0001420421
2012-01-01
2012-03-31
0001420421
2012-05-17
0001420421
2012-03-31
0001420421
2011-12-31
0001420421
2011-01-01
2011-03-31
0001420421
2007-02-22
2012-03-31
0001420421
2010-12-31
0001420421
2011-03-31
0001420421
us-gaap:CommonStockMember
2007-02-22
2007-12-31
0001420421
us-gaap:CommonStockMember
2008-01-01
2008-12-31
0001420421
us-gaap:CommonStockMember
2009-01-01
2009-12-31
0001420421
us-gaap:CommonStockMember
2010-01-01
2010-12-31
0001420421
us-gaap:CommonStockMember
2011-01-01
2011-12-31
0001420421
us-gaap:CommonStockMember
2012-01-01
2012-03-31
0001420421
us-gaap:CommonStockMember
2007-02-21
0001420421
us-gaap:CommonStockMember
2007-12-31
0001420421
us-gaap:CommonStockMember
2008-12-31
0001420421
us-gaap:CommonStockMember
2009-12-31
0001420421
us-gaap:CommonStockMember
2010-12-31
0001420421
us-gaap:CommonStockMember
2011-12-31
0001420421
us-gaap:CommonStockMember
2012-03-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2007-02-22
2007-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2008-01-01
2008-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2009-01-01
2009-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2010-01-01
2010-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2011-01-01
2011-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2012-01-01
2012-03-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2007-02-21
0001420421
us-gaap:AdditionalPaidInCapitalMember
2007-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2008-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2009-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2010-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2011-12-31
0001420421
us-gaap:AdditionalPaidInCapitalMember
2012-03-31
0001420421
MSTG:CommonSharesIssuableMember
2011-01-01
2011-12-31
0001420421
MSTG:CommonSharesIssuableMember
2012-01-01
2012-03-31
0001420421
MSTG:CommonSharesIssuableMember
2011-12-31
0001420421
MSTG:CommonSharesIssuableMember
2012-03-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2007-02-22
2007-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2008-01-01
2008-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2009-01-01
2009-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2010-01-01
2010-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2011-01-01
2011-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2012-01-01
2012-03-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2007-02-21
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2007-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2008-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2009-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2010-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2011-12-31
0001420421
MSTG:AccumulatedDeficitDuringtheExplorationStageMember
2012-03-31
0001420421
2007-02-22
2007-12-31
0001420421
2008-01-01
2008-12-31
0001420421
2009-01-01
2009-12-31
0001420421
2010-01-01
2010-12-31
0001420421
2011-01-01
2011-12-31
0001420421
2007-02-21
0001420421
2007-12-31
0001420421
2008-12-31
0001420421
2009-12-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
MUSTANG ALLIANCES, INC.
0001420421
10-Q
2012-03-31
false
--12-31
No
No
Yes
Smaller Reporting Company
Q1
2012
10066
100664133
34741
891
34741
891
140741
891
106000
30000
156335
119988
25000
25000
150
211485
144988
211485
144988
10063
9992
39000
74000
1363070
1093452
1243263
865363
140741
891
42326
70522
224887
7053
46709
86743
205084
728369
14844
20571
283222
269307
137802
1323221
-269307
-137802
-1323221
433
19723
311
2466
20126
-311
-2899
-39849
37426292
115313778
-0.01
-0.00
-269618
-140701
-1363070
-4498
-91106
-29939
-69436
-898473
-269618
-4498
-91106
-29939
-69436
-898473
2500
39000
113000
96800
2500
7970
21253
-186300
-50384
-927045
36348
89884
180249
30150
75000
216021
35
75000
190000
15000
845800
220150
84000
961786
33850
33616
34741
34741
891
6767
40383
25000
7500
97785
97785
2500
2500
5000
12000
12000
266000
0
266000
74000
0
74000
.0001
.0001
5000000
5000000
.0001
.0001
500000000
500000000
100622516
99920000
100664133
100217516
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Mustang Alliances,
Inc. (“the Company”) was incorporated on February 22, 2007 under the laws of the State of Nevada.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company has not
yet generated revenues from planned principal operations and is considered a development stage company.  The Company
originally intended to market and sell anti-lock braking systems produced in China to the auto parts and auto manufacturing market
in the United States.  The Company has since abandoned its business plan and was seeking an operating company with which
to merge or acquire.  Currently, we are no longer a blank check company as we have a specific business plan.  We
are an exploration-stage mining company and as a result of the execution and delivery of the lease agreements, we are now in the
business of exploring mineral properties.  There is no assurance, however, that the Company will achieve its objectives
or goals.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States
of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly,
they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">It is management's
opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary
for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results
to be expected for the year.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Results of operations
for interim periods are not necessarily indicative of the results of operations for a full year..</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Going Concern</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company is the
exploration and had no revenues and has incurred a net loss of approximately $269,618 for the three months ended March 31, 2012
