UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





T
ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934


FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2007





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


FROM
_________ TO
_________





HuntMountain
Resources Ltd.


(Name of
small business issuer in its charter)





Washington
            001-01428
            68-0612191(State
      or other jurisdiction of incorporation or organization)
            Commission
      File No.
            (I.R.S.
      Employer Identification Number)





1611 N. Molter Road, Suite 201  Liberty
      Lake, WA
            
            99019(Address
      of principal executive offices)
            
            (Zip
      Code)





Issuer’s
telephone number:  509-892-5287





Securities
registered under Section 12(b) of the Exchange
Act:   none


Securities
registered under Section 12(g) of the Exchange Act: Common Stock, par value
$0.001 per share








Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 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 T  NO
£


Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the 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.  £





State
issuer’s revenues for its most recent fiscal year.  $0





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
sold, or the average bid and asked price of such common equity, as of a
specified date within 60 days.  (See definition of affiliate in Rule
12b-2 of the Exchange Act.) [Amended in release No. 33-7419 (¶85,938), effective
June 13, 1997, 62 F.R. 26387.] $3,542,883 based upon 6,622,212 shares and the
average bid and asked price of $0.535 per share on March 15, 2008.





(ISSUERS
INVOLVED IN BANKRUPTCY


PROCEEDING
DURING THE PAST FIVE YEARS)





Check
whether the issuer has filed all documents and reports required to be filed by
Section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.  Yes£
No£    Not Applicable





(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date. 33,016,285 as of March 15, 2008





DOCUMENTS
INCORPORATED BY REFERENCE





If the
following documents are incorporated by reference, briefly describe them and
identify the part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
document is incorporated:  (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities
Act").  The list documents should be clearly described for
identification purposes (e.g., annual report to security holders for fiscal year
ended December 24, 1990). None





DOCUMENTS
INCORPORATED BY REFERENCE:  None.





Transitional
Small Business Disclosure Format: Yes £  NoT





SEC 2337
      (8-04)
            Persons who potentially are to
      respond to the collection of information contained in this form are not
      required to respond unless the form displays a currently valid OMB control
      number.













PART
I





ITEM
      1.
            DESCRIPTION
      OF BUSINESS




References
made in this Annual Report on Form 10-K to “we,” “our”, “us” and “the Company”
refer to HuntMountain Resources Ltd. and our subsidiaries.





(a)
            Business
      Development





Our
predecessor, Metaline Mining and Leasing Company (MMLC) was incorporated in the
State of Washington in 1927.  Historically, MMLC was engaged in the
mineral exploration business.  The Company was dormant for a number of
years during which time management did not think that the business climate for
successfully financing mineral exploration was a viable option. In 2005, given
the increase in precious metals prices and a more favorable environment for
financing mineral exploration MMLC embarked on a business plan to again become
active in mineral exploration. In March 2005 MMLC completed two private
placements with net proceeds of approximately $650,000.   In
August, 2005, the shareholders of MMLC voted to merge MMLC with and into a
wholly-owned subsidiary, HuntMountain Resources.  As a result,
HuntMountain Resources was the surviving entity.  The stock symbol was
changed to ‘HNTM’ and is currently quoted on the Over the Counter Bulletin Board
(OTC-BB) market.  We assembled an experienced executive team and began
evaluating mineral exploration properties.  We acquired interests in
several mineral exploration properties during 2006.  In February 2006,
we contracted with an Argentine geologist to act as the Company’s General
Manager – South America in pursuit of exploration properties in Argentina and
elsewhere in South America.  In March 2006, we acquired interests in
exploration properties in Pershing County, Nevada, Santa Cruz province of
Argentina, and Québec Canada. In March, 2007 HuntMountain Resources, through its
Argentine subsidiary, Cerro Cazador S.A., was awarded the exploration and
development rights to the La Josefina Project from Fomento Minero de Santa Cruz
Sociedad del Estado (“Fomicruz S. E.”).  The legal agreement granting
our rights to the La Josefina property was finalized in July, 2007. In August,
2007 the Company incorporated a Mexican Subsidiary, Cerro Cazador Mexico S.E.
and began looking at properties for acquisition in the State of Chihuahua. In
January, 2008 the Company signed a purchase agreement for 100% ownership of an
exploration concession totaling approximately 9,000 hectares in Chihuahua,
Mexico.





(b)
            Business
      of Issuer





We are
engaged in the business of acquiring, exploring and developing mineral
properties, primarily those containing gold, silver and associated base metals.
Through our Latin American subsidiaries we hold mining claims in Santa Cruz
province, Argentina and the state of Chihuahua, Mexico. Additionally, we hold an
option to acquire a 100% interest in two properties in the province of Quebec,
Canada and a 10 year lease on a mining property in the state of
Nevada.





The
Company is currently evaluating other exploration and development properties in
North and South America.





Competition





With the
increased value of gold, the mining exploration industry has become very
competitive in the identification and acquisition of properties that may have
commercial potential.  We compete for the opportunity to participate
in exploration projects with other entities, many of which have greater
financial and human resources.  In addition, we compete with others in
efforts to obtain financing to explore and develop mineral
properties.





Employees





At the
end of 2007, we had 4 employees located in Liberty Lake, Washington, responsible
for the management and oversight of our exploration, administration, financing,
and marketing activities.  In addition, we had five persons employed
in Argentina by our wholly-owned subsidiary. Our employees are not subject to a
union labor contract or a collective bargaining agreement.  For the
foreseeable future we intend to supplement our workforce by utilizing the
services of consultants and contractors.





Regulation





The
Company’s planned mineral exploration activities in all operating areas are
subject to various federal, state, and local laws and regulations governing
prospecting, development, production, labor standards, occupational health and
mine safety, control of toxic substances, and other matters involving
environmental protection and taxation.  It is possible that future
changes in these laws or regulations could have a significant impact on the
Company’s business, causing those activities to be economically reevaluated at
that time.





2





Available
Information





We are a
Washington corporation with our principal executive offices located at 1611 N.
Molter Road, Suite 201, Liberty Lake, Washington 99019. Our telephone number is
(509) 892-5287. Our web site address is www.huntmountain.com.
Copies of our annual, quarterly and recent reports and amendments to these
reports are available on our website free of charge. Our Code of Business
Conduct and Ethics for Directors, Officers and Employees is also available on
the website free of charge. We will provide copies of these materials to
shareholders upon request using the above-listed contact information, directed
to the attention of Mr. Marc Lipsker.





We have
included the CEO and CFO certifications regarding our public disclosure required
by Section 302 of the Sarbanes-Oxley Act of 2002 as Exhibits 31-1 and 31.2 to
this report.





Risk
Factors





The
following risk factors together with other information set forth in this Form
10-K, should be carefully considered by current and future investors in the
Company’s securities.





We Are Currently Reporting
Operating Losses and Have Minimal Assets





We have
no operating revenues or earnings from operations and an accumulated deficit of
approximately $11,800,000. We had approximately $650,000 in cash and cash
equivalent investments as of the end of 2007.  As a mineral
exploration company we will sustain operating expenses without corresponding
revenues.  This will result in our incurring net operating losses that
will increase continuously until we can bring a property into production or
lease, joint venture or sell any property we may acquire.





Our Primary Assets Are
Exploration Properties and We Have No Operating Properties





The
Company has currently identified no precious metal resource on any of its
properties.





Risks Inherent in the Mining
Industry





Mineral
exploration and development is highly speculative and capital
intensive.  Most exploration efforts are not successful, in that they
do not result in the discovery of mineralization of sufficient quantity or
quality to be profitably mined.  Our operations are also indirectly
subject to all of the hazards and risks normally incident to developing and
operating mining properties.  These risks include insufficient
reserves; fluctuations in production costs that may make mining of reserves
uneconomic; significant environmental and other regulatory restrictions; labor
disputes; geological problems; failure of pit walls or dams; force majeure
events; and the risk of injury to persons, property or the
environment.





Uncertainty of Reserves and
Mineralization Estimates





There are
numerous uncertainties inherent in estimating proven and probable reserves and
mineralization, including many factors beyond our control.  The
estimation of reserves and mineralization is a subjective process and the
accuracy of any such estimates is a function of the quality of available data
and of engineering and geological interpretation and
judgment.  Results of drilling, metallurgical testing, production, and
the evaluation of mine plans subsequent to the date of any estimate may justify
revision of such estimates.  No assurances can be given that the
volume and grade of any reserves recovered and rates of production will not be
less than anticipated.  Assumptions about prices are subject to great
uncertainty as metals prices have fluctuated widely in the
past.  Declines in the market price of base or precious metals also
may render reserves or mineralization containing relatively lower grades of
mineralization uneconomic to exploit.  Changes in operating and
capital costs and other factors including, but not limited to, short-term
operating factors such as the need for sequential development of mineral bodies
and the processing of new or different mineral grades, may materially and
adversely affect reserves.





Fluctuations in the Market
Price of Minerals May Make Projects Uneconomic





The
profitability of mining operations is directly related to the market price of
the metals being mined.  The market price of precious and base metals
such as gold, silver, and copper fluctuate widely and is affected by numerous
factors beyond the control of any exploration or mining
company.  These factors include expectations with respect to the rate
of inflation, the exchange rates of the dollar and other currencies, interest
rates, global or regional political, economic or banking crises, and a number of
other factors.  If the market prices of the mineral commodities we
plan to explore decline, this will have a negative effect on the availability of
financing.





3





Environmental
Risks





Mineral
exploration, development and mining is subject to potential risks and
liabilities associated with pollution of the environment and the disposal of
waste products occurring as a result of mineral exploration and
production.  Insurance against environmental risk (including potential
liability for pollution or other hazards as a result of the disposal of waste
products occurring from exploration and production) is not generally available
to the Company (or to other companies in the minerals industry) at a reasonable
price.  To the extent that the Company becomes subject to
environmental liabilities, the satisfaction of any such liabilities would reduce
funds otherwise available to the Company and could have a material adverse
effect on the Company.  Laws and regulations intended to ensure the
protection of the environment are constantly changing, and are generally
becoming more restrictive.





We May Not Have Sufficient
Funds to Complete Further Exploration Programs





We have
limited financial resources, do not generate operating revenue, and must finance
our exploration activity by other means.  We do not know whether
additional funding will be available for further exploration of our
projects.  If our exploration programs successfully locate an economic
mineral occurrence, additional funds will be required to place it into
commercial production. Substantial expenditures would be required to exploit a
mineral occurrence through drilling, metallurgical processes, and construction
of mining and processing facilities at any site chosen for mining.  If
we fail to obtain additional financing, we may have to delay or cancel further
exploration or development of our properties and we could lose all of our
interest in our properties.





Factors Beyond Our Control
May Determine Whether Any Mineral Deposits We Discover Are Sufficiently Economic
To Be Developed Into A Mine





The
determination of whether mineral deposits are economic is affected by numerous
factors beyond our control.  These factors include market fluctuations
for precious metals, the proximity and capacity of natural resource markets and
processing equipment, and government regulations related to prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and
environmental protection.





Our Resource Calculations
Rely on Estimates That Cannot Be Confirmed in Advance





In
carrying on our mineral exploration activities, and making determinations about
whether to proceed beyond the exploration stage, we must rely upon estimated
calculations of mineral content and corresponding grades on our
properties.  Any material changes in estimates will affect the
economic viability of the placing of a property into production and a property’s
return on capital.





Properties May Be Subject To
Uncertain Title





The
ownership and validity, or title, of mining claims are often uncertain and may
be contested.  A successful claim contesting our title to a property
will cause us to lose our rights to mine that property.  This could
result in our not being compensated for our prior expenditures relating to the
property.





Mineral Exploration And
Mining Activities Require Compliance With A Broad Range Of Laws And Regulations
- Violation Of Which Can Be Costly





Mining
operations and exploration activities are subject to national and local laws and
regulations governing prospecting, development, mining, production, experts,
taxes, labor standards, occupational health, waste disposal, toxic substances,
land use, environmental protection, mine safety.  In order to comply,
we may be required to make capital and operating expenditures or to close an
operation until a particular problem is remedied.  In addition, if our
activities violate any such laws and regulations, we may be required to
compensate those suffering loss or damage, and may be fined if convicted of an
offense under such legislation.





Land Reclamation
Requirements for Exploration Properties May Be Burdensome





Although
variable, depending on location and the governing authority, land reclamation
requirements are generally imposed on mineral exploration companies, as well as
companies with mining operations, in order to minimize long term effects of land
disturbance.  Reclamation may include requirements to control
dispersion of potentially deleterious effluents and to reasonably re-establish
pre-disturbance land forms and vegetation.  In order to carry out
reclamation obligations imposed on us in connection with our mineral
exploration, we must allocate financial resources that might otherwise be spent
on further exploration programs.





4





We Face Industry Competition
for The Acquisition Of Mining Properties And The Recruitment And Retention Of
Qualified Personnel





We
compete with other mineral exploration and mining companies, many of which have
greater financial resources than us, or are further in their development, for
the acquisition of mineral claims, leases and other mineral interests as well as
for the recruitment and retention of qualified employees and other
personnel.  If we require, but are unsuccessful in acquiring,
additional mineral properties or personnel, we will not be able to grow at the
rate we desire, or at all.





Future Sales of Our Common
Stock May Adversely Affect Our Stock Price and Our Financing Needs May Have a
Dilutive Impact on Our Stockholders





Sales of
a substantial number of our shares of common stock in the market, or the
perception that these sales could occur, could substantially decrease the market
price of our common stock.  Substantially all of the shares of our
common stock held by our affiliates are available for resale in the U.S. public
market in compliance with Rule 144 under the United States Securities Act of
1933, as amended (the "1933 Act").  As restrictions on resale end, the
market price of our common stock could drop significantly if the holders of
these shares sell them or are perceived by the market as intending to sell
them.  We make no prediction as to the effect, if any, that future
sales of common stock, or the availability of common stock for future sale, will
have on the market price of our common stock prevailing from time to
time.





Our Common Stock May Have a
Limited Public Market





Our
Shares of common stock have a limited public market.  Although the
shares are currently quoted for trading on the OTC Bulletin Board in the United
States, we cannot assure that an active and liquid trading market will develop
for our shares.  Such a failure may have a material adverse impact on
the market price of the shares and the ability of a shareholder to dispose of
the shares in a timely manner or at all.





Some Directors And Officers
Have Conflicts Of Interest As A Result Of Their Involvement With Other Natural
Resource Companies





Some of
our directors and officers are directors or officers of other natural resource
or mining-related companies.  These associations may give rise to
conflicts of interest from time to time.  As a result of these
conflicts of interest, we may miss the opportunity to participate in certain
transactions, which may have a material, adverse effect on our financial
position.





Permitting





In the
ordinary course of business, mining companies are required to seek governmental
permits for expansion of existing operations or for the commencement of new
operations. Obtaining the necessary governmental permits is a complex and
time-consuming process involving numerous jurisdictions and often involving
public hearings and costly undertakings on our part.  The duration and
success of our efforts to obtain permits are contingent upon many variables not
within our control. Obtaining environmental protection permits, including the
approval of reclamation plans, may increase costs and cause delays depending on
the nature of the activity to be permitted and the interpretation of applicable
requirements implemented by the permitting authority.  There can be no
assurance that all necessary permits will be obtained and, if obtained, that the
costs involved will not exceed those that we previously estimated.  It
is possible that the costs and delays associated with the compliance with such
standards and regulations could become such that we would not proceed with the
development or operation of a mine or mines.





5





ITEM
      2.
            DESCRIPTION
      OF PROPERTY





Santa
Cruz Province, Argentina











La
Josefina Property





Overview





In March, 2007
HuntMountain Resources, through its Argentine subsidiary, Cerro Cazador S.A.,
was awarded the exploration and development rights to the La Josefina Project
from Fomento Minero de Santa Cruz Sociedad del Estado
(“Fomicruz.”).  Fomicruz is owned by the government of the Santa Cruz
province in Argentina. The legal agreement granting our rights to the La
Josefina property was finalized in July, 2007.Pursuant to this
agreement, Cerro Cazador is obligated to spend US$6 million in exploration and
complete pre-feasibility and feasibility studies during a 4 exploration season
period commencing in October, 2007 at La Josefina in order to earn mining and
production rights for a 40-year period in a joint venture partnership (“JV”)
with Fomicruz S.E. Cerro Cazador may terminate this agreement at the end of each
exploration stage if results are negative. With the successful completion of
positive pre-feasibility and feasibility studies at the end of the 4th year, a
new company will be formed which will be 91%-owned by Cerro Cazador and 9%-owned
by Fomicruz. Once commercial production starts, Fomicruz has a one-time election
to increase its interest in the Company to either 19%, 29% or 49% by reimbursing
Cerro Cazador 10%, 20% or 40%, respectively, of Cerro Cazador’s total investment
in the project. The royalty prescribed by Federal (Argentina) mining code will
be a 1% mine-mouth royalty if the operation produces doré bullion within the
province, which is required in the agreement. Also, because La Josefina is a
Provincial Mining Reserve with the mineral rights belonging to the province, the
project will carry an additional 5 % mine-mouth royalty.





In
February 2008 Cerro Cazador purchased the “La Josefina Estancia”, a 90 square
kilometer parcel of land within the La Josefina project area. Cerro Cazador
plans to use the La Josefina Estancia as a base of operations for Santa Cruz
exploration.





Location





The La
Josefina property is located in north central Santa Cruz Province, about 160
kilometers NW of the coastal town of Puerto San Julian and 120 kilometers NE of
the town of Gobernador Gregores.


Infrastructure
present on the project includes a ranch house and several out-buildings that are
currently being used as camp headquarters and core storage
facilities.





6





Climate
and Physiography





The
Patagonia region is classified as a continental steppe-like climate. It is arid,
very windy and has two distinct seasons; a cold season and a warm season. The
area is sparsely vegetated, consisting mostly of scattered low bushes and grass.
Because Patagonia is in the southern hemisphere, the seasons are opposite to
North America. The cold winter months are from May to September and warmer
summer is from November to March. The average annual precipitation averages only
200 mm, much of which occurs as winter snow; average monthly temperatures range
from 3°C to 14°C, but vary widely depending on elevation. The winds are
persistent, cool, dry and gusty, averaging about 36 km/hour and directed
predominantly to the east-southeast off the Andean Cordillera. All of the
Company’s Santa Cruz province projects are characterized by subdued hilly
terrain with internal drainages and playa lakes. Elevations range from 300
meters to 800 meters above sea level. Hill slopes are not steep, usually less
than 10° and the rock exposures on these hillsides are typically excellent.
Almost all of the mineralization and significant geochemical and geophysical
anomalies are on the crests or the flanks of these subdued hills.




