~~Table~~UNITED ofSTATES ~~Contents~~

~~UNITED~~SECURITIES ~~STATES~~AND EXCHANGE COMMISSION

~~SECURITIES~~WASHINGTON, ~~AND~~DC ~~EXCHANGE~~20549 ~~COMMISSION~~

~~WASHINGTON,~~FORM DC10-Q ~~20549~~

~~FORM~~x ~~10-Q~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

xFor ~~QUARTERLY~~the ~~REPORT~~Quarterly ~~PURSUANT~~Period TOEnded ~~SECTION~~September 30, 132009. ~~OR 15(d) OF THE SECURITIES ACT OF 1934~~

~~For~~¨ ~~the~~TRANSITION ~~Quarterly~~REPORT ~~Period~~PURSUANT ~~Ended~~TO ~~June 30,~~SECTION ~~2009.~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨AURELIO ~~TRANSITION~~RESOURCE ~~REPORT~~CORPORATION ~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~AURELIO~~(Exact ~~RESOURCE~~name ~~CORPORATION~~of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Nevada

000-50931

33-1086828

(State or other jurisdiction of

incorporation or organization)

(Commission File No.)

(I.R.S. Employer

Identification No.)

Nevada	000-50931	33-1086828
Suite 202, 12345 W Alameda Parkway, Lakewood, Colorado	80228
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)
(Address of principal executive offices)	(Zip Code)

Suite 202, 12345 W Alameda Parkway, Lakewood, Colorado		80228
(Address of principal executive offices)		(Zip Code)

(303) 795 - 3030

(~~303)~~Registrant’s ~~795~~telephone -number, ~~3030~~including area code)

Indicate by check mark whether the registrant (~~Registrant’s~~1) has ~~telephone~~filed ~~number,~~all ~~including~~reports ~~area~~required ~~code~~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 the filing requirements for at least the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant ~~(1)~~ has ~~filed~~submitted ~~all~~electronically ~~reports~~and posted on its corporate Website, if any, every Interactive Data File required to be ~~filed~~submitted byand ~~Section 13~~posted orpursuant ~~15(d)~~to Rule 405 of ~~the~~Regulation ~~Securities~~S-T ~~Exchange~~(§ ~~Act~~232.405 of ~~1934~~this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to ~~file~~submit such ~~reports~~files)~~, and (2) has been subject to the filing requirements for at least the past 90 days~~. Yes x¨ No ¨

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~and~~accelerated ~~posted~~filer, onan ~~its~~accelerated ~~corporate Web site~~filer, ifa ~~any~~non-accelerated filer, ~~every~~or ~~Interactive~~a ~~Data File~~smaller ~~required~~reporting tocompany. beSee ~~submitted~~definitions ~~and posted pursuant to Rule 405~~ of ~~Regulation~~“large ~~S-T~~accelerated ~~(§232.405~~filer,” of“accelerated ~~this~~filer,” ~~chapter)~~and ~~during~~“small ~~the~~reporting ~~preceding~~company” 12in ~~months~~Rule ~~(or~~12b-2 ~~for~~of ~~such shorter period that~~ the ~~registrant~~Exchange ~~was required to submit and post such files)~~Act. ~~Yes ¨ No ¨~~

~~Indicate~~Large byAccelerated ~~check~~Filer ~~mark~~¨ ~~whether~~Accelerated ~~the~~Filer ~~registrant~~¨ ~~is a large accelerated filer, an accelerated filer, a non~~Non-~~accelerated~~Accelerated ~~filer,~~Filer or¨ aSmaller ~~smaller~~Reporting ~~reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.~~ x

~~Large~~Indicate ~~Accelerated~~by ~~Filer~~checkmark ¨whether ~~Accelerated~~the ~~Filer~~registrant ¨is ~~Non-Accelerated~~a ~~Filer~~shell ¨company ~~Smaller~~(as ~~Reporting~~defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

~~Indicate~~As byof ~~checkmark~~November 19, ~~whether~~2009 the registrant ishad a97,239,127 ~~shell~~common ~~company~~shares ~~(as defined in Rule 12b-2 of the Exchange Act)~~outstanding. ~~Yes ¨ No x~~

AsAURELIO ofRESOURCE ~~August 14, 2009 the registrant had 97,239,127 common shares outstanding~~CORPORATION.

~~Table~~FORM of10-Q ~~Contents~~

~~AURELIO~~FOR ~~RESOURCE~~THE ~~CORPORATION.~~QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009

~~FORM~~TABLE ~~10-Q~~OF CONTENTS

~~FOR~~Part ~~THE~~I ~~QUARTERLY~~– ~~PERIOD ENDED~~Financial ~~JUNE~~Information ~~30, 2009~~

TABLE OF CONTENTS


		PAGE NO.
Item 1.	Unaudited Consolidated Financial Statements

a.	Unaudited Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008	3

b.	Unaudited Consolidated Statements of Operations for the nine months ended September 30, 2009 and 2008 and from February 19, 2004 (Inception)	4

c.	Unaudited Consolidated Statement of Stockholders’ Equity (Deficit) from February 19, 2004 (Inception) through September 30, 2009	5

d.	Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2009 and 2008 and from February 19, 2004 (Inception)	7

e.	Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4.	Controls and Procedures	28

Part II – Other Information

Item 1.	Legal Proceedings	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Submission of Matters to a Vote of Security Holders	29

Item 5.	Other Information	29

Item 6.	Exhibits and Reports on Form 8-K	29

Signatures		30

		PAGE NO.
Part I – Financial Information
Item 1.	Unaudited Consolidated Financial Statements
a.	Unaudited Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008	3
b.	Unaudited Consolidated Statements of Operations for the six months ended June 30, 2009 and 2008 and from February 19, 2004 (Inception)	4
c.	Unaudited Consolidated Statement of Stockholders’ Equity (Deficit) from February 19, 2004 (Inception) through June 30, 2009	5
d.	Unaudited Consolidated Statements of Cash Flows for the three months ended June 30, 2009 and 2008 and from February 19, 2004 (Inception)	7
e.	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
Part II – Other Information
Item 1.	Legal Proceedings	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Submission of Matters to a Vote of Security Holders	29
Item 5.	Other Information	29
Item 6.	Exhibits and Reports on Form 8-K	29
Signatures		29

- 2 -

-AURELIO 2RESOURCE -CORPORATION

~~Table~~(An ofExploration ~~Contents~~Stage Company)

~~AURELIO~~CONSOLIDATED ~~RESOURCE~~BALANCE ~~CORPORATION~~SHEETS

(~~An Exploration Stage Company~~Unaudited)

CONSOLIDATED BALANCE SHEETS


	Sept 30, 2009			Dec 31, 2008
	(unaudited)
Current Assets
Cash	$	145,734		$	103,793
Accounts receivable		12,345			—
Receivable from Telifonda		254,963			216,689
Prepaid expenses and other		94,458			50,376

Total current assets		507,500			370,858

Mining claims		3,688,316			4,240,470
Investment		362,050			—
Equipment, net		50,766			89,389

		4,101,132			4,329,859

Total Assets		4,608,632			4,700,717


LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	67,968		$	170,872
Accounts payable - related parties		—			218,481
Short term note payable		—			2,000,000
Current portion of long-term debt		—			798,166

Total current liabilities		67,968			3,187,519
Long-term debt		—			1,664,000
Real estate deposit		462,050			—

Total Liabilities		530,018			4,851,519

Stockholders’ Equity
Common stock, $0.001 par value; 400,000,000 shares authorized; 97,239,127 issued and outstanding		97,240			40,417
Preferred stock, $0.01 par value; 87,500,000 shares authorized; zero issued and outstanding		—			—
Warrants		98,333			321,813
Additional paid in capital		11,867,132			7,244,506
Deficit accumulated during the exploration stage		(7,969,289	)		(7,740,859	)
Cumulative effect of currency translation		(14,801	)		(16,679	)

Total Stockholders’ Equity		4,078,614			(150,802	)

Total Liabilities and Stockholders’ Equity	$	4,608,632		$	4,700,717

~~(Unaudited)~~The accompanying notes are an integral part of the consolidated financial statements.

	June 30, 2009			Dec. 31, 2008
	(unaudited)
ASSETS
Current assets
Cash	$	353,267		$	103,793
Receivable from Telifonda		257,349			216,689
Prepaid expenses and other		52,749			50,376
Total current assets		663,365			370,858
Mining claims		3,818,767			4,240,470
Equipment, net		53,203			89,389
		3,871,970			4,329,859
Total Assets	$	4,535,335		$	4,700,717
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	70,104		$	170,872
Accounts payable-related parties		—			218,481
Short term note payable		—			2,000,000
Current portion of long-term debt		—			798,166
Total current liabilities		70,104			3,187,519
Long-term debt		—			1,664,000
Total Liabilities		70,104			4,851,519
Stockholders’ Equity
Common stock, $0.001 par value; 400,000,000 shares authorized; 97,049,195 issued and outstanding		97,049			40,417
Preferred stock, $0.01 par value; 87,500,000 shares authorized; 0 issued and outstanding		—			—
Warrants		98,333			321,813
Additional paid in capital		11,854,028			7,244,506
Deficit accumulated during the exploration stage		(7,572,149	)		(7,740,859	)
Cumulative effect of currency translation		(12,030	)		(16,679	)
Total Stockholders’ Equity		4,465,231			(150,802	)
Total Liabilities and Stockholders’ Equity	$	4,535,335		$	4,700,717

- 3 -

~~The~~AURELIO ~~accompanying~~RESOURCE ~~notes~~CORPORATION ~~are an integral part of the consolidated financial statements.~~

-(An 3Exploration -Stage Company)

~~Table~~CONSOLIDATED ofSTATEMENTS ~~Contents~~OF OPERATIONS

~~AURELIO~~(Unaudited) ~~RESOURCE CORPORATION~~

(An Exploration Stage Company)


	Three Months Ended Sept 30, 2009			Three Months Ended Sept 30, 2008			Nine Months Ended Sept 30, 2009			Nine Months Ended Sept 30, 2008			Feb. 19, 2004 (Inception) Through Sept 30, 2009
Revenue	$	—		$	—		$	—		$	—		$	—

Expenses:
Depreciation		2,321			4,159			7,911			11,881			40,129
General and administrative		52,048			76,946			196,186			279,297			2,471,301
Mineral property expenditures		131,467			104,395			193,586			352,609			2,326,748
Professional fees		89,767			187,875			318,878			525,868			1,902,569

		275,603			373,375			716,561			1,169,655			6,740,747

Loss from operations		(275,603	)		(373,375	)		(716,561	)		(1,169,655	)		(6,740,747	)
Other income (expense)
Other income		15,682			833			44,198			833			103,846
Interest income		5,569			1,864			19,652			10,389			48,116
Other expense		(1,650	)		—			(1,746	)		—			(1,746	)
Loss on debentures		—			—			—			—			(407,714	)
Loss on sale of assets		(130,000	)		—			(1,606,789	)		—			(1,606,789	)
Interest expense		—			(431,949	)		(196,122	)		(1,289,210	)		(1,593,193	)

Income (loss) before provision for income tax		(397,140	)		(802,627	)		(2,457,368	)		(2,447,643	)		(10,198,227	)

Provision for income tax		—			—			—			—			—
Net income (loss)		(397,140	)		(802,627	)		(2,457,368	)		(2,447,643	)		(10,198,227	)
Other comprehensive income (loss) - net of tax
Foreign currency translation gains (losses)		(2,771	)		(2,659	)		1,878			(2,911	)		(14,801	)

Comprehensive income (loss)		(399,911	)		(805,286	)		(2,455,490	)		(2,450,554	)		(10,213,028	)

Net income (loss) per share
(Basic and fully diluted)		(0.004	)		(0.02	)		(0.037	)		(0.06	)

Weighted average number of common shares outstanding		97,228,805			40,236,882			65,697,185			39,405,729

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~OPERATIONS~~are an integral part of the consolidated financial statements.

~~(Unaudited)~~- 4 -

	Three MonthsEndedJune 30, 2009			Three MonthsEndedJune 30, 2008			Six MonthsEndedJune 30, 2009			Six MonthsEndedJune 30, 2008			Feb. 19, 2004(Inception)ThroughJune 30, 2009
Revenue	$	—		$	—		$	—		$	—		$	—
Expenses:
Depreciation		2,317			4,023			5,590			7,722			37,808
General and administrative		60,250			247,670			144,138			202,351			2,419,253
Mineral property expenditures		16,140			125,002			62,119			248,214			2,195,281
Professional fees		92,550			205,728			229,111			337,993			1,812,802
		171,257			582,423			440,958			796,280			6,465,144
Loss from operations		(171,257	)		(582,423	)		(440,958	)		(796,280	)		(6,465,144	)
Other income (expense)
Other income		12,545			—			28,516			—			88,164
Interest income		25,201			4,107			25,221			8,525			53,685
Other expense		(76	)		—			(96	)		—			(96	)
Loss on debentures		—			—			—			—			(407,714	)
Loss on sale of assets		—			—			(1,476,789	)		—			(1,476,789	)
Interest expense		(175,100	)		(449,328	)		(196,122	)		(857,261	)		(1,593,193	)
Income (loss) before provision for income tax		(175,100	)		(1,027,644	)		(2,071,785	)		(1,645,016	)		(9,812,644	)
Provision for income tax		—			—			—			—			—
Net income (loss)		(308,687	)		(1,027,644	)		(2,060,228	)		(1,645,016	)		(9,801,087	)
Other comprehensive income (loss) - net of tax
Foreign currency translation gains (losses)		4,676			598			4,649			252			(12,030	)
Comprehensive income (loss)		(304,011	)		(1,027,046	)		(2,060,228	)		(1,644,764	)		(9,801,087	)
Net income (loss) per share
(Basic and fully diluted)		(0.01	)		(0.03	)		(0.04	)		(0.04	)
Weighted average number of common shares outstanding		55,105,899			40,132,922			49,761,357			38,989,659

AURELIO RESOURCE CORPORATION

~~The~~(An ~~accompanying~~Exploration ~~notes~~Stage ~~are~~Company) ~~an integral part of the consolidated financial statements.~~

-CONSOLIDATED 4STATEMENTS -OF STOCKHOLDERS’ EQUITY (DEFICIT)


	Common Stock							Additional Paid-in Capital		Deficit Accumulated During Exploration Stage			Cumulative Effect of Currency Translation			Total Stockholders’ Equity (Deficit)
	Shares		Amount			Warrants		Additional Paid-in Capital		Deficit Accumulated During Exploration Stage			Cumulative Effect of Currency Translation			Total Stockholders’ Equity (Deficit)
Balance, February 19, 2004 (date of inception)	—		$	—		$	—	$	—	$	—		$	—		$	—
Common stock issued for cash at $0.002 per share, March 2004	13,000,000			13,000			—		7,000		—			—			20,000
Common stock issued for cash at $0.004 per share, April 2004	18,200,000			18,200			—		51,800		—			—			70,000
Common stock issued for cash at $0.03 per share, May 2004	201,500			202			—		5,998		—			—			6,200
Net loss	—			—			—		—		(14,607	)		—			(14,607	)

