UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D. C. 20549





FORM
10-K





x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31,
2008





Commission
file number 001-01428





HUNTMOUNTAIN
RESOURCES LTD.


(Exact
name of registrant as specified in its charter)





Washington


(State
or other jurisdiction of incorporation or organization)





1611
N. Molter Road


Suite
201


Liberty
Lake, Washington 99019


(Address
of principal executive offices, including zip code.)





(509)
892-5287


(Registrant's
telephone number, including area code)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. oYes Nox





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: oYes Nox





Indicate
by check mark whether the registrant(1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 day. xYesoNo





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.o





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





Large
      Accelerated filer
              o
              
              
              Accelerated
      filer
              oNon-accelerated
      filer
              o
              
              
              Smaller
      reporting company
              x(Do
      not check if a smaller reporting
company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). oYesxNo


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 December 31, 2008:
$1,383,193.













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. (“CCSA”), 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. On November 12, 2008 the Company announced the acquisition of an
additional 100 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 2008, we had 5 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. Bryn Harman.





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.





Item 1A. 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.




There is Substantial Doubt
About Our Ability to Continue as a Going Concern




Our
independent registered public accounting firm has issued an opinion on our
consolidated financial statements that states that the consolidated financial
statements were prepared assuming we will continue as a going concern and
further states that our recurring losses from operations, stockholders’ deficit
and inability to generate sufficient cash flow to sustain our operations raise
substantial doubt about our ability to continue as a going concern.





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 $52,516,445. We had approximately $250,484 in cash and cash
equivalent investments as of the end of 2008.  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. The Company has no mineralized material or defined ore bodies on any
of its exploration 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.





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.





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 and 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.





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.





4





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.





Item
      1B.
            Unresolved
      Staff Comments – None.





5





ITEM
      2.
            DESCRIPTION
      OF PROPERTY




Santa
Cruz Province, Argentina









La
Josefina Property





Overview





In March, 2007
HuntMountain Resources Ltd., through its Argentine subsidiary, CCSA, 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, CCSA 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. CCSA 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 CCSA 10%, 20% or 40%, respectively, of CCSA’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 CCSA purchased the “La Josefina Estancia”, a 90 square kilometer
parcel of land within the La Josefina project area. CCSA 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.





6





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.





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; they are
usually less than 10°. 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





CCSA 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 318,400
Argentine pesos per year (approximately $93,647) 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 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
NNW-SSE 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 Fomicruz 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
Fomicruz 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.





10





Exploration




Between
November of 2007 and December of 2008 CCSA completed a 37,605 meter drilling
program on the La Josefina property. Significant results of this drilling
program, based on all assays received to date with grades over 1 g/t gold, are
as follows:







Hole
                    Zone
                    From
      (m)
                    To
      (m)
                    Length
      (m)
                    Au
      g/t
                    Ag
      g/t
                    Au
      equivalent1
      g/tSSI-D08-167
                    Sinter
                    33
                    34
                    1.00
                    79.6
                    14.2
                    79.64SVN-D08-057
                    Veta
      Amanda
                    141.6
                    142
                    0.40
                    71.1
                    357
                    72.04SVN-D08-078
                    Veta
      Amanda
                    29.6
                    30
                    0.40
                    50.2
                    166
                    50.63SVN-D08-057
                    Veta
      Amanda
                    140.8
                    141.2
                    0.40
                    36
                    499
                    37.31SVN-D08-139
                    Veta
      Sur
                    85.25
                    85.58
                    0.33
                    31.5
                    582
                    33.03





1 Note:
All gold equivalent values are calculated using a ratio of gold price to silver
price. The gold price used in this report was $853.30 per ounce. The silver
price used in this report was $11.18 per ounce.





11




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-136
                  Veta
      Sur
                  32
                  33
                  1.00
                  31.8
                  2.4
                  31.81SVN-D08-082
                  Veta
      Amanda
                  43.36
                  43.84
                  0.48
                  30
                  99.9
                  30.26SVN-D08-125
                  Veta
      Sur
                  150.7
                  151.15
                  0.45
                  25.3
                  1880
                  30.23SVN-D08-134
                  Veta
      Sur
                  100.1
                  100.5
                  0.40
                  24.5
                  875
                  26.79SVN-D08-198
                  Veta
      Norte
                  108
                  108.5
                  0.50
                  24.9
                  508
                  26.23SVN-D08-193
                  Veta
      Norte
                  18.3
                  19.2
                  0.90
                  26.1
                  30.4
                  26.18SVN-D07-004
                  Veta
      Sur
                  41.77
                  42.65
                  0.88
                  19.9
                  2100
                  25.40SVN-D08-118
                  Veta
      Amanda
                  11.25
                  12
                  0.75
                  24.3
                  84.2
                  24.52SVN-D08-078
                  Veta
      Amanda
                  30.4
                  30.8
                  0.40
                  22.4
                  180
                  22.87SVN-D08-198
                  Veta
      Norte
                  
                  
                  
                  21.1
                  419
                  22.20SVN-D08-084
                  Veta
      Amanda
                  168.4
                  169.23
                  0.83
                  21.4
                  245
                  22.04SVN-D08-153
                  Veta
      Sur
                  37.7
                  38.2
                  0.50
                  20.8
                  197
                  21.32SVN-D08-117
                  Veta
      Amanda
                  14.8
                  15.4
                  0.60
                  20.2
                  192
                  20.70SVN-D08-087
                  Veta
      Amanda
                  86.7
                  87.1
                  0.40
                  19.1
                  46.8
                  19.22SVN-D08-091
                  Veta
      Amanda
                  
                  
                  
                  18.7
                  68
                  18.88SVN-D08-198
                  Veta
      Norte
                  43.6
                  44.6
                  1.00
                  18.65
                  1
                  18.65SVN-D07-003
                  Veta
      Amanda
                  124.8
                  125.3
                  0.50
                  17.8
                  303
                  18.59SVN-D07-010
                  Veta
      Amanda
                  86.5
                  87
                  0.50
                  18.3
                  36.6
                  18.40SVN-D08-198
                  Veta
      Norte
                  104.7
                  105.3
                  0.60
                  17.85
                  148
                  18.24SVN-D08-176
                  Veta
      Amanda
                  263.2
                  263.6
                  0.40
                  18.15
                  19
                  18.20SVN-D07-004
                  Veta
      Sur
                  42.65
                  43.3
                  0.65
                  16.55
                  537
                  17.96SVN-D08-089
                  Veta
      Amanda
                  78
                  79
                  1.00
                  17.65
                  55.5
                  17.80SVN-D08-047
                  Veta
      Amanda
                  122.7
                  123.3
                  0.60
                  16.95
                  73.8
                  17.14SVN-D08-080
                  Veta
      Amanda
                  25.65
                  26.05
                  0.40
                  16.9
                  20.4
                  16.95SVN-D08-160
                  Veta
      Sur
                  25.9
                  26.35
                  0.45
                  14.55
                  891
                  16.88SVN-D08-176
                  Veta
      Amanda
                  262.4
                  262.8
                  0.40
                  16.55
                  19.8
                  16.60SVN-D07-010
                  Veta
      Amanda
                  124.4
                  124.85
                  0.45
                  16.15
                  6.4
                  16.17SVN-D08-150
                  Veta
      Sur
                  21.4
                  21.8
                  0.40
                  13.1
                  1160
                  16.14SVN-D08-081
                  Veta
      Amanda
                  155.85
                  156.25
                  0.40
                  15
                  346
                  15.91SVN-D08-101
                  Veta
      Amanda
                  30.3
                  30.95
                  0.65
                  15.55
                  72.7
                  15.74SVN-D08-103
                  Veta
      Amanda
                  19.08
                  19.5
                  0.42
                  14.05
                  578
                  15.56SVN-D07-001
                  Veta
      Amanda
                  81
                  81.5
                  0.50
                  15.25
                  113
                  15.55SVN-D08-098
                  Veta
      Amanda
                  50.56
                  51.18
                  0.62
                  15.3
                  10
                  15.33SVN-D08-102
                  Veta
      Amanda
                  55.5
                  55.85
                  0.35
                  14.8
                  80.4
                  15.01SVN-D08-134
                  Veta
      Sur
                  99.3
                  99.7
                  0.40
                  2.44
                  4720
                  14.81SVN-D08-150
                  Veta
      Sur
                  20.5
                  21
                  0.50
                  14.15
                  209
                  14.70SVN-D08-081
                  Veta
      Amanda
                  155.1
                  155.85
                  0.75
                  13.8
                  295
                  14.57SVN-D08-078
                  Veta
      Amanda
                  30
                  30.4
                  0.40
                  14.1
                  142
                  14.47SSI-D08-074
                  Sinter
                  40.25
                  42
                  1.75
                  14.1
                  4.7
                  14.11SVN-D08-150
                  Veta
      Sur
                  23.65
                  24
                  0.35
                  11.8
                  601
                  13.37SVN-D08-094
                  Veta
      Amanda
                  167.2
                  167.66
                  0.46
                  12.95
                  37.3
                  13.05SVN-D08-046
                  Veta
      Amanda
                  106.5
                  107
                  0.50
                  12.85
                  21
                  12.91SVN-D08-144
                  Veta
      Sur
                  101.05
                  102.35
                  1.30
                  12.25
                  197
                  12.77SVN-D07-003
                  Veta
      Amanda
                  80.5
                  81.15
                  0.65
                  12.65
                  37.7
                  12.75SVN-D08-099
                  Veta
      Amanda
                  54.33
                  54.83
                  0.50
                  12.55
                  31.1
                  12.63SVN-D07-002
                  Veta
      Amanda
                  88.5
                  89.05
                  0.55
                  12.4
                  88.2
                  12.63SVN-D07-009
                  Veta
      Amanda
                  102.2
                  102.62
                  0.42
                  12.25
                  6.2
                  12.27SVN-D07-002
                  Veta
      Amanda
                  89.05
                  89.6
                  0.55
                  11.8
                  72.5
                  11.99SVN-D08-150
                  Veta
      Sur
                  20
                  20.5
                  0.50
                  11.25
                  149
                  11.64SVN-D08-138
                  Veta
      Sur
                  47.85
                  48.6
                  0.75
                  10.05
                  598
                  11.62SVN-D08-149
                  Veta
      Sur
                  63.8
                  64.2
                  0.40
                  4.44
                  2720
                  11.57SVN-D08-132
                  Veta
      Sur
                  76.5
                  77
                  0.50
                  10.65
                  315
                  11.48SVN-D08-048
                  Veta
      Sur
                  104
                  104.65
                  0.65
                  6.5
                  1825
                  11.28SVN-D08-206
                  Veta
      Norte
                  85.9
                  86.6
                  0.70
                  11.2
                  26.8
                  11.27





12




Hole
                    Zone
                    From
      (m)
                    To
      (m)
                    Length
      (m)
                    Au
      g/t
                    Ag
      g/t
                    Au
      equivalent1
      g/tSVN-D08-120
                    Veta
      Amanda
                    8
                    8.4
                    0.40
                    10.7
                    55.2
                    10.84SVN-D08-121
                    Veta
      Amanda
                    34.95
                    35.35
                    0.40
                    10.65
                    12.6
                    10.68SVN-D07-003
                    Veta
      Amanda
                    124.2
                    124.8
                    0.60
                    9.82
                    213
                    10.38SVN-D08-098
                    Veta
      Amanda
                    56.9
                    57.4
                    0.50
                    10.35
                    10.1
                    10.38SVN-D08-098
                    Veta
      Amanda
                    51.18
                    51.6
                    0.42
                    10.1
                    36.9
                    10.20SVN-D08-144
                    Veta
      Sur
                    100.2
                    101.05
                    0.85
                    7.84
                    888
                    10.17SVN-D08-103
                    Veta
      Amanda
                    12.1
                    12.6
                    0.50
                    10.05
                    12.7
                    10.08SVN-D07-002
                    Veta
      Amanda
                    132.4
                    132.87
                    0.47
                    9.49
                    113
                    9.79SVN-D08-096
                    Veta
      Amanda
                    231.15
                    231.82
                    0.67
                    9.6
                    36
                    9.69SVN-D08-117
                    Veta
      Amanda
                    16
                    16.6
                    0.60
                    9.19
                    175
                    9.65SVN-D08-198
                    Veta
      Norte
                    107.4
                    108
                    0.60
                    8.61
                    393
                    9.64SVN-D08-132
                    Veta
      Sur
                    71
                    71.5
                    0.50
                    7.85
                    682
                    9.64SVN-D08-046
                    Veta
      Amanda
                    
                    
                    
                    8.49
                    400
                    9.54SVN-D08-141
                    Veta
      Sur
                    88.2
                    90
                    1.80
                    9.31
                    12.3
                    9.34SVN-D08-089
                    Veta
      Amanda
                    79
                    80
                    1.00
                    9.27
                    8.1
                    9.29SVN-D08-155
                    Veta
      Sur
                    
                    
                    
                    8.8
                    170
                    9.25SSI-D08-106
                    Sinter
                    71
                    71.4
                    0.40
                    9.05
                    4.3
                    9.06SVN-D08-134
                    Veta
      Sur
                    98.6
                    99.3
                    0.70
                    6.17
                    1055
                    8.93SVN-D08-091
                    Veta
      Amanda
                    187.6
                    188
                    0.40
                    8.82
                    40.7
                    8.93SVN-D08-176
                    Veta
      Amanda
                    266
                    266.4
                    0.40
                    8.57
                    43.6
                    8.68SVN-D08-149
                    Veta
      Sur
                    64.2
                    64.98
                    0.78
                    6.28
                    902
                    8.64SVN-D08-200
                    Veta
      Norte
                    127.53
                    128.3
                    0.77
                    8.19
                    147
                    8.58SVN-D08-084
                    Veta
      Amanda
                    167.8
                    168.4
                    0.60
                    7.66
                    344
                    8.56SVN-D08-078
                    Veta
      Amanda
                    29.15
                    29.6
                    0.45
                    8.41
                    53
                    8.55SVN-D08-134
                    Veta
      Sur
                    99.7
                    100.1
                    0.40
                    2.36
                    2360
                    8.54SVN-D07-005
                    Veta
      Sur
                    100.3
                    101.15
                    0.85
                    8.36
                    16.3
                    8.40SVN-D08-078
                    Veta
      Amanda
                    36.3
                    36.93
                    0.63
                    8.33
                    15.8
                    8.37SVN-D07-004
                    Veta
      Sur
                    23.15
                    24
                    0.85
                    8.22
                    2.3
                    8.23SVN-D08-158
                    Veta
      Sur
                    119.35
                    119.75
                    0.40
                    7.76
                    169
                    8.20SVN-D08-132
                    Veta
      Sur
                    
                    
                    
                    7.34
                    323
                    8.19SVN-D08-193
                    Veta
      Norte
                    20.2
                    20.6
                    0.40
                    7.96
                    17.6
                    8.01SVN-D08-092
                    Veta
      Amanda
                    108
                    108.4
                    0.40
                    7.96
                    11.5
                    7.99SVN-D08-130
                    Veta
      Sur
                    116.05
                    116.5
                    0.45
                    7.15
                    308
                    7.96SVN-D08-102
                    Veta
      Amanda
                    31.15
                    32
                    0.85
                    7.84
                    33.4
                    7.93SVN-D08-153
                    Veta
      Sur
                    37.15
                    37.7
                    0.55
                    7.84
                    25.1
                    7.91SVN-D08-096
                    Veta
      Amanda
                    230.8
                    231.15
                    0.35
                    7.79
                    39.2
                    7.89SVN-D08-155
                    Veta
      Sur
                    72.6
                    73.3
                    0.70
                    6.92
                    222
                    7.50SVN-D08-176
                    Veta
      Amanda
                    262.8
                    263.2
                    0.40
                    7.46
                    10.6
                    7.49SVN-D08-140
                    Veta
      Sur
                    61.85
                    62.6
                    0.75
                    5.14
                    864
                    7.40SVN-D08-046
                    Veta
      Amanda
                    126.05
                    126.52
                    0.47
                    6.74
                    245
                    7.38SVN-D08-206
                    Veta
      Norte
                    86.6
                    87.05
                    0.45
                    7.25
                    20.8
                    7.30SVN-D08-057
                    Veta
      Amanda
                    141.2
                    141.6
                    0.40
                    6
                    493
                    7.29SVN-D08-082
                    Veta
      Amanda
                    18.39
                    18.83
                    0.44
                    7.28
                    0.8
                    7.28SVN-D07-011
                    Veta
      Norte
                    43
                    43.85
                    0.85
                    7.05
                    8.6
                    7.07SVN-D08-209
                    Veta
      Norte
                    63.5
                    63.9
                    0.40
                    7.03
                    11.9
                    7.06SVN-D08-057
                    Veta
      Amanda
                    151.11
                    151.64
                    0.53
                    6.4
                    242
                    7.03SVN-D08-095
                    Veta
      Amanda
                    130.4
                    130.73
                    0.33
                    6.87
                    50.2
                    7.00SVN-D08-193
                    Veta
      Norte
                    52.4
                    52.8
                    0.40
                    6.79
                    45.6
                    6.91SVN-D08-096
                    Veta
      Amanda
                    230
                    230.4
                    0.40
                    6.64
                    90.2
                    6.88SVN-D08-150
                    Veta
      Sur
                    22.2
                    22.7
                    0.50
                    6.23
                    230
                    6.83SVN-D08-144
                    Veta
      Sur
                    98.75
                    99.15
                    0.40
                    6.17
                    230
                    6.77SC-D08-030
                    Veta
      Maria Belen
                    64
                    64.91
                    0.91
                    6.75
                    3.8
                    6.76SVN-D08-123
                    Veta
      Sur
                    119.5
                    120
                    0.50
                    3.77
                    1140
                    6.76SVN-D08-084
                    Veta
      Amanda
                    193.45
                    194
                    0.55
                    6.58
                    58
                    6.73




13




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-200
                  Veta
      Norte
                  80.6
                  81
                  0.40
                  6.6
                  47
                  6.72SVN-D08-090
                  Veta
      Amanda
                  83.03
                  83.6
                  0.57
                  6.32
                  145
                  6.70SVN-D08-098
                  Veta
      Amanda
                  56.4
                  56.9
                  0.50
                  6.68
                  4.7
                  6.69SVN-D08-132
                  Veta
      Sur
                  73.5
                  74
                  0.50
                  4.63
                  764
                  6.63SVN-D08-140
                  Veta
      Sur
                  61.05
                  61.85
                  0.80
                  6.05
                  155
                  6.46SVN-D08-211
                  Veta
      Norte
                  107.45
                  108.25
                  0.80
                  6.21
                  86.2
                  6.44SVN-D07-009
                  Veta
      Amanda
                  102.62
                  103.12
                  0.50
                  6.42
                  4.3
                  6.43SVN-D08-150
                  Veta
      Sur
                  21
                  21.4
                  0.40
                  4.23
                  794
                  6.31SC-D08-028
                  Veta
      Maria Belen
                  23.78
                  24.6
                  0.82
                  6.28
                  3.5
                  6.29SVN-D08-127
                  Veta
      Sur
                  125.65
                  126.07
                  0.42
                  5.75
                  185
                  6.23SVN-D08-117
                  Veta
      Amanda
                  
                  
                  
                  5.97
                  92.9
                  6.21SVN-D08-150
                  Veta
      Sur
                  
                  
                  