Mining
claim detail





The La
Josefina Project includes 15 Manifestations of Discovery (Manifestacións de
Descubrimiento, or simply “MDs”) totaling 52,776 hectares which are partially
covered by 399 mining claims (minas or pertenencias), as shown in Figure 2 and
listed in the following table:





Mineral
      Properties of the La Josefina ProjectM.D.
            Expediente
            Hectares
            No.
      of PertsNicolas
      Alejandro
            409.072/F/98
            3500
            30Lucas
      Marcelo
            409.071/F/98
            3500
            12Sofia
      Lujan
            409.070/F/98
            3500
            6Matiao
      Augusto
            409.0769/F/98
            3500
            24Maria
      Jose
            409.068/F/98
            3500
            35Ivo
      Gonzalo
            409.067/F/98
            3500
            35Mirta
      Julia
            409.066/F/98
            3500
            35Ailin
            409.065/F/98
            3500
            35Mariana
      T.
            409.064/F/98
            3500
            18Benjamin
            409.063/F/98
            3500
            35Guiliana
            409.062/F/98
            5100
            25Rosella
            409.061/F/98
            3227
            18Noemi
            409.060/F/98
            3013
            30Diana
            409.059/F/98
            2995
            25Miguel
      Angel
            409.058/F/98
            3435
            35Julia
            409.048/F/98
            6
            152,776
            399





7









Required
property payments





Cerro
Cazador must maintain the La Josefina mining rights by paying the annual canons
due the province on the project’s 399 pertenencias. This currently amounts to
approximately US$101,000 per year that can be deducted from the $ 6,000,000 work
commitment.





Accessibility





The La
Josefina Project is located in the north-central part of Santa Cruz Province,
the southernmost of the several Argentine provinces comprising a vast,
sparsely-populated, steppe-like region of southern South America known as
Patagonia. The nearest town to the project is Gobernador Gregores (population
2,500), about 110 kilometers southwest, and the nearest Atlantic coastal town is
Puerto San Julián (population 6,200), approximately 190 kilometers southeast.
The project is accessible via automobile by driving east from Gobernador
Gregores for 40 km on gravel Provincial Road 25 – or west from Puerto San Julián
for 170 km on the same road – and then north on gravel Provincial Road 12 for
110 km. Provincial Road 12 crosses the edge of the project and continues another
240 kilometers north to the oil town of Pico Truncado (population 15,000) in the
northeastern part of the province. The provincial roads are generally accessible
via two-wheel drive vehicles in dry weather but can become slippery to
impassable for short periods when wet. Gobernador Gregores and Puerto San Julián
are both served by weekly “commuter” flights to/from Comodoro Rivadavia
(population 137,000), an important industrial center and port city, 428
kilometers north of Puerto San Julián via paved highway Ruta 3. Comodoro
Rivadavia serves as the region’s major supply center for the booming petroleum
and mining industries and is served by several airline flights daily to Buenos
Aires and other major cities in Argentina. Ruta 3, Argentina’s major coastal
highway, runs from Buenos Aires on the north to Ushuaia at the southernmost tip of the
continent and offers all-weather access to a number of sea ports.





8





Geologic
Setting





The La
Josefina Project is located near the center of a large non-deformed stable
platform known as the Deseado Massif, which covers an area of approximately
100,000 square kilometers in the northern third of Santa Cruz Province. The
Deseado Massif is similar to the Somun Cura Massif encompassing parts of the
adjacent provinces to the north. The two massifs are major metallotectonic
features of the Patagonia region and represent the products of massive
continental volcanism formed in the wake of extensional rifting caused by the
breakup of the South American and African continents in Jurassic
time.





The
Deseado Massif is dominated by felsic volcanic and volcaniclastic rock units
belonging to a few major regional sequences deposited in middle- to
late-Jurassic time. The rocks are broken into a series of regional fractures
that probably represent reactivated basement fracture zones. Faults active
during the period of intense Jurassic extension and volcanism trend mostly
NNWSSE and form a series of grabens, half-grabens and horst blocks which are
tilted slightly to the east. Since Jurassic time, the rocks have been cut by
normal faults of several different orientations, mainly NW-SE and ENE-WSW but
have undergone only a moderate amount of compression. In general, the Jurassic
rocks remain relatively undeformed and generally flat to gently dipping, except
locally where close to faults, volcanic domes or similar features.





The
geology of the La Josefina Project Area was mapped in detail by Moreira (2005).
The project geology is essentially a scaled version of the Deseado Massif
geology described above. Specifically:





•
            The
      project area is dominated by Jurassic-age rhyolitic volcanic units
      belonging to the Chon Aike
Formation





•
            There
      is one inlier of metamorphic basement rocks belonging to the Paleozoic age
      La Modesta Formation;





•
            There
      are several small inliers of andesitic volcanics belonging to the Bajo
      Pobre Formation which is slightly older than the Chon
  Aike;





•
            About
      half of the area is covered by thin Quaternary basalt flows;
      and





•
            The
      project is crossed by a number of conjugate NNW-SSE and NE-SW sets of
      strong fault lineaments which are similar to those occurring throughout
      the Deseado Massif region.





Missing
or unrecognized are the Jurassic-age sedimentary and volcaniclastic units of the
Roca Blanca and La Matilde formations that are present at many other places in
the region. Rhyolitic ignimbrites, lavas and tuffs of the Chon Aike Formation
are intermittently exposed over about half of the La Josefina Project area with
the remainder of the area largely concealed beneath the veneer of Quaternary
basalts. Moreira (2005) subdivided the Chon Aike of the project area into nine
members, each representing a separate volcanic event with generally similar
sequences consisting of basal surge breccia followed by pyroclastic flows
(ignimbrites), ash-fall tuffs and finally by re-worked volcaniclastic detritus.
According to Moreira, the volcanism responsible for these nine episodic
eruptions reached its climax over a relatively short 4-million year period in
upper Jurassic time and is responsible for epithermal events that emplaced the
gold-silver mineralization found in the La Josefina Project Area.





Nearly
all of the hundreds of gold-silver and base metals occurrences in the Deseado
Massif region of southern Argentina are categorized as “low-sulfidation type
epithermal vein deposits.” “Epithermal” deposits are high-level hydrothermal
systems which usually form within one kilometer of the surface at relatively low
temperatures, generally in the range of 50°C to 200°C. They often represent
deeper parts of fossil geothermal systems with some forming hot-springs at or
near the surface. The modifier “low-sulfidation” denotes a variety of epithermal
deposits characteristically deficient in sulfide minerals and often called
“quartz-adularia” vein systems after the two most common gangue (non-valuable)
minerals in the veins. Well-known examples of low-sulfidation type epithermal
deposits include Comstock (Nevada, USA), McLaughlin (California, USA), Creede
(Colorado, USA), Ladolam (Lihir, Papua New Guinea), El Peñon (Chile), Guanajuato
(Mexico), Hishikari (Japan) and – in the Deseado Massif region of Argentina –
Mina Martha and Cerro Vanguardia.





9





The many
low-sulfidation epithermal occurrences of the Deseado Massif are products of
episodic rhyolitic volcanism spread widely over a 50-million year time period
and a 100,000 square kilometer area. Despite differences in space and time, they
are all remarkably similar in style and origin and they closely fit the classic
low-sulfidation epithermal vein model. The region’s premier deposit example and
flagship operation is the Cerro Vanguardia mine, operated jointly by AngloGold
Ashanti and Fomicruz S.E., which opened in 1998. The Cerro Vanguardia mine has
produced continuously at the approximate rate of 250,000 ounces gold and 2.5
million ounces silver per year at average cash costs of US$133 to US$232 per
ounce of gold (AngloGold Annual Reports, 2001-2006). The deposits are fissure
vein systems localized by structures, often a meter or more wide and hundreds of
meters to several kilometers long. They are comprised of quartz veins,
stockworks and breccias that carry gold, silver, electrum and some sulfides,
mainly pyrite, with variable, but usually small, amounts of base metal sulfides.
The richest mineralization commonly occurs in dilational zones caused by
structural irregularities along or down the vein. The thickening and thinning
along and down the structure, often referred to as “pinch-and-swell,” is
responsible for rod-like high-grade ore shoots that are hallmarks of these
systems.





History





In 1975
the first occurrence of metals known in the La Josefina area was publicly
mentioned by the Patagonia delegation of the National Ministry of Mining who
reported the presence of an old lead-zinc mine in veins very near Estancia La
Josefina (Viera and Marquez, 1975). This received no further attention until
1994 when a research project by the Institute of Mineral Resources of the UNLP
and the geology department of the University of Patagonia San Juan Bosco
examined the occurrence. The investigation corroborated not only the presence of
base metals but also found significant amounts of previously unknown precious
metals (1 to 3 g/t Au and 5 to 21 g/t Ag).





In 1994,
immediately after the La Josefina gold-silver discovery, Fomicruz S.E. claimed
the area as a Provincial Mineral Reserve and subsequently explored the project
in collaboration with the Instituto de Recursos Minerales (INREMI) of La Plata
University. The geology and alteration of the project area was mapped at a scale
of 1:20,000, mineralized structures and zones of sinter were mapped at 1:2,500,
trenches across the structures were continuously sampled and mapped at scales of
1:100 and ground geophysical surveys consisting of 6,000 metres of inverse
polarization resistivity and 5,750 meters of magnetic surveys were completed
over sectors of greatest interest (INREMI, 1996). In 1998, after four years of
exploring and advancing interest in the project, Fomicruz S.E. offered La
Josefina for public bidding by international mining companies. In accordance
with provincial law, the winner would continue exploring the project to earn the
right to share production with Formicruz S.E. of any commercial discoveries. The
bid was awarded to Minamérica S. A., a small private Argentine mining company.
Minamérica S.A. dug a limited number of new trenches, initiated a program of
systematic surface geochemical sampling, completed several new IP-Resistivity
geophysical survey lines and drilled the first exploration holes on the project
– 12 diamond core holes (HQ-size, 63.5mm diameter) totaling 800 meters in
length. Minamerica S.A. exploration activity and the property reverted back to
Formicruz S.E. in 1999.





In 2000,
Fomicruz S.E. resumed exploration of the project and continued their efforts
until 2006. Pits were dug to bedrock on 100-meter grids over some of the target
areas, 3,900 meters of newtrenches were dug and
sampled, more than 8,000 float, soil and outcrop samples were collected for
geochemical analyses, some new IP-Resistivity surveys were completed and 59
diamond core holes (total 3,680 meters) were drilled to average shallow depth
below surface of 55 meters. Of these holes, 37 were NQ-size core (47.6mm
diameter) and 22 were HQ-size core (63.5mm). Fomicruz reports spending more than
US$2.8 million in exploring and improving infrastructure on the La Josefina
Project from 1994 to 2006.





Exploration





Cerro
Cazador completed a 6,000 meter drilling program on the La Josefina property in
February of 2008. Significant results of this drilling program, based on all
assays received to date with grades over 1 g/t gold, are as
follows:








HOLE NUMBER
            From
            To
            Width
            Au g/t
            Ag g/tSVN-D07-001
            14.80
            15.30
            0.50
            4.96
            2.0017.00
            17.50
            0.50
            2.855
            1.5579.00
            80.00
            1.00
            2.27
            14.4081.00
            81.50
            0.50
            15.25
            113.00SVN-D07-002
            66.50
            67.12
            0.62
            1.37
            2.5073.40
            73.80
            0.40
            1.15
            2.7076.22
            76.65
            0.43
            1.58
            18.60





10




HOLE NUMBER
            From
            To
            Width
            Au g/t
            Ag g/tSVN-D07-002
            87.55
            88.10
            0.55
            1.02
            227.0088.10
            88.50
            0.40
            3.14
            25.0088.50
            89.05
            0.55
            12.40
            88.2089.05
            89.60
            0.55
            11.80
            72.5089.60
            90.08
            0.48
            4.68
            27.10132.40
            132.87
            0.47
            9.49
            113.00132.87
            133.37
            0.50
            1.51
            12.60SVN-D07-004
            23.15
            24.00
            0.85
            7.82
            2.3024.00
            26.00
            2.00
            1.14
            0.8030.00
            31.00
            1.00
            2.12
            2.2041.00
            41.77
            0.77
            2.81
            129.0041.77
            42.65
            0.88
            19.90
            2100.0042.65
            43.30
            0.65
            16.50
            537.00





In 2007
Cerro Cazador incurred approximately $825,000 in exploration expenses on the La
Josefina property.





Legal
Framework for Exploration in Argentina





In
Argentina, minerals are owned by the provinces, even when they are generally
regulated by the national Mining Code. The Mining Code establishes that private
property of mines is determined by legal concession.





The
provinces can impose a maximum 3% mine-mouth royalty on mineral production. In
the case of Santa Cruz Province, if most of the mining processes are performed
in the state with doré bar as the final product the mine-mouth royalty can drop
to 1%.





In
addition, in 1993 the Argentine Congress approved “The Mining Investment Law”
which covers all mining stages: prospecting, exploration, extraction, milling,
leaching and smelting, when this industrialization is performed by the same
economic unit in the region of origin of the mineral. Mining companies need to
file paper work with the National Mining Office in order to get an official
certificate which gives several advantages. These advantages include 30 years of
tax stability on new mines development, capital investment depreciation rights,
advantages on provincial and municipal taxes, deduction of 100% on income taxes
for the cost of investment done during prospecting and exploration studies, a
special regime for amortizing investment in infrastructure machinery and
equipment, exemption from income tax of profits resulting from mines and mineral
rights; and certain import and export benefits alleviating taxes. By virtue of
the mining code, new mine developments can claim a five-year federal tax holiday
on production income in Argentina.





Exploration
stages:





a)
Cateos: The first step in acquiring mining rights is filing a cateo, which gives exclusive
prospecting rights for the requested area for a period of time, according with
the size of the obtained surface. The maximum size of each cateo is 10,000
hectares, which gives one thousand days to explore the area. A maximum of 20
cateos can be held by a single entity (individual or company) in any one
province.





b)
Manifestation of Discoveries: The holder of a cateo has exclusive right to
establish a Manifestation of
Discovery (MD)on that cateo, but MDs can also be set without a cateo on
any land not covered by another entity’s cateo. MD ́s are filed as either a vein
or a disseminated discovery. A square protection zone can be declared around the
discovery – up to 840 hectares for a vein MD or up to 7,000 hectares for a
disseminated MD. The protection zone grants the discoverer exclusive rights for
an indefinite period, during which the discoverer must provide an annual report
presenting a program of exploration work and investments related to the
protection zone.





c) Minas
(Mining claims): An MD can later be upgraded to a Mina(mine claim), which
gives the holder the right to begin commercial extraction of
minerals.





A period
not less than sixty (60) days must elapse between the publication of the
expiration of the time for exclusive exploration rights belonging to a person
and the request of a Cateo by another person (Article 28, amended by Law 22259).
During this period of 60 days (as amended by Law 24468), it is allowed that the
owner of the Cateo makes its Manifestation of Discoveries. An additional period
to make the required “formal work” up to 150 days is obtained and the
exploration area is reduced to 70 zones or mining claims of 6 hectares each for
vein type deposits or 35 zones of mining claims of 100 hectares each for
disseminated type deposits.





11





The Mines
Notary is the officer attesting in the discovery statement to the delivery date
and hour, certifying after the Mining Authorities find out whether there is or
not another petition in the zone. The certification is made after the Graphic
Department verifies on a map the location of the announced
discovery.





When the
permission has been granted, the claims are to be defined.  Once the
discovery has been verified and the mine deposit confirmed, the petitioner will
request the formal concession for the mine.





The
explorer must compensate the surface owner for any damage incurred during the
exploration activities. The surface owner can demand a previous amount of money
as a compensation value.





Mining
Property:





The mine
concession is unlimited in time, and only ends when the exploitation ceases. It
can be transferred by any of the means used for transfers of common property,
and as in common real state, mining properties are subject to
mortgages.





The
payment of an annual Lease or Mining Right of 80 Argentinean pesos for each
claim in vein deposit and 800 Argentinean pesos for each disseminated deposit,
is required. The lease must be paid in advance and in two equal semi-annual
instalments (June 30 and December 31).





The miner
shall have to invest in the mine equipment, camps, building, roads, power
plants, within the term of 5 years (Art 273) for a minimum amount of 500 times
the annual Lease.





Provinces
that decide to collect royalties may not receive a percentage exceeding three
per cent over the “mine’s exit value” of the extracted ore.





Bajo
Pobré Property





Overview





In
January, 2006 Cerro Cazador signed a Letter of Intent with FK Minera S.A.
to acquire a 100% interest in the Bajo Pobré gold property located in Santa
Cruz Province, Argentina. In March, 2007 Cerro Cazador signed a final
contract to acquire the Bajo Pobré property.  Pursuant to
this agreement, Cerro Cazador can earn up to a 100% equity interest in the Bajo
Pobré property by making cash payments and exploration expenditures over a
five-year earn-in period. The required expenditures and ownership levels upon
meeting those requirements are:





Year of the Agreement
            
            Payment
      to
              FK Minera S.A.
            
            
            Exploration
      Expenditures
            
            
            OwnershipFirst
      Year
            
            $
            50,000
            
            
            $
            250,000
            
            
            
            0
            %Second
      Year
            
            $
            50,000
            
            
            $
            250,000
            
            
            
            0
            %Third
      Year
            
            $
            75,000
            
            
            $
            0
            
            
            
            51
            %Fourth
      Year
            
            $
            75,000
            
            
            $
            0
            
            
            
            60
            %Fifth
      Year
            
            $
            75,000
            
            
            $
            0
            
            
            
            100
            %





After the
fifth year, Cerro Cazador shall pay FK Minera the greater of a 1% NSR royalty on
commercial production or US$100,000 per year.  Cerro Cazador has the
option to purchase the NSR Royalty for a lump sum payment of US$1,000,000 less
the sum of all royalty payments made to FK Minera to that point. Cerro Cazador
has the right to conduct exploration on these properties for a period of at
least 1,000 days and retains 100% ownership of any mineral deposit found within.
Should a mineral deposit be discovered, the Company has the exclusive option to
file for mining rights of said deposit.





