**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**  Washington, D.C. 20549

**FORM 10-K**

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **November 30,2010**

[   ] TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from[      ] to [      ]

Commission file number **000-51163**

**CHANCERY RESOURCES, INC.** (Exact name of registrant as specified in its charter)

 
| **Nevada**                                                      | **26-4567259**                       |
|-----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation  or organization) | (I.R.S. Employer Identification No.) |
|                                                            |                                 |
| **4400 Westgrove Drive, Suite 104****, Dallas, Texas**          | **75001**                            |
| (Address of principal executive offices)                        | (Zip Code)                           |
|                                                            |                                 |
| Registrant's telephone number, including area  code:            | **972-655-9870**                     |

Securities registered pursuant to Section 12(b)of the Act:

 
| Title of Each Class | Name of Each Exchange On Which Registered |
|---------------------|-------------------------------------------|
| **N/A**             | **N/A**                                   |

Securities registered pursuant to Section 12(g)of the Act:

**Common Stock, Par Value $0.00001** (Title of class)

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

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) of the Act  Yes [   ]    No [X]

 

Indicate bycheck mark whether the registrant: (1) has filed all reports required to befiled by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant wasrequired to file such reports) and (2) has been subject to such filingrequirements for the last 90 days. Yes [X]    No [   ]

Indicate by check mark if disclosure ofdelinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of thischapter) is not contained herein, and will not be contained, to the best ofregistrant's knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. [   ]

Indicate by check mark whether the registrant isa large accelerated filer, an accelerated filer, a non-accelerated filer, or asmaller reporting company. See definition 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    [   ] | Smaller reporting company [X]                                                                                                                   |

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

The aggregate market value of Common Stock heldby non-affiliates of the Registrant on February 25, 2011 was$161,250 based on a $0.005closing price for the Common Stock on February 25, 2011. For purposes of thiscomputation, all executive officers and directors have been deemed to beaffiliates. Such determination shouldnot be deemed to be an admission that such executive officers and directorsare, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding ofeach of the registrant’s classes of common stock as of the latestpracticable date. **32,250,000 as of February 20, 2011**

DOCUMENTS INCORPORATED BY REFERENCE

None.

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**TABLE OFCONTENTS**

 
| Item 1.      | Business                                                                                                            | 4      |
|-------------------|---------------------------------------------------------------------------------------------------------------------|--------|
|              |                                                                                                                |   |
| Item 1A.     | Risk Factors                                                                                                        | 11     |
|              |                                                                                                                |   |
| Item 1B.     | Unresolved Staff Comments                                                                                           | 15     |
|              |                                                                                                                |   |
| Item 2.      | Properties                                                                                                          | 15     |
|              |                                                                                                                |   |
| Item 3.      | Legal Proceedings                                                                                                   | 15     |
|              |                                                                                                                |   |
| Item 4.      | Submission of Matters to a  Vote of Security Holders                                                                | 15     |
|              |                                                                                                                |   |
| Item 5.           | Market for Registrant’s  Common Equity, Related Stockholder Matters and Issuer Purchases of Equity  Securities | 15     |
|              |                                                                                                                |   |
| Item 6.      | Selected Financial Data                                                                                             | 16     |
|              |                                                                                                                |   |
| Item 7.      | Management’s Discussion and  Analysis of Financial Condition and Results of Operations                         | 16     |
|              |                                                                                                                |   |
| Item 7A.     | Quantitative and Qualitative  Disclosures About Market Risk                                                         | 21     |
|              |                                                                                                                |   |
| Item 8.      | Financial Statements and  Supplementary Data                                                                        | 21     |
|              |                                                                                                                |   |
| Item 9.      | Changes in and Disagreements  With Accountants on Accounting and Financial Disclosure                               | 28     |
|              |                                                                                                                |   |
| Item 9A(T).  | Controls and Procedures                                                                                             | 28     |
|              |                                                                                                                |   |
| Item 9B.     | Other Information                                                                                                   | 28     |
|              |                                                                                                                |   |
| Item 10.     | Directors, Executive Officers  and Corporate Governance                                                             | 29     |
|              |                                                                                                                |   |
| Item 11.     | Executive Compensation                                                                                              | 31     |
|              |                                                                                                                |   |
| Item 12.          | Security Ownership of Certain  Beneficial Owners and Management and Related Stockholder Matters                     | 33     |
|              |                                                                                                                |   |
| Item 13.     | Certain Relationships and  Related Transactions, and Director Independence                                          | 35     |
|              |                                                                                                                |   |
| Item 14.     | Principal Accounting Fees and  Services                                                                             | 35     |
|              |                                                                                                                |   |
| Item 15.     | Exhibits, Financial Statement  Schedules                                                                            | 37     |

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**PART I**

**Item1.     Business**

Thisannual report contains forward-looking statements. These statements relate tofuture events or our future financial performance. In some cases, you canidentify forward-looking statements by terminology such as “may”, “should”,“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”,“potential” or “continue” or the negative of these terms or other comparableterminology. These statements are only predictions and involve known andunknown risks, uncertainties and other factors, including the risks in thesection entitled “Risk Factors” that may cause our or our industry’s actualresults, levels of activity, performance or achievements to be materiallydifferent from any future results, levels of activity, performance orachievements expressed or implied by these forward-looking statements.

Althoughwe believe that the expectations reflected in the forward-looking statementsare reasonable, we cannot guarantee future results, levels of activity,performance or achievements. Except as required by applicable law, includingthe securities laws of the United States, we do not intend to update any of theforward-looking statements to conform these statements to actual results.

Ourfinancial statements are stated in United States Dollars (US$) and are preparedin accordance with United States Generally Accepted Accounting Principles.

Inthis annual report, unless otherwise specified, all dollar amounts areexpressed in United States dollars and all references to “common shares” referto the common shares in our capital stock.

Asused in this current report and unless otherwise indicated, the terms"we", "us", "our", “Company”, and “Chancery” meanChancery Resources, Inc. and our wholly owned subsidiaries Chancery MiningCanada Ltd. and Minera Chancery Columbia, unless otherwise indicated.

***GeneralOverview and Business Development over the Last Three Years***

Wewere incorporated in the State of Nevada on September 12, 2006. We are anexploration stage corporation. An exploration stage corporation is one that isengaged in the search from mineral deposits or reserves which are not in eitherthe development or production stage.

Wemaintain our statutory registered agent's office at The Corporation TrustCompany of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511 and our business office and mailing address is 4400 Westgrove Drive, Suite 106, Dallas, Texas 75001. Our telephone number is 972-655-9870.  

SinceOctober 2006, we held the rights to nine Mineral Titles Online cells referredto as the Hunter property, through Geoffrey Gachallan, a former director andofficer of our company, who held the property for us in trust. On September 9,2008, our rights to the claim expired.

OnMarch 19, 2008, we entered into a mining acquisition agreement with Altos deAmador S.A., wherein we have agreed to purchase a 100% interest in certainmineral claims in Valparaiso, Antioquia, Colombia, known as the El CafetalMine.

Asconsideration for the purchase, we have agreed to pay to Altos de Amador$270,000 cash, to be provided as follows:

 
|   | (a)    | $50,000  to be provided on signing of the acquisition agreement (paid);                  |
|--------|--------|------------------------------------------------------------------------------------------|
|   |   |                                                                                     |
|   | (b)    | $70,000  to be provided within 30 days of signing the acquisition agreement (paid);  and |
|   |   |                                                                                     |
|   | (c)    | $150,000  to be provided within 90 days of signing the acquisition agreement.            |

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In addition, we haveagreed to split profits from mining operations – 60% to our company and 40% tothe vendor until such time as we have paid $210,000 of the purchase price,after which, profits shall be split 90% to our company and 10% to the vendor.We have the right to acquire the vendor’s 10% profit interest at any time for$370,000.

EffectiveApril 4, 2008, we entered into an amending agreement with Altos de Amadorwherein the terms of profit split have been amended so that, upon commencementof mining operations, all profits from the sale of ore shall be split 60% toour company and 40% to the vendor. Upon our company having paid a further$210,000, in addition to the funds payable pursuant to the terms of the miningacquisition agreement, such profits shall then be split 90% to our company and10% to the vendor. Our company will have the right to acquire the vendor’s 10%profit interest at any time upon payment of an additional $370,000. There arecurrently some governmental requirements that need to be fulfilled for the ElCafetal mining title. These requirements include the present title owneramending a PTO report to comply with certain specifications and paying certainannual governmental fees, all of which are currently being completed.

Todate, we have not made the final $150,000 payment as required by the miningacquisition agreement. We plan to hold such payment until the above titlerequirements have been complied with and or alternatively to pay theoutstanding governmental fees due on the El Cafetal mine and deduct theseamounts from the final $150,000 payment. As our ***initial miningacquisition agreement with Altos de Amador is no longer in good standing due tocertain misrepresentation on warranties and representations made on Altos deAmador’s side, we have signed a Mining Acquisition Agreement on April 14******th******, 2009 directlywith the owners of the property, Inversiones Midas Limitada, to continuenegotiations, which has a final payment of $150,000 minus*** payments tothe outstanding governmental fees due on the El Cafetal mine with no timeframeperiod for payment.

OnApril 14, 2009, we entered into an agreement with Inversiones Midas wherein theterms of profit split so that, upon commencement of mining operations, allprofits from the sale of ore shall be split 60% to our company and 40% to thevendor. Upon our company having paid a further 720 million Colombian pesos(estimated value of land and equipment), Inversiones Midas agrees to give andtransfer 50% ownership of the Mining title, in addition to the funds payablepursuant to the terms of the mining acquisition agreement, such profits shallthen be split 90% to our company and 10% to the vendor. Our company will havethe right to acquire the vendor’s 10% profit interest at any time upon paymentof additional 780 million Colombian pesos, and then the remaining 50% of theTitle ownership will be transferred to our company. Effective December 15, 2010the company has decided to sell the “El Cafetal” property

OnOctober 16, 2008, Rafael A. Pinedo and Jeffrey Fanning were appointed asdirectors of our company.

Subsequentto such appointments, on October 16, 2008, Juan Restrepo Gutierrez resigned aspresident and a director of our company and Rafael A. Pinedo was appointedpresident. Mr. Restrepo remains as chief executive officer, chief financialofficer, secretary and treasurer. In addition, Mr. Fanning was appointed vicepresident of exploration. Our board of directors now consists of Rafael A.Pinedo and Jeffery Fanning.

OnNovember 4, 2008, our board of directors designated 40,000,000 shares of ourpreferred stock as the Series A Preferred Stock. Each share of Series APreferred Stock is convertible into shares of our common stock on the basis ofone (1) share of Series A Preferred Stock for one-fifth (1/5) of one share ofour Common Stock;

OnNovember 6, 2008, we entered into a consulting agreement with Rafael Pinedo,our President. The term of the agreement is for a period of one year and inconsideration for the services to be provided we have agreed to issue 1,000,000restricted shares of our common stock to Mr. Pinedo.

OnNovember 6, 2008, we entered into a mineral property acquisition agreement withCB Resources Ltd., BNP Resources LLC and Rafael Pinedo to acquire certainmineral property interests known as the HCL Property (the HCL Property iscomprised in part by our formerly owned Hunter Property). The closing of thetransactions contemplated in the mineral property acquisition agreementoccurred on November 6, 2008. In accordance with the closing of the mineralproperty acquisition agreement, we agreed to issue 1,000,000 restricted sharesof our common stock to CB Resources Ltd., 25,000,000 restricted shares of ourSeries A Preferred Stock to Rafael Pinedo and 6,000,000 restricted shares ofour Series A Preferred Stock to BNP Resources LLC. Due to land ownershiprestrictions under British Columbia laws, we entered into a trust agreementwith CB Resources Ltd., wherein CB Resources Ltd. agreed to hold the mineralproperty interests in trust for our company.

OnNovember 12, 2008, we incorporated a wholly owned subsidiary pursuant to thelaws of the Province of British Columbia under the name Chancery Mining CanadaLtd.

OnJanuary 19, 2009, we acquired through our wholly owned subsidiary, ChanceryMining Canada Ltd., an undivided one hundred percent (100%) interest in certainmineral interests located in British Columbia, Canada known as the FiddlerCreek Property.

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The Fiddler CreekProperty is comprised of 25 mineral claims, totaling 465.74 hectares locatedwithin the Omineca Mining Division in northwestern British Columbia. Theacquired block of claims counts with records of a past producer “FiddlerCreek,” which describes the geology of the Property as an area that isunderlain by argillites of the Jurassic to Cretaceous Bowser Lake Group, inwhich auriferous quartz veins are probable sources for placer gold alongFiddler Creek (BC Minfile 103I206). The deposit types that historicallypredominate in the Fiddler-Doreen area are Silver, Gold, Lead and Zinc.Geophysical, soil, rock and core samples will be analyzed soon; an explorationprogram recommended by a qualified geology person will be released whenfinalized.

OnJanuary 30, 2009, we incorporated a wholly owned subsidiary pursuant to thelaws of Columbia under the name Minera Chancery Colombia. Effective November15, 2010 the company will pursue other Resources opportunities in Colombia,

 

On July24, 2009, Chancery Resources, Inc. (the "Company") received a NI43-101 Canadian Compliant Geological report on the El Cafetal Property asprepared and submitted by James R. Reeves, Reg., P.Geo., in his capacity as ageological consultant to the Company. Technical Report was formatted onCanadian National Instrument 43-101 ("NI 43-101"), which is a mineralresource classification scheme that provides strict guidelines for the publicdisclosure of scientific and technical information relating to mineralproperties.

EffectiveNovember 15,2010; the company will start pursuing new opportunities on RareMetals in BC Canada.

 

 On August 3rd, 2009, Vincent Higgins wasappointed as independent director of our company. Subsequent to suchappointment, on August 4, 2009, Juan Restrepo Gutierrez resigned as chiefexecutive officer and remains as chief operations officer, secretary anddirector of our company and Rafael A. Pinedo was appointed chief executive andratified as president.  

There areno family relationships with any of our directors and officers. 

October16th, 2009, the Company dismissed Manning Elliott, as itsindependent registered public accounting firm and, on October 16th,2009, engaged Malone & Bailey, PC, from Houston Texas as its newindependent registered public accounting firm.

