UNITED STATESSECURITIES AND EXCHANGE ~~COMMISSION Washington~~COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~February~~May 2831, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

COMMISSION FILE NUMBER 000-52626

PENGRAM CORPORATION
(Exact name of registrant as specified in its charter)

NEVADA	68-0643436
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)


1200 Dupont Street, Suite 2J
Bellingham, WA	98225
(Address of principal executive offices)	(Zip Code)

(360) 255-3436
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ x ]~~Yes~~ Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [ ] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [ x ]

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of ~~April~~July 1813, 2011, the Issuer had 58,264,344 Shares of Common Stock outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and six months ended ~~February~~May 2831, ~~2011~~ 2011 are not necessarily indicative of the results that can be expected for the ~~year~~ year ending November 30, 2011.

As used in this Quarterly Report, the terms "we,” "us,” "our,” “Pengram” and the “Company” mean Pengram Corporation and its subsidiaries, unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

PENGRAM CORPORATION (An Exploration Stage Company)

~~FIRST~~SECOND QUARTER INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~FEBRUARY~~SIX 28MONTHS ENDED MAY 31, 2011 AND 2010 (Unaudited) (Stated in U.S. Dollars)

PENGRAM CORPORATION (An Exploration Stage Company) INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Stated in U.S. Dollars)

		FEBRUARY 28			NOVEMBER 30
		MAY 31			NOVEMBER 30
		2011			2010
ASSETS
Current
Cash	$	115,~~028~~938		$	353
Total Current Assets		115,~~028~~938			353
Long-term Investment (Note 3)		10,367			10,367
Mineral Property Acquisition Costs (Note 4)		~~396~~372,~~887~~271			412,875
Total Assets	$	~~408~~398,~~282~~576		$	423,595
LIABILITIES
Current
Accounts payable and accrued liabilities	$	~~384~~321,~~336~~412		$	340,915
Amounts due to related parties (Note 11)		5951,~~510~~121			49,000
Amount due to shareholder		1,920			1,920
Promissory notes payable (Notes 4 and 5)		83147,~~486~~212			96,248
Promissory notes payable to related parties (Note 6)		2633,~~395~~109			25,901
Loan payable (Note 7)		75,~~148~~676			7,015
Unit subscriptions received (Note 9)		14,965			14,965
Total Current Liabilities		~~577~~575,~~760~~415			535,964
STOCKHOLDERS’ DEFICIENCY
Capital Stock (Note 10)
Authorized: 100,000,000 preferred stock with a par value of $0.001 per share 300,000,000 common voting stock with a par value of $0.001 per share
Issued: 58,264,344 at February 28, 2011 and 57,737,144 common shares as at November 30, 2010		58,264			57,737
Issued: 58,264,344 at May 31, 2011 and 57,737,144 common shares as at November 30, 2010		58,264			57,737
Units and Share Subscriptions Received In Advance		-			26,360
Additional Paid-In Capital		869,285			851,852
Share Purchase Warrants (Note 10)		30,150			21,750
Deficit Accumulated During The Exploration Stage		(1,~~127~~134,~~177~~538	)		(1,070,068	)
Total Stockholders’ Deficiency		(~~169~~176,~~478~~839	)		(112,369	)
Total Liabilities And Stockholders’ Deficiency	$	~~408~~398,~~282~~576		$	423,595

The accompanying ~~condensed~~ notes are an integral part of these interim condensed consolidated financial statements.

PENGRAM CORPORATION (An Exploration Stage Company) INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Stated in U.S. Dollars)

								~~CUMULATIVE~~						CUMULATIVE
								~~PERIOD FROM~~						PERIOD FROM
		THREE						~~INCEPTION~~SIX						INCEPTION
		MONTHS						~~APRIL 28~~MONTHS						APRIL 28
		ENDED						~~2006 TO~~ENDED						2006 TO
		FEBRUARY 28						FEBRUARY 28
		MAY 31						MAY 31						MAY 31
		2011			2010			2011			2010			2011
Expenses
Bank charges and interest	$	34,~~149~~253		$	56,~~212~~076		$	447,~~206~~402		$	11,288		$	48,459
Consulting fees		1214,~~300~~050			-			4326,~~776~~350			-			57,826
Depreciation		-			126			1,516
Depreciation expense		-			126			-			252			1,516
Filing and regulatory		~~1,223~~744			~~879~~170			191,~~703~~967			1,049			20,447
Finance charges		-			2223,~~603~~106			~~137,500~~-			45,709			137,500
Incorporation costs		-			-			~~3,382~~-			-			3,382
Investor relations		-			-1,000			~~15,800~~-			1,000			15,800
Management fees		9,000			9,000			~~137~~18,~~600~~000			18,000			146,600
Mineral property exploration costs (recovery)		(2,393	)		1,569			97,354
Mineral property exploration costs		28,512			-			26,119			1,569			125,866
Office and administrative		5,~~623~~479			36,~~420~~209			7111,~~936~~102			9,629			77,415
Professional fees		2755,~~845~~411			3348,~~051~~949			~~543~~83,~~034~~256			82,000			598,445
Recovery on mineral property		-			-			~~(18,377~~-	)		-			(18,377	)
Travel		-			-			~~16,341~~-			-			16,341
Website design		~~362~~682			~~3,500~~-			41,~~406~~044			3,500			5,088
Write-off of mineral property costs		-			-3,000			~~9,000~~-			3,000			9,000
Net Loss For The Period	$	(57,109	)	$	(79,360	)	$	(1,127,177	)
Loss Before Other Income		(118,131	)		(97,636	)		(175,240	)		(176,996	)		(1,245,308	)
Basic And Diluted Loss Per Share	$	(0.01	)	$	(0.01	)
Other Income
Weighted Average Number Of Common Shares Outstanding		57,795,722			54,207,144
Dividend income (Note 3)		115,909			-			115,909			-			115,909
Loss on settlement of debt (Note 3)		(9,509	)		-			(9,509	)		-			(9,509	)
Unrealized gain on marketable securities (Note 3)		4,370			-			4,370			-			4,370
Net Loss For The Period	$	(7,361	)	$	(97,636	)	$	(64,470	)	$	(176,996	)	$	(1,134,538	)
Basic And Diluted Loss Per Share	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted Average Number Of Common Shares Outstanding		58,264,344			54,427,905			58,032,608			54,327,419

The accompanying ~~condensed~~ notes are an integral part of these interim condensed consolidated financial statements.

PENGRAM CORPORATION (An Exploration Stage Company) INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Stated in U.S. Dollars)

								CUMULATIVE
		SIX						CUMULATIVE
								PERIOD FROM
		MONTHS						PERIOD FROM
		THREE						INCEPTION
		ENDED						INCEPTION APRIL 28
		MONTHS						APRIL 28
		MAY 31						2006 TO MAY 31
		ENDED						2006 TO
		FEBRUARY 28						FEBRUARY 28
		2011			2010			2011
Cash Provided By (Used In):
Operating Activities
Net loss for the period	$	(5764,~~109~~470	)	$	(79176,~~360~~996	)	$	(1,~~127~~134,~~177~~538	)
Adjustment for items not affecting cash:
Depreciation		-			~~126~~252			1,516
Finance charges on convertible notes		-			2245,~~603~~709			137,500
Foreign exchange		-			~~671~~438			11,369
Recovery of mineral property		-			-			(18,377	)
Accrued interest expense		36,~~026~~887			510,~~003~~999			4145,~~311~~172
Write-off of mineral property costs		-			-3,000			9,000
Dividend income		(115,909	)		-			(115,909	)
Loss on settlement of dept		9,509			-			9,509
Unrealized gain of marketable securities		(4,370	)		-			(4,370	)
Changes in non-cash operating working capital items:
Accounts payable and accrued liabilities		4243,~~871~~934			2757,~~449~~452			~~359~~360,~~664~~727
Amounts due to related parties		1016,~~510~~511			612,000			5965,~~510~~511
		(702	)		(17,508	)		(525,684	)
Prepaid expenses		-			(11,057	)		-
		(107,908	)		(58,203	)		(632,890	)
Investing Activities
Advances		-			-			(10,367	)
Mineral property acquisition costs		-			(3842,~~000~~878	)		(84,075	)
Recovery of mineral property costs		1540,~~988~~604			-			~~133~~157,~~065~~681
Purchase of computer equipment		-			-			(1,516	)
		15,988			(38,000	)		37,107
		40,604			(42,878	)		61,723
Financing Activities
Issuance of convertible notes		-			-			137,500
Issuance of common stock		-			-			278,981
Finder’s fees		-			-(5,042	)		(5,042	)
Units and share subscriptions received in advance		-			1067,~~000~~450			43,825
Advance on promissory note payable		-85,500			75,000			75160,~~000~~500
Repayment of promissory note		(14,611	)		-			(67,969	)
Promissory note payable to related party		-12,000			-			2739,000
Repayment of promissory notes payable to related parties		-			-			(7,000	)
Advance on loan payable		-			-			5,390
Advance on amount due to shareholder		-			-			1,920
		(14,611	)		85,000			489,605
		82,889			137,408			587,105
Increase In Cash		~~675~~15,585			2936,~~492~~327			115,~~028~~938
Cash, Beginning Of Period		353			3,711			-
Cash, End Of Period	$	115,~~028~~938		$	3340,~~203~~038		$	115,~~028~~938
Supplemental Disclosure Of Cash Flow Information
Cash paid during the period for:
Interest	$	-		$	-		$	400
Income taxes	$	-		$	-		$	-
Non-Cash Financing And Investing Activities
Shares received from Solfotara Minerals Corp. (Note 3)	$	-		$	-		$	10,367
Shares issued for mineral property acquisition costs (Note 4)	$	-		$	-6,400		$	379,900
Promissory note payable for mineral property acquisition costs (Note 4)	$	-		$	-		$	56,600
Shares issued on conversion of convertible note (Note 10)	$	-		$	-10,000		$	137,500
Shares issued from funds received in advance (Note 10)	$	26,360		$	-		$	26,360
Marketable securities transferred for settlement debt (Note 3)	$	110,770		$	-		$	110,770

The accompanying ~~condensed~~ notes are an integral part of these interim condensed consolidated financial statements.

PENGRAM CORPORATION (An Exploration Stage Company) INTERIM CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY) PERIOD FROM INCEPTION APRIL 28, 2006 TO ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

														DEFICIT
														ACCUMULATED
					SHARE									DURING
					SUBSCRIPTIONS			ADDITIONAL			SHARE			THE
	COMMON STOCK				RECEIVED			PAID-IN			PURCHASE			EXPLORATION
	SHARES		AMOUNT		IN ADVANCE			CAPITAL			WARRANTS			STAGE			TOTAL
June 19, 2006 – stock issued for cash at $0.001	27,000,000	$	27,000	$	-		$	(18,000	)	$	-		$	-		$	9,000
Stock issued for cash at $0.01 in private placement	17,997,144		17,997		-			101,984			-			-			119,981
Net loss for the period	-		-		-			-			-			(20,112	)		(20,112	)
Balance, November 30, 2006	44,997,144		44,997		-			83,984			-			(20,112	)		108,869
Net loss for the year	-		-		-			-			-			(108,384	)		(108,384	)
Balance, November 30, 2007	44,997,144		44,997		-			83,984			-			(128,496	)		485
September 4, 2008 – units issued for cash at $0.03	3,000,000		3,000		-			41,300			35,700			-			80,000
Net loss for the year	-		-		-			-			-			(139,039	)		(139,039	)
Balance, November 30, 2008	47,997,144		47,997		-			125,284			35,700			(267,535	)		(58,554	)
Stock issued for mineral property	6,000,000		6,000		-			294,000			-			-			300,000
Relative fair value allocation of convertible notes	-		-		-			90,021			47,479			-			137,500
Stock issued under assignment agreement	150,000		150		-			37,350			-			-			37,500
Stock issued pursuant to extension agreement	60,000		60		-			35,940			-			-			36,000
Share subscriptions received in advance	-		-		2,500			-			-			-			2,500
Net loss for the year	-		-		-			-			-			(375,580	)		(375,580	)
Balance, November 30, 2009	54,207,144		54,207		2,500			582,595			83,179			(643,115	)		79,366
Units issued for cash at $0.10	600,000		600		-			37,650			21,750			-			60,000
Finder’s fees	-		-		-			(5,042	)		-			-			(5,042	)
Exercise of warrants	150,000		150		(2,500	)		12,350			-			-			10,000
Expiry of warrants	-		-		-			83,179			(83,179	)		-			-
Conversion of convertible notes	2,750,000		2,750		-			134,750			-			-			137,500
Stock issued under assignment agreement	30,000		30		-			6,370			-			-			6,400
Share subscriptions received in advance	-		-		26,360			-			-			-			26,360
Net loss for the year	-		-		-			-			-			(426,953	)		(426,953	)
Balance, November 30, 2010	57,737,144		57,737		26,360			851,852			21,750			(1,070,068	)		(112,369	)
Units issued for cash at $0.05	527,200		527		(26,360	)		17,433			8,400			-			-
Net loss for the period	-		-		-			-			-			(5764,~~109~~470	)		(5764,~~109~~470	)
Balance, February 28, 2011	58,264,344	$	58,264	$	-		$	869,285		$	30,150		$	(1,127,177	)	$	(169,478	)
Balance, May 31, 2011	58,264,344	$	58,264	$	-		$	869,285		$	30,150		$	(1,134,538	)	$	(176,839	)

The accompanying ~~condensed~~ notes are an integral part of these interim condensed consolidated financial statements.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

1.	BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The unaudited financial information furnished herein reflects all adjustments, all of which are of a normal recurring nature, which in the opinion of management are necessary to fairly state the interim consolidated financial position of Pengram Corporation (“the Company”) and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended November 30, 2010. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended November 30, 2010, has been omitted. The results of operations for the ~~three month~~six month period ended ~~February~~May 2831, 2011 are not necessarily indicative of results for the entire fiscal year ending November 30, 2011.

