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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2010

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

For the transition period from _____to _____

COMMISSION FILE NUMBER **000-52626**

PENGRAM CORPORATION(Exact name of registrant as specified in its charter)

|NEVADA                                                             |  | 68-0643436                                     
|------------------------------------------------------------------ |  | -----------------------------------------------
|State or other jurisdiction of incorporation or
      organization |  | (I.R.S. Employer Identification No.)           
|                                                                   |  |                                                
|1200 Dupont Street, Suite 2J                                       |  |                                                
|Bellingham, WA                                                     |  | 98225                                          
|(Address of principal executive offices)                           |  | (Zip Code)                                     
|                                                                   |  |                                                
|Registrant's telephone number, including area code                 |  | (360) 255-3436                                 
|                                                                   |  |                                                
|Securities registered pursuant to Section 12(b) of the
      Act:  |  | NONE.                                          
|                                                                   |  |                                                
|Securities registered under Section 12(g) of the Act:              |  | Common Stock, $0.001 Par Value Per
      Share.

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined by Rule 405 of the Securities Act. [  
]Yes     **[X]** No

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.[  
]Yes     **[X] No**

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[   ]Yes     [   ] No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) 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.
[   ]

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 of the
Exchange Act.

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). [   ]Yes     **[X] No**

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $3,029,214, based on a price
of $0.10, being the price at which the common equity was last
sold as of May 31, 2010, our most recently completed second fiscal
quarter.

---

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date. As of March 10, 2011, the Registrant had 58,264,344 shares of common stock
outstanding.

2

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PENGRAM CORPORATION

ANNUAL REPORT ON FORM 10-KFOR THE YEAR ENDED
NOVEMBER 30, 2010

TABLE OF CONTENTS

|           |           |                                                                                                                           | PAGE
|---------- | --------- | ------------------------------------------------------------------------------------------------------------------------- | ----
|           |           |                                                                                                                           |     
|PART I     | 4        
|           |           |                                                                                                                           |     
|           | ITEM 1.   | BUSINESS                                                                                                                  | 4   
|           |           |                                                                                                                           |     
|           | ITEM 1A.  | RISK FACTORS.                                                                                                             | 31  
|           |           |                                                                                                                           |     
|           | ITEM 2.   | PROPERTIES                                                                                                                | 34  
|           |           |                                                                                                                           |     
|           | ITEM 3.   | LEGAL PROCEEDINGS                                                                                                         | 34  
|           |           |                                                                                                                           |     
|PART II    | 35       
|           |           |                                                                                                                           |     
|           | ITEM 5.   | MARKET FOR REGISTRANTS
      COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES. | 35  
|           |           |                                                                                                                           |     
|           | ITEM 7.   | MANAGEMENT'S DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                               | 36  
|           |           |                                                                                                                           |     
|           | ITEM 8.   | FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA.                                                                        | 41  
|           |           |                                                                                                                           |     
|           | ITEM 9.   | CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                | 42  
|           |           |                                                                                                                           |     
|           | ITEM 9AT. | CONTROLS AND PROCEDURES.                                                                                                  | 42  
|           |           |                                                                                                                           |     
|           | ITEM 9B.  | OTHER INFORMATION                                                                                                         | 44  
|           |           |                                                                                                                           |     
|PART III   | 45       
|           |           |                                                                                                                           |     
|           | ITEM 10.  | DIRECTORS, EXECUTIVE OFFICERS
      AND CORPORATE GOVERNANCE.                                                             | 45  
|           |           |                                                                                                                           |     
|           | ITEM 11.  | EXECUTIVE COMPENSATION.                                                                                                   | 46  
|           |           |                                                                                                                           |     
|           | ITEM 12.  | SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                     | 47  
|           |           |                                                                                                                           |     
|           | ITEM 13.  | CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.                                          | 49  
|           |           |                                                                                                                           |     
|           | ITEM 14.  | PRINCIPAL ACCOUNTING FEES
      AND SERVICES.                                                                             | 50  
|           |           |                                                                                                                           |     
|           | ITEM 15.  | EXHIBITS, FINANCIAL STATEMENT
      SCHEDULES.                                                                            | 50  
|           |           |                                                                                                                           |     
|SIGNATURES | 52       

3

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PART I

The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding our capital needs, business strategy and
expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expect," "plan," "intend," "anticipate," "believe,"
"estimate, "predict," "potential" or "continue," the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks described below, and, from time to time, in other reports we file with the
United States Securities and Exchange Commission (the SEC). These factors may
cause our actual results to differ materially from any forward-looking
statement. We disclaim any obligation to publicly update these statements, or
disclose any difference between its actual results and those reflected in these
statements.

As used in this Annual Report, the terms we, us, our,
Pengram, and the Company mean Pengram Corporation and its subsidiaries,
unless otherwise indicated. All dollar amounts in this Annual Report are
expressed in U.S. dollars, unless otherwise indicated.

ITEM
1.           BUSINESS.

GENERAL

We were incorporated on April 28, 2006 under the laws of the
State of Nevada.

Our business plan is to assemble a portfolio of mineral
properties with gold potential and to engage in the exploration and development
of these properties. We currently have an option to acquire a 100% interest in
the Golden Snow Project," the Fish Project and the CPG Project"
(collectively, the Eureka Optioned Properties). We also hold a 100% interest in
the Clisbako Property, subject to the Clisbako Option Agreement (as described
below), and an option to acquire the Manado Gold Property, subject to the Manado
Assignment Agreement (as described below).

In fiscal 2010, we entered into the following agreements to
option and/or assign a majority of our interest in the Clisbako Property and the
Manado Gold Property:

|1. | Manado Assignment Agreement. On August 24, 2010,
      we entered into an assignment agreement (the Manado Assignment
      Agreement) with Manado Gold Corp. (Manado Corp.) whereby we assigned
      75% of our interest in the option agreement dated November 2, 2009, as
      amended, (the Manado Agreement) between us and Agus Abidin on behalf of
      the owners of the K.P. corporations holding the mineral properties (the
      Concession Owners) located in Northern Sulawesi, Indonesia (the Manado
      Gold Property). Under the terms of the Manado Agreement, we acquired the
      right to enter into an agreement (the Acquisition Agreement) to acquire
      up to 85% in the Manado Gold Property. See Manado Gold
  Property.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Clisbako Option Agreement. On September 15, 2010,
      we entered into an option agreement (the Clisbako Option Agreement) with
      Manado Corp. whereby we granted Manado Corp. the sole and exclusive right
      and option to acquire a 75% undivided interest in the Clisbako Property.
      Under the terms of the Clisbako Option Agreement, Manado Corp. will
      exercise its option upon paying Clisbako Inc. an aggregate of USD
      $150,000, issuing 600,000 shares of Manado Corp.s common stock (the
      Shares) and incurring CAD $650,000 in exploration expenditures on the
      Clisbako Property in stages over a three year period. See Clisbako
      Property.                                                                   

Based on the potential and current state of development, we
have decided to focus our resources on the Eureka Options Properties.

GOLDEN SNOW PROJECT, FISH PROJECT AND CPG PROJECT

One May 29, 2009, we acquired an option to acquire a 100%
undivided interest (the Option Agreement) in certain mineral properties known
as the Golden Snow Project in Eureka County, Nevada, the Fish Project in
Esmeralda County, Nevada and the CPG Project in Mineral County, Nevada
(collectively, the Eureka Optioned Properties). Our acquisition of the option was
completed pursuant to the terms and conditions of an assignment agreement (the
Assignment Agreement) dated May 29, 2009 with Portal Resources Ltd. (PRL)
and Portal Resources US Inc.s (the Assignor). Under the terms of the
Assignment Agreement, the Assignor assigned all of its rights and interest in
the an option agreement (the Option Agreement) dated August 28, 2008 among the
Assignor, Claremont Nevada Mines LLC (Claremont), Scoonover Exploration LLC
(Scoonover) and JR Exploration LLC (JR). In consideration of the assignment,
we issued 150,000 shares of common stock to PRL.

4

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In order to maintain and exercise the Option Agreement, we will
be required to:

|(a) | pay to Claremont:                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                        
|    | (i)                                                                                                                                                                                                                                                    
|    | (ii)                                                                                                                                                                                                                                                   
|    | (iii)                                                                                                                                                                                                                                                  
|    | (iv)                                                                                                                                                                                                                                                   
|    | (v)                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                        
|(b) | pay the annual claim maintenance fees for the Eureka
      Optioned Properties during the term of the Option Agreement. The Eureka
      Optioned Properties are in good standing until September 1, 2011;
    and                                     
|    |                                                                                                                                                                                                                                                        
|(c) | pay $1,000 to Claremont in conjunction with the delivery
      to Claremont of a copy of a mine plan of operations in respect of the
      Eureka Optioned Properties, or a final feasibility study in respect of the
      Eureka Optioned Properties.

Upon our exercising of the Option Agreement, Claremont,
Scoonover and JR will collectively reserve a 3% net smelter royalty on the
Eureka Optioned Properties. We may purchase up to 2% of the royalty for $500,000
per 1% of the royalty.

Of the Golden Snow Project, the Fish Project and the CPG
Project we have decided to focus our resources on the exploration of the Golden
Snow Project due to its potential and current state of development.

5

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Figure 1Location of Nevada Properties



Golden Snow Project

Description of Property

The Golden Snow Project consists of 111 unpatented mining
claims covering approximately 3.5 square miles eight miles southwest of Eureka,
Nevada. The titles to the property will expire on September 1, 2011 if we do not
renew the claims.

Location, Access, and Physiography

The Golden Snow Project is contiguous to the southern end of
Staccato Golds Lookout Mountain property, which has identified several
mineralized areas.

6

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Figure 2Location of Golden Snow Project



7

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Property History

Exploration in the Eureka District commenced in the 1860s. The
Company does not have any records of exploration work conducted on the Golden
Snow Project prior to 2006.

In 2006, Minterra Resources acquired the Golden Snow Project.
After its acquisition, Minterra Resources commenced a gravity survey and a 95
line kilometer ground magnetic survey across the Golden Snow Project. The
gravity data identified two up-thrown (horst) blocks and the magnetic data
indicate a prominent circular high that is approximately 2,782 feet in diameter
and has a similar signature to Eocene age intrusive and extrusive rocks
throughout the Eureka District.

In 2007, Minterra Resources completed a 932 sample soil
geochemistry program designed to further refine and evaluate the prominent
horst-bounding faults. Analysis of the data produced numerous large, coherent,
multipoint clusters of anomalous gold, arsenic, antimony, mercury, lead, zinc
and barite.

Geology

Many of the sediment-hosted gold deposits in Nevada appear to
have developed at or near platform margin/basin margin sites where
mineralization is found to be disseminated along the low-stands or karsted
zone separated different stratigraphic units. The Golden Snow Project is
positioned along this major platform margin that extends northwards to Cortez
Hills, Pipeline and beyond. Future study of the location of these platform
margins may result in the discovery of additional world-class gold deposits in
Nevada.

Gold mineralization has come up along the host margin where
Devonian age rocks are in contract with the Cambrian age rocks. The
mineralization is not only found within the feeder fault, but it is also
disseminated out along these low-stand zones which are commonly the break
between different rock formations. Another example of the same host margin
mineralization can be seen in a cross section of the mineralization at Lone
Tree. Mineralization has also been discovered along the Wayne Zone Fault, which
forms the western edge of the horst, and spreads out along favorable host rocks.
Both styles of mineralization appear to potentially exist at the Golden Snow
Project.

The geology of the Golden Snow Project has been interpreted to
consist of Devonian age rocks striking north/south and trending southward under
pediment cover. It has also been interpreted that the Cambrian section is
possibly in fault contact with the Devonian section. Both rock types are
favorable host rocks for Carlin-style mineralization throughout Nevada,
especially in the Eureka Area.

The following sets out the geological units exposed on the
Golden Snow Project:

Bay State Dolomite  The Bay State Dolomite is a massive
dark grey to black to purplish dolomite which is reported to be 600-850 feet
thick in the Eureka Area. The lower portion of this unit is made up of irregular
bedded light-grey, dolomite sandstone. The upper portion is in gradational
contact with the overlying Devils Gate Limestone.

Sentinel Mountain Dolomite  The Sentinel Mountain
Dolomite gradationally overlies Oxyoke Canyon. It is composed of alternating,
thick-bedded, coarse-grained, light-gray dolomite and motted, finely laminated,
chocolate brown dolomites with a strong petroliferous odor when broken. It
ranges in thickness from 410 feet to 600 feet.

Oxyoke Canyon  The Oxyoke is predominantly light gray
to brown weathering, fine to medium-grained, quartz sandstone with a dolomatic
matrix. It ranges in thickness of less than 20 feet up to 400 feet thick
throughout the Eureka Area.

Sadler Ranch  The Sadler Ranch locally has been divided
up into an upper and lower dolomite and a middle crinoidal dolomite. The lower
dolomite is a medium to thick-bedded, very finely grained, light gray to
yellowish-gray dolomite. The middle crinoidal dolomite is a light to
medium-gray, poorly bedded, laminated to cross-laminated, crinoidal packstone
with thin lenses of mudstone and packstone. The upper dolomite is a medium to thick-bedded, very fine-grained, light-gray laminated
dolomite. The thickness of this unit varies from 90 feet to 450 feet.

8

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McColley Canyon/Bartine Member  The McColley Canyon is
dominantly a medium to thick bedded gray limestone with interbedded light
brown-gray fossiliferous and organic-rich dolomite. The Bartine is composed of
thin to medium-bedded, medium-gray, fine grained limestone and yellowish
argillaceous limestone with abundant brachiopods. Some people combine these
units whereas others map them as separate units. These rocks vary from 330 feet
to 650 feet thick.

Beacon Peak Dolomite  This unit is a massive, light
gray to brown, finely laminated dolomite, with local thin beds of finely
laminated dolomite and thin lenses of well rounded, quartz-rich sandstones with
a dolomitic matrix. The average thickness is 328 feet.

Mineralization

Two major target zones exist on the Golden Snow Project. These
primary targets would be eastern and western boundary of the horst block. Both
the eastern and western edge extends for over 15,000 feet as shown by gravity
geophysics. Only drill hole ELP-8 drilled close enough to the eastern edge of
the gravity high to test for possible mineralization. The remaining holes were
either far to east and out into the abyss, or too far west of the eastern horst
fault and on top of the gravity high.

A magnetic survey run over the eastern portion of the claim
block shows a magnetic high and has been interpreted to be an intrusive as
opposed to volcanics. This area is also a potential favorable target area for
gold and base-metal mineralization.

Numerous anomalous zones with large, coherent clusters of
anomalous gold, arsenic, antimony, mercury, lead and barite have been identified
on the Golden Snow Project. The majority of the anomalies appear to be located
in the northeastern and eastern and eastern portion of the claim block because
of surface or near surface bedrock. These values are probably related to
mineralization associated with the buried intrusive. Anomalous arsenic, antimony
and mercury are present in the area of the Ratto Fault. Since these minerals are
usually formed distal to gold in Carlin-style systems the geochemistry may
indicate gold mineralization at depth.

Current Exploration Activities

Subject to obtaining sufficient financing, in the summer of
2011, we plan to retain a consulting geologist to conduct a review of the Golden
Snow Project in order to recommend an exploration program. Once our consulting
geologist has provided us with their findings, we will determine whether to
proceed with an exploration program on these properties.

Fish Project

Description of Property

The Fish Project consists of 57 unpatented lode mining claims
and is 492 hectares or 1.9 square miles.

Location, Access, and Physiography

The Fish Project is located on the northeaster flank of Lone
Mountain in the Lone Mountain District, Esmeralda County, Nevada about 12
airline miles west of the historic mining town of Tonopah, Nevada.

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Figure 3Location of Fish Project



Road access is 14 miles west of Tonopah via U.S. Highway 95 to
old Millers Mill Site and then 4.5 miles south along gravel and dirt roads. A
network of unimproved dirt roads of the property offers access for four-wheel
drive vehicles.

The Fish Project is located within the Basin and Range province
of Nevada, characterized by rugged ranges and self-contained drainage basis
floored by dry playa lakes. The property is located on the east and northeast
facing slopes of Lone Mountain. Elevations range from 5700 feet in the
relatively low relief area in the eastern part of the claim block to 6546 feet
along a ridge in the western part of the claims. The eastern half of the claims
have moderately steep to rolling slopes while the western half of the property
have steep slopes cut by occasional cliffs. The summit of Lone Mountain is about
3 miles southwest of the property at an elevation of 9108 feet.

Property History

The Lone Mountain area was first prospected in the 1860s by
Mexican miners but mining property did not begin until about 1900. Most of the
mining and exploration activity in the Lone Mountain District during 1902 to 1918 period was directed towards the Alpine Mine and
associated prospects on the western side of the range.

10

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In the early 1980s, Atlas minerals previously conducted
drilling on quartz veining in the northern portion of the property. However,
their drilling program did not detect any significant mineralization.

Geology

The Fish Project lies within the Walker Lane structural belt of
western Nevada, an area with multiple episodes of structural deformation and
igneous activity. The dominant fault direction is a right lateral strike slip,
sub parallel to and likely related to crustal scale motion along the San Andreas
Fault system to the west. The topographic disruption is essentially a regional
scale drag faulting system between two regional tectonic blocks.

Mineralization

Mineralization on the Fish Project is enigmatic due to a lack
of information about the historic workings. However, field observations, mapped
geology and geochemical samples suggest a carbonate replacement or quartz vein
base metal  silver system. Historical reports of mineralization indicate
anomalous values of zinc, lead, copper and silver.

Current Exploration Activities

The Fish Project currently represents an early stage
exploration property. Due to the potential of the Golden Snow Project, we have
deprioritized the implementation of an exploration program on this property.

CPG Project

Description of Property

The CPG Project consists of 44 unpatented mining claims
covering approximately 1.3 square miles within Mineral County, Nevada.

Location, Access, and Physiography

The CPG Project is located approximately 29 miles east of
Schurz, Nevada in Mineral County, Nevada at the north end of Bovard Mining
District.

11

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Figure 4Location of CPG Project



The CPG Project can be accessed from Hawthorne, Nevada via a 29
mile country gravel road and then turning west on an unimproved dirt road for
about 4 miles. The CPG Project can also be reached from Fallon, Nevada by
traveling east on U.S. Highway 50 for about 35 miles, then south on State Route
839 about 19 miles to the end of the pavement and then south along the gravel
county road 11 miles to turn to the dirt access road. The nearest commercial
airport is at Reno, approximately 110 miles from the CPG Project.

The climate is characterized by winters with temperatures
between 0 and 40 degrees Fahrenheit and summer temperatures between 35 and 85
degrees Fahrenheit.

The CPG Project lies on the eastern flank of the Gabbs Valley
Range, part of the Great Basin physiographic province is situated in a region of
moderate to steep relief in northwestern Nevada. The Gabbs Valley Range is the
central part of the S-shaped mountain block that includes the Gillis Range and
the Pilot Mountains. The range is about 35 miles long, the summit occurring at
8360 feet with maximum relief of more than 3000 feet. Elevations on the property
range from 4500 feet in the east to 5452 feet at the peak of Copper Mountain.
North south trending mountain ranges and intermontane basins characterize the
area.

Property History

The Company is unaware of any exploration work conducted on the
CPG Project.

Geology

The CPG Project is centered on a plug of Jurassic granite
intruding limestone of the Triassic Luning Formation. These rocks then formed an
apparent topographic high that was buried under Miocene tuff.

The contact between the Luning Formation limestone and the
Jurassic granite body shows a highly compressed metasomatic alteration pattern
associated with mineralized porphyries. On the surface, the alteration patter
extends only a few feet into the limestone. At depth, the historic reports
suggest the zone is somewhat wider. Mineralization at the surface is found near the
contact zone with the intrusive and along nearby fault zones. In both cases, the
broken zones have been intruded by later bimodal felsic and mafic-appearing
dikes.

12

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To the west of Copper Mountain, the Miocene volcanic rocks can
be seen overlying the Luning Formation and Jurassic granite. The contact is
marked by a red stained zone that is likely the pre-eruptice paleosurface or may
be a detachment fault.

Mineralization

A Jurassic age quartz monazite has intruded limestones and
caused skarnification and deposition of principally copper mineralization. The
skarn mineralization is pod-like and occurs adjacent to hornblende quartz
feldspar porphyry dikes trending approximately east-west.

Currently Exploration Activities

The CPG Project is an early stage exploration property. Due to
the potential of the Golden Snow Project, we have deprioritized the
implementation of an exploration program on this property.

CLISBAKO PROPERTY

We own a 100% interest, subject to the Clisbako Option
Agreement, in the Clisbako Property. The Clisbako Property covers an area of
approximately 3,388 hectares and is located in the Interior Plateau Region of
north central British Columbia. It is composed of ten contiguous mineral claims,
situated within the Cariboo Mining Division. The claims are situated
approximately 80 miles west of Quesnel, British Columbia.