Otherthan as set out herein, we have not been involved in any bankruptcy,receivership or similar proceedings, nor have we been a party to any materialreclassification, merger, consolidation or purchase or sale of a significantamount of assets not in the ordinary course of our business.

***OurCurrent Business***

Weare an exploration stage mining company engaged in the exploration of mineralson our properties.

Ourcurrent operational focus is to conduct exploration activities on our HCLProperty, to complete the terms of the mining acquisition agreement with Altosde Amador S.A. for the El Cafetal Mine and to conduct exploration activities onour Fiddler Creek Property.

*HCLProperty*

*GeneralInformation*

TheHCL Property is a mining claim located in Merritt, British Columbia, Canada, and totals 415.04 hectares or 1,026 acres approximately.

Thefollowing is a list of tenure numbers, claim, and expiration date of ourclaims:

 
| **Tenure Number** | **Claim Name** | **No. MTO Cells** | **Expiration Date** |
|-------------------|----------------|-------------------|---------------------|
| 592560            | HCL            | 20                | 10/04/2011          |

Acell is an area, which appears electronically on the British Columbia InternetMinerals Titles Online Grid and was formerly called a claim. A claim is a grantfrom the Crown of the available land within the cells to the holder to removeand sell minerals. The online grid is the geographical basis for the cell. Formerly,the claim was established by sticking stakes in the ground to define the areaand then recording the staking information. The staking system is nowantiquated in British Columbia and has been replaced with the online grid. Theclaim is registered in the name of the CB Resources Ltd. who has agreed to holdthe claim in trust on behalf of Chancery Resources. As October 06, 2008, it’snot yet been determined whether there are proven or probable reserves on theproperty.

Thereare no native land claims that affect title to the property.

*Locationand Access*

TheHCL mineral claim is comprised of 20 contiguous cells totaling 415.0483hectares. The center of the property is located at the latitude 50o 2' 14"N and the longitude is 120o 47' 1" W. The claim is motor vehicleaccessible from the Town of Merritt, B.C. by traveling 19 miles east alongHighway #5 beyond the Village of Quilchena, B.C. to the Minnie Lake cut-off andthen for 18 miles south by gravel ranch roads to the mineral claim.

6

 

Below is map of the HCLClaim:

*Physiography*

TheTown of Merritt, British Columbia which lies 37 miles by road northwest of theHCL mineral claim offers much of the necessary infrastructure required to baseand carry-out an exploration program (accommodations, communications, equipmentand supplies). Merritt B.C. is highway accessible from Vancouver, B.C. in a fewhours by traveling over the Coquihalla (toll section) highway, in the time ittakes to travel 200 miles. The overnight Greyhound bus service is a popular wayto send-in samples and to receive additional equipment and supplies. The claimarea ranges in elevation from 2,850 feet to 3,400 feet mean sea level. Thephysiographic setting of the property can be described as rounded, open range,plateau terrain that has been surficially altered both by the erosional and thedepositional (drift cover) effects of glaciation. Thickness of drift cover inthe valleys may vary considerably. Fresh water lakes and streams are abundantin the area.

7

 

Below is a map of theHCL Property location:

*Location,History and Land Tenure*

Thegeology of the HCL mineral claim may be described as being underlain by unitsof the Nicola Group. Some or all of these units may be found to host economicmineralization. The property geological setting offers good underlyingpossibilities and all overburden areas should be checked if a field program isundertaken. The deposit types that historically predominate in the general areaare, as the larger target, as a porphyry-type base metal (copper-gold-palladiumor copper-molybdenum) occurrence with peripheral base and precious metaloccurrences as veins and/or contact zones of mineralization. The most prolifichost in this area is the Nicola Group andesitic tuffs that are often skarned oraltered. Any occurrences of Princeton Group sediments, i.e. shales, sanstone,etc. should be checked thoroughly for coal occurrences and possibly coal-bedmethane gas possibilities.

*Requirementsfor Title*

Titleto the property has already been granted CB Resources Ltd., who holds the claimin trust for our company. To obtain a Free Miner's Certificate, which isrequired to hold a mining claim in British Columbia, Section 8(1) of the B.C.Mineral Tenure Act (MTA) stipulates that a corporation must be registered underthe British Columbia Business Corporations Act. Section 8(2) of the MTAstipulates that an individual applicant must either be a resident of Canada or be authorized to work in Canada. As the corporation is not registered in British Columbiathe claim is held in trust for the Company by CB Resources Ltd., a corporationregistered under the British Columbia Business Corporations Act. The mineraltitle claim has been registered with the Government of British Columbia.

8

 

*Fiddler Creek Property*

*GeneralInformation*

TheFiddler Creek Property is comprised of 25 mineral claims, totaling 465.74hectares located within the Omineca Mining Division in northwestern British Columbia. The acquired block of claims counts with records of a past producer“Fiddler Creek,” which describes the geology of the Property as an area that isunderlain by argillites of the Jurassic to Cretaceous Bowser Lake Group, inwhich auriferous quartz veins are probable sources for placer gold alongFiddler Creek (BC Minfile 103I206). The deposit types that historicallypredominate in the Fiddler-Doreen area are Silver, Gold, Lead and Zinc.Geophysical, soil, rock and core samples will be analyzed soon; an explorationprogram recommended by a qualify geology person will be released whenfinalized.

Thefollowing is a list of tenure number, claim name, and expiration date of ourclaims:

 
| **Tenure Number** | **Claim Name** | **No. MTO Cells** | **Expiration Date** |
|-------------------|----------------|-------------------|---------------------|
| 597810            | Fiddler Creek  | 25                | 01/19/2012          |

Belowis a map of the Fiddler Creek Property:

 

 

*Climateand Local Resources*

Theclimate in the area is temperate with significant coastal influence coming fromthe west up the Skeena valley as well as from the southwest up the Kitimatvalley. The northern location allows for long hours of daylight during thesummer, while significant snowfall occurs during winter season, which limitsfieldwork. Field season is comprised between June and early September.

Theclosest airport is the Terrace airport, which receives daily flights from Vancouver and serves as a transportation hub for the area. The Canadian National Railwayand Yellowhead Highway (Highway 16) go through Terrace along the Skeena River and connect the interior of B.C. to the ocean ports of Prince Rupert and Kitimat.

*ElCafetal Mine*

*GeneralInformation*

TheEl Cafetal Mine is located in the River basin of the Honda stream, on theEastern flank of the Western Mountain range, in the municipality of Valparaiso, Antioquia, Colombia.

Theproperty covers an area of 135 hectares. The geology of the zone includessedimentary rocks and basaltic lava and Andesite of Tertiary age with severalveins and veins with different thicknesses and sulfide concentrations up to80%.

Themineralization consists of several veins with thicknesses between 0.15 and 1.1m, composed by quartz, pyrite and partly free gold fitted in andesite lava, thestrips of 0.15 m of thickness with great sulfide concentrations are commonmainly pyrite up to an 80% with intermediate zones of rock with scatteredsulfides, in the endorsements the salband are common to conform a mineralizedzone up to 1.1 m.

Werecently completed preliminary sampling and chemical analyses on the El Cafatelproperty. Our management is awaiting the results from the preliminary samplingprogram and will update shareholders in the near future.

10

 

***Competition***

Weare a mineral resource exploration company. We compete with other mineralresource exploration companies for financing and for the acquisition of newmineral properties. Many of the mineral resource exploration companies withwhom we compete have greater financial and technical resources than thoseavailable to us. Accordingly, these competitors may be able to spend greateramounts on acquisitions of mineral properties of merit, on exploration of theirmineral properties and on development of their mineral properties. In addition,they may be able to afford more geological expertise in the targeting andexploration of mineral properties. This competition could result in competitorshaving mineral properties of greater quality and interest to prospectiveinvestors who may finance additional exploration. This competition couldadversely impact on our ability to finance further exploration and to achievethe financing necessary for us to develop our mineral properties.

***Compliancewith Government Regulation***

Weare committed to complying with and are, to our knowledge, in compliance with,all governmental and environmental regulations applicable to our company andour properties. Permits from a variety of regulatory authorities are requiredfor many aspects of mine operation and reclamation. We cannot predict theextent to which these requirements will affect our company or our properties ifwe identify the existence of minerals in commercially exploitable quantities.In addition, future legislation and regulation could cause additional expense,capital expenditure, restrictions and delays in the exploration of our properties.

***Subsidiaries***

Otherthan Chancery Mining Canada Ltd. and Minera Chancery Colombia, we do not haveany other subsidiaries.

***Researchand Development Expenditures***

Wehave incurred $Nil in research and development expenditures over the lastfiscal year.

***Employees***

Currently,we have two employees. We do not expect any material changes in the number ofemployees over the next 12 month period.

Weengage contractors from time to time to consult with us on specific corporateaffairs or to perform specific tasks in connection with our explorationprograms.

***IntellectualProperty***

Wedo not own, either legally or beneficially, any patent or trademark.

**Item1A.   Risk Factors**

**LegalProceedings.**

Weknow of no material, existing or pending legal proceedings against our company,nor are we involved as a plaintiff in any material proceeding or pendinglitigation. There are no proceedings in which any of our directors, officers oraffiliates, or any registered or beneficial shareholder, is an adverse party orhas a material interest adverse to our interest.

**RiskFactors**

Muchof the information included in this quarterly report includes or is based uponestimates, projections or other "forward looking statements". Suchforward looking statements include any projections or estimates made by us andour management in connection with our business operations. While theseforward-looking statements, and any assumptions upon which they are based, aremade in good faith and reflect our current judgment regarding the direction ofour business, actual results will almost always vary, sometimes materially,from any estimates, predictions, projections, assumptions or other futureperformance suggested herein.

Such estimates,projections or other "forward looking statements" involve various risksand uncertainties as outlined below. We caution the reader that importantfactors in some cases have affected and, in the future, could materially affectactual results and cause actual results to differ materially from the resultsexpressed in any such estimates, projections or other "forward lookingstatements".

Ourcommon shares are considered speculative during the development of our newbusiness operations. Prospective investors should consider carefully the riskfactors set out below.

 

**RisksAssociated With Mining**

*Allof our properties are in the exploration stage. There is no assurance that wecan establish the existence of any mineral resource on any of our properties incommercially exploitable quantities. Until we can do so, we cannot earn anyrevenues from operations and if we do not do so we will lose all of the fundsthat we expend on exploration. If we do not discover any mineral resource in acommercially exploitable quantity, our business could fail.*

Despiteexploration work on our mineral properties, we have not established that any ofthem contain any mineral reserve, nor can there be any assurance that we willbe able to do so. If we do not, our business could fail.

Amineral reserve is defined by the Securities and Exchange Commission in itsIndustry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7)as that part of a mineral deposit which could be economically and legallyextracted or produced at the time of the reserve determination. The probabilityof an individual prospect ever having a "reserve" that meets therequirements of the Securities and Exchange Commission's Industry Guide 7 isextremely remote; in all probability our mineral resource property does notcontain any 'reserve' and any funds that we spend on exploration will probablybe lost.

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Even if we do eventuallydiscover a mineral reserve on one or more of our properties, there can be noassurance that we will be able to develop our properties into producing minesand extract those resources. Both mineral exploration and development involve ahigh degree of risk and few properties which are explored are ultimatelydeveloped into producing mines.

Thecommercial viability of an established mineral deposit will depend on a numberof factors including, by way of example, the size, grade and other attributesof the mineral deposit, the proximity of the resource to infrastructure such asa smelter, roads and a point for shipping, government regulation and market prices.Most of these factors will be beyond our control, and any of them couldincrease costs and make extraction of any identified mineral resourceunprofitable.

*Mineraloperations are subject to applicable law and government regulation. Even if wediscover a mineral resource in a commercially exploitable quantity, these lawsand regulations could restrict or prohibit the exploitation of that mineralresource. If we cannot exploit any mineral resource that we might discover onour properties, our business may fail.*

Bothmineral exploration and extraction require permits from various foreign,federal, state, provincial and local governmental authorities and are governedby laws and regulations, including those with respect to prospecting, minedevelopment, mineral production, transport, export, taxation, labour standards,occupational health, waste disposal, toxic substances, land use, environmentalprotection, mine safety and other matters. There can be no assurance that wewill be able to obtain or maintain any of the permits required for thecontinued exploration of our mineral properties or for the construction andoperation of a mine on our properties at economically viable costs. If wecannot accomplish these objectives, our business could fail.

Webelieve that we are in compliance with all material laws and regulations thatcurrently apply to our activities but there can be no assurance that we cancontinue to remain in compliance. Current laws and regulations could be amendedand we might not be able to comply with them, as amended. Further, there can beno assurance that we will be able to obtain or maintain all permits necessaryfor our future operations, or that we will be able to obtain them on reasonableterms. To the extent such approvals are required and are not obtained, we maybe delayed or prohibited from proceeding with planned exploration ordevelopment of our mineral properties.

*Ifwe establish the existence of a mineral resource on any of our properties in acommercially exploitable quantity, we will require additional capital in orderto develop the property into a producing mine. If we cannot raise thisadditional capital, we will not be able to exploit the resource, and ourbusiness could fail.*

Ifwe do discover mineral resources in commercially exploitable quantities on anyof our properties, we will be required to expend substantial sums of money toestablish the extent of the resource, develop processes to extract it anddevelop extraction and processing facilities and infrastructure. Although wemay derive substantial benefits from the discovery of a major deposit, therecan be no assurance that such a resource will be large enough to justifycommercial operations, nor can there be any assurance that we will be able toraise the funds required for development on a timely basis. If we cannot raisethe necessary capital or complete the necessary facilities and infrastructure,our business may fail.

*Mineralexploration and development is subject to extraordinary operating risks. We donot currently insure against these risks. In the event of a cave-in or similaroccurrence, our liability may exceed our resources, which would have an adverseimpact on our company.*

Mineralexploration, development and production involves many risks which even acombination of experience, knowledge and careful evaluation may not be able toovercome. Our operations will be subject to all the hazards and risks inherentin the exploration for mineral resources and, if we discover a mineral resourcein commercially exploitable quantity, our operations could be subject to all ofthe hazards and risks inherent in the development and production of resources,including liability for pollution, cave-ins or similar hazards against which wecannot insure or against which we may elect not to insure. Any such event couldresult in work stoppages and damage to property, including damage to theenvironment. We do not currently maintain any insurance coverage against theseoperating hazards. The payment of any liabilities that arise from any suchoccurrence would have a material adverse impact on our company.