Balance, May 31, 2004	31,401,500			31,402			—		64,798		(14,607	)		—			81,593
Net loss	—			—			—		—		(60,698	)		—			(60,698	)

Balance, May 31, 2005	31,401,500			31,402			—		64,798		(75,305	)		—			20,895
Net loss	—			—			—		—		(36,750	)		—			(36,750	)

Balance, May 31, 2006	31,401,500			31,402			—		64,798		(112,055	)		—			(15,855	)
Common stock returned for cancellation	(12,965,000	)		(12,965	)		—		12,965		—			—			—
Common stock issued for acquisition of Subsidiaries	10,000,000			10,000			—		440,000		—			—			450,000
Common stock issued for cash at $0.40 per share, September 2006	4,000,000			4,000			—		1,596,000		—			—			1,600,000
Common stock options issued	—			—			—		168,000		—			—			168,000
Net loss	—			—			—		—		(957,221	)		(1,580	)		(958,801	)

Balance, December 31, 2006	32,436,500			32,437			—		2,281,763		(1,069,276	)		(1,580	)		1,243,344

~~AURELIO~~(Continued ~~RESOURCE~~On ~~CORPORATION~~Following Page)

~~(An~~- ~~Exploration~~5 ~~Stage~~- ~~Company)~~

~~CONSOLIDATED~~AURELIO ~~STATEMENTS~~RESOURCE OFCORPORATION ~~STOCKHOLDERS’ EQUITY (DEFICIT)~~

	Common Stock							AdditionalPaid-inCapital		DeficitAccumulatedDuringExplorationStage			CumulativeEffect ofCurrencyTranslation			TotalStockholders’Equity(Deficit)
	Shares		Amount			Warrants
Balance, February 19, 2004 (date of inception)	—		$	—		$	—	$	—	$	—		$	—		$	—
Common stock issued for cash at $0.002 per share, March 2004	13,000,000			13,000			—		7,000		—			—			20,000
Common stock issued for cash at $0.004 per share, April 2004	18,200,000			18,200			—		51,800		—			—			70,000
Common stock issued for cash at $0.03 per share, May 2004	201,500			202			—		5,998		—			—			6,200
Net loss	—			—			—		—		(14,607	)		—			(14,607	)
Balance, May 31, 2004	31,401,500			31,402			—		64,798		(14,607	)		—			81,593
Net loss	—			—			—		—		(60,698	)		—			(60,698	)
Balance, May 31, 2005	31,401,500			31,402			—		64,798		(75,305	)		—			20,895
Net loss	—			—			—		—		(36,750	)		—			(36,750	)
Balance, May 31, 2006	31,401,500			31,402			—		64,798		(112,055	)		—			(15,855	)
Common stock returned for cancellation	(12,965,000	)		(12,965	)		—		12,965		—			—			—
Common stock issued for acquisition of Subsidiaries	10,000,000			10,000			—		440,000		—			—			450,000
Common stock issued for cash at $0.40 per share, September 2006	4,000,000			4,000			—		1,596,000		—			—			1,600,000
Common stock options issued	—			—			—		168,000		—			—			168,000
Net loss	—			—			—		—		(957,221	)		(1,580	)		(958,801	)
Balance, December 31, 2006	32,436,500			32,437			—		2,281,763		(1,069,276	)		(1,580	)		1,243,344

(An Exploration Stage Company)

~~(Continued~~CONSOLIDATED STATEMENTS OnOF ~~Following~~STOCKHOLDERS’ ~~Page~~EQUITY (DEFICIT)

-(Continued 5From -Previous Page)


	Common Stock					Additional Paid-in Capital		Deficit Accumulated During Exploration Stage		Cumulative Effect of Currency Translation		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Warrant		Additional Paid-in Capital		Deficit Accumulated During Exploration Stage		Cumulative Effect of Currency Translation		Total Stockholders’ Equity (Deficit)
Balance, December 31, 2006, from prior page	32,436,500		32,437	—		2,281,763		(1,069,276	)	(1,580	)	1,243,344
Issuance of stock options	—		—	—		405,500		—		—		405,500
Issued for cash	1,476,555		1,477	—		1,327,423		—		—		1,328,900
Issued for services	584,100		584	—		462,671		—		—		463,255
Exercise of stock options	150,000		150	—		118,350		—		—		118,500
Net loss	—		—	—		—		(3,379,987	)	(1,675	)	(3,381,662	)

Balance, December 31, 2007	34,647,155		34,648	—		4,595,707		(4,449,263	)	(3,255	)	177,837
Issued for cash	3,333,334		3,333	321,813		674,854		—		—		1,000,000
Issuance of stock options	—		—	—		28,101		—		—		28,101
Issued for services at $0.36 per share	1,899,300		1,899			682,089						683,988
Issued for services at $0.28 per share	267,855		268	—		74,732		—		—		75,000
Forfeiture of stock options	—		—	—		(348,500	)	—		—		(348,500	)
Discount on issuance of debentures	—		—	—		1,275,018		—		—		1,275,018
Beneficial conversion feature of debentures	—		—	—		224,982		—		—		224,982
Issued in exchange for office rent	58,053		58	—		8,195		—		—		8,253
Issued in exchange for leasehold improvements	210,993		211	—		29,328		—		—		29,539
Net loss	—		—	—		—		(3,291,596	)	(13,424	)	(3,305,020	)

Balance, December 31, 2008	40,416,690		40,417	321,813		7,244,506		(7,740,859	)	(16,679	)	(150,802	)
Issued for services at $0.03 per share	4,222,223		4,222	—		122,445		—		—		126,667
Sale of subsidiary	—		—	—		—		2,228,938		—		2,228,938
Net loss	—		—	—		—		(1,751,541	)	(27	)	(1,751,568	)

Balance, March 31, 2009 (unaudited)	44,638,913		44,639	321,813		7,366,951		(7,263,462	)	(16,706	)	453,235

Issued for services at $0.0842 per share	380,418		380	—		31,660		—		—		32,040
Issued for services at $0.057 per share	789,474		790	—		42,211		—		—		45,000
Issued for services at $0.029 per share	1,551,723		1,552	—		43,448		—		—		45,000
Issued for services at $0.10 per share	522,000		522	—		51,678		—		—		52,200
Issued for exploration properties at $0.08 per share	47,500,000		47,500	—		3,752,500		—		—		3,800,000
Issued for cash	1,666,667		1,667	—		165,000		—		—		166,667
Revaluation of warrants	—		—	(223,480	)	398,580		—		—		175,100
Net loss	—		—	—		—		(308,687	)	4,676		(304,011	)
Balance, June 30, 2009 (unaudited)	97,049,195	$	97,050	98,333		11,854,027		(7,572,149	)	(12,030	)	4,465,231
Issued in exchange for rent	189,932		190	—		13,105		—		—		13,295
Net loss	—		—	—		—		(397,140	)	(2,771	)	(399,911	)

Balance, September 30, 2009 (unaudited)	97,239,127		97,240	98,333		11,867,132		(7,969,289	)	(14,801	)	4,078,615

~~AURELIO~~The ~~RESOURCE~~accompanying ~~CORPORATION~~notes are an integral part of the consolidated financial statements.

~~(An~~- ~~Exploration~~6 ~~Stage~~- ~~Company)~~

~~CONSOLIDATED~~AURELIO ~~STATEMENTS~~RESOURCE OFCORPORATION ~~STOCKHOLDERS’ EQUITY (DEFICIT)~~

(~~Continued~~An ~~From~~Exploration ~~Previous~~Stage ~~Page~~Company)

	Common Stock			Warrant			AdditionalPaid-inCapital			DeficitAccumulatedDuringExplorationStage			CumulativeEffect ofCurrencyTranslation			TotalStockholders’Equity(Deficit)
	Shares	Amount
Balance, December 31, 2006, from prior page	32,436,500		32,437		—			2,281,763			(1,069,276	)		(1,580	)		1,243,344
Issuance of stock options	—		—		—			405,500			—			—			405,500
Issued for cash	1,476,555		1,477		—			1,327,423			—			—			1,328,900
Issued for services	584,100		584		—			462,671			—			—			463,255
Exercise of stock options	150,000		150		—			118,350			—			—			118,500
Net loss	—		—		—			—			(3,379,987	)		(1,675	)		(3,381,662	)
Balance, December 31, 2007	34,647,155		34,648		—			4,595,707			(4,449,263	)		(3,255	)		177,837
Issued for cash	3,333,334		3,333		321,813			674,854			—			—			1,000,000
Issuance of stock options	—		—		—			28,101			—			—			28,101
Issued for services at $0.36 per share	1,899,300		1,899					682,089									683,988
Issued for services at $0.28 per share	267,855		268		—			74,732			—			—			75,000
Forfeiture of stock options	—		—		—			(348,500	)		—			—			(348,500	)
Discount on issuance of debentures	—		—		—			1,275,018			—			—			1,275,018
Beneficial conversion feature of debentures	—		—		—			224,982			—			—			224,982
Issued in exchange for office rent	58,053		58		—			8,195			—			—			8,253
Issued in exchange for leasehold improvements	210,993		211		—			29,328			—			—			29,539
Net loss	—		—		—			—			(3,291,596	)		(13,424	)		(3,305,020	)
Balance, December 31, 2008	40,416,690		40,417		321,813			7,244,506			(7,740,859	)		(16,679	)		(150,802	)
Issued for services at $0.03 per share	4,222,223		4,222		—			122,445			—			—			126,667
Sale of subsidiary	—		—		—			—			2,228,938			—			2,228,938
Net loss	—		—		—			—			(1,751,541	)		(27	)		(1,751,568	)
Balance, March 31, 2009 (unaudited)	44,638,913	$	44,639	$	321,813		$	7,366,951		$	(7,263,462	)	$	(16,706	)	$	453,235
Issued for services at $0.0842 per share	380,418		380		—			31,660			—			—			32,040
Issued for services at $0.057 per share	789,474		790		—			42,211			—			—			45,000
Issued for services at $0.029 per share	1,551,723		1,552		—			43,448			—			—			45,000
Issued for services at $0.10 per share	522,000		522		—			51,678			—			—			52,200
Issued for exploration properties at $0.08 per share	47,500,000		47,500		—			3,752,500			—			—			3,800,000
Issued for cash	1,666,667		1,667		—			165,000			—			—			166,667
Revaluation of warrants	—		—		(223,480	)		398,580			—			—			175,100
Net loss	—		—		—			—			(308,687	)		4,676			(304,011	)
Balance, June 30, 2009 (unaudited)	97,049,195	$	97,050		98,333			11,854,028			(7,572,149	)		(12,030	)		4,465,231

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~The~~(unaudited) ~~accompanying notes are an integral part of the consolidated financial statements.~~

- 6 -


	Three Months Ended Sept 30, 2009		Three Months Ended Sept 30, 2008		Nine Months Ended Sept 30, 2009		Nine Months Ended Sept 30, 2008		Feb. 19, 2004 (Inception) Through Sept 30, 2009
Cash Flows From Operating Activities:
Net loss	(397,140	)	(802,627	)	(2,457,368	)	(2,447,643	)	(10,198,227	)
Adjustments to reconcile comprehensive loss to net cash provided by (used for) operating activities:
Depreciation	2,321		4,159		7,911		11,881		40,129
Stock-based compensation	—		37,792		206,280		476,381		1,214,030
Interest, amortization of discount on debentures	—		323,547		—		867,304		867,304
Loss on extinguishment of debentures	—		—		—		—		407,714
Beneficial conversion feature of debentures	—		—		—		224,982		224,982
Stock in exchange for rent	13,294		—		15,471		—		23,724
Stock in exchange for mining claim	—		—		3,800,000		—		3,800,000
Value adjustment of warrants	—		—		175,100		—		175,100
Loss on sale of asset	130,000		—		130,000		—		130,000

Changes in current assets and liabilities:
Accounts receivable	(12,345	)	—		(12,345	)	—		(12,345	)
Receivable from Telifonda	2,386		—		(38,274	)	—		(254,963	)
Prepaid expenses, advances and security deposits	(41,709	)	7,030		(44,082	)	(48,422	)	(94,458	)
Reclamation bond - MAN claims	—		—		—		33,711		—
Accounts payable and accrued expenses	(2,136	)	52,479		(102,904	)	(254,670	)	71,804
Accounts payable - related parties	—		(23,477	)	(123,828	)	(561,103	)	562,492

Net Cash provided by / (used for) operating activities	(305,329	)	(401,097	)	(1,555,961	)	(1,697,579	)	(3,042,714	)


Cash Flows From Investing Activities
Sale / purchase of mining claims - net (Note 6)	100,451		(48,251	)	(1,940,012	)	(369,894	)	(5,578,796	)
Purchase of fixed assets - net	116		(29,706	)	28,509		(36,759	)	(36,958	)
Sale of subsidiary	—		—		2,228,938		—		2,228,938

Net cash provided by / (used for) investing activities	100,567		(77,957	)	317,435		(406,653	)	(3,386,816	)

~~Table~~(Continued ofOn ~~Contents~~Following Page)

~~AURELIO~~- ~~RESOURCE~~7 ~~CORPORATION~~-

~~(An~~AURELIO ~~Exploration~~RESOURCE ~~Stage~~CORPORATION ~~Company)~~

~~CONSOLIDATED~~(An ~~STATEMENTS~~Exploration OFStage ~~CASH~~Company) ~~FLOWS~~

~~(unaudited)~~CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three MonthsEndedJune 30, 2009		Three MonthsEndedJune 30, 2008		Six MonthsEndedJune 30, 2009		Six MonthsEndedJune 30, 2008		Feb. 19, 2004(Inception)ThroughJune 30, 2009
Cash Flows From Operating Activities:
Net loss	(308,687	)	(1,027,644	)	(2,060,228	)	(1,645,016	)	(9,801,087	)
Adjustments to reconcile comprehensive loss to net cash provided by (used for) operating activities:
Depreciation	2,317		4,023		5,590		7,722		37,808
Stock-based compensation	174,240		75,000		206,280		438,254		1,214,030
Interest, amortization of discount on debentures	—		393,756		—		543,757		867,304
Loss on extinguishment of debentures	—		—		—		—		407,714
Beneficial conversion feature of debentures	—		—		—		224,982		224,982
Rent expense	—		—		2,177		—		10,430
Stock in exchange for mining claim	3,800,000		—		3,800,000		—		3,800,000
Value adjustment of warrants	175,100		—		175,100		—		175,100
Changes in current assets and liabilities
Receivable from Telifonda	8,174		—		(40,660	)	—		(257,349	)
Prepaid expenses, advances and security deposits	(42,018	)	(54,784	)	(2,373	)	(55,452	)	(52,749	)
Reclamation bond - MAN claims	—		—		—		33,171		—
Accounts payable and accrued expenses	(46,026	)	6,907		(100,768	)	(307,149	)	73,940
Accounts payable - related parties	(122,090	)	(27,254	)	(123,828	)	(537,626	)	562,492
Net Cash provided by / (used for) operating activities	3,641,010		(629,996	)	1,861,290		(1,296,817	)	(2,737,385	)
Cash Flows From Investing Activities
Purchase of mining claims - net	(3,801,567	)	(276,643	)	(2,040,463	)	(321,643	)	(5,679,247	)
Purchase of fixed assets - net	(1,557	)	(6,514	)	28,393		(6,718	)	(37,074	)
Sale of subsidiary	—		—		2,228,938		—		2,228,938
Net cash provided by / (used for) investing activities	(3,803,124	)	(283,157	)	216,868		(328,361	)	(3,487,383	)

