##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington D. C. 20549
 FORM 10-Q
 QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended November 30, 2009
 Commission
file number 000-23561
 MEXORO MINERALS LTD.
  Colorado
(State or other jurisdiction of 
incorporation)
    
    84-1431797
(IRS Employer Identification
Number)Mountain View Center 
12303 Airport Way, Suite 200Broomfield, CO.
(Address of principal executive offices)
    
    80021
(Zip Code)
  Yes þ No o
 Yes
o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Yes o No þ




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TABLE OF CONTENTS  ITEM 1. FINANCIAL STATEMENTSConsolidated Balance SheetsConsolidated Statements of Operations and DeficitConsolidated Statements of Cash FlowsNotes to Consolidated Financial StatementsITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 3. Quantitative and Qualitative Disclosure about Market RiskItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. ExhibitsSIGNATURESExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 ITEM 1. FINANCIAL STATEMENTS
 MEXORO MINERALS LTD.
(A Development Stage Company)
 CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Expressed in U.S. Dollars)
 November 30, 2009
  2




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MEXORO MINERALS LTD.
(A Development Stage Company)
 
 Consolidated Balance Sheets
(Expressed in U.S. Dollars)
 November 30, 2009
    
    
    February 28, 2009(Unaudited)
    
    
    (Audited)AssetsCurrentCash and cash equivalents
    
    $
    299,861
    
    
    $
    38,704Accounts receivable
    
    
    338,004
    
    
    
    248,589Prepaid expenses
    
    
    516,289
    
    
    
    34,0481,154,154
    
    
    
    321,341Equipment (note 4)
    
    
    255,309
    
    
    
    275,900Total assets
    
    $
    1,409,463
    
    
    $
    597,241LiabilitiesCurrentAccounts payable and accrued liabilities
    
    $
    2,189,188
    
    
    $
    2,679,512Current portion of loans payable (note 9)
    
    
    699,408
    
    
    
    63,232Promissory notes (note 7)
    
    
    775,299
    
    
    
    968,543Current portion of convertible debentures (note 8)
    
    
    
    
    
    
    1,267,3143,663,895
    
    
    
    4,978,601Loans payable (note 9)
    
    
    
    
    
    
    7,608Convertible debentures (note 8)
    
    
    
    
    
    
    673,887Total liabilities
    
    
    3,663,895
    
    
    
    5,660,096Stockholders deficiencyCapital stockPreferred stockAuthorized: 20,000,000 shares without par value (note 10)Issued: nil
    
    
    
    
    
    
    Common stockAuthorized: 200,000,000 shares without par valueIssued: 42,378,827 (2009  31,019,302) (note 11)
    
    
    28,275,401
    
    
    
    25,556,901Additional paid-in capital
    
    
    12,838,523
    
    
    
    12,676,908Stock subscriptions
    
    
    1,816,000
    
    
    
    121,258Accumulated deficit from prior operations
    
    
    (2,003,427
    )
    
    
    (2,003,427
    )Accumulated deficit during the development stage
    
    
    (43,338,026
    )
    
    
    (41,864,219
    )Other comprehensive income (loss)
    
    
    157,097
    
    
    
    449,724Total stockholders deficiency
    
    
    (2,254,432
    )
    
    
    (5,062,855
    )Total liabilities and stockholders deficiency
    
    $
    1,409,463
    
    
    $
    597,241
 
 The accompanying notes are an integral part of these consolidated financial statements.
  3




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MEXORO MINERALS LTD.
(A Development Stage Company)
 
 Consolidated Statements of Operations and Deficit
(Unaudited) (Expressed in U.S. Dollars)
 Period fromInception ofDevelopmentStageThree Months Ended
    
    
    Nine Months Ended
    
    
    (March 1, 2004)November 30,
    
    
    November 30,
    
    
    November 30,
    
    
    November 30,
    
    
    To November 30,2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009Net sales
    
    $
    130,202
    
    
    $
    
    
    
    $
    522,286
    
    
    $
    
    
    
    $
    522,286Cost of goods sold
    
    
    99,103
    
    
    
    
    
    
    
    264,836
    
    
    
    
    
    
    
    264,836Gross margin
    
    
    31,099
    
    
    
    
    
    
    
    257,450
    
    
    
    
    
    
    
    257,450ExpensesGeneral and administrative
    
    
    870,171
    
    
    
    824,492
    
    
    
    2,279,498
    
    
    
    2,095,415
    
    
    
    15,013,717Mineral exploration (note 6)
    
    
    96,798
    
    
    
    1,200,176
    
    
    
    420,750
    
    
    
    3,955,061
    
    
    
    8,322,976Impairment of mineral property costs
    
    
    167,081
    
    
    
    
    
    
    
    270,237
    
    
    
    
    
    
    
    16,654,952Operating loss
    
    
    (1,102,951
    )
    
    
    (2,024,668
    )
    
    
    (2,713,035
    )
    
    
    (6,050,476
    )
    
    
    (39,734,195
    )Other income (expenses)Foreign exchange
    
    
    (45,634
    )
    
    
    (163,972
    )
    
    
    (1,061
    )
    
    
    (134,857
    )
    
    
    (193,811
    )Interest expense
    
    
    (269,618
    )
    
    
    (104,518
    )
    
    
    (521,111
    )
    
    
    (341,496
    )
    
    
    (5,310,284
    )Other income
    
    
    162,700
    
    
    
    229
    
    
    
    172,791
    
    
    
    
    
    
    
    172,791Gain (loss) on sale of assets
    
    
    1,500,000
    
    
    
    
    
    
    
    1,498,830
    
    
    
    (4,179
    )
    
    
    1,497,250Gain on settlement of debt
    
    
    264,565
    
    
    
    
    
    
    
    89,779
    
    
    
    
    
    
    
    230,223Net income (loss)
    
    
    509,062
    
    
    
    (2,292,929
    )
    
    
    (1,473,807
    )
    
    
    (6,531,008
    )
    
    
    (43,338,026
    )Accumulated deficit, beginning
    
    
    (43,847,088
    )
    
    
    (38,066,090
    )
    
    
    (41,864,219
    )
    
    
    (33,828,011
    )
    
    
    Accumulated deficit, ending
    
    $
    (43,338,026
    )
    
    $
    (40,359,019
    )
    
    $
    (43,338,026
    )
    
    $
    (40,359,019
    )
    
    $
    (43,338,026
    )Other comprehensive incomeForeign exchange gain (loss) on
translation
    
    
    (46,452
    )
    
    
    422,960
    
    
    
    (292,627
    )
    
