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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, 2009

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

For the transition period from _____to _____

COMMISSION FILE NUMBER000-52626

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: $7,679,086, based on a price
of $0.32, being the average bid and ask price of our common
stock as of May 29, 2009, our most recently completedsecond 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 15, 2010, the Registrant had 54,247,144 shares of common stock
outstanding.

2

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|PENGRAM CORPORATION                 
|------------------------------------
|                                    
|ANNUAL REPORT ON FORM 10-K          
|FOR THE YEAR ENDED NOVEMBER 30, 2009
|                                    
|TABLE OF CONTENTS                   

|           |           |                                                                                                                          | PAGE
|---------- | --------- | ------------------------------------------------------------------------------------------------------------------------ | ----
|PART I     |           | 4                                                                                                                       
|           | ITEM 1.   | BUSINESS                                                                                                                 | 4   
|           | ITEM 1A.  | RISK FACTORS                                                                                                             | 25  
|           | ITEM 2.   | PROPERTIES                                                                                                               | 29  
|           | ITEM 3.   | LEGAL
      PROCEEDINGS                                                                                                  | 29  
|PART II    | 30       
|           | ITEM 5.   | MARKET FOR
      REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES | 30  
|           | ITEM 7.   | MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                              | 31  
|           | ITEM 8.   | FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA.                                                                       | 36  
|           | ITEM 9.   | CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               | 37  
|           | ITEM 9AT. | CONTROLS AND
      PROCEDURES.                                                                                           | 37  
|           | ITEM 9B.  | OTHER INFORMATION.                                                                                                       | 39  
|PART III   | 40       
|           | ITEM 10.  | DIRECTORS, EXECUTIVE
      OFFICERS AND CORPORATE GOVERNANCE.                                                            | 40  
|           | ITEM 11.  | EXECUTIVE
      COMPENSATION.                                                                                            | 42  
|           | ITEM 12.  | SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                     | 42  
|           | ITEM 13.  | CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.                                         | 44  
|           | ITEM 14.  | PRINCIPAL ACCOUNTING FEES
      AND SERVICES.                                                                            | 44  
|           | ITEM 15.  | EXHIBITS,
      FINANCIAL STATEMENT SCHEDULES.                                                                           | 45  
|SIGNATURES | 47       

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. On April 13, 2009 we amended our Articles of Incorporation by
increasing our issued and authorized common stock on a three-for-one basis.
Accordingly, our authorized capital of common stock increased from 100,000,000
shares, par value of $0.001 per share, to 300,000,000 shares, par value of
$0.001 per share.

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 own a 100% interest in our lead mineral
project called the Clisbako Property and also in a property that we refer to
as the Texada Gold Property." We also have options to acquire: (i) a 100%
interest in the Golden Snow Project," the Fish Project and the CPG Project;"
(ii) an 85% interest in the Manado Gold Property; and (iii) a 100% interest in
the June Claims. Our mineral properties are described in detail below.

We anticipate that we will be focusing our resources on the
exploration of the Clisbako Property, the Golden Snow Project and the exercising
of our option of the Manado Gold Property due to their potential and current
state of development.

We are actively reviewing other gold potential mineral
properties for future acquisition.

RECENT CORPORATE DEVELOPMENTS

Since the filing of our Quarterly Report on Form 10-Q for the
quarter ended August 31, 2009, we experienced the following corporate
developments:

|1. | On January 19, 2010, we entered into the Manado
      Agreement. See Manado Gold Property below.                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                           
|2. | On January 21, 2010, we entered into a second extension
      agreement (the "Second Extension Agreement") with Bako Resources Inc. See
      Clisbako Property below.                  
|   |                                                                                                                                                                                           
|3. | On January 21, 2010, we announced that our directors have
      approved proceeding with an exploration program including the drilling of
      the main targets on the Clisbako Property.
|   |                                                                                                                                                                                           
|4. | On February 5, 2010, we entered into the June Agreement.
      See June Claims below.                                                                                                   

4

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|5. | On March 15, 2010, we entered into a third extension
      agreement dated for reference February 15, 2009 with Bako Resources Inc.
      See Clisbako Property below.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

CLISBAKO PROPERTY

Our main mineral property is the Clisbako Property, which we
own a 100% interest. 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

Description of Property

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 $56,600 (CDN $70,000 translated to US$65,913 as at November 30, 2009) payable on June 30, 2009. On July 23, 2009, we
entered into an extension agreement with Bako to extend the due date of the
promissory to December 31, 2009. In consideration of the 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 a non-interest bearing promissory note in the amount of CDN $70,000
payable to Bako from December 31, 2009 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, 2009, with Bako, whereby Bako agreed to extend the due date of a
non-interest bearing promissory note in the amount of CDN $65,000 payable to
Bako from December 31, 2009 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

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           | October 29, 2010
|530328        | 489.74           | October 29, 2010
|530329        | 313.10           | October 29, 2010
|530387        | 391.81           | October 29, 2010
|530462        | 391.81           | October 29, 2010
|530464        | 391.66           | October 29, 2010
|530465        | 313.21           | October 29, 2010
|534877        | 293.62           | October 29, 2010
|534928        | 293.62           | October 29, 2010
|535450        | 19.58            | October 29, 2010

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 (approximately $7.57 US) per hectare. As our
mineral claims are in good standing until October 29, 2010, we will be required
to complete minimum exploration work or pay a minimum fee of CDN$27,104
(approximately US$25,632) on or before October 29, 2010 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.

5

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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.

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.

6

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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.

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, returning values from trace to
9760 ppb gold. 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.

Phelps Dodge noticed in 1995 that several extensive intervals
of Minnovas drill core had not been sampled, and undertook to split, sample and
assay these intervals. A total of 708.5 meters of diamond drill core from the
Minnova program was sampled in the fall of 1995, returning elevated sub-economic
results for gold, arsenic and tin in sections from holes 91-04 and 92-22.

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 the best results reporting 294 ppb
gold. Most samples over 50 ppb gold were from boulder float. Elevated arsenic
amounts up to 5194 ppm were returned. As with the high gold results, the
majority of the elevated arsenic results are from boulder float samples.

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 500 ppb.

7

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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 with grab
samples indicated anomalous gold values.

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.

8

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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.

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.

9

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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.

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.

10

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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.

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.

11

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Four trenches have been excavated on the Discovery zone across
two narrow, hydrothermal breccias. The best gold grades (133 to 421 ppb gold)
were obtained from a two meter wide zone of quartz stockworks, white, vuggy
quartz veins and hydrothermal breccia. 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. The highest gold tenor (421
ppb) was obtained from the most intensely altered material. 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 (102
ppb gold), however a sulphide-rich interval was enriched in arsenic (2,930
ppb).

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. The highest tenor was 3,300 ppb gold over a two-meter sample.

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. The best hole, DOH 92-30 returned 2.0 meters of 228 ppb
gold.

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. The best chip samples across the altered zone returned
8.5 g/t gold over one meter from one of the veins.

Minnova drilled six holes in the West Lake-West Pit area in
1992 to follow-up trenching and induced polarization surveys. The best hole,
92-27, returned 135 ppb gold over an interval of 2.0 meters.

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 best grab sample returned 156 ppb gold with
elevated arsenic. 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. The best grab sample returned 1528 ppb gold. 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. Bedrock and float boulder sampling returned low gold
values ranging from trace to 315 ppb.

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. The peak gold value is 239 ppb from the Bari 1 and 466
ppb gold from the Bari 2. Both zones are within a large arsenic soil anomaly
which extends for 2 kilometers from L 406N to L 426N.

12

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Detailed sampling in 1996 failed to enhance the prospect with
best results from outcrop reporting a high of 68 ppb Gold. High arsenic values
of up to 5194 ppm were returned from float boulders.

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. The highest values
were 770 ppb gold, 56.6 ppm silver, 8330 ppm arsenic, 346 ppm tin and 7 ppm
mercury. These results were returned from dark gray or blue-black colored veins
with or without banding, or from silicified zones that displayed several stages
of brecciation. Local development of intense brecciation suggests repeated
sealing and fracturing permitting hydrothermal fluids to repeatedly permeate the
system.

Current Exploration Activités

James Chapman, P. Geo. and P. Eng., and Willie Kushner, B.Sc.
Geo., our consulting geologists, concluded that a strong potential for
mineralization on the property lies within structurally controlled features at
depth.

Our consulting geologists recommend a three-phase continuing
exploration program be undertaken on the property to determine the prime
localities of mineralization on which to focus concentrated exploration.

The three-phase program and its approximate estimated costs
consist of the following:

|Phase     | Recommended Exploration
      Program                                                                                           | Approximate Estimated Cost    | Status                                                 
|--------- | ------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | -------------------------------------------------------
|Phase I   | Soil geochemical surveys, prospecting, mapping      and geophysics in order to better define the Bari 1 and Bari 2
      zones. | CDN $122,000 ($115,375)       | Plan to implement in Third Quarter 2010.               
|Phase II  | Trenching and IP geological
      surveys.                                                                                      | CDN $152,000
      ($143,746) | To be determined based on
      the results of Phase I.
|Phase III | Diamond drilling on selected
      targets.                                                                                     | CDN $523,000
      ($494,601) | To be determined based on
      the results of Phase I.
|          | Total Estimated Cost                                                                                                            | CDN
      $797,000 ($753,723) |                                                        

Subject to obtaining sufficient financing, Phase I of our
exploration program is intended to be commenced in the summer of 2010. If we are
able to obtain financing, Phase I of our exploration program on the Clisbako
Property will involve soil geochemical surveys, prospecting, mapping and
geophysics in order to define the Bari 1 and Bari 2 zones.