*Mineralprices are subject to dramatic and unpredictable fluctuations.*

Weexpect to derive revenues, if any, either from the sale of our mineral resourceproperties or from the extraction and sale of precious and base metals such asgold, silver and copper. The price of those commodities has fluctuated widelyin recent years, and is affected by numerous factors beyond our control,including international, economic and political trends, expectations ofinflation, currency exchange fluctuations, interest rates, global or regionalconsumptive patterns, speculative activities and increased production due tonew extraction developments and improved extraction and production methods. Theeffect of these factors on the price of base and precious metals, and thereforethe economic viability of any of our exploration properties and projects,cannot accurately be predicted.

12

 

*The mining industry ishighly competitive and there is no assurance that we will continue to besuccessful in acquiring mineral claims. If we cannot continue to acquireproperties to explore for mineral resources, we may be required to reduce orcease operations.*

Themineral exploration, development, and production industry is largelyun-integrated. We compete with other exploration companies looking for mineralresource properties. While we compete with other exploration companies in theeffort to locate and acquire mineral resource properties, we will not compete withthem for the removal or sales of mineral products from our properties if weshould eventually discover the presence of them in quantities sufficient tomake production economically feasible. Readily available markets existworldwide for the sale of mineral products. Therefore, we will likely be ableto sell any mineral products that we identify and produce.

Inidentifying and acquiring mineral resource properties, we compete with manycompanies possessing greater financial resources and technical facilities. Thiscompetition could adversely affect our ability to acquire suitable prospectsfor exploration in the future. Accordingly, there can be no assurance that wewill acquire any interest in additional mineral resource properties that mightyield reserves or result in commercial mining operations.

**RisksRelated To Our Company**

*Wehave a limited operating history on which to base an evaluation of our businessand prospects.*

Wehave been in the business of exploring mineral resource properties sinceSeptember 2006 and we have not yet located any mineral reserve. As a result, wehave never had any revenues from our operations. In addition, our operatinghistory has been restricted to the acquisition and exploration of our mineralproperties and this does not provide a meaningful basis for an evaluation ofour prospects if we ever determine that we have a mineral reserve and commencethe construction and operation of a mine. We have no way to evaluate thelikelihood of whether our mineral properties contain any mineral reserve or, ifthey do that we will be able to build or operate a mine successfully. Weanticipate that we will continue to incur operating costs without realizing anyrevenues during the period when we are exploring our properties. We therefore expectto continue to incur significant losses into the foreseeable future. Werecognize that if we are unable to generate significant revenues from miningoperations and any dispositions of our properties, we will not be able to earnprofits or continue operations. At this early stage of our operation, we alsoexpect to face the risks, uncertainties, expenses and difficulties frequentlyencountered by companies at the start up stage of their business development.We cannot be sure that we will be successful in addressing these risks anduncertainties and our failure to do so could have a materially adverse effecton our financial condition. There is no history upon which to base anyassumption as to the likelihood that we will prove successful and we can provideinvestors with no assurance that we will generate any operating revenues orever achieve profitable operations.

*Thefact that we have not earned any operating revenues since our incorporationraises substantial doubt about our ability to continue to explore our mineralproperties as a going concern.*

Wehave not generated any revenue from operations since our incorporation and weanticipate that we will continue to incur operating expenses without revenuesunless and until we are able to identify a mineral resource in a commerciallyexploitable quantity on one or more of our mineral properties and we build andoperate a mine. We had cash in the amount of $323 as of November 30, 2010. AtNovember 30, 2010, we had working capital deficit of $378,907. We incurred anet loss of $275,883 for the year ended November 30, 2010 and $1,562,110 sinceinception on September 12, 2006. We estimate our average monthly operatingexpenses to be approximately $7,800 to $9,500, including mineral propertycosts, management services and administrative costs. Should the results of ourplanned exploration require us to increase our current operating budget, we mayhave to raise additional funds to meet our currently budgeted operatingrequirements for the next 12 months. As we cannot assure a lender that we willbe able to successfully explore and develop our mineral properties, we willprobably find it difficult to raise debt financing from traditional lendingsources. We have traditionally raised our operating capital from sales ofequity and debt securities, but there can be no assurance that we will continueto be able to do so. If we cannot raise the money that we need to continueexploration of our mineral properties, we may be forced to delay, scale back,or eliminate our exploration activities. If any of these were to occur, thereis a substantial risk that our business would fail.

Thesecircumstances lead our independent registered public accounting firm, in theirreport dated February 26, 2010, to comment about our company’s ability tocontinue as a going concern. Management has plans to seek additional capitalthrough a private placement and public offering of its capital stock. Theseconditions raise substantial doubt about our company’s ability to continue as agoing concern. Although there are no assurances that management’s plans will berealized, management believes that our company will be able to continueoperations in the future. The consolidated financial statements do not includeany adjustments relating to the recoverability and classification of recordedassets, or the amounts of and classification of liabilities that might benecessary in the event our company cannot continue in existence.” We continueto experience net operating losses.

13

 

**Risks Associated withOur Common Stock**

 

*Tradingon the OTC Bulletin Board may be volatile and sporadic, which could depress themarket price of our common stock and make it difficult for our stockholders toresell their shares.*

Ourcommon stock is quoted on the OTC Bulletin Board service of the FinancialIndustry Regulatory Authority. Trading in stock quoted on the OTC BulletinBoard is often thin and characterized by wide fluctuations in trading prices,due to many factors that may have little to do with our operations or businessprospects. This volatility could depress the market price of our common stockfor reasons unrelated to operating performance. Moreover, the OTC BulletinBoard is not a stock exchange, and trading of securities on the OTC BulletinBoard is often more sporadic than the trading of securities listed on aquotation system like NASDAQ or a stock exchange like Amex. Accordingly,shareholders may have difficulty reselling any of their shares.

*Ourstock is a penny stock. Trading of our stock may be restricted by the SEC’spenny stock regulations and FINRA’s sales practice requirements, which maylimit a stockholder’s ability to buy and sell our stock.*

Ourstock is a penny stock. The Securities and Exchange Commission has adopted Rule15g-9 which generally defines “penny stock” to be any equity security that hasa market price (as defined) less than $5.00 per share or an exercise price ofless than $5.00 per share, subject to certain exceptions. Our securities arecovered by the penny stock rules, which impose additional sales practicerequirements on broker-dealers who sell to persons other than establishedcustomers and “accredited investors”. The term “accredited investor” refersgenerally to institutions with assets in excess of $5,000,000 or individuals witha net worth in excess of $1,000,000 or annual income exceeding $200,000 or$300,000 jointly with their spouse. The penny stock rules require abroker-dealer, prior to a transaction in a penny stock not otherwise exemptfrom the rules, to deliver a standardized risk disclosure document in a formprepared by the SEC which provides information about penny stocks and thenature and level of risks in the penny stock market. The broker-dealer alsomust provide the customer with current bid and offer quotations for the pennystock, the compensation of the broker-dealer and its salesperson in thetransaction and monthly account statements showing the market value of eachpenny stock held in the customer’s account. The bid and offer quotations, andthe broker-dealer and salesperson compensation information, must be given tothe customer orally or in writing prior to effecting the transaction and mustbe given to the customer in writing before or with the customer’s confirmation.In addition, the penny stock rules require that prior to a transaction in apenny stock not otherwise exempt from these rules, the broker-dealer must makea special written determination that the penny stock is a suitable investmentfor the purchaser and receive the purchaser’s written agreement to thetransaction. These disclosure requirements may have the effect of reducing thelevel of trading activity in the secondary market for the stock that is subjectto these penny stock rules. Consequently, these penny stock rules may affectthe ability of broker-dealers to trade our securities. We believe that thepenny stock rules discourage investor interest in, and limit the marketabilityof, our common stock.

Inaddition to the “penny stock” rules promulgated by the Securities and ExchangeCommission, the Financial Industry Regulatory Authority has adopted rules thatrequire that in recommending an investment to a customer, a broker-dealer musthave reasonable grounds for believing that the investment is suitable for thatcustomer. Prior to recommending speculative low priced securities to theirnon-institutional customers, broker-dealers must make reasonable efforts toobtain information about the customer’s financial status, tax status,investment objectives and other information. Under interpretations of theserules, the Financial Industry Regulatory Authority believes that there is ahigh probability that speculative low-priced securities will not be suitablefor at least some customers. The Financial Industry Regulatory Authority ’requirements make it more difficult for broker-dealers to recommend that theircustomers buy our common stock, which may limit your ability to buy and sellour stock.

**OtherRisks**

*Trends,Risks and Uncertainties*

Wehave sought to identify what we believe to be the most significant risks to ourbusiness, but we cannot predict whether, or to what extent, any of such risksmay be realized nor can we guarantee that we have identified all possible risksthat might arise. Investors should carefully consider all of such risk factorsbefore making an investment decision with respect to our common stock.

14

 

**Item 1B.  Unresolved Staff Comments**

None.

**Item2.     Properties**

*ExecutiveOffices*

Asof the date of this current report, administrative and mailing offices arelocated at 4400 Westgrove Drive, Suite 106, Dallas, Texas 75001. We believe these facilities are adequate for our current needs and that alternatefacilities on similar terms would be readily available if needed. We also keepan administration and geology office on the 3rd Floor, 422 Richards Street Vancouver, B.C. V6B2Z3.

*MineralProperties*

Asof the date of this annual report on Form 10-K, we hold or have the rights toacquire the following properties: El Cafetal Mine, the HCL Property and theFiddler Creek Property. For detailed descriptions of these properties, pleasesee the section entitled “Business” above.

**Item3.     Legal Proceedings**

Weknow of no material, existing or pending legal proceedings against us, nor arewe involved as a plaintiff in any material proceeding or pending litigation.There are no proceedings in which any of our directors, officers or affiliates,or any registered or beneficial shareholder, is an adverse party or has amaterial interest adverse to our company.

**Item4.     Submission of Matters to a Vote of Security Holders**

None.

**PART II**

**Item5.     Market for Registrant’s Common Equity, RelatedStockholder Matters and Issuer Purchases of Equity Securities**

Ourcommon shares are quoted on the Over-the-Counter Bulletin Board under thesymbol “CCRY.” The following quotations, obtained from Yahoo Finance, reflectthe high and low bids for our common shares based on inter-dealer prices,without retail mark-up, mark-down or commission and may not represent actualtransactions.

Thehigh and low bid prices of our common stock for the periods indicated below areas follows:

 
| **National Association of Securities Dealers OTC  Bulletin Board****(1)** |
|---------------------------------------------------------------------------|
| **Quarter Ended**                                                         | **High** | **Low** |
| November 30, 2010                                                         | $0.005 | $0.004 |
| August 31, 2010                                                           | $0.008 | $0.005 |
| May 31, 20010                                                             | $0.009 | $0.009 |
| February 29, 2010                                                         | $0.009 | $0.007 |
| November 30, 2009                                                         | $0.019 | $0.018 |
| August 31, 2009                                                           | $0.008 | $0.008 |
| May 31, 2009                                                              | $0.005 | $0.005 |
| February 28, 2009                                                         | $0.005 | $0.002 |

15

 

 

(1)Over-the-counter market quotations reflect inter-dealer prices without retailmark-up, mark-down or commission, and may not represent actual transactions.(2) No trades occurred during this period.

Ourcommon shares are issued in registered form. Empire Stock Transfer Inc., 7251West Lake Mead Boulevard, Suite 300, Las Vegas, Nevada 89128-8351 (Telephone:(775) 562-4091; Facsimile: (775) 974-1444  is the registrar and transfer agentfor our common shares.

OnNovember 15, 2010, the shareholders' list showed 32 registered shareholders,32,250,000 common shares and no Series A Preferred Shares outstanding.

*DividendPolicy*

Wehave not paid any cash dividends on our common stock and have no presentintention of paying any dividends on the shares of our common stock. Ourcurrent policy is to retain earnings, if any, for use in our operations and inthe development of our business. Our future dividend policy will be determinedfrom time to time by our board of directors.

*EquityCompensation Plan Information*

OnFebruary 9, 2009, our directors approved the adoption of the 2009 Stock OptionPlan which permits our company to issue up to 6,450,000 shares of our commonstock to directors, officers, employees and consultants of our company.

*RecentSales of Unregistered Securities; Use of Proceeds from Registered Securities*

Wedid not sell any equity securities which were not registered under theSecurities Act during the year ended November 30, 2008 that were not otherwisedisclosed on our quarterly reports on Form 10-Q or our current reports on Form8-K filed during the year ended November 30, 2008.

*Purchaseof Equity Securities by the Issuer and Affiliated Purchasers*

Wedid not purchase any of our shares of common stock or other securities duringour fourth quarter of our fiscal year ended November 30, 2010.

**Item6.     Selected Financial Data**

Asa “smaller reporting company”, we are not required to provide the informationrequired by this Item.

**Item7.     Management’s Discussion and Analysis of FinancialCondition and Results of Operations**

**Planof Operation**

Managementplans to continue exploration of the El Cafetal property at the same time thatthe Company undertakes efforts to place the property into production. As weintend to sale or continue exploration at the El Cafetal Project for theforeseeable future, we are moving forward with our plans to make improvementsto the property, which will include recondition of current equipments andacquisition of some new parts and materials. The Company recently completedpreliminary sampling and chemical analyses on the El Cafatel property. TheCompany also intends to begin exploration of the HCL and Fiddler Creek propertyas fieldwork season 2011 starts for more detailed sampling and mapping of thearea. Our ultimate objective is to become a producer of gold, silver andpossibly other associated base metals. We are unable at this time to predictwhen, if ever, that objective will be achieved.

**Purchaseof Significant Equipment**

Wedo not intend to purchase any significant equipment over the next twelvemonths.

16

 

**Personnel Plan**

Wedo not expect any material changes in the number of employees over the next 12month period (although we may enter into employment or consulting agreementswith our officers or directors). We do and will continue to outsource contractemployment as needed.

**Off-BalanceSheet Arrangements**

Thereare no off-balance sheet arrangements that have or are reasonably likely tohave a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to investors.

Ourprincipal capital resources have been through the subscription and issuance ofcommon stock, although we have also used stockholder loans and advances fromrelated parties.