                  6.01
                  64.5
                  6.18SVN-D08-194
                  Veta
      Norte
                  53.9
                  54.35
                  0.45
                  6.12
                  22.2
                  6.18SVN-D08-091
                  Veta
      Amanda
                  188
                  188.4
                  0.40
                  6.14
                  3.2
                  6.15SVN-D08-117
                  Veta
      Amanda
                  18.6
                  19.3
                  0.70
                  6.03
                  30.2
                  6.11SVN-D08-132
                  Veta
      Sur
                  74
                  74.5
                  0.50
                  4.72
                  525
                  6.10SVN-D08-132
                  Veta
      Sur
                  76
                  76.5
                  0.50
                  5.58
                  185
                  6.06SVN-D08-101
                  Veta
      Amanda
                  30.95
                  31.76
                  0.81
                  5.87
                  44.4
                  5.99SVN-D08-130
                  Veta
      Sur
                  116.5
                  116.9
                  0.40
                  5.48
                  182
                  5.96SVN-D08-082
                  Veta
      Amanda
                  84.3
                  84.75
                  0.45
                  5.48
                  135
                  5.83SC-D08-044
                  Veta
      Maria Belen
                  94.45
                  95.25
                  0.80
                  5.75
                  21.9
                  5.81SVN-D08-095
                  Veta
      Amanda
                  128.7
                  129.1
                  0.40
                  5.66
                  51.2
                  5.79SVN-D08-158
                  Veta
      Sur
                  119.75
                  120.1
                  0.35
                  4.64
                  440
                  5.79SSI-D08-110
                  Sinter
                  72.05
                  72.55
                  0.50
                  5.79
                  -0.5
                  5.79SVN-D08-198
                  Veta
      Norte
                  108.5
                  108.9
                  0.40
                  4.9
                  247
                  5.55SVN-D08-201
                  Veta
      Norte
                  156
                  156.5
                  0.50
                  5.13
                  151
                  5.53SVN-D08-132
                  Veta
      Sur
                  71.5
                  72
                  0.50
                  3.36
                  794
                  5.44SVN-D08-150
                  Veta
      Sur
                  18.5
                  19
                  0.50
                  5.2
                  83.4
                  5.42SVN-D08-047
                  Veta
      Amanda
                  158
                  158.8
                  0.80
                  5.31
                  26.2
                  5.38SVN-D08-093
                  Veta
      Amanda
                  170.8
                  171.3
                  0.50
                  5.35
                  2.9
                  5.36SVN-D08-149
                  Veta
      Sur
                  62.2
                  62.6
                  0.40
                  5.16
                  59.2
                  5.32SVN-D08-125
                  Veta
      Sur
                  150.3
                  150.7
                  0.40
                  2.9
                  917
                  5.30SVN-D08-138
                  Veta
      Sur
                  46.9
                  47.85
                  0.95
                  4.9
                  148
                  5.29SVN-D08-200
                  Veta
      Norte
                  81
                  81.6
                  0.60
                  4.91
                  139
                  5.27SVN-D08-120
                  Veta
      Amanda
                  22
                  22.5
                  0.50
                  5.24
                  11.1
                  5.27SVN-D08-193
                  Veta
      Norte
                  17.35
                  18.3
                  0.95
                  5.19
                  22.4
                  5.25SVN-D07-009
                  Veta
      Amanda
                  67.05
                  67.55
                  0.50
                  5.13
                  44.5
                  5.25SVN-D08-127
                  Veta
      Sur
                  126.8
                  127.2
                  0.40
                  4.57
                  229
                  5.17SVN-D08-085
                  Veta
      Amanda
                  111
                  111.4
                  0.40
                  5.14
                  1.4
                  5.14SVN-D08-195
                  Veta
      Norte
                  70
                  70.5
                  0.50
                  4.97
                  43.4
                  5.08SVN-D08-018
                  Veta
      Cruzada
                  83.16
                  83.88
                  0.72
                  3.48
                  583
                  5.01SSI-D08-108
                  Sinter
                  24
                  25
                  1.00
                  4.95
                  9
                  4.97SVN-D08-153
                  Veta
      Sur
                  17
                  17.56
                  0.56
                  4.93
                  14
                  4.97SVN-D07-001
                  Veta
      Amanda
                  14.8
                  15.3
                  0.50
                  4.96
                  2
                  4.97SVN-D08-153
                  Veta
      Sur
                  38.6
                  39
                  0.40
                  4.65
                  112
                  4.94SVN-D08-200
                  Veta
      Norte
                  68.34
                  68.75
                  0.41
                  4.77
                  24.1
                  4.83SVN-D07-002
                  Veta
      Amanda
                  89.6
                  90.08
                  0.48
                  4.68
                  27.1
                  4.75SVN-D08-085
                  Veta
      Amanda
                  51.96
                  52.6
                  0.64
                  4.66
                  25.8
                  4.73SSI-D08-109
                  Sinter
                  53.45
                  54.1
                  0.65
                  4.7
                  9.3
                  4.72SVN-D08-125
                  Veta
      Sur
                  152
                  152.5
                  0.50
                  4.25
                  180
                  4.72SVN-D08-132
                  Veta
      Sur
                  70.5
                  71
                  0.50
                  4
                  249
                  4.65SVN-D08-083
                  Veta
      Amanda
                  43.5
                  44
                  0.50
                  4.35
                  85.2
                  4.57SVN-D07-009
                  Veta
      Amanda
                  45
                  45.5
                  0.50
                  4.53
                  8.8
                  4.55SVN-D08-130
                  Veta
      Sur
                  114.3
                  114.7
                  0.40
                  4.35
                  70.8
                  4.54





14




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-201
                  Veta
      Norte
                  155.5
                  156
                  0.50
                  4.3
                  66.7
                  4.47SVN-D08-081
                  Veta
      Amanda
                  177.03
                  177.6
                  0.57
                  4.24
                  78.7
                  4.45SVN-D08-151
                  Veta
      Sur
                  120.5
                  121
                  0.50
                  4.31
                  50.4
                  4.44SVN-D07-007
                  Veta
      Sur
                  99.7
                  100.3
                  0.60
                  4
                  157
                  4.41SVN-D08-129
                  Veta
      Sur
                  123.7
                  124.2
                  0.50
                  1.34
                  1170
                  4.41SVN-D08-201
                  Veta
      Norte
                  156.9
                  157.3
                  0.40
                  3.74
                  241
                  4.37SVN-D08-132
                  Veta
      Sur
                  78.5
                  79
                  0.50
                  3.69
                  252
                  4.35SVN-D08-120
                  Veta
      Amanda
                  7.1
                  8
                  0.90
                  4.29
                  22.2
                  4.35SVN-D08-155
                  Veta
      Sur
                  71.8
                  72.6
                  0.80
                  4.08
                  99.3
                  4.34SVN-D08-188
                  Veta
      Norte
                  153.2
                  153.7
                  0.50
                  4.16
                  60
                  4.32SVN-D08-118
                  Veta
      Amanda
                  6
                  7
                  1.00
                  4.26
                  17.9
                  4.31SVN-D08-153
                  Veta
      Sur
                  29.4
                  29.9
                  0.50
                  3.62
                  257
                  4.29SVN-D08-117
                  Veta
      Amanda
                  18.2
                  18.6
                  0.40
                  4.08
                  74.6
                  4.28SVN-D08-086
                  Veta
      Amanda
                  175.86
                  176.6
                  0.74
                  4.13
                  33.9
                  4.22SVN-D08-137
                  Veta
      Sur
                  74.7
                  76.3
                  1.60
                  3.56
                  241
                  4.19SVN-D08-089
                  Veta
      Amanda
                  73
                  74
                  1.00
                  4.08
                  21.6
                  4.14SSI-D08-167
                  Sinter
                  30
                  31
                  1.00
                  4.06
                  0.7
                  4.06SVN-D08-141
                  Veta
      Sur
                  96
                  97.1
                  1.10
                  3.89
                  50.9
                  4.02SC-D08-030
                  Veta
      Maria Belen
                  64.91
                  65.35
                  0.44
                  4
                  4.7
                  4.01SVN-D08-159
                  Veta
      Sur
                  118
                  118.4
                  0.40
                  3.73
                  86.9
                  3.96SVN-D08-046
                  Veta
      Amanda
                  120
                  120.5
                  0.50
                  3.1
                  323
                  3.95SVN-D08-177
                  Veta
      Amanda
                  255.9
                  256.4
                  0.50
                  3.66
                  106
                  3.94SVN-D08-084
                  Veta
      Amanda
                  194
                  194.56
                  0.56
                  3.66
                  105
                  3.94SVN-D08-099
                  Veta
      Amanda
                  54.83
                  55.47
                  0.64
                  3.86
                  21.3
                  3.92SVN-D08-087
                  Veta
      Amanda
                  77.7
                  78.1
                  0.40
                  3.9
                  3.4
                  3.91SVN-D07-005
                  Veta
      Sur
                  102.2
                  102.7
                  0.50
                  3.75
                  52.8
                  3.89SVN-D08-117
                  Veta
      Amanda
                  17.05
                  17.6
                  0.55
                  3.65
                  88.3
                  3.88SVN-D08-198
                  Veta
      Norte
                  105.3
                  105.7
                  0.40
                  3.75
                  45.3
                  3.87SVN-D08-091
                  Veta
      Amanda
                  190.7
                  191.4
                  0.70
                  3.81
                  7.6
                  3.83SVN-D08-099
                  Veta
      Amanda
                  63
                  63.45
                  0.45
                  3.75
                  30.1
                  3.83SVN-D08-102
                  Veta
      Amanda
                  34
                  35
                  1.00
                  3.81
                  5.3
                  3.82SVN-D08-046
                  Veta
      Amanda
                  105.85
                  106.5
                  0.65
                  3.69
                  48.4
                  3.82SVN-D08-018
                  Veta
      Cruzada
                  83.88
                  84.55
                  0.67
                  3.33
                  181
                  3.80SVN-D08-105
                  Veta
      Amanda
                  15.25
                  15.75
                  0.50
                  3.78
                  7.3
                  3.80SVN-D08-127
                  Veta
      Sur
                  126.4
                  126.8
                  0.40
                  2.88
                  349
                  3.79SVN-D08-047
                  Veta
      Amanda
                  121.1
                  121.8
                  0.70
                  3.63
                  56.6
                  3.78SVN-D08-207
                  Veta
      Norte
                  7.5
                  8
                  0.50
                  3.73
                  2.7
                  3.74SVN-D08-204
                  Veta
      Norte
                  18.9
                  19.4
                  0.50
                  3.7
                  7.8
                  3.72SVN-D08-130
                  Veta
      Sur
                  
                  
                  
                  3.47
                  93.2
                  3.71SVN-D08-137
                  Veta
      Sur
                  76.3
                  77
                  0.70
                  1.19
                  960
                  3.71SVN-D08-176
                  Veta
      Amanda
                  293.06
                  293.8
                  0.74
                  2.91
                  303
                  3.70SVN-D08-188
                  Veta
      Norte
                  169
                  170
                  1.00
                  3.54
                  54.1
                  3.68SVN-D08-162
                  Veta
      Sur
                  25
                  25.65
                  0.65
                  3.52
                  56.2
                  3.67SVN-D08-117
                  Veta
      Amanda
                  29.2
                  29.65
                  0.45
                  3.6
                  23.2
                  3.66SVN-D08-152
                  Veta
      Sur
                  88
                  88.5
                  0.50
                  3.47
                  70.9
                  3.66SVN-D08-209
                  Veta
      Norte
                  28.75
                  29.2
                  0.45
                  3.45
                  60.1
                  3.61SVN-D08-117
                  Veta
      Amanda
                  16.6
                  17.05
                  0.45
                  3.33
                  99.3
                  3.59SVN-D08-105
                  Veta
      Amanda
                  18.65
                  19.15
                  0.50
                  3.54
                  9.8
                  3.57SVN-D08-098
                  Veta
      Amanda
                  33.4
                  33.85
                  0.45
                  3.53
                  1
                  3.53SVN-D08-129
                  Veta
      Sur
                  126.5
                  127.5
                  1.00
                  3.33
                  71
                  3.52SVN-D08-150
                  Veta
      Sur
                  22.7
                  23.65
                  0.95
                  2.72
                  293
                  3.49SVN-D08-130
                  Veta
      Sur
                  173.55
                  174
                  0.45
                  3.45
                  4.2
                  3.46SVN-D08-086
                  Veta
      Amanda
                  175.1
                  175.55
                  0.45
                  3.27
                  60.3
                  3.43SVN-D08-130
                  Veta
      Sur
                  114.7
                  115.1
                  0.40
                  3.17
                  97.2
                  3.42





15




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-158
                  Veta
      Sur
                  118.8
                  119.35
                  0.55
                  3.02
                  150
                  3.41SVN-D07-009
                  Veta
      Amanda
                  65.85
                  66.25
                  0.40
                  3.33
                  29.8
                  3.41SVN-D08-087
                  Veta
      Amanda
                  49.75
                  50.15
                  0.40
                  3.38
                  1.1
                  3.38SVN-D08-177
                  Veta
      Amanda
                  256.4
                  256.9
                  0.50
                  3.12
                  95.6
                  3.37SVN-D08-093
                  Veta
      Amanda
                  169.33
                  169.85
                  0.52
                  3.32
                  17.9
                  3.37SC-D08-036
                  Veta
      Ailin
                  41
                  41.6
                  0.60
                  3.32
                  16
                  3.36SVN-D08-130
                  Veta
      Sur
                  115.7
                  116.05
                  0.35
                  2.46
                  340
                  3.35SVN-D08-118
                  Veta
      Amanda
                  17
                  17.5
                  0.50
                  3.31
                  9.2
                  3.33SVN-D08-192
                  Veta
      Norte
                  19.5
                  20.25
                  0.75
                  3.09
                  83.4
                  3.31SVN-D08-136
                  Veta
      Sur
                  34.5
                  35
                  0.50
                  3.29
                  6.2
                  3.31SVN-D08-120
                  Veta
      Amanda
                  15.78
                  16.23
                  0.45
                  3.18
                  36.2
                  3.27SVN-D08-192
                  Veta
      Norte
                  15.6
                  16.1
                  0.50
                  3.15
                  45.6
                  3.27SVN-D08-121
                  Veta
      Amanda
                  41.55
                  43
                  1.45
                  3.13
                  48.7
                  3.26SVN-D08-206
                  Veta
      Norte
                  92.9
                  93.6
                  0.70
                  0.309
                  1125
                  3.26SVN-D08-051
                  Veta
      Sur
                  
                  
                  
                  2.48
                  289
                  3.24SVN-D08-132
                  Veta
      Sur
                  74.5
                  75
                  0.50
                  1.65
                  604
                  3.23SSI-D08-167
                  Sinter
                  54
                  55
                  1.00
                  3.22
                  1.2
                  3.22SVN-D08-127
                  Veta
      Sur
                  126.07
                  126.4
                  0.33
                  2.63
                  224
                  3.22SVN-D07-002
                  Veta
      Amanda
                  88.1
                  88.5
                  0.40
                  3.14
                  25
                  3.21SVN-D08-193
                  Veta
      Norte
                  19.2
                  20.2
                  1.00
                  3.14
                  15.5
                  3.18SVN-D08-096
                  Veta
      Amanda
                  230.4
                  230.8
                  0.40
                  2.9
                  105
                  3.18SVN-D08-078
                  Veta
      Amanda
                  30.8
                  32
                  1.20
                  3.05
                  47.4
                  3.17SVN-D08-118
                  Veta
      Amanda
                  14.25
                  15.4
                  1.15
                  3.12
                  18
                  3.17SVN-D08-046
                  Veta
      Amanda
                  150.35
                  150.8
                  0.45
                  3.1
                  21.1
                  3.16SVN-D08-100
                  Veta
      Amanda
                  53
                  54
                  1.00
                  3.15
                  1.9
                  3.15SVN-D07-004
                  Veta
      Sur
                  41
                  41.77
                  0.77
                  2.81
                  129
                  3.15SVN-D07-005
                  Veta
      Sur
                  62
                  62.7
                  0.70
                  3.08
                  15.8
                  3.12SVN-D08-104
                  Veta
      Amanda
                  23.2
                  23.6
                  0.40
                  3.1
                  5.7
                  3.11SVN-D08-152
                  Veta
      Sur
                  86.5
                  87.3
                  0.80
                  3.03
                  20.6
                  3.08SVN-D07-003
                  Veta
      Amanda
                  147.3
                  147.75
                  0.45
                  3.03
                  8.3
                  3.05SVN-D08-142
                  Veta
      Sur
                  72.55
                  73
                  0.45
                  0.519
                  962
                  3.04SVN-D08-203
                  Veta
      Norte
                  206.5
                  206.9
                  0.40
                  2.84
                  69.9
                  3.02SVN-D07-006
                  Veta
      Sur
                  9
                  9.5
                  0.50
                  2.8
                  84.8
                  3.02SVN-D08-204
                  Veta
      Norte
                  15.9
                  16.3
                  0.40
                  3
                  3.7
                  3.01SSI-D08-110
                  Sinter
                  1
                  2.35
                  1.35
                  2.99
                  5.6
                  3.00SVN-D08-137
                  Veta
      Sur
                  77
                  77.5
                  0.50
                  1.07
                  738
                  3.00SVN-D08-153
                  Veta
      Sur
                  42.6
                  43
                  0.40
                  2.58
                  153
                  2.98SVN-D08-193
                  Veta
      Norte
                  46.05
                  46.53
                  0.48
                  2.81
                  57.8
                  2.96SVN-D08-192
                  Veta
      Norte
                  70.4
                  70.8
                  0.40
                  2.42
                  202
                  2.95SVN-D08-188
                  Veta
      Norte
                  168
                  169
                  1.00
                  2.5
                  143
                  2.87SVN-D08-193
                  Veta
      Norte
                  15
                  16
                  1.00
                  2.84
                  13.2
                  2.87SVN-D07-006
                  Veta
      Sur
                  6.5
                  7
                  0.50
                  2.5
                  130
                  2.84SVN-D08-085
                  Veta
      Amanda
                  52.6
                  53
                  0.40
                  2.75
                  22.8
                  2.81SSI-D08-116
                  Sinter
                  87
                  87.9
                  0.90
                  2.8
                  0.9
                  2.80SVN-D08-153
                  Veta
      Sur
                  38.2
                  38.6
                  0.40
                  2.01
                  301
                  2.80SVN-D08-132
                  Veta
      Sur
                  72.5
                  73
                  0.50
                  2.54
                  87.9
                  2.77SVN-D08-048
                  Veta
      Sur
                  101.35
                  101.9
                  0.55
                  1.12
                  623
                  2.75SVN-D08-103
                  Veta
      Amanda
                  18.07
                  18.4
                  0.33
                  2.71
                  14.3
                  2.75SVN-D08-136
                  Veta
      Sur
                  11.75
                  12.9
                  1.15
                  2.57
                  63.4
                  2.74SVN-D08-177
                  Veta
      Amanda
                  256.9
                  257.3
                  0.40
                  2.44
                  105
                  2.72SVN-D07-011
                  Veta
      Norte
                  40.9
                  41.35
                  0.45
                  2.68
                  9.5
                  2.70SVN-D08-046
                  Veta
      Amanda
                  122
                  122.5
                  0.50
                  2.56
                  51.1
                  2.69SVN-D08-203
                  Veta
      Norte
                  206.9
                  207.3
                  0.40
                  2.58
                  35.6
                  2.67SVN-D08-102
                  Veta
      Amanda
                  33.6
                  34
                  0.40
                  2.64
                  6.7
                  2.66