Our acquisition of the Clisbako Property was completed under the terms of a purchase agreement dated December 16, 2008 with Bako Resources Inc. (“Bako”).  Under the terms of the purchase agreement, we issued to Bako 2,000,000 pre-split (6,000,000 post-split) shares and a promissory note in the amount of $70,000 CDN ($56,600 USD) payable on June 30, 2009 .  On July 23, 2009, we entered into an extension agreement with Bako to extend the deadline of the CDN$70,000 mineral property payment (“Property Payment”)to December 31, 2009.  In consideration of this extension, we issued 60,000 shares of our common stock to Bako.  On January 21, 2010, we entered into a second extension agreement with Bako, whereby Bako agreed to extend the due date of the Property Payment  to February 15, 2010.  In consideration of the extension, we issued to Bako 10,000 shares of our common stock.  On March 15, 2010, we entered into a third extension agreement dated for reference February 15, 2010, with Bako, whereby Bako agreed to extend the due date of the Property Payment from February 15, 2010 to June 30, 2010.

Clisbako Option Agreement

On September 15, 2010, Clisbako Minerals Inc. (Clisbako Inc),
our wholly-owned subsidiary, entered into an option agreement, as amended on
November 15, 2010, (the "Clisbako Option Agreement") with Manado Gold Corp.
(Manado Corp.) whereby we granted Manado Corp. an option to acquire a 75%
undivided interest in the Clisbako Property. In order for Manado Corp. to
exercise its option, it will be required to:

|1. | pay Clisbako Inc. an aggregate of USD $150,000 as
      follows:      
|-- | ----------------------------------------------------------------------
|   |                                                                       
|   | (a)                                                                   
|   |                                                                       
|   | (b)                                                                   
|   |                                                                       
|   | (c)                                                                   
|   |                                                                       
|2. | issue an aggregate of 600,000 Shares to Clisbako Inc as
      follows:

13

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|   | (a)                                                                                       | 100,000 Shares on or before September 15, 2011;                    
|-- | ----------------------------------------------------------------------------------------- | -------------------------------------------------------------------
|   |                                                                                           |                                                                    
|   | (b)                                                                                       | a further 200,000 Shares on or before September 15, 2012;
      and
|   |                                                                                           |                                                                    
|   | (c)                                                                                       | a further 300,000 Shares on or before September 15,
      2013.    
|   |                                                                                           |                                                                    
|3. | incur exploration expenditures of $650,000 CDN on the
      Clisbako Property as follows:
|   |                                                                                           |                                                                    
|   | (a)                                                                                       | $100,000 CDN on or before September 15, 2011;                      
|   |                                                                                           |                                                                    
|   | (b)                                                                                       | a further $300,000 CDN on or before September 15, 2012;
      and  
|   |                                                                                           |                                                                    
|   | (c)                                                                                       | a further $250,000 CDN on or before September 15,
      2013.      

In addition, Manado Corp. will also be responsible to make all
government payments required to keep the claims in good standing.

The agreement is an option only and Manado Corp. may determine
at any time not to proceed in which case it would not be liable to pay any funds
or incur any exploration expenditures beyond the amounts due at the time it
provides notice that it is not proceeding. There is no assurance that Manado
Corp. will exercise the Option.

Description of Property

The Clisbako Property covers approximately 3,388 hectares. The
mineral claims making up the Clisbako Property are recorded with the Ministry of
Energy, Mines and Petroleum Resources (the Ministry of Mines) as follows:

|Tenure Number | Area in Hectares | Expiry Date      
|------------- | ---------------- | -----------------
|530325        | 489.55           | November 30, 2014
|530328        | 489.74           | November 30, 2014
|530329        | 313.10           | November 30, 2014
|530387        | 391.81           | November 30, 2014
|530462        | 391.81           | November 30, 2014
|530464        | 391.66           | November 30, 2014
|530465        | 313.21           | November 30, 2014
|534877        | 293.62           | November 30, 2014
|534928        | 293.62           | November 30, 2014
|535450        | 19.58            | November 30, 2014

The Province of British Columbia owns the land covered by the
Clisbako Property. To our knowledge, there are no aboriginal land claims that
might affect our title to the Clisbako Property or the Provinces title of the
property.

In order to maintain the Clisbako Property in good standing, we
must complete minimum exploration work on the Clisbako Property and file
confirmation of the completion of the work with the Ministry of Mines. In lieu
of completing this work, we may pay a fee equal to the minimum exploration work
that must be performed with the Ministry of Mines. The completion of mineral
exploration work or payment in lieu of exploration work in any year will extend
the existence of our mineral claims for one additional year. The minimum
exploration work that must be performed and/or the fee for keeping our claims
current is equal to $8.00 CDN per hectare. Our mineral claims are in good
standing until November 30, 2014. After November 30, 2014, we will be required
to complete minimum exploration work or pay a minimum fee of CDN$27,104 on or
before November 30, 2014 and each year thereafter in order to keep the Clisbako
Property current. If we fail to complete the minimum required amount of
exploration work or fail to make a payment in lieu of this exploration work, our
mineral claims will lapse and we will lose all interest in our mineral claims.

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Location, Access, Climate and Physiography

The Clisbako Property is located in the Interior Plateau Region
of north central British Columbia. It is composed of ten contiguous mineral
claims, situated within the Cariboo Mining Division. The claims are situated
approximately 80 miles west of Quesnel, British Columbia.

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Figure 5Location of Clisbako Property



16

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Access to the property is by paved highway west from Quesnel to
Nazko, then 30 miles southwest by gravel Forest Service Roads (FSR). The 4200
FSR crosses the northern portion of the Clisbako Property and branch roads and
logging tracks provide access to much of the rest of the property.

The climate of the area is characteristically dry. Average
annual temperature is approximately 2° C, with average summer highs in July and
August of 14° C and January winter lows averaging -13° C. Average annual
precipitation is approximately 440 millimeters, with an estimated 40% falling as
snow. The majority of rainfall occurs between June and August.

The claims cover a wide variety of terrain, from swampy meadows
to forested upland slopes. Elevations range from 1,250 meters along the Clisbako
River to over 1,500 meters to the west. A significant portion of the property
has been logged by clearcut methods. Forest cover is typical of the region,
consisting of lodgepole pine, with local stands of black spruce, fir and birch
along drainages. Timber harvesting has occurred with numerous cut blocks
scattered throughout the claim area. Swampy meadow lands in the eastern and
north-eastern portions of the property that form the headwaters of the Clisbako
River system are saturated for much of the year but dry out in late summer.
These areas are sparsely treed.

Property History

Historical work to date on the Clisbako Property has outlined
eight main zones, as currently identified, of epithermal mineralization and
alteration referred to as the North, Central, South, West Lake, Obvious, West
Lake Boulder, Gore and Bari zones. Historical records indicate that soil
geochemical surveys and geophysical surveys have been conducted over several
grids on the property, and a total of 34 diamond drill holes have been
completed. The bulk of the work has been concentrated within a 2 kilometer by 4
kilometer north trending corridor in the centre of the project area. Prior to
1989, there is no recorded work on the Clisbako Property.

Eighty Eight Resources Ltd.: 1989  1991 - In 1989, a
regional reconnaissance exploration program was conducted within the Nechako
Basin by Eighty Eight Resources Ltd. Epithermal quartz float collected on the
property returned weakly to moderately anomalous gold, silver and arsenic
values. Subsequent work traced these samples to their source and led to the
discovery of several extensive areas of epithermal silicification and argillic
alteration in 1990.

A property consisting of 15 contiguous claims (Clisbako 1-15)
covering 7,500 hectares was staked by Eighty-Eight Resources Ltd. to cover these
areas. Dawson Geological Consultants Ltd. were contracted to complete a compass
and flag grid covering the 4 main mineralized zones (North, Boulder, Central and
South Zones). Crews collected 1,320 soil samples from grids covering the
mineralized areas, and a total of 253 rock samples were collected from areas of
epithermal silicification as well as from mineralized float believed to be
locally derived. Geological mapping was also completed.

Minnova Inc.: 1991- 1992 - The property was subsequently
optioned to Minnova Inc., and five more claims (Clisbako 16-20) were added to
the property in April, 1991, following a compilation of data and
reinterpretation of the 1990 field work. Minnova then proceeded to fly an
airborne magnetic and electromagnetic survey over the entire property. Grid line
spacing over the pre-existing grid was tightened to 100 meters line spacing and
grid lines were extended 1 kilometer to the west. The entire gridded area was
geologically mapped and sampled, the results of which delineated the Gore and
Pond epithermal alteration zones. A total of 18 trenches were excavated covering
5 mineralized zones (North, South, Central, Discovery and Trail Zones), all of
which were mapped in detail and sampled. Based on the results of these programs
a 19 hole NQ drill program was completed totaling 3,024 meters. This included 11
holes in the North Zone, 7 holes in the South Zone and 1 diamond drill hole in
the Central Zone. The program confirmed the presence of widespread anomalous
gold concentrations but failed to delineate any zones of economic
significance.

In June, 1992, a total of seventeen 2-post claims were added on
the claim group, presumably to ensure that there were no internal fractions
between the Clisbako 4 & 13, 7 & 14, 5 & 10 and 8 & 10 claims.
Minnova conducted a gradient array IP geophysical survey over 17 partial grid
lines covering those zones identified to date in the central portion of the
property. An additional 7 trenches were completed in the West Lake, Gore, West
Pit and Central Zones. An 11 hole, 1,358 meter NQ drill program was conducted to
evaluate the results of the gradient array IP survey and extensions to zones
identified in 1991. Although the drilling intersected extensive widths of strong epithermal alteration in each target
area, no significant precious metal values were detected. Nonetheless, indicator
elements such as mercury, arsenic and tin were strongly anomalous throughout,
indicating that the system as a whole has a classic epithermal signature.

17

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Phelps Dodge: 19941996 - After the
  expiration of Minnovas option, Phelps Dodge examined the property and
  subsequently optioned it in the fall of 1994. Phelps Dodge, through Fox Geological
  Services Inc., carried out a 22 line kilometer soil geochemical sampling program
  in 1994. Thick glacial till cover in the project area effectively masks any
bedrock leaching and the soil survey failed to define zones of epithermal alteration.

Fox Geological was retained again to conduct a combined rock
and soil geochemistry program, IP geophysical survey, geological mapping and a
diamond drilling program during the 1995 field season. The 1995 program focused
on developing new targets in relatively under explored parts of the property and
further evaluating known zones of mineralization with limited historical
work.

Fox Geological Services completed 36 miles of gridding west of
Camp Lake to the western claim boundary. Mapping and prospecting on the grid
generated 339 rock samples of bedrock and float. This sample was collected from
a cluster of weakly quartz veined feldspar phyric rhyolite float boulders within
a discrete dispersion train in till. The bedrock source of these boulders has
not been discovered.

Soil geochemical surveys totaling 22 line kilometers covered
the western and central portions of the claim group along one kilometer spaced
lines with detailed coverage in the Gore and Bari zones resulting in 677 soil
samples. Anomalous gold results were usually isolated, one sample occurrences,
but anomalous arsenic values outlined a prominent 2000 meter by 800 meter north
trending zone which coincided with several new zones of quartz veining outlined
by prospecting. Additional follow-up was recommended in the Bari 1 and 2 zones.

The IP survey consisted of a total of 17.8 line kilometers. Two
different arrays were utilized: a reconnaissance style survey with electrodes
spaced 75 meters apart along road lines and a detailed survey with 150 meter
electrode spacing over two established grid lines. The wider separations failed
to detect any anomalous readings that were not detected using shorter
separations.

A total of 700.9 meters of NQ2 diamond drilling in 4 drill
holes was conducted on the West Lake boulder train and the Obvious Zone.
Drilling failed to encounter economic concentrations of gold with results
similar to those obtained from the North and South Zones.

A short 4 day field program was completed in 1996 consisting of
geological mapping and sampling in the Bari Zone area. A total of 24 rock
samples were submitted for analysis with most samples containing anomalous
values of gold and arsenic from boulder float.

Although a large gold bearing epithermal system had been
outlined in the central claim area covering approximately 20 square kilometers,
gold tenors are generally very low, rarely exceeding 0.5 ppm.

Goodall (Global Geological): 1996  2003 - The Bako 1 to
16 claims were subsequently staked by Geoff Goodall, P. Geo. in 1996 to cover
previously identified zones of alteration and mineralization. A prospecting
program was conducted on the Bako 1 to 5 mineral claims in the spring of 2002.
These claims cover eight zones of hydrothermal alteration typified by pronounced
bleaching of the host felsic volcanics and are characterized by intense argillic
alteration accompanied by multi-stage intense quartz veining, weak to strong
silicification, and/or hydrothermal brecciation. The work program consisted of
prospecting traverses and rock geochemical sampling of areas adjacent to and
within previously discovered zones of alteration. A total of fifty-two rock
samples were collected. A strong correlation was shown to exist between
anomalous gold values and anomalous silver values. Samples with anomalous
concentrations of antimony also had anomalous levels of arsenic, and mercury was
weakly anomalous.

Bard Ventures: 20032004-The
property was optioned to Bard Ventures in late 2003 and Global Geological
Services established two geophysical grids over the Discovery and Brooks Zones
totaling 24.5 line kilometers. Previous mapping and sampling programs within
these areas uncovered concentrations of quartz rich boulder float.

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Regional Geology

The Clisbako property is located in the northern part of the
Chilcotin Plateau. Specifically, it is situated in the south central part of the
Anahim Volcanic Belt along an east-west trend defined by three peralkaline
shield volcano complexes (Rainbow Range, Ilgachuz Range, Itcha Range) that
comprise the western part of the belt. The oldest rocks exposed in the Chilcotin
Plateau area are Pennsylvanian to Permian age Cache Creek Group sedimentary
rocks. These are overlain by upper Triassic to lower Jurassic Takla Group
andesite-basalt flows, tuffs and breccias and associated clastic rocks.
Predominant in the northern portion of the Chilcotin Plateau are andesite flows
and breccias, and sedimentary rocks of the mid-Jurassic Hazelton Group. This
sequence is unconformably overlain by the upper Cretaceous, Paleocene, Eocene
and possibly Oligocene rocks of the Ootsa Lake Group. This latter Group is
comprised of rhyolitic to dacitic tuffs, flows and breccias with minor amounts
of andesite, basalt, conglomerate and tuffaceous shale.

A sequence of Eocene to Miocene andesite, dacite and rhyolite
volcanics of the Endako Group and Pliocene to Pleistocene Chilcotin Group
vesicular andesite and basalt flows, breccias and cinder cones conformably
overlie the Ootsa Lake Group. Pleistocene to recent till, gravel and sand infill
drainages basins and locally form eskers and moraines up to 100 meters thick.
Phelps Dodge compiled a detailed regional geology synopsis of the area as part
of the work they conducted.

The Clisbako Property is dominantly underlain by felsic
volcanics and volcaniclastics of Eocene age that are referred to informally as
the Clisbako Volcanics. The Clisbako Volcanics underlie a large, regionally
circular area within which a wide variety of assemblages of the Clisbako
Volcanics occur. This area appears to be a distinct basin of volcanic deposition
and is referred to as the Clisbako Caldera Complex. The age of the complex is
Early to Middle Eocene, based on Potassium-Argon age dates and palynology.
Chemically similar volcanics, also of Eocene age, to the north in the Nechako
River map area are referred to as the Ootsa Lake Group (for the felsic members)
and the Endako Group (for the basic and intermediate members).

Volcanic, subvolcanic and volcaniclastic rocks within the
Clisbako Caldera Complex range in composition from basalt to rhyolite and
include a wide variety of textural types and facies assemblages. Dacites,
rhyodacites and rhyolites are the most common compositional types, with
andesites and basalts subordinate. Passive eruptive sequences of flows and domes
are the most abundant volcanic assemblages with explosive pyroclastics more
common towards its west central parts. Associated with both the passive and
explosive assemblages is a highly variable assemblage of lahars, fanglomerates,
coarse and fine-grained fluvial assemblages and locally, chemically deposited
siliceous sinters that have been interpreted as parts of a moat facies. Chemical
analysis of these volcanics shows them to be potassium-rich and may be
classified as belonging to the high-potash calcalkaline magma series.

Passive eruptive sequences of flows and domes are the most
abundant volcanic assemblages. Explosive pyroclastics occur throughout the
Caldera Complex, but are most common towards its west-central parts. Intimate
with both the passive and explosive volcanic assemblages is a highly variable
assemblage of lahars and fanglomerates, coarse and fine-grained fluvial
assemblages and locally, chemically deposited siliceous sinters that comprise
volcaniclastic sediments that are here interpreted as parts of a "moat" facies.
Rock units of the moat facies from recessive assemblages and are very poorly
exposed. The distribution of these three facies assemblages within the caldera
suggests the presence of a number of separate basins within the larger caldera
structure.

In the north and northeastern parts of the complex, aphyric and
biotite phyric rhyolite and rhyodacite flows and flow domes are common. In the
north part of the area a lahar-moat facies containing boulder breccia,
conglomerate, sandstones and lacustrine siltstone with opaline sinters is
associated with mainly flow and flowdome units of andesite and dacite
composition. The south eastern part of the caldera complex is underlain by platy
fractured, generally aphyric to weakly augite phyric dacite and andesite, with
local areas of basalt and minor suggestions of the presence of a lacustrine moat
facies. The southwestern part of the caldera is underlain mainly by dacitic,
andesite and subordinate biotite phyric flow units, with local areas to the
north of biotitequartz phyric rhyolite flow and pyroclastics. Here, the
lahar-lacustrine-siliceous sinter moat assemblage occupies a large area in the
central part of this southwestern sector.

The central and northwestern parts of the Clisbako Caldera
complex, underlying the Clisbako, Baez and Bako claim blocks, are underlain by a
bimodal suite of volcanics. Here, the dominant facies is an assemblage of
aphyric to weakly to moderately augite and feldspar phyric dacite flows with
local intercalations of polylithic volcaniclastics, volcanogenic breccia and fluvial clastics. The
subordinate volcanic assemblage in this central and western sector comprises
varieties of variably quartz, biotite, hornblende, plagioclase and sanidine
phyric felsic volcanics that includes explosive ash flow tuffs, subvolcanic
intrusions and breccias. Moat facies assemblages, including siliceous sinters
have been noted in this area proximal to the felsic volcanic assemblages to the
immediate northeast of this west-central facies, and the presence of boulders in
float train suggests its presence within the area.

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Property Geology

The Clisbako Property area is one of very low relief that has
been extensively glaciated. Glaciation advanced from the south-southwest,
covering the area with a variable thickness of till. Outcrop is very limited
within the project area and bedrock exposure is likely under 1%. The best
exposures are found on rounded, hummocky ridge crests and are dominated by platy
to massive dacites and rhyodacites. Outcrop is also exposed in incised outwash
channels and in logging slashes. The more recessive and easily weathered rock
assemblages such as the moat facies and clay-argillic alteration assemblages are
poorly represented in natural exposures, although their distribution has been
somewhat enhanced by logging slashes and road cuts.

Contacts were not observed between major units and very rarely
seen between beds. All age relationships between stratigraphic elements are
deductive. In addition, no zone of definitive faulting could be documented by
the presence of natural and man-made exposures, with the exception of trenching
in the North Zone. There, the zone is very strongly faulted, marked by clay
gouge, kaolinized zones and shattered rock and serves to suggest that faulting
is an important, if mostly hidden, structural element.

Dacitic flow units underlie much of the terrain in the central
and western parts of the Clisbako claim area. Rhyolite assemblage fragmental
units underlie the low lying slopes to the north and east. These rocks are in
turn overlain by Miocene basalts along the Clisbako River valley. Most units
strike northerly and dip gently east although dip reversals are common.

Exploration work to date has focused on an area roughly two
kilometers by four kilometers in size. Rocks in this area consist of rhyolitic
flows, tuffs and breccias interbedded with dacite and amydgaloidal andesite
flows and associated pyroclastic rocks. These are tilted and block-faulted and
fill a north-trending, shallow, graben and local depositional basins.

The stratigraphic and subvolcanic lithologies that underlie the
Clisbako claims can be subdivided into three separate assemblages consisting of,
in probable chronological order, a dacitic facies, a rhyolite facies and a
basalt-andesite assemblage. These east-dipping strata are disrupted by
north-trending faults near Mount Dent and at Camp Lake on the Clisbako claims.
Fluvial and lacustrine (moat facies) volcaniclastic sediments form portions of
all three assemblages. The most extensive and probably oldest volcanic facies is
represented by a suite of dacitic flows that are typically aphanitic to sparsely
porphyritic with fine-grained augite phenocrysts. Locally interbedded with the
volcanics of the Dacite Assemblage are variable thicknesses of clastic rocks
that range from sharpstone conglomerate-fanglomerate to laminated fluvial
fine-grained sandstone composed of detritus derived directly from the dacite
flows.