(Unaudited)

(Continued OnFrom ~~Following~~Previous Page)

- 7 -


	Three Months Ended Sept 30, 2009			Three Months Ended Sept 30, 2008			Nine Months Ended Sept 30, 2009			Nine Months Ended Sept 30, 2008			Feb. 19, 2004 (Inception) Through Sept 30, 2009
Cash Flows From Financing Activities:
Proceeds from sale of convertible debentures	$	—		$	—		$	—		$	1,500,000		$	1,500,000
Bridge loan from shareholder		—			—			(2,000,000	)		—			—
Issue notes for property acquisition		—			—			—			—			2,714,000
Debt principal repayment		—			(2,480	)		—			(261,056	)		(532,271	)
Proceeds from short-term borrowings		—			—			—			—			250,000
Repayment of convertible debentures		—			—			—			—			(1,500,000	)
Proceeds from exercise of stock options		—			—			—			—			118,500
Issuance of common stock for cash		—			—			166,667			1,000,000			4,039,836


Net cash provided by / (used for) financing activities		—			(2,480	)		(1,833,333	)		2,238,944			6,590,065


Effect of exchange rate changes on cash		(2,771	)		(3,163	)		1,878			(2,911	)		(14,801	)


Net increase / (decrease) in cash		(207,533	)		(484,697	)		41,941			131,801			145,734


Cash at the beginning of the period		353,267			884,908			103,793			268,410			—

Cash at the end of the period	$	145,734		$	400,211		$	145,734		$	400,211		$	145,734


Schedule Of Non-Cash Investing & Financing Activities
Acquisition of Minera Milenium, S.A. de C.V.	$	—		$	—		$	—		$	—		$	(46	)
Acquisition of Aurelio Resources, Inc.		—			—			—			—			450,000
Mineral properties		—			48,251			2,040,463			1,383,894			8,042,037
Less note payable		—			—			—			(1,014,000	)		(2,454,000	)
Fixed asset purchases		—			29,706			—			36,759			122,016
Less long-term debt		—			—			—			—			(25,453	)
Supplemental Disclosure
Cash paid for interest	$	—		$	64,839		$	21,022		$	50,546		$	(87,072	)
Cash paid for income taxes		—			—			—			—			—

~~Table~~The accompanying notes are an integral part of ~~Contents~~the consolidated financial statements.

~~AURELIO~~- ~~RESOURCE~~8 ~~CORPORATION~~-

~~(An~~AURELIO ~~Exploration~~RESOURCE ~~Stage~~CORPORATION ~~Company)~~

~~CONSOLIDATED~~NOTES ~~STATEMENTS~~TO OFUNAUDITED ~~CASH~~CONDENSED ~~FLOWS~~CONSOLIDATED FINANCIAL STATEMENTS

~~(Unaudited)~~SEPTEMBER 30, 2009

~~(Continued From~~1. ~~Previous~~BASIS ~~Page)~~OF PRESENTATION

	Three MonthsEndedJune 30, 2009		Three MonthsEndedJune 30, 2008			Six MonthsEndedJune 30, 2009			Six MonthsEndedJune 30, 2008			Feb. 19, 2004(Inception)ThroughJune 30, 2009
Cash Flows From Financing Activities:
Proceeds from sale of convertible debentures	$	—	$	—		$	—		$	1,500,000		$	1,500,000
Bridge loan from shareholder		—		—			(2,000,000	)		—			—
Issue notes for property acquisition		—		—			—			—			2,714,000
Debt principal repayment		—		(2,404	)		—			(258,576	)		(532,271	)
Proceeds from short-term borrowings		—		—			—			—			250,000
Repayment of convertible debentures		—		—			—			—			(1,500,000	)
Proceeds form exercise of stock options		—		—			—			—			118,500
Issuance of common stock for cash		166,667		—			166,667			1,000,000			4,039,836
Net cash provided by / (used for) financing activities		166,667		(2,404	)		(1,833,333	)		2,241,424			6,590,065
Effect of exchange rate changes on cash		4,676		598			4,649			252			(12,030	)
Net increase / (decrease) in cash		9,229		(914,959	)		249,474			616,498			353,267
Cash at the beginning of the period		344,038		1,799,867			103,793			268,410			—
Cash at the end of the period	$	353,267	$	884,908		$	353,267		$	884,908		$	353,267
Schedule Of Non-Cash Investing And Financing Activities
Acquisition of Minera Milenium, S.A. de C.V.	$	—	$	—		$	—		$	—		$	(46	)
Acquisition of Aurelio Resources, Inc.		—		—			—			—			450,000
Mineral properties		3,801,567		1,290,643			2,040,463			1,335,643			8,042,037
Less note payable		—		(1,014,000	)		—			(1,014,000	)		(2,454,000	)
Fixed asset purchases		1,557		6,545			—			7,053			122,016
Less long-term debt		—		—			—			—			(25,453	)
Supplemental Disclosure
Cash paid for interest	$	21,022	$	37,500		$	21,022		$	(14,293	)	$	(87,072	)
Cash paid for income taxes		—		—			—			—			—

The accompanying unaudited condensed consolidated financial statements of Aurelio Resource Corporation (the “Company” or “Aurelio”) have been prepared by management in accordance with generally accepted accounting principles for interim financial information and with the regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of their financial position as of September 30, 2009 and the results of their operations and cash flows for the three and nine months ended September 30, 2009 and 2008 have been included.

~~The~~While ~~accompanying~~management ~~notes~~believes the disclosures presented are anadequate ~~integral~~to ~~part~~prevent ofmisleading information, it is suggested that the accompanying unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission. The interim results of operations for the three and nine months ended September 30, 2009 are not necessarily indicative of the results that may be expected for any other interim period of 2009 or for the year ending December 31, 2009.

-Going 8Concern -

~~Table~~These financial statements have been prepared with the ongoing assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of ~~Contents~~business. However, certain conditions as noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

~~AURELIO~~The ~~RESOURCE~~operations ~~CORPORATION~~of the Company have primarily been funded by the sale of common stock and issuance of debt. Continued operations of the Company are dependent on the Company’s ability to complete additional equity and/or debt financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity and/or debt financings. Such financings may not be available or may not be available on reasonable terms.

~~NOTES~~From TOinception, ~~UNAUDITED~~February 19, ~~CONDENSED~~2004 ~~CONSOLIDATED~~through ~~FINANCIAL~~September 30, ~~STATEMENTS~~2009, the Company generated a loss from operations during the exploration stage of $10,198,227.

~~JUNE~~Net ~~30,~~Loss ~~2009~~Per Share

1Basic loss per share is computed by dividing the net income by the weighted average number of common shares outstanding for the period. ~~BASIS~~Diluted OFshares ~~PRESENTATION~~outstanding are calculated factoring in stock options, and warrants outstanding, and their equivalents are included in diluted computations through the “treasury stock method” unless they are anti-dilutive. Convertible securities are included in diluted computations through the “if converted” method unless they are anti-dilutive.

~~The~~Income ~~accompanying~~Taxes unaudited condensed consolidated financial statements of Aurelio Resource Corporation (the “Company” or “Aurelio”) have been prepared by management in accordance with generally accepted accounting principles for interim financial information and with the regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of their financial position as of March 31, 2009 and the results of their operations and cash flows for the three and six months ended March 31 and June 30, 2009 and 2008 have been included.

~~While~~Deferred ~~management believes~~tax ~~the~~assets ~~disclosures~~and ~~presented~~liabilities are ~~adequate~~recognized tofor ~~prevent~~the ~~misleading~~future ~~information,~~tax itconsequences isattributable ~~suggested~~to ~~that~~differences between the ~~accompanying~~financial ~~unaudited~~statement ~~consolidated~~carrying ~~financial~~amounts ~~statements~~of beexisting ~~read~~assets inand ~~conjunction~~liabilities ~~with~~and ~~the~~their ~~audited~~respective ~~consolidated~~tax ~~financial~~bases. ~~statements~~Deferred tax assets and ~~the notes~~liabilities ~~thereto~~are ~~contained~~measured inusing ~~the~~enacted ~~Company’s~~tax ~~Annual~~rates ~~Report~~expected onto ~~Form~~apply ~~10-K~~to ~~for~~taxable income in the ~~year~~years ~~ended~~in ~~December 31,~~which ~~2008,~~those astemporary ~~filed~~differences ~~with~~are ~~the~~expected ~~Securities~~to ~~and~~be ~~Exchange~~recovered ~~Commission~~or settled. ~~The~~A ~~interim~~valuation ~~results~~allowance ofis ~~operations~~required ~~for~~to the ~~three~~extent ~~and~~any ~~six months ended~~deferred ~~March 31~~tax ~~and~~assets ~~June 30,~~may ~~2009 are~~ not ~~necessarily~~be ~~indicative~~realizable. ofWhile the ~~results~~Company ~~that~~has ~~may~~net beoperating ~~expected~~loss ~~for~~(“NOLs”) ~~any~~carry-forwards ~~other~~related ~~interim~~to ~~period~~certain oftax ~~2009~~jurisdictions, orthe ~~for~~Company ~~the~~has ~~year~~limited ~~ending~~or ~~December 31,~~no ~~2009~~NOLs in others.

~~Going~~As ~~Concern~~of September 30, 2009, the deferred tax asset related to the net operating loss carry forward was fully reserved by a valuation allowance due to the uncertainty of the Company generating future taxable income.

~~These~~- ~~financial~~9 ~~statements~~- have been prepared with the ongoing assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions as noted below currently exist which raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

~~The~~Recently ~~operations~~Issued ofAccounting ~~the~~Standards Company have primarily been funded by the sale of common stock and issuance of debt. Continued operations of the Company are dependent on the Company’s ability to complete additional equity and/or debt financings or generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity and/or debt financings. Such financings may not be available or may not be available on reasonable terms.

~~From~~In ~~inception~~December 2007, ~~February~~the FASB issued FASB Statement No. 19141R, ~~2004~~Business ~~through~~Combinations ~~June~~(SFAS No. 30141R) and FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements ~~2009~~an amendment to ARB No. 51 (SFAS No. 160). SFAS No. 141R and No. 160 require most identifiable assets, ~~the~~liabilities, ~~Company~~non-controlling ~~generated~~interests, and goodwill acquired in a ~~deficit~~business ~~from~~combination ~~operations~~to ~~during~~be ~~the~~recorded ~~exploration~~at ~~stage~~“full fair value” and require non-controlling interests (previously referred to as minority interests) to be reported as a component of $9equity,~~812~~ which changes the accounting for transactions with non-controlling interest holders. Both Statements are effective for periods beginning on or after December 15,~~644~~ 2008, and earlier adoption is prohibited. SFAS No. 141R will be applied to business combinations occurring after the effective date. SFAS No. 160 will be applied prospectively to all non-controlling interests, including any that arose before the effective date. The adoption of SFAS No. 141R and SFAS No. 160 did not have a material impact on our consolidated financial statements.

~~Net~~In ~~Loss~~March ~~Per~~2008, ~~Share~~the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), which amends and expands the disclosure requirements of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative instruments. This statement applies to all entities and all derivative instruments. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS No. 161 did not have a material impact on our consolidated financial statements.

~~Basic~~In ~~loss~~April ~~per~~2008, ~~share~~the isFASB ~~computed~~issued byStaff ~~dividing~~Position No. FAS 142-3, Determination of the ~~net~~Useful ~~income~~Life byof Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the ~~weighted~~factors ~~average~~that ~~number~~should ofbe ~~common~~considered ~~shares~~in ~~outstanding~~developing ~~for~~renewal or extension assumptions used to determine the ~~period.~~useful ~~Diluted~~life ~~shares~~of ~~outstanding~~a ~~are calculated~~recognized ~~factoring~~intangible inasset ~~stock~~under ~~options~~SFAS No. 142, Goodwill and ~~warrants~~Other ~~outstanding,~~Intangible ~~and~~Assets ~~their~~(“SFAS ~~equivalents~~142”). ~~are~~The ~~included~~intent inof ~~diluted~~FSP ~~computations~~FAS ~~through~~142-3 is to improve the ~~“treasury~~consistency ~~stock~~between ~~method”~~the ~~unless~~useful ~~they~~life ~~are~~of ~~anti-dilutive.~~a ~~Convertible~~recognized ~~securities~~intangible ~~are~~asset ~~included~~under inSFAS ~~diluted~~142 and the period of expected cash flows used to measure the fair ~~computations~~value ~~through~~of the ~~“if~~asset ~~converted”~~under ~~method~~SFAS ~~unless~~141(R) ~~they~~and ~~are~~other ~~anti~~applicable accounting literature. FSP FAS 142-~~dilutive~~3 is effective for fiscal years beginning after December 15, 2008. The adoption of FSP FAS 142-3 did not have a material impact on our consolidated financial statements.

~~Income~~In ~~Taxes~~May 2008, the FASB issued Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP 14-1”), which clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. FSP 14-1 requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer’s nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. FSP 14-1 is effective for fiscal years beginning after December 15, 2008. The adoption of FSP 14-1 did not have a material impact on our consolidated financial statements.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases2. ~~Deferred~~MANAGEMENT ~~tax~~OF ~~assets~~FINANCIAL ~~and~~RISK liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is required to the extent any deferred tax assets may not be realizable. While the Company has net operating loss (“NOLs”) carry-forwards related to certain tax jurisdictions, the Company has limited or no NOLs in others.

-The 9Company -is subject to a concentration of credit risk with all of its cash at September 30, 2009 on deposit with JPMorgan Chase Bank, NA. Management considers that in view of the financial standing and nature of the operations of JPMorgan Chase Bank, NA the risk of loss is small.