Consolidated Financial Statements

These consolidated financial statements include the accounts of Pengram Corporation (“the Company”) and its wholly owned subsidiaries, Magellan Acquisition Corp. (Nevada) (“MAC”) and Clisbako Minerals Inc. (British Columbia) (“CMI”). All intercompany balances have been eliminated.

Organization

The Company was incorporated in the State of Nevada, U.S.A., on April 28, 2006. The Company’s principal executive offices are in Bellingham, Washington, U.S.A. The Company’s year end is November 30.

Exploration Stage Activities

The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. The Company was formed for the purpose of acquiring exploration and development stage natural resource properties. The Company has not commenced business operations. The Company is an exploration stage company as defined in the Securities and Exchange Commission (“S.E.C.”) Industry Guide No. 7.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

1.	BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Continued)
	Going Concern
	The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
	As shown in the accompanying financial statements, the Company has incurred a net loss of $1,127,177 for the period from April 28, 2006 (inception) to February 28, 2011, and has no revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its natural resource properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
	As shown in the accompanying financial statements, the Company has incurred a net loss of $1,134,538 for the period from April 28, 2006 (inception) to May 31, 2011, and has no revenues. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its natural resource properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.
	The financial statements have, in management’s opinion, been properly prepared within the framework of the significant accounting policies summarized below:
	a)	Organization and Start-up Costs
		Costs of start up activities, including organizational and incorporation costs, are expensed as incurred.
	b)	Exploration Stage Enterprise
		The Company’s financial statements are prepared using the accrual method of accounting. Until such properties are acquired and developed, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the exploration stage.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	c)	Mineral Property Interests
		The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing when facts and circumstances indicate impairment may exist. Proceeds received from the sale of any interest in a property will first be credited against the carrying value of the property, with any excess included in operations for the period.
		The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.
		Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a producing mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project. The Company does not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.
		If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.
		The Company’s exploration activities are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	c)	Mineral Property Interests (Continued)
		The accumulated costs of properties that are developed on the stage of commercial production will be amortized to operations through unit-of-production depletion.
	d)	Cash
		Cash consists primarily of cash on deposit.
	e)	~~Long Term Investment~~Investments
		Investments in securities of publicly traded companies are measured at fair value. Resulting gains or losses are recognized in the statement of operations.
		Investments in securities of private companies that do not have a quoted market price on a recognized securities exchange are recorded at cost. Investments are written-down when, in the opinion of management, there has been an impairment in their value which is other than temporary and such impairment is recorded in the statement of operations.
	f)	Computer Equipment
		Computer equipment is recorded at cost and will be depreciated over an estimated useful life of three years on a straight-line basis.
	g)	Financial Instruments
		The Company’s financial instruments include cash, accounts payable and accrued liabilities, amounts due to related parties, amount due to shareholder, promissory notes payable, promissory notes payable to related parties, loan payable and convertible notes. All such instruments are carried at cost, which, due to the short maturity of these financial instruments, approximate fair value at February 28, 2011.
		The Company’s financial instruments include cash, accounts payable and accrued liabilities, amounts due to related parties, amount due to shareholder, promissory notes payable, promissory notes payable to related parties, loan payable and convertible notes. All such instruments are carried at cost, which, due to the short maturity of these financial instruments, approximate fair value at May 31, 2011.
	h)	Foreign Currency Translation
		The Company’s functional currency is the US dollar. Transactions in a foreign currency are translated into U.S. dollars as follows:
		i)	monetary items are translated at the exchange rate prevailing at the balance sheetdate;
		ii)	non-monetary items are translated at the historical exchange rate;
		iii)	revenue and expense items are translated at the average rate in effect during the applicable accounting period.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	i)	Use of Estimates
		The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates.
	j)	Basic and Diluted Loss Per Share
		Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
		The following outstanding share purchase warrants were excluded from the diluted EPS computation as their effect would have been anti-dilutive:

	FEBRUARY 28	NOVEMBER 30
	MAY 31	NOVEMBER 30
	2011	2010
Share purchase warrants	1,127,200	600,000

	k)	Income Taxes

		The Company uses an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

	l)	Impairment of Long-Lived Assets

		The Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such cases, the amount of the impairment is determined based on the relative fair values of the impaired assets. The Company tests the recoverability of the assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	m)	Asset Retirement Obligations
		An asset retirement obligation (“ARO”) is a legal obligation associated with the retirement of a tangible long-lived asset and is recognized as a liability in the period which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset.
		The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flows, discounted at the Company’s credit-adjusted risk-free interest rate. To date, no significant asset retirement obligation exists due to the early stage of exploration. Accordingly, no liability has been recorded.
	n)	Share-based Compensation
		The Company accounts for stock-based compensation under the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, Stock Compensation, which requires the recognition of the fair value of stock-based compensation. Under the fair value recognition provisions for ASC 718, stock-based compensation cost is estimated at the grant date based on the fair value of the awards expected to vest and recognized as expense ratably over the requisite service period of the award. The Company has used the Black-Scholes valuation model to estimate fair value of its stock-based awards which requires various judgmental assumptions including estimating stock price volatility and expected life. The Company’s computation of expected volatility is based on a combination of historical and market- based volatility. In addition, the Company considers many factors when estimating expected life, including types of awards and historical experience. If any of the assumptions used in the Black-Scholes valuation model change significantly, stock- based compensation expense may differ materially in the future from that recorded in the current period.
		The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 718 and the conclusions reached by ASC 505-50. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505-50.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	o)	Environmental Protection and Reclamation Costs
		The operations of the Company have been, and may in the future be affected from time to time in varying degrees by changes in environmental regulations, including those for future removal and site restorations costs. Both the likelihood of new regulations and their overall effect upon the Company may vary from region to region and are not predictable.
		Environmental expenditures that relate to ongoing environmental and reclamation programs are charged to the statements of operations as incurred or capitalized and amortized depending upon their future economic benefits. The Company does not currently anticipate any material capital expenditures for environmental control facilities because its property holding is at an early stage of exploration.
	p)	Fair Value of Financial Instruments
		Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.
		The Company uses a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

	Level 1:	Observable inputs such as quoted prices in active markets;

	Level 2:	Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

	Level 3:	Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company did not have any fair value adjustments for assets and liabilities measured at fair value on a nonrecurring basis during the ~~three~~six month period ended ~~February~~May 2831, 2011.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
	p)	Fair Value of Financial Instruments (Continued)
		The following table presents information about the Company’s financial instruments that have been measured at fair value as of February 28, 2011, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:
		The following table presents information about the Company’s financial instruments that have been measured at fair value as of May 31, 2011, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair values:

				QUOTED		SIGNIFICANT
		FAIR VALUE		PRICES		OTHER
		AT		IN ACTIVE		OBSERVABLE		UNOBSERVABLE
		FEBRUARY 28		MARKETS		INPUTS		INPUTS
		MAY 31		MARKETS		INPUTS		INPUTS
DESCRIPTION		2011		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Assets:
Financial Assets:
Cash	$	115,~~028~~938	$	115,~~028~~938	$	-	$	-
Assets measured at fair value at February 28, 2011	$	1,028	$	1,028	$	-	$	-
Financial assets measured at fair value at May 31, 2011	$	15,938	$	15,938	$	-	$	-

	q)	Recent Accounting Pronouncements
		In April 2010, the FASB provided an update to address the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, provides guidance on the classification of a share-based payment award as either equity or a liability. A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. This standard is effective for fiscal years beginning after December 15, 2010, and for subsequent interim and annual reporting periods thereafter. The Company does not expect the adoption of this standard to have a significant effect on the Company's results of operations or financial position.
		In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements, amending ASC 820. ASU 2010-06 requires entities to provide new disclosures and clarify existing disclosures relating to fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2010-06, but does not expect its adoption to have a material impact on the Company’s financial position or results of operations.

	q)	Recent Accounting Pronouncements

		In May 2011, the FASB issued new authoritative guidance to provide a consistent definition of fair value and ensure that fair value measurements and disclosure requirements are similar between GAAP and International Financial Reporting Standards. This guidance changes certain fair value measurement principles and enhances the disclosure requirements for fair value measurements. This guidance is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively. The Company does not expect that the adoption of this guidance will have a material impact on its financial statements.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)
	q)	Recent Accounting Pronouncements (Continued)
		In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements amending ASC 605. ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. ASU 2009-13 eliminates the residual method of revenue allocation and requires revenue to be allocated using the relative selling price method. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The adoption did not have a material impact on the Company’s financial position or results of operations.
		Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying financial statements.
3.	LONG-TERM INVESTMENT
	In the year ended November 30, 2009, the Company received 250,000 common shares in Solfotara Minerals Corp. (“Solfotara”), a private Canadian company as consideration for transferring its interest in an option agreement to Solfotara. The total value attributed to the common stock received from Solfotara was $10,367.
4.	MINERAL PROPERTY ACQUISITION COSTS

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

											RECOVERY
		NOVEMBER 30				ABANDONED,					RECOGNIZED		FEBRUARY 28
		2010		ADDITIONS		IMPAIRED		RECOVERY			AS INCOME		2011
Mineral Property
Clisbako claims (a)	$	350,350	$	-	$	-	$	(15,988	)	$	-	$	334,362
Eureka claims (b)		62,525		-		-		-			-		62,525
	$	412,875	$	-	$	-	$	(15,988	)	$	-	$	396,887

Recent Accounting Pronouncements (Continued)

~~PENGRAM~~In ~~CORPORATION~~April ~~(An~~2010, ~~Exploration~~the ~~Stage~~FASB ~~Company)~~provided ~~NOTES~~an update TOto ~~CONSOLIDATED~~address ~~FINANCIAL~~the ~~STATEMENTS~~classification ~~FEBRUARY~~of ~~28,~~an ~~2011~~employee ~~(Unaudited)~~share-based ~~(Stated~~payment award with an exercise price denominated in Uthe currency of a market in which the underlying equity security trades.S FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, provides guidance on the classification of a share-based payment award as either equity or a liability. ~~Dollars)~~A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. This standard is effective for fiscal years beginning after December 15, 2010, and for subsequent interim and annual reporting periods thereafter. The Company does not expect the adoption of this standard to have a significant effect on the Company's results of operations or financial position.

4.In ~~MINERAL~~January ~~PROPERTY~~2010, ~~ACQUISITION~~the ~~COSTS~~FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (~~Continued~~Topic 820), Improving Disclosures about Fair Value Measurements, amending ASC 820. ASU 2010-06 requires entities to provide new disclosures and clarify existing disclosures relating to fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2010-06, but does not expect its adoption to have a material impact on the Company’s financial position or results of operations.

In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements amending ASC 605. ASU 2009-13 requires entities to allocate revenue in an arrangement using estimated selling prices of the delivered goods and services based on a selling price hierarchy. ASU 2009-13 eliminates the residual method of revenue allocation and requires revenue to be allocated using the relative selling price method. ASU 2009-13 is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The adoption did not have a material impact on the Company’s financial position or results of operations.

Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying financial statements.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

	q)	Recent Accounting Pronouncements (Continued)

3.	LONG-TERM INVESTMENT

	In the year ended November 30, 2009, the Company received 250,000 common shares in Solfotara Mining Corp. (“Solfotara”), a private Canadian company as consideration for transferring its interest in an option agreement to Solfotara. The total value attributed to the common stock received from Solfotara was $10,367.

	Solfotara undertook a corporate reorganization, whereby it spun out a certain project to Copper Development Corporation (“CDC”) in consideration for publicly traded shares in CDC.

	These marketable securities were distributed to Solfotara’s shareholders on March 24, 2011. Accordingly, the Company received 209,000 shares in CDC, having a fair value of $115,909. This receipt was recognized as dividend income in the statement of operations.

	On April 21, 2011, the Company settled $110,770 of debt by transferring its ownership in the 209,000 CDC shares which had a value of $120,279. The settlement of debt was allocated as follows:

Accounts payable and accured liabilities	$	64,448
Amounts due to related parties		14,390
Promissory notes payable		24,459
Promissory notes payable to related parties		5,883
Loan payable		1,590

	$	110,770

As result of this settlement, the Company recorded a loss on settlement of debt of $9,509 and an unrealized gain on the marketable securities of $4,370 in the statement of operations.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS

												RECOVERY
		NOVEMBER 30				ABANDONED,						RECOGNIZED		MAY 31
		2010		ADDITIONS		IMPAIRED			RECOVERY			AS INCOME		2011
Mineral Property

Clisbako claims (a)	$	350,350	$	-	$	-		$	(40,604	)	$	-	$	309,746
Eureka claims (b)		62,525		-		-			-			-		62,525
Elko claims (e)		-		10,000		(10,000	)		-			-		-

	$	412,875	$	10,000	$	(10,000	)	$	(40,604	)	$	-	$	372,271

												RECOVERY
		NOVEMBER 30				ABANDONED,						RECOGNIZED		NOVEMBER 30
		2009		ADDITIONS		IMPAIRED			RECOVERY			AS INCOME		2010
Mineral Property

Clisbako claims (a)	$	392,600	$	6,400	$	-		$	(48,650	)	$	-	$	350,350
Eureka claims (b)		47,500		15,025		-			-			-		62,525
Manado Gold claims (c)		-		50,050		-			(68,427	)		18,377		-
June claims (d)		-		3,000		(3,000	)		-			-		-

