MARCH 31, 2011

DECEMBER 31, 2010

(UNAUDITED)

(AUDITED)

ASSETS

Cash

$ 81,567

$ 61,530

Inventories

352,911

352,911

Total current assets

434,478

414,441

Mill equipment, net of accumulated depreciation of 474,397 and 392,299, respectively (see Note 4)

1,273,322

1,245,384

Mining property

1,848,042

1,772,390

Prepaid expenses (see Notes 5 and 8)

67,491

715,025

Other assets

6,000

6,000

Total Assets

$ 3,629,333

$ 4,153,240

LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable

$ 115,350

$ 310,297

Payroll liabilities

24,289

30,177

Accrued interest

31,269

19,221

Due to related party

6,000

6,000

Notes payable - current portion (see Note 3)

279,500

237,500

Director's Loan

-

323

Accrued compensation

285,847

727,633

Total current liabilities

742,255

1,331,151

Notes payable (see Note 3)

2,847,881

2,179,481

Total liabilities

3,590,136

3,510,632

STOCKHOLDERS' DEFICIT

Common stock, class A, par value $0.0001, 500,000,000 shares authorized, 304,465,315 and 286,587,004, issued and outstanding, respectively

30,446

28,658

Common stock, class B, par value $0.0001, 12,500,000 shares authorized, 3,884,321 and 3,884,321 issued and outstanding, respectively

389

389

Additional paid in capital

20,914,052

18,164,240

Accumulated deficit

(20,905,690)

(17,550,679)

39,197

642,608

Total liabilities and stockholders' deficit

$ 3,629,333

$ 4,153,240

2011

2010

Cumulative from Inception

Revenue

$ -

$ -

$ 8,234

Cost of sales

-

-

5,274

Gross profit

-

-

2,960

Expenses

Consulting fees

$ 1,915,533

$ 1,220,121

$ 11,186,036

Exploration and development

296,244

-

1,393,716

Mill operating expenses

383,913

-

1,220,422

Property lease fees

-

-

250,000

Compensation expense

315,452

96,330

3,112,883

Depreciation expense

82,097

50,506

474,397

General and administrative

316,042

183,833

2,823,213

3,309,281

1,550,790

20,460,667

Loss from operations

(3,309,281)

(1,550,790)

(20,457,707)

Interest expense

(45,730)

(40,723)

(447,983)

Net Loss

$ (3,355,011)

$ (1,591,513)

$ (20,905,690)

Net loss per common share - basic and diluted

$ (0.01)

$ (0.01)

(0.14)

Weighted average number of common shares outstanding – basic and diluted

300,517,648

186,478,019

149,508,330