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 have agreed to pay $35,000 to the owners of
the Manado Gold Property (the Owners) for the exclusive right for 90 days to
formalize an agreement (the Acquisition Agreement) to earn up to an 85%
undivided interest in the Manado Gold Property. After the 90 day period, we may
elect to exercise our option to enter into the Acquisition Agreement and will
have 30 days to finalize the terms of the formal Acquisition Agreement. On
January 21, 2010, we entered into an extension agreement with Agus Abidin
whereby the parties agreed to extend the due diligence period to March 31,
2010.

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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 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.

During the Due Diligence Period, the Owner of the Manado Gold
Property is prohibited from negotiating with or entering into an agreement with
any third party in connection with the disposition or any other encumbrance of
it its interest in the Manado Gold Property.

There is no assurance that we will exercise our option to enter
into the formal Acquisition Agreement, or that we will be able to earn any
interest in the Manado Gold Property.

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.

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.

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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.

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.

15

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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 plan to conduct due diligence as soon as practicable
pursuant to the Manado Agreement. Our due diligence period does not expire until
March 31, 2010. Upon satisfactory due diligence and subject to entering into a
formal option agreement, we plan to commence an initial exploration program of
approximately $250,000 in order to confirm results of the previous exploration
work on the mineralized zones.

GOLDEN SNOW PROJECT, FISH PROJECT AND CPG PROJECT

One May 29, 2009 we acquired an option for a 100% undivided
interest (the Nevada 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.

In order to maintain and exercise the Nevada 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 Optioned
      Properties during the term of the Nevada Option Agreement. The Eureka
      Optioned Properties are in good standing until September 1, 2010;
    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
      Optioned Properties.

Upon our exercising of the Nevada 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.

Golden Snow Project

Description of Property

The Golden Snow Project consists of 114 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, 2010 if we do not
renew our claim.

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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. The property is located in Eureka County, Nevada and is
situated near several existing gold mines. Eight miles north of the Golden Snow
Project is the East Archimedes Gold Mine where Barrick Gold Corporation is
currently mining a Carlin-type sediment hosted gold deposit. The Golden Snow
Project is also contiguous to the southern end of Staccato Gold's South Eureka
property, where Staccato has identified several mineralized areas.

Property History

Early exploration in the Eureka Mining District commenced in
the 1860s with the development of small mines throughout the district. Prior to
the 1950s, the Eureka Mining District is believed to have produced an estimated
$122 million of gold, silver, copper, lead and zinc.

Since the 1960s disseminated gold deposits have been explored
for in the Eureka Mining District. Located north of the Golden Snow Property are
historical producing mines including 112,000 ounces of gold at the Windfall Mine
and 17,700 ounces of gold at the Lookout Mountain Mine.

In 1992, Homestake Mining conducted an exploration program that
resulted in the discovery of the West Archimedes gold deposit. By 2002, a total
of 670,000 ounces of gold were produced from this deposit. In 2003, additional
exploration work was conducted on the West Archimedes deposit which allowed for
an increase in the mineralized zone.

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.

Based on a cross section showing the location of mineralization
at Lookout Mountain, 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. This mineralization is similar to Lookout mountain section except that it
lies on the western edge of a of a horst block. 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 feeder fault for mineralization at Lookout Mountain is the
Ratto Ridge Fault which has been interpreted to lie on the west side of the
major horst block.

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.

17

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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.

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
2010, 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

The Fish Project is situated within the Walker Lane Mineral
Belt, Lone Mountain District, Esmeralda County, Nevada and is located
approximately 12 miles west of the historic mining town of Tonopah, Nevada. The
Fish Project consists of 58 unpatented lode mining claims and is 492 hectares or
1.9 square miles.

18

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The Fish Project is a skarn-manto gold, silver and base metal
prospect.

Previous rock chip sampling on the Fish Project returned the
following results: gold values ranging from less than 0.002 ounces per ton, to
0.307 ounces per ton; silver values ranging from less than 0.01 ounces per ton,
to 32 ounces per ton; zinc values ranging from 0.01% to 32.8%; and lead values
ranging from less than 0.01% to 16.4%

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.

Previous drilling by Atlas Minerals has focused on the quartz
veining in the northern portion of the property. No significant mineralization
was encountered.

Three targets have been identified on the Fish Project. The
first target contains a small iron skarn gossan within white crystalline
limestone adjacent to a felsic dyke trending 130o and dipping vertical. The
mineralization zone may have originated from a hidden porphyry copper intrusion.
There is the potential for hidden skarns associated with lobes of
granodiorite.

The second target consists of numerous shafts trending 300o.
The minor dykes and vuggy quartz veining occurs within bluish limestones
trending 305/85W to 345/80W. Small skarn pods occur within the limestone and
adjacent to dykes.

The third target consists of white fine grained silicified
limestone with dark gray-blue bands (siltstones?) containing minor pyrite and
galena. Previous exploration on the third target has returned values up to 0.293
opt gold, 4.58 opt silver and 6.6% zinc. Directly to the east of the pit
containing the auriferous shear is a west dipping thrust. The area underlying
this thrust has not been tested and may represent a good target since the thrust
and associated shear structures could be a good conduit for mineralizing
fluids.

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

The CPG Project consists of 44 unpatented mining claims
covering approximately 1.3 square miles within Mineral County, Nevada. The CPG
Project is located in Eureka County, Nevada and is situated near several
existing gold mines. Approximately 10 miles north of the CPG Project Kennecott's
now closed Denton-Rawhide Mine produced 1.4 million ounces of gold and 10
million ounces of silver between 1990 and 2004.

The area of interest is contained along the southern and
western boundary of the Copper Mountain. 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.

The CPG Project hosts an early stage porphyry and skarn type
copper-gold-molybdenum prospect. Previous rock sampling on the property returned
the following results: gold values ranging from less than 0.001 ounces per ton,
to 0.036 ounces per ton; silver values ranging from less than 0.0031 ounces per
ton, to 0.75 ounces per ton; copper values ranging from 0.005% to 13.65%; and
molybdenum values ranging from less than 0.005% to 0.012% .

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.

JUNE CLAIMS

On February 5, 2010, we entered into an option agreement to
acquire the June Mineral Claims (the "June Claims") in the Alberni Mining
Division of the Province of British Columbia.

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Under the terms of the option agreement (the June Option
Agreement), we can acquire a 100% undivided interest in the property, subject
to a royalty of 2% of net smelter returns, by paying $43,000 and issuing 300,000
common shares in stages over a three year period as follows:

| | (a) | paying the Optionor US $3,000 on execution of the June
      Option Agreement, which payment has been made;                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                          
| | (b) | paying the Optionor US $10,000 on or before May 6,
      2010;                                                                           
| |     |                                                                                                                                          
| | (c) | paying the Optionor US $10,000 and issuing 100,000 shares
      of the Optionees common stock on or before February 5, 2011;            
| |     |                                                                                                                                          
| | (d) | paying the Optionor US $10,000 and issuing 100,000 shares
      of the Optionees common stock on or before the February 5, 2012;
    and
| |     |                                                                                                                                          
| | (e) | paying the Optionor US $10,000 and issuing 100,000 shares
      of the Optionees common stock on or before February 5,
  2013.          

The agreement is an option only and we may determine at any
time not to proceed in which case we would not be liable to issue any shares or
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 this option.

The June Claims cover an area of approximately 250 acres
located 5.5 miles southeast of Gold River, British Columbia. The elevation of
the claim varies from seal level on the west side of Matchlee Bay, rising to
about 2,000 feet to the west. Elevation of the main showing is about 500 feet.
The topography in general is very rough.

Location, Access, and Physiography

The property is about 5.5 miles by deep water southeast of the
dock and pulp mill at Gold River, B.C. on the west coast of Vancouver Island.
Gold River is a town with full facilities. It is connected by 57 miles of paved
road to B.C. Highway 19 at Campbell River. It is an additional 8 miles of paved
road to the dock and pulp mill at Muchalat Inlet. A boat is necessary for travel
from Gold River to the property, unless flying in with amphibious aircraft.

Timber in the area of the main showing was logged off several
years ago and the steep access road to the showings is growing in with brush and
trees. An additional logging road has bisected the property since the former
exploration work was conducted and it opens up a relatively large area for
exploration. It would accommodate trail bikes, four-wheel drive vehicles, or
dune buggies.

Water is available from creeks on the property.

Property History

The history of the property goes back at least to 1939 when the
property was staked by the June Group. It consisted of 8 claims and 3 fractions.
It was transferred the same year by bill of sale to William Sloan of Zeballos,
who was the trustee for the Burman River Gold Mines Syndicate, Vancouver.

In 1946, a geologist with the BC Department of Mines took 31
samples from the property for assay. The samples assayed in a range from trace
to 16 oz. per ton of gold and 22 oz. per ton silver, with the average of the 31
samples being over one ounce gold per ton and five ounces silver per ton. A
number of the assays also contained copper, lead and zinc.

A small sampling program by an independent geologist in 1977
confirmed the existence of the same suite of mineralization on the property. In
1977, two samples taken across a vein exposed in workings on the property
returned the following values:

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|Sample
      No. | Au oz/t | Ag oz/t | Cu % | Pb % | Zn %
|---------------- | ------- | ------- | ---- | ---- | ----
|16211            | 0.672   | 6.73    | 4.68 | 0.70 | 0.33
|16212            | 0.226   | 8.62    | 5.91 | 0.65 | 0.19

Geology

The geology of the property consists of altered andesitic
volcanics, in close proximity to the limestone, granodiorite, basalt, and
feldspar porphyry. The contact with the granodiorite is about 700 feet south of
the main showing and, where observed, running in a west-northwest direction.