and a cumulative net loss of approximately $1,363,070 for the period February 22, 2007 (inception) to March 31, 2012.   These
factors raise substantial doubt about the Company’s ability to continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">There can be no assurance
that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available
from external sources such as debt or equity financings or other potential sources.  The lack of additional capital resulting
from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially
curtail or cease operations and would, therefore, have a material adverse effect on its business.  Furthermore, there
can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have
a significant dilutive effect on the Company’s existing stockholders.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company is attempting
to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof.   There
can be no assurances that the Company will be able to raise the additional funds it requires.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The accompanying unaudited
condensed financial statements do not include any adjustments related to the recoverability or classification of asset-carrying
amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Use of Estimates</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In preparing financial
statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.
Significant estimates include the valuation of deferred tax assets and valuation of equity instrument.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Cash and Cash Equivalents</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in; text-align: justify">The Company considers all highly liquid
temporary cash investments with an original maturity of three months or less to be cash equivalents. At March 31, 2012 and December
31, 2011, the Company had no cash equivalents.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"><u>Property,
Plant and Equipment</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in; background-color: white">Property,
plant and equipment are stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs, which are not
considered improvements and do not extend the useful life of the asset, are expensed as incurred; additions, renewals and betterments
are capitalized. When assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from
the respective accounts, and any gain or loss is included in the statement of operations in other income and expenses.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; background-color: white"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in; background-color: white">Depreciation
is provided to recognize the cost of the asset in the results of operations. The Company calculates depreciation using the straight-line
method with estimated useful life as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 70%; padding-bottom: 1pt; text-align: justify">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Item</b></p></td>
<td style="width: 30%; font: bold 10pt/115% Times New Roman, Times, Serif; padding-left: 10pt; text-align: justify">Useful Life</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font: 10pt/115% Times New Roman, Times, Serif; text-align: justify">Mining equipments</td>
<td style="font: 10pt/115% Times New Roman, Times, Serif; padding-left: 10pt; text-align: justify">10 years</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in; text-align: justify">The mining equipment has not
been placed into service as of March 31, 2012</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Loss Per Share</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Basic and diluted
net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards
Codification Topic 260, “Earnings Per Share.” As of March 31, 2012 and March 31, 2011, the Company has 5,195,000 and
30,000 warrants and options that are anti-dilutive and not included in diluted loss per share respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income Taxes</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company accounts
for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. The Company’s 2007 to 2011 tax returns are subject to examinate by Internal
Revenue Services.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Business Segments</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in; text-align: justify">The Company operates in one segment and
therefore segment information is not presented.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company will recognize
revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”. In all cases, revenue is recognized
only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability
of the resulting receivable is reasonably assured.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value of Financial Instruments</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in; text-align: justify">The carrying amounts reported in the balance
sheet for accounts payable and notes payable – related party approximate fair value based on the short-term maturity of these
instruments.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Mining Properties (Exploration Costs)</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Costs of acquiring
mining properties and any exploration costs are capitalized as incurred,in accordance with FASB Accounting Standards Codification
No. 930, Extractive Activities – Mining, when proven and probable reserves exist and the property is a commercially mineable
property. Mine exploration costs incurred either to develop new gold, silver, lead and copper deposits, expand the capacity of
operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain
current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged
to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mining costs and related