Filed
with the Santa Cruz provincial mining authority, the
Bajo Pobré property is comprised of one “Manifestation of Discovery”
type mining claim designated “MD Joanna Belem 409162/S/94 and 32 covering
“pertenencia” type mining claims. The property covers an area of approximately
120 square kilometers.





Location
and Accessibility





Bajo
Pobre Property is located in north-central Santa Cruz province near 47 18’ 04”
south latitude and 69 11’ 28” west longitude, 90 kilometers south of the town of
Las Heras. It can be accessed by driving west from Las Heras on provincial route
43 for 53 kilometers then south on route 39 for 85 kilometers crossing estancias
Laguna grande, El Mirasol, La Herradura and Cumbres Blancas. From there, turning
south-east on the access road to Estancia Santa Cruz and traveling an additional
82 kilometers to the property boundary. The total distance of 220 kilometers can
be traveled in the summer by 2X4 and normally in the winter by 4X4.





12





Climate
and Physiography





The
Patagonia region is classified as a continental steppe-like climate. It is arid,
very windy and has two distinct seasons; a cold season and a warm season. The
area is sparsely vegetated, consisting mostly of scattered low bushes and grass.
Because Patagonia is in the southern hemisphere, the seasons are opposite to
North America. The cold winter months are from May to September and warmer
summer is from November to March. The average annual precipitation averages only
200 mm, much of which occurs as winter snow; average monthly temperatures range
from 3°C to 14°C, but vary widely depending on elevation. The winds are
persistent, cool, dry and gusty, averaging about 36 km/hour and directed
predominantly to the east-southeast off the Andean Cordillera. All of the
Company’s Santa Cruz province projects are characterized by subdued hilly
terrain with internal drainages and playa lakes. Elevations range from 300
meters to 800 meters above sea level. Hill slopes are not steep; usually less
than 10° and the rock exposures on these hillsides are typically excellent.
Almost all of the mineralization and significant geochemical and geophysical
anomalies are on the crests or the flanks of these subdued hills.





History





The
Bajo Pobré property was discovered in 1970 and has been worked
intermittently by several government entities and private companies. Exploration
began in the 1990’s with geologic mapping and surface sampling.  Assays
from this sampling yielded values from nil to 40 grams per ton
gold.  Drill targets identified from surface sampling were augmented
in 2002 with additional targets derived from a geophysical survey.  In 2003
and 2004, the property saw a limited amount of exploration drilling which tested
a small portion of these targets.





Geology





The
project is located within the Deseado Massif which is dominated by felsic
volcanic and volcaniclastic rock units belonging to a few major regional
sequences deposited in middle- to late-Jurassic time. The rocks are broken into
a series of regional fractures that probably represent reactivated basement
fracture zones. Faults active during the period of intense Jurassic extension
and volcanism trend mostly NNWSSE and form a series of grabens, half-grabens and
horst blocks which are tilted slightly to the east. Since Jurassic time, the
rocks have been cut by normal faults of several different orientations, mainly
NW-SE and ENE-WSW but have undergone only a moderate amount of compression. In
general, the Jurassic rocks remain relatively undeformed and generally flat to
gently dipping, except locally where close to faults, volcanic domes or similar
features.





The
geology of the project area is dominated by Jurassic-aged, volcanic rocks of the
Bajo Pobré formation. Mineralization is characterized as epithermal in
nature, comprised of numerous zones of quartz veining, vein breccias, and stock
works with a cumulative strike length of more than 9 kilometers. Individual
veins range from 0.5 meters to 6 meters in width.





Exploration
Program





We have
not engaged in any exploration activity on the Bajo Pobré property. We plan
to allocate the bulk of exploration expenditures to diamond core drilling of
established targets after a thorough review of the database.  In
addition, a small percentage of exploration expenditures will be allocated to
property-wide reconnaissance to identify additional drill targets.





El
Gateado Property





Overview





In March, 2006 Cerro Cazador acquired
the right to conduct exploration on El Gateado for a period of at least 1,000
days and retain 100% ownership of any mineral deposit found within. Should a
mineral deposit be discovered, we have the exclusive option to file for mining
rights on the deposit.Cerro Cazador paid a one-time filing
fee of US$ 3,226 for El Gateado.





Location
and Accessibility





El
Gateado is a 10,000 hectare exploration concession filed with the Santa Cruz
Provincial mining authority The El Gateado Project is located in the
north-central part of Santa Cruz Province, the southernmost of the several
Argentine provinces comprising a vast, sparsely-populated, steppe-like region of
southern South America known as Patagonia (Figure 1). The nearest town to the
project is Gobernador Gregores (population 2,500), about 110 kilometers
southwest, and the nearest Atlantic coastal town is Puerto San Julián
(population 6,200), 190 kilometers southeast. The project is accessible via
automobile by driving east from Gobernador Gregores for 40 km on gravel
Provincial Road 25 – or west from Puerto San Julián for 170 km on the same road
– and then north on gravel Provincial Road 12 for 110 km. Provincial Road 12
crosses the edge of the project and continues another 240 kilometers north to
the oil town of Pico Truncado (population 15,000) in the northeastern part of
the province. The provincial roads are generally accessible via two-wheel drive
vehicles in dry weather but can become slippery to impassable for short periods
when wet. Gobernador Gregores and Puerto San Julián are both served by weekly
“commuter” flights to/from Comodoro Rivadavia (population 137,000), an important
industrial center and port city, 428 kilometers north of Puerto San Julián via
paved highway Ruta 3. Comodoro Rivadavia serves as the region’s major supply
center for the booming petroleum and mining industries and is served by several
airline flights daily to Buenos Aires and other major cities in Argentina. Ruta
3, Argentina’s major coastal highway, runs from Buenos Aires on the north to
Ushuaia at the southernmost tip of the
continent and offers all-weather access to a number of sea ports.





13





Climate
and Physiography





The
Patagonia region is classified as a continental steppe-like climate. It is arid,
very windy and has two distinct seasons; a cold season and a warm season. The
area is sparsely vegetated, consisting mostly of scattered low bushes and grass.
Because Patagonia is in the southern hemisphere, the seasons are opposite to
North America. The cold winter months are from May to September and warmer
summer is from November to March. The average annual precipitation averages only
200 mm, much of which occurs as winter snow; average monthly temperatures range
from 3°C to 14°C, but vary widely depending on elevation. The winds are
persistent, cool, dry and gusty, averaging about 36 km/hour and directed
predominantly to the east-southeast off the Andean Cordillera. All of the
Company’s Santa Cruz province projects are characterized with subdued hilly
terrain with internal drainages and playa lakes. Elevations range from 300
meters to 800 meters above sea level. Hill slopes are not steep; usually less
than 10° and the rock exposures on these hillsides are typically excellent.
Almost all of the mineralization and significant geochemical and geophysical
anomalies are on the crests or the flanks of these subdued hills.





History





No known
exploration has taken place at El Gateado prior to the work completed by the
Company in 2006 and 2007. During that time the Company conducted a program
consisting of surface channel outcrop sampling, geological mapping, topographic
surveying and 1,500 meters of diamond core drilling.





Geology





The
project is located within the Deseado Massif which is dominated by felsic
volcanic and volcaniclastic rock units belonging to a few major regional
sequences deposited in middle- to late-Jurassic time. The rocks are broken into
a series of regional fractures that probably represent reactivated basement
fracture zones. Faults active during the period of intense Jurassic extension
and volcanism trend mostly NNWSSE and form a series of grabens, half-grabens and
horst blocks which are tilted slightly to the east. Since Jurassic time, the
rocks have been cut by normal faults of several different orientations, mainly
NW-SE and ENE-WSW but have undergone only a moderate amount of compression. In
general, the Jurassic rocks remain relatively undeformed and generally flat to
gently dipping, except locally where close to faults, volcanic domes or similar
features.





Mineralization
on the property is localized within the volcanic and volcanoclastic
Jurassic-aged Chonaike Formation. The precious metal occurrences are generally
characterized as epithermal systems manifested in quartz vein and stockwork
exposures.





Exploration
Program





We began
field reconnaissance work in February 2006 with the completion of a topographic
survey, base map generation, and a staked grid. In late 2006 and early 2007 we
drilled 13 holes on the El Gateado property. Results of our drilling program
were as follows:





14




From
            
            
            To
            
            
            GoldHole ID
            
            (meters)
            
            
            
            (g/t
            )GAT-DDH06
      001
            
            
            137.7
            
            
            
            138.7
            
            
            
            2.39138.7
            
            
            
            139.2
            
            
            
            0.68139.2
            
            
            
            139.7
            
            
            
            3.03139.7
            
            
            
            140.2
            
            
            
            3.76140.2
            
            
            
            140.8
            
            
            
            8.24140.8
            
            
            
            141.4
            
            
            
            2.52141.4
            
            
            
            142.0
            
            
            
            3.92142.0
            
            
            
            142.5
            
            
            
            0.88142.5
            
            
            
            143.2
            
            
            
            6.50143.2
            
            
            
            144.0
            
            
            
            2.92144.0
            
            
            
            145.0
            
            
            
            4.78145.0
            
            
            
            145.8
            
            
            
            3.82145.8
            
            
            
            146.6
            
            
            
            1.89146.6
            
            
            
            147.4
            
            
            
            11.70147.4
            
            
            
            148.2
            
            
            
            0.74148.2
            
            
            
            149.0
            
            
            
            0.60GAT-DDH06-002
            
            No significant resultsGAT-DDH06-003
            
            
            36.74
            
            
            
            37.50
            
            
            
            1.30GAT-DDH06-004
            
            
            16.0
            
            
            
            17.0
            
            
            
            1.0167.0
            
            
            
            68.0
            
            
            
            1.07GAT-DDH06-005
            
            No significant resultsGAT-DDH06-006
            
            
            21.0
            
            
            
            22.5
            
            
            
            3.64GAT-DDH07-007
            
            
            32.1
            
            
            
            32.6
            
            
            
            1.0733.0
            
            
            
            33.5
            
            
            
            2.61GAT-DDH07-008
            
            
            55.4
            
            
            
            55.9
            
            
            
            1.7757.2
            
            
            
            58.0
            
            
            
            1.3458.6
            
            
            
            59.5
            
            
            
            2.33GAT-DDH07-009
            
            No significant resultsGAT-DDH07-010
            
            No significant resultsGAT-DDH07-011
            
            No significant resultsGAT-DDH07-012
            
            
            9.0
            
            
            
            9.5
            
            
            
            1.3235.0
            
            
            
            36.0
            
            
            
            1.08GAT-DDH07-013
            
            
            10.0
            
            
            
            11.0
            
            
            
            1.29





Cerro
Cazador incurred approximately $706,000 in exploration expenses on the initial
El Gateado drilling program.





Other
Santa Cruz Properties





Overview





In 2006,
we were granted exclusive rights to explore three properties known as El Overo,
El Alazan, and El Tordillo in Santa Cruz province of
Argentina. We have the right to conduct exploration on these properties for
a period of at least 1,000 days and retain 100% ownership of any mineral deposit
found within. Should a mineral deposit be discovered, we have the exclusive
option to file for mining rights on the deposit.





15





Location
and Accessibility





The “El
Alazan”, “El Overo”, and “El Tordillo”  properties form a contiguous
land block located 220 kilometers NW of the port town of Puerto San Julian and
100 kilometers north of the town of Gobernador Gregores.  This entire
property package covers an area approximately 300 square kilometers in size. The
projects are accessible via automobile by driving east from Gobernador Gregores
for 40 km on gravel Provincial Road 25 – or west from Puerto San Julián for 170
km on the same road – and then north on gravel Provincial Road 12 for 50 km.
Then turning northwest on provincial route 74 for 65 km The provincial roads are
generally accessible via two-wheel drive vehicles in dry weather but can become
slippery to impassable for short periods when wet. Gobernador Gregores and
Puerto San Julián are both served by weekly “commuter” flights to/from Comodoro
Rivadavia (population 137,000), an important industrial center and port city,
428 kilometers north of Puerto San Julián via paved highway Ruta 3. Comodoro
Rivadavia serves as the region’s major supply center for the booming petroleum
and mining industries and is served by several airline flights daily to Buenos
Aires and other major cities in Argentina. Ruta 3, Argentina’s major coastal
highway, runs from Buenos Aires on the north to Ushuaia at the southernmost tip of the
continent and offers all-weather access to a number of sea ports.





Climate
and Physiography





The
Patagonia region is classified as a continental steppe-like climate. It is arid,
very windy and has two distinct seasons; a cold season and a warm season. The
area is sparsely vegetated, consisting mostly of scattered low bushes and grass.
Because Patagonia is in the southern hemisphere, the seasons are opposite to
North America. The cold winter months are from May to September and warmer
summer is from November to March. The average annual precipitation averages only
200 mm, much of which occurs as winter snow; average monthly temperatures range
from 3°C to 14°C, but vary widely depending on elevation. The winds are
persistent, cool, dry and gusty, averaging about 36 km/hour and directed
predominantly to the east-southeast off the Andean Cordillera. All of the
Company’s Santa Cruz province projects are characterized by subdued hilly
terrain with internal drainages and playa lakes. Elevations range from 300
meters to 800 meters above sea level. Hill slopes are not steep; usually less
than 10° and the rock exposures on these hillsides are typically excellent.
Almost all of the mineralization and significant geochemical and geophysical
anomalies are on the crests or the flanks of these subdued hills.





History





To date,
there has been no known historic precious metal exploration conducted on these
three properties. However, they cover areas of strong hydrothermal alteration
and structural complexity conducive to precious metal discovery that have been
indicated by satellite images.  They are also located adjacent to
several known gold and silver occurrences.





Geology





The
project is located within the Deseado Massif which is dominated by felsic
volcanic and volcaniclastic rock units belonging to a few major regional
sequences deposited in middle- to late-Jurassic time. The rocks are broken into
a series of regional fractures that probably represent reactivated basement
fracture zones. Faults active during the period of intense Jurassic extension
and volcanism trend mostly NNWSSE and form a series of grabens, half-grabens and
horst blocks which are tilted slightly to the east. Since Jurassic time, the
rocks have been cut by normal faults of several different orientations, mainly
NW-SE and ENE-WSW but have undergone only a moderate amount of compression. In
general, the Jurassic rocks remain relatively undeformed and generally flat to
gently dipping, except locally where close to faults, volcanic domes or similar
features.





Mineralization
on the properties is localized within the volcanic and volcanoclastic
Jurassic-aged Chonaike Formation. These precious metal occurrences are generally
characterized as low-sulphidation epithermal systems manifested in quartz vein
and stockwork exposures.





Exploration
Program





We have
not conducted any exploration work on the El Overo, El Alazan, and El
Tordillo properties. We plan to conduct exploration work on these
properties pending the outcome of exploration work on our other Santa Cruz
properties.





United
States





Dun
Glen Gold Project, Nevada USA





16





Overview





In early
2006 we entered into agreements to lease, with an option to purchase, the
properties comprising the Dun Glen Project. The initial lease/option term of the
agreements is 10 years, renewable for an additional 10 years.  To date
the Company has made advance royalty payments totaling
$67,500.  Future annual advance royalty payments are as
follows:





·
            2nd
      Anniversary $45,000


·
            3rd
      Anniversary $52,500


·
            4th
      Anniversary $60,000


·
            5th
      (and each anniversary thereafter)
$72,500





During
the term of the agreement, we have the option to purchase 86% of the claims for
$5,000 upon delivery of a copy of an approved mine plan of operations or a final
feasibility study.  The seller will retain a 3% net smelter return
(“NSR”) royalty of which we may purchase up to 2 percentage points for
$1,000,000 per percentage point.  NSR is generally defined as the
gross value of the metals less the costs of smelting, refining and
transportation.  We also have the option to purchase the remaining two
claim blocks (or 14% of the claims) for $250,000 per block at any time during
the term of the agreements.  The sellers will retain a 3% NSR royalty
on production from their respective claim blocks. We may purchase up to 2
percentage points for $875,000 per percentage point.  We must maintain
all of the claims referenced within the agreement in good standing during the
lease period.  We may terminate the lease at any time upon 60 days
notice.





Location





The Dun
Glen Gold Project is a precious metal exploration property located in the
historic Sierra district in Dun Glen Canyon on the west flank of the East Range
in northern Pershing County, Nevada.  The project area consists of 94
contiguous unpatented lode mining claims covering approximately 1,700 acres
within the Sierra Mining District.  It lies approximately 25 miles
southwest of Winnemucca and 21 miles north of the Florida Canyon Mine and is
accessible via 2 wheel drive vehicle year round. The Dun Glen property can be
accessed by driving 21 miles south of Winnemucca on U.S. Interstate 80, taking
the mill city exit and following a county-maintained 8-mile long dirt
road.








17





Climate
and Physiography





The Dun
Glen project lies on the western flank of the East Range in the Sierra Mining
District. The terrain is a series of alternating mountain ranges and
sagebrush-covered valleys that occupy a small part of the Basin and Range
Physiographic Province. Elevations range from 4,264 feet to about 7,430 feet
above sea level. The climate in the area is classified as semi-arid,
characterized by low rainfall, low humidity, clear skies, and relatively large
annual and daily temperature ranges. Bright, sunny days and cool, clear nights
are common. Winter minimum temperatures generally range from -10 degrees Celsius
and summer maximum temperatures can reach 37 degrees Celsius.





Although
there are some steep slopes at Dun Glen, the topography is generally subdued
over much of the Dun Glen property and immediate adjacent areas, providing ample
areas for mining operations, leach pads, waste dumps and requisite processing
areas in the event that an economic mineral occurrence is discovered. However,
there is no absolute guarantee that surface rights could be obtained on private
or public lands for mining operations. Water is available nearby, but the total
amount of water available may not be adequate for a contemporary mining
operation. Sufficient water might come from wells drilled on the property, but
there have yet been no studies to verify or refute this possibility. Adequate
electricity for a contemporary mining operation is not available nearby. The
closest power lines are approximately four miles away, but they are only
suitable for residential use at this time.