~~Table~~3. ofFINANCIAL ~~Contents~~INSTRUMENTS

AsThe Company’s financial instruments consist of ~~June 30~~cash and cash equivalents, ~~2009~~notes payable, ~~the~~debentures ~~deferred~~payable ~~tax~~and ~~asset~~accounts ~~related~~payable toand ~~the~~accrued ~~net~~liabilities. ~~operating~~Unless ~~loss~~otherwise ~~carry~~noted, ~~forward~~it ~~was~~is ~~fully~~management’s ~~reserved~~opinion bythat ~~a valuation~~the ~~allowance~~Company ~~due~~is not exposed to significant interest, currency or credit risks arising from these financial instruments. In each case, the ~~uncertainty~~fair value of ~~the~~these ~~Company~~financial ~~generating~~instruments ~~future~~approximate ~~taxable~~their ~~income.~~carrying values, unless otherwise noted

~~Recently~~- ~~Issued~~10 ~~Accounting~~- ~~Standards~~

~~In December 2007, the FASB issued FASB Statement No~~4. ~~141R,~~ ~~Business~~PROPERTY ~~Combinations~~AND ~~(SFAS~~EQUIPMENT No. 141R) and FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements an amendment to ARB No. 51 (SFAS No. 160). SFAS No. 141R and No. 160 require most identifiable assets, liabilities, non-controlling interests, and goodwill acquired in a business combination to be recorded at “full fair value” and require non-controlling interests (previously referred to as minority interests) to be reported as a component of equity, which changes the accounting for transactions with non-controlling interest holders. Both Statements are effective for periods beginning on or after December 15, 2008, and earlier adoption is prohibited. SFAS No. 141R will be applied to business combinations occurring after the effective date. SFAS No. 160 will be applied prospectively to all non-controlling interests, including any that arose before the effective date. The adoption of SFAS No. 141R and SFAS No. 160 did not have a material impact on our consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), which amends and expands the disclosure requirements of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative instruments. This statement applies to all entities and all derivative instruments. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS No. 161 did not have a material impact on our consolidated financial statements.


		Cost		Accumulated Depreciation		Net Book Value
As of September 30, 2009
Lakewood	- office furniture	$	11,943	$	4,834	$	7,109
	- office equipment⁽¹⁾		22,244		11,856		10,388
	- leasehold improvements		29,539		923		28,616
Mexico	- vehicles and equipment		8,693		5,201		3,492
	- furniture and equipment		2,495		1,334		1,161
Elfrida, AZ	- vehicles and equipment⁽²⁾		—		—		—

Total:		$	74,914	$	24,148	$	50,766

As of December 31, 2008
Lakewood	- office furniture	$	11,943	$	3,555	$	8,388
	- office equipment		47,769		17,361		30,408
	- leasehold improvements		29,539		369		29,170
Mexico	- vehicles and equipment		8,553		3,587		4,966
	- furniture and equipment		2,455		918		1,537
Elfrida, AZ	- vehicles and equipment		20,200		5,280		14,920

Total:		$	120,459	$	31,070	$	89,389

In(1) ~~April~~The ~~2008,~~reduction ~~the~~in ~~FASB~~Lakewood ~~issued~~- ~~Staff~~office ~~Position~~equipment ~~No. FAS 142-3~~cost, ~~Determination~~accumulated ofdepreciation ~~the~~and ~~Useful~~net ~~Life~~book ofvalue ~~Intangible Assets~~for ~~(“FSP FAS 142-3”). FSP FAS 142-3 amends~~ the ~~factors~~period ~~that~~ending ~~should~~September be30, ~~considered~~2009 inreflect ~~developing renewal or extension assumptions used to determine~~ the ~~useful~~sale ~~life~~ of aBolsa ~~recognized intangible asset under SFAS No. 142~~Resources, ~~Goodwill and Other Intangible Assets (“SFAS 142”)~~Inc. ~~The~~on ~~intent~~February of18, ~~FSP~~2009 ~~FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142~~ and the ~~period~~resulting oftransfer ~~expected cash flows used to measure the fair value~~ of ~~the~~ownership ~~asset under SFAS 141(R) and other applicable accounting literature. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The adoption~~ of ~~FSP~~certain ~~FAS 142-3 did not have a material impact on our consolidated financial statements~~assets.

~~In May 2008, the FASB issued Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion~~ (~~Including Partial Cash Settlement~~2) ~~(“FSP~~The ~~14-1”),~~reduction ~~which clarifies the accounting for convertible debt instruments that may be settled~~ in ~~cash~~Elfrida, ~~(including~~AZ ~~partial~~- ~~cash~~vehicles ~~settlement)~~and ~~upon~~equipment ~~conversion.~~cost, ~~FSP~~accumulated ~~14-1~~depreciation ~~requires issuers~~and tonet ~~account~~book ~~separately~~value for the ~~liability~~period ~~and~~ending ~~equity~~September ~~components~~30, of2009 ~~certain~~reflect ~~convertible debt instruments in a manner that reflects~~ the ~~issuer’s~~sale ~~nonconvertible~~of ~~debt~~Bolsa ~~(unsecured~~Resources, ~~debt) borrowing rate when interest cost is recognized~~Inc. ~~FSP~~on ~~14-1 is~~February ~~effective~~18, ~~for~~2009 ~~fiscal~~and ~~years~~the ~~beginning~~resulting ~~after~~transfer ~~December 15,~~of ~~2008.~~ownership ~~The adoption~~ of ~~FSP~~certain ~~14-1 did not have a material impact on our consolidated financial statements~~assets.

2In addition to the above equipment, the Company had capitalized costs relating to mining claims and other property in the amount of $3,688,316 and $4,240,470 at September 30, 2009 and December 31, 2008, respectively. ~~MANAGEMENT~~Refer OFalso ~~FINANCIAL~~to ~~RISK~~Note 6 regarding current property payment obligations. The September 30, 2009 capitalized costs relating to mining claims and other property were reduced as a result of the sale of Bolsa Resources, Inc. on February 18, 2009.

~~The~~Depreciation ~~Company~~expense iswas ~~subject~~$2,321 toand a$7,911 ~~concentration~~for ofthe ~~credit~~three ~~risk~~and ~~with~~nine ~~all~~months ofended ~~its cash at June~~September 30, 2009, onwas ~~deposit with JPMorgan Chase Bank~~$4,159 ~~NA.~~and ~~The cash balance at quarter-end exceeded the FDIC insured limit of~~ $~~250~~11,~~000.~~881 ~~Management~~for ~~considers that in view of~~ the ~~financial~~comparable ~~standing~~periods in 2008, and ~~nature~~was of$40,129 ~~the~~from ~~operations~~Inception ofthrough ~~JPMorgan Chase Bank~~September 30, NA ~~the risk of loss is small~~2009.

-5. 10 LONG-TERM DEBT

~~Table~~Long-term debt consists of ~~Contents~~the following:

3. FINANCIAL INSTRUMENTS


		September 30, 2009		December 31, 2008
Bank debt⁽¹⁾		$	—	$	8,166
Note payable	– Courtland Claims⁽²⁾		—		950,000
Note payable	– Rae Properties⁽³⁾		—		754,000
Note payable	– View Sites⁽⁴⁾		—		750,000

	Subtotal		—		2,462,166
Less: current portion			—		(798,166	)

Long-term portion		$	—	$	1,664,000

(1) The ~~Company’s~~bank ~~financial~~debt ~~instruments~~was ~~consist~~repaid ofin ~~cash~~full ~~and~~on ~~cash~~March ~~equivalents~~9, ~~notes payable, debentures payable and accounts payable and accrued liabilities~~2009. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. In each case, the fair value of these financial instruments approximate their carrying values, unless otherwise noted

4.- ~~PROPERTY~~11 ~~AND~~- ~~EQUIPMENT~~

		Cost		AccumulatedDepreciation		Net Book Value
As at June 30, 2009
Lakewood	- office furniture	$	11,943	$	4,408	$	7,535
	- office equipment(1)		22,244		10,797		11,447
	- leasehold improvements		29,539		738		28,801
Mexico	- vehicles and equipment		8,908		4,811		4,097
	- furniture and equipment		2,557		1,234		1,323
Elfrida, AZ	- vehicles and equipment(2)		—		—		—
Total:		$	75,191	$	21,988	$	53,203
As at December 31, 2008
Lakewood	- office furniture	$	11,943	$	3,555	$	8,388
	- office equipment		47,769		17,361		30,408
	- leasehold improvements		29,539		369		29,170
Mexico	- vehicles and equipment		8,553		3,587		4,966
	- furniture and equipment		2,455		918		1,537
Elfrida, AZ	- vehicles and equipment		20,200		5,280		14,920
Total:		$	120,459	$	31,070	$	89,389

(2)	This loan was assumed by Telifonda (Cayman) Ltd. on February 18, 2009 following completion of its acquisition of Bolsa Resources, Inc.

(13) ~~The~~This ~~reduction~~loan inwas ~~Lakewood~~assumed -by ~~office~~Telifonda ~~equipment~~(Cayman) ~~cost, accumulated depreciation and net book value for the period ending June 30, 2009 reflect the sale of Bolsa Resources, Inc~~Ltd. on February 18, 2009 ~~and~~following ~~the~~completion ~~resulting transfer~~ of ~~ownership~~its acquisition of ~~certain~~Bolsa ~~assets~~Resources, Inc.

(24) ~~The~~This ~~reduction~~loan inwas ~~Elfrida,~~assumed AZby -Telifonda ~~vehicles~~(Cayman) ~~and equipment cost, accumulated depreciation and net book value for the period ending June 30, 2009 reflect the sale of Bolsa Resources, Inc~~Ltd. on February 18, 2009 ~~and~~following ~~the~~completion ~~resulting transfer~~ of ~~ownership~~its acquisition of ~~certain~~Bolsa ~~assets~~Resources, Inc.

In addition to the above equipment, the Company had capitalized costs relating to mining claims and other property in the amount of $3,818,767 and $4,240,470 at June 30, 2009 and December 31, 2008, respectively. Refer also to Note 6 ~~regarding current property payment obligations~~. ~~The June 30,~~CONTRACTUAL ~~2009 capitalized costs relating to mining claims and other property were greatly reduced as a result of the sale of Bolsa Resources~~OBLIGATIONS, ~~Inc.~~CONTINGENT onLIABILITIES ~~February 18,~~AND ~~2009.~~COMMITMENTS

Depreciation expense was $2,317 and $5,590 for the three and six months ended June 30, 2009, was $4,023 and $7,722 for the comparable periods in 2008, and was $37,808 from Inception through June 30, 2009.


	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
Contractual Obligations as of Sept 30, 2009
Unpatented BLM mining claims - annual renewal fees⁽¹⁾	$	264,600	$	52,920	$	105,840	$	105,840	$	—
Gavilanes option payments ⁽²⁾		365,000		60,000		305,000		—		—
Crescent Valley North (CVN) Lease ⁽³⁾		—		—		—		—		—
Horse Creek (HC) Lease ⁽⁴⁾		200,000		30,000		75,000		95,000		—
Indian Creek (IC) Lease ⁽⁵⁾		—		—		—		—		—
Iron Butte Lease ⁽⁶⁾		400,000		60,000		150,000		190,000		—
North Sleeper Lease ⁽⁷⁾		—		—		—		—		—
Robinson Creek (RC) Lease ⁽⁸⁾		—		—		—		—		—

Safford Canyon Lease ⁽⁹⁾		—		—		—		—		—
Sands Spring Lease ⁽¹⁰⁾		220,000		30,000		90,000		100,000		—
Veta Grande Lease ⁽¹¹⁾		200,000		25,000		75,000		100,000		—
Lease of Lakewood, Colorado office ⁽¹²⁾		78,332		44,510		33,822		—		—
Lease of Culican, Mexico office space ⁽¹³⁾		1,638		1,512		126		—		—

5(1) Effective June 15, 2009 the Company completed the acquisition of a total of 1,820 unpatented mining claims located in Nevada from C3 Resources, Inc. ~~LONG~~(“C3”), including 934 claims comprising the Cortez-~~TERM~~Carlin ~~DEBT~~Corridor project, which were staked by C3 in 2008 and are not subject to any underlying lease or royalty agreements. For each of the unpatented mining claims, there is an annual renewal fee of $140 per claim payable to the Bureau of Land Management, an agency of the U.S. Department of the Interior. These claim fees are payable annually, on or before August 31st (although certain of the Nevada projects require payments prior to August 31st pursuant to the terms of the underlying leases as detailed in Notes (3) thru (11) below. The values in this entry have been adjusted to reflect: (i) the 52 claims at North Sleeper that are subject to a joint venture agreement (see note 7 below) and for which a third party has made the required claim payments; and, (ii) the 395 claims comprising the Crescent Valley North, Indian Creek, Robinson Creek and Safford Canton projects (see notes 3, 5, 8 and 9 below) for which a third party has made the required claim payments.

~~Long~~In light of the increased claim maintenance costs and the expense of mounting an effective grass-~~term~~roots ~~debt~~exploration ~~consists~~program, the Company elected not to renew any of the 934 Cortez-Carlin Corridor claims. The values in this entry have been further adjusted to ~~following:~~reflect the decision not to renew the 934 unpatented mining claims.

	June 30, 2009		December 31, 2008
Bank debt(1)	$	—	$	8,166
Note payable – Courtland Claims(2)		—		950,000
Note payable – Rae Properties(3)		—		754,000
Note payable – View Sites(4)		—		750,000
Subtotal		—		2,462,166
Less: current portion		—		(798,166	)
Long-term portion	$	—	$	1,664,000

(2)

In addition to the total of the option payments for the purchase price of the three mining claims (covering approximately 1,000 hectares) making up the Gavilanes property, the property is subject to a 3% net smelter return royalty in favor of Mr. Modesto Rivas Beltran of Culiacan, Sinaloa, Mexico.

~~(1)~~As ~~The~~described ~~bank~~in ~~debt~~Note is12: ~~payable~~Sale toOf aAssets ~~bank,~~To ~~with~~And ~~the~~Financing ~~final~~Agreement ~~payment~~With ~~due~~A onShareholder, orthe ~~before~~Company ~~September~~has ~~20,~~entered ~~2009.~~into ~~The~~(and ~~interest~~shareholders ~~rate~~have approved) isthe ~~12.25~~sale of a further 3% ~~and~~NSR royalty interest in the ~~loan~~Gavilanes isproperty ~~cash~~to ~~collateralized.~~Telifonda ~~The~~(Cayman) ~~bank~~Ltd. ~~debt~~This ~~was~~transaction ~~repaid~~is inanticipated ~~full~~to close on ~~March~~or 9before December 31, 2009 and only upon receipt of full payment for the royalty interest will Aurelio convey an executed royalty agreement to the purchaser.

- 1112 -

~~Table~~(3) The 172 unpatented lode mining claims comprising the Crescent Valley North (CVN) project that are situated in Sections 4 and 5, Township 30 North, Range 51 East, and Sections 28, 29, 31, 32 and 33, Township 31 North, Range 51 East, in Eureka County, Nevada and are subject to the terms and conditions of ~~Contents~~an underlying lease agreement dated August 25, 2008 between David Mathewson, as owner (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4, 2009), and C3 Resources, Inc., as tenant (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).