property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent
impairment needs to be recorded. The periodic evaluation of the carrying value of capitalized costs and any related property, plant
and equipment costs are based upon expected future cash flows and/or estimated salvage value.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company capitalizes
costs for mining properties by individual property and defers such costs for later amortization only if the prospects for economic
productions are reasonably certain. Capitalized costs are expensed in the period when the determination has been made that economic
production does not appear reasonably certain.</p>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-Based Compensation</u></p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In December 2004, the
FASB issued FASB Accounting Standards Codification No. 718, <i>Compensation – Stock Compensation</i>.  Under FASB
Accounting Standards Codification No. 718, companies are required to measure the compensation costs of share-based compensation
arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which
employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans,
performance-based awards, share appreciation rights and employee share purchase plans.  As such, compensation cost is
measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective
vesting periods of the option grant.  The Company applies this statement prospectively. </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-indent: 1in; text-align: justify">Equity instruments (“instruments”)
issued to other than employees are recorded on the basis of the fair value of the instruments, as required by FASB Accounting Standards
Codification No. 718.  FASB Accounting Standards Codification No. 505, <i>Equity Based Payments to Non-Employees </i>defines
the measurement date and recognition period for such instruments.  In general, the measurement date is when either a (a) performance
commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are
vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each
particular grant as defined in the FASB Accounting Standards Codification<u>Recent </u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Fair Value Measurement</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in; text-align: justify">The authoritative guidance for fair value
measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit
price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable,
(iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs,
of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the
following:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 1 Quoted prices in active markets for identical
assets or liabilities.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 2 Inputs other than Level 1 that are observable,
either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active,
or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">• Level 3 Unobservable inputs that are supported by
little or no market activity and that are significant to the value of the assets or liabilities.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in; text-align: justify">The Company's financial instruments include
cash and equivalents, accounts payable and accrued expenses and notes and loans payable. All these items were determined to be
Level 1 fair value measurements. The carrying amounts of cash and equivalents, accounts payable and accrued expenses and notes
and loans payable approximated fair value because of the short maturity of these instruments. The recorded value of long-term debt
approximates its fair value as the terms and rates approximate market rates.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 80pt"> On December 13, 2010 the Company
entered into a lease agreement to explore certain mining concessions in Honduras.  The Company issued 20,000,000 shares
of common stock, with a fair valued of $2,500 for this lease that was charged to mining exploration costs.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 80pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 80pt">On February
22, 2011 the Company entered into a second lease agreement to explore certain mining concessions in Honduras.  The Company
issued 20,000,000 shares of common stock, with a fair valued of $2,500 for this lease that was charged to mining exploration costs.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Property Plant and Equipment</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On February 3, 2012,
the Company entered into a Purchase and Sale Agreement with Clavo Rico, Ltd., a Turks and a fair Caicos company (“Seller”)
for the purchase of certain mining equipment from the Seller's wholly-owned subsidiary, Compania Minera Cerros del Sur, S.A., a
Honduran company (“Cerros”). The Company is a party to a lease agreement with Cerros for certain exclusive mining and
development rights and a ground lease in Honduras.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">As
consideration for the equipment, the Company exchanged 200,000 shares of common stock to the Seller with a fair value of
$106,000 based on the value of equipment. The Company also agreed to be responsible for, among other things, the cost of
freight, insurance, packing and transportation, and the risk of loss in shipping of the purchased equipment. The equipment
has not been placed in service as of March 31, 2012.</p>
<p style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"> </p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 25, 2011,
repayment for $25,000 was made for the $50,000 note due to Landolt, a company owned by a director of the Company. At which time
the note was assigned to MeM Mining, Inc. MeM is controlled by, Mendel Mochkin, a director of the company. As of March 31, 2012