History





Historic
gold production within the Sierra district was recorded at 50,000 to 75,000
ounces of lode gold and over 200,000 ounces of placer gold.  Mineral
records indicate the most productive mines were the Auld Lang Syne, Black Hole,
Monroe, and Auburn.  Historic mining never extended below the water
table.  The Dun Glen Project covers the Auld Lang Syne, Black Hole,
and Monroe. Previous modern exploration was conducted by Franco-Nevada Mining
Corp. which subsequently merged with Newmont Mining, and five
reverse-circulation holes were drilled to fulfill the contractual obligation of
the merger.  Due to equipment-related logistical drilling problems
only one hole was able to drill the edge of the vein-zone it
targeted.  Exploration work consisting of detailed geologic mapping
and surface rock sampling has also been conducted by Minterra Resource Corp. and
Golden Patriot Corp.





Geology





Published
mapping shows a northeast striking west dipping sequence of Triassic
rocks.  From bottom to top this includes the Koipato Group, Natchez
Pass Formation, and Grass Valley Formation.  Major northeast trending
faults and minor thrust faults are also shown.





Four
prospective vein zone areas occur in the 10,000 foot long vein corridor within
the Weaver Rhyolite member of the Koipato Group.  Three of these zones
contain the Monroe-White Rock, Black Hole, and Auld Lang Syne-Golden Bell
historic, gold-producing mines. The mesothermal-type veins are characterized by
white milky quartz, with multistage silicification, brecciation, iron staining,
and open space growth of quartz crystals.  Exposures in caved stopes
and adits show the veins range up to 8 feet wide.  Some veins have
clay along the footwall or hanging wall.  The margins of mafic dikes
commonly control some individual veins.





The vein
zone strikes range from north-south to slightly east of north.  Dips
are typically steeply northeast to vertical.  Mineralization has
historically been restricted to the quartz veins and included free gold, silver,
galena, and sphalerite.  These zones contain individual veins up to
2,000 feet long and up to 8 feet wide with numerous intersecting and
anastamosing subsidiary veins.  Exposed vertical extent is at least
600 feet from exposures on the tops of ridges to the bottom of the known
workings at the valley bottoms.  Producing mesothermal-type gold veins
in other districts in the world have vertical extents measured in thousands of
feet.





Surface
sampling of outcrops, dumps, and prospects throughout the district identified
the extensive quartz veining stretching from southwest of the Monroe-White Rock
Zone to the Auld Lang Syne/Golden Bell on the north.





Exploration
Program





The
Company’s initial 2006 exploration program consisted of additional geologic
mapping and the collection of approximately 1,400 rock, soil, and trench samples
across the project area.  A ground magnetic geophysical survey was
conducted to identify a unique lithology coincident with deep structures that
host gold mineralization.





18





In the
fourth quarter of 2006 the Company initiated an 8,000 foot HQ diamond core
drilling program to test targets beneath the historic surface mine workings and
other conceptual targets.  Four holes were completed for a total of
approximately 3,600 feet. Significant results of the drilling are as
follows:





Au
            AgHole ID
            Sample #
            From (ft)
            To (ft)
            g/t
            g/tDG06c-001
            C056025
            160
            165
            2.73
            20.1DG06c-001
            C056060
            335
            340
            0.269
            0.4DG06c-001
            C056062
            345
            350
            0.321
            0.8DG06c-001
            C056065
            360
            365
            0.317
            1.2DG06c-001
            C056086
            465
            470
            0.459
            <0.2DG06c-001
            C056169
            880
            885
            0.782
            0.2DG06c-002
            C056326
            175
            180
            0.656
            1.2DG06c-002
            C056328
            185
            190
            0.775
            1.1DG06c-002
            C056334
            215
            220
            1.225
            23.5DG06c-002
            C056339
            240
            245
            0.289
            5.4DG06c-002
            C056340
            245
            250
            3.18
            8DG06c-003
            C056440
            345
            350
            0.338
            0.2DG06c-004
            C057092
            30
            45
            0.029
            7.5DG06c-004
            C057101
            85
            90
            0.045
            10.5DG06c-004
            C057102
            50
            95
            0.591
            2.1DG06c-004
            C057105
            105
            110
            1.77
            1.1DG06c-004
            C057107
            115
            120
            0.53
            0.8DG06c-004
            C057113
            145
            150
            1.245
            1.6DG06c-004
            C057117
            165
            170
            0.347
            0.5DG06c-004
            C057122
            50
            195
            0.943
            1.1DG06c-004
            C057123
            195
            200
            0.983
            1DG06c-004
            C057127
            215
            220
            0.372
            0.5DG06c-004
            C057132
            50
            245
            2.21
            0.4DG06c-004
            C057149
            325
            330
            0.253
            <0.2DG06c-004
            C057150
            50
            335
            0.481
            0.2DG06c-004
            C057165
            405
            410
            0.539
            0.4DG06c-004
            C057185
            505
            510
            1.87
            0.6





At Dun
Glen, the Company intends perform offset drilling, to follow up on intersected
discoveries, and to test several additional targets that were previously
identified, although the timing of these activities is uncertain as of the date
of this report.





Canada





Abitibi
Properties, Quebec





Overview





In June
2006, the Company entered into an agreement with Diagnos, Inc., (“Diagnos”)
obtaining an exclusive option to acquire a 100 percent interest in two
prospective gold properties known as the Lac à l’Eau Jaune and Malartic Surimau
Projects located in the Abitibi region of Québec, Canada.  The Company
paid Diagnos $70,000 for the two Properties and will acquire a 100% interest by
conducting an initial exploration program comprised of at least three drill
holes on each property.  Upon completion of the initial drilling
programs, the Company will have the option to select up to an additional seven
properties in which it may acquire a 100% interest by paying Diagnos a sum of
$40,000 and completing an initial three-hole exploration drilling program for
each property.  The option will expire if the initial drill program is
not drilled by March 31, 2010.





For each
economic discovery made on any of the acquired Properties, the Company will pay
Diagnos a bonus of $500,000.  The Company will also grant Diagnos a 2%
Net Smelter Royalty (“NSR”) for economic discoveries made on the initial or
additional properties, but will retain the option to acquire 1% of the NSR upon
payment of $1 million to Diagnos within five years of making the economic
discovery.  An economic discovery is defined in the agreement as being
the production of a positive feasibility study for a given project in compliance
with Canada’s National Instrument 43-101.





19





The
Quebec properties consist of 46 provincial mining claims, each of which requires
a renewal payment of $50 per year and a minimum work commitment of $1,250 per
year to maintain. Detail pertaining to the claims is as follows:





Lac
      a l’Eau Jaune-Map Area 32G10- 21 ClaimsAmount
      of WorkClaim
      Number
            
            Hectares
            
            Expiration
      Date
            
            Cost
      to Renew
            
            
            Necessary
      to RenewCDC
      2001121
            
            
            55.78
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001122
            
            
            55.78
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001123
            
            
            55.78
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001124
            
            
            55.78
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001125
            
            
            55.78
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001126
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001127
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001128
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001129
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001130
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001131
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001132
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001133
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001134
            
            
            55.79
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001135
            
            
            55.80
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001136
            
            
            55.80
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001137
            
            
            55.80
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001138
            
            
            55.80
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2001139
            
            
            55.80
            
            2/19/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2026347
            
            
            55.80
            
            9/26/2008
            
            $
            50.00
            
            
            $
            1,200.00CDC
      2026348
            
            
            55.79
            
            9/26/2008
            
            $
            50.00
            
            
            $
            1,200.00$
            1,050.00
            
            
            $
            25,200.00Canadian
            
            
            Canadian





Malartic
      Project-Map Area 32D01- 25 ClaimsAmount
      of WorkClaim
      Number
              
              Hectares
              
              Expiration
      Date
              
              Cost
      to Renew
              
              
              Necessary
      to RenewCDC
      2014813
              
              
              57.55
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014814
              
              
              57.55
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014815
              
              
              57.54
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014816
              
              
              57.52
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014817
              
              
              57.52
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014818
              
              
              57.51
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014819
              
              
              57.51
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2014820
              
              
              57.51
              
              6/5/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015858
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015859
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015860
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015861
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015862
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015863
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015864
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015865
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015866
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015867
              
              
              57.55
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015868
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015869
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015870
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015871
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015872
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015873
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00CDC
      2015874
              
              
              57.54
              
              6/11/2008
              
              $
              50.00
              
              
              $
              1,200.00$
              1,250.00
              
              
              $
              30,000.00Canadian
              
              
              Canadian





20





Location





The Lac à
l’Eau Jaune Project is located approximately eighteen miles southwest of the
Chibougamau mining camp and is comprised of 21 claims totaling 2,900
acres.  The project area is accessible from Chibougamau via Road 167
south and Road 113 west toward the Chibougamau airport.  The Malartic
Surimau Project covers 25 claims totaling 3,554 acres approximately 25 miles
west of the Town of Val D’or and ten miles south of the Town of Cadillac and is
accessible from Highway 117 by a maintained dirt road.  The property
is separated into two blocks, with five claims lying directly north of the
property’s main body.











Geology





Malartic
Surimau Property:





The
Archaean Malartic gold mines are located along the Larder Lake-Cadillac Fault
zone, in the Abitibi sub-province of the Superior Province, some 20 km west of
Val d'Or in Quebec, Canada.  Historically the main mines of the
district known as its East Canadian, Barnat, Sladen and Canadian Malartic
properties produced over 162 tonnes of gold to 2000.





The
district straddles the faulted contact between the mafic to ultramafic volcanics
of the Piché Group to the north and the greywacke-mudstone sequence of the
Pontiac Group to the south.   The majority of the gold
mineralization is found within the sediments where it is spatially associated
with small monzonite porphyry bodies, younger diorite intrusives and
crosscutting brittle (silicified) faults.  The host succession has
been subjected to NE trending F1 folds, asymmetric F2 folds with a SE striking
penetrative S2 cleavage which is in turn paralleled by brittle
faults.   The monzodiorite intrusives predate F2, while a series
of significant ESE trending brittle faults occur near the volcanic-sediment
boundary.  Two main styles of mineralization are observed, which
consist of elongate zones of disseminated auriferous pyrite in fractured and
silicified greywacke and adjacent monzodiorite porphyry along ESE striking and
S2 parallel faults, andstockwork zones of
quartz-albite-K feldspar veinlets and intervening disseminated pyrite in
intensely fractured and altered porphyritic monzodiorite and diorite adjacent to
faults.





21





The
alteration includes K (potassium) and Na (sodium) feldspar addition,
carbonization and silicification in the sediments and by biotite development in
the intrusives.   Pyrite constitutes 5 to 10% of the altered
greywackes and monzodiorites, and 5 to 20% of the mineralized diorite which also
contains abundant magnetite.





Lac
à l’Eau Jaune property:





The
Chibougamau District of northern Quebec, some 350 km to the north-east of Val
d'Or, has produced in excess of 1,050 tonnes (33.75 Moz) of gold to date from a
variety of styles of ore, but is mostly characterized by copper-gold vein
deposits distinct from typical greenstone hosted quartz-carbonate veins. The
deposits of the district range from volcanogenic massive sulphides with copper,
zinc and silver to gold bearing sulphide veins with associated silver, zinc,
lead As & Sb; to copper-gold  and gold-copper veins with varying
amounts of sulphides; and auriferous quartz veins with minor chalcopyrite. Most
of the copper-gold deposits are localized in southeast trending ductile shear
zones and are within meta-anorthosite and gabbroic hosts.





Exploration
Program





In
October of 2007, the Company entered into an agreement with Diagnos to conduct a
three phase exploration program at both the Lac a l’Eau Jaune and Malartic
Surimaum properties. Phase 1 was completed in January of 2008 and was comprised
of data compilation and surface outcrop sampling (sample results are pending).
Phase 2 will consist of  line cutting ground geophysics and systematic
sampling. Phase 3 will consist of drilling completion of a technical report
summarizing the results. It is estimated that all 3 phases will be completed by
early 2009.





ITEM
      3.
            LEGAL
      PROCEEDINGS





There are
no material pending legal proceedings to which the Registrant is a party or of
which any of its property is subject.





ITEM
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS





Not
Applicable





PART
II





ITEM
      5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES





(a)
            Market
      Information





The
Common Stock of the Company is quoted on the over the counter market on the NASD
supervised Bulletin Board under the symbol “HNTM”.  The following
table shows the high and low closing sales prices for the Common Stock for each
quarter since January 1, 2006.  The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.





High
      Closing
            
            
            Low
      ClosingYear
      Ended 12/31/06First
      Quarter
            
            
            .42
            
            
            
            .20Second
      Quarter
            
            
            .61
            
            
            
            .38Third
      Quarter
            
            
            .65
            
            
            
            .44Fourth
      Quarter
            
            
            .80
            
            
            
            .56Year
      Ended 12/31/2007First
      Quarter
            
            
            .80
            
            
            
            .39Second
      Quarter
            
            
            .50
            
            
            
            .40Third
      Quarter
            
            
            .45
            
            
            
            .35Fourth
      Quarter
            
            
            .60
            
            
            
            .45





22





(b)
            Holders





There are
approximately 1,535 holders of the Registrant's common equity at the date
hereof.





(c)
            Dividends





We have
never paid a dividend.  There is no plan to pay dividends for the
foreseeable future.





(d)
            Securities
      Authorized for Issuance Under Equity Compensation
  Plans





Securities Authorized for
Issuance Under Equity Compensation Plans.





Plan Category
            
            Number of securities to be issued upon exercise of
      outstanding options, warrants and rights (1)
            
            
            Weighted-average exercise price of outstanding
      options, warrants and rights
            
            
            Number of securities remaining available for
      future issuance under equity compensation plans (excluding securities
      reflected in column (a))(a)
            
            
            (b)
            
            
            (c)Equity compensation plans approved by
      shareholders
            
            
            2,340,000
            
            
            $
            0.378
            
            
            
            700,000Equity compensation plans not approved by
      shareholders
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-Total
            
            
            2,340,000
            
            
            $
            0.378
            
            
            
            700,000





(e)
            Unregistered
      Sales





On March
23, 2005 the Company entered into a Stock Purchase Agreement with the Hunt
Family Limited Partnership, a Washington Limited Partnership (“HFLP”). Pursuant
to the terms of the Agreement, HFLP purchased 7,722,066 shares of Metaline
common stock or 51.48% of the total authorized shares of
Metaline.  The purchase price of the shares was $0.065 per share which
resulted in gross proceeds of $501,934 to the Company. In addition HFLP was
granted warrants, exercisable for a period of 5 years, for the purchase of an
additional 15,444,132 shares of Metaline common stock at a price of $0.065 per
share, if and when the capitalization of the Company was increased. On March 24,
2006, HFLP exercised all of their 15,444,132 common stock purchase warrants,
resulting in gross proceeds of $1,003,869 to the Company.  On August
1, 2005, the shareholders approved the merger of Metaline Mining and Leasing
Company with and into HuntMountain Resources.  Effective with this
merger, the Company’s capitalization was increased to three hundred million
(300,000,000) shares of $0.001 par value Common Stock
authorized.  There was no commission paid, directly or indirectly, to
any person in conjunction with the Stock Purchase Agreement. The sale was made
pursuant to a Section 4(2) exemption from registration under the Securities Act
of 1933.





On March
28, 2005 the Company completed a private placement of 1,500,000 special warrants
at a price of $0.10 per special warrant.  Each special warrant was
automatically converted into one share of the Company’s common stock upon the
increase of the Company’s capitalization sufficient to permit the conversion of
the warrants.  The Special Warrants were converted in August
2005.  The private placement was made pursuant to a Regulation D Rule
506 exemption from registration under the Securities Act of 1933, as amended.
The special warrants were offered and sold to a total of six investors, each of
whom were accredited investors. There was no commission paid, directly or
indirectly, to any person in conjunction with the sale of the special warrants.
The Company received gross proceeds of $150,000 from the offering.





In
December, 2006, the Company sold 300,000 units at a price of $0.43 to the Hunt
Family Limited Partnership (HFLP), a Washington Limited Partnership controlled
by the Company’s Chairman and CEO as part of a private
placement.  Each unit was comprised of one share of the Company’s
common stock and one redeemable warrant to purchase one share of the Company’s
common stock, exercisable at $0.60 for a period of 2 years.  The
private placement was made pursuant to a Regulation D Rule 506 exemption from
registration under the Securities Act of 1933, as amended. There was no
commission paid, directly or indirectly, to any person in conjunction with the
sale of the units. The Company received gross proceeds of $129,000 from the
offering.  In connection with the transaction, the Company issued
warrants to acquire an additional 300,000 shares of common stock at a price of
$0.60 per share. The offering was made pursuant to a section 4(2) exemption from
registration under the Act and Rule 506 of Regulation D.





23





In
October, 2007 the Company issued 150,000 shares at a fair market value of $0.50
per share as compensation to Matt Hughes, our Chief Operating Officer. There was
no cash consideration for the share issuance. The private placement was made
pursuant to section 4(2) and  Regulation D Rule 506 exemptions from
registration under the Act.





In
November, 2007 the Company issued 480,000 shares and 480,000 warrants pursuant
to the conversion of $120,000 of principal of a convertible note. The warrants
issued have a $0.40 exercise price and an expiration date of five years from the
date of issuance. The private placement was made pursuant to section 4(2) and
Regulation D Rule 506 exemptions from registration under the Act.





In
December, 2007 the Company issued 120,000 shares and 120,000 warrants pursuant
to the conversion of $30,000 of principal of a convertible note. The warrants
issued have a $0.40 exercise price and an expiration date of five years from the
date of issuance. The private placement was made pursuant to section 4(2) and a
Regulation D Rule 506 exemptions from registration under the Act .