~~(2)~~All ~~The note payable - Courtland Claims (which form part~~ of ~~the~~C3’s ~~Hill~~rights ~~Copper-Zinc~~and ~~Project)~~interests ~~of $950,000 is an interest-only note that is payable~~ in ~~full~~the onLease orwere ~~before~~assigned ~~September~~to ~~15, 2010, bears interest at 6% and is secured by a deed of trust on~~ the ~~underlying~~Company ~~properties. This loan was assumed by Telifonda (Cayman) Ltd.~~ on ~~February 18~~June 15, 2009 ~~following completion of its acquisition of Bolsa Resources, Inc~~.

~~(3)~~ The ~~note~~Crescent ~~payable~~Valley -North ~~Rae~~Lease ~~Properties~~contains ~~(which form part of~~ the ~~Hill~~following ~~Copper-Zinc~~material ~~Project)~~terms ~~of $754,000 is payable in three remaining semi-annual installments of $260,000, commencing in April 2009, with the entire unpaid principal balance due April 17, 2010, bears interest at 7%~~ and isconditions: ~~secured by a deed of trust on the underlying properties. This loan was assumed by Telifonda (Cayman) Ltd. on February 18, 2009 following completion of its acquisition of Bolsa Resources, Inc.~~

(4i) ~~The~~a ~~note~~term ~~payable - View Sites (which property is located to the southeast~~ of ~~the Hill Copper~~twenty-~~Zinc~~five ~~Project)~~years isand ~~payable~~so inlong ~~four~~thereafter ~~semi-annual~~as ~~installments~~minerals ofare ~~$135~~mined,~~000,~~ ~~commencing April 2009 and a final payment of $210~~produced,~~000~~ onexplored ~~March~~or ~~2011,~~sold ~~bears~~from ~~interest at 8% and is secured by a deed of trust on~~ the ~~underlying~~CVN ~~properties. This loan was assumed by Telifonda (Cayman) Ltd. on February 18, 2009 following completion of its acquisition of Bolsa Resources, Inc.~~Claims;

6.(ii) ~~CONTRACTUAL~~the ~~OBLIGATIONS~~lessee is required to make annual rental payments on each anniversary of the Lease starting at $30,000 ~~CONTINGENT~~upon ~~LIABILITIES~~signing ~~AND~~(paid) ~~COMMITMENTS~~and increasing to $60,000 on the sixth anniversary and annually thereafter, provided however that every five years the payments shall be increased in proportion to any increase in the CPI(U) over the prior five-year period;

	Total		Less than1 year		1 to 3years		3 to 5years		More than5 years
Contractual Obligations as of June 30, 2009
Unpatented BLM mining claims - annual renewal fees(1)	$	1,237,600	$	247,520	$	495,040	$	495,040	$	—
Gavilanes option payments (2)		390,000		55,000		335,000		—		—
Crescent Valley North (CVN) Lease (3)		225,000		35,000		85,000		105,000		—
Horse Canyon (HC) Lease (4)		175,000		25,000		65,000		85,000		—
Indian Creek (IC) Lease (5)		175,000		25,000		65,000		85,000		—
Iron Butte Lease (6)		350,000		50,000		130,000		170,000		—
North Sleeper Lease (7)		—		—		—		—		—
Robinson Creek (RC) Lease (8)		175,000		25,000		65,000		85,000		—
Safford Canyon Lease (9)		87,500		17,500		35,000		35,000		—
Sands Spring Lease (10)		220,000		30,000		90,000		100,000		—
Veta Grande Lease (11)		200,000		25,000		75,000		100,000		—
Lease of Lakewood, Colorado office (12)		89,412		44,316		45,096		—		—
Lease of Culican, Mexico office space (13)		516		516		—		—		—

(iii)

the CVN claims are subject to a 4% NSR production royalty payable to David Mathewson, provided that the lessee has the sole and exclusive option to buy down the royalty from 4% to 2% by paying Mathewson a lump sum payment per royalty point of between $2 and $8 million depending upon the average price of gold for the thirty days preceding the exercise of the option as more particularly set out in the Lease; and,

(1iv) ~~Effective~~prior to June 1530th, ~~2009~~ the ~~Company~~lessee ~~completed~~is ~~the~~required ~~acquisition~~to ofpay aall ~~total~~claim ofmaintenance ~~1,820~~fees ~~unpatented mining claims located in Nevada from C3 Resources, Inc. (“C3”), including 934 claims comprising the Cortez-Carlin Corridor project, which were staked by C3 in 2008~~ and ~~are~~file ~~not~~all ~~subject~~required tofilings ~~any~~with ~~underlying lease or royalty agreements. For each of~~ the ~~unpatented~~United ~~mining~~States ~~claims, there is an annual renewal fee of $140 per claim payable to the~~ Bureau of Land Management, anand ~~agency of~~ the ~~U.S.~~county ~~Department~~in ofwhich the ~~Interior.~~CVN ~~These~~claims ~~claim fees~~ are ~~payable~~located ~~annually, on or before August 31st (although certain of the Nevada projects require payments prior~~ to ~~August~~maintain ~~31st pursuant to~~ the ~~terms~~claims ~~of the underlying leases as detailed~~ in ~~Notes~~good ~~(3) thru (11) below~~standing. The values in this entry have been adjusted to reflect the 52 claims at North Sleeper that are subject to a joint venture agreement (see note (7) below) and for which a third party has made the required claim payments.

-Effective 12September 14, 2009, the Company entered into an option agreement with JKR Gold Resources, Inc. pursuant to which JKR can acquire all of Aurelio’s rights and interests in the Crescent Valley North property (in addition to the Indian Creek, Robinson Creek and Safford Canyon projects) in exchange for cash payments totaling $216,657 ($116,657 of which has been received to date), issuing 600,000 common shares of JKR, a privately-held company (received), and completing $1.5 million in exploration and development work prior to August 31, 2012; the Company would retain a 1% NSR on each of the four projects. The agreement also requires JKR to make all underlying lease payments, in addition to paying all Federal and county claim maintenance fees and expenses.

~~Table~~$16,657 of ~~Contents~~cash received was recorded as a reduction to expenses we incurred for the Crescent Valley North, Indian Creek, Robinson Creek and Safford Canyon properties while this agreement was being finalized. $100,000 of cash and the 600,000 common shares have been recorded as a real estate deposit liability until the remaining obligations have been met by JKR. The 600,000 common shares received have been recorded as an investment on the consolidated balance sheet as of September 30, 2009. As of the date of the agreement, these shares represented approximately 5% of the outstanding JKR common shares, and are accounted for under the cost method.

On(4) ~~June~~ The 189 unpatented lode mining claims comprising the Horse Creek project that are situated in Sections 13, 22, 23, 24, 25, 26, 27, 35 and 36, Township 27 North, Range 49 East; Sections 19, 30 and 31, ~~2009~~Township ~~the~~27 ~~Company~~North, ~~paid~~Range ~~renewal~~50 ~~fees~~East; ofSection ~~$125/claim~~1, ~~for~~Township 4426 ~~unpatented~~North, ~~mining~~Range ~~claims~~49 ~~at Crescent~~East; ~~Valley~~and, Sections 6 and 7, Township 26 North, 44Range ~~claims~~50 atEast ~~Safford~~in ~~Canyon~~Eureka County, 11Nevada ~~claims~~and atare ~~Indian~~subject ~~Creek~~to ~~(IC)~~the terms and 11conditions ~~claims~~of atan ~~Robinson~~underlying ~~Creek~~lease ~~(RC)~~agreement dated August 25, 2008 between David C. ~~The~~Knight ~~remaining~~(as ~~balance~~assigned offrom ~~$15/claim~~KM ~~for~~Exploration, ~~each~~Ltd. by assignment of ~~these~~mining ~~110~~leases ~~claims~~dated ~~were~~February ~~paid~~4, ~~subsequent~~2009), toas ~~the~~owner, ~~end~~and C3 Resources, Inc., as tenant (as assigned from SY Resources Acquisition, Inc. by assignment of ~~the~~mining ~~reporting~~leases ~~period~~dated September 5, 2008).

~~(2)~~All ~~In addition to the total~~ of ~~the~~C 3’s ~~option~~rights ~~payments~~and ~~for~~interests ~~the~~in ~~purchase price of~~ the ~~three~~Horse ~~mining~~Creek ~~claims~~Lease were ~~(covering~~assigned ~~approximately~~to ~~1,000 hectares) making up~~ the ~~Gavilanes~~Company ~~property,~~on ~~the property is subject to a 3% net smelter return royalty in favor of Mr. Modesto Rivas Beltran of Culiacan~~June 15, ~~Sinaloa, Mexico~~2009.

As- ~~described~~13 in- Note 12: Sale Of Assets To And Financing Agreement With A Shareholder, the Company has entered into (and shareholders have approved) the sale of a further 3% NSR royalty interest in the Gavilanes property to Telifonda (Cayman) Ltd. This transaction is anticipated to close on or before December 31, 2009 and only upon receipt of full payment for the royalty interest will Aurelio convey an executed royalty agreement to the purchaser.

~~(3)~~ The ~~172~~Horse ~~unpatented~~Creek ~~lode~~Lease ~~mining~~contains ~~claims comprising~~ the ~~Crescent~~following ~~Valley~~material North (CVN) project that are situated in Sections 4 and 5, Township 30 North, Range 51 East, and Sections 28, 29, 31, 32 and 33, Township 31 North, Range 51 East, in Eureka County, Nevada and are subject to the terms and conditions: of an underlying lease agreement dated August 25, 2008 between David Mathewson, as owner (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4, 2009), and C3 Resources, Inc., as tenant (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).

~~All~~(i) a term of ~~C3’s~~25 ~~rights~~years and ~~interests~~so inlong ~~the~~thereafter ~~Lease~~as ~~were~~minerals ~~assigned~~are tomined, ~~the~~produced, ~~Company~~explored onor ~~June 15,~~sold ~~2009.~~from the claims;

~~The~~(ii) ~~Crescent~~the ~~Valley~~lessee ~~North~~is ~~Lease~~required ~~contains~~to make annual rental payments on each anniversary of the ~~following~~Lease ~~material~~starting ~~terms~~at $20,000 upon signing (paid) and ~~conditions:~~increasing by $5,000 per year to $50,000 on the 6th anniversary and annually thereafter, provided, however, that every five years the payments shall be increased in proportion to any increase in the CPI(U) over the prior five-year period;

(iiii) the Horse Creek claims are subject to a ~~term~~4% ofNSR ~~twenty-five~~production ~~years~~royalty payable to KM Exploration, provided that the lessee has the sole and soexclusive ~~long~~option ~~thereafter~~to asbuy ~~minerals~~down ~~are~~the ~~mined,~~royalty ~~produced~~from 4% to 2% by paying KM Exploration a lump sum payment per royalty point of between $2 and $8 million, ~~explored~~depending orupon ~~sold~~the ~~from~~average price of gold for the ~~CVN~~30 ~~Claims~~days preceding the exercise of the option as more particularly set out in the Lease; and,

(iiiv) prior to August 31st, the lessee is required to ~~make~~pay ~~annual~~all ~~rental~~claim ~~payments~~maintenance onfees ~~each~~and ~~anniversary~~file ofall ~~the~~required ~~Lease~~filings ~~starting~~with atthe ~~$30,000~~United ~~upon~~States ~~signing~~Bureau ~~(paid)~~of ~~and~~Land ~~increasing~~Management toand ~~$60,000 on~~ the ~~sixth~~county ~~anniversary~~in ~~and~~which ~~annually thereafter, provided however that every five years~~ the ~~payments~~Horse ~~shall~~Creek beclaims ~~increased~~are inlocated ~~proportion~~ to ~~any~~maintain ~~increase in~~ the ~~CPI(U)~~claims ~~over~~in ~~the~~good ~~prior five-year period;~~standing.

~~(iii)~~Effective August 25, 2009, the ~~CVN~~Company ~~claims~~and ~~are~~David ~~subject~~C. toKnight aamended 4%the ~~NSR~~2008 ~~production~~Mineral ~~royalty~~Lease ~~payable~~Agreement to ~~David~~provide ~~Mathewson,~~for ~~provided~~a ~~that~~four-month ~~the~~extension ~~lessee~~in ~~has~~ the ~~sole~~due ~~and~~date ~~exclusive~~for ~~option~~the tofirst ~~buy~~advanced ~~down~~annual ~~the~~ royalty ~~from~~payment 4% (to 2%January 25, by2010), ~~paying~~in ~~Mathewson~~exchange for a ~~lump~~$3,000 increase ~~sum~~in ~~payment~~the ~~per~~first ~~royalty~~anniversary ~~point~~payment of(from ~~between~~ $225,000 ~~and~~to $828,000); ~~million~~all ~~depending~~other ~~upon~~terms ~~the average price~~ of ~~gold for~~ the ~~thirty~~2008 ~~days~~Mineral ~~preceding~~Lease ~~the~~Agreement ~~exercise~~remained ofunchanged. ~~the option as more particularly set out in the Lease; and,~~

(iv5) ~~prior~~The to88 ~~June~~unpatented ~~30th,~~lode mining claims comprising the ~~lessee~~Indian isCreek ~~required~~(IC) toproject ~~pay~~that ~~all~~are ~~claim~~situated ~~maintenance~~in ~~fees~~Sections 5 and ~~file~~6, ~~all~~Township ~~required~~27 ~~filings~~North, ~~with~~Range ~~the~~54 ~~United~~East, ~~States~~and ~~Bureau~~Sections of28, ~~Land~~29, ~~Management~~30, 31 and ~~the~~32, ~~county~~Township 28 North, Range 54 East, in ~~which~~Elko ~~the~~County, ~~CVN~~Nevada ~~claims~~and are ~~located~~subject to ~~maintain~~ the ~~claims~~terms inand ~~good~~conditions ~~standing~~of an underlying lease agreement dated August 25, 2008 between David Mathewson (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4, 2009), as owner, and C3 Resources, Inc. as lessee (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).