Rhyolites of the felsic facies assemblage lie in a north-south
trending band through the central part of the claim block. This assemblage has
been interpreted as one of the centers of felsic volcanism within the Clisbako
Caldera Complex. Volcanic and subvolcanic members of this facies include ash
flow tuffs, flows, breccias, dykes and domes (plugs) and are composed of
variations of plagioclase, biotite, quartz, hornblende and sanidine phenocrysts.
It is distinguished from the dacite assemblage by the presence of common hydrous
minerals biotite and hornblende. Associated spatially and compositionally with
rhyolites of the felsic assemblage are volcaniclastics of a moat facies,
including ash tuffs, siltstone, sandstone, conglomerate and siliceous sinters.

Overlying the Clisbako Formation is a 30 to 50 meter thick
basalt-andesite facies, the youngest unit. This is comprised of olivine basalt
flows and locally abundant pyroclastic rocks and has been correlated with the
Miocene Endako Group. It appears in the extreme northeast portion of the claim
block.

North to north-northeast striking faults are the most prominent
structures on the property. They dip moderately to steeply east and west (40° to
80°) and are responsible for extensive block faulting of the Clisbako Formation. Measured offsets range from a few meters to
about 200 meters. Epithermal alteration is hosted by several of these faults.

20

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Faulting has caused considerable rotation of the volcanic
sequence, resulting in highly variable dips. For example, on the west part of
the grid, units of the Dacite member dip steeply to vertically while at the
North Zone bedding is nearly flat lying.

A shallow graben is defined by the north trending faults in the
grid area. Epithermal style alteration at the North, Central, South, Gore and
West Lake zones occur along these structures. The easternmost fault, the East
Boundary Fault, hosts epithermal alteration intermittently over a length of 2
kilometers. The South, Trail and Central Zones occur along this structure.

Other structures include northwest and northeast trending
linears which form conspicuous drainage patterns in the northeast claim area.
They have no measurable offset and their significance is uncertain.

Several occurrences of epithermal-style alteration are known in
the east part of the property. They are all similar in style.

The zones are characterized by wide haloes of pervasive
argillic alteration occurring in the hanging wall of the graben faults.
Extensive stockworks of quartz, pyrite (+ marcasite) veinlets occur throughout
the argillic zones. Overall sulphide content averages about 0.5% .

Stockworks grade into areas of pervasive silicification close
to the faults. These commonly contain irregular shaped bodies of hydrothermal
breccia and banded veins.

Argillic alteration occurs up to 100 meters into the hanging
wall of the source structures. In zones where several parallel structures occur
close together, such as at the North Zone, the argillic zones coalesce.
Silicification is more restricted, occurring as 1 to 25 meter wide zones along
fault planes. Narrow subparallel silicified zones also occur in the footwall of
the host structures.

Footwall alteration is less intense than the hanging wall
alteration. Argillic alteration is typical, however at some locations weak
propylitization consisting mostly of chlorite and calcite veinlets is developed.

Alteration is well developed in a variety of host rocks. At the
North, West Lake and Central zones alteration occurs in rhyolites and crystal
tuffs. At the South Zone, the strongest alteration is hosted by amygdaloidal
andesite.

Mineralization

Mineralization at Clisbako consists of epithermal silica
stockworks and breccias developed on north-striking faults. Previous operators
have outlined eight zones of hydrothermal alteration on the property. These
zones are associated with rocks of the felsic assemblage, grading outward into
rocks of the dacite assemblage. The zones are referred to as the Bari, Brooks,
Gore, Discovery, Obvious, West Lake, South and North zones. The alteration zones
are typified by pronounced bleaching of the host felsic volcanics and are
characterized by intense argillic alteration accompanied by multi-stage intense
quartz veining, weak to strong silicification, and/or hydrothermal brecciation.
Locally, early argillic alteration is almost completely overprinted and masked
by later successive stages of silicification.

It has been suggested that the hydrothermal alteration and
mineralization were developed along complex steeply dipping north to north-east
trending fault structures which were formed during the development of the
Clisbako Caldera. However, within the claim area the alteration zones appear to
be controlled by a series of closely spaced subparallel small-scale faults,
rather than a single major structure. The rocks between the individual
small-scale faults are highly fractured, intensely hydrothermally altered and
flooded with a pervasive stockwork of quartz veinlets.

The various mineralized zones and prospects, along with
boulders in glacial dispersion trains, are composed of quartz veined volcanic
rocks. Vein textures include massive fine to medium grained quartz, banded
chalcedony, stockworks of comb-textured quartz and drusy vugs. Calcite occurs in
very small amounts and as fracture coatings and as replacement of alkali
feldspars in propylitically altered rock. Quartz veins are varied and have been described as; stockwork, druzy, massive,
sugary, stringers, blue/black, chalcedonic, banded, comb quartz in open space
fillings, crustiform, or brecciated. Some of the veins show quartz pseudomorphs
after coarse bladed calcite, evidence of boiling.

21

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The argillic zones contain an average of less than 0.5% sulfide
mineralization, but in the silicified zones the sulfide content may reach 5%
over narrow widths. Low sulphide concentrations are typical of an acid-sulphate
epithermal system.

Pyrite is the dominant sulphide and typically is very fine
grained. In this form it most commonly occurs as disseminations in dark gray to
blue-black chalcedonic quartz, is disseminated in the matrices of siliceous
hydrothermal breccias, or fills quartz lined cavities. Coarse-grained pyrite is
locally associated with marcasite and arsenopyrite. Pyragerite has been
identified south of Clisbako Lake, within the North Zone, and may be the main
silver bearing mineral. Barite has been observed at several localities.

Alteration fringing the siliceous lodes and breccias is
dominantly argillic, generally widespread and locally intense. It consists of
illite and montmorillonite replacement of plagioclase feldspar phenocrysts and
the ground mass, with minor sericitization of hornblende and biotite
phenocrysts. Mineralized zones generally comprise an inner zone of silicious
breccia and quartz stockworks lying on or within controlling fault structures
and a wide distal zone of argillic alteration that may extend up to 150 meters
or more out from the silica core zone. Propylitic alteration is pervasive and
comprises fine disseminated and fracture controlled chlorite which imparts a
pale green color to the rocks. It is accompanied by variable amounts of calcite
along fractures and as replacement of alkali feldspar. Potassic alteration as
measured by alkali feldspar staining of rocks is variable. In only one
occurrence has potassium feldspar been observed within a vein. Gold grades are
elevated close to the inner silicified zone while the argillic envelope is
usually barren. The various zones explored are described in detail below.

The North zone lies in a down-faulted block of feldspar (+/-
quartz) phyric rhyolite flows and tuffs and dacite flows and pyroclastic
breccias south of Camp Lake. It is exposed in a gully in which trench
excavations have exposed argillic-altered rocks over 300 meters. It has a well
defined east boundary marked by a fault. The west boundary is poorly constrained
and is probably continuous with the West Lake Zone.

Alteration associated with north-striking faults consists of
extensive silicification, quartz and pyrite stockworks, banded epithermal veins
and siliceous breccia. These zones contain elevated precious metal and
pathfinder element values. Argillic alteration is most pronounced distal from
the siliceous zones. Barren quartz stockworks are common in the argillic zone.

The Central zone is a stockwork lying along the same fault
structure that hosts the South zone. Quartz-clay alteration is similar to that
at the North zone, with extensive quartz stockworks and pervasive argillic
alteration occurring in a flow-banded dacite. The zone is narrow and probably
connects with the North Zone to the north.

Four trenches have been excavated on the Discovery zone across
two narrow, hydrothermal breccias. The matrix consists of a bluish-grey clay
gouge. The wallrock, which consists of flow banded dacite, is moderately
silicified up to four meters away from the breccia. A second less altered
breccia, consists of black, sulphidic quartz fragments in a moderate to strongly
argillized dacite host. This interval was only weakly mineralized, however a
sulphide-rich interval was enriched in arsenic.

The South Zone is typified by a large area of silicification
and hydrothermal breccia. The main outcrop area, in a small creek at the south
end of the property, consists of a zone of hydrothermal breccia, veins and
stockworks over an outcrop area of 150 meters and has been traced by drilling
for some 300 meters.

The zone shows evidence of multiple stages of silicification
indicated by cross cutting relationships and clast types within hydrothermal
breccia veins. The hanging wall is strongly bleached and variably silicified in
which a strongly developed stockwork of pyritic veinlets are cut by irregular
veins of dark grey, banded chalcedony. One such vein was traced continuously for
22 meters. It was from these veins that the best assays were obtained by
Minnova.

Despite the intense alteration, silicification and breccia
development, precious metal and pathfinder element concentrations are low. The
highest gold concentrations occur in sulphide-rich hydrothermal breccias and zones of banded grey chalcedony. Minnova drilled ten holes in
the South zone area in 1991 and 1992. Most holes returned low grade to barren
zones of siliceous breccia.

22

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Two zones were identified by IP surveys southwest of Camp Lake,
the West Lake and West Pit Zones. The West Pit is a 200-metre long chargeability
high centered on line 416N at 285+00E. It has been traced intermittently as far
south as line 400N. Trenching in 1992 failed to reach bedrock. Subcrop and
overburden contains abundant bright yellow clay along with fragments of
silicified rock and vein quartz. The West Lake zone, immediately west of the
North zone, consists of a coincident chargeability and resistivity high with a
strike length of about 300 meters. Trenching on the West Lake zone exposed a
quartz stockwork zone containing three-meter wide banded and bladed, pyritic,
quartz-chalcedony veins.

Minnova drilled six holes in the West Lake-West Pit area in
1992 to follow-up trenching and induced polarization surveys.

The Obvious Zone is located along the 4200 Forest Service Road
approximately 2 kilometers north of the North Zone at Camp Lake, and was
discovered by prospecting the excavated ditches adjacent to the road. Float
boulders of quartz veins and silicified feldspar phyric rhyolite tuffs are
present within till and subcrop. The Obvious Zone was drill tested by hole
236-34.

The West Lake Boulder Train is located along a reclaimed
logging access road along the west shore of Camp Lake. The boulder dispersion
train comprises angular float blocks up to 50 cm in size in till along a tightly
confined, north trending dispersion train over 600 meters in length. Float
blocks include massive fine grained quartz, silica breccias and quartz
stockworks. This zone was drill tested by 3 drill holes, 236-31, 236-32, and
236-33.

The Gore Zone is located approximately 1.5 kilometers southwest
of the North Zone on the eastern slope of the ridge rising to the west of Camp
Lake. The Zone comprises north trending massive silica breccias and quartz vein
stockworks within dacite flows and rhyolite tuffs and is exposed over an area of
500 meters by 50 meters.

The Bari Zone comprises two separate silica breccia bodies and
several float and subcrop occurrences centered about 2.5 kilometers due west of
the North Zone. Local lithologies include propylitically altered dacite flows
and a 50 meter thick pyroclastic breccia unit with variably silicified angular
clasts. Two separate zones, the Bari 1 and Bari 2 zones are partially exposed
through a thin cover of till and comprise north-trending zones of hydrothermal
breccia up to five meters thick. Accessory minerals include arsenopyrite and
barite and possible sulphosalts indicated by an unusual grass green colored
weathering. Both zones are within a large arsenic soil anomaly which extends for
2 kilometers from L 406N to L 426N.

Detailed sampling in 1996 failed to enhance the prospect.

Prospecting and rock geochemical sampling on the Bari Zone in
2002 has confirmed the existence of epithermal style gold and silver
mineralization within an argillically altered and quartz veined felsic volcanic
assemblage. More than 80% of the 52 rock samples returned anomalous values for
gold, silver, arsenic, tin, mercury, molybdenum or barium.

Current Exploration Activities

We will not be conducting any exploration work on the Clisbako
Property during the term of the Clisbako Option Agreement. Under the terms of
the Clisbako Option Agreement, Manado Corp. is required to incur aggregate
exploration expenditures of $650,000 CDN on the Clisbako Property during the
term of the option.

MANADO GOLD PROPERTY

On January 19, 2010, we entered into an agreement with Agus
Abidin dated for reference November 2, 2009 (the Manado Agreement) to acquire
an option to earn up to an 85% interest in the Manado Gold Property. Under the
terms of the Manado Agreement, we paid $35,000 to the owners of the Manado Gold
Property (the Owners) for the exclusive right to formalize an agreement (the
Acquisition Agreement) to earn up to an 85% undivided interest in the Manado
Gold Property.

23

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Under the terms of the proposed Acquisition Agreement, we will
be able to earn an interest in the Manado Gold Property by making cash payments,
issuing shares and completing work programs at various stages. We will be able
to acquire:

| | (a) | an initial 10% interest in the Manado Gold Property by
      paying $90,000 (of which $15,000 has been paid) and issuing 150,000 shares
      of our common stock to the Owners on execution of the Acquisition
      Agreement, and completing a mineral exploration program at a cost of not
      less than $250,000 prior to the first anniversary of the Acquisition
      Agreement;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | an additional 15% interest in the Manado Gold Property by
      paying $100,000 and issuing 300,000 shares of our common stock to the
      Owners on the first anniversary of the Acquisition Agreement, and
      completing a mineral exploration program at a cost of not less than
      $500,000 prior to the second anniversary of the Acquisition
    Agreement;                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | an additional 26% interest in the Manado Gold Property by
      paying $200,000 and issuing 500,000 shares of our common stock to the
      Owner on the second anniversary of the Acquisition Agreement, and
      completing a mineral exploration program at a cost of not less than
      $1,000,000 prior to the third anniversary of the Acquisition Agreement;
      and           
| |     |                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | an additional 34% interest in the Manado Gold Property by
      completing a scoping study.                                                                                                                                                                                                                                                                                               

If we acquire an 85% interest in the Manado Gold Property under
the proposed Acquisition Agreement, we will be responsible for the costs of any
feasibility studies and, if warranted, placing the Manado Gold Property into
commercial production. In addition, we will have an option to acquire the
remaining 15% interest in the Manado Gold Property by paying the Owners
$5,000,000.

Additional terms of the proposed Acquisition Agreement include,
among other things, that we will be responsible for all costs in maintaining the
Manado Gold Property in good standing, and we will have the right to terminate
the Acquisition Agreement on 60 days notice. If the proposed Acquisition
Agreement is terminated, we will be entitled to retain the interest in the
property we earned as of the termination date.

On April 30, 2010, we notified Mr. Abidin that we had elected
to exercise our option to enter into the Acquisition Agreement to acquire up to
an 85% undivided interest in the Manado Gold Property pursuant to the terms of
the Manado Agreement. The entry into the Acquisition Agreement has been delayed
as the Owners of the Manado Gold Property are currently completing changes under
Indonesian law in order to update the companies holding the properties to
compliance under the new Indonesian corporate laws, to convert the tenure under
which the properties are held under the new Indonesian mining laws and to permit
investment by foreign entities in the companies holding the mineral properties.
We have advanced $15,000 of the $90,000 due on execution the Acquisition
Agreement to assist the Owner in making the necessary changes. There is no
assurance that the Owners will be able to complete these changes required under
in order for us to enter into the Acquisition Agreement or earn any interest in
the Manado Gold Property.

Manado Assignment Agreement

On August 24, 2010, we entered into an agreement (the Manado
Assignment Agreement) to assign to Manado Corp. a 75% undivided interest in the
Manado Agreement. In consideration of the assignment, Manado Corp. agreed
to:

|(a) | reimburse the $80,000 in expenditures we incurred in
      connection with the Manado Agreement payable as follows:
|--- | -------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                    
|    | (i)                                                                                                                
|    | (ii)                                                                                                               
|    |                                                                                                                    
|(b) | incur expenditures to complete exploration on or place
      into production the Manado Gold Property as follows:  
|    |                                                                                                                    
|    | (i)                                                                                                                

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|    | (ii)                                                                                                                       | $500,000 prior to the second anniversary of the execution
      of the Acquisition Agreement; and     
|--- | -------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------
|    | (iii)                                                                                                                      | $1,000,000 prior to the third anniversary of the
      execution of the Acquisition Agreement.        
|    |                                                                                                                            |                                                                                                       
|(c) | following completion of the expenditures set out in (b)
      above, complete a scoping study on the Manado Gold Property.
|    |                                                                                                                            |                                                                                                       
|(d) | issue 950,000 common shares to Clisbako Inc. as
      follows:                                                            
|    |                                                                                                                            |                                                                                                       
|    | (i)                                                                                                                        | 150,000 shares on execution of the Acquisition
      Agreement;                                       
|    | (ii)                                                                                                                       | 300,000 shares prior to the first anniversary of the
      execution of the Acquisition Agreement; and
|    | (iii)                                                                                                                      | 500,000 shares prior to the second anniversary of the
      execution of the Acquisition Agreement.   
|    |                                                                                                                            |                                                                                                       
|(e) | paying to the Concession Owners as follows:                                                                               
|    |                                                                                                                            |                                                                                                       
|    | (i)                                                                                                                        | $75,000 on execution of the Acquisition
  Agreement;                                                  
|    | (ii)                                                                                                                       | $100,000 on the first anniversary of the execution of the
      Acquisition Agreement; and            
|    | (iii)                                                                                                                      | $200,000 on the second anniversary of the execution of
      the Acquisition Agreement.               

Upon completing the payments expenditures and share issuances
as set out above, Manado Corp. will earn up to 75% of our interest in the Manado
Gold Property as follows:

|(a) | an initial 7.5% undivided interest upon completion of the
      items set out in (a), (b)(i), (d)(i) and (e)(i) above;                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                 
|(b) | an additional 11.25% undivided interest upon completion
      of the items set out in paragraphs (b)(ii), (d)(ii) and (e)(ii)
    above;        
|    |                                                                                                                                                 
|(c) | an additional 19.5% undivided interest upon completion of
      the items set out in paragraphs (b)(iii), (d)(iii) and (e)(iii) above;
      and
|    |                                                                                                                                                 
|(d) | an additional 25.5% undivided interest on completing the
      scoping study described in paragraph (c) above.                                  

If Manado Corp. exercises its rights under the Agreement, we
will be carried through the first $1,750,000 of expenditures and through
completion of a scoping study. Thereafter, we will be responsible for our
proportionate share of any additional expenditures necessary to place the Manado
Gold Property into production. We will remain responsible to issue up to 950,000
of our common shares to the Concession Holders under the Acquisition Agreement.

In the event that we elect to exercise our option to purchase
the Concession Owners 15% carried interest and subject to Manado Corp. being in
good standing under this Manado Assignment Agreement, Manado Corp. will have the
right to participate as to 75% in the exercise of that option.

The Agreement is an option only and Manado Corp. may determine
at any time not to proceed in which case it would not be liable to pay any
funds, incur any exploration expenditures or issue any shares beyond the amounts
due at the time it provides notice that it is not proceeding. There is no
assurance that Manado Corp. will exercise the Option.

Assuming that Manado Corp. exercises all its options under the
Agreement, Manado Corp. will have acquired a 63.75% undivided interest in the
Manado Gold Property and we will retain an 11.25% interest in the Manado Gold
Property. In the event the option to acquire the Concession Holders carried
interest is exercised, Manado Corp. will hold a 75% undivided interest and we
will hold a 25% undivided interest.

25

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Description of the Property

The Manado Gold Property is comprised of four contiguous mining
  tenements called Bagkit Limpoga Jaya, Hakian Wellem Rumansi,
  Ratak Mining, and Manembo Mineral which cover an area
  of approximately 300 hectares.

Location, Access and Physiography

The Manado Gold Property is located 50 miles south of Manado in
northern Sulawesi, Indonesia. It is accessible by 3 miles of partly paved
all-weather road from Ratatotok, a village along the coastal national highway,
which in turn is accessible by 60 miles of paved road from Manado. The city of
Manado is a major commercial center served by local and international flights as
well as ocean-going vessels.

Figure 6Location of Manado Gold Property



26

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Property History

In 1981, PT Newmont Minahasa Raya, an Indonesian subsidiary of
Newmont Gold Company of Denver, commenced the exploration of their contract of
work (COW) concession. The exploration program led to the discovery of several
small gold deposits. The largest of the deposits known as the Mesel together
with other smaller satellite deposits was placed into production in 1996. Due to
deteriorating relations with the local people and government, Newmont was forced
to cease mining operations in 2002 but continued milling ore stockpile up to
2004. PT Newmont produced a total 2 million grams of gold mainly from the Mesel
open pit.

Newmont also identified three zones that my contain gold
mineralization, which are called Limpoga, Pasolo and Nona Hoa. These zones were
defined by the drilling of some 273 boreholes. Although detailed engineering and
economic studies were completed, no mining in any one of the three zones was
actually carried out. After the departure of Newmont, all three zones were
subsequently included in tenements acquired by local companies in Manado.

Newmont drilled a total of 6,457 meters at the Limpoga zone
between 1989 to 1999. In particular, 92 closely-spaced (40 meters) diamond drill
holes were drilled between 1989 to 1993. In late 1998, Newmont completed an
additional 1,695 meters of closed spaced (20 meters) diamond drill holes. In
1999, Newmont also drilled 19 Reverse Circular (RC) holes for a total of 1,064
meters at the Limpoga zone. This large amount of high density drilling provided
the data points for detailed engineering, which included geotechnical, bulk
density, permeability and metallurgical tests. The historical drilling of
Newmont indicated 196,000 tons of mineralized material at an estimated grade of
7.99 g/t at the Limpoga zone.