**Resultsof Operations for the Years Ended November 30, 2010 and 2008**

Thefollowing summary of our results of operations should be read in conjunctionwith our  nonaudited financial statements for the years ended November 30, 2009and 2008.

Ouroperating results for the years ended November 30, 2009 and 2008 are summarizedas follows:

 
|   |            |   | **Year Ended**  |   |
|--------|-----------------|--------|-----------------|--------|
|   |            |   | **November 30** |   |
|   |            |   | **2010**        |   |   | **2008** |   |
|   | Revenue         | $      |  Nil       |   | $ |  Nil |   |
|   | Total  Expenses | $      | 267,348         |   | $ | 1,224,237 |   |
|   | Net Loss        | $      |  275,883   |   | $ | 1,224,237 |   |

*Revenues*

Wehave not earned any revenues since our inception and we do not anticipateearning revenues in the near future.

*Expenses*

Ourexpenses for the year ended November 30, 2009 and November 30, 2008 areoutlined in the table below:

 
|   |                                  |   | **Year Ended**  |   |
|--------|---------------------------------------|--------|-----------------|--------|
|   |                                  |   | **November 30** |   |
|   |                                  |   | **2010**        |   |   | **2008** |   |
|   | General  and administrative           | $      | 62,392          |   | $ |  83,263 |   |
|   | Consulting  fees                      | $      | 184,809         |   | $ |  10,000 |   |
|   | Management  services                  | $      | -               |   | $ |  5,500 |   |
|   | Impairment  of mineral property costs | $      | 444             |   | $ |  1,116,930 |   |
|   | Mineral  property costs               | $      | 13,703          |   | $ |  6,000 |   |
|   | Rent                                  | $      | 6,000           |   | $ |  2,544 |   |

17

 

The decrease inoperating expenses for the year ended November 30, 2009, compared to the sameperiod in fiscal 2008, was mainly due to a decrease in general andadministrative expenses of $62,392 (2008: $83,263), a decrease in managementservices $Nil (2008:$5,500); an impairment of mineral property costs of $444(2008: $1,116,930), an increase in consulting fees of $184,809  (2008:$10,000); an increase in rent $6,000 (2008: $2,544)  and an increase in mineralproperty costs of $13,703  (2008: $6,000).

*Liquidityand Financial Condition*

Asof November 30, 20010, our total assets were $323 and our total liabilitieswere $379,230 and we had a working capital deficit of $378,907. Our financialstatements report a net loss of $1,562,110 for the year ended November 30,2010, and a net loss of $1,286,227 for the period from September 12, 2006 (dateof inception) to November 30, 2008.

Wehave suffered recurring losses from operations. The continuation of our companyis dependent upon our company attaining and maintaining profitable operationsand raising additional capital as needed. In this regard we have raisedadditional capital through equity offerings and loan transactions.

 
|   | **Cash  Flows**                                      |   |         |   |   |   |
|--------|------------------------------------------------------|--------|--------------|--------|--------|--------|
|   |                                                 |   | **At**       |   |   |   |
|   |                                                 |   | **November** |   |   |   |
|   |                                                 |   | **30, 2010** |   |   |   |
|   | Net Cash  (Used in) Operating Activities             | $      | (39,733)     |   | $      | )      |
|   | Net Cash  Provided by (Used In) Investing Activities | $      | (444)        |   | $      |   |
|   | Net Cash  Provided by Financing Activities           | $      | 39,018       |   | $      |   |
|   | **Increase  In Cash During The Period**              | $      | (1,315)      |   | $      |   |

Wehad a working capital deficit of $378,907 as of November 30, 2010 compared toworking capital deficit of $107,754 as of November 30, 2008.

Ourprincipal sources of funds have been from sales of our common stock and shortterm loans.

**ContractualObligations**

Asa “smaller reporting company”, we are not required to provide tabulardisclosure obligations.

**GoingConcern**

Wehave not yet achieved profitable operations and are dependent on our ability toraise capital from stockholders or other sources to meet our obligations andrepay our liabilities arising from normal business operations when they becomedue, in their report on our nonaudited financial statements for the year endedNovember 30, 2010. 

**CriticalAccounting Policies**

Thediscussion and analysis of our financial condition and results of operationsare based upon our consolidated financial statements, which have been preparedin accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to makeestimates and

18

 

assumptions that affectthe reported amounts of assets, liabilities, revenue, and expenses. Theseestimates and assumptions are affected by management’s application ofaccounting policies. We believe that understanding the basis and nature of theestimates and assumptions involved with the following aspects of our financialstatements is critical to an understanding of our financial statements.

MineralProperty Costs

TheCompany has been in the exploration stage since its inception and has not yetrealized any revenues from its planned operations. It is primarily engaged inthe acquisition and exploration of mining properties. Mineral propertyexploration costs are expensed as incurred. Mineral property acquisition costsare initially capitalized when incurred using the guidance in EITF 04-02,“Whether Mineral Rights Are Tangible or Intangible Assets”. The Companyassesses the carrying costs for impairment under SFAS No. 144, “Accounting forImpairment or Disposal of Long Lived Assets” at each fiscal quarter end. Whenit has been determined that a mineral property can be economically developed asa result of establishing proven and probable reserves, the costs then incurredto develop such property, are capitalized. Such costs will be amortized usingthe units-of-production method over the estimated life of the probable reserve.If mineral properties are subsequently abandoned or impaired, any capitalizedcosts will be charged to operations.

Long-livedAssets

Inaccordance with SFAS No. 144, “Accounting for the Impairment or Disposal ofLong-Lived Assets”, the Company tests long-lived assets or asset groups forrecoverability when events or changes in circumstances indicate that theircarrying amount may not be recoverable. Circumstances which could trigger areview include, but are not limited to: significant decreases in the marketprice of the asset; significant adverse changes in the business climate orlegal factors; accumulation of costs significantly in excess of the amountoriginally expected for the acquisition or construction of the asset; currentperiod cash flow or operating losses combined with a history of losses or aforecast of continuing losses associated with the use of the asset; and currentexpectation that the asset will more likely than not be sold or disposedsignificantly before the end of its estimated useful life. Recoverability isassessed based on the carrying amount of the asset and its fair value which isgenerally determined based on the sum of the undiscounted cash flows expectedto result from the use and the eventual disposal of the asset, as well asspecific appraisal in certain instances. An impairment loss is recognized whenthe carrying amount is not recoverable and exceeds fair value.

FinancialInstruments

Thefair values of financial instruments, which include cash, accounts payable andaccrued liabilities, amounts due to a related party and loans payable, wereestimated to approximate their carrying values due to the immediate orshort-term maturity of these financial instruments. The Company’s operationsare in Canada, which results in exposure to market risks from changes inforeign currency rates. The financial risk is the risk to the Company’soperations that arise from fluctuations in foreign exchange rates and thedegree of volatility of these rates. Currently, the Company does not usederivative instruments to reduce its exposure to foreign currency risk.

IncomeTaxes

TheCompany accounts for income taxes using the asset and liability method inaccordance with SFAS No. 109, “Accounting for Income Taxes”. The asset andliability method provides that deferred tax assets and liabilities arerecognized for the expected future tax consequences of temporary differencesbetween the financial reporting and tax bases of assets and liabilities, andfor operating loss and tax credit carry-forwards. Deferred tax assets andliabilities are measured using the currently enacted tax rates and laws thatwill be in effect when the differences are expected to reverse. The Companyrecords a valuation allowance to reduce deferred tax assets to the amount thatis believed more likely than not to be realized.

Stock-basedCompensation

19

 

The Company recordsstock-based compensation in accordance with SFAS No. 123R, “Share BasedPayments”, using the fair value method. All transactions in which goods orservices are the consideration received for the issuance of equity instrumentsare accounted for based on the fair value of the consideration received or thefair value of the equity instrument issued, whichever is more reliablymeasurable.

20

 

**Recent AccountingPronouncements**

InMay 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No.163, “Accounting for Financial Guarantee Insurance Contracts – Aninterpretation of FASB Statement No. 60”. SFAS No. 163 requires that aninsurance enterprise recognize a claim liability prior to an event of defaultwhen there is evidence that credit deterioration has occurred in an insured financialobligation. It also clarifies how Statement 60 applies to financial guaranteeinsurance contracts, including the recognition and measurement to be used toaccount for premium revenue and claim liabilities, and requires expandeddisclosures about financial guarantee insurance contracts. It is effective forfinancial statements issued for fiscal years beginning after December 15, 2008,except for some disclosures about the insurance enterprise’s risk-managementactivities. SFAS No. 163 requires that disclosures about the risk-managementactivities of the insurance enterprise be effective for the first periodbeginning after issuance. Except for those disclosures, earlier application isnot permitted. The adoption of this statement is not expected to have amaterial effect on the Company’s financial statements.

InMay 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally AcceptedAccounting Principles”. SFAS No. 162 identifies the sources of accountingprinciples and the framework for selecting the principles to be used in thepreparation of financial statements of nongovernmental entities that arepresented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public CompanyAccounting Oversight Board amendments to AU Section 411, “The Meaning ofPresent Fairly in Conformity With Generally Accepted Accounting Principles”.The adoption of this statement is not expected to have a material effect on theCompany’s financial statements.

InMarch 2008, the FASB issued SFAS No. 161, “Disclosures about DerivativeInstruments and Hedging Activities – an amendment to FASB Statement No. 133”.SFAS No. 161 is intended to improve financial standards for derivative instrumentsand hedging activities by requiring enhanced disclosures to enable investors tobetter understand their effects on an entity's financial position, financialperformance, and cash flows. Entities are required to provide enhanceddisclosures about: (a) how and why an entity uses derivative instruments; (b)how derivative instruments and related hedged items are accounted for underSFAS No. 133 and its related interpretations; and (c) how derivativeinstruments and related hedged items affect an entity’s financial position,financial performance, and cash flows. SFAS No. 161 is effective for financialstatements issued for fiscal years beginning after November 15, 2008, withearly adoption encouraged. The adoption of this statement is not expected to havea material effect on the Company's financial statements.

InDecember 2007, the FASB issued SFAS No. 141 (revised 2007), “BusinessCombinations”. SFAS No. 141 (revised 2007) establishes principles andrequirements for how the acquirer of a business recognizes and measures in itsfinancial statements the identifiable assets acquired, the liabilities assumed,and any non-controlling interest in the acquiree. The statement also providesguidance for recognizing and measuring the goodwill acquired in the businesscombination and determines what information to disclose to enable users of thefinancial statements to evaluate the nature and financial effects of thebusiness combination. SFAS No. 141 (revised 2007) applies prospectively tobusiness combinations for which the acquisition date is on or after thebeginning of the first annual reporting period beginning on or after December15, 2008. The adoption of this statement is not expected to have a materialeffect on the Company's financial statements.

InDecember 2007, the FASB issued SFAS No. 160, “Non-controlling Interests inConsolidated Financial Statements Liabilities – an Amendment of ARB No. 51”.This statement amends ARB 51 to establish accounting and reporting standardsfor the Non-controlling interest in a subsidiary and for the deconsolidation ofa subsidiary. This statement is effective for fiscal years, and interim periodswithin those fiscal years, beginning on or after December 15, 2008, and earlieradoption is prohibited. The adoption of this statement is not expected to havea material effect on the Company’s financial statements.

**Item7A.   Quantitative and Qualitative Disclosures About Market Risk**

Asa “smaller reporting company”, we are not required to provide the informationrequired by this Item.

**Item8.     Financial Statements and Supplementary Data**

21

 

Chancery Resources, Inc.(An Exploration Stage Company)November 30, 2010

 

 
|                                              | Index    |
|---------------------------------------------------|----------|
|                                              |     |
| Report  of Accounting Firm                        | F–1 |
| Consolidated  Balance Sheets                      | F–2 |
| Consolidated  Statements of Operations            | F–3 |
| Consolidated  Statements of Cash Flows            | F–4 |
| Statement  of Stockholders’ Equity (Deficit) | F–5 |
| Notes  to the Consolidated Financial Statements   | F–6 |

1

 

 

F-1

 

Chancery Resources, Inc.(An Exploration Stage Company)Consolidated Balance Sheets(Expressed in US dollars)

 
|                                                                                                                                 | November 30,

2010

$ | November 30,

2008

$ |
|--------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-----------------------|
|                                                                                                                                 |                  |                  |
| ASSETS                                                                                                                               |                  |                  |
|                                                                                                                                 |                  |                  |
| Current  Assets                                                                                                                      |                  |                  |
|                                                                                                                                 |                  |                  |
| Cash                                                                                                                                 | 323                   | 1,638                 |
| Prepaid  expenses                                                                                                                    | –                | 110,471               |
|                                                                                                                                 |                  |                  |
| Total  Assets                                                                                                                        | 323                   | 112,109               |
|                                                                                                                                 |                  | ,                     |
|                                                                                                                                 |                  |                  |
| LIABILITIES  AND STOCKHOLDERS’ DEFICIT                                                                                          |                  |                  |
|                                                                                                                                 |                  |                  |
| Current  Liabilities                                                                                                                 |                  |                  |
|                                                                                                                                 |                  |                  |
| Bank  indebtedness                                                                                                                   | 260                   | 8,872                 |
| Accounts  payable and accrued liabilities                                                                                            | 195,284               | 159,394               |
| Loan  payable, less unamortized discount of $5,541 and $14,077 (Note 4)                                                              | 64,459                | 55,923                |
| Due  to related parties (Note 3)                                                                                                     | 54,310                | 6,680                 |
| Loans  payable (Note 4)                                                                                                              | 64,917                | 64,917                |
|                                                                                                                                 |                  |                  |
| Total  Liabilities                                                                                                                   | 379,230               | 295,786               |
|                                                                                                                                 |                  |                  |
| Contingencies  and Commitments (Notes 1, 5 and 6)                                                                                    |                  |                  |
|                                                                                                                                 |                  |                  |
| Stockholders’  Deficit                                                                                                          |                  |                  |
|                                                                                                                                 |                  |                  |
| Preferred  stock: 2,500,000,000 shares authorized, $0.00001 par value;

no  shares issued and outstanding (2008 – None issued)  | –                | –                |
|                                                                                                                                 |                  |                  |
| Series  A convertible preferred stock: 40,000,000 shares authorized, $0.00001 par  value;