~~(4)~~All ~~The~~of ~~189~~C3’s ~~unpatented~~rights ~~lode mining claims comprising the Horse Creek project that are situated in Sections 13, 22, 23, 24, 25, 26, 27, 35~~ and ~~36,~~interests ~~Township 27 North, Range 49 East; Sections 19, 30 and 31, Township 27 North, Range 50 East; Section 1, Township 26 North, Range 49 East; and, Sections 6 and 7, Township 26 North, Range 50 East~~ in ~~Eureka~~the ~~County,~~Lease ~~Nevada~~were ~~and~~assigned ~~are subject~~ to the ~~terms~~Company ~~and~~on ~~conditions of an underlying lease agreement dated August 25~~June 15, ~~2008 between David C. Knight (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4,~~ 2009~~), as owner, and C3 Resources, Inc~~., ~~as tenant (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 5, 2008).~~

~~All~~The ofIndian ~~C3’s rights and interests in the Horse~~ Creek Lease ~~were~~contains ~~assigned to~~ the ~~Company~~following onmaterial ~~June 15,~~terms ~~2009.~~and conditions:

~~The~~(i) ~~Horse~~the ~~Creek~~lessee ~~Lease~~is ~~contains~~required to make annual rental payments on each anniversary of the ~~following~~Lease ~~material~~starting ~~terms~~at $20,000 upon signing (paid) and ~~conditions:~~increasing $5,000 per year to $50,000 on the sixth anniversary and annually thereafter, provided however that every five years the payments shall be increased in proportion to any increase in the CPI over the prior five-year period;

(iiii) the Indian Creek claims are subject to a ~~term~~4% NSR production royalty payable to KM Exploration, provided that the lessee has the sole and exclusive option to buy down the royalty from 4% to 2% by paying KM a lump sum payment per royalty point of 25between ~~years~~$2 and so$8 ~~long~~million ~~thereafter~~depending asupon ~~minerals~~the ~~are~~average ~~mined,~~price ~~produced,~~of ~~explored~~gold orfor ~~sold~~the ~~from~~thirty days preceding the ~~claims~~exercise of the option as more particularly set out in the Lease; and,

(iiiv) prior to June 30th, the lessee is required to ~~make~~pay ~~annual~~all ~~rental~~claim ~~payments~~maintenance onfees ~~each anniversary of the Lease starting at $20,000 upon signing (paid)~~ and ~~increasing~~file byall ~~$5,000~~required ~~per~~filings ~~year~~with ~~to $50,000 on~~ the ~~6th~~United ~~anniversary~~States ~~and~~Bureau ~~annually~~of ~~thereafter,~~Land ~~provided,~~Management ~~however,~~and ~~that~~the ~~every~~county ~~five~~in ~~years~~which the ~~payments~~Indian ~~shall~~Creek beclaims ~~increased~~are inlocated ~~proportion~~ to ~~any~~maintain ~~increase in~~ the ~~CPI(U)~~claims ~~over~~in ~~the~~good ~~prior five-year period;~~standing.

-Effective 13September 14, 2009, the Company entered into an option agreement with JKR Gold Resources, Inc. pursuant to which JKR can acquire all of Aurelio’s rights and interests in the Indian Creek property (in addition to the Crescent Valley North, Robinson Creek and Safford Canyon projects) in exchange for cash payments totaling $216,657 ($116,657 of which has been received to date), issuing 600,000 common shares of JKR, a privately-held company (received), and completing $1.5 million in exploration and development work prior to August 31, 2012; the Company would retain a 1% NSR on each of the four projects. The agreement also requires JKR to make all underlying lease payments, in addition to paying all Federal and county claim maintenance fees and expenses.

~~Table~~- of14 ~~Contents~~-

~~(iii)~~See ~~the~~final ~~Horse~~paragraph ~~Creek~~in ~~claims~~Note ~~are~~(3) on ~~subject~~page to13 a 4% NSR production royalty payable to KM Exploration, provided that the lessee has the sole and exclusive option to buy down the royalty from 4% to 2% by paying KM Exploration a lump sum payment per royalty point of between $2 and $8 million, depending upon the average price of gold for ~~the~~further 30information ~~days~~concerning ~~preceding~~ the ~~exercise~~JKR transaction. ~~of the option as more particularly set out in the Lease; and,~~

(iv6) ~~prior~~The to86 ~~August~~unpatented ~~31st,~~lode mining claims comprising the ~~lessee~~Iron isButte ~~required~~project tothat ~~pay~~are ~~all~~situated ~~claim~~in ~~maintenance~~Sections ~~fees~~13 and ~~file~~24, ~~all~~Township ~~required~~26 ~~filings~~North, ~~with~~Range 43 East, and Sections 18 and 19, Township 26 North, Range 44 East, in Lander County, Nevada and are subject to the ~~United~~terms ~~States~~and ~~Bureau~~conditions of ~~Land~~an ~~Management~~underlying lease agreement dated August 25, 2008 between David C. Knight (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4, 2009), as owner, and ~~the~~C3 ~~county~~Resources, inInc., ~~which~~as ~~the~~tenant ~~Horse~~(as ~~Creek~~assigned ~~claims~~from ~~are~~SY ~~located~~Resources toAcquisition, ~~maintain~~Inc. ~~the~~by ~~claims~~assignment inof ~~good~~mining ~~standing~~leases dated September 5, 2008).

~~(5)~~All ~~The~~of 88C3’s ~~unpatented~~rights ~~lode mining claims comprising the Indian Creek (IC) project that are situated in Sections 5~~ and 6,interests ~~Township 27 North, Range 54 East, and Sections 28, 29, 30, 31 and 32, Township 28 North, Range 54 East,~~ in ~~Elko~~the ~~County,~~Iron ~~Nevada~~Butte ~~and~~Lease ~~are~~were ~~subject~~assigned to the ~~terms~~Company ~~and~~on ~~conditions of an underlying lease agreement dated August 25~~June 15, ~~2008 between David Mathewson (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4,~~ 2009~~), as owner, and C3 Resources, Inc~~. ~~as lessee (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).~~

~~All~~The ofIron ~~C3’s~~Butte ~~rights and interests in the~~ Lease ~~were~~contains ~~assigned to~~ the ~~Company~~following onmaterial ~~June 15,~~terms ~~2009.~~and conditions:

~~The~~(i) ~~Indian~~a ~~Creek~~term ~~Lease~~of ~~contains~~25 ~~the~~years ~~following~~and ~~material~~so ~~terms~~long ~~and~~thereafter ~~conditions:~~as minerals are mined, produced, explored or sold from the claims;

(iii) the lessee is required to make annual rental payments on each anniversary of the Lease starting at $2040,000 upon signing (paid) and increasing by $510,000 per year to $50100,000 on the ~~sixth~~6th anniversary and annually thereafter, provided however that every five years the payments shall be increased in proportion to any increase in the CPI(U) over the prior five-year period;

(iii) the ~~Indian~~Iron ~~Creek~~Butte claims are subject to a 4% NSR production royalty payable to KM Exploration, provided that the lessee has the sole and exclusive option to buy down the royalty from 4% to 2% by paying KM Exploration a lump sum payment per royalty point of between $2 and $8 million, depending upon the average price of gold for the ~~thirty~~30 days preceding the exercise of the option as more particularly set out in the Lease; and,

(iv) prior to ~~June~~August ~~30th~~31st, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of Land Management and the county in which the ~~CVN~~Iron Butte claims are located to maintain the claims in good standing.

(67) The 8652 unpatented lode mining claims comprising the ~~Iron~~North ~~Butte~~Sleeper project that are situated in Sections 132, ~~and~~3, 244, ~~Township 26 North~~9, ~~Range 43 East~~10, ~~and~~11 ~~Sections 18~~ and 1933, Township 2640 North, Range 4435 East, in ~~Lander~~Humboldt County, Nevada and are subject to the terms and conditions of an underlying lease agreement dated ~~August~~December 257, ~~2008~~2006 between ~~David C. Knight (as assigned from KM Exploration~~CARACOL, ~~Ltd. by assignment of mining leases dated February 4, 2009),~~ as owner, and C3 Resources, Inc., as tenant ~~(as assigned from SY Resources Acquisition, Inc~~. ~~by assignment of mining leases dated September 5, 2008).~~

All of C3’s rights and interests in the ~~Iron~~North ~~Butte~~Sleeper Lease were assigned to the Company on June 15, 2009.

The ~~Iron~~Company, ~~Butte~~in ~~Lease~~turn, ~~contains~~entered ~~the~~into ~~following~~a ~~material~~joint venture agreement with Montezuma Mines, Inc. (“Montezuma Mines”) on June 15, 2009; pursuant to the terms of the joint venture agreement, Montezuma Mines assumed responsibility for the payments detailed in notes (ii) and ~~conditions:~~(iv) below.

~~(i)~~The aNorth ~~term~~Sleeper ofLease 25contains ~~years~~the ~~and~~following somaterial ~~long~~terms ~~thereafter~~and asconditions: ~~minerals are mined, produced, explored or sold from the claims;~~

(iii) ~~the~~a ~~lessee~~term ~~is required to make annual rental payments on each anniversary~~ of ~~the~~ten ~~Lease starting at $40~~years,~~000~~ ~~upon~~renewable ~~signing~~for ~~(paid)~~additional and increasing by $10,000 per year to $100,000 on the 6th anniversary and annually thereafter, provided however that every five years the payments shall be increased in proportion to any increase in the CPI(U) over the prior fiveten-year ~~period;~~periods

(~~iii~~ii) the ~~Iron~~lessee ~~Butte~~is ~~claims~~required ~~are subject~~ to amake 4%annual ~~NSR~~rental ~~production~~payments ~~royalty~~on ~~payable~~each toanniversary KMof ~~Exploration,~~the ~~provided~~Lease ~~that~~starting ~~the~~at ~~lessee~~$10,000 ~~has~~upon ~~the~~signing ~~sole~~(paid) and ~~exclusive~~increasing ~~option~~ to ~~buy~~$12,500 ~~down~~on the ~~royalty~~second ~~from~~anniversary 4%(paid); to$15,000 2%on bythe ~~paying~~third KManniversary; ~~Exploration~~$25,000 aon ~~lump~~the ~~sum~~fourth ~~payment~~anniversary ~~per royalty point of between $2~~ and $~~8 million~~50,000 ~~depending~~annually ~~upon~~thereafter, ~~the~~provided ~~average~~however ~~price~~that ofafter ~~gold~~five ~~for~~years the 30payments ~~days~~shall ~~preceding~~be ~~the~~increased ~~exercise~~in ofproportion ~~the~~to ~~option~~any asincrease ~~more~~in ~~particularly~~the ~~set~~CPI(U) ~~out~~subsequent into ~~the~~December ~~Lease; and~~31, 2006;

-(iii) 14the -North Sleeper claims are subject to a 3% NSR production royalty payable to CARACOL, provided that the lessee has the sole and exclusive option to buy down the royalty from 3% to 1% by paying CARACOL a lump sum payment per royalty point of between $1.5 and $7 million, depending upon the average price of gold for the month preceding the exercise of the option as more particularly set out in the Lease; and,

~~Table~~(iv) prior to June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of ~~Contents~~Land Management and the county in which the North Sleeper claims are located to maintain the claims in good standing.

~~(iv)~~- ~~prior~~15 to- August 31st, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of Land Management and the county in which the Iron Butte claims are located to maintain the claims in good standing.

(78) The 5291 unpatented lode mining claims comprising the ~~North~~Robinson ~~Sleeper~~Creek (RC) project that are situated in Sections 2,24 ~~3, 4, 9, 10, 11~~ and 3325, Township 4029 North, Range 3554 East in ~~Humboldt~~Elko County, Nevada and are subject to the terms and conditions of an underlying lease agreement dated ~~December~~August 725, ~~2006~~2008 between ~~CARACOL~~David Mathewson (as assigned from KM Exploration, Ltd. by assignment of mining leases dated February 4, 2009), as owner, and C3 Resources, Inc., as ~~tenant~~lessee (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).

All of C3’s rights and interests in the ~~North Sleeper~~ Lease were assigned to the Company on June 15, 2009.

The ~~Company,~~Robinson ~~in turn, entered into a joint venture agreement with Montezuma Mines, Inc. (“Montezuma Mines”) on June 15, 2009; pursuant to~~Creek ~~the~~Lease ~~terms~~contains of the ~~joint~~following ~~venture~~material ~~agreement,~~terms ~~Montezuma Mines assumed responsibility for the payments detailed in notes (ii)~~ and ~~(iv) below.~~conditions:

~~The~~(i) ~~North~~the ~~Sleeper~~lessee ~~Lease~~is ~~contains~~required to make annual rental payments on each anniversary of the ~~following~~Lease ~~material~~starting ~~terms~~at $20,000 upon signing (paid) and ~~conditions:~~increasing $5,000 per year to $50,000 on the sixth anniversary and annually thereafter, provided however that every five years the payments shall be increased in proportion to any increase in the CPI over the prior five-year period;

(iiii) the Robinson Creek claims are subject to a ~~term~~4% ofNSR ~~ten~~production ~~years~~royalty payable to KM Exploration, ~~renewable~~provided that the lessee has the sole and exclusive option to buy down the royalty from 4% to 2% by paying KM a lump sum payment per royalty point of between $2 and $8 million depending upon the average price of gold for ~~additional~~the ~~ten-year~~thirty ~~periods~~days preceding the exercise of the option as more particularly set out in the Lease; and,

(iiiv) prior to June 30th, the lessee is required to ~~make~~pay ~~annual~~all ~~rental~~claim ~~payments~~maintenance onfees ~~each anniversary of the Lease starting at $10,000 upon signing (paid)~~ and ~~increasing~~file toall ~~$12,500~~required onfilings ~~the~~with ~~second anniversary (paid); $15,000 on~~ the ~~third~~United ~~anniversary;~~States ~~$25,000~~Bureau onof ~~the~~Land ~~fourth~~Management ~~anniversary~~ and ~~$50,000~~the ~~annually~~county ~~thereafter,~~in ~~provided~~which ~~however that after five years~~ the ~~payments~~Robinson ~~shall~~Creek beclaims ~~increased~~are inlocated ~~proportion~~ to ~~any~~maintain ~~increase in~~ the ~~CPI(U)~~claims ~~subsequent~~in togood ~~December 31, 2006;~~standing.

~~(iii)~~Effective September 14, 2009, the ~~North~~Company ~~Sleeper~~entered ~~claims~~into ~~are~~an ~~subject~~option toagreement awith 3%JKR ~~NSR~~Gold ~~production~~Resources, ~~royalty~~Inc. ~~payable~~pursuant to ~~CARACOL,~~which ~~provided~~JKR ~~that~~can acquire all of Aurelio’s rights and interests in the ~~lessee~~Robinson Creek ~~has~~property (in addition to the ~~sole~~Crescent Valley North, Indian Creek and ~~exclusive~~Safford ~~option~~Canyon toprojects) ~~buy~~in ~~down~~exchange ~~the~~for ~~royalty~~cash ~~from~~payments 3%totaling to$216,657 1%($116,657 byof ~~paying~~which ~~CARACOL~~has abeen ~~lump~~received ~~sum~~to ~~payment~~date), ~~per~~issuing ~~royalty~~600,000 ~~point~~common shares of ~~between~~JKR, a privately-held company (received), and completing $1.5 million in exploration and $7development ~~million,~~work ~~depending~~prior ~~upon~~to ~~the~~August 31, ~~average~~2012; ~~price~~the ofCompany ~~gold~~would ~~for~~retain ~~the~~a ~~month~~1% ~~preceding~~NSR ~~the~~on ~~exercise~~each of the ~~option~~four asprojects. ~~more~~The ~~particularly~~agreement ~~set~~also ~~out~~requires JKR to make all underlying lease payments, in ~~the~~addition ~~Lease;~~to paying all Federal and, county claim maintenance fees and expenses.

~~(iv)~~See ~~prior~~final toparagraph ~~June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of Land Management and the county~~ in ~~which~~Note ~~the~~(3) on ~~North~~page 13 ~~Sleeper~~for ~~claims~~further ~~are~~information ~~located~~concerning ~~to maintain~~ the ~~claims~~JKR ~~in good standing~~transaction.