Regional Geology

Recent exploration has highlighted North Sulawesi as a
significant gold province located within a series of spatially overlapping
Tertiary volcanic arcs. In the western ensialic portion, rhyodacitic volcanics
overlie quartzo-feldspathic metamorphic basement. In contrast, the central and
eastern ensimatic areas comprise marine basaltic basement overlain by andesitic
volcanic, the centres of which have migrated progressively eastwards from the
Early Miocene until the present day.

Property Geology

Located on the Manado Gold Property is a massive karsted basal
limestone unit overlain by a volcanogenic sediment which is a reworked tuff.
This sediment is commonly calcareous at is base and shows slump and bedding
textures. The bedding dips from 15-60oto the north. Intruding this
sequence is the Limpgoa andesite. The andesite is porphyritic and invariably
altered to an assemblage of chlorite+ carbonate. Porphyroblasts of hornblende
and feldspar occur in a fine grained matrix. Petrographic studies indicate this
rock to be a tonalite. A sequence of andesite tuffs, flowing overlying the
reworked tuff to the east is most likely volcanic equivalents of the Limpoga
andesite. Unconformably overlying all the previous units is a series of
volcaniclastic rocks. This unit comprises of volcanic conglomerate, breccia and,
in places flows. The rocks are mostly of andesitic composition with minor
porphyritic hornblende dacite.

Eluvial deposits of quartz and clay sit on the karsted
limestone surface. There deposits are interpreted to be erosional remnants of
silicificied cavefill sediments mostly in the footwall of the LP fault zone.

The east northeast  west southwest trending Limpoga Lambak
fault is the main structural feature of the Limpogo zone. This fault dips 60° to
the north and exploits the unconformity separating volcanistic rock to the north
from the andesite, limestone and reworked tuff to the south. The LP fault is a
splay off the Limpoga-Lambak fault. This fault dips from 45-60° to the north and
is the main control of gold mineralization. The fault is manifested as a fault
breccia. Clasts of subangular to angular silicified, argillised tuff and
limestone.

Elsewhere in the immediate area, low sulphidation gold veins
occur such as those in the Nona Hoa and Pasolo zones. Both styles of
mineralization are hosted in Miocene carbonate rocks occurring in a
northeasterly graben. Visible gold is characteristic of the three zones.

27

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Mineralization

The rock types that host gold are quartz boulder and clay
sediments which comprise 30% of the Limpoga deposit, brecciated fault zone
material, limestone and reworked tuff. The formations at Mesel are hosted in
silicified, decalcified and dolomitized carbonates developed at intersecting
east-west and north-west faults.

The mineralized areas of the Mesel and Libongan zones are
hosted in Miocene volcaniclastics and sediments occurring either as
disseminations or as veins. The extensively occurring limestone, which may
contain anomalous gold mineralization, presents an excellent potential for the
development of a large bulk mineable gold deposit.

In this region, the following gold mineralization categories
are recognized: gold copper porphyries; gold and metal breccias; and high and
low sulphidation ephithermal systems.

Current Exploration Activities

We will not be conducting any exploration work on the Manado
Gold Property during the term of the Manado Assignment Agreement. Under the
terms of the Manado Assignment Agreement, Manado Corp. is required to incur
aggregate exploration expenditures of $1,750,000 on the Manado Gold Property
during the term of the Manado Assignment Agreement.

COMPLIANCE WITH GOVERNMENT REGULATION

British Columbia Regulations

We will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in the Province of British Columbia. The main agency
that governs the exploration of minerals in the Province of British Columbia,
Canada, is the Ministry of Mines. The Ministry of Mines manages the development
of British Columbias mineral resources, and implements policies and programs
respecting their development while protecting the environment. In addition, the
Ministry of Mines regulates and inspects the exploration and mineral production
industries in British Columbia to protect workers, the public and the
environment.

The material legislation applicable to us is the Mineral Tenure
Act, administered by the Mineral Titles Branch of the Ministry of Mines, and the
Mines Act, as well as the Health, Safety and Reclamation Code and the Mineral
Exploration Code. The Mineral Tenure Act and its regulations govern the
procedures involved in the location, recording and maintenance of mineral titles
in British Columbia. The Mineral Tenure Act also governs the issuance of leases
which are long term entitlements to minerals.

All mineral exploration activities carried out on a mineral
claim or mining lease in British Columbia must be in compliance with the Mines
Act. The Mines Act applies to all mines during exploration, development,
construction, production, closure, reclamation and abandonment. It outlines the
powers of the Chief Inspector of Mines, to inspect mines, the procedures for
obtaining permits to commence work in, on or about a mine and other procedures
to be observed at a mine. Additionally, the provisions of the Health, Safety and
Reclamation Code for mines in British Columbia contain standards for employment,
occupational health and safety, accident investigation, work place conditions,
protective equipment, training programs, and site supervision. Also, the Mineral
Exploration Code contains standards for exploration activities including
construction and maintenance, site preparation, drilling, trenching and work in
and about a water body.

Additional approvals and authorizations may be required from
other government agencies, depending upon the nature and scope of the proposed
exploration program. If the exploration activities require the falling of
timber, then either a free use permit or a license to cut must be issued by the
Ministry of Forests. Items such as waste approvals may be required from the
Ministry of Environment, Lands and Parks if the proposed exploration activities
are significantly large enough to warrant them. Waste approvals refer to the
disposal of rock materials removed from the earth which must be reclaimed. An
environmental impact statement may be required.

In order to maintain our mineral claims in good standing, we
must complete exploration work on the mineral claims and file confirmation of
the completion of work on the mineral claims with the applicable mining recording office of the Ministry of Mines. In the Province of
British Columbia, the recorded holder of a mineral claim is required to perform
a minimum amount of exploration work on a claim or make payment in the
equivalent sum in lieu of work. The fee is CDN $4.00 (approximately US$3.78) in
the first three years and CDN$8.00 (approximately US$7.67) in subsequent years.
There is a risk that new regulations could increase our costs of doing business
and prevent us from carrying out our exploration program. The completion of
mineral exploration work or payment in lieu of exploration work in any year will
extend the existence of our mineral claims for one additional year. If we fail
to complete the minimum required amount of exploration work or fail to make a
payment in lieu of this exploration work, then our mineral claims will lapse,
and we will lose all interest that we have in our mineral claims.

28

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Nevada Regulations

Exploration and development activities are all subject to
stringent national, state and local regulations. All permits for exploration and
testing must be obtained through the local Bureau of Land Management (BLM)
offices of the Department of Interior in the State of Nevada. The granting of
permits requires detailed applications and filing of a bond to cover the
reclamation of areas of exploration. From time to time, an archaeological
clearance may need to be obtained prior to proceeding with any exploration
programs.We plan to secure all necessary permits for any future exploration.

We have to apply for and receive permits from the BLM to
conduct drilling activities on BLM administered lands. Mining operations are
regulated by the Mine and Safety Health Administration (MSHA). MSHA inspectors
periodically visit projects to monitor health and safety for the workers, and to
inspect equipment and installations for code requirements. Workers must have
completed MSHA safety training and must take refresher courses annually when
working on a project. A safety officer for the project should also on site.
Other regulatory requirements monitor the following:

| | (i)   | Explosives and explosives handling.                                   
| | ----- | ----------------------------------------------------------------------
| |       |                                                                       
| | (ii)  | Use and occupancy of site structures associated with
      mining.    
| |       |                                                                       
| | (iii) | Hazardous materials and waste disposal.                               
| |       |                                                                       
| | (iv)  | State Historic site preservation.                                     
| |       |                                                                       
| | (v)   | Archaeological and paleontological finds associated with
      mining.

We believe that we are in compliance with all laws and plan to
continue to comply with the laws in the future. We believe that compliance with
the laws will not adversely affect its business operations. There is however no
assurance that any change in government regulation in the future will not
adversely affect our business operations.

Each year we must pay a maintenance fee of $140 per claim to
the Nevada State Office of the Bureau of Land Management and on September 1 of
each year we must file an affidavit and Notice of Intent to Hold the claims in
Mineral County. With respect to the Golden Snow Project, Fish Project and CPG
Project, we have paid the required maintenance fees and filed the affidavits
required in order to extend the claims to August 31, 2010.

Indonesia Regulations

Exploration and development activities are subject to the rules
and regulation of the Indonesian ministry of Energy and Mineral Resources. Under
current Indonesian law, a domestic entity may acquire a license through a Kuasa
Pertanbangan (KP). The KP grants exclusive mineral rights to the holder for
specified minerals and defined mineral activities. There are several types of KP
including, but not limited to, general survey KP, exploration KP, exploitation
KP, process and refining KP and transportation and marketing KP.

In order for a foreign entity to carry out mineral activities
in Indonesia it must acquire a contract of work (CoW) the CoW sets out in
detail the rights and obligations of the foreign entity with respect to the
exploration, development, and operation of the mineral property.

29

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Indonesian regulations also set for requirements with respect
to land remediation, water use and discharge, exploration of the mined material,
mine safety and use of explosives.

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

We will have to sustain the cost of reclamation and
environmental remediation for all exploration work undertaken. Both reclamation
and environmental remediation refer to putting disturbed ground back as close to
its original state as possible. Other potential pollution or damage must be
cleaned up and renewed along standard guidelines outlined in the usual permits.
Reclamation is the process of bringing the land back to its natural state after
completion of exploration activities. Environmental remediation refers to the
physical activity of taking steps to remediate, or remedy, any environmental
damage caused. The amount of these costs is not known at this time as we do not
know the extent of the exploration program that will be undertaken beyond
completion of the recommended work program. Because there is presently no
information on the size, tenor, or quality of any resource or reserve at this
time, it is impossible to assess the impact of any capital expenditures on
earnings, our competitive position or us in the event that a potentially
economic deposit is discovered.

Prior to undertaking mineral exploration activities, we must
make application for a permit, if we anticipate disturbing land. A permit is
issued after review of a complete and satisfactory application. We do not
anticipate any difficulties in obtaining a permit, if needed. If we enter the
production phase, the cost of complying with permit and regulatory environment
laws will be greater because the impact on the project area is greater. Permits
and regulations will control all aspects of the production program if the
project continues to that stage. Examples of regulatory requirements include:

| | (i)   | Water discharge will have to meet drinking water
      standards;                                                                               
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | Dust generation will have to be minimal or otherwise
      re-mediated;                                                                         
| | (iii) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated with natural vegetation;                                 
| | (iv)  | An assessment of all material to be left on the surface
      will need to be environmentally benign;                                           
| | (v)   | Ground water will have to be monitored for any potential
      contaminants;                                                                    
| | (vi)  | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and             
| | (vii) | There will have to be an impact report of the work on the
      local fauna and flora including a study of potentially endangered
      species.

COMPETITION

We are an exploration stage company. We compete with other
mineral resource exploration and development companies for financing and for the
acquisition of new mineral properties. Many of the mineral resource exploration
and development companies with whom we compete have greater financial and
technical resources than we do. Accordingly, these competitors may be able to
spend greater amounts on acquisitions of mineral properties of merit, on
exploration of their mineral properties and on development of their mineral
properties. In addition, they may be able to afford greater geological expertise
in the targeting and exploration of mineral properties. This competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.

RESEARCH AND DEVELOPMENT EXPENDITURES

We have not incurred any research expenditures since our
incorporation.

30

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EMPLOYEES

We have no employees other than our sole executive officer and
directors. We conduct our business largely through consultants.

ITEM 1A.        
RISK FACTORS.

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

If we do not obtain additional financing, our business will
fail.

As of November 30, 2010, we had $353 cash on hand and a working
capital deficit of $536,611. Our plan of operation calls for significant
expenses in order to meet our obligations under the Eureka Properties Option
Agreement. There is no guarantee that we will exercise our option.

Our Board of Directors have approved a private placement
offering of up to 3,000,000 units (the Units) at a price of $0.05 per Unit for
gross proceeds of up to $150,000. Each Unit is comprised of one share of our
common stock and one share purchase warrant, with each warrant entitling the
subscriber to purchase an additional share of our common stock for a period of
one year following the date of issuance at an exercise price equal to $0.10 per
share. This offering of Units will be made to investors who are not U.S.
Persons as defined in Regulation S. To date, we have issued 527,200 units for
proceeds of $26,360 under this offering. There are no assurances that any
additional units will be sold under this offering.

Obtaining financing would be subject to a number of factors
outside of our control, including market conditions and additional costs and
expenses that might exceed current estimates. These factors may make the timing,
amount, terms or conditions of financing unavailable to us in which case we will
be unable to complete our plan of operation on our mineral properties and to
meet our obligations under our option agreements.

We have yet to earn revenue and our ability to sustain our
operations is dependent on our ability to raise financing. As a result, our
accountants believe there is substantial doubt about our ability to continue as
a going concern.

We have a cumulative net loss of $1,070,068 for the period from
our inception on April 28, 2006 to November 30, 2010, and have no revenues to
date. Our future is dependent upon our ability to obtain financing. Our auditors
have expressed substantial doubt about our ability to continue as a going
concern given our accumulated losses. This opinion could materially limit our
ability to raise additional funds by issuing new debt or equity securities or
otherwise. If we fail to raise sufficient capital, we will not be able to
complete our business plan. As a result, we may have to liquidate our business
and investors may lose their investment. Investors should consider our former
auditor's comments when determining if an investment in us is suitable.

Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.

Investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

We have no known mineral reserves and if we cannot find any,
we will have to cease operations.

We have no mineral reserves. If we do not find a mineral
reserve containing gold or if we cannot explore the mineral reserve, either because we do not have the money to do
it or because it will not be economically feasible to do it, we will have to
cease operations and you will lose your investment. Mineral exploration,
particularly for gold, is highly speculative. It involves many risks and is
often non-productive. Even if we are able to find mineral reserves on our
properties, our production capability is subject to further risks including:

31

---

|- | Costs of bringing the property into production including
      exploration work, preparation of production feasibility studies, and
      construction of production facilities, all of which we have not budgeted
      for;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | Availability and costs of financing;                                                                                                                                                                                         
|- | Ongoing costs of production; and                                                                                                                                                                                             
|- | Environmental compliance regulations and restraints.                                                                                                                                                                         

The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near our mineral properties, and such other
factors as government regulations, including regulations relating to allowable
production, importing and exporting of minerals, and environmental protection.

Given the above noted risks, the chances of finding reserves on
our mineral properties are remote and funds expended on exploration will likely
be lost.

Even if we discover proven reserves of precious metals on
our mineral properties, we may not be able to successfully commence commercial
production.

Our mineral properties do not contain any known bodies of ore.
If our exploration programs are successful in discovering proven reserves on our
mineral properties, we will require additional funds in order to place the
mineral properties into commercial production. The expenditures to be made by us
in the exploration of mineral properties in all probability will be lost as it
is an extremely remote possibility that the mineral claims will contain proven
reserves. If our exploration programs are successful in discovering proven
reserves, we will require additional funds in order to place the mineral
properties into commercial production. The funds required for commercial mineral
production can range from several millions to hundreds of millions. We currently
do not have sufficient funds to place our mineral claims into commercial
production. Obtaining additional financing would be subject to a number of
factors, including the market price for gold and the costs of exploring for or
mining these materials. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. Because we will need
additional financing to fund our exploration activities there is substantial
doubt about our ability to continue as a going concern. At this time, there is a
risk that we will not be able to obtain such financing as and when needed.

We face significant competition in the mineral exploration
industry.

We compete with other mining and exploration companies
possessing greater financial resources and technical facilities than we do in
connection with the acquisition of mineral exploration claims and leases on
precious metal prospects and in connection with the recruitment and retention of
qualified personnel. There is significant competition for precious metals and,
as a result, we may be unable to acquire an interest in attractive mineral
exploration properties on terms we consider acceptable on a continuing basis.

There is no assurance that we will be able to exercise our
options to acquire the Eureka Optioned Properties and the Manado Gold Property.

In order to exercise our options to acquire the Eureka Optioned
Properties and the Manado Gold Property, we are required to make a series of
cash payments and meet the annual claim maintenance fees. In order to meet these
payments we will need to obtain substantial financing. If we are unable to meet
these payments, we will lose our options to acquire these properties.

32

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We may be unable to conduct exploration activities due to
foreign regulations.

We may have trouble obtaining any necessary permits, and
complying with foreign mining law due to our inexperience. We may be prohibited
by mining laws in Indonesia from conducting due diligence or any other activity
on the Manado Gold Property. We have not conducted any research into the
property, mining, or other applicable laws regarding the Manado Gold Property.

Because our sole executive officer does not have formal
training specific to the technicalities of mineral exploration, there is a
higher risk that our business will fail.

Richard W. Donaldson, our sole executive officer, does not have
any formal training as a geologist or in the technical aspects of managing a
mineral exploration company. With the exception of Bryan H. Wilson, a director,
our management may not be fully aware of the specific requirements related to
working within this industry. As such, the loss of Mr. Wilsons services could
cause irreparable harm to our operations, earnings, and ultimate financial
success could suffer irreparable harm due to management's lack of experience in
this industry.

Because the prices of metals fluctuate, if the price of
metals for which we are exploring decreases below a specified level, it may no
longer be profitable to explore for those metals and we will cease operations.

Prices of metals are determined by such factors as expectations
for inflation, the strength of the United States dollar, global and regional
supply and demand, and political and economic conditions and production costs in
metals producing regions of the world. The aggregate effect of these factors on
metal prices is impossible for us to predict. In addition, the prices of
precious metals are sometimes subject to rapid short-term and/or prolonged
changes because of speculative activities. The current demand for and supply of
these metals affect the metal prices, but not necessarily in the same manner as
current supply and demand affect the prices of other commodities. The supply of
these metals primarily consists of new production from mining. If the prices of
the metals are, for a substantial period, below our foreseeable cost of
production, we could cease operations and investors could lose their entire
investment.

We may conduct further offerings in the future in which case
investors shareholdings will be diluted.

We are currently offering units (common stock and share
purchase warrant) for gross proceeds of up to $150,000. Since our inception, we
have relied on such equity sales of our common stock to fund our operations. We
may conduct further equity offerings in the future to finance our current
projects or to finance subsequent projects that we decide to undertake. If
common stock is issued in return for additional funds, the price per share could
be lower than that paid by our current stockholders. We anticipate continuing to
rely on equity sales of our common stock in order to fund our business
operations. If we issue additional stock, the interests of existing shareholders
will be diluted.

The quotation price of our common stock may be volatile,
with the result that an investor may not be able to sell any shares acquired at
a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTCQB under the symbol
"PNGM. Companies quoted on the OTCQB have traditionally experienced extreme
price and volume fluctuations. In addition, our stock price may be adversely
affected by factors that are unrelated or disproportionate to our operating
performance. Market fluctuations, as well as general economic, political and
market conditions such as recessions, interest rates or international currency
fluctuations may adversely affect the market price of our common stock. As a
result of this potential volatility and potential lack of a trading market, an
investor may not be able to sell any of our common stock that they acquire at a
price equal or greater than the price paid by the investor.

Because our stock is a penny stock, shareholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.

33

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Because our securities constitute penny
stocks within the meaning of the rules, the rules apply to us and to our
securities. The rules may further affect the ability of owners of shares to sell
our securities in any market that might develop for them. As long as the trading
price of our common stock is less than $5.00 per share, the common stock will be
subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the brokers or dealers duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customers account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchasers written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock.

ITEM
2.           PROPERTIES.

We rent office space at 1200 Dupont Street, Suite 2J,
Bellingham, WA 98225, consisting of approximately 144 square feet, at a cost of
$270 per month. This rental is on a month-to-month basis without a formal
contract.

Our mineral properties are discussed in detail above under the
heading Item 1. Business.

ITEM
3.           LEGAL
PROCEEDINGS.

We are not a party to any other legal proceedings and, to our
knowledge; no other legal proceedings are pending, threatened or
contemplated.

34

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PART II

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

Market Information

Our shares of common stock are quoted on the OTCQB under the
symbol PNGM.

The high and low bid information for our common stock for the
years ended November 30, 2010 and 2009 were:

|QUARTER           | HIGH ($) | LOW ($)
|----------------- | -------- | -------
|February 28, 2009 | $0.25    | $0.10  
|May 31, 2009      | $0.30    | $0.10  
|August 31, 2009   | $0.325   | $0.16  
|November 30, 2009 | $0.40    | $0.15  
|February 28, 2010 | $0.42    | $0.135 
|May 31, 2010      | $0.14    | $0.07  
|August 31, 2010   | $0.12    | $0.05  
|November 30, 2010 | $0.09    | $0.05  

The above quotations have been adjusted to reflect the 3-for-1
stock split effected April 13, 2009. Quotations provided by the OTCQB reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.

Holders of Our Common Stock

As of March 10, 2011, there are 58,264,344 shares of our common
stock issued and outstanding held of record by 28 registered stockholders. We
believe that a number of stockholders hold stock on deposit with their brokers
or investment bankers registered in the name of stock depositories.