and December 31, 2011, the Principle balance due was $25,000, is unsecured and is due January 2013 with accrued interest at 5%.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 28,
2012 the Company received $30,000 from First Line Capital, in exchange for an unsecured note bearing interest at 8%. The
principal and interest is payable in full on March 28, 2013.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> On March 28,
2012 the Company received $8,000 from First Line Capital. It represents overfunded amount and was returned to First Line Capital
on April 9, 2012. The amount was recorded as accounts payable as of March 31, 2012.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 80pt">The Company has 5,000,000 preferred shares authorized that
the Company’s Board of Directors may, without further action by the Company’s stockholders, from time to time, direct
the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine
the rights, preferences and limitations of each series. The holders of preferred stock may be entitled to receive a preference
payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of
the common stock.  Furthermore, the board of directors could issue preferred stock with voting and other rights that
could adversely affect the voting power of the holders of the common stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><u>Lease Commitment</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On December 13, 2010,
the Company entered into a Lease Agreement (the "Lease Agreement") with Compania Minera Cerros Del Sur, S.A., a corporation
organized under the laws of Honduras (“Cerros”) and Mayan Gold, Inc., a Nevada corporation (“Mayan Gold”)
pursuant to which Cerros, the registered owner of the Corpus I, II, III and IV mining concessions and the Potosi concession, leased
us the exclusive right to prospect, explore and mine for minerals in Corpus IV. The Lease Agreement continues until the Honduras
government grants Cerros the right to assign the Corpus IV mining concession to the Company, at which time Cerros will transfer
title to the mining concession to the Company.  In consideration for such rights, we issued 20,000,000 shares of common
stock to Mayan Gold, the beneficial owner of a 100% interest in Corpus IV. The shares issued by the Company to Mayan Gold represent
approximately 18.66% of the then issued and outstanding shares of the Company. As further consideration for the right granted,
we agreed to pay Cerros an annual sum of $1,500 no later than April 1st of each year, beginning April 1, 2011.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">Cerros also granted
the Company an option to acquire the exclusive rights to properties known as Corpus I, II, and III mining concessions and the Potosi
concession. If we desire to exercise such option, the Company must send written notice to Cerros and Mayan Gold on or before December
31, 2010. The consideration for the exercise of the option is an additional 20,000,000 shares of the Company’s common stock
to be issued to Mayan Gold no later than 30 days after the date we receive all the requested documentation from Cerros in connection
with the exercise of the option.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On February 22, 2011,
Company entered into a Lease Agreement (the "Lease Agreement") with Cerros and Mayan Gold pursuant to which the Company
exercised its option to acquire the exclusive rights to properties known as Corpus I, II, and III mining concessions and the Potosi
concession and the Potosi ground lease (collectively, referred to herein as the “Property”), with the subsequent right
to participate in the development of minerals from the remaining mining concessions.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Lease Agreement
continues until the Honduras government grants Cerros the right to assign the Property to the Company, at which time Cerros will
transfer title to the mining concession to us. In consideration for such right, we issued 20,000,000 shares of common stock to
Mayan Gold, the beneficial owner of a 100% interest in Property. The shares issued by the Company to Mayan Gold represent an additional
interest of 15.72% of the then issued and outstanding shares of the Company.  As further consideration for the rights
granted, we agreed to pay Cerros an annual sum of $3,200 no later than April 1st of each year with the first payment due on April
1, 2011.<b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left; text-indent: 20pt"><u>Employment Agreements</u></p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 22, 2011, the
Company entered into a two year employment agreement with Mendel Mochkin, pursuant to which he will be employed on a part time
basis.  Mr. Mochkin shall work at least one hundred (100) hours per month on behalf of the Company as the Company's Vice
President.  Pursuant to the agreement, his compensation will be $120,000 annually, which shall accrue from the date of
the agreement and to be paid at such time when the Company has adequate capital.   On July 25, 2011, the Company
entered into a Consultancy Agreement, which replaced in its entirety the Employment Agreement between the Company and Mendel Mochkin
dated March 22, 2011.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 22, 2011, the
Company entered into a two year employment agreement with Leonard Sternheim, pursuant to which he will be employed on a part time
basis.  Mr. Sternheim shall work at least one hundred fifty (150) hours per month on behalf of the Company as its Chief
Executive Officer.  Pursuant to the agreement, his compensation will be $120,000 annually, which shall accrue from the
date of the agreement and to be paid at such time when the Company has adequate capital. In July, 2011 this agreement was nullified.