On the property is a well-defined shear-zone, from a few inches
to 6 feet wide, that has been exposed in open-cuts and in the adit for a
distance of 120 feet and is reported to have been found in a small pit about 220
feet farther east of the adit and may be the eastward continuation of the main
vein-shear. At the western end of the exposure the shear is strongly silicified
over widths ranging from 1 foot to 6 feet and consists of finely-grained
dark-grey quartz mineralized with pyrrhotite, chalcopyrite, and small amounts of
galena and magnetite. A few narrow stringers of white, later quartz cut the
silicified shear. In the eastern end, mainly in the adit, although the
silicified width is less, being from 3 to 14 inches, the silicification is more
intense and results in a well-defined lens of quartz that contains a few whisps
of unreplaced andesite and, around and extending from them, streaks of massive
sulphide.

Mineralization

The metallic minerals seen in polished sections under the
microscopic area in order of abundance: Chalcopyrite, magnetite, and
chalcopyrite with smaller amounts of arsenopyrite, pyrrhotite, pyrite,
sphalerite, galena, and, closely associated with the galena, a sliver-bismuth,
sulphide, tentatively identified by polarization, etch reactions, and
compositions as matildite. Magnetite is abundant in some sections, and a few
grains of sphalerite were seen in the chalcopyrite. The magnetite, arsenopyrite,
pyrrhotite, and pyrite are all strongly fractured and replaced by chalcopyrite
and galena. The matildite occurs in small blades in the galena. No free gold was
seen in any sections studied but those sections containing abundant magnetite,
arsenopyrite, and chalcopyrite assayed highest in gold.

A quartz vein, strike north 48 degrees west and dip vertical,
and referred to as No. 4 vein, is found about 500 feet east of the adit. This
vein consists of 5 to 6 inches of quartz and follows a strong shear, 6 inches
wide, in andesite. It has intermittently stripped for 50 feet.

A strong shear, strike north 85° west and dip 75° south, has
been opened by an open-cut at the beach, on the north side of the mouth of June
Creek. This cut, 12 feet wide at the mouth, has been driven westerly on the
shear, horizontally for 8 feet and the upward on a slope of 55° for 12 feet. The
shear has an over-all width of 4 feet, but the strongest shearing is confined to
a 4-inch width close to the hanging wall. Short gashes of solid pyrite up to 1⁄2
inch thick and of sphalerite up to 1 foot long by 3 inches thick are found in
the shear. Quartz is restricted to a few hair-like stringers.

The road building for the logging operation opened up and
exposed a strip diagonally across much of the claim group. The rock exposed is
dense, aphanitic to fine grained dark green-black and tentatively classified as
basalt. It is cut by a lighter grey-green aphanitic rock with poorly developed
light grey feldspar phenocrysts. It is referred to as felsite porphyry. The
felsite porphyry gives slightly lower magnetometer readings than the surrounding
basalt.

The rock in the tunnel area is slightly lighter in color and
has been classified as andesite. Limestone and granodiorite have been found to
the west and southwest and have given high readings on the total heavy metals
geochemical field test. A pyrite zone with some zinc value was discovered by the
prospectors on the north bank of June Creek between stations 64 and 65.

The southwest station 65 at the south edge of the creed was a
large to light green skarn zone containing a black, platy, magnetic mineral,
probably pyrrhotite. Further west along the creek to the falls is massive
limestone. Many parts of the creek are in a canyon and can only be fully
explored at periods of low water.

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TEXADA GOLD PROPERTY

We have also staked and acquired a 100% interest in a property
called the Texada Gold Property." The property is less than one mile north of
the Town of GIllies Bay. The Texada Gold Property is comprised of five mineral
claims and is located on Texada Island, British Columbia. The largest island in
the Strait of Georgia lies 68 miles west-northwest of Vancouver and is
accessible by car and ferry either directly by Powell River on the mainland or
circuitously through the Town of Comox on Vancouver Island. Air service upon
request is available on certain scheduled flights from Vancouver to Powell
River.

The property is centered at 49° 42 30 north latitude (UTM
5507050 N) and 124° 29 30 west longitude (UTM392500 E) on N.T.S. mapsheets
092F/09W and 092F/10E. Road access to and within the property is good. The
gravel Central Road and the paved GIllies Bay  Vananda highway cross the
northeastern and southwestern boundaries respectively. Old logging roads
traversable by 4-wheel drive vehicles and other trails suitable for foot access
only provide access to most of the property.

The mineral claims making up the Texada Gold Property are
recorded with the Ministry of Mines as follows:

|Tenure No. | Claim Name          | Area (Ha) | Expiry             
|---------- | ------------------- | --------- | -------------------
|600319     | TEXADA
      GOLD   | 188.04    | June
      10, 2010
|600411     | TEXADA
      GOLD 2 | 83.60     | June
      10, 2010
|600412     | TEXADA
      GOLD 3 | 20.89     | June
      10, 2010
|600413     | TEXADA
      GOLD 4 | 250.80    | June
      10, 2010
|600414     | TEXADA
      GOLD 5 | 167.15    | June
10, 2010      

The topographic relief on the property ranges from 50 meters
above sea level on the southwest to approximately 220 meters on the east
boundary which is on the southwest flank of Mount Pocahontas. The property is
characterized by northwesterly trending rocky ridges that are typically 50
meters above intervening gullies which commonly contain small streams or swamps.
The forest cover is mostly second or third growth Douglas-fir, arbutus and
jackpine on the fairly sparse ridges and cedar, spruce, hemlock, balsam, and
poplar in the lower elevations. Thick underbrush together with abundant deadfall
and logging remnants characterize the valleys.

The island is within the Sunshine Coast area of British
Columbia and features mild winters and moderate, dry summers. Consequently, all
aspects of surface exploration may be carried out year round. Drinking water for
the two towns on the island is provided by two dammed lakes. One of them, Cranby
lake is less than one mile from west of the property. Water for diamond drilling
as available from the many creeks and swamps on the property.

Subject to obtaining sufficient financing, in the summer of
2010, we plan to get a consulting geologist to conduct a review of this property
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 this property.

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.

22

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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.

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.                           

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| | (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.

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;                                   

24

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| | (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.

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, 2009, we had $3,711 cash on hand and a
working capital deficit of $360,987. Our plan of operation calls for significant
expenses in connection with the exploration and development of our mineral
properties, particularly the Clisbako Property, and to meet our obligations
under our option agreements to acquire: (i) the Golden Snow Project, Fish
Project and CPG Project; (ii) the Manado Gold Property; and (iii) the June
Claims. There is no guarantee that we will to exercise these options or that in
the event we do exercise any of these options, that the acquisition(s) will in
fact occur.

On May 1, 2009, our Board of Directors approved a private
placement offering of up to 3,000,000 units (the Units) at a price of $0.20
per Unit for gross proceeds of up to $600,000. 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 $0.30 per share. This offering of Units will be made to investors who are not
U.S. Persons as defined in Regulation S. As of November 30, 2009, we had
received proceeds of $18,860 under this offering, but have not issued any
securities. There are no assurances that any 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.

25

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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 $643,115 for the period from
our inception on April 28, 2006 to November 30, 2009, 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:

- 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.

26

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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 Manado Gold Property, the Eureka Optioned Properties and the June
Claims.

In order to exercise our options to acquire the Manado Gold
Property, Eureka Optioned Properties and June Claims, 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.

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 to do 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 $600,000. 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.

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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 OTC Bulletin Board under
the symbol "PNGM. Companies quoted on the OTC Bulletin Board 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.
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.

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|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
$337 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.

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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 originally commenced trading on the
OTC Bulletin Board under the symbol PGRM on July 11, 2007. Our symbol was
changed to "PNGM" upon completion of a 3-for-1 stock split of our authorized and
issued common stock effective April 13, 2009.

The high and low bid information for our common stock for the
years ended November 30, 2009 and 2008 as reported by the OTC Bulletin Board
were:

|QUARTER           | HIGH ($) | LOW ($)
|----------------- | -------- | -------
|February 28, 2008 | $0.067   | $0.00  
|May 31, 2008      | $0.117   | $0.02  
|August 31, 2008   | $0.15    | $0.067 
|November 30, 2008 | $0.133   | $0.083 
|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  

The above quotations have been adjusted to reflect the 3-for-1
stock split effected April 13, 2009. Quotations provided by the OTCBB 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 15, 2010, there are 54,247,144 shares of our common
stock issued and outstanding held of record by 24 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, 2009 have been previously reported in our
Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.

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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
conduct exploration work on each of our mineral properties, subject to obtaining
financing.

Clisbako Property

Our plan of operation for the Clisbako Property is to implement
Phase I of our exploration program on the Clisbako Property in order to assess
whether it possesses mineral reserves capable of commercial extraction. We have
not, nor has any predecessor, identified any commercially exploitable reserves
on the Clisbako Property.

Subject to obtaining sufficient financing, Phase I of our
exploration program is intended to be commenced in the summer of 2010. If we are
able to obtain financing, Phase I of our exploration program on the Clisbako
Property will involve soil geochemical surveys, prospecting, mapping and
geophysics in order to define the Bari 1 and Bari 2 zones. We anticipate that
Phase I will cost approximately CDN $122,000 ($117,851). There is no assurance
that we will be able to acquire such financing.

Manado Gold Property

We plan to conduct due diligence as soon as practicable
pursuant to the Manado Agreement. Our due diligence period does not expire until
March 31, 2010. Upon satisfactory due diligence and subject to entering into a
formal option agreement, we plan to commence an initial exploration program of
approximately $250,000 in order to confirm results of the previous exploration
work on the mineralized zones.