ITEM
      6.
            Selected
      Financial Data – Not Applicable





ITEM
      7.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





FORWARD-LOOKING
STATEMENTS





This
Annual Report and other documents we file with the Securities and Exchange
Commission (“SEC”) contain forward-looking statements that are based on current
expectations, estimates, forecasts and projections about us, our future
performance, our business, our beliefs and our management’s
assumptions.  All statements other than statements of historical facts
are forward-looking statements, including any statements of the plans and
objectives of management for future operations, projections of revenue earnings
or other financial items, any statements regarding future economic conditions or
performance, and any statement of assumptions underlying any of the
foregoing.  Some of these forward-looking statements may be identified
by the use of words in the statements such as “anticipate,” “estimate,” “could,”
“would,” “expect,” “project,” “intend,” “plan,” “believe,” “seek,” “should,”
“may,” “assume,” “continue,” variations of such words and similar
expressions.  These statements are not guarantees of future
performance and involve certain risks, uncertainties, and assumptions that are
difficult to predict.  We caution you that our performance and results
could differ materially from what is expressed, implied, or forecast by our
forward-looking statements due to general financial, economic, regulatory and
political conditions affecting the economy and markets, as well as more specific
risks and uncertainties affecting the Company.  The Company operates
in a rapidly changing environment that involves a number of risks, some of which
are beyond the Company’s control.  Future operating results and the
Company’s stock price may be affected by a number of factors.  Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in the section entitled “ITEM 1. BUSINESS,” and all
subsections therein, including, without limitation, the subsection entitled,
“FACTORS THAT MAY AFFECT THE COMPANY,” and the section entitled “MARKET FOR
REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS,” all contained in
this Annual Report on Form 10-K.  Given these risks and uncertainties,
any or all of these forward-looking statements may prove to be
incorrect.  Therefore, you should not rely on any such forward-looking
statements.  Furthermore, we do not intend (and we are not obligated)
to update publicly any forward-looking statements.  You are advised,
however, to consult any further disclosures we make on related subjects in our
reports to the Securities and Exchange Commission.





Year
ended December 31, 2007 compared to year ended December 31, 2006.





Result
of Operations





Dividend
and interest income decreased to $7,047 in 2007 from $53,521 in 2006. This
decrease was primarily due to a reduction in domestic short-term investments.
The Company also generated a $15,194 gain on the sale of a precious metal
investment in 2006 and this gain was included in dividend and interest income
for that year.





Total
expenses increased from approximately $2.1 million in 2006 to $9.6 million in
2007.  The increase is primarily due to an increase in financing
charges of $5.3 million and amortization of debt discount of $1.3 million. Both
of these items were due to the Company’s new convertible debt that was incurred
in 2007. In addition, increases in professional fees of $538,844, interest
expense of $192,917 and payroll expense of $110,363 contributed to the Company’s
increased operating expenses.





24





As a
result, the Company recorded a net loss of $9.6 million in 2007, compared to a
net loss of $2.0 million in 2006.





Liquidity
and Capital Resources





Working
Capital, Cash and Cash Equivalents





The
Company’s working capital deficit at December 31, 2007 was $977,242 compared to
positive working capital of $236,159 at December 31, 2006. The ratio of current
assets to current liabilities was 0.44 to 1 at December 31, 2007 compared to
5.17 to 1 at December 2006. Working capital decreased in 2007 due to the
Company’s increased exploration activity and the Company’s short-term
convertible debt financing incurred in 2007.





Net cash
used in operating activities was $2.6 million in 2007 compared with $1.7 million
used in operating activities in 2006.  The increase is the result of
the increased net loss from operations.





In 2007,
investing activities used $1.0 million compared with $48,087 in
2006.  The increase is primarily the result of a land purchase of
$710,000, the $247,486 purchase of a performance bond and property deposits of
$136,500.





Cash flow
from financing activities was $4.1 million in 2007 compared to $1.1 million in
2006.  The increase is primarily the result of $3.7 million received
from a convertible note financing.





As a
result, cash and cash equivalents increased by $355,942 in 2007.  The
Company has cash and cash equivalents of $653,304 as of December 31,
2007.  It will be necessary for the Company to raise additional
capital to continue it business activities in 2008.





Item
      7A
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK – Not
    Applicable





25





ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA





HUNTMOUNTAIN
RESOURCES
 AND
SUBSIDIARIES
 (A
Development Stage Enterprise)





Consolidated
Financial Statements and Report of Independent Registered Public Accounting
Firm





December
31, 2007 and 2006





26





HuntMoutain
Resources Ltd. and Subsidiaries
 (Formerly
Metaline Mining & Leasing Company)
 (A
Development Stage Enterprise)


Contents








PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS
            28-29CONSOLIDATED
      FINANCIAL STATEMENTS:Consolidated
      balance sheets
            30Consolidated
      statement of income
            31Consolidated
      statement of stockholders’ equity
            32Consolidated
      statement of cash flows
            33Notes
      to consolidated financial statements
            34-44





27




Williams
& Webster, P.S.


Certified
Public Accountants & Business Consultants





Bank of
America Financial Center • 601 W. Riverside, Suite 1940 Spokane WA 99201 • Phone
(509) 838-5111 • Fax (509) 838-5114











HuntMountain
Resources Ltd


Liberty
Lake, WA





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








We have
audited the accompanying consolidated balance sheet of HuntMountain Resources
Ltd as of December 31, 2007, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year then ended and for
the period from July 1, 2005 (inception of development stage) through December
31, 2007. 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 audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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 audit 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 audit provides a
reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of HuntMountain Resources Ltd as of
December 31, 2007 and the results of its operations, stockholders equity and its
cash flows for the year then ended and for the period from July 1, 2005
(inception of development stage) through December 31, 2007 in conformity with
accounting principles generally accepted in the United States of
America.








/s/ Williams &
Webster, P.S.


Williams
& Webster, P.S.


Certified Public AccountantsSpokane, Washington


April 9,
2008











Bank
      of America Financial Center
              601
      W. Riverside, Suite 1940 Spokane WA 99201
              Phone
      (509) 838-5111 • Fax (509) 838-5114
            lion crest
            www.williams-webster.com
              Member
      of Russell Bedford International
            logo 1





28








logo 2
              Certified
      Public Accountants and Advisors
            logo 3





REPORT OF
INDEPENDENT


REGISTERED
PUBLIC ACCOUNTING FIRM











Board of
Directors


HuntMountain
Resources and Subsidiaries


Spokane,
Washington








We have
audited the accompanying consolidated balance sheet of HuntMountain Resources
and Subsidiaries as of December 31, 2006, and the related consolidated
statements of income and cash flows for the year then ended and the consolidated
statement of stockholders' equity for the years ended December 31, 2006 and
2005. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. 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 audit provides 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 HuntMountain Resources and
Subsidiaries as of December 31, 2006, and the results of their operations and
their cash flows for the year then ended and the changes in stockholders' equity
for the years ended December 31, 2006 and 2005, in conformity with accounting
principles generally accepted in the United States of
America.0





/s/ LaMaster & Daniels
PLLC





Spokane,
Washington


April 13,
2007










29





HuntMountain
Resources Ltd. and Subsidiaries


(A
Development Stage Enterprise)







Consolidated
Balance Sheets





December 31,2007
            
            
            2006AssetsCURRENT
      ASSETS:Cash
      and cash equivalents:Cash
            
            $
            273,020
            
            
            $
            207,309Short
      term cash investments - domestic
            
            
            12,909
            
            
            $
            89,882Short-term
      cash investments - Argentina
            
            
            367,375
            
            
            
            -Total
      cash and cash equivalents
            
            
            653,304
            
            
            
            297,191Employee
      receivable
            
            
            2,115
            
            
            
            -Accounts
      receiveable
            
            
            40,622
            
            
            
            -Prepaid
      expenses
            
            
            72,612
            
            
            
            18,625Accrued
      interest receivable
            
            
            1,969
            
            
            
            -Total
      current assets
            
            
            770,621
            
            
            
            315,816EQUIPMENT:Office
      equipment and vehicle
            
            
            11,216
            
            
            
            11,216Less
      accumulated depreciation
            
            
            7,014
            
            
            
            3,2754,203
            
            
            
            7,941OTHER
      ASSETS:Receivable
      - V.A. tax, Argentina
            
            
            190,719
            
            
            
            -Land
      - La Josefina Estancia
            
            
            710,000
            
            
            
            -Performance
      bond
            
            
            214,762
            
            
            
            -Property
      deposits
            
            
            136,500
            
            
            
            -Investments
            
            
            7,331
            
            
            
            7,331Property
      purchase option
            
            
            70,000
            
            
            
            70,0001,329,312
            
            
            
            77,331Total
      assets
            
            $
            2,104,136
            
            
            $
            401,088Liabilities
      and Stockholders’ EquityCURRENT
      LIABILITIES:Trade
      accounts payable
            
            $
            380,118
            
            
            $
            44,125Accrued
      wages and related taxes
            
            
            120,202
            
            
            
            16,907Short
      term note payable
            
            
            3,747,000
            
            
            
            -Debt
      discount:
            
            
            (2,664,606
            )
            
            
            -Net
      short term note payable
            
            
            1,082,394
            
            
            
            -Accrued
      interest on note payable
            
            
            165,149
            
            
            
            -Total
      current liabilities
            
            
            1,747,864
            
            
            
            61,032STOCKHOLDERS’
      EQUITY:Preferred
      stock –
      10,000,000 shares, $0.001 par value, authorized;-0- shares issued and
      outstanding
            
            
            -
            
            
            
            -Common
      stock – 300,000,000 shares, $0.001 par value, authorized; 33,016,285 and
      32,266,285 shares issued and outstanding, respectively
            
            
            32,491
            
            
            
            32,266Additional
      paid-in capital
            
            
            12,081,316
            
            
            
            2,424,570Retained
      earnings - prior to development stage
            
            
            90,527
            
            
            
            90,527Deficit
      accumulated during the development stage
            
            
            (11,794,981
            )
            
            
            (2,201,534
            )Accumulated
      other comprehensive income (loss)
            
            
            (53,081
            )
            
            
            (5,773
            )Total
      stockholders’ equity
            
            
            356,272
            
            
            
            340,056Total
      liabilities and stockholders’ equity
            
            $
            2,104,136
            
            
            $
            401,088





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





30





HuntMountain
Resources Ltd. and Subsidiaries


(A
Development Stage Enterprise)







Consolidated
Statements of Income





From
      Inceptionof
      Development StageYears Ended
    December 31,
            
            
            July 1,
      2005 through December 31,2007
            
            
            2006
            
            
            2007INCOME:Dividend
      and interest income
            
            $
            7,047
            
            
            $
            53,521
            
            
            $
            72,282EXPENSES:Professional
      fees
            
            
            589,545
            
            
            
            50,701
            
            
            
            686,810Marketing
            
            
            69,743
            
            
            
            95,766
            
            
            
            176,710Exploration
      expenses
            
            
            1,000,940
            
            
            
            1,115,462
            
            
            
            2,116,402Travel
      expenses
            
            
            182,234
            
            
            
            84,043
            
            
            
            277,776Administrative
      and office expenses
            
            
            201,351
            
            
            
            117,472
            
            
            
            360,246Payroll
      expenses
            
            
            517,979
            
            
            
            314,845
            
            
            
            917,015Stock
      compensation expense
            
            
            127,600
            
            
            
            67,000
            
            
            
            198,600Comon
      stock and options issued for services
            
            
            131,500
            
            
            
            220,850
            
            
            
            353,250Interest
      expense and bank charges
            
            
            192,917
            
            
            
            -
            
            
            
            192,917Financing
      charge
            
            
            5,255,649
            
            
            
            -
            
            
            
            5,255,649Amortization
      of debt discount
            
            
            1,327,616
            
            
            
            -
            
            
            
            1,327,616Depreciation
      expense
            
            
            3,739
            
            
            
            2,572
            
            
            
            7,0139,600,815
            
            
            
            2,068,711
            
            
            
            11,870,006LOSS
      BEFORE OTHER INCOME
            
            
            (9,593,768
            )
            
            
            (2,015,190
            )
            
            
            (11,797,724
            )OTHER
      INCOME:Income
      from partnership interest
            
            
            320
            
            
            
            1,543
            
            
            
            2,743LOSS
      BEFORE INCOME TAXES:
            
            
            (9,593,448
            )
            
            
            (2,013,647
            )
            
            
            (11,794,981
            )Income
      taxes:
            
            
            -
            
            
            
            -
            
            
            
            -NET
      LOSS
            
            $
            (9,593,448
            )
            
            $
            (2,013,647
            )
            
            $
            (11,794,981
            )BASIC
      AND DILUTED LOSS PER SHARE, based on weighted-average shares
      outstanding
            
            $
            (0.30
            )
            
            $
            (0.07
            )WEIGHTED-AVERAGE
      COMMON SHARES OUTSTANDING, BASIC AND DILUTED
            
            
            32,361,217
            
            
            
            27,155,967





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





31





HuntMountain
Resources Ltd. and Subsidiaries


(A
Development Stage Enterprise)







Consolidated Statements of Stockholders’
      Equity
            Years Ended December 31, 2007 and
      2006





DeficitAccumulated
            
            
            AccumulatedNumber
      of
            
            
            Common
            
            
            Additional
            
            
            
            
            
            During
      The
            
            
            OtherShares
            
            
            Stock
            
            
            Paid-In
            
            
            Retained
            
            
            Development
            
            
            ComprehensiveOutstanding
            
            
            Amount
            
            
            Capital
            
            
            Earnings
            
            
            Stage
            
            
            Income (Loss)
            
            
            TotalBALANCES,
      DECEMBER 31, 2004
            
            
            7,277,934
            
            
            $
            379,282
            
            
            $
            -
            
            
            $
            144,968
            
            
            $
            -
            
            
            $
            1,061
            
            
            $
            525,311Common
      stock issued for cash
            
            
            9,222,066
            
            
            
            503,434
            
            
            
            148,500
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            651,934Stock
      options issued to employees
            
            
            -
            
            
            
            -
            
            
            
            4,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,000Stock
      options issued for services
            
            
            -
            
            
            
            -
            
            
            
            900
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            900Reclassification
      due to par value change
            
            
            -
            
            
            
            (866,216
            )
            
            
            866,216
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Comprehensive
      loss:Unrealized
      gain on marketable securities
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,401
            
            
            
            1,401Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (54,441
            )
            
            
            (187,887
            )
            
            
            -
            
            
            
            (242,328
            )Comprehensive
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (240,927
            )BALANCES,
      DECEMBER 31, 2005
            
            
            16,500,000
            
            
            $
            16,500
            
            
            $
            1,019,616
            
            
            $
            90,527
            
            
            $
            (187,887
            )
            
            $
            2,462
            
            
            $
            941,218Common
      stock issued for cash
            
            
            15,744,132
            
            
            
            15,744
            
            
            
            1,117,126
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,132,870Exercise
      of stock options
            
            
            18,153
            
            
            
            18
            
            
            
            (18
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Stock
      options issued to employees
            
            
            -
            
            
            
            -
            
            
            
            67,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            67,000Stock
      options issued for services
            
            
            -
            
            
            
            -
            
            
            
            220,850
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            220,850Common
      stock issued to rectify imbalance
            
            
            4,000
            
            
            
            4
            
            
            
            (4
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Comprehensive
      loss:Unrealized
      loss on marketable securities
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (8,235
            )
            
            
            (8,235
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,013,647
            )
            
            
            -
            
            
            
            (2,013,647
            )Comprehensive
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (2,021,882
            )BALANCES,
      DECEMBER 31, 2006
            
            
            32,266,285
            
            
            $
            32,266
            
            
            $
            2,424,570
            
            
            $
            90,527
            
            
            $
            (2,201,534
            )
            
            $
            (5,773
            )
            
            $
            340,056Common
      stock issued for cash
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Common
      stock issued for executive compensation
            
            
            150,000
            
            
            
            75
            
            
            
            74,925
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            75,000Exercise
      of stock options
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Stock
      options issued to employees
            
            
            -
            
            
            
            -
            
            
            
            127,600
            
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            127,600Stock
      options issued for services
            
            
            -
            
            
            
            -
            
            
            
            56,500
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            56,500Convertible
      note issuance
            
            
            -
            
            
            
            -
            
            
            
            9,247,871
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            9,247,871Convertible
      note conversion
            
            
            600,000
            
            
            
            150
            
            
            
            149,850
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            150,000Comprehensive
      loss:
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            -Unrealized
      loss on marketable securities
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (47,308
            )
            
            
            (47,308
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (9,593,448
            )
            
            
            -
            
            
            
            (9,593,448
            )Comprehensive
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (9,640,756
            )BALANCES,
      DECEMBER 31, 2007
            
            
            33,016,285
            
            
            $
            32,491
            
            
            $
            12,081,316
            
            
            $
            90,527
            
            
            $
            (11,794,981
            )
            
            $
            (53,081
            )
            
            $
            356,272





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





32





HuntMountain
Resources Ltd. and Subsidiaries


(A Development Stage
Enterprise)







Consolidated Statements of
Cash Flows





From
      InceptionYears
      Ended
            
            
            of
      Development StageDecember 31,
            
            
            July 1,
      2005 through2007
            
            
            2006
            
            
            December 31, 2007Increase
      (Decrease) in Cash and Cash EquivalentsCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (9,593,447
            )
            
            $
            (2,013,647
            )
            
            $
            (11,794,981
            )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesDepreciation
            
            
            3,739
            
            
            
            2,572
            
            
            
            7,013Stock
      option compensation expense
            
            
            127,600
            
            
            
            67,000
            
            
            
            198,600Common
      stock and options issued for services
            
            
            131,500
            
            
            
            220,850
            
            
            
            353,250Financing
      charge
            
            
            5,255,649
            
            
            
            -
            
            
            
            5,255,649Amortization
      of debt discount
            
            
            1,327,616
            
            
            
            -
            
            
            
            1,327,616Gain
      on sale of precious metal investments
            
            
            -
            
            
            
            (15,194
            )
            
            
            (15,194
            )Increase
      in long term receivable - V.A. tax
            
            
            (190,719
            )
            
            
            -
            
            
            
            (190,719
            )Increase
      in employee receivable
            
            
            (2,115
            )
            
            
            -
            
            
            
            (2,115
            )Increase
      in accounts receivable
            
            
            (40,622
            )
            
            
            -
            
            
            
            (40,622
            )(Increase)
      decrease in prepaid expenses
            
            
            (53,987
            )
            