    
    398,940
    
    
    
    157,097Total comprehensive loss
    
    $
    462,610
    
    
    $
    (1,869,969
    )
    
    $
    (1,766,434
    )
    
    $
    (6,132,068
    )
    
    $
    (43,180,929
    )Total income (loss) per share  basic
    
    $
    0.01
    
    
    $
    (0.08
    )
    
    $
    (0.04
    )
    
    $
    (0.30
    )
    
    $
    Total income (loss) per share  diluted
    
    $
    0.01
    
    
    $
    (0.08
    )
    
    $
    (0.04
    )
    
    $
    (0.30
    )
    
    $
    Weighted average number of shares of
common stock  basic
    
    
    39,604,559
    
    
    
    29,203,010
    
    
    
    36,711,212
    
    
    
    22,484,877
    
    
    
    Weighted average number of shares of
common stock  diluted
    
    
    42,601,225
    
    
    
    29,203,010
    
    
    
    36,711,212
    
    
    
    22,484,877
    
    
    
    
 The accompanying notes are an integral part of these consolidated financial statements.
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MEXORO MINERALS LTD.
(A Development Stage Company)
 
 Consolidated Statements of Cash Flows
(Unaudited) (Expressed in U.S. Dollars)
 Period fromInception ofDevelopmentStageNine Months Ended
    
    
    (March 1, 2004)November 30,
    
    
    November 30,
    
    
    to November 30,2009
    
    
    2008
    
    
    2009Cash flows from operating activitiesNet loss
    
    $
    (1,473,807
    )
    
    $
    (6,531,008
    )
    
    $
    (43,338,026
    )Adjustments to reconcile net (loss) to net cash flows:Write off of note receivable
    
    
    
    
    
    
    
    
    
    
    57,500Impairment of mineral property costs
    
    
    
    
    
    
    
    
    
    
    13,645,000Issuance of shares for consulting services
    
    
    13,500
    
    
    
    
    
    
    
    365,590Issuance of shares for interest costs
    
    
    82,500
    
    
    
    
    
    
    
    82,500Discount on convertible debenture
    
    
    86,191
    
    
    
    64,133
    
    
    
    569,549Gain on sale of assets
    
    
    (1,500,000
    )
    
    
    
    
    
    
    (1,500,000
    )Gain on settlement of debt
    
    
    (89,779
    )
    
    
    
    
    
    
    (272,038
    )Beneficial conversion feature
    
    
    51,192
    
    
    
    198,860
    
    
    
    4,081,091Stock-based compensation
    
    
    873,678
    
    
    
    563,144
    
    
    
    8,843,535Depreciation
    
    
    56,339
    
    
    
    62,881
    
    
    
    239,263Net change in operating assets and liabilities:Prepaid expense
    
    
    (461,214
    )
    
    
    4,273
    
    
    
    (497,660
    )Accounts receivable
    
    
    (48,337
    )
    
    
    (107,638
    )
    
    
    (374,284
    )Customer deposits
    
    
    
    
    
    
    
    
    
    
    (44,809
    )Notes payable
    
    
    
    
    
    
    
    
    
    
    109,337Accounts payable and accrued liabilities
    
    
    231
    
    
    
    2,800,900
    
    
    
    4,079,286Cash used in operating activities
    
    
    (2,409,506
    )
    
    
    (2,944,455
    )
    
    
    (13,954,166
    )Investing activitiesSale of equipment
    
    
    29,437
    
    
    
    
    
    
    
    33,316Purchase of property and equipment
    
    
    (23,258
    )
    
    
    (12,810
    )
    
    
    (588,247
    )Cash used in investing activity
    
    
    6,179
    
    
    
    (12,810
    )
    
    
    (554, 931
    )Financing activitiesProceeds from loans payable
    
    
    33,750
    
    
    
    13,119
    
    
    
    259,567Proceeds from notes payable
    
    
    507,514
    
    
    
    2,406,180
    
    
    
    3,571,179Proceeds from convertible debentures
    
    
    1,573,510
    
    
    
    1,370,000
    
    
    
    7,362,500Proceeds from exercise of options
    
    
    
    
    
    
    
    
    
    
    78,000Proceeds from exercise of warrants
    
    
    
    
    
    
    
    
    
    
    3,144,377Repayment of loans payable
    
    
    (58,524
    )
    
    
    (61,135
    )
    
    
    (202,564
    )Repayment of notes payable
    
    
    
    
    
    
    (900,281
    )
    
    
    (383,270
    )Repayment of convertible debentures
    
    
    (1,300,000
    )
    
    
    
    
    
    
    (1,830,000
    )Stock subscriptions
    
    
    1,816,000
    
    
    
    15,000
    
    
    
    2,107,258Issuance of common stock
    
    
    75,000
    
    
    
    179,885
    
    
    
    731,994Cash provided by financing activities
    
    
    2,647,250
    
    
    
    3,022,768
    
    
    
    14,839,041Net change in cash
    
    
    243,923
    
    
    
    65,503
    
    
    
    329,944Effect of foreign currency translation on cash
    
    
    17,234
    
    
    
    (73,630
    )
    
    
    (52,160
    )Cash and cash equivalents, beginning
    
    
    38,704
    
    
    
    12,947
    
    
    
    22,077Cash and cash equivalents, ending
    
    $
    299,861
    
    
    $
    4,820
    
    
    $
    299,861
  The accompanying notes are an integral part of these consolidated financial statements.
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MEXORO MINERALS LTD.
(A Development Stage Company)
 
 Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 1.
    