Dividends

We have not declared any dividends on our common stock since
our inception on April 28, 2006. There are no dividend restrictions that limit
our ability to pay dividends on our common stock in our Articles of
Incorporation or Bylaws. Our governing statute, Chapter 78 of the Nevada Revised
Statutes (the NRS), does provide limitations on our ability to declare
dividends. Section 78.288 of Chapter 78 of the NRS prohibits us from declaring
dividends where, after giving effect to the distribution of the dividend:

|(a) | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                                                                                                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed, if we were to be
      dissolved at the time of distribution, to satisfy the preferential rights
      upon dissolution of stockholders who may have preferential rights and
      whose preferential rights are superior to those receiving the distribution
      (except as otherwise specifically allowed by our Articles of
      Incorporation).

Recent Sales of Unregistered Securities

All unregistered sales of our equity securities made during the
fiscal year ended November 30, 2010 have been previously reported in our
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.

35

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

PLAN OF OPERATION

Over the next twelve months, our plan of operation is to focus
  our resources on the exploration of the Eureka Optioned Properties

Subject to obtaining sufficient financing, we plan to retain a
consulting geologist to conduct a review of these properties in order to
recommend an exploration program to be conducted in summer 2011. Once our
consulting geologist has provided us with their findings, we will determine
whether to proceed with an exploration program on these properties.

During the next twelve months, we will be required to make a
number of payments in order to maintain our options to acquire the Golden Snow
Project, Fish Project and CPG Project. Under the terms of our options to acquire
the Golden Snow Project, Fish Project and CPG Project, in order to keep them in
good standing, we are required to pay to Claremont: (i) an option payment of
$20,000 by August 28, 2011; and (ii) the Bureau of Land Management maintenance
and claim fees of approximately $32,583 by September 1, 2011. If we are unable
to make the payments to Claremont, the Bureau of Land Management or pay the
annual maintenance claim fees, we will lose our interest in the Golden Snow
Project, Fish Project and CPG Project.

As the agreement is an option, we may decide at any time not to
proceed in which case we would not be liable to pay any funds beyond the amounts
due at the time we provide notice that we are not proceeding. There is no
assurance that we will exercise the option.

As at November 30, 2010, we had $353 cash on hand. Accordingly,
we have insufficient cash on hand to proceed with our exploration on the Golden
Snow Project, Fish Project and CPG Project, and meet our ongoing operating
costs. As such, we will require substantial financing in order to meet our
obligations. There is no assurance that we will be able to acquire such
financing on terms that are acceptable to us, or at all.

RESULTS OF OPERATIONS

Summary of Year End Results

|         |   | Year
      Ended  |   |   | Year
      Ended  |   |  | Percentage            | 
|-------- | - | ----------------- | - | - | ----------------- | - |  | --------------------- | 
|         |   | November 30, 2010 |   |   | November 30, 2009 |   |  | Increase / (Decrease) | 
|Revenue  | $ | -                 |   | $ | -                 |   |  | n/a                   | 
|Expenses |   | (426,953          | ) |   | (375,580          | ) |  | 13.7%                 | 
|Net Loss | $ | (426,953          | ) | $ | (375,580          | ) |  | 13.7%                 | 

Revenue

We have not earned any revenues to date. We do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such deposits are
discovered, that we will enter into further substantial exploration
programs.

36

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Expenses

The major components of our expenses for the years ended
November 30, 2010 and 2009 are outlined in the table below:

|                                    |   | Year
      Ended  |   |   | Year
      Ended  |  |  | Percentage            | 
|----------------------------------- | - | ----------------- | - | - | ----------------- |  |  | --------------------- | 
|                                    |   | November 30, 2010 |   |   | November 30, 2009 |  |  | Increase / (Decrease) | 
|Bank Charges and Interest           | $ | 22,543            |   | $ | 15,418            |  |  | 46.2%                 | 
|Consulting Fees                     |   | 29,126            |   |   | -                 |  |  | 100%                  | 
|Depreciation Expense                |   | 253               |   |   | 505               |  |  | (49.9)%               | 
|Filing and Regulatory               |   | 3,232             |   |   | 5,609             |  |  | (42.4)%               | 
|Finance charges                     |   | 83,881            |   |   | 53,619            |  |  | 56.4%                 | 
|Incorporation Costs                 |   | -                 |   |   | 1,262             |  |  | (100)%                | 
|Investor Relations                  |   | 6,000             |   |   | 9,800             |  |  | (38.8)%               | 
|Management Fees                     |   | 36,000            |   |   | 36,000            |  |  | 0.0%                  | 
|Mineral Property Exploration Costs  |   | 38,317            |   |   | 51,930            |  |  | (26.2)%               | 
|Office and Administrative           |   | 23,099            |   |   | 19,181            |  |  | 20.4%                 | 
|Professional Fees                   |   | 193,075           |   |   | 168,675           |  |  | 14.5%                 | 
|Recovery on Mineral Property.       |   | (18,377           | ) |   | -                 |  |  | (100)%                | 
|Travel                              |   | 2,760             |   |   | 13,581            |  |  | (79.7)%               | 
|Website Design                      |   | 4,044             |   |   | -                 |  |  | 100%                  | 
|Write-off of Mineral Property Costs |   | 3,000             |   |   | -                 |  |  | 100%                  | 
|Total Expenses                      | $ | 426,953           |   | $ | 375,580           |  |  | 13.7%                 | 

Our operating expenses increased from $375,580, during the year
ended November 30, 2009, to $426,953, during the year ended November 30, 2010.
The increase in our operating expenses was primarily a result of increased bank
charges and interest, consulting fees, finance charges, office and
administrative expenses, professional fees, website design expenses and write
off of mineral property costs. This increase was partially offset by decreases
in filing and regulatory fees, incorporation costs, investor relations fees,
mineral property exploration costs and travel expenses.

Management fees relate to fees paid or accrued to the directors
of Magellan Acquisition Corp., our wholly owned Nevada subsidiary.

Mineral property exploration costs primarily relate to fees
incurred in connection with maintaining our option on the Golden Snow Project,
the Fish Project, CPG Project and Manado Gold Property, and maintaining our
Clisbako Property in good standing.

Professional fees primarily relate to costs incurred in
connection with our entry into option agreements on our properties, and meeting
our ongoing reporting requirements under the Exchange Act.

Finance fees during the year ended November 30, 2010 primarily
relate to amortization of the discount resulting from the allocation of proceeds
to the warrants and the intrinsic value beneficial conversion feature.

We anticipate our operating expenses will increase if we
implement our exploration program on our mineral properties.

37

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LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                   |   |   |                   |   |  |                       | 
|----------------------- | - | ----------------- | - | - | ----------------- | - |  | --------------------- | 
|                        |   | At                |   |   | At                |   |  | Percentage            | 
|                        |   | November 30, 2010 |   |   | November 30, 2009 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 353               |   | $ | 3,711             |   |  | (90.5)%               | 
|Current Liabilities     |   | (535,964          | ) |   | (375,065          | ) |  | 42.9%                 | 
|Working Capital Deficit | $ | (535,611          | ) | $ | (371,354          | ) |  | 44.2%                 | 

|Cash Flows                                     |   |                   |   |   |                   |  
|---------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                               |   | Year Ended        |   |   | Year Ended        |  
|                                               |   | November 30, 2010 |   |   | November 30, 2009 |  
|Cash Flows used in Operating Activities        | $ | (161,425          | ) | $ | (203,885          | )
|Cash Flows from (used in) Investing Activities |   | 49,002            |   |   | 90,000            |  
|Cash Flows from Financing Activities           |   | 109,065           |   |   | 87,670            |  
|Net Increase (Decrease) in Cash During Period  | $ | (3,358            | ) | $ | (26,215           | )

The increase in our working capital deficit at November 30,
2010 from our year ended November 30, 2009 is a result of the fact that: (i)
accounts payable increased due to our lack of capital to meet ongoing
expenditures; and (ii) we received a loan of $75,000 from a third party. The
loan bears interest at a rate of 10% per annum and is due on demand.

During the year ended November 30, 2010, we received $70,000
from the issuance of our securities as follows:

|(a) | on February 18, 2010, the issuance of 120,000 shares upon
      the exercise of warrants for proceeds of $10,000;
|--- | -----------------------------------------------------------------------------------------------------------------
|    |                                                                                                                  
|(b) | on July 20, 2010, the issuance of 500,000 Units for
      proceeds of $50,000; and                               
|    |                                                                                                                  
|(c) | on August 4, 2010, the issuance of 100,000 Units for
      proceeds of $10,000.                                  

Financing Requirements

As at November 30, 2010, we had $353 cash on hand. Currently,
we do not have sufficient financial resources to complete our plan of operation
for the next twelve months. We have not earned any revenues to date and we do
not anticipate earning revenues in the near future. As such, our ability to
complete our plan of operation is dependent upon our ability to obtain
substantial financing in the near term. Any future financing that we obtain is
expected to be in the form of sales of our equity securities. If we are
successful in completing any equity financings, of which there is no assurance,
our existing shareholders will experience a dilution of their interest in our
company. There is a substantial doubt that we will be able to obtain financing
in an amount that is sufficient to enable us to complete our proposed plan of
operation. If we are not successful in raising sufficient financing, we will not
be able to complete our plan of operation. We do not have any specific
alternatives to our current plan of operation and have not planned for any such
contingency. If we are not successful in raising sufficient financing, our
business may fail and our shareholders may lose all or part of their investment.

OFF-BALANCE SHEET ARRANGEMENTS

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

38

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CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure 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.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in the notes to our audited financial statements included under Item 8
of this Annual Report.

Use of Estimates

The preparation of financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures. Actual results may differ from the estimates.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method
of accounting. Until such properties are acquired and developed, we will
continue to prepare our financial statements and related disclosures in
accordance with entities in the exploration stage.

Mineral Property Interests

We are an exploration stage mining company and have not yet
realized any revenue from our operations. We are primarily engaged in the
acquisition, exploration and development of mining properties. Exploration costs
are expensed as incurred regardless of the stage of development or existence of
reserves. Costs of acquisition are capitalized subject to impairment testing,
when facts and circumstances indicate impairment may exist.

We regularly perform evaluations of any investment in mineral
properties to assess the recoverability and/or the residual value of our
investments in these assets. All long-lived assets are reviewed for impairment
whenever events or circumstances change which indicate the carrying amount of an
asset may not be recoverable.

Management periodically reviews the carrying value of our
investments in mineral leases and claims with internal and external mining
related professionals. A decision to abandon, reduce or expand a specific
project is based upon many factors including general and specific assessments of
mineral deposits, anticipated future mineral prices, anticipated future costs of
exploring, developing and operating a production mine, the expiration term and
ongoing expenses of maintaining mineral properties and the general likelihood
that we will continue exploration on such project. We do not set a
pre-determined holding period for properties with unproven deposits; however,
properties which have not demonstrated suitable metal concentrations at the
conclusion of each phase of an exploration program are re-evaluated to determine
if future exploration is warranted, whether there has been any impairment in
value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that
its carrying value cannot be supported by future production or sale, the related
costs are charged against operations in the year of abandonment or determination
of value. The amounts recorded as mineral leases and claims represent costs to
date and do not necessarily reflect present or future values.

Our exploration activities are subject to various laws and
regulations governing the protection of the environment. These laws are
continually changing, generally becoming more restrictive. We have made, and
expect to make in the future, expenditures to comply with such laws and
regulations.

39

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The accumulated costs of properties that are developed on the
stage of commercial production will be amortized to operations through
unit-of-production depletion.

40

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ITEM
8.           FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.

Index to Consolidated Financial Statements:

Audited consolidated financial statements as of November 30,
2010, including:

|1. | Report of Independent Registered Public Accounting Firm
      (Davidson and Company, L.L.P., Chartered Accountants);                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                      
|2. | Consolidated Balance Sheets as of November 30, 2010 and
      2009;                                                                                                                  
|   |                                                                                                                                                                                      
|3. | Consolidated Statements of Operations for the years ended
      November 30, 2010 and 2009 and for the cumulative period from inception on
      April 28, 2006 to November 30, 2010;
|   |                                                                                                                                                                                      
|4. | Consolidated Statements of Cash Flows for the years ended
      November 30, 2010 and 2009 and for the cumulative period from inception on
      April 28, 2006 to November 30, 2010;
|   |                                                                                                                                                                                      
|5. | Statement of Stockholders Equity (Deficiency) for the
      period from inception on April 28, 2006 through November 30, 2010;
    and                                              
|   |                                                                                                                                                                                      
|6. | Notes to the Consolidated Financial
  Statements.                                                                                                                                    

41

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PENGRAM CORPORATION(An
      Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED NOVEMBER 30, 2010 AND 2009(Stated
    in U.S. Dollars)

---

|DAVIDSON & COMPANY LLP |                       |  | A Partnership of Incorporated Professionals
|---------------------- | --------------------- |  | -------------------------------------------
|                       | Chartered Accountants | 

REPORT OF INDEPENDENT REGISTERED PUBLIC
  ACCOUNTING FIRM

To the Board of Directors and Stockholders of 
  Pengram
  Corporation

We have audited the accompanying
  consolidated balance sheets of Pengram Corporation (the Company) as of
  November 30, 2010 and 2009, and the related consolidated statements of
  operations, cash flows and stockholders' equity (deficiency) for the years ended
  November 30, 2010 and 2009 and for the period from inception on April 28, 2006
  to November 30, 2010. The Companys management is responsible for these
  consolidated financial statements. Our responsibility is to express an opinion
  on these consolidated financial statements based on our audits.

We conducted our audits in accordance with
  the standards of the Public Company Accounting Oversight Board (United States).
  Those standards require that we plan and perform the 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 also includes examining, on a test basis, evidence
  supporting the amounts and disclosures in the financial statements, assessing
  the accounting principles used and significant estimates made by management, as
  well as evaluating the overall financial statement presentation. We believe that
  our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial
  statements referred to above present fairly, in all material respects, the
  financial position of the Company as of November 30, 2010 and 2009, and the
  results of its operations and its cash flows for the years ended November 30,
  2010 and 2009 and for the period from inception on April 28, 2006 to November
  30, 2010 in conformity with accounting principles generally accepted in the
  United States of America.

The accompanying consolidated financial
  statements have been prepared assuming the Company will continue as a going
  concern. As discussed in Note 1 to the consolidated financial statements, the
  Company has experienced recurring losses from operations since inception, has a
  working capital deficit, and has a deficit accumulated during the exploration
  stage. These conditions raise substantial doubt about the Companys ability to
  continue as a going concern. Managements plans regarding these matters are also
  discussed in Note 1. The consolidated financial statements do not include any
  adjustments that might result from the outcome of this uncertainty.

|                  | **DAVIDSON** **& COMPANY LLP**
|----------------- | --------------------------------
|Vancouver, Canada |                                 
|                  | Chartered Accountants           
|March 15, 2011    |                                 



---

PENGRAM CORPORATION(An Exploration Stage Company)CONSOLIDATED BALANCE SHEETS(Stated in U.S. Dollars)

|                                                                                                                                                                                                                                                                        |   | NOVEMBER 30 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | -
|                                                                                                                                                                                                                                                                        |   | 2010        |  
|                                                                                                                                                                                                                                                                        |   |             |  
|ASSETS                                                                                                                                                                                                                                                                  |   |             |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Current                                                                                                                                                                                                                                                                 |   |             |  
|Cash                                                                                                                                                                                                                                                                    | $ | 353         |  
|Total Current assets                                                                                                                                                                                                                                                    |   | 353         |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Long-term Investment(Note 3)                                                                                                                                                                                                                                            |   | 10,367      |  
|Computer Equipment(Note 4)                                                                                                                                                                                                                                              |   | -           |  
|Mineral Property Acquisition Costs(Note
      5)                                                                                                                                                                                                                        |   | 412,875     |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Total Assets                                                                                                                                                                                                                                                            | $ | 423,595     |  
|                                                                                                                                                                                                                                                                        |   |             |  
|LIABILITIES                                                                                                                                                                                                                                                             |   |             |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Current                                                                                                                                                                                                                                                                 |   |             |  
|Accounts payable and accrued
      liabilities                                                                                                                                                                                                                          | $ | 340,915     |  
|Amounts due
      to related parties                                                                                                                                                                                                                                    |   | 49,000      |  
|Amount due to shareholder                                                                                                                                                                                                                                               |   | 1,920       |  
|Promissory
      notes payable (Notes 5 and 6)                                                                                                                                                                                                                          |   | 96,248      |  
|Promissory note payable to
      related party (Note 7)                                                                                                                                                                                                                 |   | 25,901      |  
|Loan payable
      (Note 8)                                                                                                                                                                                                                                             |   | 7,015       |  
|Convertible notes (Note 9)                                                                                                                                                                                                                                              |   | -           |  
|Unit subscriptions
      received (Note 10)                                                                                                                                                                                                                             |   | 14,965      |  
|Total Current Liabilities                                                                                                                                                                                                                                               |   | 535,964     |  
|                                                                                                                                                                                                                                                                        |   |             |  
|STOCKHOLDERS (DEFICIENCY) EQUITY                                                                                                                                                                                                                                       |   |             |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Capital Stock(Note 11)                                                                                                                                                                                                                                                  |   |             |  
|Authorized: 
                        100,000,000
      preferred stock with a par value of $0.001 per 
                        share 
                        300,000,000
      common voting stock with a par value of $0.001 
                        per
      share |   |             |  
|                                                                                                                                                                                                                                                                        |   |             |  
|Issued:
                         
       57,737,144 common shares as at November 30, 2010 and 
                          
      54,207,144 at November 30, 2009                                                                                                         |   | 57,737      |  
|Unit and Share Subscriptions Received In Advance(Note
      10)                                                                                                                                                                                                         |   | 26,360      |  
|Additional Paid-In Capital                                                                                                                                                                                                                                              |   | 851,852     |  
|Share Purchase Warrants(Note 11)                                                                                                                                                                                                                                        |   | 21,750      |  
|Deficit Accumulated During The Exploration
      Stage                                                                                                                                                                                                                  |   | (1,070,068  | )
|Total Stockholders (Deficiency) Equity                                                                                                                                                                                                                                 |   | (112,369    | )
|                                                                                                                                                                                                                                                                        |   |             |  
|Total Liabilities
      And Stockholders Equity (Deficiency)                                                                                                                                                                                                           | $ | 423,595     |  

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

---

PENGRAM CORPORATION(An Exploration Stage Company)CONSOLIDATED STATEMENTS OF OPERATIONS(Stated in U.S. Dollars)

|                                                                 |   |             |   |   |             |   |   | CUMULATIVE  |  
|---------------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                                 |   |             |   |   |             |   |   | PERIOD FROM |  
|                                                                 |   |             |   |   |             |   |   | INCEPTION   |  
|                                                                 |   | YEARS       |   |   | APRIL 28    |  
|                                                                 |   | ENDED       |   |   | 2006 TO     |  
|                                                                 |   | NOVEMBER 30 |   |   | NOVEMBER 30 |  
|                                                                 |   | 2010        |   |   | 2009        |   |   | 2010        |  
|                                                                 |   |             |   |   |             |   |   |             |  
|Expenses                                                         |   |             |   |   |             |   |   |             |  
|Bank charges and interest                                        | $ | 22,543      |   | $ | 15,418      |   | $ | 41,057      |  
|Consulting
      fees                                            |   | 29,126      |   |   | -           |   |   | 31,476      |  
|Depreciation                                                     |   | 253         |   |   | 505         |   |   | 1,516       |  
|Filing and
      regulatory                                      |   | 3,232       |   |   | 5,609       |   |   | 18,480      |  
|Finance charges                                                  |   | 83,881      |   |   | 53,619      |   |   | 137,500     |  
|Incorporation
      costs                                        |   | -           |   |   | 1,262       |   |   | 3,382       |  
|Investor relations                                               |   | 6,000       |   |   | 9,800       |   |   | 15,800      |  
|Management
      fees                                            |   | 36,000      |   |   | 36,000      |   |   | 128,600     |  
|Mineral property exploration
      costs                         |   | 38,317      |   |   | 51,930      |   |   | 99,747      |  
|Office and
      administrative                                  |   | 23,099      |   |   | 19,181      |   |   | 66,313      |  
|Professional fees                                                |   | 193,075     |   |   | 168,675     |   |   | 515,189     |  
|Recovery
      on mineral property                               |   | (18,377     | ) |   | -           |   |   | (18,377     | )
|Travel                                                           |   | 2,760       |   |   | 13,581      |   |   | 16,341      |  
|Website design                                                   |   | 4,044       |   |   | -           |   |   | 4,044       |  
|Write-off of mineral property
      costs                        |   | 3,000       |   |   | -           |   |   | 9,000       |  
|                                                                 |   |             |   |   |             |   |   |             |  
|Net Loss For The
      Period                                    | $ | (426,953    | ) | $ | (375,580    | ) | $ | (1,070,068  | )
|                                                                 |   |             |   |   |             |   |   |             |  
|Basic And Diluted
      Loss Per Share                           | $ | (0.01       | ) | $ | (0.01       | ) |   |             |  
|                                                                 |   |             |   |   |             |   |   |             |  
|                                                                 |   |             |   |   |             |   |   |             |  
|Weighted Average Number Of 
           Common Shares Outstanding |   | 54,794,432  |   |   | 53,614,295  |   |   |             |  