            
            1,114
            
            
            
            (72,612
            )Increase
      in accounts payable
            
            
            335,993
            
            
            
            -
            
            
            
            335,993Increase
      in accrued liabilities
            
            
            103,295
            
            
            
            48,551
            
            
            
            151,327Net
      cash used in operating activities
            
            
            (2,595,497
            )
            
            
            (1,688,754
            )
            
            
            (4,486,794
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Land
      purchases
            
            
            (710,000
            )
            
            
            -
            
            
            
            (710,000
            )Accrued
      interest income
            
            
            (1,969
            )
            
            
            -
            
            
            
            (1,969
            )Performance
      bond
            
            
            (247,486
            )
            
            
            -
            
            
            
            (247,486
            )Property
      deposits
            
            
            (136,500
            )
            
            
            -
            
            
            
            (136,500
            )Property
      purchase option
            
            
            -
            
            
            
            (70,000
            )
            
            
            (70,000
            )Sale
      of precious metal investments
            
            
            -
            
            
            
            28,913
            
            
            
            28,913Acquisition
      of equipment
            
            
            -
            
            
            
            (7,000
            )
            
            
            (11,216
            )Net
      cash used in investing activities
            
            
            (1,095,955
            )
            
            
            (48,087
            )
            
            
            (1,148,258
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from convertible note financing
            
            
            3,747,000
            
            
            
            -
            
            
            
            3,747,000Increase
      in debt discount
            
            
            (2,664,606
            )
            
            
            
            
            
            
            (2,664,606
            )Increase
      in accrued interest payable
            
            
            165,149
            
            
            
            -
            
            
            
            165,149Proceeds
      from sales of common stock
            
            
            2,814,605
            
            
            
            1,132,870
            
            
            
            3,947,475Net
      cash from financing activities
            
            
            4,062,149
            
            
            
            1,132,870
            
            
            
            5,195,019Effect
      of currency translation on cash
            
            
            (14,584
            )
            
            
            -
            
            
            
            (14,584
            )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            356,113
            
            
            
            (603,971
            )
            
            
            (454,617
            )CASH
      AND CASH EQUIVALENTS, BEGINNING OF YEAR/PERIOD
            
            
            297,191
            
            
            
            901,162
            
            
            
            1,107,921CASH
      AND CASH EQUIVALENTS, END OF YEAR/PERIOD
            
            $
            653,304
            
            
            $
            297,191
            
            
            $
            653,304Supplemental
      Disclosures of Cash Flow Information:Income
      taxes, paid net of refunds:
            
            
            -
            
            
            
            -
            
            
            
            -Interest
      paid:
            
            
            -
            
            
            
            -
            
            
            
            -





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





33





HuntMountain
Resources Ltd. and Subsidiaries


(A
Development Stage Enterprise)








Notes
to Consolidated Financial Statements





NOTE
1 – DESCRIPTION OF BUSINESS





HuntMountain
Resources Ltd. (the Company), a Washington corporation, was formed in
2005.  Metaline Mining and Leasing Company, a Washington corporation
since 1927, merged with and into the Company in August 2005.  The
Company’s business plan is to acquire interests in exploration properties in
North and South America.  As of the end of 2007, the Company had
acquired one exploration property in Nevada, seven properties in the province of
Santa Cruz in Argentina, and two properties in Quebec.  In addition,
the Company is in the process of finalizing an agreement to acquire an
exploration property near Chinipas, Chihuahua, Mexico. The Company continues to
actively evaluate additional properties in North and South America.





The
accompanying consolidated financial statements include the accounts of
HuntMountain Resources (HMR), a Washington corporation, its wholly-owned
Canadian subsidiary HuntMountain Resources LTD (HMR LTD), HMR’s wholly owned
Mexican subsidiary Cerro Cazador Mexico S.A. De C.V. (CCM), HMR’s wholly-owned
subsidiary HuntMountain Investments, LLC (HMI), and Cerro Cazador S.A. (CCSA),
an Argentine subsidiary 95% owned by HMR and 5% owned by HMI.





HMR LTD
is incorporated in British Columbia and provincially registered in
Yukon.  HMR LTD was formed for the purpose of holding Canadian
exploration properties, should the Company acquire an interest in any such
properties.  CCM was incorporated to acquire a property package in
Chihuaua, Mexico. HMI was incorporated for the specific purpose of holding
shares in subsidiary companies.  CCSA was formed in Argentina for the
purpose of holding Argentine exploration properties and executing agreements in
Argentina.





NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





This
summary of significant accounting policies is presented to assist in the
understanding of the financial statements. The financial statements and notes
are representations of the Company’s management, which is responsible for their
integrity and objectivity. These accounting policies conform to accounting
principles generally accepted in the United States of America and have been
consistently applied in the preparation of the financial
statements.





Accounting
Method





The
Company’s financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.





Accounts
Receivable





The
Company carries its accounts receivable at net realizable value. On a periodic
basis, the Company evaluates its accounts receivable and determines if an
allowance for doubtful accounts is necessary, based on a history of past
write-offs and collections and current credit conditions. At December 31, 2007
and 2006, the Company’s accounts receivable balance includes an allowance for
doubtful accounts of $0.





Reclassifications





Certain
amounts in the 2006 financial statements have been reclassified to conform with
the 2007 presentation with no effect on previously reported net
loss.





Use
of Estimates





The
preparation of 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 disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.





34





Cash
and Cash Equivalents





Cash and
cash equivalents include short-term cash investments that have an initial
maturity of 90 days or less. In the normal course of business, 30% of all funds
wire transferred from the Company to CCSA are withheld by the Government of
Argentina. These withheld amounts are invested in money market instruments until
the Government of Argentina approves CCSA’s formal application for release.
Funds held in this fashion are included in short-term cash
investments.





Principles
of Consolidation





The
consolidated financial statements include the accounts of the Company and its
wholly and majority-owned subsidiaries after elimination of intercompany
accounts and transactions. The wholly and majority-owned subsidiaries of the
Company are named above in NOTE 1 – DESCRIPTION OF BUSINESS.





Marketable
Securities





The
Company accounts for marketable securities in accordance with the provisions of
Statement of Financial Accounting Standards No. 115, “Accounting for Certain
Investments in Debt and Equity Securities” (“SFAS No. 115”).  Under
SFAS No. 115, debt securities and equity securities that have readily
determinable fair values are to be classified in three categories:





Held to
Maturity – the positive intent and ability to hold to
maturity.  Amounts are reported at amortized cost, adjusted for
amortization of premiums and accretion of discounts.





Trading
Securities – bought principally for purpose of selling them in the near
term.  Amounts are reported at fair value, with unrealized gains and
losses included in earnings.





Available
for Sale – not classified in one of the above categories.  Amounts are
reported at fair value, with unrealized gains and losses excluded from earnings
and reported separately as a component of stockholders’ equity.





At this
time, the Company holds securities classified as available for
sale.  See “Note 3 - Investments” for further details. Investments in
coins (gold Krugerrands and silver rounds) were liquidated during
2006.





Mineral
Development Costs





All
exploration expenditures are expensed as incurred. Significant property
acquisition payments for active exploration properties are capitalized. If no
economic ore body is discovered, previously capitalized costs are expensed in
the period the property is abandoned. Expenditures to develop new mines, to
define further mineralization in existing ore bodies, and to expand the capacity
of operating mines, are capitalized and amortized on a units-of-production basis
over proven and probable reserves.





Should a
property be abandoned, its capitalized costs are charged to operations. The
Company charges to the consolidated statement of operations the allocable
portion of capitalized costs attributable to properties sold. Capitalized costs
are allocated to properties sold based on the proportion of claims sold to the
claims remaining within the project area.





Long-lived
Assets





The
Company evaluates its long-lived assets for impairment when events or changes in
circumstances indicate that the related carrying amount may not be
recoverable.  If the sum of estimated future net cash flows on an
undiscounted basis is less than the carrying amount of the related asset
grouping, an asset impairment is considered to exist.  The related
impairment loss is measured by comparing estimated future net cash flows on a
discounted basis to the carrying amount of the asset.  Changes in
significant assumptions underlying future cash flow estimates may have a
material effect on the Company’s financial position and results of
operations.  To date no such impairments have been
identified.





Equipment
is stated at cost and is depreciated on the straight-line basis over an
estimated useful life of 3 years.





Earnings
Per Share





The
Company has adopted Statement of Financial Accounting Standards No. 128, which
provides for calculation of “basic” and “diluted” earnings per share. Basic
earnings per share includes no dilution and is computed by dividing net income
available to common shareholders by the weighted average common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of an entity similar to
fully diluted earnings per share. Although there were common stock equivalents
outstanding December 31, 2007, they were not included in the calculation of
earnings per share because they would have been considered
anti-dilutive.





35





Basic
earnings per share are computed using the weighted average number of shares
outstanding during the years (32,361,217 in 2007 and 27,155,967 in
2006).





As of
December 31, 2007, the Company had outstanding options, warrants and convertible
debt for a total of 33,637,192 shares which were considered
anti-dilutive.





Deferred
Income Tax





Deferred
income tax is provided for differences between the bases of assets and
liabilities for financial and income tax reporting.  A deferred tax
asset, subject to a valuation allowance, is recognized for estimated future tax
benefits of tax-basis operating losses being carried forward.





Fair
Value of Financial Instruments





Our
financial instruments as defined by Statement of Financial Accounting Standards
No. 107, “Disclosures about Fair Value of Financial Instruments,” include cash,
accounts payable and accrued liabilities. All instruments are accounted for on a
historical cost basis, which, due to the short maturity of these financial
instruments, approximates fair value at December 31, 2007 and 2006.





Provision
for Taxes





Income
taxes are provided based upon the liability method of accounting pursuant to
Statement of Financial Accounting Standards No. 109, “Accounting for Income
Taxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes
are recorded to reflect the tax consequences in future years of differences
between the tax basis of assets and liabilities and their financial reporting
amounts at each year-end. A valuation allowance is recorded against the deferred
tax asset if management does not believe the Company has met the “more likely
than not” standard imposed by SFAS No. 109 to allow recognition of such an
asset.





Reclamation
and Remediation





Expenditures
for ongoing compliance with environmental regulations that relate to current
operations are expensed or capitalized as appropriate. Expenditures resulting
from the remediation of existing conditions caused by past operations that do
not contribute to future revenue generations are expensed. Liabilities are
recognized when environmental assessments indicate that remediation efforts are
probable and the costs can be reasonably estimated.





Estimates
of such liabilities are based upon currently available facts, existing
technology and presently enacted laws and regulations taking into consideration
the likely effects of inflation and other societal and economic factors, and
include estimates of associated legal costs. These amounts also reflect prior
experience in remediating contaminated sites, other companies’ clean-up
experience and data released by The Environmental Protection Agency or other
organizations. Such estimates are by their nature imprecise and can be expected
to be revised over time because of changes in government regulations,
operations, technology and inflation. Recoveries are evaluated separately from
the liability and, when recovery is assured, the Company records and reports an
asset separately from the associated liability.





Recent
Accounting Pronouncements





In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
160 ("SFAS 160"), Noncontrolling interests in Consolidated Financial Statements,
which establishes accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160
is effective for financial statements issued for fiscal years beginning on or
after December 15, 2008, and interim periods within those fiscal years.
Management has not determined yet the effect that adoption of SFAS 159 may have
on our results of operations or financial position.





In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141R ("SFAS 141R"), Business Combinations, which establishes principles and
requirements for how the acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree, goodwill acquired in the business
combination, or a gain from a bargain purchase. SFAS 141R is effective for
financial statements issued for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. Management has not determined yet the effect that adoption of SFAS 159
may have on our results of operations or financial position.





36





Effective
November 1, 2007, the Company adopted the Financial Accounting Standards Board
(“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the
accounting for uncertainty in income taxes recognized in an enterprise’s
financial statements in accordance with FASB Statement No. 109, Accounting for
Income Taxes. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. Additionally, FIN 48
provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. The adoption of FIN
48 did not have a material impact on the Company’s financial position, results
of operation or liquidity.





In
September 2006, FASB issued SFAS No. 157, Fair Value
Measurements.  SFAS No. 157 defines fair value, establishes a
framework for measuring fair value under accounting principles generally
accepted in the United States of America, and expands disclosures about fair
value measurements.  SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15,
2007.  The Company is currently evaluating the impact the adoption of
this statement could have on its financial condition, results of operations, and
cash flows.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities”, which permits entities to choose to
measure many financial assets and financial liabilities at fair value.
Unrealized gains on items for which the fair value option has been elected are
to be reported in earnings. SFAS 159 will become effective as of the beginning
of the first fiscal year that begins after November 15, 2007. Management has not
determined yet the effect that adoption of SFAS 159 may have on our results of
operations or financial position.





Concentration
of Credit Risk





The
Company maintains its cash and cash equivalents in multiple financial
institutions.  Balances in the United States are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $100,000 per
institution.  Balances on deposit may occasionally exceed FDIC insured
amounts.All of the
Company’s cash in U.S. bank accounts was FDIC insured at December 31, 2007. The
Company also maintains cash in an Argentine bank. The Argentine accounts, which
had a U.S. dollar balance of $266,666 at December 31, 2007, are considered
uninsured.











NOTE
3 – INVESTMENTS





The
Company had the following investments:





December 31,2007
            
            
            2006Partnership
      interest in two units of Pondera Partners, Ltd., a drilling project
      located in Teton County, Montana (at cost less equity partnership
      losses)
            
            $
            7,331
            
            
            $
            7,331Marketable
      securities:Cost
            
            
            5,887
            
            
            
            5,887Gross
      unrealized holding loss
            
            
            (5,887
            )
            
            
            (5,887
            )$
            7,331
            
            
            $
            7,331





Marketable
securities consisted of the following investments which have been previously
written down to a carrying value of zero:





•
            25,000
      shares of Capitol Silver Mines, Inc., a development-stage
      company


•
            31,151
      shares of Carson Industries Corporation, which is currently involved in
      oil and gas exploration





NOTE
4 – PROPERTY PURCHASE OPTION





On June
19, 2006, the Company entered into an agreement with Diagnos, Inc., (Diagnos)
obtaining an exclusive option to acquire a 100% interest in two prospective gold
properties located in the Abitibi region of Québec, Canada.  The
properties consist of 46 claims covering approximately 6,500 acres.





37





The
Company will acquire a 100% interest in the properties by paying Diagnos a sum
of $70,000 and by conducting an initial exploration program comprised of at
least three drill holes on each property.  During the year ended
December 31, 2006, the Company paid the $70,000 fee, which is shown as property
purchase option on the consolidated balance sheets.  Upon completion
of the initial drilling programs, the Company will have the option to select up
to an additional seven properties in which it may acquire a 100% interest by
paying Diagnos a sum of $40,000 and completing three-hole exploration drilling
programs for each property.  The option will expire if the initial two
properties are not drilled within 48 months from the effective date of the
agreement.





For each
economic discovery made on any of the acquired properties, the Company will pay
Diagnos a bonus of $500,000.  The Company will also grant Diagnos a 2%
Net Smelter Royalty (NSR) for economic discoveries made on the initial or
additional properties, but will retain the option to acquire 1% of the NSR upon
payment of $1 million to Diagnos within five (5) years of making the economic
discovery.  An economic discovery is defined in the agreement as being
the production of a positive feasibility study for a given project in compliance
with Canada’s National Instrument 43-101.





NOTE
5 – COMMITMENTS





Santa
Cruz, Argentina





On March
27, 2007, the Company, through its Argentine subsidiary, CCSA, signed a
definitive lease purchase agreement with FK Minera S.A. to acquire a 100%
interest in the Bajo Pobré gold property located in Santa Cruz Province,
Argentina.  The Company may earn up to a 100% equity interest in the
Bajo Pobré property by making cash payments and exploration expenditures over a
five-year earn-in period.  The required expenditures and ownership
levels upon meeting those requirements are:




Payment
      to
              
              
              ExplorationYear of the Agreement
              
              FK Minera S.A.
              
              
              Expenditures
              
              
              OwnershipFirst
      year
              
              $
              50,000
              
              
              $
              250,000
              
              
              
              0
              %Second
      year
              
              
              50,000
              
              
              
              250,000
              
              
              
              0Third
      year
              
              
              75,000
              
              
              
              0
              
              
              
              51Fourth
      year
              
              
              75,000
              
              
              
              0
              
              
              
              60Fifth
      year
              
              
              75,000
              
              
              
              0
              
              
              
              100


After the
fifth year, the Company is obligated to pay FK Minera S.A. the greater of a 1%
net smelter royalty (“NSR”) on commercial production or $100,000 per
year.  The Company has the option to purchase the NSR for a lump-sum
payment of $1,000,000 less the sum of all royalty payments made to FK Minera
S.A. to that point.





Also in
March 2007, the Company, through its Argentine subsidiary, CCSA., was the
successful bidder for the exploration and development rights to the La Josefina
Project from Fomento Minero de Santa Cruz Sociedad del Estado (Fomicruz
S.E.).  Fomicruz S.E. is a company that is owned by the government of
the Santa Cruz province in Argentina.  The bid included exploration
expenditures of $6 million over a 4-year period. On July 24, 2007 the CCSA
entered into an agreement with Formicruz S.E. pursuant to which CCSA agreed to
invest a minimum of $6 million in exploration and development expenditures over
a four year period, including $1.5 million before July 2008. The agreement
delineates that in the event that a positive feasibility study is completed on
the La Josefina property that a joint venture company would be formed. The
Company would own 91% of the joint venture company and Formicruz S.E. would own
the remaining 9%.





During
the quarter ended March 31, 2007, the Company was required to purchase a
performance bond as a condition of the exploration agreement on our La Josefina
property in Argentina.  The bond was originally purchased for
$251,613.  As of December 31, 2007, the value of the bond decreased to
$214,762.  The decline in value is presented on our balance sheet as
Other Comprehensive Income. The bond has a face value of $600,000, or 10% of our
required investment under the terms of the agreement.