	$	440,100	$	74,475	$	(3,000	)	$	(117,077	)	$	18,377	$	412,875

	a)	Clisbako Claims
		On December 16, 2008, the Company entered into a purchase agreement to acquire an undivided 100% interest in a group of ten mineral claims (collectively known as the “Clisbako” claims) located in the Cariboo Mining Division of British Columbia, Canada. Consideration for the claims was 6,000,000 shares (issued – see Note 10(a)) of the Company’s common stock with a value of $300,000 and the issuance to the vendor of a promissory note in the amount of CDN$70,000 (to US$56,600 payable June 30, 2009. On July 23, 2009, the Company reached an agreement with the vendor to extend the deadline of the CDN$70,000 mineral property payment (“Property Payment”) to December 31, 2009. In consideration of the extension of the deadline, the Company issued 60,000 common shares to the vendor with a fair value of $36,000.
		On December 16, 2008, the Company entered into a purchase agreement to acquire an undivided 100% interest in a group of ten mineral claims (collectively known as the “Clisbako” claims) located in the Cariboo Mining Division of British Columbia, Canada. Consideration for the claims was 6,000,000 shares (issued – see Note 10(a)) of the Company’s common stock with a value of $300,000 and the issuance to the vendor of a promissory note in the amount of CDN$70,000 (US$56,600) payable June 30, 2009. On July 23, 2009, the Company reached an agreement with the vendor to extend the deadline of the CDN$70,000 mineral property payment (“Property Payment”) to December 31, 2009. In consideration of the extension of the deadline, the Company issued 60,000 common shares to the vendor with a fair value of $36,000.
		On January 21, 2010, the Company reached an agreement with the vendor to further extend the due date of the Property Payment to February 15, 2010. In consideration of the further extension of the deadline, the Company issued 10,000 shares of its common stock to the vendor with a value of $4,200.
		On March 15, 2010, the Company entered into a third extension agreement dated for reference February 15, 2010, with the vendor to extend the Property Payment from February 15, 2010 to June 30, 2010. In consideration of the extension, the Company issued to the vendor 20,000 common shares with a value of $2,200.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	a)	Clisbako Claims (Continued)
		On September 15, 2010, and as amended by letter agreement dated November 15, 2010, the Company, through its wholly owned subsidiary, CMI., entered into an option agreement (the "Clisbako Option Agreement") with Manado Gold Corp. whereby the Company granted Manado Gold Corp. the sole and exclusive right and option to acquire a 75% undivided interest in the Clisbako Property. Under the terms of the Option Agreement, Manado Gold Corp. will exercise its option upon completing the following:

1.	Paying an aggregate of $150,000 to CMI. as follows:
	(a)	$50,000 on execution of the agreement (CDN$50,000 or US$48,650 has been paid);
	(b)	a further $50,000 on or before February 28, 2011 (paid CDN$16,000 or US$15,988; an additional CDN$24,000 paid subsequent to February 28, 2011); and
	(c)	a further $50,000 on or before April 30, 2011.
2.	Issuing an aggregate of 600,000 Shares to CMI as follows:
	(a)	100,000 Shares on or before September 15, 2011;
	(b)	a further 200,000 Shares on or before September 15, 2012; and
	(c)	a further 300,000 Shares on or before September 15, 2013.
3.	Incurring Exploration Expenditures of CDN$650,000 on the Clisbako Property as follows:
	(a)	CDN$100,000 on or before September 15, 2011;
	(b)	a further CDN$300,000 on or before September 15, 2012; and
	(c)	a further CDN$250,000 on or before September 15, 2013.

Manado Gold Corp. will also be responsible to make all government payments required to keep the claims in good standing.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 2011 (Unaudited) (Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	b)	Eureka Claims
		On May 29, 2009, the Company entered into an assignment agreement to acquire an undivided 100% interest in a series of mineral claims (collectively known as the “Eureka” claims) situated in the Eureka County, Esmeralda County and Mineral County, Nevada. Consideration for the claims is as follows:
		i)	150,000 common shares (issued) with a value of $37,500;
		ii)	$10,000 advance royalty payment due on or before August 28, 2009 (paid);
		iii)	$15,000 advance royalty payment due on or before August 28, 2010 (paid);
		iv)	$20,000 advance royalty payment due on or before August 28, 2011;
		v)	$25,000 advance royalty payment due on or before August 28, 2012;
		vi)	$30,000 advance royalty payment due on or before August 28, 2013, with an additional $30,000 due each year thereafter for a period of ten years, with an option to renew for an additional ten years.
	c)	Manado Gold Claims
		On January 19, 2010, the Company entered into an option agreement dated for reference November 2, 2009 (the “Agreement”) to acquire interests in four mineral claims (collectively referred to as the “Manado Gold claims”) in the Lobongan District of Northern Sulawesi, Indonesia.
		In consideration of $35,000 paid on execution of the Agreement, the Company has been granted an exclusive right, for a period of 90 days (to January 31, 2010) from the date of execution of this Agreement (the “Due Diligence Period”) to enter into an acquisition agreement (the “Acquisition Agreement”) to acquire up to an 85% undivided interest in the Manado Gold claims. At any time prior to the expiration of the Due Diligence Period, the Company may elect, by notice in writing, to exercise its option to enter into the Acquisition Agreement (exercised).

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 2011 (Unaudited) (Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	c)	Manado Gold Claims (Continued)
		During the year ended November 30, 2010, the Company elected to exercise its option to enter into the Acquisition Agreement. The Acquisition Agreement shall provide for the earning of interests by the Company in the Manado Gold claims by making cash payments, stock issuances and completing work programs as follows:
		i)	A 10% interest by:
				Making a cash payment of $90,000 on execution of the Acquisition Agreement ($15,050 paid);
				Issuing 150,000 shares of the Company’s common stock on execution of the Acquisition Agreement; and
				Completing a mineral exploration program at a cost of not less than $250,000 within one year of the Acquisition Agreement.
		ii)	An additional 15% interest by:
				Making an additional cash payment of $100,000 on the first anniversary of the Acquisition Agreement;
				Issuing an additional 300,000 shares of the Company’s common stock on the first anniversary of the Acquisition Agreement; and
				Completing an additional mineral exploration program at a cost of not less than $500,000 prior to the second anniversary of the Acquisition Agreement.
		iii)	An additional 26% interest by:
				Making an additional cash payment of $200,000 on the second anniversary of the Acquisition Agreement;
				Issuing an additional 500,000 shares of the Company’s common stock on the second anniversary of the Acquisition Agreement; and
				Completing an additional mineral exploration program at a cost of not less than $1,000,000 prior to the third anniversary of the Acquisition Agreement.
		iv)	An additional 34% interest on completion of a scoping study on the claims.
		Upon the Company earning an 85% interest as outlined above, the vendor shall be carried and shall not be obligated to pay their proportionate share of the costs to complete a feasibility study and to place the claims into commercial production. On completion of the feasibility study, the Company shall have the option to acquire the remaining 15% interest for a cash payment of $5,000,000.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 2011 (Unaudited) (Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)

ca) ~~Manado~~Clisbako ~~Gold~~ Claims (Continued)

InOn ~~August~~September 15, 2010, and as amended by letter agreement dated November 15, 2010, the Company, ~~entered~~through its wholly owned subsidiary, CMI., entered into an option agreement (the "Clisbako Option Agreement") with Manado Gold Corp., (”which has two common directors with the Company, ~~Assignee”)~~whereby the Company granted Manado Gold Corp. the sole and exclusive right and option to ~~assign~~acquire a 75% undivided interest in the ~~original~~Clisbako ~~option agreement~~Property. Under ~~The~~the ~~consideration~~terms ~~for~~of the Option Agreement, Manado Gold Corp. will exercise its ~~assignment~~option isupon completing the following:

a) The reimbursement by the Assignee of $80,000 in expenditures incurred by the Company in connection with the original option agreement payable as follows: (i) $40,000 on execution of this Agreement (received); (ii) $40,000 on or before September 15, 2010 ($28,427 received as at February 28, 2011). b) The Assignee incurring expenditures to complete exploration on or place into production the Manado Gold Property as follows: (i) $250,000 within the first year of the Acquisition Agreement; (ii) $500,000 prior to the second anniversary of the Acquisition Agreement; and (iii) $1~~,000,000 prior to the third anniversary of the execution of the Acquisition Agreement~~. c)Paying ~~Following~~an ~~completion~~aggregate of the expenditures set out above, the Assignee making the expenditures will complete a scoping study on the Manado Gold Property. d) The Assignee will issue 950,000 shares of its common stock to the Company, as follows: (i) $150,000 ~~shares on execution of the Acquisition Agreement; (ii) 300,000 shares prior~~ to ~~the first anniversary the Acquisition Agreement; and (iii) 500,000 shares prior to the second anniversary of the Acquisition Agreement~~CMI. ~~e) The Assignee will make payments to the Concession Owners~~ as follows: (i) $75,000 on execution of the Acquisition Agreement; (ii) $100,000 on the first anniversary of the execution of the Acquisition Agreement; and (iii) $200,000 on the secondanniversary of the execution of the Acquisition Agreement.

~~PENGRAM~~(a) ~~CORPORATION~~$50,000 on execution of the agreement (AnCDN$50,000 ~~Exploration~~or ~~Stage~~US$48,650 ~~Company~~has been paid); ~~NOTES~~(b) TOa ~~CONSOLIDATED~~further ~~FINANCIAL~~$50,000 ~~STATEMENTS~~on ~~FEBRUARY~~or before February 28, 2011 (~~Unaudited~~paid CDN$40,000 or US$40,604); and (~~Stated~~c) ina Ufurther $50,000 on or before April 30, 2011.S (By agreement dated April 30, 2011 with Manado Gold Corp., ~~Dollars~~the Company has agreed to waive payment, in exchange to terminate an assigned option with respect to the Manado property. See Note 4 (c)).

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	c)	Manado Gold Claims (Continued)
		Upon completing the payments expenditures and share issuance as set out above, the Assignee will earn up to 75% of the Company’s interest in the Manado Gold Property as follows:
		(i)	7.5% undivided interest upon completion of the items set out in (a), (b)(i), (d)(i) and (e)(i) above;
		(ii)	11.25% undivided interest upon completion of the items set out in paragraphs (b)(ii), (d)(ii) and (e)(ii) above;
		(iii)	19.5% undivided interest upon completion of the items set out in paragraphs (b)(iii), (d)(iii) and (e)(iii) above; and
		(iv)	25.5% undivided interest on completing the scoping study described in paragraph (c) above.
		If the Assignee exercises its rights under the Agreement, the Company will be carried through the first $1,750,000 of expenditures and through completion of a scoping study. Thereafter the Company will be responsible for its proportionate share. The Company will remain responsible to issue up to 950,000 of its common shares to the Concession Holders under the formal agreement.
		In the event the Company elects to exercise its option to purchase the Concession Owners’ 15% carried interest, the Assignee will have the right to participate as to 75% in the exercise of that option.
		Assuming that the Assignee exercises all its options under the Agreement, the Assignee will have acquired a 63.75% undivided interest in the Manado Gold Property and the Company will retain an 11.25% interest in the Manado Gold Property, In the event the option to acquire the Concession Holder’s carried interest is exercised, the Assignee will hold a 75% undivided interest and the Company will hold a 25% undivided interest.
		As of February 28, 2011, the Company has not entered into the Acquisition Agreement.
		Subsequent to the period ended February 28, 2011, the Company received a notice from a party purporting to represent the vendor of the Manado Gold Property. The notice purports to cancel the Company’s rights under the letter agreement dated November 2, 2009. The Company is considering legal action against the vendor. The Company has advanced a total of $50,000 to the vendor.

Issuing an aggregate of 600,000 Shares to CMI as follows:

~~PENGRAM~~(a) ~~CORPORATION~~100,000 ~~(An~~Shares ~~Exploration~~on ~~Stage~~or ~~Company~~before September 15, 2011; (b) ~~NOTES~~a TOfurther ~~CONSOLIDATED~~200,000 ~~FINANCIAL~~Shares ~~STATEMENTS~~on ~~FEBRUARY~~or 28before September 15, ~~2011~~2012; and (~~Unaudited~~c) ~~(Stated~~a infurther ~~U.S.~~300,000 ~~Dollars)~~Shares on or before September 15, 2013.

4.	MINERAL PROPERTY AND ACQUISITION COSTS (Continued)
	d)	June Claims
		On February 5, 2010, the Company entered into an option agreement to acquire an undivided 100% interest in a series of mineral claims (collectively known as the “June claims”) situated in the Alberni Mining Division of British Columbia, Canada. Consideration for the claims is as follows:
		i)	Payment of $3,000 due on February 5, 2010 (paid);
		ii)	Payment of $10,000 due on or before May 6, 2010;
		iii)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2011;
		iv)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2012;
		v)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2013.
		During the year ended November 30, 2010, the Company abandoned and wrote off all costs incurred with respect to the June property.
5.	PROMISSORY NOTES PAYABLE
	a)	On January 11, 2010, the Company entered into a promissory note agreement whereby it borrowed $75,000 from an arm’s length party. The note bears interest at 10% per annum, is unsecured and repayable on demand. As at February 28, 2011, a total of $8,486 (November 30, 2010 - $6,637) has been accrued as interest on this note.
	b)	Pursuant to a purchase agreement to acquire the Clisbako claims outlined in Note 4(a), the Company issued a promissory note in the amount of CDN$70,000 (translated to US$65,913 as at November 30, 2009) payable June 30, 2009. The promissory note is unsecured and free on interest. During the year ended November 30, 2009, the Company reached an agreement with the vendor to extend the deadline of the promissory note to December 31, 2009.
		During the year ended November 30, 2010, the Company obtained various extensions from the vendor to postpone the Property Payment. The Company repaid CDN$55,000 on the promissory note. During the three month period ended February 28, 2011, the Company repaid the remaining balance of CDN$15,000 of the promissory note.

Incurring Exploration Expenditures of CDN$650,000 on the Clisbako Property as follows:

~~PENGRAM~~(a) ~~CORPORATION~~CDN$100,000 ~~(An~~on ~~Exploration~~or ~~Stage~~before ~~Company~~September 15, 2011; (b) ~~NOTES~~a TOfurther ~~CONSOLIDATED~~CDN$300,000 ~~FINANCIAL~~on ~~STATEMENTS~~or ~~FEBRUARY~~before 28September 15, ~~2011~~2012; and (~~Unaudited~~c) ~~(Stated~~a infurther ~~U.S.~~CDN$250,000 ~~Dollars)~~on or before September 15, 2013.