    Basis of presentationMexoro Minerals Ltd. (formerly Sunburst Acquisitions IV, Inc.) (Mexoro or the Company)
was incorporated in the state of Colorado on August 27, 1997 and on February 15, 2006 its
name was changed to Mexoro Minerals Ltd. The Company was formed to seek out and acquire
business opportunities. Between 1997 and 2003, the Company was engaged in two business
acquisitions and one business opportunity, none of which generated a significant profit or
created sustainable business. All were sold or discontinued. Effective March 1, 2004, the
Company changed its operations to mineral exploration and the extraction of mineralized
material in Mexico.On February 12, 2009, the Company entered into a joint venture through a definitive agreement
for development of Cieneguita project with Minera Rio Tinto, S.A. de C.V. (MRT), a company
duly incorporated pursuant to the laws of Mexico, which is controlled by a former officer and
director of the Company. The purpose of the joint venture is to put the Cieneguita property
into production. As per the agreement, MRT is to provide the necessary working capital to
begin and maintain mining operations estimated to be $3,000,000. MRT will spend 100% of the
funds in exchange for a 75% interest in the net cash flow from production. Accordingly, as of
February 12, 2009 the Company is considered to be a development stage company.On May 25, 2004, the Company completed a Share Exchange Agreement with Sierra Minerals and
Mining, Inc. (Sierra Minerals), a Nevada corporation, which caused Sierra Minerals to
become a wholly-owned subsidiary. Sierra Minerals held certain rights to properties in Mexico
that the Company now owns or has an option to acquire. Through Sierra Minerals, the Company
entered into a joint venture agreement with MRT. In August 2005, the Company cancelled the
joint venture agreement in order to directly pursue mineral exploration opportunities through
a wholly-owned Mexican subsidiary, Sunburst Mining de Mexico S.A. de C.V. (Sunburst de
Mexico). On August 25, 2005, Sunburst de Mexico, Mexoro and MRT entered into agreements
providing Sunburst de Mexico the right to explore and exploit certain properties in Mexico.
In December 2005, the Company and Sunburst de Mexico entered into a new agreement with MRT
(the New Agreement) (note 6). On January 20, 2006, Sierra Minerals was dissolved.The accompanying unaudited consolidated financial statements have been prepared in accordance
with United States generally accepted accounting principles (US GAAP) for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete consolidated financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the nine months ended
November 30, 2009 are not necessarily indicative of the results that may be expected for the
year ending February 28, 2010. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Companys annual report on Form 10-K for the
year ended February 28, 2009.
 2.
    
    SIGNIFICANT ACCOUNTING POLICIES
 (a)
    
    Recent accounting pronouncements
 (i)
    
    In September 2009, the FASB issued Update No. 2009-13,
Multiple-Deliverable Revenue Arrangementsa consensus of the FASB Emerging
Issues Task Force (ASU 2009-13). It updates the existing multiple-element
revenue arrangements guidance currently included under ASC 605-25, which
originated primarily from the guidance in EITF Issue No. 00-21, Revenue
Arrangements with Multiple Deliverables (EITF 00-21). The revised guidance
primarily provides two significant changes: 1) eliminates the need for objective
and reliable evidence of the fair value for the undelivered element in order for
a delivered item to be treated as a separate unit of accounting, and 2)
eliminates the residual method to allocate the arrangement consideration. In
addition, the guidance also expands the disclosure requirements for revenue
recognition. ASU 2009-13 will be effective for the first annual reporting period
beginning on or after June 15, 2010, with early adoption permitted provided that
the revised guidance is retroactively applied to the beginning of the year of
adoption. The Company is currently assessing the future impact of this new
accounting update to its financial statements.
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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 2.
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 (a)
    
    Recent accounting pronouncements (continued)
 (ii)
    
    In September 2009, the FASB issued ASC 105, formerly FASB Statement
No. 168, the FASB Accounting Standards Codification (Codification) and the
Hierarchy of Generally Accepted Accounting Principles (GAAP), a replacement of
FASB Statement No. 162 (SFAS 168). SFAS 168 establishes the Codification as the
single source of authoritative GAAP in the United States, other than rules and
interpretive releases issued by the SEC. The Codification is a reorganization of
current GAAP into a topical format that eliminates the current GAAP hierarchy and
establishes instead two levels of guidance  authoritative and non-authoritative.
All non-grandfathered, non-SEC accounting literature that is not included in the
Codification will become non-authoritative. The FASBs primary goal in developing
the Codification is to simplify user access to all authoritative GAAP by
providing all the authoritative literature related to a particular accounting
topic in one place. The Codification will be effective for interim and annual
periods ending after September 15, 2009. As the Codification was not intended to
change or alter existing GAAP, it did not have a material impact on the Companys
financial statements.(iii)
    
    Effective July 1, 2009, the Company adopted FASB ASU No. 2009-05,
Fair Value Measurements and Disclosures (Topic 820) (ASU 2009-05). ASU 2009-05
provided amendments to ASC 820-10, Fair Value Measurements and Disclosures 
Overall, for the fair value measurement of liabilities. ASU 2009-05 provides
clarification that in circumstances in which a quoted price in an active market
for the identical liability is not available, a reporting entity is required to
measure fair value using certain techniques. ASU 2009-05 also clarifies that when
estimating the fair value of a liability, a reporting entity is not required to
include a separate input or adjustment to other inputs relating to the existence
of a restriction that prevents the transfer of a liability. ASU 2009-05 also
clarifies that both a quoted price in an active market for the identical
liability at the measurement date and the quoted price for the identical
liability when traded as an asset in an active market when no adjustments to the
quoted price of the asset are required are Level 1 fair value measurements.
Adoption of ASU 2009-05 did not have a material impact on the Companys results
of operations or financial condition.(iv)
    
    Effective June 30, 2009, the Company adopted three accounting
standard updates which were intended to provide additional application guidance
and enhanced disclosures regarding fair value measurements and impairments of
securities. They also provide additional guidelines for estimating fair value in
accordance with fair value accounting. The first update, as codified in ASC
820-10-65, provides additional guidelines for estimating fair value in accordance
with fair value accounting. The second accounting update, as codified in ASC
320-10-65, changes accounting requirements for other-than-temporary-impairment
(OTTI) for debt securities by replacing the current requirement that a holder
have the positive intent and ability to hold an impaired security to recovery in
order to conclude an impairment was temporary with a requirement that an entity
conclude it does not intend to sell an impaired security and it will not be
required to sell the security before the recovery of its amortized cost basis.
The third accounting update, as codified in ASC 825-10-65, increases the
frequency of fair value disclosures. These updates were effective for fiscal
years and interim periods ended after June 15, 2009. The adoption of these
accounting updates did not have a material impact on the Companys financial
statements.
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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 2.
    
    SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 (a)
    
    Recent accounting pronouncements (continued)
 (v)
    
    Effective June 30, 2009, the Company adopted a new accounting
standard for subsequent events, as codified in ASC 855-10. The update modifies
the names of the two types of subsequent events either as recognized subsequent
events (previously referred to in practice as Type I subsequent events) or
non-recognized subsequent events (previously referred to in practice as Type II
subsequent events). In addition, the standard modifies the definition of
subsequent events to refer to events or transactions that occur after the balance
sheet date, but before the financial statements are issued (for public entities)
or available to be issued (for nonpublic entities). It also requires the
disclosure of the date through which subsequent events have been evaluated. The
update did not result in significant changes in the practice of subsequent event
disclosures, and therefore the adoption did not have a material impact on the
Companys financial statements.(vi)
    
    Effective January 1, 2009, the Company adopted an accounting
standard update regarding the determination of the useful life of intangible
assets. As codified in ASC 350-30-35, this update amends the factors considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under intangibles accounting. It also requires a
consistent approach between the useful life of a recognized intangible asset
under prior business combination accounting and the period of expected cash flows
used to measure the fair value of an asset under the new business combinations
accounting (as currently codified under ASC 850). The update also requires
enhanced disclosures when an intangible assets expected future cash flows are
affected by an entitys intent and/or ability to renew or extend the arrangement.
The adoption did not have a material impact on the Companys financial
statements.(vii)
    
    Effective January 1, 2009, the Company adopted a new accounting
standard update regarding business combinations. As codified under ASC 805, this
update requires an entity to recognize the assets acquired, liabilities assumed,
contractual contingencies, and contingent consideration at their fair value on
the acquisition date. It further requires that acquisition-related costs be
recognized separately from the acquisition and expensed as incurred; that
restructuring costs generally be expensed in periods subsequent to the
acquisition date; and that changes in accounting for deferred tax asset valuation
allowances and acquired income tax uncertainties after the measurement period be
recognized as a component of provision for taxes. The adoption did not have a
material impact on the Companys financial statements.
 (b)
    
    Accounting Estimates
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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 3.
    
    GOING CONCERNThe accompanying financial statements have been prepared on a going concern basis. The
Company has a history of operating losses and will need to raise additional capital to fund
its planned operations. As at November 30, 2009, the Company had a working capital deficiency
of $2,509,741 (February 28, 2009  $4,657,260) and a cumulative loss during the development
period of $43,338,026 (February 28, 2009  $41,864,219). These conditions raise substantial
doubt about the Companys ability to continue as a going concern.The Company intends to reduce its cumulative loss through the attainment of profitable
operations from its investment in a Mexican mining venture (note 6). In addition, the Company
has conducted private placements of convertible debt and common stock (note 11), which have
generated a portion of the initial cash requirements of its planned Mexican mining ventures
(note 6).In February 2009, the Company signed a definitive agreement with MRT to provide funding of up
to $9,000,000 to the Company to initiate production at its Cieneguita property, complete a
feasibility study as well as to continue the exploration of its properties.In July 2009, the Company signed a definitive agreement to sell its Guazapares project
located in South western Chihuahua, Mexico to Paramount Gold de Mexico, SA de C.V., the
Mexican subsidiary of Paramount Gold and Silver Corp. (Paramount) for a total consideration
of up to $5.3 million. The sale is subject to satisfaction of various conditions precedent
prior to closing. Payment for the properties is expected once the title of the claims has
been re-registered in Paramounts name with the Mining Bureau in Mexico.In September 2009, the Company entered into private placement subscription agreements for
private placement of up to a total of 9,000,000 unregistered shares of the Companys common
stock with 100% warrant coverage at a purchase price of $0.20 per unit. In November 2009, the
Company entered into an amendment to each of the private placement agreements to increase the
maximum units to be sold to 12,500,000 unregistered shares of the Companys common stock and
increase the aggregate purchase price of the units to $2,500,000.
 4.
    
    EQUIPMENT
 November 30,
    
    
    February 28,2009
    
    
    2009Accumulated
    
    
    Net Book
    
    
    Net BookCost
    
    
    Depreciation
    
    
    Value
    
    
    ValueSoftware
    
    $
    23,673
    
    
    $
    17,304
    
    
    $
    6,369
    
    
    $
    5,730Machinery
    
    
    278,066
    
    
    
    74,852
    
    
    
    203,214
    
    
    
    193,097Vehicles
    
    
    102,156
    
    
    
    73,073
    
    
    
    29,083
    
    
    
    56,456Computers
    
    
    27,752
    
    
    
    22,497
    
    
    
    5,255
    
    
    
    9,751Office equipment
    
    
    16,296
    
    
    
    4,908
    
    
    
    11,388
    
    
    
    10,866$
    447,943
    
    
    $
    192,634
    
    
    $
    255,309
    
    
    $
    275,900
  9




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 5.
    
    JOINT VENTURE WITH MRT
  6.
    
    MINERAL PROPERTIES
  Encino
    
    
    NewSahuayacan
    
    
    Guazapares
    
    
    Cieneguita
    
    
    Gordo
    
    
    Projects
    
    
    TotalDrilling and sampling
    
    $
    152
    
    
    $
    
    
    
    $
    78,369
    
    
    $
    
    
    
    $
    
    
    
    $
    78,521Geological,
geochemical,
geophysics
    
    
    4,099
    
    
    
    44,730
    
    
    
    46,630
    
    
    
    
    
    
    
    1,015
    
    
    
    96,474Land use permits
    
    
    3,778
    
    
    
    4,849
    
    
    
    6,913
    
    
    
    2,826
    
    
    
    
    
    
    
    18,366Automotive
    
    
    
    
    
    
    446
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    446Travel
    
    
    7,160
    
    
    
    217
    
    
    
    14,382
    
    
    
    
    
    
    
    
    
    
    
    21,759Consulting
    
    
    25,976
    
    
    
    8,199
    
    
    
    111,019
    
    
    
    
    
    
    
    
    
    
    
    145,194Equipment
    
    
    2,426
    
    
    
    
    
    
    
    2,893
    
    
    
    
    
    
    
    
    
    
    
    5,319General
    
    
    11,461
    
    
    
    20,141
    
    
    
    22,917
    
    
    
    152
    
    
    
    
    
    
    
    54,671$
    55,052
    
    
    $
    78,582
    
    
    $
    283,123
    
    
    $
    2,978
    
    
    $
    1,015
    
    
    $
    420,750
  Cieneguita
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Encino
    
    
    NewOperations
    
    
    Sahuayacan
    
    
    Guazapares
    
    
    Cieneguita
    
    
    Gordo
    
    
    Projects
    
    
    TotalDrilling and sampling
    
    $
    
    
    
    $
    
    
    
    $
    370,660
    
    
    $
    2,008,668
    
    
    $
    
    
    
    $
    
    
    
    $
    2,379,328Geological,
geochemical,
geophysics
    
    
    
    
    
    
    
    
    
    
    127,881
    
    
    
    368,613
    
    
    
    
    
    
    
    46,720
    
    
    
    543,214Land use permits
    
    
    50
    
    
    
    110,437
    
    
    
    45,550
    
    
    
    117,785
    
    
    
    (1,561
    )
    
    
    
    
    
    
    272,261Automotive
    
    
    246
    
    
    
    
    
    
    
    3,247
    
    
    
    8,143
    
    
    
    
    
    
    
    
    
    
    
    11,636Travel
    
    
    658
    
    
    
    304
    
    
    
    33,663
    
    
    
    30,687
    
    
    
    202
    
    
    
    
    
    
    
    65,514Consulting
    
    
    12,314
    
    
    
    
    
    
    
    149,471
    
    
    
    153,793
    
    
    
    
    
    
    
    
    
    
    
    315,578Equipment
    
    
    104
    
    
    
    
    
    
    
    22,413
    
    
    
    22,378
    
    
    
    
    
    
    
    
    
    
    
    44,895General
    
    
    8,308
    
    
    
    6,685
    
    
    
    85,740
    
    
    
    221,395
    
    
    
    507
    
    
    
    
    
    
    
    322,635$
    21,680
    
    
    $
    117,426
    
    
    $
    838,625
    
    
    $
    2,931,462
    
    
    $
    (852
    )
    
    $
    46,720
    
    
    $
    3,955,061
  10




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 6.
    