Mr. Sternheim is currently acting in a consultancy capacity as the Company’s Chief Executive Officer.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Consulting Agreements</u></p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">On July 21, 2011, the Company entered
into a consulting agreement with Lawrence H. Wolfe, pursuant to which he will work as Chief Financial Officer. Pursuant to the
agreement, 100,000 shares were issued as a signing bonus for the execution and delivery of the agreement with a fair value of $24,000(See
note 5). His compensation will be $150,000 for the first 12 months, payable 60% in cash and 40% in stock. The cash portion shall
be paid monthly, and the shares shall be valued based on the stock price of the last day of the preceding month and will be issued
on January 1st and June 1st. On each anniversary, an option to purchase 120,000 shares of common stock at an exercise price of
0.50 per share is granted, half of Option shall vest on January 1 and half on June 1 following such grant date. As a one-time bonus,
the options to purchase 250,000 shares at $0.50 per share upon production of 12,000 and 24,000 ounces of gold, respectively, and
an option to purchase 500,000 shares at $0.50 per share upon production of 48,000 ounces of gold. The consulting agreement has
been amended to include a $.25 (cents) per share price floor on the valuation of the common stock. For the three months ended March
31, 2012 and year ended December 31, 2011, Mr. Wolfe has earned an aggregate of 16,007 shares and 122,120 shares pursuant to his
consulting agreement with a fair value of $15,000 and $30,000, respectively.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">On July 25, 2011, the Company
entered into a Consultancy Agreement with Mendel Mochkin, which replaced in its entirety the Employment Agreement dated March
22, 2011(See note 7). Pursuant to the agreement, his compensation will be $120,000 for the first 12 months, payable 60% in cash
and 40% in stock. The cash portion shall be paid monthly, and the shares shall be valued based on the stock price of the last
day of the preceding month and will be issued on January 1st and June 1st. On each anniversary, an option to purchase 120,000
shares of common stock at an exercise price of 0.50 per share is granted, half of option shall vest on January 1 and half on June
1 following such grant date. As a one-time bonus, the options to purchase 250,000 shares at $0.50 per share upon production of
12,000 and 24,000 ounces of gold, respectively, and an option to purchase 500,000 shares at $0.50 per share upon production of
48,000 ounces of gold. The consulting agreement has been amended to include a $.25 (cents) per share price floor on the valuation
of the common stock. For the three months ended March 31, 2012 and year ended December 31, 2011, Mr. Mendel has been paid $24,221
and $89,935, respectively and an aggregate of 12,805 and 97,698 shares pursuant to his consulting agreement with a fair value
of $12,000 and $24,000, respectively.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">On July 21, 2011, the Company entered
into a Consultancy Agreement with Zegal and Ross Capital LLC. Pursuant to the agreement, 100,000 shares was issued as a signing
bonus for the execution and delivery of the agreement with a fair value of $24,000(See note 5). The compensation will be $120,000
for the first 12 months, payable 60% in cash and 40% in stock. The cash portion shall be paid monthly, and the shares shall be
valued based on the stock price of the last day of the preceding month and will be issued on January 1st and June 1st. On each
anniversary, an option to purchase 120,000 shares of common stock at an exercise price of $0.50 per share is granted, half of option
shall vest on January 1st and half on June 1st following such grant date. As a one-time bonus, the options to purchase 250,000
shares at $0.50 per share upon production of 12,000 and 24,000 ounces of gold, respectively, and an option to purchase 500,000
shares at $0.50 per share upon production of 48,000 ounces of gold. The consulting agreement has been amended to include a $.25
(cents) per share price floor on the valuation of the common stock. . For the three months ended March 31, 2012 and year ended
December 31, 2011, Zegal and Ross has earned an aggregate of 12,805 and 42,849 shares pursuant to the consulting agreement with
a fair value of $12,000 and $20,000, respectively.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Mr. Sternheim is currently on a
month-to-month arrangement with the company and has been paid $60,000 and $179,943 for three months ended March 31, 2012 and the
year ended December 31, 2011, respectively.</p>
-25000
-6000
-70744
-144097
-140715
6400
8720
8720
10720
9992
10063
-5600
43044
43044
43544
865363
1243263
74000
39000
-4498
-95604
-125543
-194979
-1093452
-1363070
-3698
-43840
-73779
64000000
87200000
87200000
107200000
100217516
100664133
6400
-5600
800
64000000
2240
42724
44964
