDURES.
 
 Report
on Controls and Procedures
 
 We
carried out an evaluation, under the supervision and with the participation of
our management, including our chief executive officer and our chief financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this
report.  The evaluation was undertaken in consultation with our
accounting personnel.  Based on that evaluation, our chief executive
officer and our chief financial officer concluded that our disclosure controls
and procedures are effective to ensure that information required to be disclosed
by us in the reports that we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and
forms.
 
 Report
on Internal Control over Financial Reporting
 
 Our chief
executive officer and our chief financial officer are responsible for
establishing and maintaining adequate internal control over financial
reporting.  Internal control over financial reporting is defined in
Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of
1934 as a process designed by, or under the supervision of, our principal
executive and principal financial officers and effected by our board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures
that:
 
 ·
              pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of our
      assets;
 ·
              provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of management and our
      directors; and
 ·
              provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.
 
 Because
of its inherent limitations, our internal control over financial reporting may
not prevent or detect misstatements.  Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.  Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
  Our chief
executive officer and our chief financial officer assessed the effectiveness of
our internal control over financial reporting as of January 31,
2009.  In making this assessment, management used the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal
Control—Integrated Framework
  35
  Based on
our assessment, our chief executive officer and our chief financial officer
believe that, as of January 31, 2009, our internal control over financial
reporting is effective based on those criteria.
 
 This
report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in
this report.
 
 Changes
in Internal Control over Financial Reporting
 
 There
have been no changes in our internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during
the fourth quarter of the last fiscal year that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 ITEM
9B.         OTHER
INFORMATION.
  Polymet
signed an agreement dated October 10, 2008 with Minera Farellón Limitada for the
option to buy the Che properties for $20,000 payable by April 10, 2009. We paid
$444 as consideration for the option. We amended the option on April 7, 2009 to
extend the payment date to October 10, 2009.
 
 We signed
a letter agreement dated October 21, 2008, with Andrew Barwicki for investor
relations services. We agreed to pay him a monthly fee of $4,500. Either party
can terminate the agreement without cause at any time.
  On
November 19, 2008 we signed a loan agreement and promissory note in the amount
of $105,000 in favor of Richard N. Jeffs, the father of our president, Caitlin
Jeffs.  The loan bears interest at the rate of 8%, compounded
monthly.  The loan is due to be paid on demand.
  PART
III
 
 ITEM
10.          DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE.
 
 Table 11
contains certain information regarding our directors, executive officers and key
personnel. There is a family
relationship between Caitlin Jeffs and Michael Thompson.  Directors
serve for oneyear and until their successors are duly elected and
qualified. In Chile, Polymet has one legal representative, which is similar
to a director, and a manager, which is similar to a president.
 
 Table
      11: Directors and OfficersName
              Age
              PositionCaitlin
      Jeffs
              33
              Director,
      chief executive officer, president and secretaryMichael
      Thompson
              39
              Director
      and vice president of explorationJohn
      Da Costa
              44
              Chief
      financial officer and treasurerKevin
      Mitchell
              48
              Legal
      representative and manager of
Polymet
 
 Biographical
Information – Officers and Directors
 
 Caitlin Jeffs, P.
Geo.  Ms. Jeffshas been a director
since October 2007 and our president, chief executive officer and secretary
since April 21, 2008.  Ms. Jeffs has been a geologist since
2002.  Ms. Jeffs graduated from the University of British Columbia in
2002 with an honors bachelor of science in geology.  She is a
professional geologist on the register of the Association of Professional
Geoscientists of Ontario.  She worked for Placer Dome (CLA) Ltd. in
Canada from February 2003 until May 2006.  She has been a
self-employed consulting geologist since May 2006.  She is an owner
and the general manager of Fladgate Exploration Consulting Corporation in
Ontario, Canada. She lives with Michael Thompson as a family.
  36
 
 Michael Thompson, P. Geo. Mr.
Thompson has been a director since October 2007 and our vice-president of
exploration since April 2008.  Mr. Thompson graduated from the
University of Toronto in 1997 with an honors bachelor of science in
geology.  He is a professional geologist on the register of the
Association of Professional Geoscientists of Ontario.  He worked in
Canada for Teck Cominco Limited from 1999 until 2002 and Placer Dome (CLA) Ltd.
from January 2003 until May 2006.  He has been a self-employed
consulting geologist since May 2006.  He is an owner and the president
of Fladgate Exploration Consulting Corporation in Ontario, Canada. He lives with
Caitlin Jeffs as a family.
 