    MINERAL PROPERTIES (CONTINUED)
      Cieneguita
     11




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 6.
    
    MINERAL PROPERTIES (CONTINUED)
  (i)
    
    MRT and/or its investors will subscribe for up to $1 million of a
secured convertible debenture at 8% interest (payable in stock or cash). The
debenture is convertible into units at $0.60 per unit. Each unit comprises 2
common shares and 1 warrant. Each warrant is exercisable at $0.50 per share for a
period of 3 years. The funds from the placement will be used for continued
exploration of the Companys properties and general working capital.
 (ii)
    
    MRT is to provide the necessary working capital to begin and
maintain mining operations estimated to be $3,000,000 used for the purpose of
putting the Cieneguita property into production. MRT will spend 100% of the funds
in exchange for a 75% interest in the net cash flow from production. The
agreement will limit the mining to the mineralized material that is available
from surface to a depth of 15 meters or approximately 10% of the mineralized
material found to date.
 (iii)
    
    MRT will spend up to $5 million to take the Cieneguita property
through the feasibility stage. In doing so, MRT will earn a 60% interest in
Mexoros rights to the property. After the expenditure of the $5 million all
costs will be shared on a ratio of 60% to MRT and 40% to Mexoro. If the Company
elects not to pay its portion of costs after the $5 million has been spent, the
Companys position shall revert to a 25% carried interest on the property.
 Guazapares
       12




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 6.
    
    MINERAL PROPERTIES (CONTINUED)San Francisco (Guazapares)As per the agreement, the due dates for all payments for the ownership of Guazapares have
been deferred with the property owners for a period of 37 months from the closing date.
Sunburst is required to make monthly payment of $6,000 plus $900 in taxes for 36 months
commencing on July 20, 2009 and ending on June 10, 2012 for deferment from the escrow fund.
MRT assigned to Sunburst de Mexico, for a term of 60 months, commencing from June 25, 2004
(the Option Period), with the consent of the San Francisco concessions owner Minera
Rachasa, S.A. de C.V. (Minera Rachasa), MRTs rights and obligations acquired under the San
Francisco option agreement, including the option to purchase the San Francisco concessions
for a price of $250,000 on June 25, 2009.To maintain the option, Sunburst de Mexico assumed the obligation to pay to the San Francisco
owner cumulative annual payments. The payments are: $20,000 on June 25, 2006 (paid); $30,000
on June 25, 2007 (paid); and $40,000 on June 25, 2008 (paid).If the option is exercised prior to the expiration of the Option Period by payment of the
purchase price of $250,000; the obligation to pay the annual payments will be terminated. MRT
and the San Francisco owner reserved a combined 2.5% NSR. MRT reserved no other rights on the
San Francisco concessions.In June 2009, Paramount made the $250,000 payment to Minera Rachasa and acquired the San
Francisco concessions as part of the definitive agreement to acquire the Guazapares project.San Antonio (Guazapares)MRT assigned to Sunburst de Mexico, with the consent of the San Antonio concessions owner
(Rafael Fernando Astorga Hernández), MRTs rights and obligations acquired under the San
Antonio option agreement, including the option to purchase the San Antonio concessions for a
price of $500,000, commencing on January 15, 2004 (the signing date of the San Antonio option
agreement) and due on January 15, 2010.To maintain the option, Sunburst de Mexico assumed the obligation to pay to the San Antonio
owner cumulative annual payments. The remaining payments are: $50,000 on January 15, 2008
(this payment was deferred to January 31, 2008 and paid) and $50,000 on January 15, 2009
(overdue).In June 2009, Mexoro assigned the option to acquire San Antonio concessions to Paramount as
part of the definitive agreement to acquire the Guazapares project.Encino GordoOn December 8, 2005, the Company and Sunburst de Mexico entered into a New Agreement with
MRT to exercise their option under the sale and purchase of the mining concessions agreement,
dated August 18, 2005, to obtain two mining concessions in the Encino Gordo region. The New
Agreement also provided the Company the option to obtain three additional concessions in the
Encino Gordo region.
  13




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 6.
    
    MINERAL PROPERTIES (CONTINUED)
  (a)
    
    The share option agreement with MRT was cancelled;
 (b)
    
    The Company granted MRT the option to buy all of the outstanding shares of
Sunburst de Mexico for $100 if the Company failed to transfer $1,500,000 to Sunburst de
Mexico by April 30, 2006. On April 6, 2006, MRT agreed to waive its option to purchase
the shares of Sunburst de Mexico and also waived the Companys obligation to transfer
$1,500,000 to Sunburst de Mexico. The property agreements were modified to change the
NSR to a maximum of 2.5% for all properties covered by the agreements. The property
agreements contained NSRs ranging from 0.5% to 7%;
 (c)
    
    The Company agreed to issue 2,000,000 shares of the Companys common stock to MRT
within four months of the date of the signing of the New Agreement. These shares were
issued to MRT and its assignee at the market value of $1.05 per share on February 23,
2006, and $2,100,000 was charged to operations for the year ended February 28, 2006.
This issuance fulfilled the Companys payment obligations under the previous property
agreements;
 (d)
    
    The Company agreed to issue 1,000,000 additional shares of the Companys common
stock to MRT if and when the Cieneguita Property is put into production and reaches 85%
of production capacity over a 90-day period, as defined in the New Agreement; and
 (e)
    
    The operators agreement with MRT was cancelled.
  Sahuayacan
  Segundo Santo Nino (Sahuayacan)
   14




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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 6.
    
    MINERAL PROPERTIES (CONTINUED)
 La Maravilla (Sahuayacan)
  7.
    