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

---

PENGRAM CORPORATION(An Exploration Stage Company)CONSOLIDATED STATEMENTS OF CASH FLOWS(Stated in U.S. Dollars)

|                                                                                                       |   |             |   |   |             |   |   | CUMULATIVE  |  
|------------------------------------------------------------------------------------------------------ | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                                                                       |   |             |   |   |             |   |   | PERIOD FROM |  
|                                                                                                       |   |             |   |   |             |   |   | INCEPTION   |  
|                                                                                                       |   | YEARS       |   |   | APRIL 28    |  
|                                                                                                       |   | ENDED       |   |   | 2006 TO     |  
|                                                                                                       |   | NOVEMBER 30 |   |   | NOVEMBER 30 |  
|                                                                                                       |   | 2010        |   |   | 2009        |   |   | 2010        |  
|                                                                                                       |   |             |   |   |             |   |   |             |  
|Cash Provided By (Used In) Operating Activities                                                        |   |             |   |   |             |   |   |             |  
|Net loss for the period                                                                                | $ | (426,953    | ) | $ | (375,580    | ) | $ | (1,070,068  | )
|Adjustment
      for items not affecting cash:                                                         |   |             |   |   |             |   |   |             |  
|Depreciation                                                                                           |   | 253         |   |   | 505         |   |   | 1,516       |  
|Finance charges on convertible notes                                                                   |   | 83,881      |   |   | 53,619      |   |   | 137,500     |  
|Foreign exchange                                                                                       |   | 2,056       |   |   | 9,313       |   |   | 11,369      |  
|Recovery of mineral property                                                                           |   | (18,377     | ) |   | -           |   |   | (18,377     | )
|Accrued interest expense                                                                               |   | 21,539      |   |   | 14,681      |   |   | 38,285      |  
|Write-off of mineral property costs                                                                    |   | 3,000       |   |   | -           |   |   | 9,000       |  
|Changes in non-cash operating
      working capital items:                                             |   |             |   |   |             |   |   |             |  
|Accounts payable and accrued liabilities                                                               |   | 148,176     |   |   | 75,577      |   |   | 316,793     |  
|Amounts due to related parties                                                                         |   | 25,000      |   |   | 18,000      |   |   | 49,000      |  
|                                                                                                       |   | (161,425    | ) |   | (203,885    | ) |   | (524,982    | )
|Cash Provided By (Used In) Investing Activities                                                        |   |             |   |   |             |   |   |             |  
|Advances                                                                                               |   | -           |   |   | 100,000     |   |   | (10,367     | )
|Mineral property acquisition
      costs                                                               |   | (68,075     | ) |   | (10,000     | ) |   | (84,075     | )
|Recovery
      of mineral property costs                                                               |   | 117,077     |   |   | -           |   |   | 117,077     |  
|Purchase of computer equipment                                                                         |   | -           |   |   | -           |   |   | (1,516      | )
|                                                                                                       |   | 49,002      |   |   | 90,000      |   |   | 21,119      |  
|Cash Provided By (Used In) Financing Activities                                                        |   |             |   |   |             |   |   |             |  
|Issuance
      of convertible notes                                                                    |   | -           |   |   | 70,000      |   |   | 137,500     |  
|Issuance of common stock                                                                               |   | 70,000      |   |   | -           |   |   | 278,981     |  
|Finders
      fees                                                                                    |   | (5,042      | ) |   | -           |   |   | (5,042      | )
|Unit and share subscriptions
      received in advance                                                 |   | 22,465      |   |   | 21,360      |   |   | 43,825      |  
|Advance on
      promissory note payable                                                               |   | 75,000      |   |   | -           |   |   | 75,000      |  
|Repayment of promissory note                                                                           |   | (53,358     | ) |   | -           |   |   | (53,358     | )
|Promissory
      note payable to related party                                                         |   | -           |   |   | 7,000       |   |   | 27,000      |  
|Repayment of promissory note
      payable to related party                                            |   | -           |   |   | (7,000      | ) |   | (7,000      | )
|Advance on
      loan payable                                                                          |   | -           |   |   | (4,610      | ) |   | 5,390       |  
|Advance on amount due to
      shareholder                                                             |   | -           |   |   | 920         |   |   | 1,920       |  
|                                                                                                       |   | 109,065     |   |   | 87,670      |   |   | 504,216     |  
|                                                                                                       |   |             |   |   |             |   |   |             |  
|(Decrease) Increase In Cash                                                                            |   | (3,358      | ) |   | (26,215     | ) |   | 353         |  
|Cash, Beginning Of Period                                                                              |   | 3,711       |   |   | 29,926      |   |   | -           |  
|                                                                                                       |   |             |   |   |             |   |   |             |  
|Cash, End Of Period                                                                                    | $ | 353         |   | $ | 3,711       |   | $ | 353         |  
|                                                                                                       |   |             |   |   |             |   |   |             |  
|Supplemental Disclosure Of Cash Flow Information                                                       |   |             |   |   |             |   |   |             |  
|Cash paid
      during the period for:                                                                 |   |             |   |   |             |   |   |             |  
|Interest                                                                                               | $ | -           |   | $ | 400         |   | $ | 400         |  
|Income taxes                                                                                           | $ | -           |   | $ | -           |   | $ | -           |  
|                                                                                                       |   |             |   |   |             |   |   |             |  
|Non-Cash Financing And Investing Activities                                                            |   |             |   |   |             |   |   |             |  
|Shares received from Solfotara
      Minerals Corp. (Note 3)                                           | $ | -           |   | $ | 10,367      |   | $ | 10,367      |  
|Shares issued
      for mineral property acquisition costs (Note 5)                                    | $ | 6,400       |   | $ | 373,500     |   | $ | 379,900     |  
|Promissory note payable for
      mineral property acquisition costs 
                  (Note
      5) | $ | -           |   | $ | 56,600      |   | $ | 56,600      |  
|Shares issued on conversion
      of convertible note (Note 11)                                        | $ | 137,500     |   | $ | -           |   | $ | 137,500     |  

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

---

PENGRAM CORPORATION(AnExplorationStageCompany)STATEMENTOFSTOCKHOLDERSEQUITY(DEFICIENCY)PERIODFROMINCEPTIONAPRIL 28, 2006 TONOVEMBER30, 2010(Stated in U.S. Dollars)

DEFICITACCUMULATEDSHARE
      
      
      
      
      
      
      
      
      DURINGSUBSCRIPTIONS
      
      
      ADDITIONAL
      
      
      SHARE
      
      
      THECOMMON
        STOCK
      
      
      RECEIVED
      
      
      PAID-IN
      
      
      PURCHASE
      
      
      EXPLORATIONSHARES
      
      
      AMOUNT
      
      
      IN
        ADVANCE
      
      
      CAPITAL
      
      
      WARRANTS
      
      
      STAGE
      
      
      TOTALJune 19, 2006  stock issued for cash at $0.001
      
      27,000,000
      
      $
      27,000
      
      $
      -
      
      $
      (18,000
      )
      $
      -
      
      $
      -
      
      $
      9,000Stock issued for cash $0.01 in private placement
      
      17,997,144
      
      
      17,997
      
      
      -
      
      
      101,984
      
      
      -
      
      
      -
      
      
      119,981Net loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (20,112
      )
      
      (20,112
      )Balance, November 30, 2006
      
      44,997,144
      
      
      44,997
      
      
      -
      
      
      83,984
      
      
      -
      
      
      (20,112
      )
      
      108,869Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (108,384
      )
      
      (108,384
      )Balance, November 30, 2007
      
      44,997,144
      
      
      44,997
      
      
      -
      
      
      83,984
      
      
      -
      
      
      (128,496
      )
      
      485September 4, 2008  units issued for cash at $0.03
      
      3,000,000
      
      
      3,000
      
      
      -
      
      
      41,300
      
      
      35,700
      
      
      -
      
      
      80,000Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (139,039
      )
      
      (139,039
      )Balance, November 30, 2008
      
      47,997,144
      
      
      47,997
      
      
      -
      
      
      125,284
      
      
      35,700
      
      
      (267,535
      )
      
      (58,554
      )Stock issued for mineral property
      
      6,000,000
      
      
      6,000
      
      
      -
      
      
      294,000
      
      
      -
      
      
      -
      
      
      300,000Relative fair value allocation of convertible
        notes
      
      -
      
      
      -
      
      
      -
      
      
      90,021
      
      
      47,479
      
      
      -
      
      
      137,500Stock issued under assignment agreement
      
      150,000
      
      
      150
      
      
      -
      
      
      37,350
      
      
      -
      
      
      -
      
      
      37,500Stock issued pursuant to extension agreement
      
      60,000
      
      
      60
      
      
      -
      
      
      35,940
      
      
      -
      
      
      -
      
      
      36,000Share subscriptions received in advance
      
      -
      
      
      -
      
      
      2,500
      
      
      -
      
      
      -
      
      
      -
      
      
      2,500Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (375,580
      )
      
      (375,580
      )Balance, November 30, 2009
      
      54,207,144
      
      
      54,207
      
      
      2,500
      
      
      582,595
      
      
      83,179
      
      
      (643,115
      )
      
      79,366Units issued for cash at $0.10
      
      600,000
      
      
      600
      
      
      -
      
      
      37,650
      
      
      21,750
      
      
      -
      
      
      60,000Finders fees
      
      -
      
      
      -
      
      
      -
      
      
      (5,042
      )
      
      -
      
      
      -
      
      
      (5,042
      )Exercise of warrants
      
      150,000
      
      
      150
      
      
      (2,500
      )
      
      12,350
      
      
      -
      
      
      -
      
      
      10,000Expiry of warrants
      
      -
      
      
      -
      
      
      -
      
      
      83,179
      
      
      (83,179
      )
      
      -
      
      
      -Conversion of convertible notes
      
      2,750,000
      
      
      2,750
      
      
      -
      
      
      134,750
      
      
      -
      
      
      -
      
      
      137,500Stock issued under assignment agreement
      
      30,000
      
      
      30
      
      
      -
      
      
      6,370
      
      
      -
      
      
      -
      
      
      6,400Share subscriptions received in advance
      
      -
      
      
      -
      
      
      26,360
      
      
      -
      
      
      -
      
      
      -
      
      
      26,360Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (426,953
      )
      
      (426,953
      )Balance, November 30, 2010
      
      57,737,144
      
      $
      57,737
      
      $
      26,360
      
      $
      851,852
      
      $
      21,750
      
      $
      (1,070,068
      )
      $
      (112,369
      )


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

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION AND NATURE OF
      OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Consolidated Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | These consolidated financial statements include the
      accounts of Pengram Corporation (the Company) and its wholly owned
      subsidiaries, Magellan Acquisition Corp. (Nevada) (MAC) and Clisbako
      Minerals Inc. (British Columbia) (CMI). All intercompany balances have
      been eliminated.                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company was incorporated in the State of Nevada,
      U.S.A., on April 28, 2006. The Companys principal executive offices are
      in Bellingham, Washington, U.S.A. The Companys year end is November
      30.                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Exploration Stage Activities                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has been in the exploration stage since its
      formation and has not yet realized any revenues from its planned
      operations. The Company was formed for the purpose of acquiring
      exploration and development stage natural resource properties. The Company
      has not commenced business operations. The Company is an exploration stage
      company as defined in the Securities and Exchange Commission (S.E.C.)
      Industry Guide No. 7.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Forward Stock Split                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During the year ended November 30, 2009, the Company
      completed a three-for-one forward stock split of its common stock. The
      Companys authorized common stock was increased from 100,000,000 shares
      with a par value of $0.001 per share to 300,000,000 shares with a par
      value of $0.001. Share and per share amounts (except par value) for the
      periods presented have been adjusted to reflect the effects of this stock
      split.          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The accompanying financial statements have been prepared
      assuming the Company will continue as a going
      concern.                                                                                                                                                                                                                                                                                                                                                     

---

PENGRAM CORPORATION (An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Going Concern (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As shown in the accompanying financial statements, the
      Company has incurred a net loss of $1,070,068 for the period from April
      28, 2006 (inception) to November 30, 2010, and has no revenues. These
      factors raise substantial doubt about the Companys ability to continue as
      a going concern. The future of the Company is dependent upon its ability
      to obtain financing and upon future profitable operations from the
      development of its natural resource properties. Management has plans to
      seek additional capital through a private placement and public offering of
      its common stock. The financial statements do not include any adjustments
      relating to the recoverability and classification of recorded assets, or
      the amounts of and classification of liabilities that might be necessary
      in the event the Company cannot continue in existence.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States. Because a precise determination of many assets and
      liabilities is dependent upon future events, the preparation of financial
      statements for a period necessarily involves the use of estimates which
      have been made using careful judgement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The financial statements have, in managements opinion,
      been properly prepared within the framework of the significant accounting
      policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | c)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | c)                                        
|   |                                           
|   |                                           
|   |                                           
|   | d)                                        
|   |                                           
|   |                                           
|   |                                           
|   | e)                                        
|   |                                           
|   |                                           
|   |                                           
|   | f)                                        
|   |                                           
|   |                                           
|   |                                           
|   | g)                                        
|   |                                           
|   |                                           
|   |                                           
|   | h)                                        
|   |                                           
|   |                                           

| | i)   | monetary items are translated at the exchange rate
      prevailing at the balance sheet date;                             
| | ---- | ---------------------------------------------------------------------------------------------------------------------------
| | ii)  | non-monetary items are translated at the historical
      exchange rate;                                                   
| | iii) | revenue and expense items are translated at the average
      rate in effect during the applicable accounting
      period.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | i)                                        
|   |                                           
|   |                                           
|   |                                           
|   | j)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

2010
      2009Convertible notes
      -
      2,910,856Share purchase warrants
      600,000
      4,650,000


| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company uses an asset and liability approach for
      financial accounting and reporting on income taxes. If it is more likely
      than not that some portion or all of a deferred tax asset will not be
      realized, a valuation allowance is recognized.                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | l) | Impairment of Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company records impairment losses on long-lived
      assets used in operations when indicators of impairment are present and
      the undiscounted cash flows estimated to be generated by those assets are
      less than the assets carrying amount. In such cases, the amount of the
      impairment is determined based on the relative fair values of the impaired
      assets. The Company tests the recoverability of the assets whenever events
      or changes in circumstances indicate that its carrying amount may not be
      recoverable.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | m)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | n)                                        
|   |                                           
|   |                                           

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | n)                                        
|   |                                           
|   |                                           
|   |                                           
|   | o)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   | p)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

| | Level 1: | Observable inputs such as quoted prices in active
      markets;                                                                        
| | -------- | ----------------------------------------------------------------------------------------------------------------------------------------
| |          |                                                                                                                                         
| | Level 2: | Inputs, other than the quoted prices in active markets,
      that are observable either directly or indirectly; and                    
| |          |                                                                                                                                         
| | Level 3: | Unobservable inputs in which there is little or no market
      data, which require the reporting entity to develop its own assumptions.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | p)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

| |                                                              |   |             |  |   | QUOTED    |  |   | SIGNIFICANT |  |   |              | 
| | ------------------------------------------------------------ | - | ----------- |  | - | --------- |  | - | ----------- |  | - | ------------ | 
| |                                                              |   | FAIR VALUE  |  |   | PRICES    |  |   | OTHER       |  |   |              | 
| |                                                              |   | AT          |  |   | IN ACTIVE |  |   | OBSERVABLE  |  |   | UNOBSERVABLE | 
| |                                                              |   | NOVEMBER 30 |  |   | MARKETS   |  |   | INPUTS      |  |   | INPUTS       | 
| | DESCRIPTION                                                  |   | 2010        |  |   | (LEVEL 1) |  |   | (LEVEL 2)   |  |   | (LEVEL 3)    | 
| |                                                              |   |             |  |   |           |  |   |             |  |   |              | 
| | Assets:                                                      |   |             |  |   |           |  |   |             |  |   |              | 
| | Cash                                                         | $ | 353         |  | $ | 353       |  | $ | -           |  | $ | -            | 
| | Assets measured at fair value 
         at November 30, 2010 | $ | 353         |  | $ | 353       |  | $ | -           |  | $ | -            | 

| | q) | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | Certain comparative figures have been reclassified to
      conform with the current years presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | r) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | In April 2010, the FASB issued ASU No. 2010-17 (Topic
      605), Revenue Recognition Milestone Method. This standard provides
      guidance on defining a milestone and determining when it may be
      appropriate to apply the milestone method of revenue recognition for
      research and development transactions. The amendments in this update
      provide guidance on the criteria that should be met for determining
      whether the milestone method of revenue recognition is appropriate. A
      vendor can recognize consideration that is contingent upon achievement of
      a milestone in its entirety as revenue in the period in which the
      milestone is achieved only if the milestone meets all applicable criteria.
      The amendments in this update are effective for the Company on a
      prospective basis for milestones achieved after December 31, 2010. The
      implementation of this standard is not expected to have a significant
      impact on the Companys financial position or results of
      operations.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 AND 2009(Stated in U.S. Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------

| | r) | Recent Accounting Pronouncements
      (Continued)
| | -- | --------------------------------------------------

In April 2010, the FASB provided an
  update to address the classification of an employee share-based payment award
  with an exercise price denominated in the currency of a market in which the
  underlying equity security trades. FASB Accounting Standards Codification Topic
  718, CompensationStock Compensation, provides guidance on the classification of
  a share-based payment award as either equity or a liability. A share-based
  payment award that contains a condition that is not a market, performance, or
  service condition is required to be classified as a liability. This standard is
  effective for years beginning after December 15, 2010, and for subsequent
  interim and annual reporting periods thereafter. The Company does not expect the
  adoption of this standard to have a significant effect on the Company's results
  of operations or financial position.

In January 2010, the FASB issued
  Accounting Standards Codification (ASC) Update 2010-02, Consolidation (Topic
  810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This
  amendment to Topic 810 clarifies, but does not change, the scope of current US
  GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and
  removes the potential conflict between guidance in that Subtopic and asset
  derecognition and gain or loss recognition guidance that may exist in other US
  GAAP. An entity will be required to follow the amended guidance beginning in the
  period that it first adopts FAS 160 (now included in Subtopic 810-10). For those
  entities that have already adopted FAS 160, the amendments are effective at the
  beginning of the first interim or annual reporting period ending on or after
  December 15, 2009. The amendments should be applied retrospectively to the first
  period that an entity adopted FAS 160. The Company does not expect the
  provisions of ASCU 2010-02 to have a material effect on the financial position,
  results of operations or cash flows of the Company.

In October 2009, the FASB issued ASU
  2009-13, Revenue Recognition (Topic 605), Multiple-Deliverable Revenue
    Arrangementsamending ASC 605. ASU 2009-13 requires entities to allocate
  revenue in an arrangement using estimated selling prices of the delivered goods
  and services based on a selling price hierarchy. ASU 2009-13 eliminates the
  residual method of revenue allocation and requires revenue to be allocated using
  the relative selling price method. ASU 2009-13 is effective prospectively for
  revenue arrangements entered into or materially modified in fiscal years
  beginning on or after June 15, 2010. The adoption is not expected to have a
  material impact on the Companys financial position or results of operations.