31,000,000  shares issued and outstanding | 310                   | 310                   |
|                                                                                                                                 |                  |                  |
| Common  stock: 2,500,000,000 shares authorized, $0.00001 par value;

32,250,000  shares issued and outstanding                       | 322                   | 322                   |
|                                                                                                                                 |                  |                  |
| Additional  paid-in capital                                                                                                          | 1,163,227             | 1,088,418             |
|                                                                                                                                 |                  |                  |
| Donated  capital (Note 3)                                                                                                            | 19,500                | 13,500                |
|                                                                                                                                 |                  |                  |
| Accumulated  other comprehensive loss                                                                                                | (156)                 | –                |
|                                                                                                                                 |                  |                  |
| Deficit  accumulated during the exploration stage                                                                                    | (1,562,110)           | (1,286,227)           |
|                                                                                                                                 |                  |                  |
| Total  Stockholders’ Deficit                                                                                                    | (378,907)             | (183,677)             |
|                                                                                                                                 |                  |                  |
| Total  Liabilities and Stockholders’ Deficit                                                                                    | 323                   | 112,109               |
|                                                                                                                                 |                  |                  |

 

 

(The Accompanying Notes are an Integral Part ofThese Financial Statements)

F-2

 

 

 

ChanceryResources, Inc.(An Exploration Stage Company)Consolidated Statements of Operations(Expressed in US dollars)

 

 
|                                         |   |  

For the

Year ended |   | For the

Year ended | Accumulated from

September 12, 2006

(Date of Inception) |
|----------------------------------------------|--------|-----------------------------|--------|---------------------|-----------------------------------------------------------|
|                                         |   | November 30,                |   | November 30,        | to November 30,                                           |
|                                         |   | 2010                        |   | 2008                | 2009                                                      |
|                                         |   | $                           |   | $                   | $                                                         |
|                                         |   |                        |   |                |                                                      |
| Revenue                                      |   | –                      |   | –              | –                                                    |
|                                         |   |                        |   |                |                                                      |
| Expenses                                     |   |                        |   |                |                                                      |
|                                         |   |                        |   |                |                                                      |
| General  and administrative                  |   | 62,392                      |   | 83,263              | 192,792                                                   |
| Consulting  fees                             |   | 184,809                     |   | 10,000              | 194,809                                                   |
| Management  services                         |   | –                      |   | 5,500               | 12,750                                                    |
| Impairment  of mineral property costs        |   | 444                         |   | 1,116,930           | 1,121,074                                                 |
| Mineral  property costs                      |   | 13,703                      |   | 6,000               | 19,778                                                    |
| Rent                                         |   | 6,000                       |   | 2,544               | 12,372                                                    |
|                                         |   |                        |   |                |                                                      |
| Total  Operating Expenses                    |   | 267,348                     |   | 1,224,237           | 1,553,575                                                 |
|                                         |   |                        |   |                |                                                      |
| Interest  Expense                            |   | 8,535                       |   | –              | 8,535                                                     |
|                                         |   |                        |   |                |                                                      |
| Net  Loss                                    |   | (275,883)                   |   | (1,224,237)         | (1,562,110)                                               |
|                                         |   |                        |   |                |                                                      |
| Net  Loss Per Share – Basic and Diluted |   | (0.01)                      |   | (0.01)              | N/A                                                       |
|                                         |   |                        |   |                |                                                      |
| Weighted  Average Common Shares Outstanding  |   | 32,250,000                  |   | 89,390,000          | N/A                                                       |
|                                         |   |                        |   |                |                                                      |
| Statement  of Other Comprehensive Loss       |   |                        |   |                |                                                      |
| Net  Loss                                    |   | (275,883)                   |   | (1,224,237)         | (1,562,110)                                               |
| Foreign  currency translation adjustment     |   | (156)                       |   | –              | (156)                                                     |
|                                         |   |                        |   |                |                                                      |
| Total  Comprehensive Loss                    |   | (276,039)                   |   | (1,224,237)         | (1,562,266)                                               |

 

 

(The Accompanying Notes are an Integral Part ofThese Financial Statements)

F-3

 

Chancery Resources, Inc.(An Exploration Stage Company)Statements of Cash Flows(Expressed in US dollars)
|                                                                         | For the Year

Ended

November 30,

2010

$ | For the Year

Ended

November 30,

2008

$ | Accumulated from  September 12, 2006 (Date of Inception)

to November 30, 2009

$ |
|------------------------------------------------------------------------------|--------------------------------------------|--------------------------------------------|-----------------------------------------------------------------------------------|
|                                                                         |                                       |                                       |                                                                              |
| Cash  Flows From Operating Activities                                        |                                       |                                       |                                                                              |
|                                                                         |                                       |                                       |                                                                              |
| Net  loss for the period                                                     | (275,883)                                  | (1,224,237)                                | (1,562,110)                                                                       |
|                                                                         |                                       |                                       |                                                                              |
| Adjustments  to reconcile net loss to net cash used in operating activities: |                                       |                                       |                                                                              |
| Donated  services and expenses                                               | 6,000                                      | 6,250                                      | 19,500                                                                            |
| Impairment  of mineral property costs                                        | 444                                        | 1,116,930                                  | 1,117,374                                                                         |
| Amortization  of discount                                                    | 8,536                                      | –                                     | 11,232                                                                            |
| Share-based  compensation                                                    | 184,809                                    | 10,000                                     | 194,809                                                                           |
|                                                                         |                                       |                                       |                                                                              |
| Changes  in operating assets and liabilities:                                |                                       |                                       |                                                                              |
| Prepaid  expenses                                                            | 471                                        | 242                                        | –                                                                            |
| Accounts  payable and accrued liabilities                                    | 35,890                                     | 5,674                                      | 45,284                                                                            |
|                                                                         |                                       |                                       |                                                                              |
| Net  Cash Used In Operating Activities                                       | (39,733)                                   | (85,141)                                   | (173,911)                                                                         |
|                                                                         |                                       |                                       |                                                                              |
| Cash  Flows From Investing Activities                                        |                                       |                                       |                                                                              |
|                                                                         |                                       |                                       |                                                                              |
| Mineral  property costs                                                      | (444)                                      | (50,000)                                   | (50,444)                                                                          |
|                                                                         |                                       |                                       |                                                                              |
| Net  Cash Used In Investing Activities                                       | (444)                                      | (50,000)                                   | (50,444)                                                                          |
|                                                                         |                                       |                                       |                                                                              |
| Cash  Flows From Financing Activities                                        |                                       |                                       |                                                                              |
|                                                                         |                                       |                                       |                                                                              |
| Advances  from related party                                                 | 47,630                                     | 29,376                                     | 119,524                                                                           |
| Bank  indebtedness                                                           | (8,612)                                    | 8,872                                      | 260                                                                               |
| Proceed  from the sale of common stock                                       | –                                     | –                                     | 105,050                                                                           |
|                                                                         |                                       |                                       |                                                                              |
| Net  Cash Provided By Financing Activities                                   | 39,018                                     | 38,248                                     | 224,834                                                                           |
|                                                                         |                                       |                                       |                                                                              |
| Effect  of Exchange Rate Changes on Cash                                     | (156)                                      | –                                     | (156)                                                                             |
|                                                                         |                                       |                                       |                                                                              |
| Increase  (decrease) in Cash                                                 | (1,315)                                    | (96,893)                                   | 323                                                                               |
|                                                                         |                                       |                                       |                                                                              |
| Cash  - Beginning of Period                                                  | 1,638                                      | 98,531                                     | –                                                                            |
|                                                                         |                                       |                                       |                                                                              |
| Cash  - End of Period                                                        | 323                                        | 1,638                                      | 323                                                                               |
|                                                                         |                                       |                                       |                                                                              |
| Supplemental  Disclosures                                                    |                                       |                                       |                                                                              |
|                                                                         |                                       |                                       |                                                                              |
| Interest  paid                                                               | –                                     | –                                     | –                                                                            |
| Income  taxes paid                                                           | –                                     | –                                     | –                                                                            |
|                                                                         |                                       |                                       |                                                                              |
| Non-Cash  Financing and Investing Activities                                 |                                       |                                       |                                                                              |
|                                                                         |                                       |                                       |                                                                              |
| Promissory  note issued for mineral property                                 | –                                     | 70,000                                     | 70,000                                                                            |
| Common  stock issued for mineral property                                    | –                                     | 120,000                                    | 120,000                                                                           |
| Preferred  stock issued for mineral property                                 | –                                     | 744,000                                    | 744,000                                                                           |
| Common  stock issued for services and prepaid expenses                       | –                                     | 120,000                                    | 120,000                                                                           |

 

(The Accompanying Notes are an Integral Part ofThese Financial Statements)

F-4

 

Chancery Resources, Inc.(An Exploration Stage Company)Consolidated Statement of Stockholders’ Equity (Deficit)For the Period from September 12, 2006 (Date of Inception) to November 30, 2010(Expressed in US dollars)
|                                                                          |            |         |          |       |          |        |        | Deficit     |        |
|-------------------------------------------------------------------------------|-----------------|--------------|---------------|------------|---------------|-------------|-------------|-------------|-------------|
|                                                                          |            |         |          |       |          |        | Accumulated | Accumulated |        |
|                                                                          | Convertible     |         |          | Additional |          | Other       | During the  |        |
|                                                                          | Preferred Stock | Common Stock | Paid-in       | Donated    | Comprehensive | Exploration | Exploration |
|                                                                          | Shares          | Par Value    | Shares        | Par Value  | Capital       | Capital     | Income      | Stage       | Total       |
|                                                                          | #               | $            | #             | $          | $             | $           | $           | $           | $           |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Balance – September 12, 2006 (Date of Inception)                         | –          | –       | –        | –     | –        | –      | –      | –      | –      |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Shares issued for cash  at $0.0000004 per share                               | –          | –       | 125,000,000   | 1,250      | (1,200)       | –      | –      | –      | 50          |
| Donated  services                                                             | –          | –       | –        | –     | –        | 1,250       | –      | –      | 1,250       |
| Net loss  for the period                                                      | –          | –       | –        | –     | –        | –      | –      | (5,999)     | (5,999)     |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Balance –  November 30, 2006                                             | –          | –       | 125,000,000   | 1,250      | (1,200)       | 1,250       | –      | (5,999)     | (4,699)     |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Shares issued for cash  at $0.004 per share                                   | –          | –       | 26,250,000    | 262        | 104,738       | –      | –      | –      | 105,000     |
| Donated  services                                                             | –          | –       | –        | –     | –        | 6,000       | –      | –      | 6,000       |
| Net loss  for the year                                                        | –          | –       | –        | –     | –        | –      | –      | (55,991)    | (55,991)    |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Balance –  November 30, 2007                                             | –          | –       | 151,250,000   | 1,512      | 103,538       | 7,250       | –      | (61,990)    | 50,310      |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Cancellation  of shares                                                       | –          | –       | (121,000,000) | (1,210)    | 1,210         | –      | –      | –      | –      |
| Shares  issued for services at $0.12 per share                                | –          | –       | 1,000,000     | 10         | 119,990       | –      | –      | –      | 120,000     |
| Shares  issued for mineral property at $0.12 per share                        | –          | –       | 1,000,000     | 10         | 119,990       | –      | –      | –      | 120,000     |
| Shares  issued for mineral property at $0.024 per share                       | 31,000,000      | 310          | –        | –     | 743,690       | –      | –      | –      | 744,000     |
| Donated  services and expenses                                                | –          | –       | –        | –     | –        | 6,250       | –      | –      | 6,250       |
| Net loss  for the year                                                        | –          | –       | –        | –     | –        | –      |        | (1,224,237) | (1,224,237) |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Balance –  November 30, 2008                                             | 31,000,000      | 310          | 32,250,000    | 322        | 1,088,418     | 13,500      | –      | (1,286,227) | (183,677)   |
|                                                                          |            |         |          |       |          |        |        |        |        |
| Donated  rent                                                                 | –          | –       | –        | –     | –        | 6,000       | –      | –      | 6,000       |
| Re-valuation  of share-based compensation services at $0.24 per share

  | –          | –       | –        | –     | 74,809        | –      | –      | –      | 74,809      |
| Foreign  currency translation                                                 | –          | –       | –        | –     | –        | –      | (156)       |        | (156)       |
| Net loss  for the year                                                        | –          | –       | –        | –     | –        | –      | –      | (275,883)   | (275,883)   |
| Balance –  November 30, 2009                                             | 31,000,000      | 310          | 32,250,000    | 322        | 1,163,227     | 19,500      | (156)       | (1,562,110) | (378,907)   |

OnFebruary 4, 2008, the Company effected a 25:1 forward stock split of theauthorized, issued and outstanding common and preferred stock. All shareamounts have been retroactively adjusted for all periods presented.

(The Accompanying Notes are an Integral Part ofThese Financial Statements)

F-5

 

Chancery Resources, Inc.(An Exploration Stage Company) Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 
| 1.     | Nature  of Operations and Continuance of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | Chancery  Resources, Inc. (the “Company”) was incorporated in the State of Nevada on September 12, 2006. The Company is an Exploration Stage Company as defined by Financial  Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)  915, “*Development Stage Entities”.* The Company has acquired a mineral property  located in the province of British Columbia, Canada, and has not yet determined  whether this property contains reserves that are economically recoverable.

 

The  Company incorporated a wholly-owned subsidiary Chancery Mining Canada Ltd.  (“Chancery Canada”) on November 12, 2008 in the province of British Columbia  , Canada, and incorporated another wholly-owned subsidiary Minera Chancery Colombia (“Chancery Colombia”) on January 30, 2009 in Medellin, Colombia. Both subsidiaries will  focus on mining activities.

 

These  consolidated financial statements have been prepared on a going concern  basis, which implies the Company will continue to realize its assets and  discharge its liabilities in the normal course of business. The Company has  not generated any revenue since inception and has never paid any dividends  and is unlikely to pay dividends or generate earnings in the immediate or  foreseeable future. The continuation of the Company as a going concern is  dependent upon the continued financial support from its shareholders, the  ability of the Company to obtain necessary equity financing to continue  operations, and the attainment of profitable operations. As at November 30,  2010, the Company has a working capital deficit of $378,907 and has  accumulated losses of $1,562,110 since inception. These factors raise  substantial doubt regarding the Company’s ability to continue as a going  concern. These consolidated financial statements do not include any  adjustments to the recoverability and classification of recorded asset  amounts and classification of liabilities that might be necessary should the Company  be unable to continue as a going concern.