16




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-121
                  Veta
      Amanda
                  39.6
                  40.1
                  0.50
                  2.48
                  64.9
                  2.65SVN-D08-194
                  Veta
      Norte
                  54.35
                  54.8
                  0.45
                  2.55
                  38
                  2.65SVN-D08-123
                  Veta
      Sur
                  131.5
                  132
                  0.50
                  2.38
                  96.4
                  2.63SVN-D08-094
                  Veta
      Amanda
                  218.8
                  219.05
                  0.25
                  2.59
                  8.2
                  2.61SVN-D08-104
                  Veta
      Amanda
                  39
                  40.45
                  1.45
                  2.54
                  8.8
                  2.56SVN-D08-086
                  Veta
      Amanda
                  155.35
                  155.9
                  0.55
                  2.27
                  106
                  2.55SC-D08-015
                  Veta
      Las Latitas
                  41.75
                  42.25
                  0.50
                  2.51
                  12.4
                  2.54SSI-D08-106
                  Sinter
                  71.4
                  71.85
                  0.45
                  2.53
                  3.3
                  2.54SVN-D08-192
                  Veta
      Norte
                  66.5
                  67
                  0.50
                  1.67
                  331
                  2.54SVN-D07-006
                  Veta
      Sur
                  6
                  6.5
                  0.50
                  2.45
                  29.8
                  2.53SC-D08-030
                  Veta
      Maria Belen
                  63.42
                  64
                  0.58
                  2.51
                  6.8
                  2.53SVN-D07-003
                  Veta
      Amanda
                  73.08
                  73.8
                  0.72
                  2.31
                  75.6
                  2.51SVN-D08-129
                  Veta
      Sur
                  130.9
                  131.4
                  0.50
                  0.487
                  769
                  2.50SVN-D08-129
                  Veta
      Sur
                  125
                  125.5
                  0.50
                  2.36
                  43.4
                  2.47SVN-D08-083
                  Veta
      Amanda
                  34.3
                  34.75
                  0.45
                  2.45
                  5.8
                  2.47SVN-D08-083
                  Veta
      Amanda
                  32.7
                  33.1
                  0.40
                  2.37
                  16.2
                  2.41SVN-D08-101
                  Veta
      Amanda
                  14.8
                  15.25
                  0.45
                  2.37
                  16
                  2.41SVN-D08-162
                  Veta
      Sur
                  24.5
                  25
                  0.50
                  2.11
                  102
                  2.38SVN-D08-082
                  Veta
      Amanda
                  49.41
                  50.17
                  0.76
                  2.1
                  105
                  2.38SVN-D07-011
                  Veta
      Norte
                  33.9
                  34.5
                  0.60
                  2.31
                  21.4
                  2.37SVN-D08-086
                  Veta
      Amanda
                  163
                  163.4
                  0.40
                  2.33
                  13.7
                  2.37SVN-D08-049
                  Veta
      Sur
                  27.3
                  27.85
                  0.55
                  2.15
                  76.2
                  2.35SVN-D08-095
                  Veta
      Amanda
                  129.65
                  130.4
                  0.75
                  2.31
                  14.3
                  2.35SVN-D08-130
                  Veta
      Sur
                  115.1
                  115.7
                  0.60
                  2.09
                  95
                  2.34SVN-D08-176
                  Veta
      Amanda
                  264.4
                  264.8
                  0.40
                  2.15
                  71.7
                  2.34SVN-D08-149
                  Veta
      Sur
                  62.6
                  63
                  0.40
                  1.765
                  215
                  2.33SVN-D08-047
                  Veta
      Amanda
                  150.4
                  151.4
                  1.00
                  2.3
                  6.6
                  2.32SVN-D08-123
                  Veta
      Sur
                  123.5
                  124
                  0.50
                  1.56
                  287
                  2.31SVN-D07-001
                  Veta
      Amanda
                  79
                  80
                  1.00
                  2.27
                  14.4
                  2.31SVN-D08-140
                  Veta
      Sur
                  62.6
                  63
                  0.40
                  2.13
                  64.3
                  2.30SVN-D08-076
                  Veta
      Amanda
                  21.95
                  22.35
                  0.40
                  2.27
                  5.4
                  2.28SVN-D08-123
                  Veta
      Sur
                  120
                  120.5
                  0.50
                  1.695
                  220
                  2.27SVN-D08-169
                  Veta
      Amanda
                  212
                  213
                  1.00
                  2.23
                  10
                  2.26SVN-D08-160
                  Veta
      Sur
                  24.9
                  25.9
                  1.00
                  1.845
                  152
                  2.24SVN-D08-203
                  Veta
      Norte
                  273.9
                  274.3
                  0.40
                  2.23
                  1.6
                  2.23SVN-D07-007
                  Veta
      Sur
                  100.3
                  100.85
                  0.55
                  2.03
                  70.8
                  2.22SVN-D08-193
                  Veta
      Norte
                  49.5
                  49.9
                  0.40
                  2.12
                  33.2
                  2.21SVN-D08-150
                  Veta
      Sur
                  24
                  24.5
                  0.50
                  2.11
                  36.2
                  2.20SVN-D08-051
                  Veta
      Sur
                  148
                  148.8
                  0.80
                  1.62
                  221
                  2.20SVN-D08-081
                  Veta
      Amanda
                  220.97
                  221.2
                  0.23
                  2.16
                  11.6
                  2.19SVN-D07-010
                  Veta
      Amanda
                  85.55
                  86
                  0.45
                  2.18
                  3.8
                  2.19SVN-D08-089
                  Veta
      Amanda
                  74
                  75
                  1.00
                  2.15
                  13.4
                  2.19SVN-D08-052
                  Veta
      Sur
                  84.5
                  85
                  0.50
                  2.13
                  12.7
                  2.16SVN-D08-176
                  Veta
      Amanda
                  290.06
                  290.55
                  0.49
                  1.74
                  161
                  2.16SC-D08-015
                  Veta
      Las Latitas
                  42.25
                  42.77
                  0.52
                  2.1
                  22.7
                  2.16SVN-D08-120
                  Veta
      Amanda
                  16.7
                  17.25
                  0.55
                  1.975
                  69.2
                  2.16SSI-D08-116
                  Sinter
                  90.4
                  91.5
                  1.10
                  2.14
                  1.7
                  2.14SVN-D08-139
                  Veta
      Sur
                  84.95
                  85.25
                  0.30
                  1.94
                  73.9
                  2.13SVN-D08-142
                  Veta
      Sur
                  98.75
                  99.8
                  1.05
                  1.785
                  131
                  2.13SVN-D08-209
                  Veta
      Norte
                  57
                  57.4
                  0.40
                  2.07
                  22.1
                  2.13SVN-D08-159
                  Veta
      Sur
                  143.43
                  144.1
                  0.67
                  2.08
                  18.1
                  2.13SVN-D08-083
                  Veta
      Amanda
                  41.7
                  42.1
                  0.40
                  2.12
                  2.7
                  2.13SVN-D07-004
                  Veta
      Sur
                  30
                  31
                  1.00
                  2.12
                  2.2
                  2.13SVN-D08-083
                  Veta
      Amanda
                  33.1
                  33.5
                  0.40
                  2.1
                  8.7
                  2.12




17




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-046
                  Veta
      Amanda
                  150.8
                  151.2
                  0.40
                  2.09
                  10.4
                  2.12SVN-D08-150
                  Veta
      Sur
                  21.8
                  22.2
                  0.40
                  1.85
                  101
                  2.11SVN-D07-012
                  Veta
      Norte
                  89.95
                  90.7
                  0.75
                  2.06
                  19.7
                  2.11SVN-D08-211
                  Veta
      Norte
                  174.4
                  175
                  0.60
                  2.01
                  33.7
                  2.10SVN-D08-195
                  Veta
      Norte
                  68
                  68.6
                  0.60
                  2.02
                  18.8
                  2.07SVN-D08-176
                  Veta
      Amanda
                  265.2
                  265.6
                  0.40
                  1.975
                  34.4
                  2.07SVN-D08-123
                  Veta
      Sur
                  118.5
                  119
                  0.50
                  1.855
                  79.1
                  2.06SVN-D08-157
                  Veta
      Sur
                  106.4
                  106.8
                  0.40
                  1.73
                  119
                  2.04SSI-D08-108
                  Sinter
                  25
                  26.5
                  1.50
                  2.03
                  4
                  2.04SVN-D08-195
                  Veta
      Norte
                  12.4
                  13.2
                  0.80
                  2.02
                  6.9
                  2.04SVN-D08-076
                  Veta
      Amanda
                  35.85
                  36.25
                  0.40
                  1.86
                  65.1
                  2.03SVN-D08-102
                  Veta
      Amanda
                  57.4
                  57.85
                  0.45
                  2.01
                  4.6
                  2.02SVN-D08-082
                  Veta
      Amanda
                  19.37
                  19.8
                  0.43
                  2.01
                  1.1
                  2.01SVN-D08-129
                  Veta
      Sur
                  86.3
                  86.85
                  0.55
                  1.99
                  8.3
                  2.01SVN-D08-134
                  Veta
      Sur
                  91.85
                  92.23
                  0.38
                  1.97
                  15.1
                  2.01SVN-D07-010
                  Veta
      Amanda
                  79.5
                  80
                  0.50
                  1.915
                  35.3
                  2.01SVN-D08-085
                  Veta
      Amanda
                  49.4
                  50.4
                  1.00
                  1.975
                  9.2
                  2.00SVN-D08-092
                  Veta
      Amanda
                  140.65
                  141.08
                  0.43
                  1.93
                  18.5
                  1.98SVN-D08-077
                  Veta
      Amanda
                  85.03
                  85.43
                  0.40
                  1.845
                  49.7
                  1.98SVN-D07-006
                  Veta
      Sur
                  32
                  32.5
                  0.50
                  1.83
                  54.9
                  1.97SVN-D08-094
                  Veta
      Amanda
                  167.66
                  168.1
                  0.44
                  1.91
                  24.2
                  1.97SVN-D08-056
                  Veta
      Amanda
                  80.25
                  81
                  0.75
                  1.965
                  1.7
                  1.97SVN-D08-133
                  Veta
      Sur
                  137.8
                  138.2
                  0.40
                  1.84
                  42.3
                  1.95SVN-D08-084
                  Veta
      Amanda
                  195.56
                  195.98
                  0.42
                  1.68
                  102
                  1.95SVN-D08-046
                  Veta
      Amanda
                  119.3
                  120
                  0.70
                  1.5
                  169
                  1.94SVN-D08-094
                  Veta
      Amanda
                  169.65
                  170.1
                  0.45
                  1.915
                  2.4
                  1.92SSI-D08-110
                  Sinter
                  71.45
                  72.05
                  0.60
                  1.905
                  1.1
                  1.91SC-D08-043
                  Veta
      Maria Belen
                  55.4
                  55.8
                  0.40
                  1.86
                  7.9
                  1.88SVN-D08-150
                  Veta
      Sur
                  18
                  18.5
                  0.50
                  1.76
                  43.6
                  1.87SVN-D08-194
                  Veta
      Norte
                  55.7
                  56.1
                  0.40
                  1.795
                  27.1
                  1.87SSI-D08-167
                  Sinter
                  37
                  38
                  1.00
                  1.85
                  4.2
                  1.86SVN-D08-198
                  Veta
      Norte
                  105.7
                  107.4
                  1.70
                  1.785
                  28.2
                  1.86SVN-D08-101
                  Veta
      Amanda
                  21.19
                  21.74
                  0.55
                  1.845
                  4.7
                  1.86SVN-D08-130
                  Veta
      Sur
                  
                  
                  
                  1.66
                  68.3
                  1.84SVN-D08-130
                  Veta
      Sur
                  129.2
                  129.7
                  0.50
                  1.785
                  18.2
                  1.83SVN-D08-076
                  Veta
      Amanda
                  15.25
                  16.25
                  1.00
                  1.81
                  8.5
                  1.83SVN-D08-127
                  Veta
      Sur
                  129.2
                  129.7
                  0.50
                  1.605
                  78
                  1.81SVN-D08-210
                  Veta
      Norte
                  88.35
                  89.25
                  0.90
                  1.62
                  71.8
                  1.81SVN-D08-130
                  Veta
      Sur
                  77.55
                  77.95
                  0.40
                  1.485
                  121
                  1.80SVN-D08-176
                  Veta
      Amanda
                  266.8
                  267.2
                  0.40
                  1.46
                  127
                  1.79SVN-D08-124
                  Veta
      Sur
                  203
                  203.5
                  0.50
                  1.57
                  85
                  1.79SVN-D08-209
                  Veta
      Norte
                  49
                  49.5
                  0.50
                  1.78
                  1.9
                  1.78SVN-D08-117
                  Veta
      Amanda
                  11.85
                  12.3
                  0.45
                  1.735
                  14.7
                  1.77SVN-D07-006
                  Veta
      Sur
                  32.5
                  33
                  0.50
                  1.69
                  29.8
                  1.77SVN-D08-142
                  Veta
      Sur
                  71.62
                  72.55
                  0.93
                  0.816
                  360
                  1.76SVN-D08-157
                  Veta
      Sur
                  97.75
                  98.25
                  0.50
                  1.635
                  47.1
                  1.76SVN-D08-017
                  Veta
      Cruzada
                  62.5
                  63
                  0.50
                  1.67
                  32.4
                  1.75SVN-D08-083
                  Veta
      Amanda
                  42.6
                  43
                  0.40
                  1.72
                  9.5
                  1.74SVN-D08-077
                  Veta
      Amanda
                  103.4
                  103.8
                  0.40
                  1.52
                  85
                  1.74SVN-D08-099
                  Veta
      Amanda
                  63.45
                  64
                  0.55
                  1.545
                  75
                  1.74SVN-D08-176
                  Veta
      Amanda
                  264.8
                  265.2
                  0.40
                  1.67
                  24.5
                  1.73SVN-D08-194
                  Veta
      Norte
                  113.75
                  114.25
                  0.50
                  1.72
                  -0.5
                  1.72SVN-D08-193
                  Veta
      Norte
                  0.4
                  1.4
                  1.00
                  1.685
                  4.2
                  1.70SVN-D08-157
                  Veta
      Sur
                  103
                  103.5
                  0.50
                  1.635
                  13.8
                  1.67




18




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D08-120
                  Veta
      Amanda
                  16.23
                  16.7
                  0.47
                  1.58
                  33.6
                  1.67SVN-D08-123
                  Veta
      Sur
                  120.5
                  121
                  0.50
                  1.18
                  183
                  1.66SVN-D07-010
                  Veta
      Amanda
                  69
                  70
                  1.00
                  1.655
                  1
                  1.66SVN-D08-076
                  Veta
      Amanda
                  17.25
                  18.2
                  0.95
                  1.61
                  12.7
                  1.64SVN-D08-143
                  Veta
      Sur
                  94.4
                  94.9
                  0.50
                  1.525
                  43.1
                  1.64SVN-D08-195
                  Veta
      Norte
                  69
                  70
                  1.00
                  1.605
                  8.4
                  1.63SVN-D07-002
                  Veta
      Amanda
                  76.22
                  76.65
                  0.43
                  1.575
                  18.6
                  1.62SC-D08-028
                  Veta
      Maria Belen
                  88.3
                  88.8
                  0.50
                  1.6
                  8.9
                  1.62SVN-D08-139
                  Veta
      Sur
                  79.66
                  80
                  0.34
                  1.58
                  14.2
                  1.62SVN-D08-091
                  Veta
      Amanda
                  177.8
                  178.35
                  0.55
                  1.315
                  115
                  1.62SVN-D07-002
                  Veta
      Amanda
                  87.55
                  88.1
                  0.55
                  1.02
                  227
                  1.61SVN-D08-201
                  Veta
      Norte
                  156.5
                  156.9
                  0.40
                  1.5
                  42.1
                  1.61SVN-D08-176
                  Veta
      Amanda
                  265.6
                  266
                  0.40
                  1.465
                  52.2
                  1.60SVN-D08-100
                  Veta
      Amanda
                  10.7
                  11.2
                  0.50
                  1.59
                  3
                  1.60SVN-D08-127
                  Veta
      Sur
                  
                  
                  
                  1.21
                  144
                  1.59SVN-D08-176
                  Veta
      Amanda
                  264
                  264.4
                  0.40
                  1.49
                  34.2
                  1.58SVN-D08-127
                  Veta
      Sur
                  128.8
                  129.2
                  0.40
                  1.215
                  139
                  1.58SVN-D08-080
                  Veta
      Amanda
                  28.15
                  28.55
                  0.40
                  1.54
                  14.6
                  1.58SVN-D08-121
                  Veta
      Amanda
                  13.5
                  14.7
                  1.20
                  1.57
                  1.8
                  1.57SVN-D08-130
                  Veta
      Sur
                  76.6
                  77.1
                  0.50
                  1.395
                  68.1
                  1.57SVN-D08-157
                  Veta
      Sur
                  83
                  83.5
                  0.50
                  1.435
                  51.4
                  1.57SVN-D08-158
                  Veta
      Sur
                  79.6
                  80
                  0.40
                  1.535
                  12.4
                  1.57SVN-D08-202
                  Veta
      Norte
                  75.7
                  76.1
                  0.40
                  1.55
                  6.5
                  1.57SVN-D08-117
                  Veta
      Amanda
                  15.4
                  16
                  0.60
                  1.465
                  38.8
                  1.57SC-D08-053
                  Veta
      Maria Belen
                  12.5
                  13
                  0.50
                  1.555
                  1.9
                  1.56SVN-D08-101
                  Veta
      Amanda
                  31.76
                  32.7
                  0.94
                  1.495
                  20.6
                  1.55SVN-D07-002
                  Veta
      Amanda
                  132.87
                  133.37
                  0.50
                  1.51
                  12.6
                  1.54SVN-D08-152
                  Veta
      Sur
                  87.3
                  88
                  0.70
                  1.375
                  60.3
                  1.53SVN-D08-142
                  Veta
      Sur
                  70.1
                  70.85
                  0.75
                  1.415
                  45
                  1.53SVN-D08-131
                  Veta
      Sur
                  118.1
                  118.7
                  0.60
                  1.15
                  144
                  1.53SVN-D08-081
                  Veta
      Amanda
                  154.7
                  155.1
                  0.40
                  1.205
                  123
                  1.53SVN-D08-052
                  Veta
      Sur
                  128.6
                  129.2
                  0.60
                  1.48
                  14.7
                  1.52SVN-D08-138
                  Veta
      Sur
                  57.53
                  58.45
                  0.92
                  1.435
                  24.1
                  1.50SC-D08-062
                  Veta
      Tonina
                  75.6
                  76.23
                  0.63
                  1.325
                  64.1
                  1.49SVN-D08-095
                  Veta
      Amanda
                  201.5
                  201.9
                  0.40
                  1.475
                  6
                  1.49SVN-D08-130
                  Veta
      Sur
                  77.95
                  78.35
                  0.40
                  1.27
                  81.1
                  1.48SC-D08-037
                  Veta
      Ailin
                  103
                  103.5
                  0.50
                  1.455
                  5.1
                  1.47SVN-D08-077
                  Veta
      Amanda
                  84.73
                  85.03
                  0.30
                  1.19
                  105
                  1.47SVN-D08-149
                  Veta
      Sur
                  61.4
                  62.2
                  0.80
                  1.1
                  139
                  1.46SVN-D08-141
                  Veta
      Sur
                  93
                  96
                  3.00
                  1.395
                  25.3
                  1.46SVN-D08-117
                  Veta
      Amanda
                  7.1
                  7.5
                  0.40
                  1.42
                  15.2
                  1.46SVN-D08-102
                  Veta
      Amanda
                  29.5
                  30
                  0.50
                  1.4
                  20
                  1.45SVN-D08-084
                  Veta
      Amanda
                  27.9
                  28.32
                  0.42
                  1.42
                  11.6
                  1.45SVN-D08-077
                  Veta
      Amanda
                  57
                  58.09
                  1.09
                  1.405
                  17
                  1.45SVN-D08-125
                  Veta
      Sur
                  151.15
                  151.66
                  0.51
                  1.19
                  98.1
                  1.45SVN-D08-086
                  Veta
      Amanda
                  194
                  194.65
                  0.65
                  1.42
                  9.1
                  1.44SVN-D08-192
                  Veta
      Norte
                  18
                  19
                  1.00
                  1.42
                  7.8
                  1.44SVN-D08-123
                  Veta
      Sur
                  128.5
                  129
                  0.50
                  1.19
                  94.2
                  1.44SVN-D08-098
                  Veta
      Amanda
                  91.2
                  91.55
                  0.35
                  1.435
                  0.5
                  1.44SC-D08-042
                  Veta
      Maria Belen
                  94.85
                  95.25
                  0.40
                  1.4
                  8.8
                  1.42SC-D08-028
                  Veta
      Maria Belen
                  87.6
                  88.3
                  0.70
                  1.395
                  10
                  1.42SVN-D08-118
                  Veta
      Amanda
                  13.5
                  14.25
                  0.75
                  1.37
                  17.7
                  1.42SVN-D08-159
                  Veta
      Sur
                  112.3
                  112.7
                  0.40
                  1.36
                  20.7
                  1.41SVN-D08-130
                  Veta
      Sur
                  128
                  129.2
                  1.20
                  1.165
                  94.7
                  1.41