Management does not believe any other
  recently issued but not yet effective accounting pronouncements, if adopted,
  would have an effect on the accompanying financial statements.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|3. | LONG-TERM INVESTMENT                                                                                                                                                                                                                                                                                                                                
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                     
|   | The Company received 250,000 common shares in Solfotara
      Minerals Corp. (Solfotara), a private Canadian company as consideration
      for transferring its interest in an option agreement to Solfotara in the
      year ended November 30, 2009. The total value attributed to the common
      stock received from Solfotara was $10,367.
|   |                                                                                                                                                                                                                                                                                                                                                     
|4. | COMPUTER EQUIPMENT                                                                                                                                                                                                                                                                                                                                  

| |                    |   | NOVEMBER 30 |  |   | NOVEMBER 30  | 
| | ------------------ | - | ----------- |  | - | ------------ | 
| |                    |   | 2010        |  |   | 2009         | 
| |                    |   |             |  |   | ACCUMULATED  | 
| |                    |   | COST        |  |   | AMORTIZATION | 
| |                    |   |             |  |   |              | 
| | Computer Equipment | $ | 1,516       |  | $ | 1,516        | 

|5. | MINERAL PROPERTY ACQUISITION
      COSTS
|-- | ----------------------------------------

| |                        |   |                |  |   |           |  |   |            |   |   |          |   |   | RECOVERY        |  |   |                  | 
| | ---------------------- | - | -------------- |  | - | --------- |  | - | ---------- | - | - | -------- | - | - | --------------- |  | - | ---------------- | 
| |                        |   | NOVEMBER       |  |   |           |  |   | ABANDONED, |   |   |          |   |   | RECOGNIZED      |  |   | **NOVEMBER**     | 
| |                        |   | 30,
      2009 |  |   | ADDITIONS |  |   | IMPAIRED   |   |   | RECOVERY |   |   | AS
      INCOME |  |   | **30,** **2010** | 
| | Mineral Property       |   |                |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |                  | 
| |                        |   |                |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |                  | 
| | Clisbako claims (a)    | $ | 392,600        |  | $ | 6,400     |  | $ | -          |   | $ | (48,650  | ) | $ | -               |  | $ | 350,350          | 
| | Eureka claims (b)      |   | 47,500         |  |   | 15,025    |  |   | -          |   |   | -        |   |   | -               |  |   | 62,525           | 
| | Manado Gold claims (c) |   | -              |  |   | 50,050    |  |   | -          |   |   | (68,427  | ) |   | 18,377          |  |   | -                | 
| | June claims (d)        |   | -              |  |   | 3,000     |  |   | (3,000     | ) |   | -        |   |   | -               |  |   | -                | 
| |                        |   |                |  |   |           |  |   |            |   |   |          |   |   |                 |  |   |                  | 
| |                        | $ | 440,100        |  | $ | 74,475    |  | $ | (3,000     | ) | $ | (117,077 | ) | $ | 18,377          |  | $ | 412,875          | 

| |                     |   | NOVEMBER 30 |  |   |           |  |   | ABANDONED, |  |   | NOVEMBER 30 | 
| | ------------------- | - | ----------- |  | - | --------- |  | - | ---------- |  | - | ----------- | 
| |                     |   | 2008        |  |   | ADDITIONS |  |   | IMPAIRED   |  |   | 2009        | 
| | Mineral Property    |   |             |  |   |           |  |   |            |  |   |             | 
| |                     |   |             |  |   |           |  |   |            |  |   |             | 
| | Clisbako claims (a) | $ | -           |  | $ | 392,600   |  | $ | -          |  | $ | 392,600     | 
| | Eureka claims (b)   |   | -           |  |   | 47,500    |  |   | -          |  |   | 47,500      | 
| |                     |   |             |  |   |           |  |   |            |  |   |             | 
| |                     | $ | -           |  | $ | 440,100   |  | $ | -          |  | $ | 440,100     | 

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | a)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              

| | 1. | Paying an aggregate of $150,000 to CMI. as
      follows:
| | -- | ---------------------------------------------------------
| |    |                                                          
| |    | (a)                                                      
| |    |                                                          
| |    | (b)                                                      
| |    |                                                          
| |    | (c)                                                      

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | a)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              

| | 3. | Incurring Exploration Expenditures of CDN$650,000 on the
      Clisbako Property as follows:
| | -- | --------------------------------------------------------------------------------------------
| |    |                                                                                             
| |    | (a)                                                                                         
| |    |                                                                                             
| |    | (b)                                                                                         
| |    |                                                                                             
| |    | (c)                                                                                         

Manado Gold Corp. will also be
  responsible to make all government payments required to keep the claims in good
  standing.

| | b) | Eureka Claims                                                                                                                                                                                                                                                                                                                    
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | On May 29, 2009, the Company entered into an assignment
      agreement to acquire an undivided 100% interest in a series of mineral
      claims (collectively known as the Eureka claims) situated in the Eureka
      County, Esmeralda County and Mineral County, Nevada. Consideration for the
      claims is as follows:
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | i)                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | ii)                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | iii)                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | iv)                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | v)                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | vi)                                                                                                                                                                                                                                                                                                                              

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              

| | a) | The reimbursement by the Assignee of $80,000 in
      expenditures incurred by the Company in connection with the original
      option agreement payable is as follows:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i)  | $40,000 on execution of this Agreement
      (received);                                 
| | ---- | -----------------------------------------------------------------------------------------
| | (ii) | $40,000 on or before September 15, 2010 ($28,427 received
      as at November 30, 2010).

| | b) | The Assignee incurring expenditures to complete
      exploration on or place into production the Manado Gold Property is as
      follows:                        
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                    
| |    | (i)                                                                                                                                                                
| |    | (ii)                                                                                                                                                               
| |    | (iii)                                                                                                                                                              
| |    |                                                                                                                                                                    
| | c) | Following completion of the expenditures set out above,
      the Assignee making the expenditures will complete a scoping study on the
      Manado Gold Property.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY ACQUISITION COSTS(Continued)
|-- | ---------------------------------------------
|   |                                              
|   | c)                                           
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              
|   |                                              

Upon completing the payments
  expenditures and share issuance as set out above, the Assignee will earn up to
  75% of the Companys interest in the Manado Gold Property as follows:

| | (i)   | 7.5% undivided interest upon completion of the items set
      out in (a), (b)(i), (d)(i) and (e)(i) above;                 
| | ----- | ----------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                             
| | (ii)  | 11.25% undivided interest upon completion of the items
      set out in paragraphs (b)(ii), (d)(ii) and (e)(ii) above;      
| |       |                                                                                                                             
| | (iii) | 19.5% undivided interest upon completion of the items set
      out in paragraphs (b)(iii), (d)(iii) and (e)(iii) above; and
| |       |                                                                                                                             
| | (iv)  | 25.5% undivided interest on completing the scoping study
      described in paragraph (c) above.                            

If the Assignee exercises its rights
  under the Agreement, the Company will be carried through the first $1,750,000 of
  expenditures and through completion of a scoping study. Thereafter the Company
  will be responsible for its proportionate share. The Company will remain
  responsible to issue up to 950,000 of its common shares to the Concession
  Holders under the formal agreement.

In the event the Company elects to
  exercise its option to purchase the Concession Owners 15% carried interest, the
  Assignee will have the right to participate as to 75% in the exercise of that
  option.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|5. | MINERAL PROPERTY AND ACQUISITION COSTS(Continued)
|-- | -------------------------------------------------
|   |                                                  
|   | c)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   | d)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  

|   | During the year ended November 30, 2010, the Company
      abandoned and wrote off all costs incurred with respect to the June
      property.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                               
|6. | PROMISSORY NOTE PAYABLE                                                                                                                       
|   |                                                                                                                                               
|   | a)                                                                                                                                            

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|6. | PROMISSORY NOTE PAYABLE(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | PROMISSORY NOTE PAYABLE TO RELATED PARTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On December 19, 2007, the Company entered into a
      promissory note agreement whereby it borrowed $20,000. The note is
      unsecured, repayable on demand and bears interest at 10% per annum,
      payable annually. As at November 30, 2010, a total of $5,901 (2009 -
      $3,901) has been accrued as interest payable on the loan. During the year
      ended November 30, 2008, the owner of the company holding the promissory
      note became an officer and director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|8. | LOAN PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On October 1, 2008, the Company received a loan from an
      arms length party of $10,000. The loan is unsecured, repayable on demand
      and bears interest at 10% per annum, payable annually. During the year
      ended November 30, 2009, the Company paid back $4,610 of this balance. As
      at November 30, 2010, a total of $1,625 (2009 - $1,086) has been accrued
      as interest payable on the loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9. | CONVERTIBLE NOTES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On April 30, 2009, the Company issued 55, $2,500
      Convertible Notes (the Notes) in the aggregate amount of $137,500 due
      and payable on or before October 31, 2010, with interest charged at the
      rate of 10% per annum payable annually. Attached to the Notes were 550,000
      share purchase warrants (10,000 attached to each of the 55 Notes). Each
      warrant entitles the holder to purchase three shares of the Companys
      common stock for a period expiring one year from the date of issuance of
      the Notes at an exercise price of $0.25 ($0.083 per share). At the
      election of the holder, the Notes and interest accrued thereon are
      convertible into such number of shares of the Companys common stock as
      shall be equal to the principal amount of the Note to be converted divided
      by $0.05. Conversion of the Notes does not affect the
      warrants.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|9. | CONVERTIBLE NOTES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | During the year ended November 30, 2008, the Company had
      received $67,500 towards the convertible notes offering. During the year
      end November 30, 2009, the Company received the remaining $70,000 towards
      this offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company has allocated the proceeds received between
      the notes and the detachable warrants on a relative fair value basis. The
      fair value of the warrants was estimated using the Black-Scholes option
      pricing model at the date of issue with the following weighted average
      assumptions: expected dividend yield of 0%; average risk free interest
      rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The
      fair value of the notes was estimated by multiplying the number of shares
      that would result from an immediate exercise of the conversion option, by
      the market price on the date of issue. The relative fair values of the
      notes and the warrants determine the debt discount attributable to the
      warrants. The result was $47,479 of the proceeds being allocated to the
      warrants and $90,021 being allocated to the notes. The resulting discount
      on the notes is amortized over the term of the notes to maturity such
      that, in the absence of any conversions, the carrying value of the notes
      at maturity would be equal to the face amount of $137,500. In the event of
      a conversion of any, or all, of the face amount of the notes, the
      proportionate amount of the unamortized discount as of the date of
      conversion is immediately charged to operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In accordance with the provisions of ASC 470  20, the
      Company determined the intrinsic value of the beneficial conversion
      feature on the notes by comparing the market price of the Companys common
      stock at issuance of the notes to the effective conversion price of the
      notes, as determined by dividing the proceeds allocated to the notes by
      the number of shares that would result from an immediate exercise of the
      conversion option. The initial beneficial conversion feature was
      determined to be $734,250; however, in accordance with the provisions of
      ASC 470  20, it is limited to the proceeds allocated to the notes, being
      $90,021. This beneficial conversion feature was recorded as an immediate
      charge to additional paid-in capital and a further discount on the
      convertible note carrying value. This further discount is to be amortized
      over the term of the notes to maturity. In the event of a conversion of
      any, or all, of the face amount of the notes, the proportionate amount of
      the unamortized beneficial conversion feature as of the date of conversion
      is immediately charged to operations.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | During the year ended November 30, 2010, the Company
      recorded as finance charges, $28,964 of amortization (2009 - $18,515) of
      the discount resulting from the allocation of proceeds to the warrants and
      a further $54,917 of the intrinsic value of the beneficial conversion
      feature (2009 - $35,104), leaving total unamortized amounts of $Nil (2009
      - $83,881). The accrued interest of $20,406 remains unpaid as of November
      30, 2010, and is included in accounts payable and accrued
      liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|9.  | CONVERTIBLE NOTES(Continued)                                                                                                                            
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                         
|    | During the year ended November 30, 2010, the entire
      principal of $137,500 was converted into 2,750,000 shares of the Companys
      common stock.
|    |                                                                                                                                                         
|10. | UNIT AND SHARE SUBSCRIPTIONS RECEIVED IN
      ADVANCE                                                                                                  

| | a) | Unit subscriptions received                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | During the year ended November 30, 2010, the Company
      received $22,465 (2009 - $18,860) in advance of a private placement. Under
      the terms of the financing, the subscription price for each unit is $0.05.
      Each unit will consist of one common share and one common share warrant,
      each whole warrant entitling the holder thereof to purchase an additional
      common share at $0.10 for a period of two years. A total of $26,360 in
      subscription funds, representing 527,200 units, has been approved for
      issuance subsequent to the year end and therefore has been classified as
      unit subscription received in advance as of November 30, 2010.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The Company received $14,965 in subscription funds in
      connection with the private placement mentioned above. Due to the
      provision in the subscription agreements that the subscription funds will
      constitute non-interest bearing demand loans to the Company in the event
      the subscriptions are not accepted by the Company, the Company classified
      the unit subscriptions received in advance as current
      liabilities.                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | b) | Share subscriptions received in advance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | During the year ended November 30, 2009, the Company
      received $2,500 towards the exercise of share purchase warrants. A total
      of 30,000 shares of the Companys common stock were issued in March 2010
      upon exercise of the warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                           

|11. | CAPITAL STOCK
|--- | -------------
|    |              
|    | a)           
|    |              
|    |              
|    |              
|    |              

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|11. | CAPITAL STOCK(Continued)
|--- | ------------------------
|    |                         
|    | a)                      
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         
|    |                         

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|11. | CAPITAL STOCK(Continued)
|--- | ------------------------
|    |                         
|    | b)                      
|    |                         
|    |                         

NUMBER OF
      EXERCISEWARRANTS
      PRICE
      EXPIRY DATE500,000
      $ 0.15
      July 20, 2012100,000
      $ 0.15
      August 4, 2012600,000


A summary of changes in share purchase
  warrants for the years ended November 30, 2009 and 2010 is presented below:

| |                            |  | NUMBER OF  |   |   | WEIGHTED AVERAGE |  
| | -------------------------- |  | ---------- | - | - | ---------------- | -
| |                            |  | WARRANTS   |   |   | EXERCISE PRICE   |  
| |                            |  |            |   |   |                  |  
| | Balance, November 30, 2008 |  | 3,000,000  |   | $ | 0.033            |  
| | Issued                     |  | 1,650,000  |   | $ | 0.083            |  
| | Balance, November 30, 2009 |  | 4,650,000  |   | $ | 0.05             |  
| | Granted                    |  | 600,000    |   | $ | 0.15             |  
| | Exercised                  |  | (150,000   | ) | $ | (0.083           | )
| | Expired                    |  | (4,500,000 | ) | $ | (0.05            | )
| |                            |  |            |   |   |                  |  
| | Balance, November 30, 2010 |  | 600,000    |   | $ | 0.15             |  

The fair value of the warrants issued
  in connection with the private placement during the year ended November 30, 2010
  was measured at the award date using the Black-Scholes option pricing model with
  the following weighted average assumptions: expected dividend yield of 0%;
  average risk free interest rate of 1.46%; expected volatility of 168% and a term
  of 2 years. Of the total proceeds, $21,750 was allocated to share purchase
  warrants.

The fair value of the warrants issued
  with the convertible notes during the year ended November 30, 2009 was measured
  as disclosed in Note 9.

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|11. | CAPITAL STOCK(Continued)                                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                         
|    | c)                                                                                                                      
|    |                                                                                                                         
|    |                                                                                                                         
|    |                                                                                                                         
|    |                                                                                                                         
|    |                                                                                                                         
|12. | RELATED PARTY TRANSACTIONS                                                                                              
|    |                                                                                                                         
|    | During the year ended November 30, 2010, the Company
      entered into the following transactions with related parties:
|    |                                                                                                                         
|    | a)                                                                                                                      
|    |                                                                                                                         
|    | b)                                                                                                                      

|    | These transactions with related parties were in the
      normal course of operations and were measured at the exchange value which
      represented the amount of consideration established and agreed to by the
      parties. The amount due to the related parties is non- interest bearing
      with no fixed terms of repayment.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                         
|13. | COMMITMENTS AND CONTRACTUAL OBLIGATIONS                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                         
|    | The Company has no significant commitments or contractual
      obligations with any parties respecting executive compensation, consulting
      arrangements or other matters. Rental of premises and investor relations
      services are provided on a month-to-month
      basis.                                                  

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30, 2010 and 2009(Stated in U.S. Dollars)

|14. | SEGMENT INFORMATION                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                       
|    | The Company has one reportable operating segment, being
      the acquisition and exploration of mineral properties. Details of
      identifiable assets by geographic segments are as
      follows:

MINERALCAPITAL
      
      
      PROPERTYASSETS
      
      
      INTERESTSNovember 30, 2010USA
      $
      -
      
      $
      62,525Canada
      
      -
      
      
      350,350$
      -
      
      $
      412,875


MINERALCAPITAL
      
      
      PROPERTYASSETS
      
      
      INTERESTSNovember 30, 2009USA
      $
      -
      
      $
      47,500Canada
      
      253
      
      
      392,600$
      253
      
      $
      440,100


|15. | INCOME TAXES
|--- | ------------
|    |             
|    | a)          
|    |             
|    |             

| |                                                       |   | 2010     |   |   | 2009     |  
| | ----------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                       |   |          |   |   |          |  
| | Loss for the year                                     | $ | (426,953 | ) | $ | (375,580 | )
| |                                                       |   |          |   |   |          |  
| | Computed expected income tax expense
      (recovery) | $ | (145,000 | ) | $ | (128,000 | )
| | Non-deductible item                                   |   | 8,000    |   |   | 17,600   |  
| | Increase in valuation allowance                       |   | 137,000  |   |   | 110,400  |  
| |                                                       |   |          |   |   |          |  
| | Income tax expense (recovery)                         | $ | -        |   | $ | -        |  

---

PENGRAM CORPORATION(An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOVEMBER 30,
    2010 and 2009(Stated in U.S. Dollars)

|15. | INCOME TAXES(Continued)
|--- | -----------------------

| | b) | Significant components of the Companys deferred income
      tax assets are as follows:
| | -- | ----------------------------------------------------------------------------------------

| |                                                     |   | 2010     |   |   | 2009     |  
| | --------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                     |   |          |   |   |          |  
| | Deferred income tax assets:                         |   |          |   |   |          |  
| | Non-capital loss
      carryforward                 | $ | 335,000  |   | $ | 198,000  |  
| | Mineral
      property and exploration expenditures |   | 28,000   |   |   | 21,000   |  
| |                                                     |   | 363,000  |   |   | 219,000  |  
| | Valuation allowance                                 |   | (363,000 | ) |   | (219,000 | )
| |                                                     |   |          |   |   |          |  
| | Net deferred income tax assets                      | $ | -        |   | $ | -        |  

| | c) | The Company has incurred operating losses of
      approximately $986,000 which, if unutilized, will expire in 2030. Subject
      to certain restrictions, the Company has mineral property and exploration
      expenditures of $494,000 available to reduce future taxable income. Future
      tax benefits, which may arise as a result of these losses, have not been
      recognized in these financial statements, and have been offset by a
      valuation allowance.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

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

On June 18, 2009, we dismissed Williams & Webster, P.S.
(Williams & Webster)(now known as BehlerMick, P.S), as our independent
public accountants. Our Board of Directors approved the dismissal of Williams
& Webster. On the same date, we appointed Davidson & Company LLP,
Chartered Accountants, ("Davidson") as our new independent registered public
accounting firm. Our Board of Directors approved the engagement of Davidson.

Williams & Websters reports on our financial statements
for the years ended November 30, 2008 and 2007 did not contain an adverse
opinion or disclaimer of opinion, nor were they modified or qualified as to
uncertainty, audit scope or accounting principles with the exception of a
statement regarding the uncertainty of our ability to continue as a going
concern.

There have been no disagreements during the fiscal years ended
November 30, 2008 and 2007 and the subsequent interim period up to and including
the date of dismissal between Pengram and Williams & Webster on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which, if not resolved to the satisfaction of
Williams & Webster, would have caused them to make reference to the subject
matter of the disagreement in connection with Williams & Websters report
for the financial statements for the past year and any subsequent interim period
up to and including to the date of Williams & Websters dismissal.

ITEM 9AT.       
 CONTROLS AND PROCEDURES.

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 November 30, 2010.

Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures
were not effective as of the Evaluation Date as a result of the material
weaknesses in internal control over financial reporting discussed below.

Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified below, we believe that our financial statements contained in our
Annual Report for the year ended November 30, 2010 fairly present our financial
condition, results of operations and cash flows in all material respects.

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.                                                                                                                                   

42

---

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
November 30, 2010, 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 a
material weakness in internal control over financial reporting.

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

The material weakness identified is described below.

|1. | Certain entity level controls establishing a tone at the
      top were considered material weaknesses. As of November 30, 2010, the
      Company did not have a policy on fraud. A whistleblower policy is not
      necessary given the small size of the organization.                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Due to the significant number and magnitude of
      out-of-period adjustments identified during the year- end closing process,
      management has concluded that the controls over the period-end financial
      reporting process were not operating effectively. A material weakness in
      the period-end financial reporting process could result in us not being
      able to meet our regulatory filing deadlines and, if not remediated, has
      the potential to cause a material misstatement or to miss a filing
      deadline in the future. Management override of existing controls is
      possible given the small size of the organization and lack of
      personnel.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | There is no system in place to review and monitor
      internal control over financial reporting. The Company maintains an
      insufficient complement of personnel to carry out ongoing monitoring
      responsibilities and ensure effective internal control over financial
      reporting.                                                                                                                                                                                                                                                                                                                                                                                               

As a result of the material weakness in internal control over
financial reporting described above, the Company's management has concluded
that, as of November 30, 2010, the Company's internal control over financial
reporting was not effective based on the criteria in Internal Control -
Integrated Framework issued by 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 SEC that permit us
to provide only management's report in this annual report.

Changes in Internal Controls

There have been no changes in our internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f)
under the Exchange Act) during our quarter ended November 30, 2010 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Limitations on the effectiveness of controls and procedures

Our management, including our Chief Executive Officer and Chief
Financial Officer, do not expect that the our controls and procedures will
prevent all potential errors or fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.

43

---

ITEM 9B.       
 OTHER INFORMATION.

None.

44

---

PART III

ITEM 10.        
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The following table sets forth the names, ages and positions
  of our officers and directors as of the date hereof:

|Name                 | Age | Position                                                                                            
|-------------------- | --- | ----------------------------------------------------------------------------------------------------
|                     |     |                                                                                                     
|Richard W. Donaldson | 72  | Chief Executive Officer, Chief Financial Officer,
      President, Secretary, Treasurer and Director
|                     |     |                                                                                                     
|Bryan H. Wilson      | 60  | Director                                                                                            

Set forth below is a brief description of the background and
business experience of our executive officer and directors:

Richard W. Donaldsonwas appointed as our Chief
Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and
as a member of our Board of Directors on May 2, 2008. Mr. Donaldson is a self
employed business consultant, involved in corporate management reorganizations,
mergers and acquisitions for over 25 years. Mr. Donaldson is a former director
and officer of numerous private and public companies, including Noront Resources
Ltd., Aiviv Ventures Inc., Cherokee Minerals Corp., Canzona Minerals, Inc. and
Renox Creek Petroleum Corp.