Golden Snow Project, Fish Project, CPG Project, June
Claims and Texada Gold Property

Subject to obtaining sufficient financing, in the summer of
2010, 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 fall
2010 or early 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, CPG Project. Under the terms of our options to acquire
the Golden Snow Project, Fish Project, CPG Project and June Claims, in order to
keep them in good standing, we are required to pay to Claremont: (i) an option
payment of $15,000 by August 28, 2010; and (ii) the Bureau of Land Management
maintenance and claim fees of approximately $32,088 by September 1, 2010. 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. Under the terms of the
option agreement to acquire the June Claims, we are required to pay US $10,000
on or before May 6, 2011.

These agreements are options only and we may determine at any
time not to proceed in which case we would not be liable to issue any shares or
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 this option.

As at November 30, 2009, we had $3,711 cash on hand.
Accordingly, we have insufficient cash on hand to proceed with our exploration
on the Clisbako Property, conduct due diligence of the Manado Gold Property,
satisfy the option payments to acquire the Golden Snow Project, Fish Project and
CPG Project, and meet our ongoing operating costs. There is no assurance that we
will be able to acquire such financing on terms that are acceptable to us, or at
all. As such we will require substantial financing in order to meet our
obligations.

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RESULTS OF OPERATIONS

|Summary of Year End Results |   |                   |   |   |                   |   |  |                       | 
|--------------------------- | - | ----------------- | - | - | ----------------- | - |  | --------------------- | 
|                            |   | Year Ended        |   |   | Year Ended        |   |  | Percentage            | 
|                            |   | November 30, 2009 |   |   | November 30, 2008 |   |  | Increase / (Decrease) | 
|Revenue                     | $ | -                 |   | $ | -                 |   |  | n/a                   | 
|Expenses                    |   | (375,580          | ) |   | (139,039          | ) |  | 170.1%                | 
|Net Loss                    | $ | (375,580          | ) | $ | (139,039          | ) |  | 170.1%                | 

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.

Expenses

The major components of our expenses for the years ended
November 30, 2009 and 2008 are outlined in the table below:

|                                    |   | Year
      Ended  |  |   | Year
      Ended  |  |  | Percentage            | 
|----------------------------------- | - | ----------------- |  | - | ----------------- |  |  | --------------------- | 
|                                    |   | November 30, 2009 |  |   | November 30, 2008 |  |  | Increase / (Decrease) | 
|Bank charges and interest           | $ | 15,418            |  | $ | -                 |  |  | 100%                  | 
|Consulting Fees                     |   | -                 |  |   | 400               |  |  | (100)%                | 
|Depreciation Expense                |   | 505               |  |   | 505               |  |  | 0.0%                  | 
|Filing and Regulatory               |   | 5,609             |  |   | 4,185             |  |  | 34%                   | 
|Finance charges                     |   | 53,619            |  |   | -                 |  |  | 100%                  | 
|Incorporation Costs                 |   | 1,262             |  |   | 800               |  |  | 57.8%                 | 
|Investor Relations                  |   | 9,800             |  |   | -                 |  |  | 100%                  | 
|Management Fees                     |   | 36,000            |  |   | 11,800            |  |  | 205.1%                | 
|Mineral Property Exploration Costs  |   | 51,930            |  |   | -                 |  |  | 100%                  | 
|Office and Administrative           |   | 19,181            |  |   | 11,215            |  |  | 71.0%                 | 
|Professional Fees                   |   | 168,675           |  |   | 104,134           |  |  | 62.0%                 | 
|Travel                              |   | 13,581            |  |   | -                 |  |  | 100%                  | 
|Write-off of Mineral Property Costs |   | -                 |  |   | 6,000             |  |  | (100)%                | 
|Total Expenses                      | $ | 375,580           |  | $ | 139,039           |  |  | 170.1%                | 

Our operating expenses during the year ended November 30, 2009
totaled $375,580 compared with $139,039 during the year ended November 30, 2008.
The increase in our operating expenses was primarily a result of increased bank
charges and interest, finance charges, management fees, mineral property
exploration costs and professional fees.

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, Manado Gold Property and June Claims, and
maintaining our Clisbako Property and Texada Property in good standing.

The additional professional fees during the year ended November
30, 2009 primarily relate to costs incurred in connection with our acquisition
of our optioned properties, and meeting our ongoing reporting requirements under
the Exchange Act.

32

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Finance fees during the year ended November 30, 2009 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.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital         |   |                   |   |   |                   |   |  |                       | 
|----------------------- | - | ----------------- | - | - | ----------------- | - |  | --------------------- | 
|                        |   | At                |   |   | At                |   |  | Percentage            | 
|                        |   | November 30, 2009 |   |   | November 30, 2008 |   |  | Increase / (Decrease) | 
|Current Assets          | $ | 14,078            |   | $ | 29,926            |   |  | (53.0)%               | 
|Current Liabilities     |   | (375,065          | ) |   | (199,605          | ) |  | 87.9%                 | 
|Working Capital Deficit | $ | (360,987          | ) | $ | (169,679          | ) |  | 112.7%                | 

|Cash Flows                                     |   |                   |   |   |                   |  
|---------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                               |   | Year Ended        |   |   | Year Ended        |  
|                                               |   | November 30, 2009 |   |   | November 30, 2008 |  
|Cash Flows used in Operating Activities        | $ | (203,885          | ) | $ | (41,973           | )
|Cash Flows from (used in) Investing Activities |   | 90,000            |   |   | (110,367          | )
|Cash Flows from Financing Activities           |   | 87,670            |   |   | 178,500           |  
|Net Increase (Decrease) in Cash During Period  | $ | (26,215           | ) | $ | 26,160            |  

The increase in our working capital deficit at November 30,
2009 from our year ended November 30, 2008 is a result of the fact that: (i)
accounts payable increased due to our lack of capital to meet ongoing
expenditures; (ii) we recorded a payable of $65,913 (CDN $70,000) in connection
with our acquisition of the Clisbako Property; and (iii) we recorded $18,860 as
unit subscriptions received as we have not issued these securities as at
November 30, 2009.

During the year ended November 30, 2009, we issued 55 units for
total proceeds of $137,500. Each unit is comprised of a $2,500, 10% convertible
note and 10,000 share purchase warrants. Upon issuance of the 55 units, we
terminated the offering. We received proceeds of $67,500 during the year ended
November 30, 2008 and the remaining $70,000 during the year ended November 30,
2009. During the year ended November 30, 2009, no amounts of principal or
accrued interest were converted into shares of the Companys common stock.

On August 6, 2008, we entered into a letter of intent with
Magellan Copper and Gold plc (Magellan) pursuant to which we intended to
acquire Magellan Resources Pte Ltd. and St. Anthony Resources Pte Ltd.
(collectively, the Magellan Singapore Subsidiaries). In connection with the
Letter of Intent, we advanced an aggregate of $110,367 to Magellan (the
Advances). However, on December 17, 2008, we relinquished any rights that we
may have had to acquire the Magellan Singapore Subsidiaries pursuant to the
terms of a purchase agreement dated for reference as of December 15, 2008 with
Solfotara, Magellan and Magellan Acquisition Corp. (MAC), our wholly owned
subsidiary. Under the terms of this purchase agreement, Solfotara issued 250,000
of its shares (the Shares) to MAC and agreed to repay the Advances to MAC as
follows: (i) $20,000 within three days of signing the agreement (which amount
has been paid); (ii) $30,000 on April 15, 2009 (which amount has been paid); and
(iii) $50,000 on June 15, 2009 (which amount has been paid). In consideration of
the Shares and the above payments, we relinquished any rights that we may have
had to acquire Magellan Singapore Subsidiaries and assigned to Solfotara our
right to be repaid the Advances. The total value attributed to the common stock
received from Solfotara was $10,367, or approximately $0.04 per share.

33

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Financing Requirements

As at November 30, 2009, we had $3,711 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.

On May 1, 2009, our Board of Directors approved a private
placement offering of up to 3,000,000 units (the Private Placement Units) at a
price of $0.20 per Private Placement Unit for gross proceeds of up to $600,000.
Each Private Placement 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 $0.30 per share.
This offering of Private Placement Units will be made to investors who are not
U.S. Persons as defined in Regulation S of the Securities Act. As of November
30, 2009, we had received proceeds of $18,860 under this offering, but have not
issued any securities. There are no assurances that any Private Placement Units
will be sold under this offering.

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.

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.

34

---

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.

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

35

---

|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA.
|------- | --------------------------------------------------

Index to Consolidated Financial Statements:

Audited consolidated financial statements as of November 30,
2009, including:

|1. | Report of Independent Registered Public Accounting Firm
  (Davidson and Company, L.L.P., Chartered Accountants);                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                      
|2. | Report of Independent Registered Public Accounting Firm
      (BehlerMick, P.S., Certified Public Accountants)(Formerly Williams &
      Webster, P.S.);                             
|   |                                                                                                                                                                                      
|3. | Consolidated Balance Sheets as of November 30, 2009 and
      2008;                                                                                                                  
|   |                                                                                                                                                                                      
|4. | Consolidated Statements of Operations for the years ended
      November 30, 2009 and 2008 and for the cumulative period from inception on
      April 28, 2006 to November 30, 2009;
|   |                                                                                                                                                                                      
|5. | Consolidated Statements of Cash Flows for the years ended
      November 30, 2009 and 2008 and for the cumulative period from inception on
      April 28, 2006 to November 30, 2009;
|   |                                                                                                                                                                                      
|6. | Consolidated Statement of Stockholders Equity
      (Deficiency) for the period from inception on April 28, 2006 through
      November 30, 2009; and                               
|   |                                                                                                                                                                                      
|7. | Notes to the Consolidated Financial
  Statements.                                                                                                                                    

36

---

PENGRAM CORPORATION(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 2009 AND 2008(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 sheet of
  Pengram Corporation (the Company) as of November 30, 2009, and the related
  consolidated statements of operations, cash flows and stockholders equity
  (deficiency) for the year ended November 30, 2009 and for the period from
  inception on April 28, 2006 to November 30, 2009. 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
  audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audit included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the company's internal control
  over financial reporting. Accordingly, we express no such opinion. An audit 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 audit provides a
  reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of the
  Company as of November 30, 2009, and the results of its operations and its cash
  flows for the year ended November 30, 2009 and for the period from inception on
  April 28, 2006 to November 30, 2009 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, 2010    |                      

nexia

1200 - 609 Granville Street P.O. Box 10372, Pacific Centre, Vancouver, B.C., Canada V7Y 1G6
  Telephone (604) 687-0947 Fax (604) 687-6172

---

To the Board of Directors and Stockholders of 
  Pengram
  Corporation

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
  FIRM

We have audited the accompanying balance sheet of Pengram
  Corporation as of November 30, 2008, and the related statements of operations,
  stockholders equity and cash flows for the year then ended. These financial
  statements are the responsibility of the Companys management. Our
  responsibility is to express an opinion on these financial statements based on
  our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The Company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audit included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Companys internal control
  over financial reporting. Accordingly, we express no such opinion. An audit 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 audit provides a
  reasonable basis for our opinion.