    PROMISSORY NOTES
  (a)
    
    During the twelve months ended February 29, 2008, the Company converted accounts
payable of $465,994 (Swiss Franc (CHF) 565,000) into promissory notes. The Company had
an implied obligation to pay the accounts payable in Swiss Francs as the funds to pay
the expense came from Swiss investors in CHF. Accordingly, the promissory notes were
issued in CHF. The notes consist of one warrant for each CHF 5.00 of notes issued,
exercisable at $1.00 each. The principal and interest on the notes became due and
payable on April 30, 2008. The Company has not repaid the promissory notes as of
November 30, 2009 and is in default. The principal and interest on the notes due and
payable as of November 30, 2009 was $704,050. The interest rate payable during the
default period is 12%.
 (b)
    
    $71,249 of promissory notes is due to related parties and their associates that
bear no interest and have no terms of repayment (14).
 8.
    
    CONVERTIBLE DEBENTURES
        15




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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 8.
    
    CONVERTIBLE DEBENTURES (CONTINUED)
   2008Expected volatility
    
    
    71.48-110.72
    %Weighted-average volatility
    
    
    71.48-110.72
    %Expected dividend rate
    
    
    Expected life of warrants in years
    
    
    4Risk-free rate
    
    
    2.30-3.41
    %
   th
   16




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 8.
    
    CONVERTIBLE DEBENTURES (CONTINUED)
  2009Expected volatility
    
    
    110.36
    %Weighted-average volatility
    
    
    110.36
    %Expected dividend rate
    
    
    Expected life of warrants in years
    
    
    3-4Risk-free rate
    
    
    1.21-1.45
    %
       2009Expected volatility
    
    
    108.54-110.36
    %Weighted-average volatility
    
    
    108.54-110.36
    %Expected dividend rate
    
    
    Weighted-average expected life of warrants in years
    
    
    3Risk-free rate
    
    
    1.36-1.45
    %
  17




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 8.
    
    CONVERTIBLE DEBENTURES (CONTINUED)
   9.
    
    LOANS PAYABLE
   10.
    
    PREFERRED STOCK
  11.
    
    COMMON STOCK
      18




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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 11.
    
    COMMON STOCK (CONTINUED)
                19




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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 11.
    
    COMMON STOCK (CONTINUED)
                 20




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 12.
    
    STOCK COMPENSATION PROGRAM
   2009
    
    
    2008Expected volatility
    
    
    107.27%-109.46
    %
    
    
    62%-72
    %Weighted-average volatility
    
    
    107.56
    %
    
    
    72.15
    %Expected dividend rate
    
    
    
    
    
    
    Expected life of options in years
    
    
    10
    
    
    
    2-10Risk-free rate
    
    
    3.42
    %
    
    
    2.82%-3.86
    %
   Weighted-Weighted
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Number of
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Price
    
    
    Shares
    
    
    Term
    
    
    ValueBalance at March 1, 2009
    
    $
    0.56
    
    
    
    4,835,000Options granted
    
    
    0.33
    
    
    
    1,150,000Options exercised
    
    
    
    
    
    
    Options cancelled/forfeited
    
    $
    0.65
    
    
    
    (285,000
    )Balance at November 30, 2009
    
    $
    0.51
    
    
    
    5,700,000
    
    
    
    8.26
    
    
    $
    613,075Exercisable at November 30, 2009
    
    $
    0.64
    
    
    
    3,486,668
    
    
    
    7.59
    
    
    $
    232,046
    21




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 12.
    
    STOCK COMPENSATION PROGRAM (CONTINUED)
 Weighted-averageGrant-DateNon-vested options
    
    Shares
    
    
    Fair ValueNonvested at February 28, 2009
    
    
    2,502,499
    
    
    $
    0.28Granted
    
    
    1,150,000
    
    
    
    0.33Vested
    
    
    (1,334,167
    )
    
    
    0.55Cancelled/forfeited
    
    
    (105,000
    )
    
    
    0.40Nonvested at November 30, 2009
    
    
    2,213,332
    
    
    $
    0.29
  13.
    
    WARRANTS
       22




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 13.
    
    WARRANTS (CONTINUED)
  WeightedNumber of
    
    
    AverageWarrants
    
    
    Exercise PriceBalance, February 29, 2008
    
    
    4,486,100
    
    
    $
    1.17Issued
    
    
    4,989,890
    
    
    
    0.73Cancelled
    
    
    (2,043,100
    )
    
    
    1.00Exercised
    
    
    (330,000
    )
    
    
    1.00Balance, February 28, 2009
    
    
    7,102,890
    
    
    $
    1.03Issued
    
    
    10,912,500
    
    
    
    0.46Cancelled
    
    
    (2,496,490
    )
    
    
    0.91Exercised
    
    
    
    
    
    
    November 30, 2009
    
    
    15,518,900
    
    
    $
    0.65
  Number ofWarrants
    
    
    Exercise Price
    
    
    Expiry Date166,666
    
    
    $
    0.30
    
    
    May 8, 20121,125,000
    
    
    $
    0.30
    
    
    July 23, 2011 to November 5, 20111,300,000
    
    
    $
    0.36
    
    
    July 23, 2011200,000
    
    
    $
    0.40
    
    
    March 24, 2012100,000
    
    
    $
    0.43
    
    
    September 8, 20101,454,167
    
    
    $
    0.50
    
    
    December 31, 20105,000,000
    
    
    $
    0.50
    
    
    December 24, 20121,666,667
    
    
    $
    0.50
    
    
    November 5, 2012200,000
    
    
    $
    0.65
    
    
    June 30, 20121,793,400
    
    
    $
    0.75
    
    
    April 2012 to August, 2013113,000
    
    
    $
    1.00
    
    
    January 31, 20101,000,000
    
    
    $
    1.25
    
    
    December 31, 2009200,000
    
    
    $
    1.30
    
    
    June 30, 20121,000,000
    
    
    $
    1.50
    
    
    December 31, 2009200,000
    
    
    $
    2.00
    
    
    June 30, 201215,518,900
  23




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 14.
    
    RELATED PARTY TRANSACTIONS
    15.
    