  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| 2.     | Summary  of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Basis  of Presentation |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | These  consolidated financial statements and related notes are presented in  accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The financial statements include accounts  of the Company and its wholly-owned subsidiaries, Chancery Canada and Chancery Colombia. All intercompany transactions and balances have been eliminated. The  Company’s fiscal year-end is November 30.

  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Use  of Estimates |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | The  preparation of financial statements in conformity with US generally accepted  accounting principles requires management to make estimates and assumptions  that affect the reported amounts 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. The Company  regularly evaluates estimates and assumptions related to the recoverability  of mineral property costs, imputed interest, donated expenses, stock-based  compensation and deferred income tax asset valuation allowances. The Company  bases its estimates and assumptions on current facts, historical experience  and various other factors that it believes to be reasonable under the  circumstances, the results of which form the basis for making judgments about  the carrying values of assets and liabilities and the accrual of costs and  expenses that are not readily apparent from other sources. The actual results  experienced by the Company may differ materially and adversely from the  Company’s estimates. To the extent there are material differences between the  estimates and the actual results, future results of operations will be  affected.

  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Cash  and Cash Equivalents |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | The Company considers all highly liquid  instruments with maturity of three months or less at the time of issuance to  be cash equivalents. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Earnings  (Loss) Per Share |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | The  Company computes net earnings (loss) per share in accordance with ASC 260 *"Earnings  per Share".* ASC 260 requires presentation of both basic and diluted  earnings per share (“EPS”) on the face of the income statement. Basic EPS is  computed by dividing net earnings (loss) available to common shareholders  (numerator) by the weighted average number of shares outstanding  (denominator) during the period. Diluted EPS gives effect to all dilutive  potential common shares outstanding during the period using the treasury  stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in  determining the number of shares assumed to be purchased from the exercise of  stock options or warrants. Diluted EPS excludes all dilutive potential shares  if their effect is anti dilutive.

  |

F-6

 

Chancery Resources, Inc.(An Exploration Stage Company)Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 
| 2.     | Summary  of Significant Accounting Policies (continued) |
|--------|---------------------------------------------------------|
|   |                                                    |   |
|   | e)                                                      | Comprehensive  Loss |
|   |                                                    |   |
|   |                                                    | ASC  220 *“Reporting Comprehensive Income,”* establishes standards for the  reporting and display of comprehensive loss and its components in the  financial statements. As at November 30, 2010, the Company’s only component  of comprehensive loss was foreign currency translation adjustment. |
|   |                                                    |   |
|   | f)                                                      | Mineral  Property Costs |
|   |                                                    |   |
|   |                                                    | The  Company has been in the exploration stage since its inception and has not yet  realized any revenues from its planned operations. It is primarily engaged in  the acquisition and exploration of mining properties. Mineral property  exploration costs are expensed as incurred. Mineral property acquisition  costs are initially capitalized when incurred using the guidance in EITF  04-02, *“Whether Mineral Rights Are Tangible or Intangible Assets”.* The  Company assesses the carrying costs for impairment under ASC 360 “*Property,  Plant, and Equipment”* at each fiscal quarter end. When it has been  determined that a mineral property can be economically developed as a result  of establishing proven and probable reserves, the costs then incurred to  develop such property, are capitalized. Such costs will be amortized using  the units-of-production method over the estimated life of the probable  reserve. If mineral properties are subsequently abandoned or impaired, any  capitalized costs will be charged to operations. |
|   |                                                    |   |
|   | g)                                                      | Long-lived  Assets |
|   |                                                    |   |
|   |                                                    | In accordance with ASC 360 “*Property,  Plant, and Equipment”*, the Company tests long-lived assets or asset  groups for recoverability when events or changes in circumstances indicate  that their carrying amount may not be recoverable. Circumstances which could  trigger a review include, but are not limited to: significant decreases in  the market price of the asset; significant adverse changes in the business  climate or legal factors; accumulation of costs significantly in excess of  the amount originally expected for the acquisition or construction of the  asset; current period cash flow or operating losses combined with a history  of losses or a forecast of continuing losses associated with the use of the  asset; and current expectation that the asset will more likely than not be  sold or disposed significantly before the end of its estimated useful life.  Recoverability is assessed based on the carrying amount of the asset and its  fair value which is generally determined based on the sum of the undiscounted  cash flows expected to result from the use and the eventual disposal of the  asset, as well as specific appraisal in certain instances. An impairment loss  is recognized when the carrying amount is not recoverable and exceeds fair  value. |
|   |                                                    |   |
|   | h)                                                      | Asset  Retirement Obligations |
|   |                                                    |   |
|   |                                                    | The Company follows the provisions of ASC 440  “*Asset Retirement and Environmental  Obligations”,* which establishes  standards for the initial measurement and subsequent accounting for  obligations associated with the sale, abandonment or other disposal of  long-lived tangible assets arising from the acquisition, construction or  development and for normal operations of such assets. |
|   |                                                    |   |
|   | i)                                                      | Financial  Instruments |
|   |                                                    |   |
|   |                                                    | ASC 820 *“Fair Value Measurements”*  requires an entity to maximize the use of observable inputs and minimize the  use of unobservable inputs when measuring fair value. ASC 820 establishes a  fair value hierarchy based on the level of independent, objective evidence  surrounding the inputs used to measure fair value. A financial instrument’s  categorization within the fair value hierarchy is based upon the lowest level  of input that is significant to the fair value measurement. ASC 820  prioritizes the inputs into three levels that may be used to measure fair  value:

* *

*Level 1*

Level 1 applies to assets or liabilities for  which there are quoted prices in active markets for identical assets or  liabilities.

* *

*Level 2*

Level 2 applies to assets or liabilities for  which there are inputs other than quoted prices that are observable for the  asset or liability such as quoted prices for similar assets or liabilities in  active markets; quoted prices for identical assets or liabilities in markets  with insufficient volume or infrequent transactions (less active markets); or  model-derived valuations in which significant inputs are observable or can be  derived principally from, or corroborated by, observable market data.

2.             Summary of Significant  Accounting Policies (continued)

 

i)              Financial Instruments and Fair  Value Measures (continued)

* *

*Level 3*

Level 3 applies to assets or liabilities for  which there are unobservable inputs to the valuation methodology that are  significant to the measurement of the fair value of the assets or  liabilities.

The Company’s financial instruments consist  principally of cash, bank indebtedness, accounts payable, amounts due to a  related party, and loans payable. Pursuant to ASC 820, the fair value of cash  equivalents is determined based on *“Level 1”* inputs, which consist of  quoted prices in active markets for identical assets. The Company believes  that the recorded values of all of our other financial instruments  approximate their current fair values because of their nature and respective  maturity dates or durations.

 

The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates.  The financial risk is the risk to the Company’s operations that arise from  fluctuations in foreign exchange rates and the degree of volatility of these  rates. Currently, the Company does not use derivative instruments to reduce  its exposure to foreign currency risk.

  |
|   |                                                    |   |
|   | j)                                                      | Income  Taxes |
|   |                                                    |   |
|   |                                                    | The Company accounts for income taxes using  the asset and liability method in accordance with ASC 740, *“Income Taxes”.*  The asset and liability method provides that deferred tax assets and  liabilities are recognized for the expected future tax consequences of  temporary differences between the financial reporting and tax bases of assets  and liabilities, and for operating loss and tax credit carry-forwards.  Deferred tax assets and liabilities are measured using the currently enacted  tax rates and laws that will be in effect when the differences are expected  to reverse. The Company records a valuation allowance to reduce deferred tax  assets to the amount that is believed more likely than not to be realized.

  |

F-7

 

Chancery Resources, Inc.(An Exploration Stage Company)Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 
| 2. | Summary  of Significant Accounting Policies (continued) |
|----|---------------------------------------------------------|

 
|   | k)     | Foreign  Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | The Company’s functional and reporting  currency is the United States dollar. Occasional transactions may occur in  Canadian dollars and management has adopted ASC 830 *“Foreign Currency  Translation Matters”.* Monetary assets and liabilities denominated in  foreign currencies are translated using the exchange rate prevailing at the  balance sheet date. Non-monetary assets and liabilities denominated in  foreign currencies are translated at rates of exchange in effect at the date  of the transaction. Average monthly rates are used to translate revenues and  expenses. Gains and losses arising on translation or settlement of foreign  currency denominated transactions or balances are included in the  determination of income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | l)     | Stock-based  Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | The Company records stock-based compensation  in accordance with ASC 718, “*Compensation – Stock Based Compensation”*  using the fair value method. All transactions in which goods or services are  the consideration received for the issuance of equity instruments are  accounted for based on the fair value of the consideration received or the  fair value of the equity instrument issued, whichever is more reliably  measurable.

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|   | m)     | Recent  Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   | In May 2009, FASB issued ASC 855, Subsequent  Events, which establishes general standards of for the evaluation,  recognition and disclosure of events and transactions that occur after the  balance sheet date. Although there is new terminology, the standard is based  on the same principles as those that currently exist in the auditing  standards. The standard, which includes a new required disclosure of the date  through which an entity has evaluated subsequent events, is effective for  interim or annual periods ending after June 15, 2009.  The adoption of ASC  855 did not have a material effect on the Company’s financial statements

 

In June 2009, the FASB issued guidance now  codified as ASC 105, Generally Accepted Accounting Principles, as the single  source of authoritative accounting principles recognized by the FASB to be  applied by nongovernmental entities in the preparation of financial  statements in conformity with U.S. GAAP, aside from those issued by the SEC.  ASC 105 does not change current U.S. GAAP, but is intended to simplify user  access to all authoritative U.S. GAAP by providing all authoritative  literature related to a particular topic in one place.  The adoption of ASC  105 did not have a material impact on the Company’s financial statements, but  did eliminate all references to pre-codification standards.

 

The Company has implemented all new accounting  pronouncements that are in effect and that may impact its financial  statements and does not believe that there are any other new accounting  pronouncements that have been issued that might have a material impact on its  financial position or results of operations.

  |

 

Chancery Resources, Inc.(An Exploration Stage Company)Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 
| 2. | Summary  of Significant Accounting Policies (continued) |
|----|---------------------------------------------------------|

 

 
| 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| a)       For the year ended November  30, 2009, the Company recognized $Nil (2008 - $5,500) for donated services  provided by the former President of the Company and incurred $Nil (November  30, 2008 - $2,544) in rent to a company controlled by the former President of  the Company.

b)       For the year ended November  30, 2009, the Company incurred $6,000 (2008 - $Nil) in donated rent to a  company controlled by the President of the Company, and is indebted to the  President for $51,780 (2008 - $4,150) for advances and expenses paid for on  behalf of the Company, which is non-interest bearing, unsecured and due on  demand.

c)                                                                                     As at November 30,  2009, the Company is indebted to the Chief Executive Officer of the Company  for $2,530 (2008 - $2,530) for expenses paid for on behalf of the Company,  which is non-interest bearing, unsecured and due on demand.

  |  
 

 

 

 

 
 

 
 

 
 

 
 

 
 

 
 

 
F-9

 

Chancery Resources, Inc.(An Exploration Stage Company)Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 

4.

Loans  Payable

 

 

 

 

 

 

a)       As of  November 30, 2009, the Company is indebted to the former President of the  Company for $44,917 (2008 - $44,917) for cash advances and expenses paid for  on behalf of the Company, which is non-interest bearing, unsecured and due on  demand.

b)        On August  8, 2008, the Company received a $20,000 loan which is non-interest bearing,  unsecured and due on August 8, 2010.

c)       On July 25,  2008, the Company received a $70,000 loan which is non-interest bearing,  unsecured and due on July 25, 2010. As at November 30, 2009, an implicit  interest rate of 15% was recognized resulting in a discount of $5,541 (2008 -  $14,077) on the date of the loan. As at November 30, 2009, the Company has  accreted $11,528 of the discount bring the carrying value of the loan to  $64,459.

 

5.

Mineral  Properties

a)         On  March 19, 2008, the Company entered into an agreement to acquire a 100%  interest in certain mineral claims located in Valparaiso, Antioquia, Colombia for $270,000 to be paid as follows:

i.          $50,000  payable immediately on the signing of the agreement (paid);

ii.         $70,000  payable before April 18, 2008 (paid by loan payable and

iii.      $150,000 payable before  June 17, 2008 (unpaid).

Upon commencement of  mining operations, all profits from the sale of ore shall be split 60% to the  Company and 40% to the vendor. Upon the Company having paid $210,000 of additional  consideration to the vendor, such profits will then be split 90% to the  Company and 10% to the vendor. The Company may acquire the vendor’s 10%  profit interest at any time upon payment of $370,000 of additional  consideration.

The cost of the mineral  property was initially capitalized. As at November 30, 2009, the Company had recognized  an impairment loss of $nil (2008 - $252,930), as it had not yet been  determined whether there are proven or probable reserves on the property.

b)         On November  6, 2008, the Company entered into an agreement to acquire 100% interest in  certain mineral claims located in the province of British Columbia, Canada. In consideration of the purchase, the Company issued 1,000,000 shares of restricted  common stock and 31,000,000 shares of restricted convertible preferred stock.  The preferred shares are convertible into common shares on the basis of five  shares of preferred stock for one share of common stock. The claim is  registered in the name of CB Resources Ltd., a private British Columbia  company with common directors, which holds the claim in trust on behalf of  the Company. The cost of the mineral property was initially capitalized. As  at November 30, 2009, the Company had recognized an impairment loss of $nil  (2008 - $864,000), as it had not yet been determined whether there are proven  or probable reserves on the property.

c)         On  January 19, 2009, the Company acquired through its wholly-owned subsidiary  Chancery Canada, a 100% interest in certain mineral interests located in  British Columbia, Canada known as the Fiddler Creek Property by the purchase  of a Free Miner Certificate for $444 (CDN$500). As at November 30, 2009, the  Company recognized an impairment loss of $444, as it has not yet been  determined whether there are proven or probable reserves on the property.

 

6.

Commitments

 

 

 

 

 

On February 1, 2009, the Company entered into  an agreement with a consultant to prepare a technical report of a mining  property in consideration for the lesser of $700 per day or $5,000.