6.Manado ~~PROMISSORY~~Gold ~~NOTES PAYABLE TO RELATED PARTIES On December 19, 2007, the Company entered into a promissory note agreement whereby it borrowed $20,000~~Corp. ~~The~~will ~~note~~also is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. As at February 28, 2011, a total of $6,395 (November 30, 2010 - $5,901) has been accrued as interest payable on the loan. During the year ended November 30, 2008, the owner of the company holding the promissory note became an officer and director of the Company. 7. LOAN PAYABLE On October 1, 2008, the Company received a loan from an arm’s length party of $10,000. The loan is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. During the year ended November 30, 2009, the Company paid back $4,610 of this balance. As at February 28, 2011, a total of $1,758 (November 30, 2010 - $1,625) has been accrued as interest payable on the loan. 8. CONVERTIBLE NOTES On April 30, 2009, the Company issued 55, $2,500 Convertible Notes (the “notes”) in the aggregate amount of $137,500 due and payable on or before October 31, 2010, with interest charged at the rate of 10% per annum payable annually. Attached to the Notes were 550,000 share purchase warrants (10,000 attached to each of the 55 notes). Each warrant entitles the holder to purchase three shares of the Company’s common stock for a period expiring one year from the date of issuance of the notes at an exercise price of $0.25 ($0.083 per share). At the election of the holder, the notes and interest accrued thereon are convertible into such number of shares of the Company’s common stock as shall be responsible ~~equal~~ to ~~the~~make ~~principal~~all ~~amount~~government ofpayments ~~the~~required ~~convertible note~~ to bekeep ~~converted divided by $0.05. Conversion of~~ the ~~notes~~claims ~~does~~in ~~not affect the warrants~~good standing. During the year ended November 30, 2008, the Company had received $67,500 towards the convertible notes offering. During the year end November 30, 2009, the Company received the remaining $70,000 towards this offering.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

8.	CONVERTIBLE NOTES (Continued)
4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	The Company has allocated the proceeds received between the notes and the detachable warrants on a relative fair value basis. The fair value of the warrants was estimated using the Black-Scholes option pricing model at the date of issue with the following weighted average assumptions: expected dividend yield of 0%; average risk free interest rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The fair value of the notes was estimated by multiplying the number of shares that would result from an immediate exercise of the conversion option, by the market price on the date of issue. The relative fair values of the notes and the warrants determine the debt discount attributable to the warrants. The result was $47,479 of the proceeds being allocated to the warrants and $90,021 being allocated to the notes. The resulting discount on the notes is amortized over the term of the notes to maturity such that, in the absence of any conversions, the carrying value of the notes at maturity would be equal to the face amount of $137,500. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized discount as of the date of conversion is immediately charged to operations.
	b)	Eureka Claims
	In accordance with the provisions of ASC 470 – 20, the Company determined the intrinsic value of the beneficial conversion feature on the notes by comparing the market price of the Company’s common stock at issuance of the notes to the effective conversion price of the notes, as determined by dividing the proceeds allocated to the notes by the number of shares that would result from an immediate exercise of the conversion option. The initial beneficial conversion feature was determined to be $734,250; however, in accordance with the provisions of ASC 470 – 20, it is limited to the proceeds allocated to the notes, being $90,021. This beneficial conversion feature was recorded as an immediate charge to additional paid-in capital and a further discount on the convertible note carrying value. This further discount is to be amortized over the term of the notes to maturity. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized beneficial conversion feature as of the date of conversion is immediately charged to operations.
		On May 29, 2009, the Company entered into an assignment agreement to acquire an undivided 100% interest in a series of mineral claims referred to as the CPG Project, Fish Claims and The Golden Snow Property (collectively known as the “Eureka” claims) situated in the Eureka County, Esmeralda County and Mineral County, Nevada. Consideration for the claims was as follows:
	During the year ended November 30, 2010, the Company recorded as finance charges, $28,964 of amortization (February 28, 2010 - $7,804) of the discount resulting from the allocation of proceeds to the warrants and a further $54,917 (February 28, 2010 - $14,799) of the intrinsic value of the beneficial conversion feature, leaving total unamortized amounts of $Nil (February 28, 2010 - $61,278). The accrued interest of $20,406 remains unpaid as of February 28, 2011 and November 30, 2010, and is included in accounts payable and accrued liabilities.
		i)	150,000 common shares (issued) with a value of $37,500;
	During the year ended November 30, 2010, the entire principal of $137,500 was converted into 2,750,000 shares of the Company’s common stock.
		ii)	$10,000 advance royalty payment due on or before August 28, 2009 (paid);
		iii)	$15,000 advance royalty payment due on or before August 28, 2010 (paid);
		iv)	$20,000 advance royalty payment due on or before August 28, 2011;
		v)	$25,000 advance royalty payment due on or before August 28, 2012;
		vi)	$30,000 advance royalty payment due on or before August 28, 2013, with an additional $30,000 due each year thereafter for a period of ten years, with an option to renew for an additional ten years.
		The Company entered into three property agreements dated as of April 26, 2011 covering the Golden Snow Property, the CPG Project and the Fish Claims to replace the single agreement covering these mineral properties.
		CPG Project
		The Company entered into an agreement dated as of March 31, 2011 with Claremont Nevada Mines LLC (“Claremont”) to earn a 100% undivided interest (the “CPG Option”) in the CPG Project by:
		(a)	paying to the Claremont advance royalty payments as follows:
			i) $4,100 on or before August 28, 2011;
			ii) $5,100 on or before August 28, 2012; and
			iii) $6,200 on or before August 28, 2013.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

9.	UNIT SUBSCRIPTIONS RECEIVED
4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)
	During the year ended November 30, 2010, the Company received $14,965 in subscription funds in connection with a private placement mentioned above. Due to the provision in the subscription agreements that the subscription funds will constitute non-interest bearing demand loans to the Company in the event the subscriptions are not accepted by the Company, the Company classified the unit subscriptions received in advance as current liabilities.
	b)	Eureka Claims (Continued)
10.	CAPITAL STOCK
		CPG Project (Continued
	a)	Common Stock
		(b)	paying to Claremont, during the term of the option, $1,000 in connection with the delivery by the Company to Claremont of:
		On June 19, 2006, the Company issued 27,000,000 common shares to the Company’s founder (9,000,000 pre-stock split shares at a price of $0.001 for gross proceeds of $9,000).
			(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and
		During the year ended November 30, 2006, pursuant to a private placement, the Company issued 17,997,144 common shares (5,999,048 pre-stock split shares at a price of $0.02 for gross proceeds of $119,981).
			(ii)	a final feasibility study in respect of the property that is approved by the Company’s management.
		During the year ended November 30, 2008, the Company received $80,000 from completing a private placement of 3,000,000 units (1,000,000 pre-stock split units at a price of $0.08 per unit). Each unit was comprised of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the subscriber to purchase one share of the Company’s common stock for a period expiring two years from the date of issue at an exercise price of $0.033 per share.
		During the year ended November 30, 2009, the Company completed the following stock transactions:
			issued 6,000,000 common shares pursuant to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.05 per share for a total value of $300,000;
			issued 150,000 common shares pursuant to a mineral property assignment agreement (see Note 4). The Company recorded these shares at a price of $0.25 per share for a total value of $37,500; and
			issued 60,000 common shares pursuant to an extension to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.60 per share for a total value of $36,000.

~~PENGRAM~~The ~~CORPORATION~~term ~~(An~~of ~~Exploration~~the ~~Stage~~CPG ~~Company)~~Option ~~NOTES~~expires August TO28, ~~CONSOLIDATED~~2013, ~~FINANCIAL~~but ~~STATEMENTS~~may ~~FEBRUARY~~be ~~28,~~extended ~~2011~~for ~~(Unaudited)~~five ~~(Stated~~years by paying $6,200 in Ueach subsequent year.S. ~~Dollars)~~The Company is also obligated to pay all county and BLM claim fees and Nevada state taxes during the currency of the agreement.

10.	CAPITAL STOCK (Continued)
	a)	Common Stock (Continued)
		During the year ended November 30, 2010, the Company completed the following stock transactions:
			issued 600,000 units for total proceeds of $60,000 in relation to a private placement. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.15 for a period of two years.
			issued 150,000 common shares from exercise of warrants;
			issued 2,750,000 common shares with a value of $137,500 pursuant to the conversion of convertible notes (see Note 8);
			issued 30,000 common shares with a value of $6,400 pursuant to an extension to a mineral property purchase agreement (see Note 4);
		During the three month period ended February 28, 2011, pursuant to a private placement, the Company issued 527,200 units for proceeds of $26,360. These funds had been received in advance at November 30, 2010. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.10 for a period of two years.
	b)	Share Purchase Warrants
		As at February 28, 2011 share purchase warrants were outstanding for the purchase of common shares as follows:

The CPG Project is subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

	(a)	to 1% by paying $1,000,000 to the royalty holder; or

	(b)	to 2% by paying $500,000 to the royalty holder.

Fish Claims

The Company entered into an agreement dated as of March 31, 2011 with Claremont to earn a 100% undivided interest (the “Fish Option”) in the Fish Claims by:

(a)	paying to Claremont advance royalty payments as follows:

	i)	$5,400 on or before August 28, 2011;

	ii)	$6,800 on or before August 28, 2012; and

	iii)	$8,100 on or before August 28, 2013.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)

	b)	Eureka Claims (Continued)

		Fish Claims (Continued)

		(b)	paying to Claremont, during the term of the option, $1,000 in connection with the delivery by the Company to Claremont of:

			(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

			(ii)	a final feasibility study in respect of the property that is approved by the Company’s management.

The term of the Fish Option expires August 28, 2013, but may be extended for five years by paying $8,100 in each subsequent year. The Company is also obligated to pay all county and BLM claim fees and Nevada state taxes during the currency of the agreement.

The Fish Claims are subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

	(a)	to 1% by paying $1,000,000 to the royalty holder; or

	(b)	to 2% by paying $500,000 to the royalty holder.

Golden Snow Property

The Company entered into an agreement dated as of March 31, 2011 with Scoonover Exploration LLC and JR Exploration LLC (collectively, the “Golden Snow Optionors”) to earn a 100% undivided interest (the “Golden Snow Option”) in the Golden Snow Property by:

(a)	paying to the Golden Snow Optionors advance royalty payments as follows:

	i)	$10,600 on or before August 28, 2011;

	ii)	$13,200 on or before August 28, 2012; and

	iii)	$15,900 on or before August 28, 2013.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)

	b)	Eureka Claims (Continued)

		Golden Snow Property (Continued)

		(b)	paying to the Golden Snow Optionors, during the term of the option, $1,000 in connection with the delivery by the Company to the Golden Snow Optionors of:

			(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

			(ii)	a final feasibility study in respect of the property that is approved by the Optionee’s management.

The term of the Golden Snow Option expires August 28, 2013, but may be extended for five years by paying $15,900 in each subsequent year. The Company is also obligated to pay all county and BLM claim fees and Nevada state taxes during the currency of the agreement.

The Golden Snow Property is subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

	(a)	to 1% by paying $1,000,000 to the royalty holder; or

	(b)	to 2% by paying $500,000 to the royalty holder.

Agreement with Terrace Ventures Inc. (Golden Snow Property)

On April 26, 2011, the Company entered into an agreement (the "Earn-In Agreement") with Terrace Ventures Inc.(“Terrace”). Under the terms of the Earn-In Agreement, Terrace will earn up to a 75% interest in the Company’s agreement with the Golden Snow Optionors (the “Underlying Agreement”) by paying the Company up to $175,000 and expending up to $1,750,000 in exploration expenditures on the Golden Snow Property as follows:

(a)	The first 25% interest in the Underlying Agreement upon Terrace:

	(i)	paying the Company $25,000 by way of a non-interest bearing Promissory Note due 45 days from the date of the Earn-In Agreement, subsequent to period-end the Promissory Note was extended to September 27, 2011. In consideration of this extension, the Note will bear interest of 10% per annum calculated from April 26, 2011;

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)

	b)	Eureka Claims (Continued)

		Agreement with Terrace Ventures Inc. (Golden Snow Property) (Continued)

		(a)	The first 25% interest in the Underlying Agreement upon Terrace: (Continued)

			(ii)	completing exploration expenditures on the Property totalling $250,000 by July 31, 2012.

		(b)	An additional 25% interest in the Underlying Agreement upon Terrace:

			(i)	paying the Company $50,000 on or before May 31, 2013;

			(ii)	completing exploration expenditures on the Property totalling $500,000 by July 31, 2013.

		(c)	An additional 25% interest in the Underlying Agreement upon Terrace:

			(i)	paying the Company $100,000 on or before May 31, 2014;

			(ii)	completing exploration expenditures on the Property totalling $1,000,000 by July 31, 2014.

		Terrace is also obligated to pay all advance royalties, county and BLM claim fees and Nevada state taxes during the currency of the Earn-In Agreement.

	c)	Manada Gold Claims

		On January 19, 2010 the Company entered into an option agreement to acquire interests in four mineral claims (collectively known as the “Manado Gold claims”) in the Lobongan District of Northern Sulawesi, Indonesia. The Company paid $35,000 for this option agreement and then entered into an acquisition agreement to purchase an 85% in the Manado gold claims over a three year period. Terms of the acquisition agreement were for the Company to earn an initial 10% interest to pay a cash payment of $90,000 (paid $15,050), issue 150,000 shares of the Company’s stock (not issued) and complete an exploration program of at least $250,000 (not completed); to earn a further 15% pay a cash payment of $100,000, issue 300,000 shares of the Company’s stock, and complete an additional $500,000 exploration program; to earn a further 26% interest pay $200,000, issue 500,000 shares of the Company’s stock and incur a further $1,000,000 in exploration expenditures; the final 34% interest upon completion of a scoping study on the claims.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY ACQUISITION COSTS (Continued)

	c)	Manada Gold Claims (Continued)

		In August 2010, the Company entered into an agreement with Manado Gold Corp. (“Manado Gold”) to earn a 75% interest in the Company’s 85% interest. Manado Gold agreed to reimburse the Company $80,000 (received $68,427), carry out the exploration expenditures required under the original acquisition agreement and to issue the Company 950,000 shares of its capital stock to the Company.