    SUPPLEMENTAL CASH FLOW INFORMATION
 Nine
    
    
    Nine
    
    
    Period FromMonths
    
    
    Months
    
    
    Inception ofEnded
    
    
    Ended
    
    
    Development StageNovember
    
    
    November
    
    
    (March 1, 2004) to30, 2009
    
    
    30, 2008
    
    
    November 30, 2009Interest paid
    
    $
    
    
    
    $
    36,034
    
    
    $
    280,053Common stock issued on conversion of debt
    
    
    872,500
    
    
    
    878,000
    
    
    
    4,193,000Common stock issued on settlement of notes
payable
    
    
    1,250,000
    
    
    
    2,936,028
    
    
    
    3,133,322Common stock issued for interest costs
    
    
    82,500
    
    
    
    
    
    
    
    82,500Common stock issued for financing costs
    
    
    145,000
    
    
    
    
    
    
    
    145,000Common stock issued for mineral property costs
    
    
    
    
    
    
    
    
    
    
    580,000Common stock issued for bonuses
    
    
    280,000
    
    
    
    650,000
    
    
    
    512,750Shares issued for services
    
    $
    13,500
    
    
    $
    67,424
    
    
    $
    365,590
 16.
    
    COMMITMENTS
     24




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##### Table of Contents



MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 16.
    
    COMMITMENTS (CONTINUED)
   17.
    
    SUBSEQUENT EVENTS
 Entry into a Material Definitive Agreement
     Net Cash Flow
    
    
    Net Cash FlowInterest
    
    
    InterestFrom First Phase
    
    
    Following First PhaseHolder
    
    Ownership Percentage
    
    
    Production
    
    
    ProductionMRT
    
    
    54
    %
    
    
    74
    %
    
    
    54
    %Marje Minerals
    
    
    6
    %
    
    
    6
    %
    
    
    6
    %Mexoro
    
    
    40
    %
    
    
    20
    %
    
    
    40
    %
  25




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MEXORO MINERALS LTD.
(A Development Stage Company)
Notes to Consolidated Financial Statements
Nine Months Ended November 30, 2009
(Unaudited) (Expressed in U.S. Dollars)
 17.
    
    SUBSEQUENT EVENTS (CONTINUED)
   26




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 Certain statements contained in this Form 10-Q constitute forward-looking statements. These
statements, which may be identified by words such as plan, anticipate, believe, estimate,
should, expect and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These statements reflect the
current views of management with respect to future events and are subject to risks, uncertainties
and other factors that may cause our actual results, performance or achievements, or industry
results, to be materially different from those described in such forward-looking statements. Such
risks and uncertainties include those set forth under this Item 2, Managements Discussion and
Analysis of Financial Condition and Results of Operations and elsewhere in this Form 10-Q and in
our Form 10-K filed with the U.S. Securities and Exchange Commission (the SEC). These
forward-looking statements represent beliefs and assumptions only as of the date of this report. We
undertake no obligation to update the forward-looking information to reflect actual results or
changes in the factors affecting such forward-looking information. We advise you to carefully
review the reports and documents we file from time to time with the SEC, particularly our annual
reports on Form 10-K , our quarterly reports on Form 10-Q and our current reports on Form 8-K .
 Overview
       27




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##### Table of Contents



Net Cash Flow Interest
    
    
    Net Cash Flow InterestFrom First Phase
    
    
    Following First PhaseHolder
    
    Ownership Percentage
    
    
    Production (First 15 Meters)
    
    
    Production (Beyond 15 Meters)MRT
    
    
    54
    %
    
    
    74
    %
    
    
    54
    %Marje Minerals
    
    
    6
    %
    
    
    6
    %
    
    
    6
    %Mexoro
    
    
    40
    %
    
    
    20
    %
    
    
    40
    %
   
    
    MRT purchased $1 million of secured convertible debentures at 8%
interest (payable in stock or cash). The proceeds from this investment
were used for continued exploration and development of the Cieneguita
Project and general working capital. On November 5, 2009, MRT
exercised its conversion rights on the debenture and a designee of MRT
was issued 3,333,333 common shares and a warrant to purchase 1,666,667
shares of common stock at an exercise price of $0.50 per share.
    
    MRT agreed to provide the necessary working capital to begin and
maintain mining operations, estimated to be $3 million, to put the
first phase of the Cieneguita Project into production. In exchange for
these funds, we assigned MRT an interest to 74% of the net cash flow
from First Phase Production. The agreement limits the mining during
First Phase Production to the mineralized material that is available
from the surface to a depth of 15 meters.
    
    MRT committed to spend up to $4 million to take the Cieneguita Project
through the feasibility stage. In doing so, we assigned MRT a 54%
interest in our rights to the Cieneguita Project. After the
expenditure of the $4 million, all costs will be shared on a pro rata
ownership basis (i.e. 54% to MRT, 40% to the Company and 6% to Marje
Minerals). If any party cannot pay its portion of the costs after the
$4 million has been spent, then their ownership position in the
Cieneguita Project will be reduced by 1% for every $100,000 invested
by the other owners. Our ownership interest in the Cienguita Project,
however, cannot be reduced below 25%. In addition, we have the right
to cover Marje Minerals pro rata portion of costs if they cannot pay
their portion of the costs. In return, we will receive 1% of Marje
Minerals ownership position in the Cieneguita Project for every
$100,000 we invest on their behalf.
    
    The MRT agreement was contingent on our repaying a debenture to
Paramount Gold and Silver Corp. In March 2009, we repaid $1 million,
or approximately two thirds of the debt, and Paramount released a
security interest it had on the Cieneguita Project. In October 2009,
we repaid the remaining amount of the debt, and Paramount released its
security interests on the Sahuayacan, Guazapares and Encino Gordo
properties.
 Strategy
   
    
    Create a pipeline of quality properties providing a steady stream of
new prospects and/or projects to explore, contract-out and/or enter
into development agreements with another mining company.
    
    Identify and acquire at low cost (whenever possible) early to
mid-stage properties in selected locations along the main gold-silver
belts in Mexico.
    
    Focus on small to medium-sized gold and/or silver deposits (minimum
deposits containing 500,000 ounces gold-equivalent).
    