(89) The 9144 unpatented lode mining claims comprising the ~~Robinson~~Safford ~~Creek~~Canyon ~~(RC)~~ project that are situated in Sections 248, 19, 20, 29 and 2530, Township 2931 North, Range 5451 East, in ~~Elko~~Eureka County, Nevada and are subject to the terms and conditions of an underlying lease agreement dated ~~August~~November 2530, ~~2008~~2006 between ~~David~~WFW ~~Mathewson (as assigned from KM Exploration~~Resources, ~~Ltd.~~LLC ~~by assignment of mining leases dated February 4, 2009),~~ as owner, and C3 Resources, Inc., as ~~lessee~~tenant (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008).

All of C3’s rights and interests in the Safford Canyon Lease were assigned to the Company on June 15, 2009.

The ~~Robinson~~Safford ~~Creek~~Canyon Lease contains the following material terms and conditions:

(i) ~~the~~a ~~lessee~~term ~~is required to make annual rental payments on each anniversary~~ of ~~the~~ten ~~Lease starting at $20~~years,~~000~~ ~~upon~~extendable ~~signing~~in ~~(paid)~~five-year ~~and~~increments ~~increasing~~up ~~$5,000 per year~~ to ~~$50,000~~40 onyears ~~the sixth anniversary~~ and ~~annually~~so long thereafter, ~~provided~~as ~~however~~minerals ~~that~~are ~~every~~mined, ~~five~~produced, ~~years~~explored ~~the~~or ~~payments~~sold ~~shall~~from ~~be increased in proportion to any increase in~~ the ~~CPI~~WFW ~~over the prior five-year period~~Claims;

(~~iii~~ii) the ~~Robinson~~lessee ~~Creek~~is ~~claims~~required ~~are subject~~ to amake 4%annual ~~NSR~~rental ~~production~~payments ~~royalty~~on ~~payable~~each toanniversary KMof ~~Exploration, provided that~~ the ~~lessee~~Lease ~~has~~starting ~~the~~at ~~sole~~$6,000 ~~and~~upon ~~exclusive~~signing ~~option~~(paid), to$12,500 ~~buy~~in ~~down~~years ~~the royalty from 4% to~~ 2% bythru ~~paying~~6, KM$17,500 ain ~~lump~~years ~~sum~~7 ~~payment~~thru ~~per~~11 ~~royalty~~provided ~~point~~that ~~of between $2 and $8 million depending upon~~ the ~~average~~payments ~~price~~shall ofbe ~~gold~~adjusted ~~for~~in the ~~thirty~~11th ~~days~~and ~~preceding~~subsequent ~~the~~years ~~exercise~~to ofreflect ~~the~~increases ~~option~~in asinflation ~~more~~and ~~particularly~~general ~~set~~costs ~~out~~of ~~in the Lease; and,~~living.

-(iii) 15the -WFW claims are subject to a 3% NSR production royalty payable to WFWE Resources, provided that the lessee has the sole and exclusive option to buy down the royalty from 3% to 1% by paying WFW Resources a lump sum payment per royalty point of between $1.5 and $7 million depending upon the average price of gold for the thirty days preceding the exercise of the option as more particularly set out in the Lease;

~~Table~~- of16 ~~Contents~~-

(iv) prior to June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of Land Management and the county in which the ~~CVN~~Safford Canyon claims are located to maintain the claims in good standing.; and,

(9v) ~~The~~at 44any ~~unpatented~~time ~~lode~~during ~~mining~~the ~~claims~~term ~~comprising~~of the ~~Safford~~lease, ~~Canyon~~the ~~project~~lessor ~~that~~may ~~are~~purchase ~~situated~~all in44 ~~Sections~~WFW 8,claims ~~19,~~for $20,000 29per ~~and 30~~claim, ~~Township~~thus 31eliminating ~~North,~~the ~~Range~~annual 51rental ~~East,~~payments in(the ~~Eureka~~claims ~~County,~~would ~~Nevada~~remain ~~and are~~ subject to the ~~terms~~NSR ~~and~~production conditions of an underlying lease agreement dated November 30, 2006 between WFW Resources, LLC as owner, and C3 Resources, Inc., as tenant (as assigned from SY Resources Acquisition, Inc. by assignment of mining leases dated September 19, 2008royalty).

~~All~~Effective September 14, 2009, the Company entered into an option agreement with JKR Gold Resources, Inc. pursuant to which JKR can acquire all of C3Aurelio’s rights and interests in the Safford Canyon ~~Lease~~property ~~were~~(in ~~assigned~~addition to the ~~Company~~Crescent onValley ~~June~~North, Indian Creek and Robinson Creek projects) in exchange for cash payments totaling $216,657 ($116,657 of which has been received to date), issuing 600,000 common shares of JKR, a privately-held company (received), and completing $1.5 million in exploration and development work prior to August 1531, ~~2009~~2012; the Company would retain a 1% NSR on each of the four projects. The agreement also requires JKR to make all underlying lease payments, in addition to paying all Federal and county claim maintenance fees and expenses.

~~The~~See ~~Safford~~final ~~Canyon~~paragraph ~~Lease~~in ~~contains~~Note ~~the~~(3) on ~~following~~page ~~material~~13 ~~terms~~for ~~and~~further ~~conditions:~~information concerning the JKR transaction.

(i10) aThe ~~term~~78 ofunpatented ~~ten~~lode ~~years~~mining claims comprising the Sand Springs project that are situated in Sections 3, ~~extendable~~4, 9 and 10, Township 11 North, Range 21 East in ~~five-year~~Churchill ~~increments~~County, upNevada and are subject to 40the ~~years~~terms and soconditions ~~long~~of ~~thereafter~~an asunderlying ~~minerals~~lease ~~are~~agreement ~~mined~~dated March 14, ~~produced~~2007 (as amended) between Randall Stoeberl (d/b/a RS Gold), ~~explored~~as orowner, ~~sold~~and ~~from~~C3 ~~the~~Resources, ~~WFW~~Inc., ~~Claims;~~as tenant.

~~(ii)~~All ~~the lessee is required to make annual rental payments on each anniversary~~ of ~~the~~C3’s ~~Lease~~rights ~~starting~~and atinterests ~~$6,000 upon signing (paid), $12,500~~ in ~~years 2 thru 6, $17,500 in years 7 thru 11 provided that~~ the ~~payments~~Sands ~~shall~~Springs beLease ~~adjusted~~were inassigned ~~the 11th and subsequent years~~ to ~~reflect~~the ~~increases~~Company inon ~~inflation~~June 15, ~~and general costs of living~~2009.

~~(iii)~~The ~~the~~Sand ~~WFW~~Springs ~~claims~~Lease ~~are~~contains ~~subject to a 3% NSR production royalty payable to WFWE Resources, provided that~~ the ~~lessee~~following ~~has~~material ~~the~~terms ~~sole~~ and ~~exclusive~~conditions: option to buy down the royalty from 3% to 1% by paying WFW Resources a lump sum payment per royalty point of between $1.5 and $7 million depending upon the average price of gold for the thirty days preceding the exercise of the option as more particularly set out in the Lease;

(ivi) ~~prior~~a toterm ~~June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau~~ of ~~Land~~25 ~~Management~~years and ~~the~~so ~~county~~long inthereafter ~~which~~as ~~the~~minerals ~~Safford~~are ~~Canyon~~mined, ~~claims~~produced, ~~are~~explored ~~located~~or tosold ~~maintain~~from the claims ~~in good standing~~; ~~and,~~

(vii) atthe ~~any~~lessee ~~time~~is ~~during~~required ~~the~~to ~~term~~make ofannual ~~the~~rental ~~lease,~~payments ~~the~~on ~~lessor~~each ~~may~~anniversary ~~purchase~~of ~~all~~the 44Lease ~~WFW~~starting ~~claims~~at ~~for~~ $20,000 ~~per~~upon ~~claim~~signing (paid), ~~thus~~$10,000 ~~eliminating~~on the ~~annual~~second ~~rental~~anniversary ~~payments~~ (~~the~~paid), ~~claims~~$30,000 ~~would~~on ~~remain~~the ~~subject~~3rd toanniversary, $40,0000 on the ~~NSR~~4th ~~production~~anniversary ~~royalty)~~and $50,000 annually thereafter.

(10iii) ~~The 78 unpatented lode mining claims comprising~~ the Sand Springs ~~project~~claims ~~that~~ are ~~situated~~subject into ~~Sections~~a 3,% 4,NSR 9production ~~and~~royalty ~~10,~~payable ~~Township~~to 11RS ~~North,~~Gold ~~Range~~provided 21that ~~East~~the inlessee ~~Churchill~~has ~~County,~~the ~~Nevada~~sole and ~~are~~exclusive ~~subject~~option to ~~the~~buy ~~terms~~down ~~and~~the ~~conditions~~royalty offrom an3% ~~underlying~~to ~~lease~~1% ~~agreement~~by ~~dated~~paying ~~March~~RS ~~14,~~Gold ~~2007~~a ~~(as~~lump ~~amended)~~sum ~~between~~payment ~~Randall~~per ~~Stoeberl~~royalty ~~(d/b/a~~point RSof ~~Gold),~~$1 million as ~~owner,~~more ~~and~~particularly C3set ~~Resources,~~out ~~Inc.,~~in asthe ~~tenant.~~Lease; and,

~~All~~(iv) prior to August 31st, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of ~~C3’s~~Land ~~rights~~Management and ~~interests~~the county in which the ~~Sands~~Sand Springs ~~Lease~~claims ~~were~~are ~~assigned~~located to maintain the ~~Company~~claims onin ~~June 15,~~good ~~2009~~standing.

~~The~~In August 2009, the Company reduced its land position at Sand Springs ~~Lease~~to ~~contains~~a core group of 10 unpatented mining claims; accordingly, the ~~following~~figures ~~material~~in ~~terms~~this ~~and~~entry ~~conditions:~~have been reduced to reflect the reduced land position.

(i11) aThe ~~term~~86 ofunpatented 25lode ~~years~~mining ~~and~~claims socomprising ~~long~~the ~~thereafter~~Veta asGrande ~~minerals~~project that are ~~mined~~situated in Sections 3, ~~produced~~4, ~~explored~~9 orand ~~sold~~10, ~~from~~Township 11 North, Range 21 East in Douglas County, Nevada and are subject to the ~~claims;~~terms and conditions of an underlying lease agreement dated March 14, 2007 between CARACOL, as owner, and C3 Resources, Inc., as tenant.

~~(ii)~~All ~~the~~of ~~lessee~~C3’s isrights ~~required~~and tointerests ~~make~~in ~~annual rental payments on each anniversary of~~ the Lease ~~starting~~were atassigned ~~$20,000~~to ~~upon signing (paid), $10,000 on~~ the ~~second~~Company ~~anniversary (paid), $30,000~~ on ~~the 3rd anniversary~~June 15, ~~$40,0000 on the 4th anniversary and $50,000 annually thereafter~~2009.

~~(iii)~~The ~~the~~Veta ~~Sand~~Grande ~~Springs~~Lease ~~claims~~contains ~~are subject to a 3% NSR production royalty payable to RS Gold provided that~~ the ~~lessee~~following ~~has~~material ~~the~~terms ~~sole~~ and ~~exclusive~~conditions: ~~option to buy down the royalty from 3% to 1% by paying RS Gold a lump sum payment per royalty point of $1 million as more particularly set out in the Lease; and,~~

(ivi) ~~prior~~a toterm ~~August 31st, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau~~ of ~~Land~~ten ~~Management~~years, ~~and~~extendable ~~the~~for ~~county~~additional inten ~~which~~year ~~the Sand Springs claims are located to maintain the claims in good standing.~~periods;

- 1617 -

~~Table~~(ii) the lessee is required to make annual rental payments on each anniversary of ~~Contents~~the Lease starting at $20,000 upon signing (paid) and increasing to $25,000 on the 2nd (paid) through 4th anniversaries, and $50,000 annually thereafter;

(11iii) ~~The~~the 86Veta ~~unpatented~~Grande ~~lode~~claims ~~mining~~are ~~claims~~subject ~~comprising~~to ~~the~~a ~~Veta~~3% ~~Grande~~NSR ~~project~~production royalty payable to CARACOL, provided that ~~are~~the ~~situated~~lessee inhas ~~Sections~~the sole and exclusive option to buy down the royalty from 3,% 4,to 91% ~~and~~by ~~10,~~paying ~~Township~~CARACOL 11a ~~North,~~lump ~~Range~~sum 21payment ~~East~~per inroyalty ~~Douglas~~point ~~County,~~of ~~Nevada~~between $1.5 and ~~are~~$7 ~~subject~~million, todepending upon the ~~terms~~average ~~and~~price ~~conditions~~ of angold ~~underlying~~for ~~lease~~the ~~agreement~~month ~~dated~~preceding ~~March~~the ~~14,~~exercise ~~2007~~of ~~between~~the ~~CARACOL,~~option as ~~owner,~~more ~~and~~particularly C3set ~~Resources,~~out ~~Inc.,~~in asthe ~~tenant.~~Lease; and,

~~All~~(iv) prior to June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of ~~C3’s~~Land ~~rights~~Management and ~~interests~~the county in which the ~~Lease~~Veta ~~were~~Grande ~~assigned~~claims are located to maintain the ~~Company~~claims onin ~~June 15,~~good ~~2009~~standing.

~~The~~(12) ~~Veta~~Beginning ~~Grande~~in ~~Lease~~July ~~contains~~2008 the ~~following~~Company ~~material~~leased ~~terms~~office space in Lakewood, Colorado. During the second 12 months of the lease, the Company is required to pay $3,693 per month, including utilities, with an option to pay a total of $13,295 ($1,108 per month) of the second year’s rent in stock. In July 2009, the Company issued a total of $13,295 worth of restricted common shares in partial payment of the 2009-2010 rent obligations. During the third year of the lease, the Company’s monthly rent (including utilities) will be $3,758 and ~~conditions:~~the Company will have the option to pay the equivalent of $1,503 of the rent per month in restricted common shares during the third year of the lease.

(i13) aLease ~~term~~ of ~~ten~~office ~~years~~space in Culiacan, ~~extendable~~Sinaloa, Mexico for ~~additional~~P1,700 ~~ten~~(approximately ~~year~~$126 ~~periods;~~per month based on prevailing exchange rates at September 30, 2009) with a commitment through October 2010.