 John Da Costa.Mr.
Da Costa has been our chief financial officer and treasurer since May 13,
2008.  Mr. Da Costa is the founder and president of Da Costa
Management Corp., a company that has provided management and accounting services
to public and private companies since August 2003.  Mr. Da Costa is
also the treasurer of Rock City Energy Corp., a public company, a position he
has held since August 2006, and a director and the chief executive office (since
February 2006) and chief financial officer and secretary (since May 2002) of
GlobeTrac Inc., also a public company.
 
 Biographical
Information - Significant Employee
 
 Kevin Mitchell.  Mr.
Mitchell has been the legal representative and manager of Minera Polymet
Limitada since it was formed in August 2007.  He is a Canadian who has
lived in Chile for more than twenty years.  He has owned and operated
a heavy equipment company for all of that time, mainly servicing the mining
industry.  Since February 2007 he has been the legal representative
and manager of Minera Farellón Limitada, a Chilean company that investigates
potential projects, conducts due diligence reviews, and provides logistical
support.
 
 None of
our directors or executive officers has, during the past five
years,
 
 ·
              had
      any bankruptcy petition filed by or against any business of which such
      person was a general partner or executive officer, either at the time of
      the bankruptcy or within two years prior to that
  time,
 ·
              been
      convicted in a criminal proceeding and none of our directors or executive
      officers is subject to a pending criminal
  proceeding,
 ·
              been
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities, futures, commodities or
      banking activities, or
 ·
              been
      found by a court of competent jurisdiction (in a civil action), the
      Securities and Exchange Commission or the Commodity Futures Trading
      Commission to have violated a federal or state securities or commodities
      law, and the judgment has not been reversed, suspended, or
      vacated.
 
 Director
Compensation
 
 Our
directors did not receive compensation during the 2009 fiscal year.
 
 Section
16(a) Beneficial Ownership Reporting Compliance
 
 Section
16(a) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder require our officers and directors, and persons who own more than 10%
of our common stock, to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish us with copies.  To
our knowledge, based solely upon review of the copies of such reports received
or written representations from the reporting persons, we believe that during
the last fiscal year our directors, executive officers and persons who own more
than 10% of our common stock complied with all Section 16(a) filing
requirements.
  37
 
 Code
of Ethics
 
 We have
adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions.  Our code of ethics will be
provided to any person without charge, upon request.  Requests should
be in writing and addressed to Caitlin Jeffs, c/o Red Metal Resources Ltd., 195
Park Avenue, Thunder Bay, Ontario P7B 1B9.
 
 Corporate
Governance
 
 Our board
of directors does not have an audit committee, a compensation committee or a
nominating committee.
 
 We have
not adopted any procedures by which our security holders may recommend nominees
to our board of directors and that has not changed during the last fiscal
year.
 
 None of
the members of our board of directors qualifies as an “audit committee financial
expert”, as defined by Item 407 of Regulation S-K promulgated under the
Securities Act of 1933 and the Securities Exchange Act of 1934.
 
 ITEM
11.          EXECUTIVE
COMPENSATION.
 
 Table 12
discloses information with respect to all compensation awarded to, earned by or
paid to our chief executive officer and up to two of our executive officers
whose annual salary and bonus exceeded $100,000 during our last two completed
fiscal years (collectively referred to in this discussion as the “named
executive officers”).  We have no employment agreements with our named
executive officers or with our key employee other than our oral agreement to pay
Mr. Mitchell $2,000 per month to act as Polymet’s registered
representative.
 