    Target initially the Sierra Madre Occidental and Central Mexico
regions, and potentially extend further south into Mexico and other
countries if conditions and the projects potential warrant such
development.
  28




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##### Table of Contents



Plan of Operation
 Summary
          29




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##### Table of Contents



Exploration Projects  Current Status
   Results of Operations
 Three and nine months ended November 30, 2009 compared to the three and nine months ended November
30, 2008.
  Revenues
  Operating Costs
  Expenses
    30




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##### Table of Contents



Loss
    Liquidity and Capital Resources
  Cash and Working Capital
   Cash Used in Operating Activities
  Cash Used in Investing Activities
  Financing Activities
    31




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##### Table of Contents



Going Concern
        Name
    
    Date

    
    Payment Type

    
    USDSahuayacan Property
    
    December 2009 to November 2010
    
    Property payments
    
    $
    65,000Segundo Santo Nino (Sahuayacan)
    
    May 2010
    
    Property payments
    
    $
    120,000La Estrella y la Sultana Menor
    
    December 2009 and June 2010
    
    Property payments
    
    $
    67,000
  32




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##### Table of Contents



Off-Balance Sheet Arrangements
  
 
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
  
 
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    33




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##### Table of Contents



Changes in Internal Control over Financial Reporting
  Inherent Limitations on Effectiveness of Controls
  
 
 PART II  OTHER INFORMATION
  
 
 Item 1. Legal Proceedings
  
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Unregistered Sales of Equity Securities
 # ofWarrants
    
    
    # of Options
    
    
    
    
    
    
    Price perName
    
    # of Shares
    
    
    Issued **
    
    
    Issued **
    
    
    Dated
    
    
    Share
    
    
    Amount USD$
    
    
    NotesJohn Martin
    
    
    100,000
    
    
    
    100,000
    
    
    
    
    
    
    
    09/09/2009
    
    
    $
    0.20
    
    
    $
    20,000
    
    
    
    (1) (11)Woodstone Capital Inc.
    
    
    100,000
    
    
    
    100,000
    
    
    
    
    
    
    
    09/25/2009
    
    
    $
    0.20
    
    
    $
    20,000
    
    
    
    (2) (11)Woodstone Capital Inc.
    
    
    100,000
    
    
    
    100,000
    
    
    
    
    
    
    
    10/16/2009
    
    
    $
    0.20
    
    
    $
    20,000
    
    
    
    (3) (11)Medig Placements
    
    
    150,000
    
    
    
    150,000
    
    
    
    
    
    
    
    11/04/2009
    
    
    $
    0.20
    
    
    $
    30,000
    
    
    
    (4) (11)Christopher Anderson
    
    
    125,000
    
    
    
    125,000
    
    
    
    
    
    
    
    11/04/2009
    
    
    $
    0.20
    
    
    $
    25,000
    
    
    
    (5) (11)Joachim Brunner
    
    
    50,000
    
    
    
    50,000
    
    
    
    
    
    
    
    11/06/2009
    
    
    $
    0.20
    
    
    $
    10,000
    
    
    
    (6) (11)MRT*
    
    
    3,333,333
    
    
    
    1,666,667
    
    
    
    
    
    
    
    11/06/2009
    
    
    $
    0.30
    
    
    $
    50,000
    
    
    
    (7) (11)George Young*
    
    
    
    
    
    
    
    
    
    
    1,000,000
    
    
    
    09/21/2009
    
    
    
    
    
    
    
    
    
    
    
    (8) (11)Decerto Group*
    
    
    
    
    
    
    1,000,000
    
    
    
    
    
    
    
    09/21/2009
    
    
    
    
    
    
    
    
    
    
    
    (9) (11)MRT*
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    09/21/2009
    
    
    
    
    
    
    
    
    
    
    
    (10) (11)
  34




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##### Table of Contents



*
    
    Affiliate of the Company.**
    
    Each warrant and option entitles the holder to purchase one share of common stock.(1)
    
    On September 9, 2009, the Company issued 100,000 shares and 100,000 warrants to John Martin
for subscription proceeds of $20,000. Each warrant is exercisable at $0.30 per common share
within two years.(2)
    
    On September 25, 2009, the Company issued 100,000 shares and 100,000 warrants to Woodstone
Capital Inc. for subscription proceeds of $20,000. Each warrant is exercisable at $0.30 per
common share within two years.(3)
    
    On October 16, 2009, the Company issued 100,000 shares and 100,000 warrants to Woodstone
Capital Inc. for subscription proceeds of $20,000. Each warrant is exercisable at $0.30 per
common share within two years.(4)
    
    On November 4, 2009, the Company issued 150,000 shares and 150,000 warrants to Medig
Placements for subscription proceeds of $30,000. Each warrant is exercisable at $0.30 per
common share within two years.(5)
    
    On November 4, 2009, the Company issued 125,000 shares and 125,000 warrants to Christopher
Anderson for subscription proceeds of $25,000. Each warrant is exercisable at $0.30 per common
share within two years.(6)
    
    On November 6, 2009, the Company issued 50,000 shares and 50,000 warrants to Joachim Brunner
for subscription proceeds of $10,000. Each warrant is exercisable at $0.30 per common share
within two years.(7)
    
    On November 6, 2009, the Company issued 3,333,333 shares and 1,666,667 warrants to a designee
of MRT from conversion of debentures. Each warrant is exercisable at $0.50 per common share
within three years.(8)
    
    On September 21, 2009, the Company issued options to George Young, our president, to purchase
1,000,000 shares of our common stock pursuant to our 2009 Nonqualified Stock Option Plan. The
options vest in four equal installments, with the first installment vesting on the six month
anniversary of the grant date and the remaining installments vesting every six months
thereafter. The options have an exercise price of $0.36 per share.(9)
    
    On September 21, 2009, the Company granted a warrant to the Decerto Group to purchase
1,000,000 shares of our Companys common stock, with an exercise price equal to $0.36 per
share. The warrant shares vest in four equal installments, with the first installment vesting
on the six month anniversary the grant date, and the and the second installment vesting on the
one year anniversary of the date of the consulting agreement, contingent upon the Decerto
Group continuing to provide consulting services to the Company on such dates. John Clair, our
director, is a manager of the Decerto Group.(10)
    
    On September 21, 2009, the Company granted a warrant to MRT to purchase 300,000 shares of our
Companys common stock, with an exercise price equal to $0.36 per share. The warrant shares
vest in four equal installments, with the first installment vesting on the six month
anniversary the grant date, and the remaining installments vesting every six months
thereafter, contingent upon MRT continuing to provide consulting services to the Company on
such dates. Mario Ayub, our director, is a manager of the MRT.    35




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##### Table of Contents



Item 6. Exhibits
  ExhibitNumber
    
    Description31.1
    
    
    Certification of Principal Executive Officer of Mexoro Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a).*31.2
    
    
    Certification of Chief Financial Officer of Mexoro Minerals Ltd. pursuant to Rule 13a-14(a)/15d-14(a).*32.1
    
    
    Certification of Principal Executive Officer of Mexoro Minerals Ltd. pursuant to 18 U.S.C. Section 1350.*32.2
    
    
    Certification of Chief Financial Officer of Mexoro Minerals Ltd. pursuant to 18 U.S.C. Section 1350.*
 *
    
    filed herewith  36




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##### Table of Contents



SIGNATURES
  Mexoro Minerals Ltd./S/ George YoungName:
    George YoungTitle:
    PresidentDate:
    January 14, 2009
  37