Results of Operations

We have not generated any revenue since our inception. For the years ended December 31, 2010 and December 31, 2011, we had the following expenses:

                                                                          Accumulated
                                                                              from
                                                       For the year       November 26,
                              For the year ended          ended             2007 to
                                 December 31,          December 31,       December 31,
                                     2010                  2011               2011

General and administrative   $             62,241     $      486,741     $      621,246
Exploration cost                                -            530,925            553,198
Management fees                                 -            543,974            556,454
                             $             62,241     $    1,561,640     $    1,730,898

During the year ended December 31, 2010, we incurred $62,241 in general and administrative expenses. Our general and administrative fees were primarily for transfer agent and filing fees and legal, accounting and auditing fees.

For the year ended December 31, 2011, we incurred $486,741 in general and administrative expenses, $530,925 in exploration costs and $543,974 in management fees. Our general and administrative fees were primarily for legal costs and accounting and auditing fees. Management fees include cash compensation and the value of the equity compensation paid to Mr. Ferris. Exploration costs include direct costs associated with La Candelaria of $201,925 and the value of stock issued to Gonzalez of $303,000.

Liquidity and Capital Resources

The following is a summary of our balance sheet as of December 31, 2010 and December 31, 2011:

                        December 31,       December 31,
                            2010               2011

Cash                   $        9,977     $      215,737
Current Liabilities            67,636             74,375
Working Capital               233,533            143,600

Stockholders' Equity   $      233,533     $      214,925

As of December 31, 2010, we had a working capital balance as a result of notes receivable offset by accounts payable and accrued liabilities. As of December 31, 2011, our cash position has increased because of investments made by North American Gold Corp. (North American") under an Investment Agreement, which is described below. The Company reasonably anticipates earning revenues from the Tailings project by the second or third quarter of 2012.

On August 29, 2011, the Company and North American executed an Investment Agreement (the Investment Agreement"). Under the Investment Agreement, North American agreed to invest up to $15,000,000 to purchase the Company's Common Stock in increments of $100,000 or an integral multiple thereof, at the Company's option at any time through August 31, 2013 (the Open Period"). During the Open Period, the Company has the option to deliver a put notice (a Put Notice") to North American that states the number of shares of Common Stock the Company proposes to sell to North American (the Put Shares"), and the price per share for those Put Shares (the Share Price"). The Share Price is equal to 90% of the volume weighted average closing price of the Common Stock for the 20 days immediately preceding the date of the Put Notice. The closing for the sale of the Put Shares pursuant to a Put Notice shall take place no later than 10 Trading Days after the date of such Put Notice. A Trading Day" is defined as a day in which the NASDAQ stock market or OTC Bulletin Board is open for business. North American has the right to refuse to close any requested sale of Put Shares because of negative market conditions affecting the Common Stock.

The Investment Agreement was amended to allow the Company to use the net proceeds from the sale of the Put Shares to fund the exploration and development of gold and silver mining concessions in the La Candelaria project and other projects approved in advance by the Company and North American. The Company and North American have agreed that the proceeds may be used to fund expenses incurred in connection with the Mine Tailings Project.

The sales of Put Shares will not be registered under the Securities Act of 1933, but will be issued under an exemption from the registration requirements of the Securities Act of 1933. Any Put Shares issued and sold to North American will be restricted securities" and will be subject to applicable restrictions on resale.

As of the date of this filing, North American has purchased 1,966,148 Put Shares from the Company, resulting in gross proceeds to the Company (before any wire transfer or other fees) of $1,150,000. North American owns a total of 2,291,148 shares of Common Stock, or 2.6% of the issued and outstanding shares.

There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report that they have substantial doubt we will be able to continue as a going concern.

Accounting and Audit Plan

We intend to continue to have our outside consultant assist us in the preparation of our quarterly and annual financial statements and have these financial statements reviewed or audited by our independent auditor. Our outside consultant is expected to charge us approximately $5,000 to prepare our quarterly financial statements and approximately $10,000 to prepare our annual financial statements. In the next twelve months, we anticipate spending approximately $60,000 to pay for our accounting and audit requirements.

Off-balance sheet arrangements

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

Critical Accounting Policies

Our financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our historical financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and which require the application of significant judgment by management.