 Table
      12: Summary CompensationNameandprincipalposition
              Year
              Salary
                ($)
              Bonus
                ($)
              Stock
                awards
                ($)
              Option
      awards
                ($)
              Non-equity
      incentive plan compensation
                ($)
              Non-qualified
      deferred compensation earnings
                ($)
              All
      other
                compensation
                ($)
              Total
                ($)Caitlin
      Jeffs
              2009
              
              
              
              
              
              
              $327,081
      (1)
              $327,081
      (1)Chief
      Executive Officer,
              2008
              
              
              
              
              
              
              $67,503
      (1)
              $67,503
      (1)President
      andSecretaryMichael
      Thompson
              2009
              
              
              
              
              
              
              $327,081
      (1)
              $327,081
      (1)Vice
      President,
              2008
              
              
              
              
              
              
              $67,503
      (1)
              $67,503
      (1)ExplorationJohn
      Da Costa
              2009
              
              
              
              
              
              
              $123,823
      (2)
              $123,823
      (2)Chief
      Financial Officer
              2008
              
              
              
              
              
              
              $73,772
      (2)
              $73,772
      (2)
 (1)  Paid or accrued
to a company controlled by Caitlin Jeffs and Michael Thompson for administrative
and geological services. (2) 
Paid or accrued to a company owned by John Da Costa for consulting and out of
pocket expenses.
 38
  When we
are able to do so, our plan is to implement a compensation program consisting of
base salary, bonuses and awards of stock options or, possibly, restricted
stock.  We believe that a combination of cash and common stock or
options will allow us to attract and retain the services of the individuals who
will help us achieve our business objectives, thereby increasing value for our
shareholders.  We intend to grant options or restricted stock because
we believe that share ownership by our employees is an effective method to
deliver superior shareholder returns by increasing the alignment between the
interests of our employees and our shareholders. No employee will be required to
own common stock in our company.
 
 In
setting the compensation for our officers, we plan to look primarily at the
person’s responsibilities, at salaries paid to others in businesses comparable
to ours, at the person’s experience and at our ability to replace the
individual.  It is not likely that we will be able to pay salaries to
our employees until we begin to generate cash from our operations.
 
 We also
expect that we may pay bonuses in the future to reward exceptional performance,
either by the individual or by the company.
 
 We have
granted no stock options to our executive officers or any other
persons.
 
 ITEM
12.          SECURITY OWNERSHIP OF
CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
 
 Table 13
sets forth, as of April 28, 2009, information regarding the beneficial ownership
of our common stock with respect to each of our executive officers, each of our
directors, each person known by us to own beneficially more than 5% of the
common stock, and all of our directors and executive officers as a
group.  Beneficial ownership is determined under the rules of the
Securities and Exchange Commission and generally includes voting or investment
power over securities.  Each individual or entity named has sole
investment and voting power with respect to the shares of common stock indicated
as beneficially owned by them, subject to community property laws, where
applicable, except where otherwise noted.
 
 Shares of
common stock subject to options or warrants that are currently exercisable or
exercisable within 60 days of April 28, 2009 are considered outstanding and
beneficially owned by the person holding the options or warrants for the purpose
of computing the percentage ownership of that person but are not treated as
outstanding for the purpose of computing the percentage ownership of any other
person.
 
 Table
      13: Security OwnershipClass
      of security
              Name
      and address
                of
      beneficial owner
              Number
      of shares
                beneficially
      owned
              Percentage
      of
                common
      stockCommon
      stock
              Caitlin
      Jeffs (1)
              2,520,000
              4.33%Common
      stock
              Michael
      Thompson (1)(2)
              80,000
              0.14%Common
      stock
              John
      Da Costa (3)
              2,525,000
              4.34%All
      officers and directors as a group
              5,125,000
              8.81%Common
      stock
              Richard  N.
      Jeffs (4)(5)(6)
              7,686,667
              12.67%Common
      stock
              Money
      Layer Limited (6)(7)
              3,520,000
              5.87%Common
      stock
              Laboa
      Holdings Inc. (6)
              7,500,010
              12.89%Common
      stock
              Kevin
      Mitchell (6)(8)
              7,500,010
              12.89%
 (1)
                The
      address for Caitlin Jeffs and Michael Thompson is 195 Park Avenue, Thunder
      Bay, Ontario P7B 1B9.(2)
                Includes
      warrants for the exercise of 40,000
shares.
 (3)
                The
      address for John Da Costa is 610-1100 Melville Street, Vancouver, British
      Columbia V6E 4A6.
 (4)
                The
      address for Richard N. Jeffs is 49 Pont Street, London, United Kingdom
      SW1X 0BD.
 (5)
                Includes
      warrants for the exercise of 2,500,000 shares and 2,520,000 shares held by
      his spouse, Susan Jeffs. Mr. Jeffs expressly disclaims any interest in the
      shares owned by Susan Jeffs.
 (6)
                5%
      shareholder
 (7)
                Includes
      warrants for the exercise of 1,760,000 common
  shares.
 (8)
                The
      address for Kevin Mitchell is Baldomero Lillo 3260, Vallenar, III Region,
      Chile.
 