Pershing
County, Nevada





The
Company has a lease for the Dun Glen property with an option to purchase a 100%
interest in the claims.  Lease payments began in 2006 and are
considered advance royalty payments.  The term of the lease is 10
years, renewable at the Company’s option for an additional ten
years.  The Company paid $37,500 in advance royalty payments during
the quarter ended March 31, 2007, for this property.  Future annual
advance royalty payments begin at $45,000 per year in 2008 and escalate to
$72,500 per year at the end of the fifth year of the lease and for every year
beyond that, until the lease is terminated or the purchase option is exercised.
The Company has also agreed to keep the claims in good standing until the lease
is terminated or the purchase option is exercised.





38





Quebec,
Canada





During
2006, the Company entered into a definitive Option Agreement for the acquisition
of a 100% interest in two properties in the Abitibi region of
Quebec.  Pursuant to the terms of the Option Agreement, the Company
paid $70,000 ($35,000 for each of the two properties) in cash to the property
owner.  The Company has also agreed to explore these properties and
drill at least three exploration drill holes in each.  The payments
and drilling of exploration drill holes will earn the Company a 100% interest in
each of these properties and give the Company the option to acquire additional
properties from the same property owner at similar terms.  The Company
has also agreed to keep the claims in good standing until the agreement is
terminated.





Facility
Leases





The
Company has lease commitments on office space and storage space in Liberty Lake,
Washington. The total annual lease obligation for this facility is $54,792 (not
including common area maintenance charges).





NOTE
6 – INCOME TAXES





The
Company accounts for income taxes and the related accounts under the liability
method.  Deferred tax assets and liabilities are determined based on
the difference between the financial statement carrying amounts and the income
tax basis of assets and liabilities.  A valuation allowance is applied
against any net deferred tax asset if, based on available evidence, it is more
likely than not that some or all of the deferred tax assets will not be
realized.





At
December 31, 2007 and 2006 the Company had gross deferred tax assets calculated
at the expected rate of 34% of approximately $1,512,000 and $554,000,
respectively, principally arising from net operating loss carryforwards for
income tax purposes.  As management of the Company cannot determine
that it is more likely than not that the Company will realize the benefit of the
deferred tax asset, a valuation allowance of $1,512,000 and $554,000 has been
established at December 31, 2007 and 2006, respectively.





The
significant components of the Company’s net deferred tax asset (liabilities) at
December 31, 2007 and 2006 are as follows:





2007
            
            
            2006Net
      operating loss carryforwards
            
            $
            4,447,265
            
            
            $
            1,630,000Gross
      deferred tax assets (liabilities):Net
      Operating Loss
            
            $
            1,512,000
            
            
            $
            554,000Valuation
      Allowance
            
            
            (1,512,000
            )
            
            
            (554,000
            )Net
      Deferred tax asset (liability)
            
            $
            -
            
            
            $
            -





At
December 31, 2007 and 2006, the Company has net operating loss carryforwards of
approximately $4,447,000 and $1,630,000 respectively, which will expire in the
years 2020 through 2021.  The net change in the allowance account was
an increase of $958,000.





NOTE
7 – DERIVATE INSTRUMENTS





The
Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 133, “Accounting for Derivative Instruments and Hedging
Activities,” (hereinafter “SFAS No. 133”) as amended by SFAS No. 137,
“Accounting for Derivative Instruments and Hedging Activities – Deferral of the
Effective Date of FASB No. 133,” and SFAS No. 138, “Accounting for Certain
Derivative Instruments and Certain Hedging Activities” and SFAS No. 149,
“Amendment of Statement 133 on Derivative Instruments and Hedging Activities.”
These statements establish accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. They require that an entity recognize all
derivatives as either assets or liabilities in the consolidated balance sheet
and measure those instruments at fair value. In February 2006, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 155, “Accounting for Certain Hybrid Financial Instruments, an Amendment of
FASB Standards No. 133 and 140.” See Recent Accounting
Pronouncements.





If
certain conditions are met, a derivative may be specifically designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk
or (ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change.





39





Historically,
the Company has not entered into derivative contracts to hedge existing
risks.





The
Company issued a convertible note in 2007 which did not give rise to derivative
instruments.





NOTE
8 – SALES OF COMMON STOCK AND WARRANTS





During
the year ended December 31, 2007, the Company issued 600,000 units consisting of
one share and one warrant pursuant to the conversion of a portion of a
convertible note. Each common share had a par value of $0.001 and an issuance
price of $0.25. Each warrant has an exercise price of $0.40 per common share.
The expiration date of each warrant is five (5) years from the date of
issuance.





During
the year ended December 31, 2007, the Company issued 150,000 shares for
compensation to the Company’s Chief Operating Officer. The shares had a fair
market value of $75,000.





During
the year ended December 31, 2006, 15,444,132 warrants were exercised and, in
accordance with the terms of the warrants, resulted in the issuance of
15,444,132 shares of the Company’s common stock.  The warrants were
exercised at a price of $0.065 per share.  The Company received gross
proceeds of $1,003,869 from the exercise of the warrants.





Also
during the year ended December 31, 2006, the Company entered into and completed
an agreement to sell 300,000 units to an entity controlled by the Company’s
Chairman and CEO.  Each unit was priced at $0.43 and consisted of one
share of the Company’s $0.001 par value common stock and one warrant to purchase
one share of the Company’s $0.001 par value common stock at a price of $0.60 for
a period of two years.  The Company received proceeds of $129,000
related to the transaction.  As of December 31, 2006, none of these
warrants have been exercised, leaving 300,000 warrants outstanding at December
31, 2007.





NOTE
9 – BRIDGE LOAN





As of
January 31, 2007, HuntMountain Resources obtained an unsecured loan commitment
for multiple advances up to $2,000,000 from Hunt Family Limited Partnership
(“HFLP”) , an entity controlled by Tim Hunt, the Company’s Chairman and CEO, for
the specific purpose of providing working capital, surety, bonding and/or
indemnification purposes for HuntMountain Resources and its
subsidiaries.





In August
2007, the Company obtained an amended, unsecured loan commitment for multiple
advances up to $5,000,000 from HFLP, effective August 1, 2007, to amend the
previous bridge financing note that was effective on January 31, 2007. The
simple interest rate on the new bridge financing note was eleven percent (11%)
per annum. The aggregate amount of unpaid advances and accrued and unpaid
interest under the amended note was convertible into equity securities of the
Company at the same price and terms as securities sold by the Company to
investors in its next equity financing.  The amended note amends and
restates, and does not evidence payment of, the unsecured loan for multiple
advances effective January 31, 2007.





In
October 2007, the Company obtained an amended and restated convertible unsecured
note for multiple advances up to $5,000,000 (“the October Note”) from HFLP to
provide working capital for the Company and its subsidiaries.  The
amended note was effective on October 23, 2007.  The amended and
restated convertible unsecured note was completed to replace the previous bridge
financing note that was effective August 1, 2007. The simple interest rate of
the October Note is eleven percent (11%) per annum. The aggregate amount of
unpaid advances and accrued and unpaid interest under the amended note is
convertible, in whole or in part, at the option of the holder into units of the
Company’s common stock. Each unit consists of one common share and one common
share purchase warrant at a conversion price of $0.25 per unit. The exercise
price of the warrants issued pursuant to such conversion is set at $0.40 to
acquire one new common share of the Company. The warrants to be issued pursuant
to the conversion of the October note are exercisable for a period of five years
from the conversion date.





In
November 2007 and December 2007, the Company issued 600,000 units pursuant to
the conversion of a portion of the October Note.





In
accordance with EITF 00-27, the Company recognized the beneficial conversion
feature associated with the notes convertibility into shares and warrants. The
total value of warrants was determined using the Black Scholes Option Price
Calculation. In employing this model, we used the actual three month T-Bill rate
on the advance dates for the risk-free rate. Similarly, the actual share price
on advance dates was used in the calculation. We assumed expected volatility of
82%, no dividends and a five year horizon in all Black Scholes Option Price
calculations. The total value of warrants was $5,054,863 and the total value of
shares was $4,153,009.





40





Following
the guidance provided by EITF 00-27 the Company allocated proceeds first to the
warrants issuable upon conversion of the note. The value of the warrants was
recorded on the balance sheet as debt discounts and increases to shareholder’s
equity. The debt discounts are being amortized over the remaining life of the
convertible note. The value of warrants in excess of the actual debt advance
amounts were expensed as financing fees.





Once the
Company allocated proceeds of convertible note advances to the warrant values,
the embedded conversion feature of shares issuable on conversion of the notes
was recognized. All amounts relating to the share values were expensed as
financing fees.





NOTE
10 – STOCK OPTION PLAN





The
Company’s 2005 Stock Plan permits the granting of up to 3,000,000 non-qualified
stock options, incentive stock options, and restricted shares of common stock to
employees, directors, and consultants.  As of December 31, 2007, there
were 2,340,000 stock options granted to employees and consultants, of which
1,880,000 are vested.  These options were granted to employees and
consultants to the Company.





For
purposes of calculating the fair value of options, volatility for the two years
presented is based on the historical volatility of the Company’s common stock
over its public trading life.  The Company currently does not foresee
the payment of dividends in the near term.  The fair value for these
options was estimated at the date of grant using the Black-Scholes
option-pricing model with the following assumptions:





Years
      EndedDecember 31,2007
            
            
            2006Weighted
      average risk free rate:
            
            
            3.58
            %
            
            
            4.89
            %Weighted
      average volatility:
            
            
            76.17
            %
            
            
            75.00
            %Expected
      dividend yield:
            
            
            0.00
            %
            
            
            0.00
            %Weighted
      average life (in years):
            
            
            2.45
            
            
            
            2.00





Expenses
of $52,600 for stock options issued to employees and $131,500 for stock options
issued to non-employees, including consultants and directors, were recorded in
2007.  This compares to expenses of $67,000 for stock options issued
to employees and $220,850 for stock options issued to non-employees in
2006.  Expenses for the remaining options will be recorded as they
vest in 2008.  The following table summarizes the terms of the options
outstanding at December 31, 2007:





WeightedAverage
              
              
              
              RemainingExercise
              
              Exercise
              
              Number
      of
              
              Contracual
              
              NumberPrices
              
              Price
              
              Options
              
              Life (in years)
              
              Excercisable$0.20
              
              $0.20
              
              90,000
              
              4.14
              
              90,000$0.25
              
              $0.25
              
              700,000
              
              3.54
              
              650,000$0.30
              
              $0.30
              
              100,000
              
              3.84
              
              100,000$0.34
              
              $0.34
              
              10,000
              
              2.58
              
              10,000$0.37
              
              $0.37
              
              10,000
              
              2.26
              
              10,000$0.38
              
              $0.38
              
              370,000
              
              4.86
              
              210,000$0.40
              
              $0.40
              
              150,000
              
              4.87
              
              50,000$0.45
              
              $0.45
              
              650,000
              
              4.5
              
              550,000$0.55
              
              $0.55
              
              5,000
              
              3.5
              
              5,000$0.60
              
              $0.60
              
              55,000
              
              4.9
              
              5,000$0.63
              
              $0.63
              
              200,000
              
              4.11
              
              200,000$0.38
              
              2,340,000
              
              4.21
              
              1,880,000





41





The
following summarizes option activity for the years presented:





Shares
            
            
            Exercise
      PriceBalance,
      at January 1, 2006
            
            
            190,000
            
            
            $
            0.26Issued
            
            
            1,190,000
            
            
            $
            0.35Exercised
            
            
            (18,153
            )
            
            $
            0.26Cancelled
            
            
            (5,000
            )
            
            $
            0.28Forfeited
      (cashless purchase)
            
            
            (11,847
            )
            
            $
            0.26Balance
      at December 31, 2006
            
            
            1,345,000
            
            
            $
            0.35Balance
      at January 1, 2007
            
            
            1,345,000
            
            
            $
            0.35Issued
            
            
            1,020,000
            
            
            $
            0.43Exercised
            
            
            0Cancelled
            
            
            (25,000
            )
            
            $
            0.58Forfeited
      (cashless purchase)
            
            
            0
            
            
            $
            0.00Balance
      at December 31, 2007
            
            
            2,340,000
            
            
            $
            0.35





Options
outstanding at December 31, 2007, have a remaining contractual life of
approximately 4 years.





NOTE
11 – LEASES





The
Company has lease commitments on two mineral properties and office and storage
space in Liberty Lake, Washington.  The leased mineral properties are
the Dun Glen property in Nevada and the Bajo Pobré property in the Santa Cruz
province of Argentina.  The annual lease obligations are:





OfficeYear
            
            Facility
            
            
            Dun Glen
            
            
            Bajo Pobre
            
            
            Total2008
            
            $
            54,792
            
            
            $
            45,000
            
            
            $
            50,000
            
            
            $
            149,7922009
            
            
            54,792
            
            
            
            52,500
            
            
            
            75,000
            
            
            
            182,2922010
            
            
            54,792
            
            
            
            60,000
            
            
            
            75,000
            
            
            
            189,7922011
            
            
            54,792
            
            
            
            72,500
            
            
            
            75,000
            
            
            
            202,2922012
            
            
            54,792
            
            
            
            72,500
            
            
            
            100,000
            
            
            
            127,292





NOTE
12 – LA JOSEFINA ESTANCIA PURCHASE





Further
to an agreement dated December 12, 2007 and finalized via perfection of title on
April 4, 2008 the Company acquired 90 square kilometers of land in Santa Cruz
province, Argentina. The purchase price for this property was $710,000. Known as
the La Josefina estancia, the purpose of the land purchase was to provide a
centralized base of operations in the Company’s core operating
area.





42





NOTE
13 – RELATED PARTY TRANSACTIONS





During
the year ended December 31, 2007 the Company leased office space from Hunt
Family Properties LLC, an entity controlled by the Company’s Chief Executive
Officer and Chairman, Tim Hunt. The Company paid $26,904 in lease payments to
Hunt Family Properties LLC in 2007.





During
the year ended December 31, 2007 the Company paid $73,616 to HuntWood Custom
Cabinets, an entity controlled by the Company’s Chief Executive Officer and
Chairman, Tim Hunt, for management consulting services.





During
the year ended December 31, 2007 the Company paid $17,895 in professional fees
to Workland & Witherspoon, PLLC, a firm in which Greg Lipsker, a shareholder
of the Company and the Company’s Vice-Chairman, was a partner.





At
December 31, 2007 the Company had an employee advance for field exploration
expenses from an officer of Cerro Cazador S.A. of $1,870.





During
the year ended December 31, 2006 the Company paid $33,502 to HuntWood Custom
Cabinets, an entity controlled by the Company’s Chief Executive Officer and
Chairman, Tim Hunt, for management services and employee health
insurance.





During
the year ended December 31, 2006 the Company leased office space from Hunt
Family Properties LLC, an entity controlled by the Company’s Chief Executive
Officer and Chairman, Tim Hunt. The Company paid $26,382 in lease payments to
Hunt Family Properties LLC in 2006.





During
the year ended December 31, 2006 the Company paid $24,449 in professional fees
to Workland & Witherspoon, PLLC, a firm in which Greg Lipsker, a shareholder
of the Company and the Company’s Vice-Chairman, was a partner.





During
the year ended December 31, 2006 the Company paid $7,320 in consulting expenses
to directors of the Company.





At
December 31, 2007 the Company had an employee advance for field exploration
expenses from an officer of Cerro Cazador S.A. of $348.





Additional
related party transactions are included as part of Note 9 and Note
10.





NOTE
14 – SUBSEQUENT EVENTS





Note
Conversion





Subsequent
to December 31, 2007 holders of the October Note converted principal amounts of
$103,000 into 412,000 units comprised on one (1) common share and one (1)
warrant per unit. The conversion price was $0.25 per unit. The warrants have an
exercise price of $0.40 per share.  The expiration date of each
warrant is five (5) years from the date of issuance.





Bridge
Financing





Subsequent
to December 31, 2007 the Company drew an additional $1,103,000 on the October
Note. The balance owing on the note was $4,747,000 as of the date of this
report. The Company has accrued $186,614 of interest payable pertaining to the
October Note.





Loan
From Hunt Family Limited Partnership





On March 11, 2008 HuntMountain
Resources obtained an unsecured loan of $500,000 from Hunt Family Limited
Partnership (“HFLP”) , an entity controlled by Tim Hunt, the Company’s Chairman
and CEO, for the specific purpose of providing working capital, surety, bonding
and/or indemnification purposes for HuntMountain Resources and its subsidiaries.
The loan bears interest at a rate of eight percent (8%) per annum and does not
have specific repayment terms.





ITEM
9.          CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





On
November 15, 2007, the Board of Directors of the Company appointed Williams
& Webster, P.S., Certified Public Accountants and Business Consultants, of
601 W. Riverside Avenue, Suite 1940, Spokane, WA 99201 (“Williams &
Webster”) as the Company’s new independent registered public accounting firm
following the resignation of LeMaster & Daniels P.L.L.C., as disclosed in
the Company’s Form 8-K filed on December 24, 2007.





43





Prior to
its appointment as independent accountants, the Company did not consult Williams
& Webster on any of the matters referenced in Item 304(a)(2) of Regulation
S-B.





ITEM
      9A.
            CONTROLS
      AND PROCEDURES





EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES





In
connection with the preparation of this annual report on Form 10-K, an
evaluation was carried out by the Company’s management, with the participation
of the Chief Executive Officer and the Chief Financial Officer, of the
effectiveness of the Company’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934
(“Exchange Act”)) as of December 31, 2007.  Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms and that such information is accumulated and communicated to management,
including the Chief Executive Officer and the Chief Financial Officer, to allow
timely decisions regarding required disclosures.





Based on
that evaluation, the Company’s management concluded, as of the end of the period
covered by this report, that the Company’s disclosure controls and procedures
were effective in recording, processing, summarizing, and reporting information
required to be disclosed, within the time periods specified in the Securities
and Exchange Commission’s rules and forms.





MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting.  The Company’s internal control over
financial reporting is a process, under the supervision of the Chief Executive
Officer and the Chief Financial Officer, designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of the Company’s financial statements for external purposes in accordance with
United States generally accepted accounting principles
(GAAP).  Internal control over financial reporting 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 the Company’s
      assets;





·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of the financial statements in accordance with generally
      accepted accounting principles, and that receipts and expenditures are
      being made only in accordance with authorizations of management and the
      Board of Directors; and





·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use, or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, 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.