19




Hole
                  Zone
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      g/t
                  Ag
      g/t
                  Au
      equivalent1
      g/tSVN-D07-001
                  Veta
      Amanda
                  17.05
                  17.5
                  0.45
                  1.41
                  0.8
                  1.41SVN-D08-052
                  Veta
      Sur
                  70.5
                  71.15
                  0.65
                  1.405
                  2.6
                  1.41SVN-D08-056
                  Veta
      Amanda
                  84
                  86
                  2.00
                  1.39
                  0.9
                  1.39SVN-D07-007
                  Veta
      Sur
                  33.9
                  34.75
                  0.85
                  1.375
                  4
                  1.39SVN-D08-200
                  Veta
      Norte
                  71.4
                  71.8
                  0.40
                  1.375
                  3.2
                  1.38SVN-D07-002
                  Veta
      Amanda
                  66.5
                  67.12
                  0.62
                  1.37
                  2.5
                  1.38SVN-D08-177
                  Veta
      Amanda
                  157.05
                  157.45
                  0.40
                  1.315
                  19.5
                  1.37SVN-D08-150
                  Veta
      Sur
                  34.5
                  35
                  0.50
                  1.31
                  21.4
                  1.37SC-D08-042
                  Veta
      Maria Belen
                  94.4
                  94.85
                  0.45
                  1.35
                  4.7
                  1.36SVN-D08-121
                  Veta
      Amanda
                  43.85
                  45.8
                  1.95
                  1.33
                  10.1
                  1.36SVN-D08-083
                  Veta
      Amanda
                  38.3
                  39.1
                  0.80
                  1.35
                  2.1
                  1.36SVN-D08-152
                  Veta
      Sur
                  88.5
                  89
                  0.50
                  0.811
                  199
                  1.33SVN-D08-125
                  Veta
      Sur
                  135
                  136
                  1.00
                  1.285
                  17.1
                  1.33SVN-D08-142
                  Veta
      Sur
                  98.37
                  98.75
                  0.38
                  1.245
                  27.4
                  1.32SVN-D08-193
                  Veta
      Norte
                  8.6
                  9.4
                  0.80
                  1.295
                  8.1
                  1.32SVN-D08-188
                  Veta
      Norte
                  152.45
                  153.2
                  0.75
                  1.295
                  7.2
                  1.31SSI-D08-110
                  Sinter
                  74.85
                  75.3
                  0.45
                  1.305
                  2.4
                  1.31SVN-D08-192
                  Veta
      Norte
                  71.25
                  73
                  1.75
                  1.12
                  71.1
                  1.31SVN-D08-118
                  Veta
      Amanda
                  9.8
                  10.2
                  0.40
                  1.275
                  11.5
                  1.31SVN-D08-092
                  Veta
      Amanda
                  101.2
                  101.7
                  0.50
                  1.3
                  1
                  1.30SVN-D08-193
                  Veta
      Norte
                  11.45
                  11.85
                  0.40
                  1.3
                  0.8
                  1.30SVN-D08-088
                  Veta
      Amanda
                  225.52
                  226.4
                  0.88
                  1.265
                  11.4
                  1.29SVN-D08-132
                  Veta
      Sur
                  73
                  73.5
                  0.50
                  1.11
                  69.9
                  1.29SVN-D08-191
                  Veta
      Norte
                  147.6
                  148.1
                  0.50
                  1.26
                  12.6
                  1.29SSI-D08-109
                  Sinter
                  100.3
                  100.7
                  0.40
                  1.26
                  12
                  1.29SVN-D08-209
                  Veta
      Norte
                  42
                  42.6
                  0.60
                  1.285
                  1.7
                  1.29SVN-D08-137
                  Veta
      Sur
                  77.5
                  78.4
                  0.90
                  0.705
                  218
                  1.28SVN-D08-102
                  Veta
      Amanda
                  39.7
                  40.55
                  0.85
                  1.235
                  15.7
                  1.28SVN-D08-077
                  Veta
      Amanda
                  70.45
                  70.95
                  0.50
                  0.972
                  115
                  1.27SVN-D08-201
                  Veta
      Norte
                  123
                  123.6
                  0.60
                  1.26
                  4.9
                  1.27SVN-D08-057
                  Veta
      Amanda
                  150.1
                  150.6
                  0.50
                  1.065
                  78
                  1.27SVN-D08-052
                  Veta
      Sur
                  92
                  94
                  2.00
                  1.235
                  11.6
                  1.27SVN-D08-046
                  Veta
      Amanda
                  124.2
                  125
                  0.80
                  1.025
                  91.2
                  1.26SVN-D08-117
                  Veta
      Amanda
                  25.9
                  26.9
                  1.00
                  1.26
                  1
                  1.26SSI-D08-074
                  Sinter
                  24
                  25
                  1.00
                  1.245
                  -0.5
                  1.24SVN-D08-195
                  Veta
      Norte
                  12
                  12.4
                  0.40
                  1.205
                  14.4
                  1.24SVN-D08-192
                  Veta
      Norte
                  42
                  43
                  1.00
                  1.225
                  2.9
                  1.23SVN-D08-051
                  Veta
      Sur
                  78.3
                  78.7
                  0.40
                  1.225
                  2.2
                  1.23SVN-D08-094
                  Veta
      Amanda
                  169.15
                  169.65
                  0.50
                  1.19
                  13.6
                  1.23SVN-D08-051
                  Veta
      Sur
                  81
                  81.6
                  0.60
                  1.22
                  2.1
                  1.23SVN-D08-104
                  Veta
      Amanda
                  25.6
                  26.25
                  0.65
                  1.205
                  6
                  1.22SVN-D08-206
                  Veta
      Norte
                  93.6
                  94
                  0.40
                  0.418
                  302
                  1.21SVN-D08-046
                  Veta
      Amanda
                  125
                  125.55
                  0.55
                  1.2
                  3.4
                  1.21SVN-D08-083
                  Veta
      Amanda
                  80.1
                  80.5
                  0.40
                  1.21
                  -0.5
                  1.21SC-D08-028
                  Veta
      Maria Belen
                  86.6
                  87.26
                  0.66
                  1.195
                  3.4
                  1.20SC-D08-042
                  Veta
      Maria Belen
                  94
                  94.4
                  0.40
                  1.195
                  3.4
                  1.20SC-D08-028
                  Veta
      Maria Belen
                  87.2
                  87.6
                  0.40
                  1.195
                  3.3
                  1.20SSI-D08-167
                  Sinter
                  29
                  30
                  1.00
                  1.195
                  1.5
                  1.20SVN-D08-206
                  Veta
      Norte
                  123.35
                  124
                  0.65
                  1.185
                  5.3
                  1.20SVN-D07-003
                  Veta
      Amanda
                  77.38
                  77.9
                  0.52
                  1.165
                  11.8
                  1.20SVN-D08-153
                  Veta
      Sur
                  40.5
                  41.2
                  0.70
                  1.13
                  24.5
                  1.19SVN-D08-100
                  Veta
      Amanda
                  13.85
                  14.6
                  0.75
                  1.18
                  5.1
                  1.19SVN-D08-207
                  Veta
      Norte
                  16.4
                  16.9
                  0.50
                  1.18
                  2.8
                  1.19SVN-D08-083
                  Veta
      Amanda
                  31.45
                  32.35
                  0.90
                  1.065
                  46
                  1.19





20




Hole
                        Zone
                        From
      (m)
                        To
      (m)
                        Length
      (m)
                        Au
      g/t
                        Ag
      g/t
                        Au
      equivalent1
      g/tSVN-D08-097
                        Veta
      Amanda
                        37.3
                        37.85
                        0.55
                        1.175
                        3.5
                        1.18SVN-D08-149
                        Veta
      Sur
                        79.8
                        80.2
                        0.40
                        0.886
                        113
                        1.18SVN-D08-171
                        Veta
      Amanda
                        200.9
                        201.4
                        0.50
                        1.15
                        11.7
                        1.18SVN-D08-206
                        Veta
      Norte
                        82
                        83
                        1.00
                        1.15
                        11
                        1.18SVN-D08-083
                        Veta
      Amanda
                        43
                        43.5
                        0.50
                        1.115
                        18.6
                        1.16SVN-D08-209
                        Veta
      Norte
                        48
                        49
                        1.00
                        1.155
                        1.8
                        1.16SVN-D08-117
                        Veta
      Amanda
                        27.95
                        28.4
                        0.45
                        1.15
                        2.8
                        1.16SVN-D08-130
                        Veta
      Sur
                        171.35
                        171.85
                        0.50
                        1.125
                        12.3
                        1.16SVN-D08-076
                        Veta
      Amanda
                        29.15
                        29.6
                        0.45
                        1.15
                        1.5
                        1.15SC-D08-044
                        Veta
      Maria Belen
                        93.8
                        94.45
                        0.65
                        1.095
                        22
                        1.15SVN-D07-002
                        Veta
      Amanda
                        73.4
                        73.8
                        0.40
                        1.145
                        2.7
                        1.15SVN-D08-051
                        Veta
      Sur
                        85.5
                        86.15
                        0.65
                        1.14
                        2.9
                        1.15SVN-D08-125
                        Veta
      Sur
                        147
                        147.5
                        0.50
                        1.065
                        30.8
                        1.15SVN-D07-004
                        Veta
      Sur
                        24
                        26
                        2.00
                        1.14
                        0.8
                        1.14SVN-D08-052
                        Veta
      Sur
                        103.56
                        104
                        0.44
                        0.98
                        61.5
                        1.14SVN-D07-011
                        Veta
      Norte
                        48
                        49
                        1.00
                        1.135
                        1.7
                        1.14SVN-D08-056
                        Veta
      Amanda
                        171.6
                        172.4
                        0.80
                        1.13
                        2.9
                        1.14SVN-D08-168
                        Veta
      Amanda
                        362
                        362.8
                        0.80
                        0.621
                        193
                        1.13SSI-D08-167
                        Sinter
                        42
                        43
                        1.00
                        1.115
                        3.6
                        1.12SVN-D08-176
                        Veta
      Amanda
                        255.15
                        255.6
                        0.45
                        1.055
                        25.2
                        1.12SVN-D08-132
                        Veta
      Sur
                        70
                        70.5
                        0.50
                        1.07
                        17.6
                        1.12SVN-D08-117
                        Veta
      Amanda
                        17.6
                        18.2
                        0.60
                        0.965
                        56.5
                        1.11SVN-D08-087
                        Veta
      Amanda
                        88
                        88.4
                        0.40
                        1.08
                        11.2
                        1.11SVN-D08-048
                        Veta
      Sur
                        106
                        107
                        1.00
                        1.045
                        23.6
                        1.11SVN-D08-198
                        Veta
      Norte
                        104.2
                        104.7
                        0.50
                        1.065
                        12.3
                        1.10SVN-D08-129
                        Veta
      Sur
                        130.5
                        130.9
                        0.40
                        0.961
                        51.7
                        1.10SVN-D08-176
                        Veta
      Amanda
                        262
                        262.4
                        0.40
                        1.065
                        11.5
                        1.10SVN-D08-086
                        Veta
      Amanda
                        171.6
                        172.2
                        0.60
                        1.08
                        1.2
                        1.08SVN-D08-201
                        Veta
      Norte
                        210.7
                        211.3
                        0.60
                        0.988
                        33.1
                        1.07SVN-D08-188
                        Veta
      Norte
                        170
                        170.5
                        0.50
                        1.04
                        12.8
                        1.07SSI-D08-108
                        Sinter
                        42.5
                        43.5
                        1.00
                        1.065
                        1
                        1.07SVN-D08-092
                        Veta
      Amanda
                        107.6
                        108
                        0.40
                        1.025
                        15.1
                        1.06SVN-D08-090
                        Veta
      Amanda
                        122.13
                        122.9
                        0.77
                        1.06
                        -0.5
                        1.06SVN-D08-210
                        Veta
      Norte
                        145.1
                        145.8
                        0.70
                        0.607
                        172
                        1.06SVN-D08-102
                        Veta
      Amanda
                        32
                        33.6
                        1.60
                        1.045
                        4
                        1.06SSI-D08-110
                        Sinter
                        25.45
                        25.85
                        0.40
                        1.04
                        5.1
                        1.05SSI-D08-167
                        Sinter
                        27
                        28
                        1.00
                        1.05
                        1.2
                        1.05SVN-D08-141
                        Veta
      Sur
                        91.8
                        93
                        1.20
                        0.965
                        32.8
                        1.05SVN-D08-192
                        Veta
      Norte
                        17.25
                        18
                        0.75
                        1.03
                        6.7
                        1.05SVN-D08-141
                        Veta
      Sur
                        49.45
                        49.85
                        0.40
                        0.966
                        30.2
                        1.05SVN-D08-127
                        Veta
      Sur
                        125.1
                        125.65
                        0.55
                        1.015
                        10.2
                        1.04SVN-D08-204
                        Veta
      Norte
                        15.3
                        15.9
                        0.60
                        1.025
                        4.9
                        1.04SVN-D07-005
                        Veta
      Sur
                        101.7
                        102.2
                        0.50
                        0.993
                        16.7
                        1.04SVN-D07-012
                        Veta
      Norte
                        65.4
                        66.35
                        0.95
                        1.01
                        8.6
                        1.03SVN-D08-157
                        Veta
      Sur
                        100
                        100.5
                        0.50
                        1.015
                        3.5
                        1.02SSI-D08-107
                        Sinter
                        31.3
                        31.9
                        0.60
                        1.02
                        0.9
                        1.02SVN-D08-194
                        Veta
      Norte
                        96
                        96.5
                        0.50
                        1.01
                        4.3
                        1.02SVN-D08-105
                        Veta
      Amanda
                        20.15
                        22.15
                        2.00
                        1.01
                        1.7
                        1.01SVN-D08-158
                        Veta
      Sur
                        65.8
                        66.4
                        0.60
                        0.994
                        6.8
                        1.01SVN-D08-121
                        Veta
      Amanda
                        26.15
                        26.55
                        0.40
                        1.005
                        1.7
                        1.01SVN-D08-099
                        Veta
      Amanda
                        52.28
                        53.25
                        0.97
                        0.889
                        45.7
                        1.01SVN-D07-003
                        Veta
      Amanda
                        113.3
                        114
                        0.70
                        1.005
                        -0.5
                        1.00SVN-D07-013
                        Veta
      Sur
                        38.5
                        39.5
                        1.00
                        0.969
                        12.3
                        1.00SVN-D08-143
                        Veta
      Sur
                        81.6
                        82
                        0.40
                        0.962
                        14.3
                        1.00SVN-D08-095
                        Veta
      Amanda
                        133.9
                        134.36
                        0.46
                        0.987
                        4.5
                        1.00SVN-D08-142
                        Veta
      Sur
                        96
                        97.5
                        1.50
                        0.909
                        34
                        1.00





21





In 2008
CCSA incurred $4,551,394 in exploration expenses on the La Josefina property. In
2007 CCSA 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. MDs 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.





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.





22





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 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 CCSA 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 CCSA signed a final contract to acquire the Bajo
Pobré property.  Pursuant to this agreement, CCSA 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
                            %




CCSA paid
approximately half of its required payment to FK Minera S.A. in the second year
of the agreement and all of its required payment to FK Minera S.A. in the first
year of the agreement.  CCSA has not engaged in any exploration
activity on the Bajo Pobré property. CCSA has not fulfilled any of our
exploration obligations relative to the Bajo Pobré property. Further, CCSA has
not received any form of formal relief from the contract terms relating to the
Bajo Pobré property.




After the
fifth year, CCSA shall pay FK Minera the greater of a 1% NSR royalty on
commercial production or US$100,000 per year.  CCSA 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. CCSA 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





The Bajo
Pobré 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 two wheel drive vehicles and normally in the winter
by four wheel drive vehicles.





23





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 have not
fulfilled any of our exploration obligations relative to the Bajo Pobré
property. We plan to allocate the bulk of future 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 CCSA 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.CCSA 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.





24





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 CCSA in
2006 and 2007 (See below). During that time CCSA 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 NNW-SSE 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 Chon Aike 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,
based on assay results over 1 g/t Au, were as follows:





Hole
                  From
      (m)
                  To
      (m)
                  Length
      (m)
                  Au
      (g/t)GAT-DDH06
      001
                  146.6
                  147.4
                  0.80
                  11.7GAT-DDH06
      001
                  140.2
                  140.8
                  0.60
                  8.24GAT-DDH06
      001
                  142.5
                  143.2
                  0.70
                  6.5GAT-DDH06
      001
                  144
                  145
                  1.00
                  4.78GAT-DDH06
      001
                  141.4
                  142
                  0.60
                  3.92GAT-DDH06
      001
                  145
                  145.8
                  0.80
                  3.82GAT-DDH06
      001
                  139.7
                  140.2
                  0.50
                  3.76GAT-DDH06-006
                  21
                  22.5
                  1.50
                  3.64GAT-DDH06
      001
                  139.2
                  139.7
                  0.50
                  3.03GAT-DDH06
      001
                  143.2
                  144
                  0.80
                  2.92GAT-DDH07-007
                  33
                  33.5
                  0.50
                  2.61GAT-DDH06
      001
                  140.8
                  141.4
                  0.60
                  2.52GAT-DDH06
      001
                  137.7
                  138.7
                  1.00
                  2.39GAT-DDH07-008
                  58.6
                  59.5
                  0.90
                  2.33GAT-DDH06
      001
                  145.8
                  146.6
                  0.80
                  1.89GAT-DDH07-008
                  55.4
                  55.9
                  0.50
                  1.77GAT-DDH07-008
                  57.2
                  58
                  0.80
                  1.34GAT-DDH07-012
                  9
                  9.5
                  0.50
                  1.32GAT-DDH06-003
                  36.74
                  37.5
                  0.76
                  1.3GAT-DDH07-013
                  10
                  11
                  1.00
                  1.29GAT-DDH07-012
                  35
                  36
                  1.00
                  1.08GAT-DDH06-004
                  67
                  68
                  1.00
                  1.07GAT-DDH07-007
                  32.1
                  32.6
                  0.50
                  1.07GAT-DDH06-004
                  16
                  17
                  1.00
                  1.01





25





CCSA
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.