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the financial position of Pengram
  Corporation as of November 30, 2008 and the results of its operations,
  stockholders equity and its cash flows for the year then ended in conformity
  with accounting principles generally accepted in the United States of
  America.

The accompanying financial statements have been prepared
  assuming that the Company will continue as a going concern. As discussed in Note
  1 to the financial statements, the Company has no revenues, limited resources
  and a large accumulated deficit. These factors raise substantial doubt about the
  Companys ability to continue as a going concern. Managements plans are also
  discussed in Note 1. The financial statements do not include any adjustments
  that might result from the outcome of this uncertainty.

/s/ BehlerMick PS 
  BehlerMick PS 
  Spokane, Washington 
  March 11, 2009

---

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

|                                                                                                                                 |   | NOVEMBER 30 |  
|-------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | -
|                                                                                                                                 |   | 2009        |  
|                                                                                                                                 |   |             |  
|ASSETS                                                                                                                           |   |             |  
|                                                                                                                                 |   |             |  
|Current                                                                                                                          |   |             |  
|Cash                                                                                                                             | $ | 3,711       |  
|Marketable securities (Note 11)                                                                                                  |   | 10,367      |  
|Total Current Assets                                                                                                             |   | 14,078      |  
|                                                                                                                                 |   |             |  
|Computer Equipment(Note 3)                                                                                                       |   | 253         |  
|Mineral Property Acquisition Costs(Note 4)                                                                                       |   | 440,100     |  
|Advances(Note 11)                                                                                                                |   | -           |  
|                                                                                                                                 |   |             |  
|Total
      Assets                                                                                                               | $ | 454,431     |  
|                                                                                                                                 |   |             |  
|LIABILITIES                                                                                                                      |   |             |  
|                                                                                                                                 |   |             |  
|Current                                                                                                                          |   |             |  
|Accounts
      payable and accrued liabilities                                                                                   | $ | 172,333     |  
|Amounts due to related
      parties                                                                                             |   | 24,000      |  
|Amount
      due to shareholder                                                                                                  |   | 1,920       |  
|Promissory note payable
      (Note 4)                                                                                           |   | 65,913      |  
|Promissory notes payable to related parties (Note 5)                                                                             |   | 23,901      |  
|Loan payable (Note 6)                                                                                                            |   | 6,476       |  
|Convertible notes (Note 8)                                                                                                       |   | 61,662      |  
|Convertible notes
      subscriptions received                                                                                   |   | -           |  
|Unit
      subscriptions received (Note 9)                                                                                       |   | 18,860      |  
|Total Current Liabilities                                                                                                        |   | 375,065     |  
|                                                                                                                                 |   |             |  
|STOCKHOLDERS EQUITY (DEFICIENCY)                                                                                                |   |             |  
|                                                                                                                                 |   |             |  
|Capital Stock(Note 7)                                                                                                            |   |             |  
|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: 
                   
      54,207,144 common shares as at November 30, 2009 and
      47,997,144 as at November 30, 2008 |   | 54,207      |  
|                                                                                                                                 |   |             |  
|Share Subscriptions Received In Advance(Note 9)                                                                                  |   | 2,500       |  
|Additional Paid-In Capital                                                                                                       |   | 582,595     |  
|Share Purchase Warrants(Note 7)                                                                                                  |   | 83,179      |  
|Accumulated Deficit During The
      Exploration Stage                                                                           |   | (643,115    | )
|Total Stockholders Equity (Deficiency)                                                                                          |   | 79,366      |  
|                                                                                                                                 |   |             |  
|Total
      Liabilities And Stockholders Equity (Deficiency)                                                                    | $ | 454,431     |  

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 |  
|                                                          |   | 2009        |   |   | 2008        |   |   | 2009        |  
|                                                          |   |             |   |   |             |   |   |             |  
|Expenses                                                  |   |             |   |   |             |   |   |             |  
|Bank charges and interest                                 | $ | 15,418      |   | $ | -           |   | $ | 18,514      |  
|Consulting fees                                           |   | -           |   |   | 400         |   |   | 2,350       |  
|Depreciation expense                                      |   | 505         |   |   | 505         |   |   | 1,263       |  
|Filing
      and regulatory                               |   | 5,609       |   |   | 4,185       |   |   | 15,248      |  
|Finance charges                                           |   | 53,619      |   |   | -           |   |   | 53,619      |  
|Incorporation costs                                       |   | 1,262       |   |   | 800         |   |   | 3,382       |  
|Investor relations                                        |   | 9,800       |   |   | -           |   |   | 9,800       |  
|Management fees                                           |   | 36,000      |   |   | 11,800      |   |   | 92,600      |  
|Mineral property
      exploration costs                  |   | 51,930      |   |   | -           |   |   | 61,430      |  
|Office
      and administrative                           |   | 19,181      |   |   | 11,215      |   |   | 43,214      |  
|Professional fees                                         |   | 168,675     |   |   | 104,134     |   |   | 322,114     |  
|Travel                                                    |   | 13,581      |   |   | -           |   |   | 13,581      |  
|Write-off of mineral
      property costs                 |   | -           |   |   | 6,000       |   |   | 6,000       |  
|                                                          |   |             |   |   |             |   |   |             |  
|Net Loss For
      The Period                             | $ | (375,580    | ) | $ | (139,039    | ) | $ | (643,115    | )
|                                                          |   |             |   |   |             |   |   |             |  
|                                                          |   |             |   |   |             |   |   |             |  
|Basic And Diluted Loss Per Share                          | $ | (0.01       | ) | $ | (0.01       | ) |   |             |  
|                                                          |   |             |   |   |             |   |   |             |  
|                                                          |   |             |   |   |             |   |   |             |  
|Weighted
      Average Number Of CommonShares Outstanding |   | 53,614,295  |   |   | 45,712,212  |   |   |             |  

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 |  
|                                                                                   |       | 2009        |   |   | 2008        |   |   | 2009        |  
|                                                                                   |       |             |   |   |             |   |   |             |  
|Cash (Used In) Operating Activities                                                |       |             |   |   |             |   |   |             |  
|Net loss for the period                                                            | $     | (375,580    | ) | $ | (139,039    | ) | $ | (643,115    | )
|Adjustment for items not affecting cash:                                           |       |             |   |   |             |   |   |             |  
|Depreciation                                                                       |       | 505         |   |   | 505         |   |   | 1,263       |  
|Finance charges on convertible notes                                               |       | 53,619      |   |   | -           |   |   | 53,619      |  
|Foreign exchange on promissory note payable                                        |       | 9,313       |   |   | -           |   |   | 9,313       |  
|Accrued interest payable                                                           |       | 14,681      |   |   | 2,065       |   |   | 16,746      |  
|Write-off of mineral property costs                                                |       | -           |   |   | 6,000       |   |   | 6,000       |  
|Changes
          in non-cash operating working capital items:                     |       |             |   |   |             |   |   |             |  
|Deposits                                                                           |       | -           |   |   | 375         |   |   | -           |  
|Accounts payable and accrued liabilities                                           |       | 75,577      |   |   | 88,121      |   |   | 168,617     |  
|Amounts due to related parties                                                     |       | 18,000      |   |   | -           |   |   | 24,000      |  
|                                                                                   |       | (203,885    | ) |   | (41,973     | ) |   | (363,557    | )
|Cash Provided By (Used In) Investing Activities                                    |       |             |   |   |             |   |   |             |  
|Advances                                                                           |       | 100,000     |   |   | (110,367    | ) |   | (10,367     | )
|Mineral property
          acquisition costs                                       |       | (10,000     | ) |   | -           |   |   | (16,000     | )
|Computer
          equipment                                                       |       | -           |   |   | -           |   |   | (1,516      | )
|                                                                                   |       | 90,000      |   |   | (110,367    | ) |   | (27,883     | )
|Cash Provided By Financing
          Activities                                    |       |             |   |   |             |   |   |             |  
|Convertible notes
          subscriptions received                                 |       | -           |   |   | 67,500      |   |   | -           |  
|Issuance
          of convertible notes                                            |       | 70,000      |   |   | -           |   |   | 137,500     |  
|Issuance of common stock                                                           |       | -           |   |   | 80,000      |   |   | 208,981     |  
|Unit
          subscriptions received                                              |       | 18,860      |   |   | -           |   |   | 18,860      |  
|Share subscriptions
          received in advance                                  |       | 2,500       |   |   | -           |   |   | 2,500       |  
|Promissory notes payable to related parties                                        |       | 7,000       |   |   | 20,000      |   |   | 27,000      |  
|Repayment of promissory
          notes payable to related parties                 |       | (7,000      | ) |   | -           |   |   | (7,000      | )
|Loan
          payable                                                             |       | (4,610      | ) |   | 10,000      |   |   | 5,390       |  
|Amount due to shareholder                                                          |       | 920         |   |   | 1,000       |   |   | 1,920       |  
|                                                                                   |       | 87,670      |   |   | 178,500     |   |   | 395,151     |  
|                                                                                   |       |             |   |   |             |   |   |             |  
|Increase (Decrease) In Cash                                                        |       | (26,215     | ) |   | 26,160      |   |   | 3,711       |  
|Cash, Beginning Of Period                                                          |       | 29,926      |   |   | 3,766       |   |   | -           |  
|                                                                                   |       |             |   |   |             |   |   |             |  
|Cash, End Of
          Period                                                      | $     | 3,711       |   | $ | 29,926      |   | $ | 3,711       |  
|                                                                                   |       |             |   |   |             |   |   |             |  
|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 11)                  | $     | 10,367      |   | $ | -           |   | $ | 10,367      |  
|Shares
          issued for mineral property acquisition costs (Note 4)            | $     | 373,500     |   | $ | -           |   | $ | 373,500     |  
|Promissory
          note payable for mineral property acquisition  costs (Note 4) | **$** | 56,600      |   | $ | -           |   | $ | 56,600      |  