22400000
80
5920
6000
800000
2000
500
2500
20000000
2000
500
2500
20000000
6
14994
15000
60000
-3000
3000
-30000000
19723
19723
128
319872
320000
1280000
100
249900
250000
1000000
34
81966
82000
340000
97785
97785
12000
12000
4
8796
8800
40000
13283
13283
74000
74000
297516
106000
20
105980
200000
175001
18
174983
175000
15000
3
14997
30000
30
73970
-74000
7970
7970
39000
39000
41617
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In February 2007 the
Company issued 64,000,000 shares of common stock at $.0000125 per share to the Founders of the Company for $800.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In February 2008 the
Company sold 22,400,000 shares of common stock at $.002 per share pursuant to its public offering.  The Company received
net proceeds of $44,964.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In February 2008 the
Company issued 800,000 shares of common stock with the fair value of $.0075 per share for services rendered.  The Company
recorded stock based compensation expense of $6,000 in connection with this issuance.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On December 15, 2010,
the Company notified the FINRA of its intention to implement a 1 for 8 share dividend or forward stock split of its issued and
outstanding common stock to the holders of record as of December 27, 2010 (the “Shareholders”). The forward stock split
became effective as of the start of business on January 3, 2011.  All share and per share data have been retroactively
restated to reflect this recapitalization.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On December 13, 2010
the Company issued 20,000,000 shares of common stock as payment for certain mining leases in Honduras at a fair value of $2,500.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On February 22, 2011
the Company issued 20,000,000 shares of common stock as payment for certain additional mining leases in Honduras at a fair value
of $2,500.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 28, 2011
the Company sold 60,000 units consisting of 60,000 shares of common stock and 30,000 warrants for $15,000.  The warrants
are exercisable at $.50 per share and have a two year term.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 31, 2011
the Company's CEO retired 30,000,000 shares of his common stock of the Company as additional paid-in capital.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On April 12, 2011,
the Company sold 1,000,000 units consisting of 1,000,000 shares of common stock and 500,000 warrants for cash of $250,000.  The
warrants are exercisable at $.50 per share and have a two year term</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On April 20, 2011,
the Company sold 100,000 units consisting of 100,000 shares of common stock and 50,000 warrants for cash of $25,000.  The
warrants are exercisable at $.50 per share and have a two year term.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On April 21, 2011,
the Company sold 100,000 units consisting of 100,000 shares of common stock and 50,000 warrants for cash of $25,000.  The
warrants are exercisable at $.50 per share and have a two year term.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On May 6, 2011, the
Company sold 60,000 units consisting of 60,000 shares of common stock and 30,000 warrants for cash of $15,000.  The warrants
are exercisable at $.50 per share and have a two year term.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On May 11, 2011, the
Company sold 20,000 units consisting of 20,000 shares of common stock and 10,000 warrants for cash of $5,000.  The warrants
are exercisable at $.50 per share and have a two year term.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 19, 2011,
the Company issued 40,000 units to Mark Holcombe, a director of the Company in consideration of consisting of 40,000 shares of
common stock and 20,000 warrants with a fair value of $1,583. Each warrant allows Mr. Holcombe to purchase one additional share
of common stock at a price of $0.50 per share for two years.  The shares were valued at $.25 per share, the fair value
on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 21, 2011,
the Company issued 100,000 shares to Lawrence H. Wolfe, our Chief Financial Officer, in consideration for the execution and delivery
of a consulting agreement with Mr. Wolfe.  The shares were valued at $.24 per share, the fair value on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 21, 2011,
the Company issued 100,000 shares to Zegal and Ross Capital LLC in consideration for the execution and delivery of a consulting
agreement. The shares were valued at $.24 per share, the fair value on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 25, 2011,
the Company issued 100,000 shares to Mendel Mochkin, a director, in consideration for the execution and delivery of a consulting
agreement with such person which replaced in its entirety Mr. Mochkin's employment agreement. Mr. Mochkin is an accredited investor.