 39
  ITEM
13.          CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
 
 Using the
definition of “independent” set forth in Section 803 of the Rules of the NYSE
Amex, we have determined that none of our directors are
independent.
 
 Transactions
with Related Persons
 
 Since
February 1, 2007, no director, executive officer, or holder of more than 5% of
our common stock, or any immediate family of such director, executive officer,
or security holder has had any direct or indirect material interest in any
transaction or currently proposed transaction, in which we were or are to be a
participant, that exceeded the lesser of (1) $120,000 or (2) 1% of the average
of our total assets at year-end for the last three completed fiscal years,
except for the following:
 
 Notes
Payable to Richard N. Jeffs
 
 As of
April 30, 2009 we owed Mr. Richard N. Jeffs, the father of our president,
Caitlin Jeffs, a total of $686,000 in principal and $33,587 in
interest.  These notes are payable on demand, unsecured and the
interest is calculated and compounded monthly at the rate of 8%.
 
 Sales
of Securities made to Richard N. Jeffs
 
 On August
13, 2007, we issued 333,334 units at $0.30 per unit by way of private placement
to Richard N. Jeffs.  Each unit consists of one common share and 1⁄2 of
one warrant.  Two share purchase warrants entitle the holder to
purchase one share of common stock for $0.50 per share.  The warrants
have a term of two years and will expire on August 13, 2009.   At
the date of filing none of these warrants had been exercised.
 
 On April
21, 2008, we issued 2,000,000 units at $0.25 per unit by way of private
placement to Richard N. Jeffs.  Each unit consists of one common share
and one warrant entitling the holder to purchase one share of common stock for
$0.35 per share.  The warrants have a term of two years and will
expire on April 21, 2010.  At the date of filing none of these
warrants had been exercised.
 
 On May
14, 2008, we issued 333,333 units at $0.30 per unit by way of private placement
to Richard N. Jeffs.  Each unit consists of one common share and one
warrant entitling the holder to purchase one share of common stock for $0.50 per
share.  The warrants have a term of two years and will expire on May
14, 2010.  At the date of filing none of these warrants had been
exercised. The warrants are required to be exercised if, at any time after
November 14, 2008, our common stock trades at $0.80 per share for 30 consecutive
days.
 
 Interest
of Richard N. Jeffs in Minera Farellon Limitada
 
 Minera
Farellon Limitada, is owned 50% by Richard N. Jeffs and 50% by Kevin
Mitchell.
 
 Sales
of Securities made to Michael Thompson
 
 On April
21, 2008, we issued 40,000 units at $0.25 per unit by way of private placement
to Michael Thompson.  Each unit consists of one common share of our
common stock and one warrant entitling the holder to purchase one share of
common stock for $0.35 per share.  The warrants have a term of two
years and will expire on April 21, 2010.   At the date of filing
none of these warrants had been exercised.
  40
 
 Sales
of Securities made to Money Layer Limited
  On April
21, 2008, we issued 1,760,000 units at $0.25 per unit by way of private
placement to Money Layer Limited.  Each unit consists of one common
share and one warrant entitling the holder to purchase one share of common stock
for $0.35 per share.  The warrants have a term of two years and will
expire on April 21, 2010.  At the date of filing none of these
warrants had been exercised.
  Sales
of Securities made to Kinnaman Trading Company Limited
  On April
21, 2008, we issued 200,000 units at $0.25 per unit by way of private placement
to Kinnaman Trading Company Limited. Each unit consists of one common share and
one warrant entitling the holder to purchase one share of common stock for $0.35
per share. The warrants have a term of two years and will expire on April 21,
2010. At the date of filing none of these warrants had been
exercised.
  On May
14, 2008, we issued 333,333 units at $0.30 per unit by way of private placement
to Kinnaman Trading Company Limited. Each unit consists of one common share and
one warrant entitling the holder to purchase one share of common stock for $0.50
per share. The warrants have a term of two years and will expire on May 14,
2010. At the date of filing none of these warrants had been exercised. The
warrants are required to be exercised if, at any time after November 14, 2008,
the Company’s shares trade at $0.80 per share for 30 consecutive
days.
  Sale
of Securities made to Pilenga Limited
  On May
14, 2008, we issued 333,333 units at $0.30 per unit by way of private placement
to Pilenga Limited. Each unit consists of one common share and one warrant
entitling the holder to purchase one share of common stock for $0.50 per share.
The warrants have a term of two years and will expire on May 14, 2010. At the
date of filing none of these warrants had been exercised. The warrants are
required to be exercised if, at any time after November 14, 2008, the Company’s
shares trade at $0.80 per share for 30 consecutive days.
 ITEM
14.          PRINCIPAL
ACCOUNTING FEES AND SERVICES.
 