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

---

|PENGRAM CORPORATION                                            
|---------------------------------------------------------------
|(An Exploration Stage Company)                                 
|                                                               
|STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)                 
|                                                               
|PERIOD FROM INCEPTION APRIL 28, 2006 TO NOVEMBER 30,
      2009
|(Stated in U.S. Dollars)                                       

|                                                               |  |              |  |   |          |  |   |               |  |   |            |   |   |             |  |   | DEFICIT     |   |   |          |  
|-------------------------------------------------------------- |  | ------------ |  | - | -------- |  | - | ------------- |  | - | ---------- | - | - | ----------- |  | - | ----------- | - | - | -------- | -
|                                                               |  |              |  |   |          |  |   |               |  |   |            |   |   |             |  |   | ACCUMULATED |   |   |          |  
|                                                               |  |              |  |   |          |  |   | SHARE         |  |   |            |   |   |             |  |   | DURING      |   |   |          |  
|                                                               |  |              |  |   |          |  |   | SUBSCRIPTIONS |  |   | ADDITIONAL |   |   | SHARE       |  |   | THE         |   |   |          |  
|                                                               |  | COMMON STOCK |  |   | RECEIVED |  |   | PAID-IN       |  |   | PURCHASE   |   |   | EXPLORATION |  |   |             |  
|                                                               |  | SHARES       |  |   | AMOUNT   |  |   | IN ADVANCE    |  |   | CAPITAL    |   |   | WARRANTS    |  |   | STAGE       |   |   | TOTAL    |  
|                                                               |  |              |  |   |          |  |   |               |  |   |            |   |   |             |  |   |             |   |   |          |  
|June 19, 2006  stock issued
      for cash at
      $0.001    |  | 27,000,000   |  | $ | 27,000   |  | $ | -             |  | $ | (18,000    | ) | $ | -           |  | $ | -           |   | $ | 9,000    |  
|Stock issued for cash $0.01 in private

      placement        |  | 17,997,144   |  |   | 17,997   |  |   | -             |  |   | 101,984    |   |   | -           |  |   | -           |   |   | 119,981  |  
|Net loss for the period                                        |  | -            |  |   | -        |  |   | -             |  |   | -          |   |   | -           |  |   | (20,112     | ) |   | (20,112  | )
|Balance, November 30, 2006                                     |  | 44,997,144   |  |   | 44,997   |  |   | -             |  |   | 83,984     |   |   | -           |  |   | (20,112     | ) |   | 108,869  |  
|                                                               |  |              |  |   |          |  |   |               |  |   |            |   |   |             |  |   |             |   |   |          |  
|Net loss for the year                                          |  | -            |  |   | -        |  |   | -             |  |   | -          |   |   | -           |  |   | (108,384    | ) |   | (108,384 | )
|Balance, November 30, 2007                                     |  | 44,997,144   |  |   | 44,997   |  |   | -             |  |   | 83,984     |   |   | -           |  |   | (128,496    | ) |   | 485      |  
|                                                               |  |              |  |   |          |  |   |               |  |   |            |   |   |             |  |   |             |   |   |          |  
|September 4, 2008  units
      issued for
      cash at $0.03 |  | 3,000,000    |  |   | 3,000    |  |   | -             |  |   | 41,300     |   |   | 35,700      |  |   | -           |   |   | 80,000   |  
|Net 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    |   |   | -           |  |   | -           |   |   | 300,000  |  
|Relative fair value allocation of 
      convertible notes     |  | -            |  |   | -        |  |   | -             |  |   | 90,021     |   |   | 47,479      |  |   | -           |   |   | 137,500  |  
|Stock issued under assignment

      agreement                 |  | 150,000      |  |   | 150      |  |   | -             |  |   | 37,350     |   |   | -           |  |   | -           |   |   | 37,500   |  
|Stock issued pursuant to extension

      agreement            |  | 60,000       |  |   | 60       |  |   | -             |  |   | 35,940     |   |   | -           |  |   | -           |   |   | 36,000   |  
|Share subscriptions received
      in advance                  |  | -            |  |   | -        |  |   | 2,500         |  |   | -          |   |   | -           |  |   | -           |   |   | 2,500    |  
|Net 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    | ) | $ | 79,366   |  

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

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(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 dates (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 STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(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 $643,115 for the period from April 28,
      2006 (inception) to November 30, 2009, and has no revenues. 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 STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

|                        |  | 2009      |  |  | 2008      | 
|----------------------- |  | --------- |  |  | --------- | 
|                        |  |           |  |  |           | 
|Convertible notes       |  | 2,910,856 |  |  | -         | 
|Share purchase warrants |  | 4,650,000 |  |  | 3,000,000 | 

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | k)                                        
|   |                                           
|   |                                           
|   |                                           
|   | l)                                        
|   |                                           
|   |                                           
|   |                                           
|   | m)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

The Company measured their marketable
  securities using Level 3 fair value assumptions as at November 30, 2009. The
  fair value of the common shares received (see Note 11) was determined as the
  difference between the Companys cash advances paid and the cash advances to be
  recovered from Solfotara Minerals Corp. The Company did not have any fair value
  adjustments for assets and liabilities measured at fair value on a nonrecurring
  basis during the year ended November 30, 2009.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

| |                                                    |   |                   |  |   | QUOTED        |  |   | SIGNIFICANT   |  |   |               | 
| | -------------------------------------------------- | - | ----------------- |  | - | ------------- |  | - | ------------- |  | - | ------------- | 
| |                                                    |   |                   |  |   | PRICES        |  |   | OTHER         |  |   |               | 
| |                                                    |   | FAIR VALUE        |  |   | IN ACTIVE     |  |   | OBSERVABLE    |  |   | UNOBSERVABLE  | 
| |                                                    |   | AT                |  |   | MARKETS       |  |   | INPUTS        |  |   | INPUTS        | 
| |                                                    |   | NOVEMBER
      30 |  |   |               |  |   |               |  |   |               | 
| | DESCRIPTION                                        |   | 2009              |  |   | **(LEVEL 1)** |  |   | **(LEVEL 2)** |  |   | **(LEVEL 3)** | 
| |                                                    |   |                   |  |   |               |  |   |               |  |   |               | 
| |                                                    |   |                   |  |   |               |  |   |               |  |   |               | 
| |                                                    |   |                   |  |   |               |  |   |               |  |   |               | 
| | Assets:                                            |   |                   |  |   |               |  |   |               |  |   |               | 
| | Cash                                               | $ | 3,711             |  | $ | 3,711         |  | $ | -             |  | $ | -             | 
| | Marketable securities                              |   | 10,367            |  |   | -             |  |   | -             |  |   | 10,367        | 
| | Assets measured at fair value at November 30, 2009 | $ | 14,078            |  | $ | 3,711         |  | $ | -             |  | $ | 10,367        | 

| | q) | Comparative Figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Certain comparative figures have been reclassified to
      conform with the current years presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | r) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In February 2010, FASB issued ASU 2010-09 Subsequent
      Event (Topic 855) Amendments to Certain Recognition and Disclosure
      Requirements. ASU 2010-09 removes the requirement for an SEC filer to
      disclose a date in both issued and revised financial statements. Revised
      financial statements include financial statements revised as a result of
      either correction of an error or retrospective application of GAAP. All of
      the amendments in ASU 2010-09 are effective upon issuance of the final
      ASU, except for the use of the issued date for conduit debt obligors. That
      amendment is effective for interim or annual periods ending after June 15,
      2010. The Company adopted ASU 2010- 09 in February 2010 and did not
      disclose the date the financial statements are available to be
      issued.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

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

|3. | COMPUTER EQUIPMENT
|-- | ------------------

| |                    |   | 2009  |  |   | 2008         | 
| | ------------------ | - | ----- |  | - | ------------ | 
| |                    |   |       |  |   | ACCUMULATED  | 
| |                    |   | COST  |  |   | AMORTIZATION | 
| |                    |   |       |  |   |              | 
| | Computer Equipment | $ | 1,516 |  | $ | 1,263        | 

|4. | MINERAL PROPERTY AND ACQUISITION COSTS
|-- | --------------------------------------

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

| |                   |   |       |  |   |           |  |   | ABANDONED, |   |   |      | 
| | ----------------- | - | ----- |  | - | --------- |  | - | ---------- | - | - | ---- | 
| |                   |   | 2007  |  |   | ADDITIONS |  |   | IMPAIRED   |   |   | 2008 | 
| | Mineral Property  |   |       |  |   |           |  |   |            |   |   |      | 
| |                   |   |       |  |   |           |  |   |            |   |   |      | 
| | Spelter claim (a) | $ | 6,000 |  | $ | -         |  | $ | (6,000     | ) | $ | -    | 