		On April 30, 2011, the optionors of the mineral property agreed to have the Company terminate its agreement with Manado Gold, in return the Company agreed to waive the payment of $50,000 in respect of the Clisbako property due April 30, 2011 (note 4 (a)) from Manado Gold.

		As at May 31, 2011, the Company has abandoned its pursuit of an interest in the acquisition agreement.

d)	June Claims

	On February 5, 2010, the Company entered into an option agreement to acquire an undivided 100% interest in a series of mineral claims (collectively known as the “June claims”) situated in the Alberni Mining Division of British Columbia, Canada. Consideration for the claims is as follows:

	i)	Payment of $3,000 due on February 5, 2010 (paid);

	ii)	Payment of $10,000 due on or before May 6, 2010;

	iii)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2011;

	iv)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2012;

	v)	Payment of $10,000 and the issuance of 100,000 shares of the Company’s common stock due on or before February 5, 2013.

	During the year ended November 30, 2010, the Company abandoned and wrote off all costs incurred with respect to the June property.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

4.	MINERAL PROPERTY AND ACQUISITION COSTS (Continued)

	e)	Elko Claims

		On April 13, 2011, the Company acquired a 30-day exclusive right to negotiate with Development Resources LLC, a Delaware limited liability company, for the acquisition of 54 mineral claims located in Elko County, Nevada. The Company paid $10,000 to Development Resources LLC to acquire the exclusive right. This right expired unexercised on May 20, 2011.

5.	PROMISSORY NOTES PAYABLE

	a)	On January 11, 2010, the Company entered into a promissory note agreement whereby it borrowed $75,000 from an arm’s length party. The note bears interest at 10% per annum, is unsecured and repayable on demand. As at May 31, 2011, a total of $10,109 (November 30, 2010 - $6,637) has been accrued as interest on this note.

		On April 21, 2011, the Company settled $24,459 of the promissory note by way of exchange of marketable securities for debt. See Note 3.

	b)	Pursuant to a purchase agreement to acquire the Clisbako claims outlined in Note 4(a), the Company issued a promissory note in the amount of CDN$70,000 (translated to US$65,913 as at November 30, 2009) payable June 30, 2009. The promissory note is unsecured and free of interest. During the year ended November 30, 2009, the Company reached an agreement with the vendor to extend the deadline of the promissory note to December 31, 2009.

		During the year ended November 30, 2010, the Company obtained various extensions from the vendor to postpone the Property Payment. The Company repaid CDN$55,000 on the promissory note. During the six month period ended May 31, 2011, the Company repaid the remaining balance of CDN$15,000 of the promissory note.

	c)	During the six month period ended May 31, 2011, the Company entered into additional promissory note agreements, whereby it borrowed an additional $85,500 from arms’ length parties. These notes bear interest at 10% per annum, are unsecured and are repayable on demand. As at May 31, 2011, total interest of $1,062 has been accrued on these outstanding notes.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

6.	PROMISSORY NOTES PAYABLE TO RELATED PARTIES

	a)	On December 19, 2007, the Company entered into a promissory note agreement whereby it borrowed $20,000. The note is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. As at May 31, 2011, a total of $6,834 (November 30, 2010 - $5,901) has been accrued as interest payable on the loan. During the year ended November 30, 2008, the owner of the company holding the promissory note became an officer and director of the Company.

		On April 21, 2011, the Company settled $5,883 of the promissory note by way of marketable securities for debt exchange. See Note 3.

	b)	On April 13, 2011, the Company entered into a promissory note agreement, whereby it borrowed $12,000 from a related party. This note bears interest of 10% per annum, is unsecured and is repayable on demand. As at May 31, 2011, total interest of $158 has been accrued on this note.

7.	LOAN PAYABLE

	On October 1, 2008, the Company received a loan from an arm’s length party of $10,000. The loan is unsecured, repayable on demand and bears interest at 10% per annum, payable annually. During the year ended November 30, 2009, the Company paid back $4,610 of this balance. As at May 31, 2011, a total of $1,876 (November 30, 2010 - $1,625) has been accrued as interest payable on the loan.

	On April 21, 2011, the Company settled $1,590 of the loan by way of exchange of marketable securities for debt. See Note 3.

8.	CONVERTIBLE NOTES

	On April 30, 2009, the Company issued 55, $2,500 Convertible Notes (the “notes”) in the aggregate amount of $137,500 due and payable on or before October 31, 2010, with interest charged at the rate of 10% per annum payable annually. Attached to the Notes were 550,000 share purchase warrants (10,000 attached to each of the 55 notes). Each warrant entitles the holder to purchase three shares of the Company’s common stock for a period expiring one year from the date of issuance of the notes at an exercise price of $0.25 ($0.083 per share). At the election of the holder, the notes and interest accrued thereon are convertible into such number of shares of the Company’s common stock as shall be equal to the principal amount of the convertible note to be converted divided by $0.05. Conversion of the notes does not affect the warrants.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

8.	CONVERTIBLE NOTES (Continued)

	During the year ended November 30, 2008, the Company had received $67,500 towards the convertible notes offering. During the year end November 30, 2009, the Company received the remaining $70,000 towards this offering.

	The Company has allocated the proceeds received between the notes and the detachable warrants on a relative fair value basis. The fair value of the warrants was estimated using the Black-Scholes option pricing model at the date of issue with the following weighted average assumptions: expected dividend yield of 0%; average risk free interest rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The fair value of the notes was estimated by multiplying the number of shares that would result from an immediate exercise of the conversion option, by the market price on the date of issue. The relative fair values of the notes and the warrants determine the debt discount attributable to the warrants. The result was $47,479 of the proceeds being allocated to the warrants and $90,021 being allocated to the notes. The resulting discount on the notes is amortized over the term of the notes to maturity such that, in the absence of any conversions, the carrying value of the notes at maturity would be equal to the face amount of $137,500. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized discount as of the date of conversion is immediately charged to operations.

	In accordance with the provisions of ASC 470 – 20, the Company determined the intrinsic value of the beneficial conversion feature on the notes by comparing the market price of the Company’s common stock at issuance of the notes to the effective conversion price of the notes, as determined by dividing the proceeds allocated to the notes by the number of shares that would result from an immediate exercise of the conversion option. The initial beneficial conversion feature was determined to be $734,250; however, in accordance with the provisions of ASC 470 – 20, it is limited to the proceeds allocated to the notes, being $90,021. This beneficial conversion feature was recorded as an immediate charge to additional paid-in capital and a further discount on the convertible note carrying value. This further discount is to be amortized over the term of the notes to maturity. In the event of a conversion of any, or all, of the face amount of the notes, the proportionate amount of the unamortized beneficial conversion feature as of the date of conversion is immediately charged to operations.

	During the year ended November 30, 2010, the Company recorded as finance charges, $28,964 of amortization (May 31, 2010 - $15,783) of the discount resulting from the allocation of proceeds to the warrants and a further $54,917 (May 31, 2010 - $29,925) of the intrinsic value of the beneficial conversion feature, leaving total unamortized amounts of $Nil (May 31, 2010 - $38,173). The accrued interest of $24,122 remains unpaid as of May 31, 2011 and November 30, 2010, and is included in accounts payable and accrued liabilities.

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

8.	CONVERTIBLE NOTES (Continued)

	During the year ended November 30, 2010, the entire principal of $137,500 was converted into 2,750,000 shares of the Company’s common stock.

9.	UNIT SUBSCRIPTIONS RECEIVED

	During the year ended November 30, 2010, the Company received $14,965 in subscription funds in connection with a private placement mentioned above. Due to the provision in the subscription agreements that the subscription funds will constitute non-interest bearing demand loans to the Company in the event the subscriptions are not accepted by the Company, the Company classified the unit subscriptions received in advance as current liabilities.

10.	CAPITAL STOCK

	a)	Common Stock

		On June 19, 2006, the Company issued 27,000,000 common shares to the Company’s founder (9,000,000 pre-stock split shares at a price of $0.001 for gross proceeds of $9,000).

		During the year ended November 30, 2006, pursuant to a private placement, the Company issued 17,997,144 common shares (5,999,048 pre-stock split shares at a price of $0.02 for gross proceeds of $119,981).

		During the year ended November 30, 2008, the Company received $80,000 from completing a private placement of 3,000,000 units (1,000,000 pre-stock split units at a price of $0.08 per unit). Each unit was comprised of one share of the Company’s common stock and one share purchase warrant. Each warrant entitles the subscriber to purchase one share of the Company’s common stock for a period expiring two years from the date of issue at an exercise price of $0.033 per share.

		During the year ended November 30, 2009, the Company completed the following stock transactions:

			issued 6,000,000 common shares pursuant to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.05 per share for a total value of $300,000;

PENGRAM CORPORATION

(An Exploration Stage Company)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2011

(Unaudited)

(Stated in U.S. Dollars)

10.	CAPITAL STOCK (Continued)

	a)	Common Stock (Continued)

			issued 150,000 common shares pursuant to a mineral property assignment agreement (see Note 4). The Company recorded these shares at a price of $0.25 per share for a total value of $37,500; and

			issued 60,000 common shares pursuant to an extension to a mineral property purchase agreement (see Note 4). The Company recorded these shares at a price of $0.60 per share for a total value of $36,000.

		During the year ended November 30, 2010, the Company completed the following stock transactions:

			issued 600,000 units for total proceeds of $60,000 in relation to a private placement. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.15 for a period of two years.

			issued 150,000 common shares from exercise of warrants;

			issued 2,750,000 common shares with a value of $137,500 pursuant to the conversion of convertible notes (see Note 8);

			issued 30,000 common shares with a value of $6,400 pursuant to an extension to a mineral property purchase agreement (see Note 4);

		The Company approved a private offering of up to 3,000,000 units (the “Units”) at a price of $0.05 per unit for gross proceeds of up to $150,000. The Company received in advance 527,200 units for proceeds of $26,360 which were issued during the period ended May 31, 2011. Each unit consists of one common share and one share purchase warrant, each whole warrant entitling the holder thereof to purchase an additional common share at a price of $0.10 for a period of two years.

	b)	Share Purchase Warrants

		As at May 31, 2011 share purchase warrants were outstanding for the purchase of common shares as follows:

NUMBER OF	EXERCISE
WARRANTS	PRICE	EXPIRY DATE

500,000	$ 0.15	July 20, 2012
100,000	$ 0.15	August 4, 2012
527,200	$ 0.10	February 18, 2013

1,127,200

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~FEBRUARY~~MAY 2831, 2011 (Unaudited) (Stated in U.S. Dollars)

10.	CAPITAL STOCK (Continued)
	b)	Share Purchase Warrants (Continued)
		A summary of changes in share purchase warrants for the periods ended November 30, 2010 and February 28, 2011 is presented below:
		A summary of changes in share purchase warrants for the periods ended November 30, 2010 and May 31, 2011 is presented below:

	NUMBER OF			WEIGHTED AVERAGE
	WARRANTS			EXERCISE PRICE
Balance, November 30, 2009	4,650,000		$	0.05
Granted	600,000		$	0.15
Exercised	(150,000	)	$	(0.083	)
Expired	(4,500,000	)	$	(0.05	)
Balance, November 30, 2010	600,000		$	0.15
Granted	527,200		$	0.10
Balance, February 28, 2011	1,127,200		$	0.13
Balance, May 31, 2011	1,127,200		$	0.13

The fair value of the warrants issued in connection with the private placement during the year ended November 30, 2010 was measured at the award date using the Black-Scholes option pricing model with the following weighted average assumptions: expected dividend yield of 0%; average risk free interest rate of 1.46%; expected volatility of 168% and a term of 2 years. Of the total proceeds, $21,750 was allocated to share purchase warrants.

The fair value of the warrants issued in connection with the private placement during the ~~three~~six month period ended ~~February~~ 28May 31, 2011 was measured at the award date using the Black-Scholes option ~~pricing~~ pricing model with the following weighted average assumptions: expected dividend ~~yield~~ yield of 0%; average risk free interest rate of 0.78%; expected volatility of 202% and a term of 2 years. Of the total proceeds, $8,400 was allocated to share ~~purchase~~ purchase warrants.

c)PENGRAM ~~Stock~~CORPORATION ~~Options~~(An AsExploration atStage ~~February~~Company) ~~28,~~NOTES ~~2011,~~TO ~~the~~INTERIM ~~Company~~CONDENSED ~~does~~CONSOLIDATED ~~not~~FINANCIAL ~~have~~STATEMENTS anMAY ~~incentive~~31, ~~stock~~2011 ~~option~~(Unaudited) ~~plan~~(Stated in U.S. Dollars)

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 2011 (Unaudited) (Stated in U.S. Dollars)

10.	CAPITAL STOCK (Continued)

	c)	Stock Options

		On March 1, 2011, the Company adopted its 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan provides for the issuance of incentive and non-qualified shares of the Company's stock to officers, directors, employees, and non-employees. A total of 5,500,000 shares of the Company’s common stock are available for issuance under the Plan. The exercise price must not be less than: (i) 80% of market price of the Company's common stock in respect of non-qualified stock options; and (ii) market price of the Company's common stock in respect of incentive stock options. The options can be granted for a maximum term of 10 years and vest as determined by the Board of Directors.

11.	RELATED PARTY TRANSACTIONS

	As of May 31, 2011, the Company is indebted to the following additional related parties otherwise not disclosed in previous notes:

	i)	Included in due to related parties is a loan payable to a member of the board of directors of MAC of $497 (November 30, 2010 - $Nil);

	ii)	Included in due to related parties is a loan payable to a company owned by a member of the board of directors of MAC of $1,013 (November 30, 2010 - $Nil).

	The amounts due to the related parties are unsecured, non-interest bearing with no fixed terms of repayment.

	During the six months ended May 31, 2011, the Company paid or accrued $18,000 (2010 - $18,000) for management fees to the board of directors of MAC.

	On April 21, 2011, outstanding management fees aggregating $14,390 were settled by the Company by the transferring of marketable securities to related parties. See Note 3.

	These transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties.