Bryan H. Wilson was appointed as a member of our Board
of Directors on December 19, 2008. Mr. Wilson obtained a Bachelor of Science
from the University of Waterloo in 1975. He has worked in the fields of mining
exploration and development for 18 years and financial services for 12 years. He
has filled various roles such as Mining Analyst for C.M Oliver and Dominick
& Dominick Securities Inc. and as a Corporate Finance Specialist for Thames
Capital. Since September 2008, Mr. Wilson has served as a Director, Exploration
Business Development of Centerra Gold (CG - TSX), a company engaged in the
acquisition, development, and production of gold properties in Central Asia, the
former Soviet Union and emerging markets. Mr. Wilson also serves as a member of
the board of directors for Canyon Copper Corp (CNYC  OTCBB), a company engaged
in the acquisition of mineral projects, Doubleview Capital Corp. (DBV.P 
TSX-V), a capital pool company listed on the TSX Venture Exchange and Spider
Resources (SPQ  TSX-V) a junior exploration company.

In addition to the companies above, Mr. Wilson also acted as
  President, CEO and Director of St. Genevieve Resources Ltd. (SGVL-CNSX, STGIF-OTCBB),
  a mining exploration and development company, from January 2003 to March 2008
  and President and CEO of Gee-Ten Ventures (GTV  TSX.V) a mining exploration
  and development company from February 2008 to February 2010.

Term of Office

Members of our board of directors are appointed to hold office
until the next annual meeting of our stockholders or until his or her successor
is elected and qualified, or until he or she resigns or is removed in accordance
with the provisions of the Nevada Revised Statutes. Our officers are appointed
by our board of directors and hold office until removed by the board.

Significant Employees

We have no significant employees other than our sole executive
officer and our directors.

Committees of the Board of Directors

Our board of directors does not maintain a
separately-designated standing audit committee. As a result, our entire board of
directors acts as our audit committee. Neither Mr. Donaldson nor Mr. Wilson
meets the definition of an audit committee financial expert. We believe
that the cost related to appointing a financial expert to our board of directors
at this time is prohibitive.

45

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We presently do not have a compensation committee, nominating
committee, an executive committee of our board of directors, stock plan
committee or any other committees.

Code of Ethics

We adopted a Code of Ethics applicable to our directors and
officers, which is a code of ethics as defined by applicable rules of the SEC.
Our Code of Ethics is attached as an exhibit to our Annual Report on Form 10-KSB
for the fiscal year ended November 30, 2007, filed on March 6, 2008. If we make
any amendments to our Code of Ethics other than technical, administrative, or
other non-substantive amendments, or grant any waivers, including implicit
waivers, from a provision of our Code of Ethics to our directors and officers,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a Current Report on Form 8-K filed with the SEC.

Compliance with Section 16(a) Beneficial Ownership
Compliance

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than 10% of our
equity securities (collectively, the Reporting Persons), to file reports of
ownership and changes in ownership with the SEC. Reporting Persons are required
by SEC regulation to furnish us with copies of all forms they file pursuant to
Section 16(a). Based on our review of the copies of such forms received by us,
we believe that during the year ended November 30, 2010, the following persons
have failed to file, on a timely basis, the identified reports required by
Section 16(a) of the Exchange Act:

|                                                       |                | Transactions | Known Failures
|------------------------------------------------------ | -------------- | ------------ | --------------
|                                                       | Number of Late | Not Timely   | to File a     
|Name and Principal
      Position                      | Reports        | Reported     | Required Form 
|Richard W. Donaldson                                   | None           | None         | None          
|CEO, CFO, President, Secretary, Treasurer and Director |                |              |               
|Bryan H. Wilson                                        | None           | None         | None          
|Director                                               |                |              |               
|Bako Resources Inc.                                    | One            | One          | One           
|10% Holder                                             |                |              |               

ITEM
11.          EXECUTIVE
COMPENSATION.

Summary Compensation Table

The following table sets forth total compensation paid to or
earned by our named executive officers as that term is defined in Item 402(m)(2)
of Regulation S-K, during our fiscal years ended November 30, 2010 and 2009:

|Name
      & Principal Position                                                                               | Year      | Salary
    ($) | Bonus
    ($) | Stock
      Awards ($) | Option
      Awards ($) | Non- Equity Incentive
      Plan Compen- sation ($) | Non- qualified Deferred Compen- sation
      Earnings ($) | All Other
      Compen- sation ($) | Total
    ($)     
|------------------------------------------------------------------------------------------------------------- | --------- | -------------- | ------------- | ---------------------- | ----------------------- | --------------------------------------------------- | --------------------------------------------------------- | ---------------------------------- | ------------------
|Richard W. Donaldson(1)
      CEO, CFO, President, Secretary, Treasurer,
      Director &
    Director of MAC | 2010 2009 | - -            | - -           | - -                    | - -                     | - -                                                 | - -                                                       | 12,000 12,000                      | 12,000 
    12,000

46

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|Name & Principal
      Position                                                       | Year      | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards($) | Non- 
        Equity Incentive Plan
      Compen- sation ($) | Non- 
        qualified Deferred Compen-
      sation Earnings ($) | All Other Compen- sation
      ($) | Total ($)    
|------------------------------------------------------------------------------------- | --------- | ---------- | --------- | ---------------- | ---------------- | ------------------------------------------------------------ | ------------------------------------------------------------------ | ---------------------------------- | -------------
|Don Archibald(2)Director of
      MAC                                                 | 2010 2009 | - -        | - -       | - -              | - -              | - -                                                          | - -                                                                | 12,000 12,000                      | 12,000 12,000
|David K. Ryan(3)Director of
      MAC and       sole officer and director of Clisbako | 2010 2009 | - -        | - -       | - -              | - -              | - -                                                          | - -                                                                | 12,000 12,000                      | 12,000 12,000

Notes:

|(1) | We accrue $1,000 per month for Mr. Donaldson acting as a
      director of Magellan Acquisition Corp. (MAC), our wholly owned
      subsidiary.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | We have paid or accrued $1,000 per month for Mr.
      Archibald acting as a director of MAC.                                                    
|(3) | We have paid $1,000 per month for Mr. Ryan acting as a
      director of MAC.                                                                    

Outstanding Equity Awards At Fiscal Year-End

We have not issued any outstanding equity awards since our
inception.

Compensation of Directors

During the year ended November 30, 2010, we did not pay or
accrue any compensation to Mr. Wilson, a member of our Board of Directors.

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

EQUITY COMPENSATION PLANS

As at November 30, 2010, we had no equity compensation plans
(including individual compensation arrangements) under which our equity
securities are authorized for issuance.

Subsequent to our fiscal year ended November 30, 2010, we
adopted our 2011 Stock Incentive Plan (the 2011 Plan). The purpose of the 2011
Plan is to enhance our long-term stockholder value by offering opportunities to
our directors, officers, employees and eligible consultants to acquire and
maintain stock ownership in us in order to give these persons the opportunity to
participate in our growth and success, and to encourage them to remain in our
service.

The 2011 Plan allows us to grant options to our officers,
directors and employees. In addition, we may grant options to individuals who
act as our consultants, so long as those consultants do not provide services
connected to the offer or sale of our securities in capital raising transactions
and do not directly or indirectly promote or maintain a market for our
securities.

A total of 5,500,000 shares of our common stock are available
for issuance under the 2011 Plan.

The 2011 Plan provides for the grant of incentive stock options
and non-qualified stock options. Incentive stock options granted under the 2011
Plan are those intended to qualify as incentive stock options as defined under
Section 422 of the Internal Revenue Code. However, in order to qualify as
incentive stock options under Section 422 of the Internal Revenue Code, the
2011 Plan must be approved by our stockholders within 12 months of its adoption.
The 2011 Plan has not been approved by our stockholders.

47

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Non-qualified stock options granted under the 2011 Plan are
option grants that do not qualify as incentive stock options under Section 422
of the Internal Revenue Code.

Options granted under the 2011 Plan are non-transferable, other
than by will or the laws of descent and distribution.

The 2011 Plan terminates on March 1, 2021, unless sooner
terminated by action of our Board of Directors. No option is exercisable by any
person after such expiration. If an award expires, terminates or is canceled,
the shares of our common stock not purchased thereunder shall again be available
for issuance under the 2011 Plan.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of March 10, 2011
by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors,
(iii) each of our named executive officers; and (iv) officers and directors as a
group. Unless otherwise indicated, the shareholder listed possesses sole voting
and investment power with respect to the shares shown.

|Title of Class         | Name and Address of Beneficial Owner                                                                                                  | Amount
        and Nature of Beneficial Ownership | Percentage
        of Common Stock(1)
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | -------------------------------------
|DIRECTORS AND OFFICERS
|Common Stock           | Richard W. Donaldson 
        Chief Executive Officer, Chief Financial Officer, 
        President, Secretary, Treasurer and Director | 23,975,000(2)
        (direct)                    | 41.2%                                
|Common Stock           | Bryan H. Wilson 
        Director                                                                                                     | 1,000,000(2)
        (direct)                     | 1.7%                                 
|Common Stock           | All Officers and Directors
      as a Group (2 persons)                                                                               | 23,975,000                                        | 41.2%                                
|5% STOCKHOLDERS       
|Common Stock           | Richard W. Donaldson 
        P.O. Box 230, Town Plaza 
        Leeward Highway, Providenciales 
        Turks & Caicos Islands, BWI  | 23,975,000(2)
        (direct)                    | 41.2%                                
|Common Stock           | Bako Resources Inc. 
        Suite 950, 650 W. Georgia St. 
        Vancouver, BC V6B 4N8                                             | 6,090,000 
        (direct)                       | 10.5%                                

|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of
      outstanding shares of any person as shown in this table does not
      necessarily reflect the persons actual ownership or voting power with
      respect to the number of shares of common stock actually outstanding on
      March 10, 2011. As of March 10, 2011, there were 58,264,344 shares of our
  common stock issued and outstanding.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

48

---

|(2) | On July 9, 2009, Mr. Wilson entered into an option
      agreement dated July 9, 2009 with Mr. Donaldson, our sole executive
      officer, pursuant to which Mr. Donaldson granted an option to Mr. Wilson
      to acquire 1,000,000 shares of our common stock at a price of $0.05 per
      share until July 31, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Change in Control

We are not aware of any arrangement that might result in a
change in control in the future.

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

Certain Relationships and Related Transactions

Except as disclosed below, none of the following persons has,
in the last two fiscal years, had any material interest, director or indirect,
in any transaction with us or in any presently proposed transaction that has or
will materially affect us:

|(a) | any director or officer;                                                                                                                                                                              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | any proposed nominee for election as a
director;                                                                                                                                                      
|(c) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 5% of the voting rights attached to our common
      stock;                                                 
|(d) | any promoters; or                                                                                                                                                                                     
|(e) | any relative or spouse of any of the foregoing persons,
      or any relative of such spouse, who has the same house as such person or
      who is a director or officer of any parent or
subsidiary.

On December 16, 2008, we entered into a purchase agreement (the “Purchase Agreement”) with Bako Resources Inc. (“Bako”), a British Columbia company that is a holder of more than five percent (5%) of our common stock.  Under the terms of the Purchase Agreement, our wholly owned British Columbian subsidiary, Clisbako Minerals Inc., acquired a 100% interest in ten mineral claims located 80 miles west of Quesnel, British Columbia, Canada (the “Clisbako Property”).  In consideration of the Clisbako Property we issued to  Bako 2,000,000 pre-split shares (6,000,000 post-split shares) of our common stock and a non-interest bearing promissory note in the amount of CDN $70,000 (“Property Payment”) payable on June 30, 2009.  On July 23, 2009, we entered into an extension agreement with Bako to extend the due date of the Property Payment to December 31, 2009.  In consideration of the extension, we issued 60,000 post-split shares of our common stock to Bako.  On January 21, 2010, we entered into a second extension agreement with Bako, whereby Bako agreed to extend the due date of the Property Payment payable to Bako from December 31, 2009 to February 15, 2010.  In consideration of the extension, we issued to Bako 10,000 post-split shares of our common stock.  On March 15, 2010, we entered into a third extension agreement dated for reference February 15, 2009 with Bako whereby Bako agreed to extend the due date of the Property Payment to June 30, 2010.  In consideration of the extension, we agreed to pay CDN $5,000 of the promissory note and issue to Bako 20,000 shares of our common stock.  On September 17, 2010, we paid $50,000 CDN of the promissory note and pursuant to a verbal agreement have agreed to extend the balance of the promissory note, being $15,000 CDN, to December 31, 2010.

As at November 30, 2010, we were indebted to Kahala Financial
Corp., a company controlled by Mr. Donaldson, our sole executive officer and
director, in the principal amount of $20,000. The loan is unsecured and bears an
interest at a rate of 10% per annum and is due on demand. As at November 30,
2010, a total of $5,901 of interest has accrued in respect of the above loan.

Director Independence

Our common stock is quoted on the OTCQB, which does not have
director independence requirements. Under NASDAQ Rule 5605(a)(2), a director is
not considered to be independent if he or she is also or has been an executive
officer or employee of the corporation. In applying the definition, we have
determined that Bryan H. Wilson is our sole independent director. Mr. Donaldson
does not qualify as an independent member of our Board of Directors.

49

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ITEM
14.          PRINCIPAL ACCOUNTING
FEES AND SERVICES.

The aggregate fees billed for the two most recently completed
fiscal years for professional services rendered by the principal accountant for
the audit of our annual financial statements and review of the financial
statements included in our Quarterly Reports on Form 10-Q and services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal periods were as follows:

|                   | Year Ended November 30, 2010 | Year Ended November 30, 2009
|------------------ | ---------------------------- | ----------------------------
|Audit Fees         | $41,726                      | $28,267                     
|Audit-Related Fees | $Nil                         | $Nil                        
|Tax Fees           | $Nil                         | $Nil                        
|All Other Fees     | $Nil                         | $Nil                        
|Total              | $41,726                      | $28,267                     

ITEM
15.          EXHIBITS, FINANCIAL
STATEMENT SCHEDULES.

The following exhibits are either provided with this Annual
Report or are incorporated herein by reference:

|Exhibit |                                                                                                                                                                                       
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                                               
|        |                                                                                                                                                                                       
|3.1     | Articles of
      Incorporation.(1)                                                                                                                                                   
|        |                                                                                                                                                                                       
|3.2     | Certificate of Change Pursuant to NRS 78.209 increasing
      the authorized capital of common stock to 300,000,000 shares, par value
      $0.001 per share.(5)                      
|        |                                                                                                                                                                                       
|3.3     | Bylaws, as amended.(1)                                                                                                                                                                
|        |                                                                                                                                                                                       
|4.1     | Specimen Stock Certificate.(1)                                                                                                                                                        
|        |                                                                                                                                                                                       
|10.1    | Loan Agreement dated December 19, 2007 between the
      Company (as the borrower) and Kahala Financial Corp. (as the
      lender).(2)                                               
|        |                                                                                                                                                                                       
|10.2    | Purchase Agreement dated December 15, 2008 among Magellan
      Acquisition Corp., Solfotara Mining Corp. and Magellan Copper and Gold plc
      (Magellan Singapore Subsidiaries).(4)
|        |                                                                                                                                                                                       
|10.3    | Purchase Agreement dated December 16, 2008 between the
      Company and Bako Resources Inc. (Clisbako Property).(4)                                                                  
|        |                                                                                                                                                                                       
|10.4    | Extension Agreement dated July 23, 2009 between the
      Company and Bako Resources Inc.(7)                                                                                          
|        |                                                                                                                                                                                       
|10.5    | Assignment Agreement dated May 29, 2009 among the
      Company, Portal Resources US Inc. and Portal Resources Ltd. (Golden
      Snow Project, Fish Project and CPG Project)(6)      
|        |                                                                                                                                                                                       
|10.6    | Agreement dated for reference November 2, 2009 executed
      on January 19, 2010 between the Company and Agus Abidin (Manado Gold
      Property).(8)                                
|        |                                                                                                                                                                                       
|10.7    | Second Extension Agreement dated January 21, 2010 between
      the Company and Bako Resources Inc.(Clisbako
      Property).(9)                                                      
|        |                                                                                                                                                                                       
|10.8    | Extension Agreement Dated January 21, 2010 between the
      Company and Agus Abidin (Manado Gold Property).                                                                          
|        |                                                                                                                                                                                       
|10.9    | Option agreement dated February 5, 2010 between the
      Company and Larry Sostad (June Claims). (8)                                                                                 
|        |                                                                                                                                                                                       
|10.10   | Third Extension Agreement dated March 15, 2010 between
      the Company and Bako Resources Inc. (Clisbako
      Property).(10)                                                       
|        |                                                                                                                                                                                       
|10.11   | Second Extension Agreement Dated March 29, 2010 between
      the Company and Agus Abidin (Manado Gold Property).(11)                                                                 
|        |                                                                                                                                                                                       
|10.12   | Loan Agreement dated January 11, 2010 between the Company
      and Laverne Assets Group Corp.(12)                                                                                    

50

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|Exhibit |                                                                                                                                                           
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibits                                                                                                                                   
|        |                                                                                                                                                           
|10.12   | Agreement dated
        for reference April 23, 2010 executed on April 28, 2010 between the Company
        and Bull and Bear Financial Report.(13)       
|        |                                                                                                                                                           
|10.13   | Option Agreement
        dated July 23, 2010 between the Clisbako Minerals Inc. and Interior Plateau
        Mining Corp.(14)                             
|        |                                                                                                                                                           
|10.14   | Assignment Agreement
        dated August 24, 2010 between the Company and Manado Gold Corp.(15)                                                          
|        |                                                                                                                                                           
|10.15   | Option Agreement
        dated for September 15, 2010 between Clisbako Minerals Inc. and Manado
        Gold Corp.(16)                                    
|        |                                                                                                                                                           
|10.16   | Extension Agreement
    dated November 30, 2010 between the Company and Manado Gold Corp.                                                                 
|        |                                                                                                                                                           
|10.17   | 2011 Stock Option
        Plan.(17)                                                                                                                       
|        |                                                                                                                                                           
|14.1    | Code of Ethics.(3)                                                                                                                                        
|        |                                                                                                                                                           
|21.1    | List
        of Subsidiaries.                                                                                                                             
|        |                                                                                                                                                           
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.
|        |                                                                                                                                                           
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.

Notes:

|(1)  | Previously filed as an exhibit to our Registration
      Statement on Form SB-2 filed on April 24, 2007.
|---- | --------------------------------------------------------------------------------------------------------
|(2)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on December 26, 2007.      
|(3)  | Previously filed as an exhibit to our Annual Report on
      Form 10-KSB filed on March 6, 2008.        
|(4)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on December 22, 2008.      
|(5)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on April 17, 2009.         
|(6)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on June 2, 2009.           
|(7)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on July 27, 2009.          
|(8)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on January 21, 2010.       
|(9)  | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on January 26, 2010.       
|(10) | Previously filed as an exhibit to our Annual Report on
      Form 10-K filed on March 16, 2010.         
|(11) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on April 6, 2010.          
|(12) | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q filed on April 19, 2010.      
|(13) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on May 4, 2010.            
|(14) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on August 10, 2010.        
|(15) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on August 30, 2010.        
|(16) | Previously filed as an exhibit to our Quarterly Report on
      Form 10-Q filed on October 20, 2010.    
|(17) | Previously filed as an exhibit to our Current Report on
      Form 8-K filed on March 3, 2011.          

51

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SIGNATURES

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

PENGRAM CORPORATION

|Date: | March 15, 2011 | By: | /s/ Richard W. Donaldson                               
|----- | -------------- | --- | -------------------------------------------------------
|      |                |     | RICHARD W. DONALDSON                                   
|      |                |     | Chief Executive Officer, Chief
      Financial Officer,
|      |                |     | President, Secretary, Treasurer,                       
|      |                |     | (Principal Executive Officer                           
|      |                |     | and Principal Accounting Officer)                      

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|Date: | March 15, 2011 | By: | /s/ Richard W. Donaldson                               
|----- | -------------- | --- | -------------------------------------------------------
|      |                |     | RICHARD W. DONALDSON                                   
|      |                |     | Chief Executive Officer, Chief
      Financial Officer,
|      |                |     | President, Secretary, Treasurer,                       
|      |                |     | (Principal Executive Officer                           
|      |                |     | and Principal Accounting Officer)                      
|      |                |     | Director                                               
|      |                |     |                                                        
|      |                |     |                                                        
|      |                |     |                                                        
|      |                |     |                                                        
|Date: | March 15, 2011 | By: | /s/ Bryan H. Wilson                                    
|      |                |     | BRYAN H. WILSON                                        
|      |                |     | Director                                               

---