The
Company’s management conducted an assessment of the effectiveness of the
Company’s internal control over financial reporting as of December 31, 2007,
based on criteria established in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).  As a result of this assessment,
management identified material weaknesses in internal control over financial
reporting.





A
material weakness is a control deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the Company’s annual or interim
financial statements will not be prevented or detected on a timely
basis.





The
material weakness identified is described below:





Due to
management turnover in 2007 the Company did not implement and document an
appropriate system of internal control over financial reporting prior to
December 31, 2007. Specific deficiencies are as follows:





·
            The
      Company’s activity level internal controls are not specifically linked to
      relevant financial statement
assertions;





44





·
            The
      Company has not documented internal controls pertaining to period end
      closing entries and procedures;





·
            The
      Company has not developed specific internal controls to ensure that
      disbursements are allocated to appropriate
  periods;





As a
result of the material weaknesses in internal control over financial reporting
described above, HuntMountain Resources Ltd.’s management has concluded that, as
of December 31, 2007, the Company’s internal control over financial reporting
was not effective based on the criteria in Internal Control – Integrated
Framework issued by the COSO.





This
annual report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting.  We were not required to have, nor have we, engaged our
independent registered public accounting firm to perform an audit of internal
control over financial reporting pursuant to the rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report.





Remediation
of material weakness in internal control over financial reporting





In order
to remediate the material weaknesses identified in Management’s Report on
Internal Control Over Financial Reporting, we have taken the following actions
subsequent to December 31, 2007:





·
            The
      Company is evaluating services of outside consultants to assist in
      developing and implementing a suitable system of internal controls over
      financial reporting;





·
            The
      Company is currently in the process of developing a comprehensive
      accounting manual that will include comprehensive internal control
      procedures.





CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING





As of the
end of the period covered by this report, there have been no changes in internal
control over financial reporting (as defined in Rule 13a-15(f) of the Exchange
Act) during the quarter ended December 31, 2007, that materially affected, or
are reasonably likely to materially affect, the Company’s internal control over
financial reporting.





ITEM
      9B.
            OTHER
      INFORMATION. Not Applicable





PART
III





ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.





Directors and Executive
Officers





The
following information is provided with respect to each executive officer and
director of the Company:





Name
      (age)
            Position
            
            Length of
      ServiceTim
      Hunt (55)
            Chairman,
      and Director
            
            2005Gregory
      B. Lipsker (57)
            Director
            
            2007*William
      R. Green (69)
            Director
            
            1993*Eberhard
      A. Schmidt (70)
            Director
            
            2005Alastair
      H. Summers (71)
            Director
            
            2006Randal
      L. Hardy (46)
            Director
            
            2005**Michael
      M. Mastor (49)
            Director
            
            2007Matthew
      J. Hughes (47)
            Executive
      Vice-President of Exploration & Chief Operating
Officer
            
            2005Danilo
      Silva (45)
            President
      Cerro Cazador, S.A.
            
            2006Bryn
      Harman (38)
            Chief
      Financial Officer
            
            2007


_______________________________


*Previously
held executive officer and director positions with the predecessor company,
Metaline Mining & Leasing Company.


**Previously
served as President and Chief Financial Officer of the Company.





45





Tim Hunt, Chairman
and Chief Executive Officer, is a general partner of HFLP and is the founder and
president of Spokane, Washington-based T.R.A. Industries, Inc., dba Huntwood
Industries, one of the largest building products manufacturers in the Western
United States. Mr. Hunt has led the development of Huntwood Industries over the
past 20 years – taking the business from a start-up venture to a significant
middle-market enterprise. During his business career, Mr. Hunt has been engaged
in a variety of business start-up ventures both related and unrelated to
Huntwood Industries. Mr. Hunt had also previously served as a member of the
board of directors at State National Bank; a community based financial
institution headquartered in Eastern Washington. Mr. Hunt also spent two years
as an investment banker, specializing in the mining industry, with National
Securities.





William R. Green,
P.E., Ph.D. is a mining engineer and geologist, and was a professor of mining
engineering at the University of Idaho from 1965 to 1983. He has been actively
involved in the mining industry since 1962, working as a consultant to financial
managers and various US and Canadian public mining companies. He was a
co-founder, and served as an officer and director, of both Bull Run Gold Mines
and Yamana Resources. He was the President, CEO and Chairman of Mines
Management, Inc., a U.S. public company from 1964 until 2003.





Gregory B. Lipsker,
has been a director of the Company since August, 2007. Mr. Lipsker was a partner
is a Spokane, Washington law firm from 1995 until 2008. Mr. Lipsker is now
employed on a part-time basis as the Company’s General Counsel. Mr Lipsker is
graduated from Gonzaga University and the Georgetown University Law
Center.





Eberhard A. Schmidt,
Ph.D. has more than 35 years of experience in exploring, evaluating and
developing precious and base metal properties in the western United States and
Mexico. He managed regional exploration offices for Cyprus Mines, Amoco Minerals
and Meridian Minerals in Spokane and for Minera Hecla in Mexico. Dr. Schmidt
received his Ph.D. in Structural and Economic Geology from the University of
Arizona and is a past president of the Northwest Mining
Association.





Alastair H. Summers
has more than 45 years of experience in mine development and production in North
and South America, including over ten years as an executive with Hecla Mining
Company. He was Vice President and General Manager for Minera Hecla de Mexico
responsible for the design, construction, operation and reclamation of the La
Choya open pit/heap leach gold mine. Mr. Summers also served as President and
General Manager of Minera Hecla Venezolana initiating improvements to Hecla’s La
Camorra operation which resulted in production increases from 85,000 to 250,000
ounces of gold per year. Mr. Summers’ career includes the development, design,
and operation of several successful mines for The Bunker Hill Company, Western
Nuclear, and American Mine Services. He is registered as a Professional
Geologist in Idaho and Professional Engineer in Colorado.





Randal L. Hardy,
serves as President and CEO Timberline Resources Corporation, a public drilling
and precious metals exploration venture based in Coeur d’Alene, ID. Mr. Hardy
was appointed as a Director in August 2007. Mr. Hardy was appointed to this
position after previously holding the position of President of the Company since
September 2006, and immediately prior to this time servicing as its Vice
President and Chief Financial Officer. Mr. Hardy has over 20 years of experience
in financial and operational management. He is the former President and CEO of
Sunshine Minting, Inc., a precious metal custom minting and manufacturing firm.
During his 8-year tenure as the Company’s President, it grew from 25 employees
to over 125. Prior to this, Mr. Hardy served as Treasurer of the NYSE-listed
Sunshine Mining and Refining Company for over 6 years. He graduated Magna Cum
Laude from Boise State University with a BBA in Finance.





Michael M. Mastor,
was appointed a Director in September 2007. From July 1998 to present, he has
been a licensed financial advisor and franchise owner with Ameriprise Financial.
Prior to his work at Ameriprise, he served as Mine Manager for Newmont Gold
Company. He received his B.S. in Mining Engineering from the Colorado School of
Mines.





Matthew J. Hughes,
Executive Vice President of Exploration and Chief Operating Officer, is a
geologist with seventeen years of experience in the discovery, exploration and
mining of precious metal projects in the United States, Argentina, China, Brazil
and Uzbekistan. Mr. Hughes was appointed as the Executive Vice President of
Exploration and Chief Operating Officer in August 2007 after having served as
Vice President of Exploration since December 2005. He has been directly
responsible for the discovery of numerous precious and base metal occurrences,
including the producing Mina Martha high-grade silver lode in Santa Cruz,
Argentina. He has worked as the Chief Geologist for Mundoro Mining, Inc. where
he led the exploration and development of the nine million ounce Maoling gold
deposit, thought to be the largest undeveloped gold deposit in China. He served
as Senior Exploration Geologist and consultant for Yamana Resources, Minas
Buenaventura, and Silver Standard Resources. Mr. Hughes has been the Vice
President of Exploration for Platero Resources, Chief Mine Geologist for Kinross
Candelaria Mining Co., and Exploration Geologist for NERCO Exploration and Atlas
Precious Metals. He received his Bachelor of Science degree in geology from the
University of Oregon.





46





Danilo Silva, General
Manager of South American Operations, also serves as the President of our
wholly-owned Argentine subsidiary, Cerro Cazador, S.A. He has over 18 years of
experience in the natural resources industry, including over 11 years as a
geologist in base and precious metal mining exploration. Mr. Silva has served as
Senior Geologist and Project Manager for Yamana Resources and Compania Minera
Polimet, as Senior Geologist for Buenaventura, and as General Manager for
Platero Resources. While serving in these positions, he discovered numerous
viable gold and silver targets. He has led successful exploration and drill
programs and has managed the advancement of many projects, including the
discovery and development of the Mina Martha high-grade silver mine in Santa
Cruz province. Mr. Silva has served as a consulting geologist for several
companies, including Placer Dome and Hidefield Gold. Mr. Silva holds a degree in
Geological Science from the National University at Bahia Blanca in
Argentina.





Bryn Harman, CFA,
Chief Financial Officer. Mr. Harman has been our Chief Financial Officer since
November, 2007. Prior to joining us Mr. Harman had been the Vice President and
Director of Research for ICM Asset Management since 2002. From 1999 until 2002
Mr. Harman was a Senior Equity Analyst for RedChip Companies. Mr. Harman is a
Chartered Financial Analyst and is graduated from the University of Saskatchewan
with a Bachelor of Commerce (finance) degree.





Committees
of the Board of Directors





Audit
Committee





The Audit
Committee is responsible for monitoring the integrity of the Company's financial
reporting standards and practices and its financial statements, overseeing the
Company's compliance with ethics and compliance policies and legal and
regulatory requirements, and selecting, compensating, overseeing, and evaluating
the Company's independent auditors.





William Green,
Randy Hardy and Mike Mastor serve as members of the Audit
Committee. William Green and Mike Mastor are independent as defined by
NASDAQ marketplace rules 4200(a)(15) and 4350(d)(2). In forming our Board of
Directors, we sought individuals with the ability to guide our operations based
on their business experience, both past and present, and their education. Our
business model is not complex and our accounting issues are straightforward.
Responsibility for our operations is centralized within management. We rely on
the assistance of others to help us with the preparation of our financial
information. We recognize that having a person who possesses all of the
attributes of an independent audit committee financial expert would be a
valuable addition to our Board of Directors. However, we are not, at this time,
able to compensate such a person, and therefore, may find it difficult to
attract such a candidate.





The Board
of Directors has adopted a policy requiring that the Audit Committee
pre-approve the audit and non-audit services performed by the independent
auditor in order to assure that the provision of such services does not impair
the auditor's independence.





Compliance with Section
16(a) of the Exchange Act. Our officers, directors and persons owning
more than 10% of our common stock are obligated to file reports of ownership and
changes in ownership with the Securities and Exchange Commission under Section
16(a) of the Securities Exchange Act of 1934. 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 our fiscal year ended
December 31, 2007 our directors, executive officers and persons who own more
than 10% of our common stock complied with all Section 16(a) filing requirements
with the exception of the following: Ron Schutz (3 Reports, 3 Transactions) Tim
Hunt (18 Reports, 18 Transactions), Eberhard Schmidt (1 Report, 1 Transaction),
Hunt Family Limited Partnership (1 Report, 1 Transaction), Gregory B. Lipsker (1
Report, 1 Transaction), Michael Mastor (1 Report, 1 Transaction), and Randal
Hardy  (2 Reports, 2 Transactions)





ITEM
      11.
            EXECUTIVE
      COMPENSATION





This
information is incorporated by reference to our Information Statement to be
filed on Form 14C.





ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





The
following table sets forth information as of December 31, 2007 regarding any
person known to the Company to be the beneficial owner of more than five percent
of any class of the Company’s voting securities as well as the names and
shareholdings of each director and executive officer of the Company, and the
shareholdings of all directors and executive officers as a group.





47





Security Ownership of
Management





The
following table sets out as of  December 31, 2007, the names and
shareholdings of each director and executive officer of the Company, and the
shareholdings of all directors and executive officers as a group. At such date,
the number of issued and outstanding shares of common stock of the Company was
33,016,285 and there were an additional 1,660,000 shares that could potentially
be issued within the next sixty days upon the exercise of vested stock options
and warrants.








Amount and Nature of
              Beneficial Ownership
              Name of Person or Group
            
            (all direct unless otherwise
      noted)
            
            
            % ofTim Hunt – Chairman,
      Chief Executive Officer & Director (1)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            24,875,250
            
            
            
            75.80
            %(8))William R. Green –
      Director(2)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            1,046,000
            
            
            
            3.22
            %(8)Gregory B. Lipsker –
      Director(3)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            730,000
            
            
            
            2.25
            %(8)Randal L. Hardy –
      Director(4)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            225,000
            
            
            
            0.69
            %(8)Eberhard A. Schmidt –
      Director(2)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            155,000
            
            
            
            0.48
            %(8)Alastair H. Summers –
      Director(2)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            150,000
            
            
            
            0.46
            %(8)Michael
      Mastor
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            150,000
            
            
            
            0.46
            %(8)Matthew Hughes – EVP
      & COO(5)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            165,000
            
            
            
            0.59
            %(8)Bryn Harman– Chief
      Financial Officer(6)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            50,000
            
            
            
            0.46
            %(8)Danilo Silva – President
      of Cerro Cazador, S.A.(7)
              1611
      N. Molter Road, Ste 201
              Liberty
      Lake, WA 99019
            
            
            100,000
            
            
            
            0.31
            %(8)Total
      Management Group
            
            
            27,646,250
            *
            
            
            81.0
            %(9)*All
      executive officers and directors as a group (10 persons)


_______________________________


(1)
            Includes
      23,525,275 shares owned through the Hunt Family Limited Partnership
      (HFLP), 508,700 shares owned jointly owned with Resa Hunt, Tim’s wife,
      291,275 shares owned directly by Tim Hunt together 250,000 shares that
      could be issued upon exercise of options within 60 days, and 300,000
      shares that could be issued through warrant conversion from a prior
      private equity sale. Tim Hunt personally exercises control powers over
      HFLP.


(2)
            includes
      150,000 shares that could be issued upon exercise of options within 60
      days.





48





(3)
            includes
      250,000 shares that could be issued upon exercise of options within 60
      6ays.


(4)
            includes
      150,000 shares that could be issued upon exercise of options within 60
      days.


(5)
            includes
      100,000 shares that could be issued upon exercise of options within 60
      days.


(6)
            includes
      60,000 shares that could be issued upon exercise of options within 60
      days.


(7)
            includes
      100,000 shares that could be issued upon exercise of options within 60
      days.


(8)
            percentage
      calculations noted above assumes that only specific identified exercised
      its options and/or warrants.


(9)
            percentage
      calculation is based upon assumes that all executive officers and
      directors exercise options and/or
warrants.





There are
no arrangements known to the Company, the operation of which may at a subsequent
time result in the change of control of the Company.





ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE




This
information in incorporated by reference from Notes 8, 9 and 12 to the Company’s
Audited Financial Statements As set
forth in Item 8 of this Form 10K.





ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES





Audit
Fees





The
aggregate fees billed for professional services rendered by the Company’s
principal accountant for the audit of the Company’s annual financial statements
for the fiscal years ended December 31, 2007 and 2006 and for services rendered
by the Company’s principal accountant relating to the preparation of quarterly
financial statements for inclusion in the Company’s quarterly reports on Form
10QSB were $45,692 and $25,346 respectively.





Audit
Related Fees





The
Company incurred no fees during the last two fiscal years for assurance and
related services by the Company’s principal accountant that were reasonably
related to the performance of the audit of the Company’s financial
statements.





Tax
Fees





The
Company incurred fees totaling $3,291 and $2,173 during the fiscal years ended
December 31, 2007 and 2006, respectively, for professional services rendered by
the Company’s principal accountant for tax compliance, tax advice and tax
planning.





All
Other Fees





The
Company incurred no fees during the fiscal years ended December 31, 2007and 2006
respectively, for services rendered by the Company’s principal accountant
relating all other services.





ITEM
      15.
            EXHIBITS





(a) The
following documents are filed as part of the report:





1.
Financial Statements





*  Independent
Auditors' Reports


*  Balance
Sheets at December 31, 2007 and 2006


Statements
of Income (Loss)


for
the years ended December 31, 2007 and 2006


*  Statements
of Stockholders' Equity


for
the years ended December 31, 2007 and  2006


*  Statements
of Cash Flows


for
the years ending December 31, 2007 and 2006


*  Notes
to Financial Statements





49





2.
Exhibits required by Item 601 (1)





(3)(i)
            Articles
      of Incorporation (2)


(3)(ii)
            Bylaws
      (2)





(10)
            Material
      contracts  (2).





(13)
            Annual
      or quarterly reports, Form 10-Q(2)


(14)
            Code
      of Ethics





(21)
            Subsidiaries
      of the registrant





(31)
            Rule
      13a-14(a)/15d-14(a) Certifications


(31)(i)                      Certification
of Tim Hunt


(31)(ii)
Certification of Bryn Harman


(32)
            Section
      1350 Certifications


(32)(i)                      Certification
of Tim Hunt


(32(ii)
Certification of Bryn Harman


___________________________


(1)           Omitted
Exhibits are not applicable


(2)           Incorporated
by reference to previous filing





50





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.





HUNTMOUNTAIN
      RESOURCES/s/
      Tim HuntBy:Tim
      Hunt, Chief Executive Officer(Principal
      Executive Officer)/s/
      Bryn HarmanBy:Bryn
      Harman, Chief Financial Officer(Principal
      Financial Officer)





In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





/s/
      Tim Hunt4/11/08TIM
      HUNT
            DateDirector/s/
      William R. Green4/11/08WILLIAM
      R. GREEN
            DateDirector/s/
      Eberhard Schmidt4/11/08Eberhard
      Schmidt
            DateDirector/s/
      Alastair Summers4/11/08ALASTAIR
      SUMMERS
            DateDirector/s/
      Gregory B. Lipsker4/11/08GREGORY
      B. LIPSKER
            DateDirector/s/
      Michael Mastor4/11/08MICHAEL
      MASTOR
            DateDirector/s/
      Randal Hardy4/11/08RANDAL
      HARDY
            DateDirector







51