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.





26





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 NNW-SSE 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 Chon Aike Formation. These precious metal occurrences are
generally characterized as low-sulfidation 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




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
$85,000.  Future annual advance royalty payments are as
follows:





·
            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.





27









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.





28





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.




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, based on assay
results over 1 g/t Au equivalent, are as follows:







Hole ID
                  From (ft)
                  To (ft)
                  Au
      g/t
                  Ag
      g/t
                  Au
      Equivalent g/tDG06c-002
                  245
                  250
                  3.18
                  8
                  3.28DG06c-001
                  160
                  165
                  2.73
                  20.1
                  2.99DG06c-004
                  50
                  245
                  2.21
                  0.4
                  2.22DG06c-004
                  505
                  510
                  1.87
                  0.6
                  1.88DG06c-004
                  105
                  110
                  1.77
                  1.1
                  1.78DG06c-002
                  215
                  220
                  1.225
                  23.5
                  1.53DG06c-004
                  145
                  150
                  1.245
                  1.6
                  1.27DG06c-004
                  195
                  200
                  0.983
                  1
                  1.00




At Dun
Glen, the Company intends perform offset drilling, follow up on intersected
discoveries and test several additional targets that were previously identified,
although the timing of these activities is uncertain as of the date of this
report. The Company did not conduct any exploration activity on the Dun Glen
property in 2008.




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.





29





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.




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





30




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




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.





31









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.




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.





32





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 million ounces) 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 sulfides with
copper, zinc and silver to gold bearing sulfide veins with associated silver,
zinc, lead arsenic & antimony; to copper-gold  and gold-copper
veins with varying amounts of sulfides; 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
phased exploration program at both the Lac a l’Eau Jaune (“LEJ”) and Malartic
Surimaum properties. Diagnos conducted site visits and exploration work on the
LEJ claim block in November of 2007, collecting 26 rock samples that were sent
to ALS Chemex in Val d’Or, Québec for assay analysis. In the spring of 2008,
Diagnos conducted compilation work followed by a field exploration program on
the LEJ project. Fieldwork was carried out from May 19th to the 1st of June and
included geological mapping, prospecting, rock sampling and soil sampling.
During this period a Mobile Metal Ion (MMI) orientation survey was carried out.
The purpose of the orientation survey was to test the usefulness of the method
in the project area. A total of 152 rock samples, mostly from outcrop, were
collected and delivered for analysis to ALS Chemex in Val d’Or, Québec. A total
of 72 soil samples were collected and sent for MMI analysis to SGS Minerals
Services, Toronto.Rock samples collected
on the LEJ property were analyzed for a multi-element suite including gold and
copper. Diagnos conducted site visits and exploration work on the Malartic claim
block in September of 2008 and collected 145 rock samples which were sent to ALS
Chemex in Val d’Or, Québec.





Mineralization
was observed in the ultramafic volcanic and quartzite units. Highest grades were
obtained at the quartzite/ultramafic contact which was found in both the
northern and southern claim block. The “quartzite” may also be described as a
heavily silicified sheared horizon with areas containing clasts of semi-massive
to massive sulfides (Cpy, Py, Sp) and abundant mineralization within the
schistosity. The ultramafic volcanic rocks show up to 5% disseminated/clasts Py
and Cpy in the northern block while the southern block showed the ultramafic to
be either moderately mineralized or with large (5-10 cm) massive sulfide
pouches.





The
Company incurred $227,880 and $1,533 in 2008 and 2007, respectively, in
exploration expenses relating to the Quebec properties.




El
Milagro/El Capitan Property





Overview




In 2008
the company purchased a 100% interest in the “El Capitan” and “El Milagro”
mineral exploration and mining concessions from a Mexican Particular; Jesus
Guadelupe Morales. The El Capitan exploration concession was purchased for
$110,000 with no underlying royalties. The El Milagro mining concession was
purchased for $150,000 and retains a 2% net profit royalty which must be paid to
a previous owner should a mine be put into production




Location




The El
Capitan and El Milagro property package is located in the northern Mexico state
of Chihuahua.





33










Climate
and Physiography





The
overall climate of the region is characterized by mild temperatures, but rainy
during the summer season. It is possible to operate year-round in this area.
Temperatures typically range between 18o C during the summer to a low of 0o C in
winter. Maximum temperature is about 34° C. Snow occurs in the higher elevations
of the region. Annual rainfall averages between 90 and 100 cm. Vegetation
consists mainly of the typical scrub oak forest found in the Sierra Madre
Mountains. Coniferous pines occur in the higher elevations. The projects lie
within Sierra Madre Occidental physiographic province between 800 meters and
1200 meters elevation. The concessions are situated in the east-central portion
of the GUADELUPE VICTORIA (G12B-28) 1:50,000 scale topographic map
sheet.  Topography is generally steep and mountainous with V-shaped
valleys.




Mining
claim detail




El
Capitan is a roughly rectangular concession consisting of 8,105 hectares. It
surrounds and encompasses the El Milagro concession consisting of 100
hectares.





34









Required
property payments





There are
no required payments left to be made on the concessions to previous owners.
Bi-annual tax payments totaling approximately $10,000 must be made each January
and each June to keep the concessions in good standing.




Accessibility




The
properties can be easily accessed via two-wheel drive vehicles by traveling
south-east from Chihuahua City 304 kilometers to El Divisadero where the
pavement ends. This route passes through the towns of Cuauhtémoc and Creel. From
El Divisadero the route continues on maintained gravel and dirt secondary roads
for approximately 100 kilometers to the town of Chinipas, which can also be
reached by traveling approximately 150 kilometers northeast from the Sonora town
of Alamos. From Chinipas, the route continues north for 40 kilometers through
the village of Guadalupe Victoria and on to the small village of Guazisaco,
which is very close to theEl
Milagro/El Capitan Property. During the rainy season a four-wheel drive vehicle
may be necessary on the dirt portions of the route and to ford several river
crossings.




Geologic
Setting





The El
Capitan/El Milagro project lies along the western edge of the Sierra Madre
Occidental, a north-northwest-trending volcanic plateau that separates the
southward extension of the Basin and Range Province of the southwestern United
States into two parts. Basement rocks in the Sierra Madre Occidental are
obscured by Cenozoic volcanic flows, tuffs, and related intrusions
but are inferred to include Proterozoic basement rocks, overlying Paleozoic
shelf and sedimentary rocks, possibly scattered Triassic-Jurassic clastic rocks,
and Mesozoic intrusions





In the
Chinipas mining district, the lowest exposed unit of the lower volcanic series
consists of rhyolitic flows and volcaniclastic units and related shallow
intrusions. These are overlain by andesitic flows and epiclastic rocks with
related andesitic porphyry intrusions. Local pillow lavas and limestone within
the andesitic sequence attest to their deposition in a subaqueous environment.
These rocks are probably part of the upper Cretaceous Tarahumara Formation.
Mineralization in the district, which is predominately hosted in andesites of
the lower volcanic series can also be found in calcareous sediments, carbonates
and in portions of the underlying rhyolites. Structural extension in the
district takes the form of normal faults striking north-south to
north-northwest, with west-northwest-trending flexures, as well as dilation of
west-northwest-trending fractures, caused by strike-slip faulting.





35





Mineralization
in the area is typical of low sulfidation epithermal gold-silver and silver-lead
veins, stockworks and breccias bodies. However, skarn-type carbonate replacement
and mineralized brecciation in calcareous sediments proximal to intrusive
emplacements has also been documented.




History




Between
1989 and 1992 the property was controlled by two Mexican individuals who opened
up one or more historic mine workings, extracted 25 tons of ore, and had it
shipped by mule train to a nearby mill for processing. Also during this time the
claim holders commissioned a Professional Engineer to sample the underground
workings and estimate a resource. In the early to mid 2000’s the project was
controlled by Chesapeake Gold, a Canadian junior exploration company, which
completed a limited program of sampling and mapping. The results of that program
are unknown. The local inhabitants of the town of Guazisaco, which is located
proximal to numerous old mine working within the El Capitan project, indicate
that  gold had been produced in the area by Huarajic Indians and
Mestizo Mexican miners who extracted gold along high-grade vein outcroppings and
surrounding placers. This activity is believed to date back to the colonial
period of 1680-1750.  Along the local river beds there are numerous
abandoned Tahonas (primitive water driven machines used to break down and
extract precious metals), possibly indicating historic small scale metals
production in the area.




Exploration




During
2008 one of the Company’s geologists made five, 20 day site visits to the
project. Exploration work included regional reconnaissance, geologic mapping,
and chip/channel sampling. Work was carried out on foot and with the aid of
mules. The purpose of these programs was to identify zones of alteration,
mineralization, and historic mining activity. Approximately 200 samples were
collected and sent ALS Chemex in Chihuahua City for preparation and
analysis.  Multipal zones of apparent mineralization was discovered
and mapped and 13 abandon mine sites were located and recorded.




CCSA
Mexico and the Company incurred $30,104 and $23,535 in exploration expenses on
the El Milagro/El Capitan property in 2008 and 2007, respectively.




Legal
Framework for Exploration in Mexico





In
preparation for organized exploration that would include trenching, road
construction and drilling, the company finalized negotiations with the local
inhabitants, township representatives, and Ejido Members in late February of
2009. On March 24th of 2009
a final agreement was signed that would allow the company to complete all
necessary exploration work within the project area for a term of five years. The
company is now in the process of evaluating and engaging contractors to complete
and file all necessary permits to maintain the project in good standing within
the legal framework for exploration in Mexico.




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 12/31/2007First
      Quarter
                  
                  
                  .80
                  
                  
                  
                  .39Second
      Quarter
                  
                  
                  .50
                  
                  
                  
                  .40Third
      Quarter
                  
                  
                  .45
                  
                  
                  
                  .35Fourth
      Quarter
                  
                  
                  .60
                  
                  
                  
                  .45Year
      Ended 12/31/2008First
      Quarter
                  
                  
                  .93
                  
                  
                  
                  .50Second
      Quarter
                  
                  
                  .85
                  
                  
                  
                  .73Third
      Quarter
                  
                  
                  .77
                  
                  
                  
                  .59Fourth
      Quarter
                  
                  
                  .69
                  
                  
                  
                  .26




36




(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)
                        (a)
                      
                      
                      Weighted-average
      exercise price of outstanding options, warrants and rights
                        (b)
                      
                      
                      Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
                        (c)Equity
      compensation plans approved by shareholders
                      
                      
                      2,495,000
                      
                      
                      $
                      0.45
                      
                      
                      
                      505,000Equity
      compensation plans not approved by shareholders
                      
                      
                      -0-
                      
                      
                      
                      -0-
                      
                      
                      
                      -0-Total
                      
                      
                      2,495,000
                      
                      
                      $
                      0.45
                      
                      
                      
                      505,000





(e)
            Unregistered
      Sales





In
January, 2008 the Company issued 408,000 shares and 408,000 warrants pursuant to
the conversion 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.





In March,
2008 the Company issued 4,000 shares and 4,000 warrants pursuant to the
conversion 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.





On April
9, 2008 the Company issued 40,000 shares and 40,000 warrants pursuant to the
conversion 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.





37





On April
16, 2008 the Company issued 20,200,056 shares and 20,200,056 warrants pursuant
to the conversion of principal and accrued interest 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.





In July,
2008 the Company issued 22,394,192 shares and 22,394,192 warrants pursuant to
the conversion of principal and accrued interest 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–We
      are a smaller reporting company as defined by Rule 12b-2 of the Exchange
      Act and are not required to provide the information under this
      item.





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, 2008 compared to year ended December 31, 2007





Result
of Operations





Dividend
and interest income increased to $8,211 in 2008 from $7,047 in 2007. This
increase was primarily due to currency exchange rate changes.





Total
expenses increased from approximately $9.6 million in 2007 to $40.7 million in
2008.  The increase is primarily due to an increase in financing
charges of $18.3 million, amortization of debt discount of $5.6 million and the
increase in exploration expenses of $4.8 million.





As a
result, the Company recorded a net loss of $40.7 million in 2008, compared to a
net loss of $9.6 million in 2007.





38





Liquidity
and Capital Resources





Working
Capital, Cash and Cash Equivalents





The
Company’s working capital deficit at December 31, 2008 was $3.6 million compared
to $977,242 at December 31, 2007. The ratio of current assets to current
liabilities was 0.23 to 1 at December 31, 2008 compared to 0.44 to 1 at December
31, 2007. Working capital decreased in 2008 due to the Company’s increased
exploration activity and the Company’s short-term convertible debt financing
incurred in 2007 and 2008.





Net cash
used in operating activities was $8.3 million in 2008 compared with $2.6 million
used in operating activities in 2007.  The increase is the result of
the increased net loss from operations.





In 2008,
investing activities used $839,587 compared with $1.1 million in
2007.  The decrease is primarily related to a land purchase of
$710,000 and the $247,486 purchase of a performance bond that occurred in
2007.





Cash flow
from financing activities was $8.79 million in 2008 compared to $4 million in
2007.  The increase is primarily the result of $6.8 million received
from a convertible note financing and $1.9 million received from a shareholder
loan.





As a
result, cash and cash equivalents decreased by $402,819 in 2008.  The
Company has cash and cash equivalents of $250,484 as of December 31,
2008.  It will be necessary for the Company to raise additional
capital to continue it business activities in 2009.





Overview





We are an
exploration stage company focusing on the exploration of gold, silver and base
metal properties in South America, Central America, Canada and the United
States. From 2005 through December 31, 2008 our activities primarily related to
securing exploration projects and conducting exploration activities including
diamond drilling.





Our
current operating plan for the next 12 month includes:





·
            Evaluating
      assay data created in the exploration processes conducted in Argentina in
      2007 and 2008;


·
            Developing
      and evaluating an exploration plan based on the findings of our assay data
      analysis;


·
            Conducting
      further geologic reconnaissance activity on our Mexican
      properties;


·
            Assessing
      the exploration potential of our Nevada and Canadian
      properties;


·
            Securing
      new equity and/or debt financing




Off-Balance
Sheet Arrangements




None.




Contractual
Obligations




Our
contractual obligations as of December 31, 2008 were as
follows:




Payments
      due by periodContractual
      obligations
                      
                      Total
                      
                      
                      Less
      than 1 year
                      
                      
                      1-3
      years
                      
                      
                      3-5
      years
                      
                      
                      More
      than 5 yearsLease
      obligation – Bajo Bobre Property
                      
                      $
                      339,214
                      
                      
                      $
                      94,607
                      
                      
                      $
                      150,000
                      
                      
                      $
                      0
                      
                      
                      $
                      0Exploration
      obligation – Bajo Pobre Property
                      
                      
                      500,000
                      
                      
                      
                      500,000
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0Exploration
      obligation – La Josefina Property
                      
                      
                      623,606
                      
                      
                      
                      0
                      
                      
                      
                      623,606
                      
                      
                      
                      0
                      
                      
                      
                      0Dun
      Glen Property
                      
                      
                      475,000
                      
                      
                      
                      52,500
                      
                      
                      
                      205,000
                      
                      
                      
                      217,500
                      
                      
                      
                      0Total
                      
                      $
                      1,937,820
                      
                      
                      $
                      647,107
                      
                      
                      $
                      978,606
                      
                      
                      $
                      217,500
                      
                      
                      $
                      0




Critical
Accounting Estimates




Estimates




The
process of preparing financial statements in conformity with U.S. GAAP requires
the use of estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses.  Such estimates primarily relate to
unsettled transactions and events as of the date of the financial
statements.  Accordingly, upon settlement, actual results may differ from
estimated amounts.





39





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.




Property,
Plant and Equipment




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, 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.  Property and equipment are being depreciated over
useful lives of three to seven years using straight-line
depreciation.




Share-Based
Compensation




We
account for stock-based compensation in accordance with SFAS No. 123(R),
Share-Based Payment
..  Under the fair value recognition provisions of this statement,
share-based compensation cost is measured at the vesting date based on the value
of the award.  Determining the fair value of share-based awards at the
grant date requires judgment, including estimating expected dividends.  In
addition, judgment is also required in estimating the amount of share-based
awards that are expected to be forfeited.  If actual results differ
significantly from these estimates, stock-based compensation expense and our
results of operations could be materially impacted.





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 160 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
141R may have on our results of operations or financial position.





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.  As such, the Company adopted SFAS 159 effective
January 1, 2008.  However, the Company has not elected the fair value
option for any financial instruments, and adoption has not impacted the
Company’s financial statements.




In May
2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The
Hierarchy of Generally accepted Accounting Principles” ("SFAS 162"). SFAS 162
identifies a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with U.S. generally accepted accounting principles for
non-governmental entities. SFAS 162 is effective 60 days following the
Securities and Exchange Commission's approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, "The Meaning of Presenting Fairly
in Conformity with Generally Accepted Accounting Principles." The Company is
assessing the impact of the adoption of SFAS 162 and believes there will be no
material impact on its consolidated financial statements.





40





Item 7A
            QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK –We are a smaller reporting company
      as defined by Rule 12b-2 of the Exchange Act and are not required to
      provide the information under this
item.





41





ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA








HUNTMOUNTAIN
RESOURCES
 AND
SUBSIDIARIES
 (An
Exploration Stage Enterprise)








Consolidated
Financial Statements and Report of Independent Registered Public Accounting
Firm





December
31, 2008 and 2007





42





HuntMountain
Resources Ltd. and Subsidiaries
 (Formerly
Metaline Mining & Leasing Company)
 (An
Exploration Stage Enterprise)


Contents







PageREPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                    44CONSOLIDATED
      FINANCIAL STATEMENTS:Consolidated
      balance sheets
                    45Consolidated
      statement of income
                    46Consolidated
      statement of stockholders’ equity
                    48Consolidated
      statement of cash flows
                    47Notes
      to consolidated financial statements
                    49
      - 61





43




HuntMountain
Resources Ltd
 Liberty
Lake, WA
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 We have
audited the accompanying consolidated balance sheets of HuntMountain Resources
Ltd as of December 31, 2008 and 2007, and the related consolidated statements of
operations, stockholders’ equity and cash flows for the years then ended and for
the period from July 1, 2005 (inception of development stage) through December
31, 2008.  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 did not audit the financial
statements of Cerro Cazador S.A., a wholly owned subsidiary, which statements
reflect 55% of total consolidated assets as of December 31, 2008 and 19% of
consolidated net loss for the year ended December 31, 2008. Those financial
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amounts included for Cerro Cazador
S.A. as of December 31, 2008 and for the year then ended is based solely on the
report of the other auditor.
 