 

 

 

 

7.

Common  Stock

a)       On January  24, 2008, the Company effected a 25:1 forward stock split of the authorized,  issued and outstanding common and preferred stock. As a result, the  authorized share capital increased from 100,000,000 shares of common stock to  2,500,000,000 shares of common stock with no change in par value and from  100,000,000 shares of preferred stock to 2,500,000,000 shares of preferred  stock with no change in par value. All share amounts have been retroactively  adjusted for all periods presented.

b)       On November  6, 2008, the Company entered into a consulting agreement with a Director of  the Company, for the provision of management and operational services for a  period of one year. In consideration for these services, the Company issued  1,000,000 shares of restricted common stock with a fair value of $240,000.  For the year ended November 30, 2009, $184,809 (2008 - $Nil) was charged to  operations.

c)       On February  9, 2009, the Company approved the adoption of the 2009 Stock Option Plan  which permits the Company to issue up to 6,450,000 shares of common stock to  directors, officers, employees and consultants of the Company.

 

 

 

 

 

F-10

 

Chancery Resources, Inc.(An Exploration Stage Company)Notes to the Financial StatementsNovember 30, 2010(Expressed in US dollars)

 

 

 

8.

Income  Taxes

 

 

The Companyhas a net operating loss carry-forward of approximately $1,538,000 available tooffset taxable income in future years which commence expiring in fiscal 2026.

 

The Company is subject to United States income taxes at a rate of 35%. The reconciliation of the provision for incometaxes at the United States statutory rate compared to the Company’s income taxexpense as reported is as follows:

 

 

 

Year Ended

November 30,

2009

$

 

Year Ended

November 30,

2008

$

 

 

 

 

 

Income tax recovery at statutory rate

 

96,559

 

428,483

 

 

 

 

 

Donated services and expenses

 

(2,100)

 

(2,188)

 

 

 

 

 

Valuation allowance change

 

(94,459)

 

(426,295)

 

 

 

 

 

Provision for income taxes 

 

–

 

–

 

The significantcomponents of deferred income tax assets and liabilities as at November 30,2010 are as follows:

 

 

 

 

November 30,

2010

$

 

November 30,

2008

$

 

 

 

 

 

Net operating losses carried forward

 

539,913

 

445,454

 

 

 

 

 

Valuation allowance

 

(539,913)

 

(445,454)

 

 

 

 

 

Net deferred income tax asset

 

–

 

–

 

9.

Subsequent  Events

 

Pursuant to FASB ASC 855-10, the Company has  evaluated all events or transactions that occurred from November 30, 2010  through February 15, 2011 the date of issuance of the audited  consolidated financial statements. During this period, the Company did not  have any material recognizable subsequent events.

 

 

 

 

F-11

 

**Item 9.  Changes in and Disagreements With Accountants on Accounting and FinancialDisclosure**

Therewere no disagreements related to accounting principles or practices, financialstatement disclosure, internal controls or auditing scope or procedure duringthe two fiscal years and interim periods, including the interim period upthrough the date the relationship ended.

**Item9A(T).   Controls and Procedures**

***Management’sReport on Disclosure Controls and Procedures***

Wemaintain disclosure controls and procedures that are designed to ensure thatinformation required to be disclosed in our reports filed under the *SecuritiesExchange Act of 1934* , as amended, is recorded, processed, summarized andreported within the time periods specified in the Securities and ExchangeCommission's rules and forms, and that such information is accumulated andcommunicated to our management, including our president and chief executiveofficer (who is acting as our principal executive officer and our principalfinancial officer and principle accounting officer) to allow for timelydecisions regarding required disclosure.

Asof November 30, 2010, the end of our fiscal year covered by this report, wecarried out an evaluation, under the supervision and with the participation ofour president and chief executive officer (who is acting as our principalexecutive officer and our principal financial officer and principle accountingofficer), of the effectiveness of the design and operation of our disclosurecontrols and procedures. Based on the foregoing, our president and chiefexecutive officer (who is acting as our principal executive officer and ourprincipal financial officer and principle accounting officer) concluded thatour disclosure controls and procedures were effective as of the end of theperiod covered by this annual report.

***Management’sReport on Internal Control over Financial Reporting***

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting. Responsibility, estimates and judgments bymanagement are required to assess the expected benefits and related costs ofcontrol procedures. The objectives of internal control include providingmanagement with reasonable, but not absolute, assurance that assets aresafeguarded against loss from unauthorized use or disposition, and thattransactions are executed in accordance with management’s authorization andrecorded properly to permit the preparation of consolidated financialstatements in conformity with accounting principles generally accepted in the United States. 

Thisannual report does not include an attestation report of our company’sregistered public accounting firm regarding internal control over financialreporting. Management’s report was not subject to attestation by our company’sregistered public accounting firm pursuant to temporary rules of the Securitiesand Exchange Commission that permit our company to provide only management’sreport in this annual report.

***Changesin Internal Control over Financial Reporting***

Therehave been no changes in our internal controls over financial reporting thatoccurred during the year ended November 30, 2009 that have materially or arereasonably likely to materially affect, our internal controls over financialreporting.

**Item9B.   Other Information**

None.

28

 

**PART III**

**Item10.   Directors, Executive Officers and Corporate Governance**

Alldirectors of our company hold office until the next annual meeting of thesecurity holders or until their successors have been elected and qualified. Theofficers of our company are appointed by our board of directors and hold officeuntil their death, resignation or removal from office. Our directors andexecutive officers, their ages, positions held, and duration as such, are asfollows:

 

**Name**

**Position Held  with the Company**

**Age**

**Date First Elected or Appointed**

Rafael A.  Pinedo

Chief Executive Officer, President and  Director

42

October 16, 2008

Jeffrey  Fanning

Vice President of  Exploration and Director

41

October 16, 2008

Juan  Restrepo  Gutierrez

Vincent  Higgins

Chief Operations Officer,  Secretary and DirectorIndependent  Director

53

44

January 9, 2008

August 3rd, 2009

**BusinessExperience**

Thefollowing is a brief account of the education and business experience during atleast the past five years of each director, executive officer and key employeeof our company, indicating the person’s principal occupation during thatperiod, and the name and principal business of the organization in which suchoccupation and employment were carried out.

*RafaelA. Pinedo*

Mr.Pinedo has over 20 years of experience in the areas of consulting, engineering,and energy. Since December 3, 1998, Mr. Pinedo has served as Chairman ofPilgrim Petroleum Corporation (PGPM.OTC and PHV on the Frankfurt StockExchange), an oil and gas exploration company based out of Dallas, Texas. SinceDecember 31, 2003, Mr. Pinedo has also served as president and director ofengineering and operations, for American Petroleum Corp, an Irving, and Texas based operating company, and managing director of American BNP Resources LP based in Midland, Texas. Mr. Pinedo is Chairman of Arcland Energy Corporation (OTC: ACLY) a Dallas Texas exploration company. In addition Mr. Pinedo also was a director of CBResources Ltd. (CNQ.ICD) a Canadian public company based in Vancouver, Canada and director at Mineral Hills Industries Ltd. a Canadian public company (TSXV.MHI), he hasassisted as consultant and investor on a number of public companies in the United States, Canada and United Kingdom in energy and mineral exploration operations.

*JeffreyFanning*

Mr.Fanning has over 16 years of experience in engineering, field services andconsulting. Mr. Fanning is currently president of Lariat Energy Corp. a fieldand exploration service company and was vice-president of operations at PilgrimPetroleum Corp. (OTC.PGPM) until December 2006. Mr. Fanning worked as anoperations manager for American BNP Resources LLC a drilling and operatingcompany. Prior to this, Mr. Fanning has been involve in property developmentand further strategic property acquisitions and assisted a number of publiccompanies in developing their operating plans for their exploration operations.

29

 

*Juan Restrepo Gutierrez*

Mr.Restrepo Gutierrez acts as general manager of Mineral and Geological ConsultingCompany since October 2006. Prior to that Mr. Restrepo Gutierrez worked in thetire and retreading industry where he served as a production manager, generalmanager and a consultant for several companies. Mr. Restrepo Gutierrez alsoworked in the electronic maintenance industry and has experience in the noferrous foundry industry where he acted as a manager for several years.

Mr.Restrepo Gutierrez has a Bachelor of Geology and a Master of Science in Geologyfrom the University of South Florida, Tampa. He has taken specialization coursesin project management, sales and service management, strategic marketingmanagement and quality control under ISO 9000. He taught Optical Mineralogy andIgneous and Metamorphic Petrology at the Universidad Nacional de Colombia. Mr.Restrepo Gutierrez has also taught courses at the Universidad PontificiaBolivariana and Colegiatura Colombiana de Diseño.

OnAugust 3rd, 2009, Vincent Higgins was appointed as independent director of ourcompany. 

   

Mr.Higgins, age 43, is recognized international leader in training, leadershipdevelopment, and multicultural team building.  Founded the Institutefor Effective Leadership. Served as the Director of the Lumen Institute, Dallas, Texas and founded the Dallas branch.  Trilingual: English, Spanish, andItalian. Extensive experience in operations and growth of internationalnon-profit organizations including institutional fundraising and networking.Obtained undergraduate degree in Physics, Summa Cum Laude at the University ofDallas, TX. Doctoral track in High Energy Physics, at Purdue University, WestLafayette, Indiana and degrees in Philosophy and Theology at the PontificalUniversity Regina Apostolorum, in Rome, Italy

**FamilyRelationships**

Thereare no family relationships between any of our directors, executive officersand proposed directors or executive officers.

**Involvementin Certain Legal Proceedings**

Noneof our directors, executive officers, promoters or control persons has beeninvolved in any of the following events during the past five years:

 

1.

any  bankruptcy petition filed by or against any business of which such person was  a general partner or executive officer either at the time of the bankruptcy  or within two years prior to that time;

 

 

2.

any  conviction in a criminal proceeding or being subject to a pending criminal  proceeding, excluding traffic violations and other minor offences;

 

 

3.

being  subject to any order, judgment or decree, not subsequently reversed,  suspended or vacated, of any court of competent jurisdiction, permanently or  temporarily enjoining, barring, suspending or otherwise limiting his  involvement in any type of business, securities or banking activities; or

 

 

4.

being  found by a court of competent jurisdiction in a civil action, the Securities  and Exchange Commission or the Commodity Futures Trading Commission to have  violated a federal or state securities or commodities law, and the judgment  has not been reversed, suspended, or vacated.

**Compliancewith Section 16(a) of the Securities Exchange Act of 1934**

Section16(a) of the Securities Exchange Act of 1934 requires our executive officersand directors and persons who own more than 10% of our common stock to filewith the Securities and Exchange Commission initial statements of beneficialownership, reports of changes in ownership and annual reports concerning theirownership of our common stock and other equity securities, on Forms 3, 4 and 5respectively. Executive officers, directors and greater than 10% shareholdersare required by the SEC regulations to furnish us with copies of all Section16(a) reports that they file.

Basedsolely on our review of the copies of such forms received by us, or writtenrepresentations from certain reporting persons, we believe that during fiscalyear ended November 30, 2009, all filing requirements applicable to ourofficers, directors and greater than 10% percent beneficial owners werecomplied with, with the exception of the following:

30

 

 

**Name**

**Number of Late  Reports**

**Number of  Transactions  Not Reported on  a Timely Basis**

**Failure to File  Required  Forms**

Rafael A.  Pinedo

1 (2)

1 (2)

1 (2)

Jeffrey  Fanning

1 (2)

1 (2)

1 (2)

Juan  Restrepo Gutierrez

Nil

Nil

Nil

 

(1)

The  executive officer, director or holder of 10% or more of our common stock  filed a late Form 3 – Initial Statement of Beneficial Ownership of  Securities.

(2)

The  executive officer, director or holder of 10% or more of our common stock  failed to file a Form 4 – Statement of Changes in Beneficial Ownership of  Securities.

**Codeof Ethics**

Weadopted a Code of Ethics applicable to all of our directors, officers,employees and consultants, which is a "code of ethics" as defined byapplicable rules of the SEC. Our Code of Ethics is attached as an exhibit toour annual report on Form 10-K filed on February 28, 2008. If we make anyamendments to our Code of Ethics other than technical, administrative, or othernon-substantive amendments, or grant any waivers, including implicit waivers,from a provision of our Code of Ethics to our chief executive officer, chieffinancial officer, or certain other finance executives, we will disclose thenature of the amendment or waiver, its effective date and to whom it applies ina Current Report on Form 8-K filed with the SEC.

**AuditCommittee and Audit Committee Financial Expert**

Ourboard of directors has determined that it does not have a member of its auditcommittee that qualifies as an "audit committee financial expert" asdefined in Item 407(d)(5)(ii) of Regulation S-K, and is "independent"as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the SecuritiesExchange Act of 1934, as amended.

Webelieve that the members of our board of directors are collectively capable ofanalyzing and evaluating our financial statements and understanding internalcontrols and procedures for financial reporting. We believe that retaining anindependent director who would qualify as an "audit committee financialexpert" would be overly costly and burdensome and is not warranted in ourcircumstances given the early stages of our development and the fact that wehave not generated any material revenues to date. In addition, we currently donot have nominating, compensation or audit committees or committees performingsimilar functions nor do we have a written nominating, compensation or auditcommittee charter. Our board of directors does not believe that it is necessaryto have such committees because it believes the functions of such committeescan be adequately performed by our board of directors.