The issuance was conducted in reliance upon an exemption from registration provided under Section 4(2) of the Securities Act of
1933, as amended.  The shares were valued at $.24 per share, the fair value on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On July 27, 2011 the
Company sold 1,000,000 units in consideration of $250,000 consisting of 1,000,000 shares of common stock and 1,000,000 warrants.
Each warrant allows for the purchase one additional share of common stock at a price of $0.50 per share for two years.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On October 24, 2011,
we issued 20,000 shares to Ben Lafazan and 20,000 shares to Barry Wolinetz as partial settlement for services rendered. The shares
were valued at $.22 per share, the fair value on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">At December 31, 2011
the Company has 297,516 shares issuable to officers and directors with a fair value of $74,000 in connection with certain consulting
agreements.  These shares were valued at the fair value on the date of grant.  These shares were issued to
officers and directors during March, 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">   In
February and March 2012 the company raised an aggregate of $175,000 from one investor under a Regulation S Subscription Agreement.
Under this agreement, the Company is offering for sale up to $500,000 of shares and warrants at a purchase price of $1.00 per share.
For each dollar invested, the investor will receive one share of common stock and one warrant. Each warrant entitles the investor
to purchase one share of common stock for $1.50 per share. The warrants expire on the third anniversary date its issuance.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On February 3, 2012,
the Company issued 200,000 shares of common stock as payment for certain mining equipments in Honduras at a fair value
of $106,000 based on the value of the equipment.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">On March 1, 2012,
an investor exercised his right to purchase 30,000 shares for $.50 per share. The Company received proceeds of $15,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">At March 31, 2011
the Company has 41,617 shares issuable to officers and directors with a fair value of $39,000 in connection with certain consulting
agreements.  These shares were valued at the fair value on the date of grant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Warrants</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">During 2011, the Company
issued 1,690,000 warrants in connection with a private placement offering. The warrants have a term of two years from the date
of the subscription agreement and allow investors to purchase one share of common stock for $.50.  At March 31, 2012
and December 31, 2011 all warrants have a remaining contractual life of approximately 1.5 years and 1.25 years, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">In February and March
2012, the company issued 175,000 warrants in connection with a private placement offering. The warrants have a term of three years
from the date of the subscription agreement and allow investors to purchase one share of common stock for $1.50 per share. At March
31, 2012, all warrants have a remaining contractual life of approximately 3 years.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Information with respect to warrants
outstanding and exercisable at March 31, 2012 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: bottom; line-height: 115%; font-weight: bold">Three Months Ended, March 31, 2012:</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Outstanding</b></p></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Range of</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise Price</b></p></td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1.5pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercisable</b></p></td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td colspan="2" style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="width: 64%; vertical-align: bottom; line-height: 115%; font-weight: bold">Warrants outstanding, December 31, 2011</td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 9%; vertical-align: top; line-height: 115%; text-align: right">1,690,000</td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 1%; vertical-align: top; line-height: 115%">$</td>
<td style="width: 9%; vertical-align: top; line-height: 115%; text-align: right">0.50</td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td>
<td style="width: 9%; vertical-align: top; line-height: 115%; text-align: right">1,690,000</td>
<td style="width: 1%; vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; line-height: 115%; font-weight: bold">Issued</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">175,000</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">$</td>
<td style="vertical-align: top; line-height: 115%; text-align: right">1.50</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">175,000</td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; line-height: 115%; font-weight: bold">Exercised</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">(30,000)</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">$</td>
<td style="vertical-align: top; line-height: 115%; text-align: right">0.50</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">-</td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; line-height: 115%; font-weight: bold">Expired</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: top; line-height: 115%"> </td>
<td style="border-bottom: black 1.5pt solid; vertical-align: top; line-height: 115%; text-align: right">-</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">--</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">-</td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; line-height: 115%; font-weight: bold">Warrants outstanding, March 31, 2012</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; vertical-align: top; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; vertical-align: top; line-height: 115%; text-align: right">1,835,000</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">$</td>
<td style="vertical-align: top; line-height: 115%; text-align: right">0.50-1.50</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%; text-align: right">1,835,000</td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><u>Options</u></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">During July 2011,