12.	COMMITMENTS AND CONTRACTUAL OBLIGATIONS

	The Company has no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements or other matters. Rental of premises and investor relations services are provided on a month-to-month basis.

~~11.~~PENGRAM ~~RELATED~~CORPORATION ~~PARTY~~(An ~~TRANSACTIONS~~Exploration Stage Company) NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MAY 31, 2011 (Unaudited) (Stated in U.S. Dollars)

As of February 28, 2011, the Company is indebted to the following related parties:

	i)	Loan payable to a member of the board of directors of MAC of $497 (November 30, 2010 - $Nil);
	ii)	Loan payable to a company owned by a member of the board of directors of MAC of $1,013 (November 30, 2010 - $Nil).

The amounts due to the related parties are unsecured, non-interest bearing with no fixed terms of repayment.

During the three months ended February 28, 2011, the Company paid or accrued $9,000 (2010 - $9,000) for management fees to the board of directors of MAC.

These transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties.

12. COMMITMENTS AND CONTRACTUAL OBLIGATIONS The Company has no significant commitments or contractual obligations with any parties respecting executive compensation, consulting arrangements or other matters. Rental of premises and investor relations services are provided on a month-to-month basis.

PENGRAM CORPORATION (An Exploration Stage Company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 28, 2011 (Unaudited) (Stated in U.S. Dollars)

13.	SEGMENT INFORMATION

	The Company has one reportable operating segment, being the acquisition and exploration of mineral properties. Details of identifiable assets by geographic segments are as follows:

		MINERAL		~~MINERAL~~
		CAPITAL		PROPERTY
		PROPERTY
		ASSETS		INTERESTS
		INTERESTS
February 28, 2011
May 31 2011
USA	$	-62,525	$	~~62,525~~
Canada		-309,746		~~334,362~~
	$	-372,271	$	~~396,887~~
				MINERAL
		CAPITAL		PROPERTY
		ASSETS		INTERESTS
November 30, 2010
USA	$	-	$	62,525
Canada		-		350,350
	$	-	$	412,875

14.	SUBSEQUENT EVENTS
		MINERAL
	a)	Subsequent to February 28, 2011, the Company entered into three promissory note agreements whereby it borrowed $70,000 from two arms’ length parties and $12,000 from a related party. Each note bears interest at 10% per annum, is unsecured and is repayable on demand.
		PROPERTY
	b)	On March 1, 2011, the Company adopted its 2011 Stock Incentive Plans (the “2011 Plan”). The 2011 Plan provides for the issuance of incentive and non-qualified shares of the Company's stock to officers, directors, employees, and non-employees. A total of 5,500,000 shares of the Company’s common stock are available for issuance under the Plan. The exercise price must not be less than: (i) 80% of market price of the Company's common stock in respect of non-qualified stock options; and (ii) market price of the Company's common stock in respect of incentive stock options. The options can be granted for a maximum term of 10 years and vest as determined by the Board of Directors.
		INTERESTS
November 30, 2010
USA	$	62,525
Canada		350,350
	$	412,875

~~PENGRAM~~14. ~~CORPORATION~~SUBSEQUENT ~~(An~~EVENTS ~~Exploration~~Subsequent ~~Stage~~to May 31, 2011, the Company) ~~NOTES~~entered TOinto ~~CONSOLIDATED~~two ~~FINANCIAL~~promissory ~~STATEMENTS~~note ~~FEBRUARY~~agreements whereby it borrowed $28,346 ~~2011~~from ~~(Unaudited)~~an ~~(Stated~~arm’s inlength Uparty.S. ~~Dollars)~~Each note bears interest at 10% per annum, is unsecured and is repayable on demand.

14.	SUBSEQUENT EVENT (Continued)
	c)	On April 13, 2011, the Company acquired a 30-day exclusive right to negotiate with Development Resources LLC, a Delaware limited liability company, for the acquisition of 54 mineral claims located in Elko County, Nevada. The Company paid $10,000 to Development Resources LLC to acquire the exclusive right.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate,” "believe,” "estimate,” "should,” "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II - Item 1A. Risk Factors and elsewhere in this Quarterly Report. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”).

OVERVIEW

We were incorporated on April 28, 2006 under the laws of the State of Nevada.

Our business plan is to assemble a portfolio of mineral properties with gold potential and to engage in the exploration and development of these properties. We currently have an option to acquire a 100% interest in certain mineral properties known as the ~~Golden~~Fish ~~Snow~~ Project in ~~Eureka~~Esmeralda County, Nevada, and the ~~Fish~~CPG Project in ~~Esmeralda~~Mineral County, Nevada. ~~and~~We also have an option to acquire the ~~CPG~~Golden ~~Project~~Snow Property in ~~Mineral~~ Eureka County, Nevada ~~(collectively~~, ~~the~~which ~~“Eureka~~is ~~Optioned~~subject ~~Properties)~~to a 75% earn-in by Terrace Ventures Inc.

We ~~also~~ hold a 100% ~~interest~~title in ten contiguous mineral claims covering an area of approximately 3,388 hectares (the “Clisbako Property”) located in the Interior Plateau Region of north central British Columbia. On September 15, 2010, Clisbako Minerals Inc. (“Clisbako”) entered into an option agreement (the “Clisbako Option Agreement”) with Manado Gold Corp. (“Manado Corp.”) whereby we granted Manado Corp. the sole and exclusive right and option to acquire a 75% undivided interest in the Clisbako Property. Under the terms of the Clisbako Option Agreement, Manado Corp. will exercise its option upon paying Clisbako ~~Inc.~~ an aggregate of USD $150,000, issuing 600,000 shares of Manado Corp.’s common stock and incurring CAD $650,000 in exploration expenditures on the Clisbako Property in stages over a three year period.

We previously held an option to acquire the Manado Gold Property located 50 miles south of Manado in northern Sulawesi, Indonesia. On April 10, 2011, we received a notice from a party purporting to represent Agus Abidin, the vendor of the Manado Gold Property. The notice purports to cancel our rights under the letter agreement dated November 2, 2009 (the "Agreement") alleging that we failed to meet the requirements under the Agreement. Under the terms of the Agreement, we had elected to exercise our right to enter into a formal agreement to acquire the Manado Gold Property; however, the vendor, Mr. Abidin, had not met legal requirements to convert the tenures under which the Manado Gold Property is held into the new form of tenure required by the new Indonesian mining laws which is necessary to permit us to acquire our interest. Despite numerous requests by us to Mr. Abidin and his representatives, this was never accomplished by him. Because of the delays on the part of the vendor, we had already determined to focus on our North American properties. Based on the notice received, we are now considering legal action against the vendor. We have advanced a total of $50,000 to the vendor.

Based on the potential and current state of development, we have decided to focus our resources on the ~~Eureka~~Fish ~~Optioned~~Project ~~Properties~~and CPG Project.

RECENT CORPORATE DEVELOPMENTS

We experienced the following corporate developments since the filing of our ~~Annual~~Quarterly Report on Form 10-KQ for the fiscal ~~year~~Quarter ended February ~~November 30~~28, ~~2010~~ 2011:

1.	On April 10, 2011, we received a notice to cancel our rights to the Manado Gold Property. See “Overview” above.
2.	On April 13, 2011, we acquired a 30-day exclusive right to negotiate with Development Resources LLC, a Delaware limited liability company, for the acquisition of 54 mineral claims located in Elko County, Nevada. We paid $10,000 to Development Resources LLC to acquire the exclusive right.

1.	Effective April 21, 2011, Bryan Wilson resigned as a member of our Board of Directors. To fill the vacancy created by his resignation, we appointed Howard Metzler as a member of our Board of Directors. There were no disagreements between with Mr. Wilson regarding any matter relating to the Company’s operations, policies or practices.

2.	On April 26, 2011, we entered into three property agreements dated as of March 31, 2011 covering our Golden Snow, CPG and Fish Properties located in Nevada. The three properties were previously held under a single agreement. The three new agreements are on substantially the same terms, but allow us to acquire each property independently and permit us to enter into agreements for joint venture financing of exploration programs on a property-by-property basis. See “CPG Project”, “Fish Claims” and “Golden Snow Property” below.

3.	We entered into an agreement with Terrace Ventures Inc. dated April 26, 2011 (the "Earn-In Agreement"). Under the terms of the Earn-In Agreement, Terrace will earn up to a 75% interest in the Company’s agreement with the Golden Snow Optionors (the “Underlying Agreement”) by paying to the Company up to $175,000 and expending up to $1,750,000 to do exploration work on the Golden Snow Property. See “Agreement with Terrace Ventures Inc.” below.

4.	On May 12, 2011, we entered into an amendment to the letter agreement dated April 13, 2011 with Development Resources LLC granting us the exclusive right to negotiate the acquisition of 54 mineral claims located in the Long Canyon area of Elko County, Nevada. Under the terms of the amendment agreement, Development Resources LLC, the owner of the mineral claims, agreed to extend the exclusivity period for an additional 7 days to permit negotiations to be completed. We were unable to reach an agreement with Development Resources LLC by the end of the exclusivity period.

5.	We settled approximately $110,000 of outstanding indebtedness of the Company and our wholly-owned subsidiary, Magellan Acquisition Corp. ("Magellan"), by transferring our 209,000 shares of Copper Development Corp. held by Magellan to certain creditors of the Company and Magellan, including $7,923.50 of indebtedness to Richard W. Donaldson, our President, $5,883.00 of indebtedness to Kahala Financial Corp. a company controlled by Mr. Donaldson, $6,174.50 of indebtedness to Don Archibald, a director of Magellan and $291.50 of indebtedness to David K. Ryan, a director of Magellan. For the purposes of the settlement, the shares of Copper Development Corp. were valued based on their trading price on the London AIM Market of approximately $0.55 per share.

CPG PROJECT

The CPG Project consists of 44 unpatented lode mining claims in the Walker Lane of Western Nevada. Under the terms of the agreement between us and Claremont Nevada Mines LLC (the “CPG Optionor”), we have the right to earn a 100% undivided interest (the “CPG Option”) in the CPG Project by:

(a)	paying to the CPG Optionor advance royalty payments as follows:

	(i)	$4,100 on or before August 28, 2011;

	(ii)	$5,100 on or before August 28, 2012; and

	(iii)	$6,200 on or before August 28, 2013.

(b)	paying to the CPG Optionor, during the term of the option, $1,000 in connection with the delivery by the Company to the CPG Optionor of:

	(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

(ii)

a final feasibility study in respect of the property that is approved by the Company’s management.

The term of the CPG Option expires August 28, 2013, but may be extended for five years by paying $6,200 in each subsequent year. We are also obligated to pay all county and BLM claim fees and Nevada state taxes during the currency of the agreement.

The CPG Project is subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

(a)	to 1% by paying $1,000,000 to the royalty holder; or

(b)	to 2% by paying $500,000 to the royalty holder.

FISH CLAIMS

The Fish Claims consists of 58 unpatented lode mining claims in the Lone Mountain Mining District of Esmeralda County, Nevada. Under the terms of the agreement between us and Claremont Nevada Mines LLC (the “Fish Optionor”), the Company has the right to earn a 100% undivided interest (the “Fish Option”) in the Fish Claims by:

(a)	paying to the Fish Optionor advance royalty payments as follows:

	(i)	$5,400 on or before August 28, 2011;

	(ii)	$6,800 on or before August 28, 2012; and

	(iii)	$8,100 on or before August 28, 2013.

(b)	paying to the Fish Optionor, during the term of the option, $1,000 in connection with the delivery by the Company to the Fish Optionor of:

	(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

	(ii)	a final feasibility study in respect of the property that is approved by the Company’s management.

The term of the Fish Option expires August 28, 2013, but may be extended for five years by paying $8,100 in each subsequent year. We are also obligated to pay all county and BLM claim fees and Nevada state taxes during the currency of the agreement.

The Fish Claims are subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

(a)	to 1% by paying $1,000,000 to the royalty holder; or

(b)	to 2% by paying $500,000 to the royalty holder.

GOLDEN SNOW PROPERTY

The Golden Snow Property consists of 83 mineral claims located in the Eureka Mining District in Eureka County, Nevada. Under the terms of the agreement among the Company, Scoonover Exploration LLC and JR Exploration LLC (collectively, the “Golden Snow Optionors”), the Company has the right to earn a 100% undivided interest (the “Golden Snow Option”) in the Golden Snow Property by:

(a)	paying to the Golden Snow Optionors advance royalty payments as follows:

	(i)	$10,600 on or before August 28, 2011;

	(ii)	$13,200 on or before August 28, 2012; and

	(iii)	$15,900 on or before August 28, 2013.

(b)	paying to the Golden Snow Optionors, during the term of the option, $1,000 in connection with the delivery by the Company to the Golden Snow Optionors of:

	(i)	a copy of a mine plan of operations in respect of the property which is approved by the lead government agency having responsibility for such approval; and

	(ii)	a final feasibility study in respect of the property that is approved by the Company’s management.

The Golden Snow Property is subject to a royalty of 3% net smelter returns upon the commencement of commercial production. At any time the Company may reduce the royalty as follows:

(a)	to 1% by paying $1,000,000 to the royalty holder; or

(b)	to 2% by paying $500,000 to the royalty holder.

Agreement with Terrace Ventures Inc. (Golden Snow Property)

We entered into an agreement with Terrace Ventures Inc. dated April 26, 2011, as amended on June 29, 2011, (the "Earn-In Agreement”) whereby Terrace will earn up to a 75% interest in our agreement with the Golden Snow Optionors (the “Underlying Agreement”) by paying us up to $175,000 and expending up to $1,750,000 to do exploration work on the Golden Snow Property as follows:

(a)	The first 25% interest in the Underlying Agreement upon Terrace:

	(i)	paying the Company $25,000 by way of a promissory note, bearing interest at a rate of 10% per annum, due on September 27, 2011;

	(ii)	completing exploration expenditures on the Property totalling $250,000 by July 31, 2012.