 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, 2008 and 2007  and the results of its operations,
stockholders equity and its cash flows for the years then ended and for the
period from July 1, 2005 (inception of development stage) through December 31,
2008 in conformity with accounting principles generally accepted in the United
States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company’s accumulated deficit and lack of revenues raise
substantial doubt about its ability to continue as a going concern. Management’s
plans regarding the resolution of this issue are also discussed in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
  
 Williams
& Webster, P.S.
 Certified
Public Accountants
 Spokane,
Washington
 April 14,
2009





44




HuntMountain
Resources Ltd. and Subsidiaries


(An
Exploration Stage Enterprise)





Consolidated
Balance Sheets








December 31,2008
                  
                  
                  2007AssetsCURRENT
      ASSETS:Cash
      and cash equivalents:Cash
                  
                  $
                  62,162
                  
                  
                  $
                  273,020Short
      term cash investments - domestic
                  
                  
                  14,246
                  
                  
                  
                  12,909Short-term
      cash investments - Argentina
                  
                  
                  174,076
                  
                  
                  
                  367,375Total
      cash and cash equivalents
                  
                  
                  250,484
                  
                  
                  
                  653,304Receivables
                  
                  
                  153,135
                  
                  
                  
                  42,737Prepaid
      expenses
                  
                  
                  77,453
                  
                  
                  
                  72,612Accrued
      interest receivable
                  
                  
                  5,909
                  
                  
                  
                  1,969Deposits
      paid to vendors
                  
                  
                  584,000
                  
                  
                  
                  -Total
      current assets
                  
                  
                  1,070,981
                  
                  
                  
                  770,621PROPERTY
      AND EQUIPMENT, NET:
                  
                  
                  1,323,204
                  
                  
                  
                  714,203OTHER
      ASSETS:Receivable
      - V.A. tax, Argentina
                  
                  
                  380,153
                  
                  
                  
                  190,719Performance
      bond
                  
                  
                  98,927
                  
                  
                  
                  214,762Property
      deposits and property purchase option
                  
                  
                  341,500
                  
                  
                  
                  206,500Investments
                  
                  
                  7,331
                  
                  
                  
                  7,331Total
      other assets
                  
                  
                  827,911
                  
                  
                  
                  619,312Total
      assets
                  
                  $
                  3,222,095
                  
                  
                  $
                  2,104,136Liabilities
      and Stockholders’ Equity (Deficit)CURRENT
      LIABILITIES:Trade
      accounts payable
                  
                  $
                  2,376,402
                  
                  
                  $
                  380,118Accrued
      wages and related taxes
                  
                  
                  115,260
                  
                  
                  
                  120,202Employee
      expense payable
                  
                  
                  3,412
                  
                  
                  
                  -Tax
      payable, Argentina
                  
                  
                  123,290
                  
                  
                  
                  -Shareholder
      loan, including interest payable
                  
                  
                  1,898,534
                  
                  
                  
                  -Net
      short term note payable
                  
                  
                  -
                  
                  
                  
                  1,082,394Accrued
      interest on note payable
                  
                  
                  -
                  
                  
                  
                  165,149Other
      payable
                  
                  
                  202,500
                  
                  
                  
                  -Total
      current liabilities
                  
                  
                  4,719,397
                  
                  
                  
                  1,747,864STOCKHOLDERS’
      EQUITY (DEFICIT):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; 76,251,362 and
      33,016,285 shares issued and outstanding, respectively
                  
                  
                  76,251
                  
                  
                  
                  32,491Additional
      paid-in capital
                  
                  
                  50,975,578
                  
                  
                  
                  12,081,316Retained
      earnings - prior to development stage
                  
                  
                  90,527
                  
                  
                  
                  90,527Deficit
      accumulated during the development stage
                  
                  
                  (52,448,659
                  )
                  
                  
                  (11,794,981
                  )Accumulated
      other comprehensive loss
                  
                  
                  (190,999
                  )
                  
                  
                  (53,081
                  )Total
      stockholders’ equity (deficit)
                  
                  
                  (1,497,302
                  )
                  
                  
                  356,272Total
      liabilities and stockholders’ equity (deficit)
                  
                  $
                  3,222,095
                  
                  
                  $
                  2,104,136The
      accompanying notes are an integral part of these consolidated financial
      statements.





45





HuntMountain
Resources Ltd. and Subsidiaries


(An
Exploration Stage Enterprise)





Consolidated
Statements of Operations








From
      Inceptionof
      Development StageYears Ended December 31,
                            
                            
                            July
      1, 2005 through2008
                            
                            
                            2007
                            
                            
                            December 31, 2008INCOME:
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -EXPENSES:Professional
      fees
                            
                            
                            942,414
                            
                            
                            
                            589,545
                            
                            
                            
                            1,629,225Marketing
                            
                            
                            51,293
                            
                            
                            
                            69,743
                            
                            
                            
                            228,004Exploration
      expenses
                            
                            
                            5,758,673
                            
                            
                            
                            1,000,940
                            
                            
                            
                            7,875,075Travel
      expenses
                            
                            
                            279,202
                            
                            
                            
                            182,234
                            
                            
                            
                            556,979Administrative
      and office expenses
                            
                            
                            385,843
                            
                            
                            
                            201,351
                            
                            
                            
                            746,089Payroll
      expenses
                            
                            
                            945,845
                            
                            
                            
                            517,979
                            
                            
                            
                            1,862,860Stock
      compensation expense
                            
                            
                            229,262
                            
                            
                            
                            127,600
                            
                            
                            
                            427,862Common
      stock and options issued for services
                            
                            
                            126,588
                            
                            
                            
                            131,500
                            
                            
                            
                            479,838Interest
      expense and banking charges
                            
                            
                            331,257
                            
                            
                            
                            192,917
                            
                            
                            
                            524,174Other
      expense - Argentina
                            
                            
                            87,240
                            
                            
                            
                            -
                            
                            
                            
                            87,240Value
      added tax net present value adjustment
                            
                            
                            953,520
                            
                            
                            
                            -
                            
                            
                            
                            953,520Depreciation
      expense
                            
                            
                            90,634
                            
                            
                            
                            3,739
                            
                            
                            
                            97,64710,181,772
                            
                            
                            
                            3,017,550
                            
                            
                            
                            15,468,512LOSS
      BEFORE OTHER INCOME
                            
                            
                            (10,181,772
                            )
                            
                            
                            (3,017,550
                            )
                            
                            
                            (15,468,512
                            )OTHER
      INCOME/(EXPENSE):Financing
      charge
                            
                            
                            (23,594,347
                            )
                            
                            
                            (5,255,649
                            )
                            
                            
                            (28,849,996
                            )Amortization
      of debt discount
                            
                            
                            (6,890,868
                            )
                            
                            
                            (1,327,616
                            )
                            
                            
                            (8,218,485
                            )Dividend
      and interest income
                            
                            
                            8,211
                            
                            
                            
                            7,047
                            
                            
                            
                            80,493Income
      from partnership interest
                            
                            
                            2,680
                            
                            
                            
                            320
                            
                            
                            
                            5,423Gain
      on sale of fixed assets
                            
                            
                            2,418
                            
                            
                            
                            -
                            
                            
                            
                            2,418LOSS
      BEFORE INCOME TAXES:
                            
                            
                            (40,653,678
                            )
                            
                            
                            (9,593,448
                            )
                            
                            
                            (52,448,659
                            )Income
      taxes:
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -NET
      LOSS AFTER TAXES from continued operations
                            
                            $
                            (40,653,678
                            )
                            
                            $
                            (9,593,448
                            )
                            
                            $
                            (52,448,659
                            )OTHER
      COMPREHENSIVE LOSS
                            
                            
                            (137,919
                            )
                            
                            
                            (47,308
                            )
                            
                            
                            (190,999
                            )COMPREHENSIVE
      LOSS
                            
                            
                            (40,791,597
                            )
                            
                            
                            (9,640,756
                            )
                            
                            
                            (52,639,658
                            )BASIC
      AND DILUTED COMPREHENSIVE LOSS PER SHARE based on weighted-average shares
      outstanding
                            
                            $
                            (0.71
                            )
                            
                            $
                            (0.30
                            )WEIGHTED-AVERAGE
      COMMON SHARES OUTSTANDING, BASIC AND DILUTED
                            
                            
                            57,365,938
                            
                            
                            
                            32,361,217





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





46





HuntMountain
Resources Ltd. and Subsidiaries


(An
Exploration Stage Enterprise)


---




Consolidated
Statements of Cash Flows





From
      InceptionYears
      Ended
                                              
                                              
                                              of
      Development StageDecember 31,
                                              
                                              
                                              July
      1, 2005 through2008
                                              
                                              
                                              2007
                                              
                                              
                                              December 31, 2008Increase
      (Decrease) in Cash and Cash EquivalentsCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                                              
                                              $
                                              (40,653,678
                                              )
                                              
                                              $
                                              (9,593,447
                                              )
                                              
                                              $
                                              (52,448,659
                                              )Adjustments
      to reconcile net loss to net cash used in operating
    activitiesDepreciation
                                              
                                              
                                              90,634
                                              
                                              
                                              
                                              3,739
                                              
                                              
                                              
                                              97,647Stock
      option compensation expense
                                              
                                              
                                              229,262
                                              
                                              
                                              
                                              127,600
                                              
                                              
                                              
                                              427,862Common
      stock and options issued for services
                                              
                                              
                                              126,588
                                              
                                              
                                              
                                              131,500
                                              
                                              
                                              
                                              479,838Financing
      charge
                                              
                                              
                                              23,594,347
                                              
                                              
                                              
                                              5,255,649
                                              
                                              
                                              
                                              28,849,996Amortization
      of debt discount
                                              
                                              
                                              6,890,868
                                              
                                              
                                              
                                              1,327,616
                                              
                                              
                                              
                                              8,218,485Gain
      on sale of precious metal investments
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (15,194
                                              )(Increase)
      decrease in receivables
                                              
                                              
                                              (299,833
                                              )
                                              
                                              
                                              (233,455
                                              )
                                              
                                              
                                              (533,288
                                              )(Increase)
      decrease in prepaid expenses
                                              
                                              
                                              (4,841
                                              )
                                              
                                              
                                              (53,987
                                              )
                                              
                                              
                                              (77,453
                                              )(Increase)
      decrease in deposits paid to vendors
                                              
                                              
                                              (584,000
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (584,000
                                              )Increase
      in accounts payable
                                              
                                              
                                              2,122,985
                                              
                                              
                                              
                                              335,993
                                              
                                              
                                              
                                              2,458,978Increase
      in interest payable, shareholder loan
                                              
                                              
                                              28,534
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              28,534Increase
      in accrued liabilities
                                              
                                              
                                              (4,942
                                              )
                                              
                                              
                                              103,295
                                              
                                              
                                              
                                              146,385Increase
      in other payable
                                              
                                              
                                              202,500
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              202,500Net
      cash used in operating activities
                                              
                                              
                                              (8,261,575
                                              )
                                              
                                              
                                              (2,595,497
                                              )
                                              
                                              
                                              (12,748,369
                                              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Land
      purchases
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (710,000
                                              )
                                              
                                              
                                              (710,000
                                              )Accrued
      interest income
                                              
                                              
                                              (3,940
                                              )
                                              
                                              
                                              (1,969
                                              )
                                              
                                              
                                              (5,909
                                              )Performance
      bond
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (247,486
                                              )
                                              
                                              
                                              (247,486
                                              )Property
      deposits
                                              
                                              
                                              (135,000
                                              )
                                              
                                              
                                              (136,500
                                              )
                                              
                                              
                                              (271,500
                                              )Property
      purchase option
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (70,000
                                              )Sale
      of precious metal investments
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              28,913Acquisition
      of equipment
                                              
                                              
                                              (700,648
                                              )
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (711,864
                                              )Net
      cash used in investing activities
                                              
                                              
                                              (839,587
                                              )
                                              
                                              
                                              (1,095,955
                                              )
                                              
                                              
                                              (1,987,845
                                              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from convertible note financing
                                              
                                              
                                              6,849,413
                                              
                                              
                                              
                                              4,062,149
                                              
                                              
                                              
                                              10,911,562Proceeds
      from sale of common stock
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,132,870Proceeds
      from shareholder loan
                                              
                                              
                                              1,870,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,870,000Net
      cash from financing activities
                                              
                                              
                                              8,719,413
                                              
                                              
                                              
                                              4,062,149
                                              
                                              
                                              
                                              13,914,432Effect
      of currency translation on cash
                                              
                                              
                                              (21,070
                                              )
                                              
                                              
                                              (14,584
                                              )
                                              
                                              
                                              (35,655
                                              )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                              
                                              
                                              (402,819
                                              )
                                              
                                              
                                              356,113
                                              
                                              
                                              
                                              (857,436
                                              )CASH
      AND CASH EQUIVALENTS, BEGINNING OF YEAR/PERIOD
                                              
                                              
                                              653,304
                                              
                                              
                                              
                                              297,191
                                              
                                              
                                              
                                              1,107,921CASH
      AND CASH EQUIVALENTS, END OF YEAR/PERIOD
                                              
                                              $
                                              250,484
                                              
                                              
                                              $
                                              653,304
                                              
                                              
                                              $
                                              250,484Supplemental
      Disclosures of Cash Flow Information:NON-CASH
      FINANCING ACTIVITIES:Conversion
      of note into equity
                                              
                                              
                                              10,163,010
                                              
                                              
                                              
                                              150,000
                                              
                                              
                                              
                                              10,313,010Cashless
      exercise of options
                                              
                                              
                                              188,829
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              188,829Accrued
      interest
                                              
                                              
                                              (275,082
                                              )
                                              
                                              
                                              (165,149
                                              )
                                              
                                              
                                              (440,232
                                              )Conversion
      of accrued interest into equity
                                              
                                              
                                              598,550
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              598,550Income
      taxes, paid net of refunds:
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Interest
      paid:
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -





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





47








HuntMountain
Resources Ltd. and Subsidiaries


(An
Exploration Stage Enterprise)





Consolidated
      Statements of Stockholders’ Equity
              Years
      Ended December 31, 2008, 2007, 2006 and
2005


---




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:Other
      comprehensive loss:
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                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:Other
      comprehensive loss:
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (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
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                52,600
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                52,600Stock
      options issued for services
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                131,500
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                131,500Convertible
      note issuance
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                9,247,871
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                9,247,871Convertible
      note conversion
                                                
                                                
                                                600,000
                                                
                                                
                                                
                                                150
                                                
                                                
                                                
                                                149,850
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                150,000Comprehensive
      loss:
                                                
                                                
                                                -Other
      comprehensive loss:
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (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
                                                )
                                                
                                                $
                                                356,272Common
      stock issued for cash
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Common
      stock issued for executive compensation
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Exercise
      of stock options
                                                
                                                
                                                188,829
                                                
                                                
                                                
                                                189
                                                
                                                
                                                
                                                (189
                                                )
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Stock
      options issued to employees
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                229,262
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                229,262Stock
      options issued for services
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                126,588
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                126,588Convertible
      note issuance
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                27,787,800
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                27,787,800Convertible
      note conversion
                                                
                                                
                                                43,046,248
                                                
                                                
                                                
                                                43,046
                                                
                                                
                                                
                                                10,750,801
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                10,793,847Miscellaneous
      stock adjustment
                                                
                                                
                                                -
                                                
                                                
                                                
                                                526
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                526Other
      comprehensive loss:
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (137,918
                                                )
                                                
                                                
                                                (137,918
                                                )Net
      loss
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (40,653,678
                                                )
                                                
                                                
                                                -
                                                
                                                
                                                
                                                (40,653,678
                                                )Comprehensive
      loss
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                (40,791,596
                                                )BALANCES,
      DECEMBER 31, 2008
                                                
                                                
                                                76,251,362
                                                
                                                
                                                $
                                                76,251
                                                
                                                
                                                $
                                                50,975,578
                                                
                                                
                                                $
                                                90,527
                                                
                                                
                                                $
                                                (52,448,659
                                                )
                                                
                                                $
                                                (190,999
                                                )
                                                
                                                $
                                                (1,497,302
                                                )The
      accompanying notes are an integral part of these consolidated financial
      statements.





48





HuntMountain
Resources Ltd. and Subsidiaries


(An
Exploration 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 2008, the Company had
acquired one exploration property in Nevada, seven properties in the province of
Santa Cruz in Argentina, one property in Mexico and an option on two properties
in Quebec. The Company continues to actively evaluate additional properties in
North and South America.





The
accompanying consolidated financial statements include the accounts of
HuntMountain Resources Ltd. (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
Chihuahua, 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 – GOING CONCERN





As shown
in the accompanying financial statements, the Company has had no revenues and
has incurred an accumulated deficit from the inception of the development stage
of $52,448,659 through December 31, 2008. These factors raise substantial doubt
about the Company’s ability to continue as a going concern. Management intends
to seek additional capital from new equity securities offerings that will
provide funds needed to increase liquidity, fund internal growth and fully
implement its business plan.





Historically,
the Company has generally funded its operations with proceeds from related party
loans that were converted into shares of its common stock. Should the Company be
unsuccessful in raising additional funds through future private placements, its
business, and, as a result, its financial position, results of operations and
cash flow will likely be materially adversely impacted. As such, substantial
doubt as to the Company’s ability to continue as a going concern remains as of
the date of these financial statements.





The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence. An estimated $3,500,000 is believed necessary to
continue operations and increase development through the next twelve months.
Currently, the Company anticipates raising the majority of the $3,500,000
through the issuance of common stock to private investors. The timing and amount
of capital requirements will depend on a number of factors, including
exploration and acquisition expenses and the general operations of the
continuing operations of the Company.





NOTE
3 – 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.





49





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, 2008
the Company’s accounts receivable balance was $153,135 compared to $42,737 at
December 31, 2007. The Company’s accounts receivable balance includes no
allowance for doubtful accounts based upon management’s expectations and
analysis.





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.





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. All of the wholly 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 4 - Investments for further details.





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.





Equipment





The
Company evaluates equipment for impairment annually, or 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.





50





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





Drilling
and excavation equipment is stated at cost on the balance sheet for December 31,
2008. The Company has not begun depreciating drilling and excavation equipment
because the equipment has not been placed into service.





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 on December 31, 2008, they were not included in the calculation of
earnings per share because they would have been considered
anti-dilutive.





Basic
earnings per share are computed using the weighted average number of shares
outstanding during the years (57,365,938 at year end of 2008 and 32,266,285 at
the end of 2007).




As of
December 31, 2008 and 2007, the Company had outstanding options and warrants for
a total of 48,896,248 and 33,637,192 respectively of additional 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.





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.





51





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 160 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
141R may have on our results of operations or financial position.





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.  As such, the Company adopted SFAS 159 effective
January 1, 2008.  However, the Company has not elected the fair value
option for any financial instruments, and adoption has not impacted the
Company’s financial statements.




In May
2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The
Hierarchy of Generally accepted Accounting Principles” ("SFAS 162"). SFAS 162
identifies a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with U.S. generally accepted accounting principles for
non-governmental entities. SFAS 162 is effective 60 days following the
Securities and Exchange Commission's approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, "The Meaning of Presenting Fairly
in Conformity with Generally Accepted Accounting Principles." The Company is
assessing the impact of the adoption of SFAS 162 and believes there will be no
material impact on its consolidated financial statements.