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|4. | MINERAL PROPERTY AND ACQUISITION COSTS(Continued)
|-- | -------------------------------------------------
|   |                                                  
|   | a)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   | b)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|4. | MINERAL PROPERTY AND ACQUISITION COSTS(Continued)                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|5. | PROMISSORY NOTES PAYABLE TO RELATED PARTIES                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On December 19, 2007, the Company entered into a promissory note 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, 2009, a total
      of $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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On August 26, 2009, the Company received two demand loans for a total of $7,000 from companies controlled by an officer and director of the Company. During the year ended November 30, 2009, the Company repaid these loans in
      full. These notes were unsecured, repayable on demand and free of interest.                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6. | 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, 2009, a total of $1,086 has been accrued as interest payable on the loan.                                                             

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|7. | CAPITAL STOCK
|-- | -------------
|   |              
|   | a)           
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   |              
|   | b)           
|   |              
|   |              

|NUMBER OF |  | EXERCISE |  | EXPIRY           
|--------- |  | -------- |  | -----------------
|WARRANTS  |  | PRICE    |  | DATE             
|          |  |          |  |                  
|3,000,000 |  | $ 0.033  |  | September 4, 2010
|1,650,000 |  | $ 0.083  |  | April 30, 2010   
|          |  |          |  |                  
|4,650,000 |  |          |  |                  

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|7. | CAPITAL STOCK(Continued)
|-- | ------------------------
|   |                         
|   | b)                      
|   |                         
|   |                         

| |                                     |  |           |  |   | WEIGHTED | 
| | ----------------------------------- |  | --------- |  | - | -------- | 
| |                                     |  |           |  |   | AVERAGE  | 
| |                                     |  | NUMBER OF |  |   | EXERCISE | 
| |                                     |  | WARRANTS  |  |   | PRICE    | 
| | Balance, November 30, 2006 and 2007 |  | -         |  | $ | -        | 
| | Issued                              |  | 3,000,000 |  | $ | 0.033    | 
| | Balance, November 30, 2008          |  | 3,000,000 |  | $ | 0.033    | 
| | Issued (Note 8)                     |  | 1,650,000 |  | $ | 0.083    | 
| | Balance, November 30, 2009          |  | 4,650,000 |  | $ | 0.05     | 

The fair value of the warrants issued
  in connection with the private placement during the year ended November 30, 2008
  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 4.90%; expected volatility of 162% and a term
  of 0.75 years. Of the total proceeds, $35,700 was allocated to share purchase
  warrants.

The fair value of the warrants issued
  during the year ended November 30, 2009 was measured as disclosed in Note 8.

| | c) | Stock Options                                                                           
| | -- | ----------------------------------------------------------------------------------------
| |    |                                                                                         
| |    | As at November 30, 2009, the Company does not have an
      incentive stock option plan.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|8. | 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 convertible note to be converted divided by $0.05. Conversion of the notes does not affect the warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | 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.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|8. | CONVERTIBLE NOTES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In accordance with the provisions of ASC 470  20, the Company determines 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 is recorded as an immediate
      charge to additional paid-in capital and a further discount on the convertible note carrying value. This further discount is 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, 2009, the Company recorded as finance charges, $18,515 of amortization of the discount resulting from the allocation of proceeds to the warrants and a further $35,104 of the intrinsic
      value of the beneficial conversion feature, leaving total unamortized amounts of $83,881.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended November 30, 2009, no amounts of principal or accrued interest were converted into shares of the Companys common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|9. | UNIT AND SHARE SUBSCRIPTIONS RECEIVED IN ADVANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|9. | UNIT AND SHARE SUBSCRIPTIONS RECEIVED IN ADVANCE(Continued)
|-- | -----------------------------------------------------------
|   |                                                            
|   | b)                                                         
|   |                                                            
|   |                                                            

|10. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                       
|    | During the year ended November 30, 2009, the Company paid
      management fees for services performed in the amount of $Nil (2008 -
      $2,800) to a former director and paid or accrued a total of $36,000 (2008
      - $9,000) to the board of directors of MAC.

|11. | MARKETABLE SECURITIES AND ADVANCES                                                                                                                                                                                                                                                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                             
|    | The Company entered into a letter of intent dated August
      6, 2008 with Magellan Copper and Gold PLC (Magellan) to acquire 100% of
      the issued and outstanding shares of Magellan Resources PTE Ltd. and St.
      Anthony Resources PTE Ltd. (Magellan Subsidiaries). Consideration for
      the transaction will consist of the following:  
|    |                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                             
|    | Pending the closing of the transaction, the Company will
      advance $35,000 per month to Magellan for payment of expenses related to
      the mineral properties held by Magellan Subsidiaries. During the year
      ended November 30, 2008, the Company advanced a total of $110,367 to
      Magellan in connection with the letter of
      intent.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|11. | MARKETABLE SECURITIES AND ADVANCES(Continued)                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                      
|    | On December 15, 2008, the Company decided not to pursue
      with the letter of intent and entered into an agreement with Solfotara
      Minerals Corp., a private Canadian company, whereby the Company would
      transfer their option to acquire the Magellan Subsidiaries for
      consideration as follows:
|    |                                                                                                                                                                                                                                                                                                                      
|    | 1.                                                                                                                                                                                                                                                                                                                   
|    | 2.                                                                                                                                                                                                                                                                                                                   
|    | 3.                                                                                                                                                                                                                                                                                                                   
|    | 4.                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                      
|    | The total value attributed to the common stock received
      from Solfotara Minerals Corp. was $10,367, or approximately $0.04 per
      share.                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                      
|12. | 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.                                     
|    |                                                                                                                                                                                                                                                                                                                      
|13. | 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:                                                                                                               

| |                   |   |         |  |   | MINERAL   | 
| | ----------------- | - | ------- |  | - | --------- | 
| |                   |   | CAPITAL |  |   | PROPERTY  | 
| |                   |   | ASSETS  |  |   | INTERESTS | 
| |                   |   |         |  |   |           | 
| | November 30, 2009 |   |         |  |   |           | 
| | USA               | $ | -       |  | $ | 47,500    | 
| | Canada            |   | 253     |  |   | 392,600   | 
| |                   |   |         |  |   |           | 
| |                   | $ | 253     |  | $ | 440,100   | 
| |                   |   |         |  |   |           | 
| | November 30, 2008 |   |         |  |   |           | 
| | USA               | $ | -       |  | $ | -         | 
| | Canada            |   | 758     |  |   | -         | 
| |                   |   |         |  |   |           | 
| |                   | $ | 758     |  | $ | -         | 

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|14. | INCOME TAX
|--- | ----------
|    |           
|    | a)        
|    |           
|    |           

| |                                             |   | 2009     |   |   | 2008     |  
| | ------------------------------------------- | - | -------- | - | - | -------- | -
| | Loss for the period                         | $ | (375,580 | ) | $ | (139,039 | )
| | Computed expected (benefit of) income taxes |   | (128,000 | ) |   | (47,000  | )
| | Non-deductible item                         |   | 17,600   |   |   | -        |  
| | Increase in valuation allowance             |   | 110,400  |   |   | 47,000   |  
| | Income tax provision                        | $ | -        |   | $ | -        |  

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

| |                                                     |   | 2009     |   |   | 2008    |  
| | --------------------------------------------------- | - | -------- | - | - | ------- | -
| |                                                     |   |          |   |   |         |  
| | Deferred income tax assets:                         |   |          |   |   |         |  
| | Non-capital loss
      carryforward                 | $ | 198,000  |   | $ | 90,000  |  
| | Mineral
      property and exploration expenditures |   | 21,000   |   |   | 3,200   |  
| |                                                     |   | 219,000  |   |   | 93,200  |  
| | Valuation allowance                                 |   | (219,000 | ) |   | (93,200 | )
| |                                                     |   |          |   |   |         |  
| | Net deferred income tax assets                      | $ | -        |   | $ | -       |  

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|14. | INCOME TAX(Continued)
|--- | ---------------------
|    |                      
|    | c)                   

| |                                               |   | INCOME TAX OPERATING | 
| | --------------------------------------------- | - | -------------------- | 
| |                                               |   | LOSS CARRY FORWARD   | 
| |                                               |   |                      | 
| |                                               |   | AMOUNT               | 
| |                                               |   |                      | 
| | 2009                                          | $ | 324,000              | 
| | 2008                                          |   | 139,000              | 
| | 2007                                          |   | 99,000               | 
| | 2006                                          |   | 20,000               | 
| |                                               |   |                      | 
| | Total income tax operating loss carry forward | $ | 582,000              | 

|15. | SUBSEQUENT EVENTS                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                         
|    | Other than as disclosed elsewhere in these consolidated
      financial statements, the Company had the following events occurring
      subsequent to the year ended November 30, 2009:
|    |                                                                                                                                                                                         
|    |                                                                                                                                                                                         
|    |                                                                                                                                                                                         
|    |                                                                                                                                                                                         

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|15. | SUBSEQUENT EVENTS(Continued)
|--- | ----------------------------

The Acquisition Agreement shall provide
  for the earning of interests by the Company in the Manado Gold claims by making
  cash payments, stock issuances and completing work programs as follows:

| | a) | A 10% interest by:            
| | -- | ------------------------------
| |    |                               
| |    |                               
| |    |                               
| |    |                               
| |    |                               
| | b) | An additional 15% interest by:
| |    |                               
| |    |                               
| |    |                               
| |    |                               
| |    |                               
| | c) | An additional 26% interest by:
| |    |                               
| |    |                               
| |    |                               
| |    |                               

| | d) | An additional 34% interest on completion of a
      scoping study on the claims.
| | -- | --------------------------------------------------------------------------------

Upon the Company earning an 85%
  interest as outlined above, the vendor shall be carried and shall not be
  obligated to pay their proportionate share of the costs to complete a
  feasibility study and to place the claims into commercial production. On
  completion of the feasibility study, the Company shall have the option to
  acquire the remaining 15% interest for a cash payment of $5,000,000.