**Item11.   Executive Compensation**

Theparticulars of the compensation paid to the following persons:

 

 

(a)

our  principal executive officer;

 

 

 

 

(b)

each  of our two most highly compensated executive officers who were serving as  executive officers at the end of the years ended November 30, 2009 and 2008;  and

 

 

 

 

(c)

up  to two additional individuals for whom disclosure would have been provided  under (b) but for the fact that the individual was not serving as our  executive officer at the end of the years ended November 30, 2009 and 2008,

31

 

who we will collectivelyrefer to as the named executive officers of our company, are set out in thefollowing summary compensation table, except that no disclosure is provided forany named executive officer, other than our principal executive officers, whosetotal compensation did not exceed $100,000 for the respective fiscal year:

 

    **SUMMARY COMPENSATION  TABLE**    

**Name  and Principal  Position**

**Year**

**Salary  ($)**

**Bonus  ($)**

**Stock  Awards  ($)**

**Option  Awards  ($)**

**Non-  Equity  Incentive  Plan  Compensa-  tion  ($)**

**Change in  Pension  Value and  Nonqualified  Deferred  Compensation  Earnings  ($)**

**All  Other  Compensa-  tion  ($)**

**Total  ($)**

Juan  Restrepo  Gutierrez  Chief Executive  Officer, Chief  Financial Officer,  Secretary,  Treasurer and  Former President  (1)

2009  2008

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Geoffrey  Gachallan  Former President,  Secretary and  Treasurer (2)

2009  2008

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Rafael A.  Pinedo  President and  Director (3)

2009  2008

Nil  N/A

Nil  N/A

10,000 (5)  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

10,000  N/A

Jeffrey  Fanning  Vice President of  Exploration and  Director (4)

2009  2008

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

Nil  N/A

 

 

(1)

Mr.  Restrepo Gutierrez was appointed as our President, Chief Executive Officer,  Chief Financial Officer, Secretary, Treasurer and a Director on January 9,  2008. On October 16, 2008, Mr. Restrepo Gutierrez resigned as a director and  President.

 

 

 

 

(2)

Mr.  Gachallan resigned as our President, Chief Executive Officer, Chief Financial  Officer, Secretary and Treasurer of on January 9, 2008.

 

 

 

 

(3)

Mr.  Pinedo was appointed as our President and a Director on October 16, 2008.

 

 

 

 

(4)

Mr.  Fanning was appointed as our Vice President of Exploration and a Director on  October 16, 2008.

 

 

 

 

(5)

On  November 6, 2008, we entered into a consulting agreement with Rafael Pinedo,  our President. The term of the agreement is for a period of one year and in  consideration for the services to be provided we issued 1,000,000 restricted  shares of our common stock to Mr. Pinedo.

32

 

Other than as set outbelow, there are no arrangements or plans in which we provide pension,retirement or similar benefits for directors or executive officers. Ourdirectors and executive officers may receive share options at the discretion ofour board of directors in the future. We do not have any material bonus orprofit sharing plans pursuant to which cash or non-cash compensation is or maybe paid to our directors or executive officers, except that share options maybe granted at the discretion of our board of directors.

OnNovember 6, 2008, we entered into a consulting agreement with Rafael Pinedo,our President. The term of the agreement is for a period of one year and inconsideration for the services to be provided we issued 1,000,000 restrictedshares of our common stock to Mr. Pinedo.

**StockOption Grants to our Named Executive Officers**

Asat November 30, 2009, our company did not have a stock option plan and ourcompany did not grant any stock options to any named executive officers duringthe years ended November 30, 2009 or 2008.

OnFebruary 9, 2009, our directors approved the adoption of the 2009 Stock OptionPlan which permits our company to issue up to 6,450,000 shares of our commonstock to directors, officers, employees and consultants of our company.

**OutstandingEquity Awards at Fiscal Year End**

Therewere no outstanding equity awards granted to any named executive officer as ofNovember 30, 2009 or 2008.

**AggregatedOption Exercises in Last Fiscal Year and Fiscal Year-End Values**

Therewere no options outstanding, and hence no options exercised, by any namedexecutive officers during the years ended November 30, 2009 or 2008.

**Compensationof Directors**

Wedo not have any agreements for compensating our directors for their services intheir capacity as directors, although such directors are expected in the futureto receive stock options to purchase shares of our common stock as awarded byour board of directors.

**Pension,Retirement or Similar Benefit Plans**

Thereare no arrangements or plans in which we provide pension, retirement or similarbenefits for directors or executive officers. We have no material bonus orprofit sharing plans pursuant to which cash or non-cash compensation is or maybe paid to our directors or executive officers, except that stock options maybe granted at the discretion of the board of directors or a committee thereof.

**Indebtednessof Directors, Senior Officers, Executive Officers and Other Management**

Noneof our directors or executive officers or any associate or affiliate of ourcompany during the last two fiscal years, is or has been indebted to ourcompany by way of guarantee, support agreement, letter of credit or othersimilar agreement or understanding currently outstanding.

**Item12.   Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters**

Thefollowing table sets forth, as of February 23, 2010, certain information withrespect to the beneficial ownership of our common shares by each shareholderknown by us to be the beneficial owner of more than 5% of our common shares, aswell as by each of our current directors and executive officers as a group.Each person has sole voting and

33

 

investment power withrespect to the shares of common stock, except as otherwise indicated.Beneficial ownership consists of a direct interest in the shares of commonstock, except as otherwise indicated.

 

**Name  and Address of Beneficial Owner**

**Amount and Nature of  Beneficial Ownership**

**Percentage  of Class****(1)**

Rafael A.  Pinedo  President and Director  4400 Westgrove Dr Suite 106  Dallas Texas 75001

6,000,000 (2)

18.60%

Jeffrey  Fanning  Vice President of Exploration and Director  4400 Westgrove Dr Suite 106  Dallas Texas 75001

1,200,000 (3)(4)

3.72%

Juan  Restrepo Gutierrez  Chief Executive Officer, Chief Financial  Officer, Secretary and Treasurer  Calle 10 No 25-103, Apt 10  Medellin, Colombia

4,000,000

12.40%

*Directors  and Executive Officers as a Group**(1)*

*11,200,000*

*34.72%*

 

 

 

(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 February 23, 2009. As of February 23, 2010, there were  32,250,000 shares of our company’s common stock issued and outstanding.

 

 

 

 

(2)

Includes  5,000,000 shares of common stock issuable to Rafael A. Pinedo upon exchange  of 25,000,000 shares of our Series A Preferred Stock.

 

 

 

 

(3)

BNP  Resources LLP is controlled by Jeffrey Fanning, a director of our company.

 

 

 

 

(4)

Includes  1,200,000 shares of common stock issuable to BNP Resources LLP upon exchange  of 6,000,000 shares of our Series A Preferred Stock.

34

 

**Item 13.  Certain Relationships and Related Transactions, and Director Independence**

Exceptas disclosed herein, no director, executive officer, shareholder holding atleast 5% of shares of our common stock, or any family member thereof, had anymaterial interest, direct or indirect, in any transaction, or proposedtransaction since the year ended November 30, 2009, in which the amount involvedin the transaction exceeded or exceeds the lesser of $120,000 or one percent ofthe average of our total assets at the year end for the last three completedfiscal years.

Forthe year ended November 30, 2009, the Company recognized $5,500 (2007 - $6,000)for donated services provided by the former President of the Company andincurred $1,794 (2007 - $3,303) in rent to a company controlled by the formerPresident of the Company.

Forthe year ended November 30, 2008, the Company incurred $750 (2007 - $Nil) indonated rent to a company controlled by the President of the Company, and isindebted to the President for $4,150 (2007 - $Nil) for advances and expensespaid for on behalf of the Company, which is non-interest bearing, unsecured anddue on demand.

Asat November 30, 2008, the Company is indebted to the Chief Executive Officer ofthe Company for $2,530 (2007 - $Nil) for expenses paid for on behalf of theCompany, which is non-interest bearing, unsecured and due on demand.

OnNovember 6, 2008, the Company entered into a consulting agreement with thePresident of the Company for services and was issued 1,000,000 shares ofrestricted common stock with a fair value of $120,000. (Refer to Note 6).

OnMay 27, 2008, the Company entered into a share cancellation and return totreasury agreement with the former President of the Company wherein he agreedto the return for cancellation 121,000,000 shares of common stock held by him.The former President was not offered any compensation for such cancellation.

*Director  Independence*

Wecurrently act with two directors, consisting of Rafael A. Pinedo and JuanRestrepo. We have determined that none of our directors is an “independentdirector” as defined in NASDAQ Marketplace Rule 4200(a)(15).

Wedo not have a standing audit, compensation or nominating committee, but ourentire board of directors acts in such capacities. We believe that our membersof our board of directors are capable of analyzing and evaluating our financialstatements and understanding internal controls and procedures for financialreporting. The board of directors of our company does not believe that it isnecessary to have an audit committee because we believe that the functions ofan audit committee can be adequately performed by the board of directors. Inaddition, we believe that retaining an independent director who would qualifyas an “audit committee financial expert” would be overly costly and burdensomeand is not warranted in our circumstances given the early stages of ourdevelopment.

**Item14.   Principal Accounting Fees and Services**

Theaggregate fees billed for the most recently completed fiscal year endedNovember 30, 2009 and for fiscal year ended November 30, 2008 for professionalservices rendered by the principal accountant for the audit of our annualfinancial statements and review of the financial statements included in ourannual report on Form 10-K and services that are normally provided by theaccountant in connection with statutory and regulatory filings or engagementsfor these fiscal periods were as follows:

35

 

 

 

**Year Ended**

 

  **November 30, 2009**

  **November 30, 2008**

Audit Fees

$14,118

$12,600

Audit  Related Fees

Nil

Nil

Tax Fees

Nil

Nil

All Other  Fees

Nil

Nil

Total

Nil

Nil

Ourboard of directors pre-approves all services provided by our independentauditors. All of the above services and fees were reviewed and approved by theboard of directors either before or after the respective services wererendered.

Ourboard of directors has considered the nature and amount of fees billed by ourindependent auditors and believes that the provision of services for activitiesunrelated to the audit is compatible with maintaining our independent auditors’independence.

36

 

**PART IV**

**Item15.   Exhibits, Financial Statement Schedules**

 

(a)

Financial  Statements

 

 

 

 

(1)

Financial  statements for our company are listed in the index under Item 8 of this  document

 

 

 

 

(2)

All  financial statement schedules are omitted because they are not applicable,  not material or the required information is shown in the financial statements  or notes thereto.

 

 

 

(b)

Exhibits

 

**Exhibit**

**Description**

**Number**

 

 

 

 

 

**(31)**

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

 

 

31.1*

Section  302 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo

 

 

 

 

 

 

**(32)**

**Section 1350 Certifications**

 

 

32.1*

Section  906 Certification under Sarbanes-Oxley Act of 2002 of Rafael Pinedo

 

 

 

 

 

 

 

 

*filed herewith.

38

 

**SIGNATURES**

Inaccordance with Section 13 or 15(d) of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

**CHANCERYRESOURCES INC.**

By:*/s/ Rafael Pinedo*Rafael Pinedo, President and Director(Principal Executive Officer)February 28, 2011

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities and on the dates indicated.

 

 

By: */s/  Rafael Pinedo*

 
Rafael  Pinedo, President and Director

 
(Principal  Executive Officer)

 
February  28, 2011

 
 

 
 

 
 

 

 

 

 

 
 

 
 

 
 

 
39

 

 

 

EXHIBIT 31.1

**CERTIFICATION PURSUANT TO** **18 U.S.C. ss 1350, AS ADOPTED PURSUANT TOSECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I,Rafael Pinedo, certify that:

 

1.

I  have reviewed this Annual Report on Form 10-K of Chancery Resources, Inc.;

 

 

 

2.

Based  on my knowledge, this report does not contain any untrue statement of a  material fact or omit to state a material fact necessary to make the  statements made, in light of the circumstances under which such statements  were made, not misleading with respect to the period covered by this report;

 

 

 

3.

Based  on my knowledge, the financial statements, and other financial information  included in this report, fairly present in all material respects the  financial condition, results of operations and cash flows of the registrant  as of, and for, the periods presented in this report;

 

 

 

4.

The  registrant's other certifying officer(s) and I are responsible for  establishing and maintaining disclosure controls and procedures (as defined  in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial  reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the  registrant and have:

 

 

 

 

a.

Designed  such disclosure controls and procedures, or caused such disclosure controls  and procedures to be designed under our supervision, to ensure that material  information relating to the registrant, including its consolidated  subsidiaries, is made known to us by others within those entities,  particularly during the period in which this report is being prepared;

 

 

 

 

b.

Designed  such internal control over financial reporting, or caused such internal  control over financial reporting to be designed under our supervision, to  provide reasonable assurance regarding the reliability of financial reporting  and the preparation of financial statements for external purposes in  accordance with generally accepted accounting principles;

 

 

 

 

c.

Evaluated  the effectiveness of the registrant's disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the  disclosure controls and procedures, as of the end of the period covered by  this report based on such evaluation; and

 

 

 

 

d.

Disclosed  in this report any change in the registrant's internal control over financial  reporting that occurred during the registrant's most recent fiscal quarter  (the registrant's fourth fiscal quarter in the case of an annual report) that  has materially affected, or is reasonably likely to materially affect, the  registrant's internal control over financial reporting; and

 

 

 

5.

The  registrant's other certifying officer(s) and I have disclosed, based on our  most recent evaluation of internal control over financial reporting, to the  registrant's auditors and the audit committee of the registrant's board of  directors (or persons performing the equivalent functions):

 

 

 

 

a.

All  significant deficiencies and material weaknesses in the design or operation  of internal control over financial reporting which are reasonably likely to  adversely affect the registrant's ability to record, process, summarize and  report financial information; and

 

 

 

 

b.

Any  fraud, whether or not material, that involves management or other employees  who have a significant role in the registrant's internal control over  financial reporting.

Date:February 28, 2011

*/s/Rafael Pinedo*Rafael PinedoPresident and Director(Principal Executive Officer )

 

 

 

 

 

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I,Rafael Pinedo, hereby certify, pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

the  Annual Report on Form 10-K of Chancery Resources, Inc. for the year ended  November 30, 2010 (the "Report") fully complies with the  requirements of Section 13(a) or 15(d) of the Securities Exchange Act of  1934; and

 

 

(2)

the  information contained in the Report fairly presents, in all material  respects, the financial condition and results of operations of Chancery Resources,  Inc.

Dated:February 28, 2011

 

 

 

*/s/  Rafael Pinedo*

 

Rafael  Pinedo

 

President  and Director

 

(Principal  Executive Officer)

 

Chancery  Resources, Inc.

 

Asigned original of this written statement required by Section 906, or otherdocument authenticating, acknowledging, or otherwise adopting the signaturethat appears in typed form within the electronic version of this writtenstatement required by Section 906, has been provided to Chancery Resources,Inc. and will be retained by Chancery Resources, Inc. and furnished to theSecurities and Exchange Commission or its staff upon request.

 

 

 

EXHIBIT 32.2

  |