Fair
Value Measurements





Our
financial instruments as defined by Statement of Financial Accounting Standards
No. 107, “Disclosures about Fair Value of Financial Instruments,” include cash,
short term investments, a performance bond and accrued liabilities. All
instruments except the performance bond are accounted for on a historical cost
basis, which, due to the short maturity of these financial instruments,
approximates fair value at December 31, 2008 and December 31, 2007. The
performance bond was marked to market on December 31, 2008 and December 31,
2007.





Effective
January 1, 2008, the Company adopted Financial Accounting Standards Board (FASB)
SFAS No. 157, Fair Value Measurements (SFAS 157). The provisions of SFAS 157 are
applicable to all of the Company’s assets and liabilities that are measured and
recorded at fair value. SFAS 157 establishes a new framework for measuring fair
value and expands related disclosures. SFAS 157 defines fair value as the price
that would be received for an asset or the exit price that would be paid to
transfer a liability in the principal or most advantageous market in an orderly
transaction between market participants. SFAS 157 establishes a fair value
hierarchy that gives the highest priority to observable inputs and the lowest
priority to unobservable inputs. The three levels of the fair value hierarchy
defined by SFAS 157 are described below.





Level 1:
Quoted prices are available in active markets for identical assets or
liabilities. Active markets are those in which transactions for the asset or
liability occur with sufficient frequency and volume to provide pricing
information on an ongoing basis.





Level 2:
Pricing inputs are other than quoted prices in active markets included in Level
1, which are either directly or indirectly observable as of the reporting date.
Level 2 includes those financial instruments that are valued using models or
other valuation methodologies. These models are primarily industry-standard
models that consider various assumptions, including quoted forward prices for
commodities, time value, volatility factors, and current market and contractual
prices for the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the
marketplace throughout the full term of the instrument, can be derived from
observable data or are supported by observable levels at which transactions are
executed in the marketplace.





Level 3:
Pricing inputs include significant inputs that are generally unobservable from
objective sources. These inputs may be used with internally developed
methodologies that result in management’s best estimate of fair value. Level 3
instruments include those that may be more structured or otherwise tailored to
the Company’s needs.





52





As
required by SFAS No. 157, financial assets and liabilities are classified in
their entirety based on the lowest level of input that is significant to the
fair value measurement.  The Company’s assessment of the significance
of a particular input to the fair value measurement requires judgment, and may
affect the valuation of fair value assets and liabilities and their placement
within the fair value hierarchy levels.





The
following table discloses by level within the fair value hierarchy the Company’s
assets and liabilities measured and reported on the Consolidated Balance Sheets
as of December 31, 2008, at fair value on a recurring basis:





Total
                                        
                                        
                                        Level
      I
                                        
                                        
                                        Level
      II
                                        
                                        
                                        Level
      IIIAssets:Performance
      bond
                                        
                                        $
                                        98,927
                                        
                                        
                                        $
                                        98,927
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        0Receivable
      – V.A. Tax
                                        
                                        
                                        380,153
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        0
                                        
                                        
                                        
                                        380,153Total:
                                        
                                        $
                                        479,080
                                        
                                        
                                        $
                                        98,927
                                        
                                        
                                        $
                                        0
                                        
                                        
                                        $
                                        380,153





The
performance bond, required to secure the Company’s rights to explore the La
Josefina property, is a step-up coupon US dollar bond issued by the Government
of Argentina with a face value of $600,000 and a maturity date of 2035. The bond
was originally purchased for $251,613 and had a value of $214,762 at December
31, 2007. As of the year ended December 31, 2008, the value of the bond
decreased to $98,927.





The
Receivable V.A. Tax accrued due to the payment of valued added tax on certain
transactions in Argentina. The Company will realize this credit as an offset
against V.A. taxes due on future revenues.  This asset is reported at
net present value based upon the Company’s estimate of an expected benefit
period of 7 years and a discount rate of 18.6%  based upon the average
Argentine interest rates.





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 $250,000 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, 2008. The
Company also maintains cash in an Argentine bank. The Argentine accounts, which
had a U.S. dollar balance of $184,664 at December 31, 2008, are considered
uninsured.





Beneficial
Conversion Feature of Convertible Notes





The
Company has determined that the Convertible Note (discussed in Note 10 –
Convertible Note) contains a beneficial conversion feature. Following the
guidance provided by EITF 00-27 the Company allocated proceeds of convertible
debt first to the warrants issuable upon conversion of the note. The value of
the warrants was recorded on the balance sheet as debt discount and increases to
shareholder’s equity. The debt discounts were 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.





Foreign
Currency Translation





Our
international operations use the US Dollar as their functional currency. The
financial statements of international subsidiaries are translated to their U.S.
dollar equivalents at end-of-period currency exchange rates for assets and
liabilities and at average currency exchange rates for revenues and expenses.
Translation adjustments for international subsidiaries are recorded as a loss in
the accompanying Consolidated Statements of Income. Transaction gains and losses
resulting from fluctuations in currency exchange rates on transactions
denominated in currencies other than the functional currency are recognized as
incurred in the accompanying Consolidated Statements of Income, except for
certain inter-company balances designated as long-term investments.





Other
Comprehensive Income





The
Company has adopted SFAS 130, “Reporting of Comprehensive Income,”which establishes guidelines for the reporting and display of
comprehensive income (loss) and its components in financial statements.
Comprehensive income (loss) includes the accrued gain or loss on the performance
bond (discussed in Note 6- Commitments).





53





Derivative
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.





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





Compensated
Absences





The
Company has not accrued for compensated absences because the amounts are deemed
to be immaterial.





Reclassifications





Certain
prior year amounts in the accompanying financial statements have been
reclassified to conform to the fiscal 2008 presentation. These reclassifications
have resulted in no changes to the Company’s accumulated deficit or the net loss
presented.





NOTE
4 – INVESTMENTS





The
Company had the following investments:





December
      31,2008
                  
                  
                  2007Partnership
      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
                  
                  
                  5,772
                  
                  
                  
                  5,772Gross
      unrealized holding loss
                  
                  
                  (5,772
                  )
                  
                  
                  (5,772
                  )$
                  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
5 – 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.





54





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
6 – 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:





Year
      of the Agreement
                        
                        Payment
      to FK Minera SA
                        
                        
                        Exploration
      Expenditures Required
                        
                        
                        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, 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.





As of
April 14, 2009, the Company has not conducted any exploration activity pursuant
to the agreement with FK Minera SA.  The Company has not made all
payments required by the Bajo Pobré contract, nor have the parties to the
contract amended the contract terms. The Company owed $19,607 pursuant to the
contract on December 31, 2008. The Company’s ability to retain rights to explore
the Bajo Pobré property is uncertain at this time.





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.  On July 24, 2007 the CCSA
entered into an agreement with Fomicruz 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 Fomicruz 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.  As of December 31, 2008, the value of the bond decreased
further to $98,927. 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.





The
Company incurred approximately $5,301,724 in exploration expenses on the La
Josefina property in 2007 and 2008.





55





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.





Quebec,
Canada





As
addressed in Note 5, 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 $68,523 (not
including common area maintenance charges).





NOTE
7 – 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, 2008 and 2007 the Company had gross deferred tax assets calculated
at the expected rate of 34% of approximately $3,480,000 and $1,512,000,
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 $3,480,000 and $1,512,000 has been
established at December 31, 2008 and 2007, respectively.





The
significant components of the Company’s net deferred tax asset (liabilities) at
December 31, 2008 and 2007 are as follows:





2008
                    
                    
                    2007Net
      operating loss carryforwards
                    
                    $
                    10,236,000
                    
                    
                    $
                    4,447,000Gross
      deferred tax assets (liabilities):Net
      Operating Loss
                    
                    $
                    3,480,000
                    
                    
                    $
                    1,512,000Valuation
      Allowance
                    
                    
                    (3,480,000
                    )
                    
                    
                    (1,512,000
                    )Net
      Deferred tax asset (liability)
                    
                    $
                    -
                    
                    
                    $
                    -





At
December 31, 2008 and 2007, the Company has net operating loss carryforwards of
approximately $14,683,000and $4,447,000 respectively, which will expire in the
years 2021 through 2022.  The net change in the allowance account was
an increase of $1,968,000.





NOTE
8 – SALES OF COMMON STOCK AND WARRANTS





During
the year ended December 31, 2005, the Company entered into and completed an
agreement to sell 7,722,066 shares of common stock to an entity controlled by a
family group.  The shares represented 51.48% of the authorized and
issued common stock of the Company.  The Company received proceeds of
$501,934 related to the transaction.  In connection with the
transaction, the Company issued warrants to acquire an additional 15,444,132
shares of common stock at a price of $0.065 per share, if and when the
capitalization of the Company is increased.





56





Additionally,
during the year ended December 31, 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 warrants were all converted to common stock subsequent
to the Company’s increased capitalization approved by the stockholders at the
Annual Meeting on August 1, 2005, and the special warrants were
cancelled.  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, all of whom are 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. 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.





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, 2008 the Company issued 43,046,248 shares pursuant
to the conversion of a convertible note (see Note 9 – Notes Payable) and 188,829
shares pursuant to the exercise of options (see Note 10 – Stock Option
Plan).





NOTE
9 – NOTES PAYABLE





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





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 March
2008 the Company received an additional $500,000 advance from HFLP pursuant to
the identical terms of the October Note.  Because, at or prior to
receipt of the advance, HFLP management had notified the Company that it would
convert all balances of principal and interest of the October Note into units as
outlined above, the Company and HFLP agreed that the $500,000 advance in March
2008 would be deemed an advance under the October Note. This advance created an
event of default under the terms of the note; however, HFLP waived the default
and interest penalties stated in the default provision of the October
Note.





In
January of 2008 holders of the October Note converted into units, at the
conversion price of $0.25 per share outstanding principal of $102,000 of the
October Note.  As a result the Company issued a total of 408,000
shares and 408,000 warrants.





In March
of 2008 holders of the October Note converted into units, at the conversion
price of $0.25 per share outstanding principal of $1,000 of the October
Note.  As a result the Company issued a total of 4,000 shares and
4,000 warrants.




In April
of 2008 holders of the October Note converted into units, at the conversion
price of $0.25 per share outstanding principal of $4,747,000, plus accrued
interest of $313,014, of the October Note.  As a result the Company
issued a total of 20,240,056 shares and 20,240,056 warrants.





57





During
the second quarter the Company drew an additional $3,025,000 on the October
Note, resulting in a balance of $3,525,000 at June 30, 2008.





Between
July 1, 2008 and July 30, 2008 the Company drew an additional $1,475,000 on the
October Note, resulting in a balance of $5,000,000 on July 30, 2008. On July 30,
2008 holders of the October Note Converted the entire $5,000,000 of October Note
principal at a conversion price of $0.25 per unit. As a result the Company
issued 20,000,000 shares and 20,000,000 warrants.





On July
31, 2008 the Company drew an additional $500,000 on the October Note, resulting
in a balance of $500,000 on that date. Subsequently, on July 31, 2008, holders
of the October Note converted the entire $500,000 balance and $98,548 in accrued
interest payable relating to the October Note into units at a conversion price
of $0.25 per unit. As a result the Company issued 2,394,192 shares and 2,394,192
warrants.





In
accordance with EITF 00-27, the Company recognized the beneficial conversion
feature associated with the October Note’s convertibility into shares and
warrants. The total value of warrants was determined using the Black Scholes
option pricing model. In employing this model, the Company 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.  The
Company assumed expected volatility of 83%, no dividends and a five year horizon
in all Black Scholes option pricing calculations. In 2008, the total value of
warrants from issuances of the October Note was $12,360,296 and the total value
of shares was $11,331,545.







The
following is a summary of common stock warrant activity for each of the three
years ended December 31, 2008:





Number
      of Shares Under Warrants
                        
                        
                        Exercise
      PriceBalance
      at December 31, 2006
                        
                        
                        -
                        
                        
                        
                        -Issued
      in conjunction with conversion of convertible note
                        
                        
                        600,000
                        
                        
                        $
                        0.40Balance
      at December 31, 2007
                        
                        
                        600,000
                        
                        
                        $
                        0.40Issued
      in conjunction with conversion of convertible note
                        
                        
                        43,046,248
                        
                        
                        $
                        0.40Balance
      at December 31, 2008
                        
                        
                        43,646,248
                        
                        
                        $
                        0.40





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, 2008, there
were 2,495,000 stock options granted to employees and consultants, of which
2,295,000 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
      Ended December 31,2008
                              
                              
                              2007Weighted
      average risk free rate:
                              
                              
                              1.4
                              %
                              
                              
                              3.6
                              %Weighted
      average volatility:
                              
                              
                              82.8
                              %
                              
                              
                              76.2
                              %Expected
      dividend yield:
                              
                              
                              0
                              
                              
                              
                              0Weighted
      average life (in years):
                              
                              
                              5.0
                              
                              
                              
                              2.0





58





Expenses
of $229,262 for stock options issued to employees and $126,588 for stock options
issued to non-employees, including consultants and directors, were recorded in
2008.  This compares to expenses of $127,600 for stock options issued
to employees and $131,500 for stock options issued to non-employees in
2007.  The following table summarizes the terms of the options
outstanding at December 31, 2008:





Number
      of
                            Options
                          
                          
                          Weighted
      Average Exercise
                            Price
                          
                          
                          Weighted
      Average
                            Remaining
                            Contractual
      Life
                            (Years)
                          
                          
                          Number
      of
                            Exercisable
                            Options
      at
                            December
      31, 200890,000
                          
                          
                          $
                          0.20
                          
                          
                          
                          3.14
                          
                          
                          
                          90,000700,000
                          
                          
                          $
                          0.25
                          
                          
                          
                          2.60
                          
                          
                          
                          700,000100,000
                          
                          
                          $
                          0.30
                          
                          
                          
                          2.83
                          
                          
                          
                          100,00010,000
                          
                          
                          $
                          0.34
                          
                          
                          
                          1.58
                          
                          
                          
                          10,000150,000
                          
                          
                          $
                          0.38
                          
                          
                          
                          4.57
                          
                          
                          
                          150,000650,000
                          
                          
                          $
                          0.45
                          
                          
                          
                          3.55
                          
                          
                          
                          650,0005,000
                          
                          
                          $
                          0.55
                          
                          
                          
                          2.50
                          
                          
                          
                          5,00055,000
                          
                          
                          $
                          0.60
                          
                          
                          
                          3.98
                          
                          
                          
                          55,000150,000
                          
                          
                          $
                          0.63
                          
                          
                          
                          3.34
                          
                          
                          
                          150,000100,000
                          
                          
                          $
                          0.64
                          
                          
                          
                          4.69
                          
                          
                          
                          100,000100,000
                          
                          
                          $
                          0.67
                          
                          
                          
                          5.0
                          
                          
                          
                          -385,000
                          
                          
                          $
                          0.76
                          
                          
                          
                          4.52
                          
                          
                          
                          285,000TOTALS
                          
                          
                          2,495,000
                          
                          
                          $
                          0.453
                          
                          
                          
                          3.54
                          
                          
                          
                          2,295,000





The
following summarizes option activity for the years presented:





Shares
      under option
                                              
                                              
                                              Weighted
      average exercise priceBalance
      at January 1, 2007
                                              
                                              
                                              1,345,000
                                              
                                              
                                              $
                                              0.35Issued
                                              
                                              
                                              1,020,000
                                              
                                              
                                              
                                              0.43Exercised
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Cancelled
                                              
                                              
                                              (25,000
                                              )
                                              
                                              
                                              0.58Forefeited
      (cashless exercise)
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Balance
      at December 31, 2007
                                              
                                              
                                              2,340,000
                                              
                                              
                                              $
                                              0.35Balance
      at January 1, 2008
                                              
                                              
                                              2,340,000
                                              
                                              
                                              $
                                              0.35Issued
                                              
                                              
                                              585,000.00
                                              
                                              
                                              
                                              0.72Exercised
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Cancelled
                                              
                                              
                                              (60,000.00
                                              )
                                              
                                              
                                              0.59Forefeited
      (cashless exercise)
                                              
                                              
                                              (370,000.00
                                              )
                                              
                                              
                                              0.39Balance
      at December 31, 2008
                                              
                                              
                                              2,495,000
                                              
                                              
                                              $
                                              0.45





Options
outstanding at December 31, 2008, have a remaining contractual life of
approximately 3.54 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.  As of December 31, 2008 the annual lease
obligations are:





Year
                      
                      Office
      Facility
                      
                      
                      Dun
      Glen
                      
                      
                      Bajo
      Pobré
                      
                      
                      Total2009
                      
                      $
                      68,523
                      
                      
                      $
                      52,500
                      
                      
                      $
                      75,000
                      
                      
                      $
                      196,0232010
                      
                      
                      68,523
                      
                      
                      
                      60,000
                      
                      
                      
                      75,000
                      
                      
                      
                      203,5232011
                      
                      
                      68,523
                      
                      
                      
                      72,500
                      
                      
                      
                      75,000
                      
                      
                      
                      216,0232012
                      
                      
                      68,523
                      
                      
                      
                      72,500
                      
                      
                      
                      100,000
                      
                      
                      
                      241,0232013
                      
                      
                      68,523
                      
                      
                      
                      72,500
                      
                      
                      
                      -
                      
                      
                      
                      141,023





59





NOTE
12 – LA JOSEFINA ESTANCIA PURCHASE





In 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.





NOTE
13 – RELATED PARTY TRANSACTIONS





The
Company leases office space from Hunt Family Properties LLC, an entity
controlled by the Company’s Chief Executive Officer and Chairman, Tim Hunt. The
Company paid $68,523 and $26,909 in lease payments to Hunt Family Properties LLC
in 2008 and 2007 respectively.





During
the year ended December 31, 2008 the company paid $14,938 to Alastair Summers, a
director of the Company, for consulting services.





As of
December 31, 2008 the Company had an exploration advance receivable of $200 owed
by Mathew Hughes, an executive officer 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 $1,870.





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





As
of December 31, 2008 the Company had an exploration advance receivable of $3,420
owed by Danilo Silva, an executive officer of CCSA.





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 former Vice-Chairman, was a
principal.





Additional
related party transactions are included as part of Note 8, Note 9, Note 15 and
Note 17.





NOTE
14 – VALUE ADDED TAX CREDIT





The
Company has in other assets --Receivable - V.A. tax, Argentina as of December
31, 2008 and 2007 of $380,153 and $190,719 respectively.  These
amounts reflect the Value Added Tax Credit accrued due to the payment of valued
added tax on certain transactions in Argentina. The Company will realize this
credit as an offset against V.A. taxes due on future revenues.  In
accordance with APB 21, the asset is reported at net present value based upon
the Company’s estimate of future revenues.  The Company used an
expected benefit period of 7 years and a discount rate of 18.6%  based
upon the average Argentine interest rates and has recorded, as an other expense,
a $953,520 net present value adjustment in 2008, which is not deemed to be
recoverable at this time.





NOTE
15 – SHAREHOLDER LOAN





Commencing
in October, 2008 the Company put into place a new shareholder loan structure
through which HFLP continued to finance the company through December 31, 2008.
Between October 6, 2008 and December 31, 2008 HFLP advanced $1,870,000 to the
Company to finance ongoing exploration activities, primarily in Argentina. The
shareholder loan bears interest at an annual rate of 12% and has no maturity
date. The company accrued interest expense of $28,534 relating to the
shareholder loan in 2008.