On January 21, 2010, the Company and
  the vendor agreed to extend the Due Diligence Period from January 31, 2010 to
  March 31, 2010.

---

|PENGRAM CORPORATION                       
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|NOVEMBER 30, 2009 AND 2008                
|(Stated in U.S. Dollars)                  

|15. | SUBSEQUENT EVENTS(Continued)
|--- | ----------------------------

- On February 5, 2010, the Company entered into an option agreement to
      acquire an undivided 100% interest in a series of mineral claims (collectively
      known as the June 1- 4 Claims) situated in the Alberni Mining Division of
      British Columbia, Canada. Consideration for the claims is as follows:

| | a) | Payment of $3,000 due on February 5, 2010
      (paid);                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                               
| | b) | Payment of $10,000 due on or before May 6,
      2010;                                                                        
| |    |                                                                                                                               
| | c) | Payment of $10,000 and issuance of 100,000 shares of the
      Companys common stock due on or before February 5, 2011;      
| |    |                                                                                                                               
| | d) | Payment of $10,000 and issuance of 100,000 shares of the
      Companys common stock due on or before February 5, 2012;      
| |    |                                                                                                                               
| | e) | Payment of $10,000 and issuance of 100,000 shares of the
      Companys common stock due on or before February 5,
      2013.

- The Company entered into a promissory note agreement whereby it borrowed
    $75,000 from an arms length party. The note bears interest at 10% per annum,
    is unsecured and repayable on demand.

---

|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, 2009. Disclosure controls and
procedures are designed to ensure that information required to be disclosed in
reports filed or submitted under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the SEC rules and
forms and that such information is accumulated and communicated to management,
including the Chief Executive Officer and the Chief Financial Officer, to allow
timely decisions regarding required disclosures.

Based on that evaluation, the Company's management concluded,
as of the end of the period covered by this report, that the Company's
disclosure controls and procedures were not effective in recording, processing,
summarizing, and reporting information required to be disclosed, within the time
periods specified in the Securities and Exchange Commission's rules and
forms.

Managements Report on Internal Control over Financial
Reporting

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

- Pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect the transactions and dispositions of the Company's assets;
- Provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of the financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures are being
  made only in accordance with authorizations of management and the Board of
  Directors; and

37

---

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

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may deteriorate.

The Company's management conducted an assessment of the
effectiveness of the Company's internal control over financial reporting as of
November 30, 2009, 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, 2009, the
      Company did not have an audit committee. There is no 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, 2009, 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 Securities and
Exchange Commission 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, 2009 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.

38

---

|ITEM 9B. | OTHER INFORMATION.
|-------- | ------------------

On March 15, 2010, we entered into a third extension agreement
dated for reference February 15, 2010 (the "Third Extension Agreement") with
Bako Resources Inc. ("Bako") whereby Bako agreed to extend the due date of a
non-interest bearing promissory note in the amount of CDN $65,000 payable to
Bako from February 15, 2010 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. These shares were issued pursuant to Regulation S
promulgated under the Securities Act on the basis of representations provided by
Bako that it is not a U.S. Person as that term is defined in Regulation S of
the Securities Act.

The promissory note was initially issued as part consideration
for our acquisition of the Clisbako Property under the terms of the purchase
agreement dated December 16, 2008 between Bako and us.

39

---

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 | 71  | Chief Executive
    Officer, Chief Financial Officer, President, Secretary, Treasurer and Director
|Bryan H. Wilson            | 59  | 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 previously served as
President and CEO of Gee-Ten Ventures Inc. from February 2008 to February 2010.
Since September 1999, Mr. Wilson has acted as a director of Spider Resources
Inc. (SPQ-TSX.V), a junior exploration company, and was the CEO and president of
Spider Resources Inc. from June 2003 to June 2005. In addition, Mr. Wilson has
served as a member of the board of directors for Canyon Copper Corp (CNYC 
OTCBB) (formerly, Aberdene Mines Ltd.), a company engaged in the acquisition of
mineral projects since April 2006 and was the President and Treasurer of Canyon
Copper Corp. from May 2006 to November 2007.

In addition to the companies above, Mr. Wilson also acted as
CEO, President and Director of Vencan Gold Corp. (now known as Red Pine
Exploration Inc. (RPX  TSX.V)), a company engaged in the exploration of various
gold projects, from April 2003 to September 2005. Mr. Wilson also served 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.

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.

40

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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.

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, 2009, the following persons
have failed to file, on a timely basis, the identified reports required by
Section 16(a) of the Exchange Act:

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

41

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|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, 2009 and 2008:

|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 | 2009 2008 | - -       | - -             | - -                    | - -                     | - -                                                 | - -                                                       | 12,000 3,000                       | 12,000 3,000   
|Don Archibald(2)Director of MAC                                                                               | 2009 2008 | - -       | - -             | - -                    | - -                     | - -                                                 | - -                                                       | 12,000 3,000                       | 12,000 3,000   
|David K. Ryan(3)Director of MAC and       sole officer and director of Clisbako                               | 2009 2008 | - -       | - -             | - -                    | - -                     | - -                                                 | - -                                                       | 12,000 3,000                       | 12,000 3,000   
|Bernie J. Hoing(4)      Former Executive Officer & Former Director                                            | 2009 2008 | n/a -     | n/a -           | n/a -                  | n/a -                   | n/a -                                               | n/a -                                                     | n/a 2,800                          | n/a 2,800      

|Notes: |                                                                                                                                                                                                                                                                                                 
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)    | Mr. Donaldson was appointed as our CEO, CFO, President,
      Secretary, Treasurer and Director on May 2, 2008. Commencing September 1,
      2008, we accrued $1,000 per month for Mr. Donaldson acting as a director
      of Magellan Acquisition Corp. (MAC), our wholly owned subsidiary.
|(2)    | Mr. Archibald serves as a director of MAC. Commencing
      September 1, 2008, we have paid or accrued $1,000 per month for Mr.
      Archibald acting as a director of MAC.                                                                                                                    
|(3)    | Mr. Ryan serves as a director of MAC. Commencing
      September 1, 2008, we have paid $1,000 per month for Mr. Ryan acting as a
      director of MAC.                                                                                                                                         
|(4)    | Mr. Hoing resigned as our President, Secretary, Treasurer
      and Director on May 2, 2008.                                                                                                                                                                                                    

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, 2009, 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

We have no equity compensation plans (including individual
compensation arrangements) under which our equity securities are authorized for
issuance.

42

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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 15, 2010
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                                                                                                         | 23,000,000(2)(direct)                           | 42.4%                              
|Common Stock           | Bryan H. Wilson
      Director                                                                                                                                                                                                                | 1,000,000(2)(direct)                            | 1.8%                               
|Common Stock           | All Officers and
      Directors as a Group (2 persons)                                                                                                                                                                                       | 24,000,000                                      | 44.2%                              
|5% STOCKHOLDERS       
|Common Stock           | Richard W.
      Donaldson       Chief Executive Officer, Chief Financial Officer,
      President, Secretary, Treasurer and Director 
      P.O. Box 230, Town
      Plaza Leeward Highway, Providenciales Turks & Caicos Islands,
      BWI | 23,000,000(2)(direct)                           | 42.4%                              
|Common Stock           | Bako Resources Inc. Suite
      950, 650 W. Georgia St. Vancouver, BC V6B 4N8                                                                                                                                                                 | 6,090,000 (direct)                              | 11.2%                              

|(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 15, 2010. As of March 15, 2010, there
      were 54,247,144 shares of our common stock issued and
  outstanding.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

43

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|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 payable on
June 30, 2009. On July 23, 2009, we entered into an extension agreement with
Bako to extend the due date of the promissory 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 a non-interest bearing
promissory note in the amount of CDN $70,000 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 a non-interest bearing promissory
note 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.

As at November 30, 2009, 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,
2009, a total of $3,901 of interest has accrued in respect of the above
loan.

Director Independence

Our common stock is quoted on the OTC Bulletin Board
interdealer quotation system, 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.

|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:

44

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|                   |   | Year Ended November 30, 2009 |  |   | Year Ended November 30, 2008 | 
|------------------ | - | ---------------------------- |  | - | ---------------------------- | 
|Audit Fees         | $ | 28,267                       |  | $ | 22,900                       | 
|Audit-Related Fees | $ | Nil                          |  | $ | Nil                          | 
|Tax Fees           | $ | Nil                          |  | $ | Nil                          | 
|All Other Fees     | $ | Nil                          |  | $ | Nil                          | 
|Total              | $ | 28,267                       |  | $ | 22,900                       | 

|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).                                                           
|14.1    | Code of Ethics.(3)                                                                                                                                                                        
|16.1    | Letter of Williams & Webster,
        P.S. (Former Auditor).(8)                                                                                                                           
|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.          

45

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| | (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.

46

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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, 2010 |  | 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, 2010 |  | 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, 2010 |  | By: | /s/
      Bryan H. Wilson                              
|      |                |  |     | BRYAN H. WILSON                                        
|      |                |  |     | Director                                               

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