Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may," "would," "could," "should," "expects," "projects," "anticipates," "believes," "estimates," "plans," "intends," "targets" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Results of Operations

For The Three Months Ended March 31, 2009 Compared to The Three Months Ended March 31, 2008.

During the quarterly periods ended March 31, 2009, and March 31, 2008, we received no revenues.

Operating expenses decreased from $173,912 in the quarterly period ended March 31, 2008, to $169,761 in the quarterly period ended March 31, 2009.
Exploration, development and related costs decreased to $45,512 in the quarter ended March 31, 2009, from $58,196 in the year-ago quarter. We incurred a bad debt expense of $1,230 in the three months ended March 31, 2008, as compared to no bad debt expense in the three months ended March 31, 2009. Officer salaries and bonus remained $37,500 in both of these three month periods. We realized an operating loss of $169,761 during the quarter ended March 31, 2009, as compared to operating loss of $173,912 in the comparable period in 2008.

Interest income decreased to $47 in the three months ended March 31, 2009, from $2,502 in the three months ended March 31, 2008. Interest expense totaled $2,055 and $8,490 in 2009 and 2008, respectively. We realized a gain on securities in the three months ended March 31, 2009 of $1,058, as compared to no gain in the 2008 period. Unrealized gain on securities were $4,027 and $15,251 for the three months ended March 31, 2009 and 2008. We received $3,709 in other investment income in 2009, versus $20,977 in 2008.

Net loss totaled ($162,975), or ($0.01) per share, and ($75,182), or ($0.01) per share in the three months ended March 31, 2009 and 2008.

Liquidity

Current assets at March 31, 2009, totaled $122,591. As of that date, we had $9,793 in cash, as compared to $182,984 at December 31, 2008.

During the three months ended March 31, 2009, our operating activities used net cash of $110,360. In 2008, by contrast, operating activities provided net cash of $9,788. There was $62,831 cash used by investing activities and no cash provided by financing activities in the three months ended March 31, 2009, with no cash provided by investing activities or financing activities during the three months ended March 31, 2008.

At March 31, 2009, the Company had working capital of ($98,976), as compared to working capital of $120,761 at December 31, 2008.

---