NOTE
16 – PROPERTY AND EQUIPMENT





In July
of 2008 the Company acquired for cash a truck-mounted drilling rig for $260,634.
In December of 2008 the Company acquired spare parts and other related equipment
for the drilling rig at a cost of $91,418.In October of 2008 the Company
acquired a bulldozer for $37,030. In April, May and June of 2008 CCSA acquired
three trucks, with a December 31, 2008 undepreciated value of $128,792. In 2008
CCSA acquired computer and camp equipment with a December 31, 2008 undepreciated
value of $137,706. Also in 2007, CCSA acquired the La Josefina Estancia for
$710,000.





60





The
following is a summary of property, equipment and accumulated depreciation at
December 31, 2008:





December
      31, 2008
                          
                          
                          December
      31, 2007Equipment
                          
                          $
                          711,864
                          
                          
                          $
                          11,216Land
                          
                          
                          710,000
                          
                          
                          
                          710,000Less
      accumulated depreciation
                          
                          
                          98,660
                          
                          
                          
                          7,014Property,
      Plant & Equipment, net:
                          
                          $
                          1,323,204
                          
                          
                          $
                          714,202





Depreciation
expense was $90,634 in 2008 and $3,739 in 2007.





The
Company evaluates the recoverability of property and equipment when events and
circumstances indicate that such assets might be impaired. The Company
determines impairment by comparing the undiscounted future cash flows estimated
to be generated by these assets to their respective carrying
amounts.





Maintenance
and repairs are expensed as incurred. Replacements and betterments are
capitalized. The cost and related reserves of assets sold or retired are removed
from the accounts, and any resulting gain or loss is reflected in results of
operations.




NOTE
17 - SUBSEQUENT EVENTS





Shareholder
Loan





Subsequent
to December 31, 2008 Hunt Family Limited Partnership loaned an additional
$1,558,500 to the Company under the same terms as discussed in Note 15.




Other
Payable





Subsequent
to December 31, 2008 the Company returned a$202,500 deposit advanced by an
investor pursuant to a cancelled private placement transaction contemplated by
the Company in December of 2008.




Subsequent
to December 31, 2008 the Company invested an additional $950,000 in Cerro
Cazador S.A.


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





Not
applicable.




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, 2008.  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.





61





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, 2008,
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 weaknesses identified are described below:





Lack of Appropriate Accounting
Policies, Procedures, and Personnel.  Management of
HuntMountain Resources, Ltd. has not established with appropriate rigor the
accounting policies, procedures, and documentation of significant judgments and
estimates made by management in the preparation of the financial statements,
including accounting policies related to accounting for convertible debt,
determination of the functional currency of the foreign subsidiary, and
accounting for non-routine expenditures.  In addition, management has
not appropriately assessed the risk to reliable financial reporting related to
the effects of the staffing of key financial reporting
position(s).  This led to the identification by the auditors of
material misstatements in the financial statements that were not identified by
management related to the measurement of convertible debt, foreign subsidiary
financial statements, and accounting for fixed assets.


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, 2008, 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, 2008:





·
            The
      Company’s Chief Financial Officer has communicated enhanced accounting
      policies and procedures to address identified
  gaps.




·
            Management
      is currently in the process of evaluating staffing adequacy of the
      Accounting Department of the Argentine
  subsidiary.





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.None.





62





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 (56)
                      Chairman,
      and Director
                      2005William
      R. Green (70)
                      Director
                      1993*Eberhard
      A. Schmidt (71)
                      Director
                      2005Alastair
      H. Summers (72)
                      Director
                      2006Randal
      L. Hardy (47)
                      Director
                      2005**Darrick
      Hunt
                      Director
                      2008Matthew
      J. Hughes (48)
                      Executive
      Vice-President of Exploration & Chief Operating
Officer
                      2005Danilo
      Silva (46)
                      President
      of CCSA
                      2006Bryn
      Harman, CFA (39)
                      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.





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.





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.





63





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.





Darrick Hunt, CPA is
the Chief Financial Officer of Spokane, Washington-based Huntwood Industries,
the largest building materials manufacturer and one of the largest employers in
the Eastern Washington/Northern Idaho region.  He holds a license as a
Certified Public Accountant under the Board of Accountancy of Washington State,
having received his Bachelors in Business Administration from Gonzaga
University.





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.





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. Mr. Harman is a member of the CFA
Institute and the Institute of Management Accountants.





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, Eberhard Schmidt and Alastair Summers serve as members of the Audit
Committee. William Green, Eberhard Schmidt and Alastair Summers 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 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.





64





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.





Compensation
Committee





William
Green, Eberhard Schmidt and Alastair Summers serve as members of the
Compensation Committee. William Green, Eberhard Schmidt and Alastair Summers are
independent as defined by NASDAQ marketplace rules 4200(a)(15) and
4350(d)(2).





Corporate Governance and
Nominating Committee





William
Green, Eberhard Schmidt and Alastair Summers serve as members of the Corporate
Governance and Nominating Committee. William Green, Eberhard Schmidt and
Alastair Summers are independent as defined by NASDAQ marketplace rules
4200(a)(15) and 4350(d)(2).





The
Company does not have a disclosure committee.





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, 2008 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: Tim Hunt (6 Reports, 12 Transactions),
Michael Mastor (1 Report, 1 Transaction), Bryn Harman (2 reports, 2
transactions), Steve Taylor (1 report, 1 transaction) and Mathew Hughes (2
reports, 2 transactions).




Code
of Ethics




We have
adopted a corporate code of ethics. We believe our code of ethics is reasonably
designed to deter wrongdoing and promote honest and ethical conduct; provide
full, fair, accurate, timely and understandable disclosure in public reports;
comply with applicable laws; ensure prompt internal reporting of code
violations; and provide accountability for adherence to the code. A copy of the
code of ethics is attached hereto.





ITEM
      11.
            EXECUTIVE
      COMPENSATION





The
following table sets forth the compensation paid by the Company to its Chief
Executive Officer and our other most highly compensated officers for the year
ended December 31, 2008 and the year ended December 31, 2007:





Name
                                    Year
                                    
                                    Salary
                                    
                                    
                                    Bonus
                                    
                                    
                                    Stock
      Awards
                                    
                                    
                                    Option
      Awards
                                    
                                    
                                    TotalTim
      Hunt,
                                    2008
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0Chairman
      and CEO
                                    2007
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    02006
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    60,000
                                    
                                    
                                    $
                                    60,000Matthew
      Hughes,
                                    2008
                                    
                                    $
                                    148,846
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    64,000
                                    
                                    
                                    $
                                    212,846Chief
      Operating
                                    2007
                                    
                                    $
                                    120,577
                                    
                                    
                                    $
                                    15,000
                                    
                                    
                                    $
                                    75,000
                                    
                                    
                                    $
                                    17,178
                                    
                                    
                                    $
                                    227,755Officer
                                    2006
                                    
                                    $
                                    90,577
                                    
                                    
                                    $
                                    577
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    22,750
                                    
                                    
                                    $
                                    113,904Bryn
      Harman,
                                    2008
                                    
                                    $
                                    113,000
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    50,000
                                    
                                    
                                    $
                                    163,423Chief
      Financial
                                    2007
                                    
                                    $
                                    13,327
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    15,500
                                    
                                    
                                    $
                                    28,827Officer
                                    2006
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0Steve
      Taylor,
                                    2008
                                    
                                    $
                                    53,846
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    25,000
                                    
                                    
                                    $
                                    78,846Vice
      President and
                                    2007
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0Secretary/Treasurer
                                    2006
                                    
                                    $
                                    42,077
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    42,077Randall
      Hardy,
                                    2008
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0President
                                    2007
                                    
                                    $
                                    84,577
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    24,000
                                    
                                    
                                    $
                                    108,5772006
                                    
                                    $
                                    101,538
                                    
                                    
                                    $
                                    3,352
                                    
                                    
                                    $
                                    0
                                    
                                    
                                    $
                                    22,015
                                    
                                    
                                    $
                                    126,905





65





Executive
Compensation Agreements




Hughes
Employment Agreement





Matthew
Hughes has been an employee of the Company since December 2005 as Vice President
of Exploration.  In August 2007, he entered into a seven-year
employment agreement whereby he would become the Executive Vice President and
Chief Operating Officer.  A brief description of the material terms of
this agreement are as follows:  the term is seven-years with future
renewals to be negotiated between the employee and the chief executive officer;
it can be terminated for cause (without notice) or without cause; if termination
occurs without cause, Mr. Hughes will be entitled to receive six (6) months of
his annual salary in severance; in the event that the company is acquired and
results in Mr. Hughes’ termination or diminution of duties, he will be entitled
to receive twelve (12) months of his annual salary.  His compensation
included an initial annual salary of $150,000, 150,000 shares of restricted
stock, and a $15,000 cash bonus. Mr. Hughes’s base salary was set to increase
periodically through the life of the agreement; however, due to cost cutting
measures, Mr. Hughes salary was permanently reduced to $148,500 on January 1,
2009.





Mr.
Hughes was also granted incentive stock options to purchase 100,000 shares of
common stock (at the closing stock price on the effective date of the agreement,
August 22, 2007) pursuant to the 2005 Stock Option Plan, with 50,000 vesting on
February 1, 2008 and 50,000 vesting on September 1, 2008.  Mr. Hughes
is also eligible to receive health insurance for himself and his family through
the Company, and the Company will pay the premiums for the policy he
chooses.





Harman
Employment Agreement





On
October 29, 2007 the Company entered into an employment agreement with Bryn
Harman. Mr. Harman’s compensation included an annual salary rate of $105,000
until May 7, 2008, an annual salary rate of $115,000 from May 7, 2008 to
November 7, 2008 and an annual rate of $125,000 thereafter, Due to cost cutting
measures, Mr. Harman’s base salary was permanently reduced to an annual rate of
$117,000 on January 1, 2009. Mr. Harman was granted 150,000 stock options
vesting over time during the first year of employment.





Outstanding
Equity Awards at Year End





The
following table summarizes the amount of our executive officers' equity-based
compensation outstanding at the fiscal year ended December 31,
2008:





Options
      awards
                                              
                                              Stock
      awardsName
                                              
                                              Number
      of Securities Underlying Unexercised Options - Exercisable
                                              
                                              
                                              Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised Options
      - Unexercisable
                                              
                                              
                                              Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
                                              
                                              
                                              Option
      Exercise Price
                                              
                                              Option
      Exercise date
                                              
                                              Number
      of Shares That Have Not Vested
                                              
                                              
                                              Market
      Value of Shares That Have Not Vested
                                              
                                              
                                              Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
                                              
                                              
                                              Equity
      Incentive Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not VestedTim
      Hunt
                                              
                                              
                                              250,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.25
                                              
                                              3/26/2011
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Matthew
                                              
                                              
                                              50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.45
                                              
                                              9/1/2013
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Hughes
                                              
                                              
                                              50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.45
                                              
                                              2/1/2013
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.63
                                              
                                              11/2/2011
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.25
                                              
                                              12/15/2013
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.25
                                              
                                              12/15/2012
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.25
                                              
                                              12/15/2011
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.67
                                              
                                              9/1/2015
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              --
                                              
                                              
                                              
                                              50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.67
                                              
                                              2/1/2014
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -Bryn
      Harman
                                              
                                              
                                              50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.38
                                              
                                              11/8/2013
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -50,000
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              $
                                              0.38
                                              
                                              4/8/2013
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -





66





Director
Compensation





No annual
compensation is paid to our directors.  Upon appointment to the board
of directors each director is granted an option to purchase 150,000 shares of
the Company’s common stock at the prevailing market price on the date of
appointment. During the year ended December 31, 2008, Darrick Hunt was granted a
fully vested stock option to purchase 150,000 shares of common stock at market
value on the date of his appointment.





Name
                          
                          Fees
      earned or paid in cash
                          
                          
                          Stock
      awards
                          
                          
                          Option
      Awards
                          
                          
                          All
      other Compensation
                          
                          
                          TotalTim
      Hunt
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0William
      Green
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0Eberhard
      Schmidt
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0Alastair H. Summers
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          14,938
                          
                          
                          $
                          14,938Randy
      Hardy
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          0Darrick
      Hunt
                          
                          $
                          0
                          
                          
                          $
                          0
                          
                          
                          $
                          75,000
                          
                          
                          $
                          0
                          
                          
                          $
                          75,000





Retirement,
Resignation or Termination Plans




We
sponsor no plan, whether written or verbal, that would provide compensation or
benefits of any type to an executive upon retirement, or any plan that would
provide payment for retirement, resignation, or termination as a result of a
change in control of our Company or as a result of a change in the
responsibilities of an executive following a change in control of our
Company.  Specific executive employment agreements described above do,
however, provide, that in the event of a change in control, if the executive’s
employment is terminated by the Company without cause, as such term is defined
in the respective employment agreements, the executive will be entitled to the
payment amounts set forth in the employment agreement.





The
Company does not have a disclosure committee.





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





The
information in the Information Statement set forth under the caption “SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” is incorporated herein by
reference.





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




This
information in incorporated by reference from Notes 6, 9, 10, 12, 14 and
16  to the Company’s Audited Financial Statements as set forth in Item
8 of this Form 10K.





The
Company has lease commitments on office space and storage space owned by Hunt
Family Limited Partnership, an entity controlled by the Company’s Chairman and
CEO. The total annual lease obligation for this facility is $68,523 (not
including common area maintenance charges).





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





67





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
January 2007 note. 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.





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 March
2008 the Company received an additional $500,000 advance from HFLP pursuant to
the identical terms of the October Note.  Because, at or prior to
receipt of the advance, HFLP management had notified the Company that it would
convert all balances of principal and interest of the October Note into units as
outlined above, the Company and HFLP agreed that the $500,000 advance in March
2008 would be deemed an advance under the October Note. This advance created an
event of default under the terms of the note; however, HFLP waived the default
and interest penalties stated in the default provision of the October
Note.





In April
of 2008 holders of the October Note converted into units, at the conversion
price of $0.25 per share outstanding principal of $4,747,000, plus accrued
interest of $313,014, of the October Note.  As a result the Company
issued a total of 20,240,056 shares and 20,240,056 warrants.





During
the second quarter the Company drew an additional $3,025,000 on the October
Note, resulting in a balance of $3,525,000 at June 30, 2008.





Between
July 1, 2008 and July 30, 2008 the Company drew an additional $1,475,000 on the
October Note, resulting in a balance of $5,000,000 on July 30, 2008. On July 30,
2008 holders of the October Note Converted the entire $5,000,000 of October Note
principal at a conversion price of $0.25 per unit. As a result the Company
issued 20,000,000 shares and 20,000,000 warrants.





On July
31, 2008 the Company drew an additional $500,000 on the October Note, resulting
in a balance of $500,000 on that date. Subsequently, on July 31, 2008, holders
of the October Note converted the entire $500,000 balance and $98,548 in accrued
interest payable relating to the October Note into units at a conversion price
of $0.25 per unit. As a result the Company issued 2,394,192 shares and 2,394,192
warrants. During the year ended December 31, 2008 the company paid $14,938 to
Alastair Summers, a director of the Company, for consulting
services.





As of
December 31, 2008 the Company had an exploration advance receivable of $200 owed
by Mathew Hughes, an executive officer 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 $1,870.





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





As
of December 31, 2008 the Company had an exploration advance receivable of $3,420
owed by Danilo Silva, an executive officer of CCSA.





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.





68





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, 2008 and 2007 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
10Q were $57,597 and $45,692 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 $3,432 and $3,291 during the fiscal years ended
December 31, 2008 and 2007, 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 $7,402 and nil  in fees during the fiscal years ended
December 31, 2008 and 2007 respectively, for services rendered by the Company’s
principal accountant relating all other services.





Our audit
committee’s pre-approval policies and procedures described in paragraph
(c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committees
pre-approve all accounting related activities prior to the performance of any
services by any accountant or auditor.





The
percentage of hours expended on the principal accountant’s engagement to audit
our financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant’s full time,
permanent employees was 0%.





69





ITEM
15.                EXHIBITS





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





Incorporated
      as referenceExhibit
                                        Document
      Description
                                        Form
                                        Date
                                        Number
                                        Filed
      Herewith3.1
                                        Articles
      of incorporation
                                        DEF
      14C
                                        10/5/2007
                                        3.13.2
                                        Bylaws
                                        DEF
      14C
                                        10/5/2007
                                        3.214.1
                                        Code
      of Business Conduct and Ethics
                                        
                                        
                                        
                                        X14.2
                                        Code
      of Ethics for President, CEO and Senior Financial Officers
                                        
                                        
                                        
                                        X14.3
                                        Code
      of Ethics for Financial Reporting Officers
                                        
                                        
                                        
                                        X21
                                        Subsidiaries
      of the Registrant
                                        
                                        
                                        
                                        X31.1
                                        Certification
      of the Principal Executive Officer
                                        
                                        
                                        
                                        X31.2
                                        Certification
      of the Chief Financial Officer
                                        
                                        
                                        
                                        X32.1
                                        Certification
      of Principal Executive Officer pursuant to Section 302 of the Sarbanes-
      Oxley Act of 2002
                                        
                                        
                                        
                                        X32.2
                                        Certification
      of Principal Financial Officer pursuant to Section 302 of the Sarbanes-
      Oxley Act of 2002
                                        
                                        
                                        
                                        X99.1
                                        Audit
      Committee Charter
                                        
                                        
                                        
                                        X





70





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 Hunt4/14/2009TIM
      HUNT
                            
                            DateDirector/s/
      William R. Green4/14/2009WILLIAM
      R. GREEN
                            
                            DateDirector/s/
      Eberhard Schmidt4/14/2009EBERHARD
      SCHMIDT
                            
                            DateDirector/s/
      Alastair Summers4/14/2009ALASTAIR
      SUMMERS
                            
                            DateDirector/s/
      Darrick Hunt4/14/2009DARRICK
      HUNT
                            
                            DateDirector/s/
      Randal Hardy4/14/2009RANDAL
      HARDY
                            
                            DateDirector





71




Incorporated
      as referenceExhibit
                                    Document
      Description
                                    Form
                                    Date
                                    Number
                                    Filed
      Herewith3.1
                                    Articles
      of incorporation
                                    DEF
      14C
                                    10/5/2007
                                    3.13.2
                                    Bylaws
                                    DEF
      14C
                                    10/5/2007
                                    3.214.1
                                    Code
      of Business Conduct and Ethics
                                    
                                    
                                    
                                    X14.2
                                    Code
      of Ethics for President, CEO and Senior Financial Officers
                                    
                                    
                                    
                                    X14.3
                                    Code
      of Ethics for Financial Reporting Officers
                                    
                                    
                                    
                                    X21
                                    Subsidiaries
      of the Registrant
                                    
                                    
                                    
                                    X31.1
                                    Certification
      of the Principal Executive Officer
                                    
                                    
                                    
                                    X31.2
                                    Certification
      of the Chief Financial Officer
                                    
                                    
                                    
                                    X32.1
                                    Certification
      of Principal Executive Officer pursuant to Section 302 of the Sarbanes-
      Oxley Act of 2002
                                    
                                    
                                    
                                    X32.2
                                    Certification
      of Principal Financial Officer pursuant to Section 302 of the Sarbanes-
      Oxley Act of 2002
                                    
                                    
                                    
                                    X99.1
                                    Audit
      Committee Charter
                                    
                                    
                                    
                                    X






72