 (1)  Audit
Fees and Related Fees
  The
aggregate fees billed and accrued for each of the last two fiscal years for
professional services rendered by our principal accountant for the audit of our
annual consolidated financial statements and for the review of our financial
statements or for services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years was:
  2009 -
$2,757 – Manning Elliot Chartered Accountants
 2008 -
$11,270 – Manning Elliot Chartered Accountants
 
 2009 -
$42,826 – Mendoza Berger & Company, L.L.P.
 2008 - $0
– Mendoza Berger & Company, L.L.P.
  41
 
 (2)  Audit-Related
Fees
 
 The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported in the preceding paragraph:
 
 2009 - $0
– Manning Elliot Chartered Accountants
 2008 - $0
– Manning Elliot Chartered Accountants
 
 2009 -
$2,000 – Mendoza Berger & Company, L.L.P.
 2008 - $0
– Mendoza Berger & Company, L.L.P.
  (3)  Tax
Fees
  The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:
  2009 -
$1,669 – Manning Elliot Chartered Accountants
 2008 - $0
– Manning Elliot Chartered Accountants
 
 2009 -
$1,991 – Mendoza Berger & Company, L.L.P.
 2008 - $0
– Mendoza Berger & Company, L.L.P.
 
 2009 -
$954 – Javier Cortez Godoy
 2008 - $0
– Javier Cortez Godoy
  (4)  All
Other Fees
  The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1), (2) and (3) was:
  2009 - $0
– Manning Elliot Chartered Accountants
 2008 - $0
– Manning Elliot Chartered Accountants
 
 2009 - $0
– Mendoza Berger & Company, L.L.P.
 2008 - $0
– Mendoza Berger & Company, L.L.P.
 
 We do not
have an audit committee.  Our board of directors pre-approves all
audit and permissible non-audit services provided by the independent auditors.
 These services may include audit services, audit-related services, tax
services and other services.
  42
 
 ITEM
15.           EXHIBITS.
 
 The
following exhibits are filed herewith or incorporated by reference:
 