(b)	An additional 25% interest in the Underlying Agreement upon Terrace:

	(i)	paying the Company $50,000 on or before May 31, 2013;

	(ii)	completing exploration expenditures on the Property totalling $500,000 by July 31, 2013:

(c)	An additional 25% interest in the Underlying Agreement upon Terrace:

	(i)	paying the Company $100,000 on or before May 31, 2014;

	(ii)	completing exploration expenditures on the Property totalling $1,000,000 by July 31, 2014.

Terrace is also obligated to pay all advance royalties, county and BLM claim fees and Nevada state taxes during the currency of the Earn-In Agreement.

PLAN OF OPERATION

Over the next twelve months, our plan of operation is to focus our resources on the exploration of the ~~Eureka~~CPG ~~Optioned~~Project ~~Properties~~and the Fish Claims. Subject to obtaining sufficient financing, we plan to retain a consulting geologist to conduct a review of these properties in order to recommend an exploration program to be conducted in summer 2011. Once our consulting geologist has provided us with their findings, we will determine whether to proceed with an exploration program on these properties.

Subject to obtaining sufficient financing, we plan to retain a consulting geologist to conduct a review of these properties in order to recommend an exploration program to be conducted in summer 2011. Once our consulting geologist has provided us with their findings, we will determine whether to proceed with an exploration program on these properties.6

During the next twelve months, we will be required to make a number of payments in order to maintain our options to acquire the ~~Golden~~CPG ~~Snow~~ Project, Fish ~~Project~~Claims and ~~CPG~~Golden ~~Project~~Snow Property. Under the terms of our options to acquire the ~~Golden~~CPG ~~Snow~~ Project, Fish ~~Project~~Claims and ~~CPG~~Golden ~~Project~~Snow Property, in order to keep them in good standing, we are required to pay ~~to Claremont~~: (i) anClaremont ~~option~~and ~~payment~~the ofGolden Snow Optionors option payments totaling $20,~~000~~100 by August 28, 2011; and (ii) ~~the~~ Bureau of Land Management maintenance and claim fees of approximately $32,583 by September 1, 2011. If we are unable to make the payments to Claremont, the Golden Snow Optionors, the Bureau of Land Management or pay the ~~annual~~ annual maintenance claim fees, we will lose our interest in the ~~Golden~~CPG ~~Snow~~ Project, Fish Claims ~~Project~~ and ~~CPG~~Golden ~~Project~~Snow Property.

As the agreement is an option, we may decide at any time not to proceed in which case we would not be liable to pay any funds beyond the amounts due at the time we provide notice that we are not proceeding. There is no assurance that we will exercise the option.

As at ~~February~~May 2831, 2011, we had $115,~~028~~938 cash on hand. Accordingly, we have insufficient cash on hand to proceed with our exploration on the ~~Golden Snow~~ CPG Project, Fish ~~Project~~Claims and ~~CPG~~Golden ~~Project~~Snow Property, and meet our ongoing ~~operating~~ operating costs. As such, we will require substantial financing in order to meet ~~our~~ our obligations. There is no assurance that we will be able to acquire such financing on terms that are acceptable to us, or at all.

RESULTS OF OPERATIONS

Three Months Summary
		Three Months Ended			Three Months Ended		Percentage
		February 28, 2011			February 28, 2010		Increase / (Decrease)
Revenue	$	-		$	-		n/a
Expenses		(57,109	)		(79,360	)	(28.0)%
Net Loss	$	(57,109	)	$	(79,360	)	(28.0)%

Three and Six Months Summary

		Three			Three
		Months			Months		Percentage		Six Months			Six Months		Percentage
		Ended May			Ended May		Increase /		Ended May			Ended May		Increase /
		31, 2011			31, 2010		(Decrease)		31, 2011			31, 2010		(Decrease)
Revenue	$	Nil		$	Nil		n/a	$	Nil		$	Nil		n/a
Expenses		(118,131	)		(97,636	)	21.0%		(175,240	)		(176,996	)	(1.0)%
Other Income		110,770			-		n/a		110,770			-		n/a
Net Loss	$	(7,361	)	$	(97,636	)	(92.5)%	$	(64,470	)	$	(176,996	)	(63.6)%

Revenue

We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs.

Expenses

Our operating expenses for the three and six months ended ~~February 28,~~May 31, 2011 and 2010 consisted of the following:

		Three Months Ended			Three Months Ended	Percentage
								Six Months		Six Months
		February 28, 2011			February 28, 2010	Increase / (Decrease)
		Three Months			Three Months	Percentage		Ended		Ended	Percentage
Bank charges and interest	$	3,149		$	5,212	(39.6)%
		Ended			Ended	Increase /		May 31,		May 31,	Increase /
Consulting Fees		12,300			-	100%
		May 31, 2011			May 31, 2010	(Decrease)		2011		2010	(Decrease)
Depreciation Expense		-			126	(100)%
Bank charges and interest	$	4,253		$	6,076	(30.0)%	$	7,402	$	11,288	(34.4)%
Filing and Regulatory		1,223			879	39.1%
Consulting fees		14,050			-	100.0%		26,350		-	100.0%
Finance Charges		-			22,603	(100)%
Depreciation Expense		-			126	(100.0)%		-		252	(100.0)%
Management Fees		9,000			9,000	0.0%
Filing and Regulatory		744			170	337.6%		1,967		1,049	87.5%
Mineral Property Exploration		(2,393	)		1,569	(252.5)%
Finance Charges		-			23,106	(100.0)%		-		45,709	(100.0)%
Costs
Investor Relations		-			1,000	(100.0)%		-		1,000	(100.0)%
Office and Administrative		5,623			3,420	64.4%
Management Fees		9,000			9,000	0.0%		18,000		18,000	0.0%
Professional Fees		27,845			33,051	(15.8)%
Mineral Property Exploration Costs		28,512			-	100.0%		26,119		1,569	1564.7%
Website Costs		362			3,500	(89.7)%
Office and Administrative		5,479			6,209	(11.8)%		11,102		9,629	15.3%
Total Operating Expenses	$	57,109		$	79,360	(28.0)%
Professional Fees		55,411			48,949	13.2%		83,256		82,000	1.5%
Website design		682			-	100.0%		1,044		3,500	(70.2)%
Write-off Mineral Property Costs		-			3,000	(100.0)%		-		3,000	(100.0)%
Total Operating Expenses	$	118,131		$	97,636	21.0%	$	175,240	$	176,996	(1.0)%

Our operating expenses ~~decreased from $79,360,~~ during the ~~three months~~quarter ended ~~February~~May 2831, ~~2010~~2011 totaled $118,131 tocompared with $5797,~~109~~636 during the ~~three~~quarter ~~months~~ ended ~~February~~ 28May 31, ~~2011~~2010. The ~~decrease~~increase in our operating expenses was primarily a result of ~~decreased~~increased consulting ~~bank~~fees, ~~charges~~filing and ~~interest~~regulatory, ~~finance charges,~~ mineral property exploration costs, professional fees and website ~~costs.~~design, This ~~decrease~~increase was partially offset by ~~increases~~a decrease in ~~consulting~~bank ~~fees,~~charges ~~filing~~ and ~~regulatory~~interest, ~~fees~~depreciation ~~and~~expense, finance charges, investor relations, office and administrative and write-off mineral property cost.

During the six months ended May 31, 2011, our operating expenses decreased from $176,996 to $175,240 during the six months ended May 31, 2010. The decrease in our operating expenses was primarily a result of decreased bank charges and interest, depreciation expense, finance charges, investor relations, website design and write off mineral property cost. This decrease was partially offset by an increase in consulting fees, filing and regulatory, mineral property exploration costs, office and administrative and professional fees.

Finance fees during the three and six months ended May 31, 2010 primarily relate to amortization of the discount resulting from the allocation of proceeds to the warrants and the intrinsic value beneficial conversion feature.

Management fees relate to fees paid or accrued to the directors of Magellan Acquisition Corp., our wholly owned Nevada subsidiary.

Professional fees primarily relate to ~~costs incurred in connection with~~ meeting our ongoing reporting requirements under the Exchange Act.

Finance fees during the three months ended February 28, 2010 primarily relate to amortization of the discount resulting from the allocation of proceeds to the warrants and the intrinsic value beneficial conversion feature.

We anticipate our operating expenses will increase if we implement our exploration program on our mineral properties.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
					At		Percentage
		At February 28, 2011			November 30, 2010		Increase / (Decrease)
		At May 31, 2011			November 30, 2010		Increase / (Decrease)
Current Assets	$	115,~~028~~938		$	353		~~191~~4,415.20%
Current Liabilities		(~~577~~575,~~760~~415	)		(535,964	)	7.84%
Working Capital Deficit	$	(~~576~~559,~~732~~477	)	$	(535,611	)	74.75%

Cash Flows
		Six Months Ended May			Six Months Ended May
		31, 2011			31, 2010
Cash Flows (Used In) Operating Activities	$	(107,908	)	$	(58,203	)
Cash Flows (Used In) From Investing Activities		40,604			(42,878	)
Cash Flows From Financing Activities		82,889			137,408
Increase (Decrease) In Cash During Period	$	15,585		$	36,327

Cash Flows
		Three Months Ended			Three Months Ended
		February 28, 2011			February 28, 2010
Cash Flows (Used In) Operating Activities	$	(702	)	$	(17,508	)
Cash Flows (Used In) From Investing Activities		15,988			(38,000	)
Cash Flows (Used In) From Financing Activities		(14,611	)		85,000
Increase (Decrease) In Cash During Period	$	675		$	29,492

The increase in our working capital deficit at May 31, 2011 from our year ended November 30, 2010 is a result of the fact that our sole source of financing was in the form of short term loans. During the six months ended May 31, 2011, we received a loan of $12,000 from a related party and a loan of $85,500 from a third party. Both loans bear interest at a rate of 10% per annum and are due on demand.

The increase in our working capital deficit at February 28, 2011 from our year ended November 30, 2010 is a result of the fact that accounts payable increased due to our lack of capital to meet ongoing expenditures.

Future Financings

As at ~~February~~May 2831, 2011, we had $115,~~028~~938 cash on hand. Currently, we we do not have sufficient financial resources to complete our plan of operation ~~for~~ for the next twelve months. We have not earned any revenues to date and we do ~~not~~ not anticipate earning revenues in the near future. As such, our ability to ~~complete~~ complete our plan of operation is dependent upon our ability to obtain ~~substantial~~ substantial financing in the near term. Any future financing that we obtain is expected to be in the form of sales of our equity securities. If we are successful in completing any equity financings, of which there is no assurance, our existing shareholders will experience a dilution of their interest in our company. There is a substantial doubt that we will be able to obtain financing in an amount that is sufficient to enable us to complete our proposed plan of operation. If we are not successful in raising sufficient financing, we will not be able to complete our plan of operation. We do not have any specific alternatives to our current plan of operation and have not planned for any such contingency. If we are not successful in raising sufficient financing, our business may fail and our shareholders may lose all or part of their investment.

Our Board of Directors have approved a private placement offering of up to 3,000,000 units (the “Units”) at a price of $0.05 per Unit for gross proceeds of up to $150,000. Each Unit is comprised of one share of our common stock and one share purchase warrant, with each warrant entitling the subscriber to purchase an additional share of our common stock for a period of two years following the date of issuance at an exercise price equal to $0.10 per share. This offering of Units is being made to investors who are not “U.S. Persons” as defined in Regulation S. To date, we have issued 527,200 units for proceeds of $26,360 under this offering. There are no assurances that any additional units will be sold under this offering.

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.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are disclosed in the notes to our consolidated financial statements for the ~~three~~six months ended ~~February~~May 2831, ~~2011~~ 2011 included in this Quarterly Report.

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations.

Use of Estimates

The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Actual results may differ from the estimates.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method of accounting. Until such properties are acquired and developed, we will continue to prepare our financial statements and related disclosures in accordance with entities in the exploration stage.

Mineral Property Interests

We are an exploration stage mining company and have not yet realized any revenue from our operations. We are primarily engaged in the acquisition, exploration and development of mining properties. Exploration costs are expensed as incurred regardless of the stage of development or existence of reserves. Costs of acquisition are capitalized subject to impairment testing, when facts and circumstances indicate impairment may exist.

We regularly perform evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of our investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.

Management periodically reviews the carrying value of our investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a production mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that we will continue exploration on such project. We do not set a pre-determined holding period for properties with unproven deposits; however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.

If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value. The amounts recorded as mineral leases and claims represent costs to date and do not necessarily reflect present or future values.

Our exploration activities are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. We have made, and expect to make in the future, expenditures to comply with such laws and regulations.

The accumulated costs of properties that are developed on the stage of commercial production will be amortized to operations through unit-of-production depletion.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4T.

CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~February~~May 2831, 2011 (the “Evaluation Date”). This evaluation ~~was~~ was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed in our Annual Report on Form 10-K for the year ended November 30, 2010 (the “2010 Annual Report”).

~~Disclosure~~Notwithstanding ~~controls~~the ~~and~~assessment ~~procedures~~that ~~are~~our ~~those~~internal ~~controls~~control ~~and~~over ~~procedures~~financial ~~that~~reporting ~~are~~was ~~designed~~not toeffective ~~ensure~~and that ~~information~~there ~~required~~were tomaterial beweaknesses ~~disclosed~~as identified in our ~~reports~~2010 ~~filed~~Annual orReport, ~~submitted~~we ~~under~~believe ~~the~~that ~~Exchange~~our ~~Act~~financial ~~are recorded,~~statements ~~processed,~~contained ~~summarized~~in ~~and~~our ~~reported~~Quarterly ~~within~~Report ~~the~~on ~~time~~Form ~~periods~~10-Q ~~specified~~for in the ~~SEC's~~ ~~rules~~quarter ~~and~~ended ~~forms.~~May ~~Disclosure controls and procedures include~~31, ~~without~~ ~~limitation,~~2011 ~~controls~~fairly ~~and~~present ~~procedures designed to ensure that information required to be disclosed in~~ our ~~reports~~financial ~~filed under the Exchange Act is accumulated and communicated to management~~condition, ~~including~~results ~~our~~of ~~Chief~~operations ~~Executive Officer~~ and ~~Chief~~cash ~~Financial~~flows ~~Officer,~~in toall ~~allow~~material ~~timely decisions regarding required disclosure~~respects.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our 2010 Annual Report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended February 28, 2011 fairly present our financial condition, results of operations and cash flows in all material respects.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~February~~May 2831, 2011 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

811

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

None.