the Company granted 360,000 stock options to consultants for services to be rendered over a two-year period.  The options
are exercisable at $0.50 per share, half of the option shall vest on January 1 and half on June 1 following the grant date. These
options had a fair value of $61,104 using the Black-Scholes option-pricing model. The grant date fair values of the Company’s
option awards during the three months ended March 31, 2012 and the year ended December 31, 2011 were estimated using the Black
Scholes option pricing model with the following assumptions:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">For the Three months ended</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">For the Year ended</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">March 31, 2012</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">December 31, 2011</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">Expected life (years)</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">2</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">2</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Risk – free interest rate</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.40</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.40</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Expected volatility</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">178</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">178</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Dividend Yield</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.00</td>
<td nowrap="nowrap" style="line-height: 115%">%</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.00</td>
<td nowrap="nowrap" style="line-height: 115%">%</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 1in">The Company has Consultancy
agreements that contain provisions for the issuance and granting of options aggregating 3,000,000 shares at $.50 per share  that
are predicated on the Company reaching certain milestones in the production of gold.  None of the milestones have been
met and accordingly such options have not been granted or issued.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold; text-align: right"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: right">Number of Options</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Weighted Average Exercise Price</td>
<td nowrap="nowrap" style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 115%">Balance at December 31, 2011</td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">360,000</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Granted</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Exercised</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Forfeited</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Balance at March 31, 2012</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">360,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Options exercisable at December 31, 2011</td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">180,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%">Weighted average fair value of options granted during 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">61,104.00</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in"> Of the total 360,000 options granted
during 2011, 180,000 of them are vested, exercisable and non-forfeitable.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 1in">The following table summarizes information
about stock options for the Company as of March 31, 2012 and December 31, 2011:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white">
<tr style="vertical-align: bottom">
<td colspan="8" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012 Options Outstanding</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2012 Options Exercisable</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Number</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted Average</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Outstanding at</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Remaining</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted Average</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Vested at</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">March 31, 2012</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Contractual Life</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Exercise Price</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">March, 31, 2012</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">360,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.17</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">180,000</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white">
<tr style="vertical-align: bottom">
<td colspan="8" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011 Options Outstanding</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">2011 Options Exercisable</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Number</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted Average</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Vested at</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%; font-weight: bold; text-align: center">Outstanding at</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Remaining</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">Weighted Average</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">December 31,</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="line-height: 115%; text-align: center"> </td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">December 31, 2011</td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Contractual Life</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center">Exercise Price</td>
<td nowrap="nowrap" style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%; font-weight: bold; text-align: center"> 2011</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; line-height: 115%"> </td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%; text-align: center">360,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">1.42</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">-</td>
<td nowrap="nowrap" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">0.50</td>
<td nowrap="nowrap" style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; margin: 0 0 10pt"> </p>