 Exhibit
              Description3.1
              Articles
      of Incorporation (1)3.2
              By-laws
      (1)10.1
              Agreement
      to assign contract for the option to purchase mining holdings dated
      September 25, 2007 between Minera Farellón Limitada and Minera Polymet
      Limitada (2)10.2
              Contract
      for the option to purchase mining holdings dated May 2, 2007 between
      Compañia Minera Romelio Alday Limitada and Minera Farellón Limitada
      (2)10.3
              Amendment
      number 1 to Agreement to assign contract for the option to purchase mining
      holdings dated November 20, 2007 (3)10.4
              Contract
      for the option to purchase mining holdings dated December 7, 2007 between
      Ingenieria De Proyectos, Desarrollo, Estudios y Servicios H.I.T. Limitada
      and Minera Farellón Limitada (4)10.5
              Santa
      Rosa option agreement to acquire mining concession dated February 1, 2008
      between Minera Farellón Limitada and Minera Polymet Limitada
      (4)10.6
              Contract
      for the option to purchase mining holdings dated September 10, 2007
      between Antolin Amadeo Crespo Garcia and Minera Farellón Limitada
      (4)10.7
              Camila
      option agreement to acquire mining concession dated February 1, 2008
      between Minera Farellón Limitada and Minera Polymet Limitada
      (4)10.8
              Contract
      for the option to purchase mining holdings dated October 10, 2008 between
      Minera Farellón Limitada and Minera Polymet Limitada (6), Amendment #1
      dated October 10, 2008 (6) and Amendment #2 dated April 7, 2009
      (5)10.9
              Letter
      of intent for the purchase of Pertenencia Irene Una al Dos dated February
      2, 2009 between Minera Farellón Limitada and Minera Polymet Limitada
      (6)10.10
              Contract
      for consulting services dated April 1, 2009 between Minera Farellón
      Limitada and Minera Polymet Limitada (5)(7)10.11
              Loan
      Agreement dated November 19, 2008 between Red Metal Resources Ltd. and
      Richard N. Jeffs and Promissory Note dated November 19, 2008 in favor of
      Richard N. Jeffs (6)10.12
              Loan
      Agreement dated February 11, 2009 between Red Metal Resources Ltd. and
      Richard N. Jeffs and Promissory Note dated February 11, 2009 in favor of
      Richard N. Jeffs (6)10.13
              Loan
      Agreement dated February 25, 2009 between Red Metal Resources Ltd. and
      Richard N. Jeffs and Promissory Note dated February 25, 2009 in favor of
      Richard N. Jeffs (6)10.14
              Loan
      Agreement dated April 6, 2009 between Red Metal Resources Ltd. and Richard
      N. Jeffs and Promissory Note dated April 6, 2009 in favor of Richard N.
      Jeffs (6)10.15
              Loan
      Agreement dated April 28, 2009 between Red Metal Resources Ltd. and
      Richard N. Jeffs and Promissory Note dated April 28, 2009 in favor of
      Richard N. Jeffs (6)10.16
              Termination
      of option to purchase Santa Rosa property (6)10.17
              Loan
      Agreement dated July 17, 2008 between Red Metal Resources Ltd. and Richard
      N. Jeffs and Promissory Note dated July 17, 2008 in favor of Richard N.
      Jeffs (6)10.18
              Loan
      Agreement dated July 30, 2008 between Red Metal Resources Ltd. and Richard
      N. Jeffs and Promissory Note dated July 30, 2008 in favor of Richard N.
      Jeffs (6)10.19
              Loan
      Agreement dated September 11,
      2008 betweenRed Metal Resources Ltd. and Richard N. Jeffs and
      Promissory Note dated September 11,
      2008 infavor of Richard N. Jeffs (6)10.20
              Loan
      Agreement dated October
      22, 2008 betweenRed Metal Resources Ltd. and Richard N. Jeffs
      and Promissory Notedated October
      22, 2008 in favor of Richard N. Jeffs (6)21
              List
      of significant subsidiaries of Red Metal Resources
  Ltd.(6)31
              Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of
    2002(6)32
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002(6)
 (1)
                Incorporated
      by reference from the registrant’s registration statement on Form SB-2
      filed with the Securities and Exchange Commission on May 22, 2006 as file
      number 333-134-363.
 (2)
                Incorporated
      by reference from the registrant’s current report on Form 8-K filed with
      the Securities and Exchange Commission on October 2,
  2007.
 (3)
                Incorporated
      by reference from the registrant’s current report on Form 8-K filed with
      the Securities and Exchange Commission on May 1,
  2008.
 (4)
                Incorporated
      by reference from the registrant’s annual report on Form 10-KSB for the
      fiscal year ended January 31, 2008 filed with the Securities and Exchange
      Commission on May 13, 2008.
 (5)
                Incorporated
      by reference from the registrant’s current report on Form 8-K filed with
      the Securities and Exchange Commission on on
      April 15, 2009.
  (6)
                Filed
      herewith.
 (7)
                Denotes
      a management contract.
  43
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  Dated:  May
1, 2009
 RED
      METAL RESOURCES LTD.By:
                /s/
      Caitlin JeffsCaitlin
      Jeffs, Chief Executive Officer
  By:
                /s/
      John Da CostaJohn
      Da Costa, Chief Financial Officer
 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated
  Signature
              
              Title
              
              Date/s/
      Caitlin Jeffs
              
              Chief
      Executive Officer,
              
              May
      1, 2009Caitlin
      Jeffs
              
              President,
      Secretary and director/s/
      John Da Costa
              
              Chief
      Financial Officer
              
              May
      1, 2009John
      Da Costa/s/
      Michael Thompson
              
              Director
              
              May
      1, 2009Michael
      Thompson






44