ITEM 1A.

RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

If we do not obtain additional financing, our business will fail.

As of ~~February~~May 2831, 2011, we had $115,~~028~~938 cash on hand and a ~~working~~ working capital deficit of $~~576~~559,~~732~~477. Our plan of operation calls for significant expenses in order to meet our obligations under the ~~Eureka~~option ~~Properties~~agreements ~~Option~~to acquire ~~Agreement~~the CPG Project, Fish Claims and Golden Snow Property. There is no guarantee that we will exercise our option.

Our Board of Directors have approved a private placement offering of up to 3,000,000 units (the “Units”) at a price of $0.05 per Unit for gross proceeds of up to $150,000. Each Unit is comprised of one share of our common stock and one share purchase warrant, with each warrant entitling the subscriber to purchase an additional share of our common stock for a period of ~~one~~two ~~year~~years following the date of issuance at an exercise price equal to $0.10 per share. This offering of Units is being made to investors who are not “U.S. Persons” as defined in Regulation S. To date, we have issued 527,200 units for proceeds of $26,360 under this offering. There are no assurances that any additional units will be sold under this offering.

Obtaining financing would be subject to a number of factors outside of our control, including market conditions and additional costs and expenses that might exceed current estimates. These factors may make the timing, amount, terms or conditions of financing unavailable to us in which case we will be unable to complete our plan of operation on our mineral properties and to meet our obligations under our option agreements.

We have yet to earn revenue and our ability to sustain our operations is dependent on our ability to raise financing. As a result, our accountants believe there is substantial doubt about our ability to continue as a going concern.

We have a cumulative net loss of $1,~~127~~134,~~177~~538 for the period from our inception on April 28, 2006 to ~~February~~May 2831, 2011, and have no revenues to date. Our future is dependent upon our ability to obtain additional financing. ~~Our~~ Our auditors have expressed substantial doubt about our ability to continue as a going concern given our accumulated losses. This opinion could materially limit our ability to raise additional funds by issuing new debt or equity securities or otherwise. If we fail to raise sufficient capital, we will not be able to complete our business plan. As a result, we may have to liquidate our business and investors may lose their investment. Investors should consider our former auditor's comments when determining if an investment in us is suitable.

Because of the unique difficulties and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.

Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

912

We have no known mineral reserves and if we cannot find any, we will have to cease operations.

We have no mineral reserves. If we do not find a mineral reserve containing gold or if we cannot explore the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we will have to cease operations and you will lose your investment. Mineral exploration, particularly for gold, is highly speculative. It involves many risks and is often non-productive. Even if we are able to find mineral reserves on our properties, our production capability is subject to further risks including:

Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;
Availability and costs of financing;
Ongoing costs of production; and
Environmental compliance regulations and restraints.

The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near our mineral properties, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.

Given the above noted risks, the chances of finding reserves on our mineral properties are remote and funds expended on exploration will likely be lost.

Even if we discover proven reserves of precious metals on our mineral properties, we may not be able to successfully commence commercial production.

Our mineral properties do not contain any known bodies of ore. If our exploration programs are successful in discovering proven reserves on our mineral properties, we will require additional funds in order to place the mineral properties into commercial production. The expenditures to be made by us in the exploration of mineral properties in all probability will be lost as it is an extremely remote possibility that the mineral claims will contain proven reserves. If our exploration programs are successful in discovering proven reserves, we will require additional funds in order to place the mineral properties into commercial production. The funds required for commercial mineral production can range from several millions to hundreds of millions. We currently do not have sufficient funds to place our mineral claims into commercial production. Obtaining additional financing would be subject to a number of factors, including the market price for gold and the costs of exploring for or mining these materials. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. Because we will need additional financing to fund our exploration activities there is substantial doubt about our ability to continue as a going concern. At this time, there is a risk that we will not be able to obtain such financing as and when needed.

We face significant competition in the mineral exploration industry.

We compete with other mining and exploration companies possessing greater financial resources and technical facilities than we do in connection with the acquisition of mineral exploration claims and leases on precious metal prospects and in connection with the recruitment and retention of qualified personnel. There is significant competition for precious metals and, as a result, we may be unable to acquire an interest in attractive mineral exploration properties on terms we consider acceptable on a continuing basis.

There is no assurance that we will be able to exercise our option to acquire the ~~Eureka~~CPG ~~Optioned~~Project, ~~Properties~~Fish Claims and Golden Snow Property.

In order to exercise our option to acquire the ~~Eureka~~CPG ~~Optioned~~Project, ~~Properties~~Fish Claims and Golden Snow Property, we are required to make a series of cash payments and meet the annual claim maintenance fees. In order to meet these payments we will need to obtain substantial financing. If we are unable to meet these payments, we will lose our options to acquire these properties.

1013

Because our sole executive officer does not have formal training specific to the technicalities of mineral exploration, there is a higher risk that our business will fail.

Richard W. Donaldson, our sole executive officer, does not have any formal training as a geologist or in the technical aspects of managing a mineral exploration company. With the exception of ~~Bryan~~Howard ~~H. Wilson~~Metzler, a director, our management may not be fully aware of the specific requirements related to working within this industry. As such, the loss of Mr. ~~Wilson~~Metzler’s services could cause irreparable harm to our operations, earnings, and ultimate financial success could suffer irreparable harm due to management's lack of experience in this industry.

Because the prices of metals fluctuate, if the price of metals for which we are exploring decreases below a specified level, it may no longer be profitable to explore for those metals and we will cease operations.

Prices of metals are determined by such factors as expectations for inflation, the strength of the United States dollar, global and regional supply and demand, and political and economic conditions and production costs in metals producing regions of the world. The aggregate effect of these factors on metal prices is impossible for us to predict. In addition, the prices of precious metals are sometimes subject to rapid short-term and/or prolonged changes because of speculative activities. The current demand for and supply of these metals affect the metal prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of these metals primarily consists of new production from mining. If the prices of the metals are, for a substantial period, below our foreseeable cost of production, we could cease operations and investors could lose their entire investment.

We may conduct further offerings in the future in which case investors’ shareholdings will be diluted.

We are currently offering units (common stock and share purchase warrants) for gross proceeds of up to $150,000. Since our inception, we have relied on such equity sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, the interests of existing shareholders will be diluted.

The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTCQB under the symbol "PNGM”. Companies quoted on the OTCQB have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire at a price equal or greater than the price paid by the investor.

Because our stock is a penny stock, shareholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system. Because our securities constitute “penny stocks” within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the trading price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

1.	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

1114

2.	contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;

3.	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;

4.	contains a toll-free telephone number for inquiries on disciplinary actions;

5.	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and

6.	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~All~~Other ~~unregistered~~than ~~sales~~as ofdisclosed ~~our equity securities made during the fiscal year ended November 30, 2010 have been previously reported~~ in our ~~Quarterly~~ Current Reports on Form 108-QK, ~~and~~we have ~~our~~not ~~Current~~completed ~~Reports~~any onunregistered ~~Form~~sales ~~8-K~~of equity securities.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

Exhibit
Number	Description of Exhibits
3.1	Articles of Incorporation. (1)
3.2	Certificate of Change Pursuant to NRS 78.209 increasing the authorized capital of common stock to 300,000,000 shares, par value $0.001 per share.(5)
3.3	Bylaws, as amended. (1)
4.1	Specimen Stock Certificate. (1)
10.1	Loan Agreement dated December 19, 2007 between the Company (as the borrower) and Kahala Financial Corp. (as the lender).(2)
10.2	Purchase Agreement dated December 15, 2008 among Magellan Acquisition Corp., Solfotara Mining Corp. and Magellan Copper and Gold plc (Magellan Singapore Subsidiaries).(4)
10.3	Purchase Agreement dated December 16, 2008 between the Company and Bako Resources Inc. (Clisbako Property). (4)

1215

Exhibit
Number	Description of Exhibits
10.3	Purchase Agreement dated December 16, 2008 between the Company and Bako Resources Inc. (Clisbako Property). (4)
10.4	Extension Agreement dated July 23, 2009 between the Company and Bako Resources Inc. (7)
10.5	Assignment Agreement dated May 29, 2009 among the Company, Portal Resources US Inc. and Portal Resources Ltd. (Golden Snow Project, Fish Project and CPG Project) (6)
10.6	Agreement dated for reference November 2, 2009 executed on January 19, 2010 between the Company and Agus Abidin (Manado Gold Property). (8)
10.7	Second Extension Agreement dated January 21, 2010 between the Company and Bako Resources Inc. (Clisbako Property). (9)
10.8	Extension Agreement Dated January 21, 2010 between the Company and Agus Abidin (Manado Gold Property).
10.9	Option agreement dated February 5, 2010 between the Company and Larry Sostad (June Claims). (10)
10.10	Third Extension Agreement dated March 15, 2010 between the Company and Bako Resources Inc. (Clisbako Property).(11)
10.11	Second Extension Agreement Dated March 29, 2010 between the Company and Agus Abidin (Manado Gold Property).(12)
10.12	Loan Agreement dated January 11, 2010 between the Company and Laverne Assets Group Corp. (13)
10.12	Agreement dated for reference April 23, 2010 executed on April 28, 2010 between the Company and Bull and Bear Financial Report.(14)
10.13	Option Agreement dated July 23, 2010 between the Clisbako Minerals Inc. and Interior Plateau Mining Corp.(15)
10.14	Assignment Agreement dated August 24, 2010 between the Company and Manado Gold Corp.(16)
10.15	Option Agreement dated for September 15, 2010 between Clisbako Minerals Inc. and Manado Gold Corp.(17)
10.16	Extension Agreement dated November 30, 2010 between the Company and Manado Gold Corp.(19)
10.17	2011 Stock Option Plan.(18)
10.18	Option Agreement (Golden Snow) dated March 31, 2011 between the Company and Scoonover Exploration LLC and JR Exploration LLC. (20)
10.19	Option Agreement (CPG Project) dated March 31, 2011 between the Company and Claremont Nevada Mines LLC. (20)
10.20	Option Agreement (Fish Claims) dated March 31, 2011 between the Company and Claremont Nevada Mines LLC. (20)
10.21	Earn-In Agreement (Golden Snow) dated April 26, 2011 between the Company and Terrace Ventures Inc. (20)
10.22	Extension dated May 12, 2011 to Letter Agreement dated April 13, 2011 between the Company and Development Resources LLC.(21)
10.23	Extension Agreement dated June 29, 2011 between the Company and Terrace Ventures Inc.
14.1	Code of Ethics. (3)
21.1	List of Subsidiaries.(19)
31.1	Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Notes:
(1)	Previously filed as an exhibit to our Registration Statement on Form SB-2 filed on April 24, 2007.
(2)	Previously filed as an exhibit to our Current Report on Form 8-K filed on December 26, 2007.
(3)	Previously filed as an exhibit to our Annual Report on Form 10-KSB filed on March 6, 2008.
(4)	Previously filed as an exhibit to our Current Report on Form 8-K filed on December 22, 2008.
(5)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 17, 2009.
(6)	Previously filed as an exhibit to our Current Report on Form 8-K filed on June 2, 2009.
(7)	Previously filed as an exhibit to our Current Report on Form 8-K filed on July 27, 2009.
(8)	Previously filed as an exhibit to our Current Report on Form 8-K filed on January 21, 2010.
(9)	Previously filed as an exhibit to our Current Report on Form 8-K filed on January 26, 2010.
(10)	Previously filed as an exhibit to our Current Report on Form 8-K filed on February 11, 2010.
(11)	Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 16, 2010.
(12)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 6, 2010.
(13)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q filed on April 19, 2010.
(14)	Previously filed as an exhibit to our Current Report on Form 8-K filed on May 4, 2010.
(15)	Previously filed as an exhibit to our Current Report on Form 8-K filed on August 10, 2010.
(16)	Previously filed as an exhibit to our Current Report on Form 8-K filed on August 30, 2010.
(17)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q filed on October 20, 2010.
(18)	Previously filed as an exhibit to our Current Report on Form 8-K filed on March 3, 2011.
(19)	Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 15, 2011.

1316

(9)	Previously filed as an exhibit to our Current Report on Form 8-K filed on January 26, 2010.
(10)	Previously filed as an exhibit to our Current Report on Form 8-K filed on February 11, 2010.
(11)	Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 16, 2010.
(12)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 6, 2010.
(13)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q filed on April 19, 2010.
(14)	Previously filed as an exhibit to our Current Report on Form 8-K filed on May 4, 2010.
(15)	Previously filed as an exhibit to our Current Report on Form 8-K filed on August 10, 2010.
(16)	Previously filed as an exhibit to our Current Report on Form 8-K filed on August 30, 2010.
(17)	Previously filed as an exhibit to our Quarterly Report on Form 10-Q filed on October 20, 2010.
(18)	Previously filed as an exhibit to our Current Report on Form 8-K filed on March 3, 2011.
(19)	Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 15, 2011.
(20)	Previously filed as an exhibit to our Current Report on Form 8-K filed on April 27, 2011.
(21)	Previously filed as an exhibit to our Current Report on Form 8-K filed on May 16, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			~~PENGRAM CORPORATION~~	PENGRAM CORPORATION
Date:	~~April~~July 1920, 2011	~~By:~~	~~/s/ Richard W. Donaldson~~By:	/s/ Richard W. Donaldson
			~~RICHARD W. DONALDSON~~	RICHARD W. DONALDSON
			~~Chief Executive Officer, Chief Financial Officer,~~	Chief Executive Officer, Chief Financial Officer,
			~~President, Secretary, Treasurer,~~	President, Secretary, Treasurer,
			~~(Principal Executive Officer~~	(Principal Executive Officer
			and Principal Accounting Officer)
				and Principal Financial Officer)

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