~~(ii)~~In ~~the~~addition, ~~lessee~~should iswe ~~required~~produce toprecious ~~make~~or ~~annual~~base ~~rental~~metals ~~payments~~ on ~~each anniversary of~~ the ~~Lease~~Gavilanes ~~starting~~property, atwe ~~$20,000~~would have ~~upon~~to ~~signing~~pay ~~(paid)~~a ~~and~~net ~~increasing~~smelter toreturn ~~$25,000~~royalty onas ~~the~~described 2in ndNote (~~paid~~2). ~~through 4th anniversaries, and $50,000 annually thereafter;~~

~~(iii)~~Our ~~the~~total ~~Veta~~rent ~~Grande~~expense ~~claims~~(including ~~are~~those ~~subject~~Bolsa-related torent aexpenses 3%from January 1 ~~NSR~~through ~~production royalty payable to CARACOL~~February 18, ~~provided~~2009) ~~that~~for the ~~lessee~~three ~~has the sole~~ and ~~exclusive~~nine ~~option~~months toended ~~buy~~September 30, ~~down~~2009 ~~the~~was ~~royalty from 3% to 1% by paying CARACOL a lump sum payment per royalty point of between~~ $~~1.5~~11,457 and $~~7 million~~33,983 ~~depending~~respectively. ~~upon the average price of gold for the month preceding the exercise of the option as more particularly set out in the Lease; and,~~

~~(iv)~~7. ~~prior~~STOCKHOLDERS’ toEQUITY June 30th, the lessee is required to pay all claim maintenance fees and file all required filings with the United States Bureau of Land Management and the county in which the Veta Grande claims are located to maintain the claims in good standing.

~~(12)~~Shares ~~Beginning~~Issued ~~in July 2008 the Company leased office space in Lakewood, Colorado.~~ During ~~the~~The ~~second~~Period 12Ending ~~months of the lease~~September 30, ~~the Company is required to pay $3,693 per month, including utilities, with an option to pay a total of $13,295 ($1,108 per month) of the second year’s rent in stock. In July~~ 2009, the Company issued a total of $13,295 worth of restricted common shares in partial payment of the 2009-2010 rent obligations. During the third year of the lease, the Company’s monthly rent (including utilities) will be $3,758 and the Company will have the option to pay the equivalent of $1,503 of the rent per month in restricted common shares during the third year of the lease.

~~(13)~~On ~~Lease~~July 6, of2009 ~~office~~we ~~space~~issued ina ~~Culiacan,~~total ~~Sinaloa~~of 189,932 ~~Mexico~~restricted ~~for~~common ~~P1,700~~shares ~~(approximately~~at a deemed price of $~~129~~0.07/share ~~per~~to ~~month~~the ~~based~~Company’s onthird-party ~~prevailing~~landlord ~~exchange~~in partial ~~rates~~consideration for the office rent at the Company’s Lakewood, Colorado corporate offices for the period July 1, 2009 - June 30, ~~2009~~2010 pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) ~~with~~of athe ~~commitment~~Securities ~~through~~Act ~~October~~of ~~2009~~1933, as amended.

InThe ~~addition,~~shares ~~should~~were wevalued ~~produce~~at ~~precious~~the orfair ~~base~~value ~~metals~~of on the ~~Gavilanes~~services ~~property,~~received weby ~~would have to pay a net smelter return~~the ~~royalty as described in Note (2)~~Company.

~~Our~~Series ~~total~~A ~~rent expense (including those Bolsa-related rent expenses from January 1 through February 18, 2009) for the three months ended March 31~~ and ~~June 30,~~Series ~~2009~~B ~~was~~Warrants ~~$11,482 and $11,271 respectively.~~

7In conjunction with a $1,500,000 convertible debenture financing entered into with private investors on February 26, 2008 (the debentures were repaid in full at their face value on October 1, 2008), we issued Series A and Series B common share purchase warrants. ~~STOCKHOLDERS’~~Specifically, ~~EQUITY~~we issued (i) 3,750,000 Series A common share purchase warrants which have an initial exercise date of August 26, 2008 and will be exercisable for five (5) years with an exercise price of $0.35 per share of common stock and (ii) 4,999,997 Series B common share purchase warrants which were exercisable immediately upon issuance for eighteen (18) months with an exercise price of $0.35 per share of common stock.

~~May~~- ~~2009~~18 ~~Private~~- ~~Placement Financing~~

OnSubsequent ~~May 29~~to Closing, ~~2009~~we ~~the~~paid ~~Company entered into~~ a ~~private~~finder’s ~~placement~~fee ~~financing~~of ~~agreement~~$90,000 ~~with~~in ~~Telifonda~~cash ~~(Cayman)~~and ~~Ltd.~~3% ~~(“Telifonda”),~~of ~~who~~the ~~subscribed~~value toof 1the transaction,~~666,667~~ ~~shares~~or at $~~0.10/share~~45,000, ~~for~~payable ~~net~~in ~~proceeds~~each of ~~$166,667.~~Series ~~The~~A ~~financing~~and ~~closed~~Series onB ~~June 16, 2009 upon receipt of funds~~warrants.

~~This~~Pursuant ~~financing was in partial consideration for a revision~~ to the ~~original~~terms ~~agreement between the Company~~ and ~~Telifonda~~conditions toof ~~extend~~ the ~~due~~February ~~date of a~~2008 ~~scheduled~~Convertible ~~principal~~Debenture ~~payment~~Financing, ~~under~~ the ~~February~~exercise ~~2009~~price ~~Respite~~of ~~Agreement~~the ~~from~~Series ~~May 31,~~A ~~2009~~and ~~until~~Series ~~September 30,~~B ~~2009~~warrants ~~(See~~was ~~also Note 12~~ re-set ~~Sale of Assets~~ to ~~and~~$0.10 ~~Financing~~per ~~Arrangement~~share ~~With~~on aMay 29, ~~Shareholder)~~2009.

-The 17Series -B warrants expired unexercised on August 26, 2009.

~~Table~~Telifonda ofWarrants ~~Contents~~

NoIn ~~fees~~conjunction orwith ~~commissions~~a $1 million equity financing entered into with Telifonda Ltd. on February 15, 2008 we issued 1,666,667 common share purchase warrants which were ~~paid~~exercisable inimmediately ~~conjunction~~upon issuance for five years with ~~this~~an ~~financing~~exercise price of $0.50 per share of common stock.

~~Additional~~Effective May 29, ~~Shares~~2009 ~~Issued~~the ~~During~~Company ~~The~~and ~~Period~~Telifonda ~~Ending~~mutually-agreed ~~June~~to adjust the exercise price of these warrants to $0.10 per share of common stock, with an accelerated expiration date of May 3029, ~~2009~~2010.

~~On April 7, 2009 we issued a total of 380,418 common shares at a deemed price of $0~~8.~~0842/share~~ toSTOCK-BASED ~~Company~~COMPENSATION officers, directors and consultants in partial consideration for consulting services during the first quarter of 2009, pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.

OnThe Company ~~April~~adopted SFAS No. 20123R, ~~2009~~“Share weBased ~~issued~~Payment” a(“SFAS ~~total~~123R”), ofon ~~789~~January 1,~~474~~ ~~common~~2006. ~~shares~~SFAS at123R arequires ~~deemed~~all ~~price of $0.057/~~share-based topayments, ~~Company~~including ~~officers~~grants ~~and directors in partial consideration for consulting services during the third quarter~~ of ~~2008~~stock options, ~~pursuant~~ to ~~exemptions~~be ~~from registration~~recognized ~~as set out~~ in ~~Rule~~the ~~506~~income ofstatement ~~Regulation~~as Dan ~~and/or~~operating expense, ~~Section 4(2)~~based ofon ~~the~~their ~~Securities~~fair ~~Act of 1933, as amended~~values.

OnPrior ~~April 20,~~to ~~2009~~adoption weof ~~issued~~SFAS ~~a total~~123R, ofAurelio ~~1,551,723~~accounted ~~common~~for ~~shares~~stock-based atemployee acompensation ~~deemed~~under ~~price~~Accounting Principles ofBoard $0Opinion No.~~029/share~~ 25, to“Accounting ~~Company~~for ~~officers~~Stock ~~and~~Issued ~~directors~~to inEmployees” ~~partial~~(“APB”). ~~consideration~~The ~~for~~Company ~~consulting~~has ~~services~~applied ~~during~~ the ~~fourth~~modified ~~quarter~~prospective ofmethod ~~2008,~~in ~~pursuant~~adopting toSFAS ~~exemptions~~123R, ~~from~~and ~~registration~~ as ~~set~~a ~~out~~result, inperiods ~~Rule~~prior ~~506 of~~to ~~Regulation~~the Dadoption ~~and/or Section 4(2)~~ of ~~the~~SFAS ~~Securities~~123R have ~~Act~~not ofbeen ~~1933, as amended~~restated.

OnThe ~~June 4,~~following ~~2009~~summarizes wethe ~~issued~~activity ~~a total~~ of ~~90,000~~the ~~common shares at a deemed price of $0.10/share to~~ Company’s ~~officers,~~stock ~~directors~~options ~~and consultants in partial consideration~~ for ~~consulting services during~~ the ~~second~~nine ~~quarter~~months ~~of 2009, pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or~~ended ~~Section~~September ~~4(2) of the Securities Act of 1933~~30, as2009: ~~amended.~~

On June 4, 2009 we issued a total of 432,000 common shares at a deemed price of $0.0842/share to Company officers, directors and consultants as a pre-payment of the equity portion of their respective consulting contracts for the period July 1, 2009 through December 31, 2010 pursuant to exemptions from registration as set out in Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended.


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Number of shares under option:
Outstanding at July 1, 2009	350,000	$	0.70
Granted	—		—
Exercised	—		—
Expired	50,000		0.79

Outstanding at Sept 30, 2009	300,000	$	0.66	0.6	$	—

Exercisable at Sept 30, 2009	300,000	$	0.66	0.6	$	—

OnAll ~~June 15,~~outstanding ~~2009~~options ~~we issued a total of 47,500,000 restricted common shares valued at $0.08/share to C3 Resources, Inc. in payment for ten gold and silver exploration projects in Nevada. These shares~~ were ~~issued~~fully ~~pursuant~~vested ~~to exemptions from registration~~ as ~~set out in Rule 506~~ of ~~Regulation D and/or Section~~September ~~4(2) of the Securities Act of 1933~~30, ~~as amended~~2009.

~~Series~~There Awas ~~and~~no ~~Series~~intrinsic Bvalue ~~Warrants~~of any option as all were out of the money as of September 30, 2009.

~~In conjunction~~The ~~with~~Black-Scholes aoption ~~$1,500,000~~pricing ~~convertible~~model ~~debenture~~is ~~financing~~used ~~entered~~by ~~into~~the ~~with~~Company ~~private~~to ~~investors~~determine ~~on February 26, 2008 (~~the ~~debentures~~weighted ~~were~~average ~~repaid~~fair ~~in full at their face~~ value on October 1, 2008), we issued Series A and Series B common share purchase warrants. Specifically, we issued (i) 3,750,000 Series A common share purchase warrants which shall have an initial exercise date of ~~August 26,~~options ~~2008~~ and ~~will~~the bevalue ~~exercisable for five years with an exercise price~~ of ~~$0.35~~the ~~per~~re-priced ~~share of common stock and (ii) 4,999,997 Series B common share purchase~~ warrants. ~~which~~The ~~were~~fair ~~exercisable~~value ~~immediately upon issuance for 18 months with an exercise price~~ of ~~$0.35~~options ~~per~~at ~~share~~date of ~~common~~grant ~~stock. Subsequent to Closing, we paid a finder’s fee of $90,000 in cash~~ and ~~3% of~~ the ~~value~~assumptions ofutilized ~~the~~to ~~transaction,~~determine orsuch ~~$45,000,~~values ~~payable~~are inindicated ~~each~~as offollows: ~~Series A and Series B warrants.~~

Pursuant to the terms and conditions of the February 2008 Convertible Debenture Financing, the exercise price of the Series A and Series B warrants was re-set to $0.10 per share on May 29, 2009, resulting in an expense of $175,100 which was recorded as interest expense for the three and six months ending June 30, 2009.


	Nine Months Ended September 30,
	2009	2008
Expected life	0.1 to 1.3 yrs	3 yr
Risk-free interest rates	0.14 to 1.94%	4.60%
Expected stock price volatility	164%	74%
Expected dividend yield	—	—

~~Telifonda~~- ~~Warrants~~19 -

~~In conjunction with a $1 million equity financing entered into with Telifonda Ltd~~9. onINCOME ~~February 15,~~TAXES ~~2008 we issued 1,666,667 common share purchase warrants which were exercisable immediately upon issuance for five years with an exercise price of $0.50 per share of common stock.~~

The Company has net operating loss carry-forwards 18of approximately $7.7 million available for deduction against future years’ taxable income. This was fully reserved by a valuation allowance as of the quarter ended September 30, 2009, since the realization of the net operating loss carry-forwards is doubtful. It is reasonably possible that our estimate of the valuation allowance will change. The operating loss carry-forwards will expire between 2019 and 2023.

~~Table~~10. ofRELATED ~~Contents~~PARTY TRANSACTIONS

~~Effective~~During ~~May~~the year ended December 2931, ~~2009~~2008 and throughout the ~~Company~~first, second and ~~Telifonda~~third ~~mutually~~quarters of 2009 Aurelio maintained consulting contracts with our president, company officers, directors and their wholly-~~agreed~~owned companies, through which they provided services to ~~adjust~~our company. For the ~~exercise~~three ~~price~~and nine months ended September 30, 2009, Aurelio paid or accrued consulting fees of ~~these~~$59,994 ~~warrants~~and $180,032 in lieu of salaries to company officers and $0directors.10 ~~per~~Fees ~~share~~charged offor ~~common~~consulting ~~stock,~~services ~~with~~were anin ~~accelerated~~the ~~expiration~~normal ~~date~~course of ~~May 29~~business and were measured at the exchange amount, ~~2010~~which is the amount of consideration established and agreed to by the related parties. Refer to Note 7.

~~2007~~In ~~Warrants~~addition, in June 2009 we issued a total of 522,000 restricted common shares to Company officers, directors and consultants in partial consideration for consulting services. 432,000 of those shares were a pre-payment (for the period July 1, 2009 thru December 31, 2010) of the equity portion of the individuals’ consulting contracts. The value of the shares issued for the three and nine months ending September 30, 2009 was $7,200 and $16,200 respectively.

InSome ~~conjunction~~of ~~with~~the aCompany’s ~~$1,328,900~~directors ~~equity~~have ~~financing~~interests ~~entered~~in ~~into~~the various transactions with ~~accredited~~Telifonda ~~investors~~(Cayman) onLtd. ~~June~~ as described in Note 7, ~~2007~~- weStockholders’ ~~issued~~Equity ~~738,278~~(May ~~common~~2009 ~~share~~Private ~~purchase~~Placement ~~warrants~~Financing) ~~which~~and ~~were exercisable~~also ~~immediately~~Note ~~upon~~12 ~~issuance~~- ~~for~~Sale ~~two~~of ~~years~~Assets ~~with~~To anAnd ~~exercise~~Financing ~~price~~Arrangement ofWith ~~$1.60~~A ~~per~~Shareholder ~~share~~that ofare ~~common~~different ~~stock~~from, or are in addition to, their interests as stockholders in the Company.

These ~~warrants~~interests ~~expired~~include ~~unexercised~~the ~~on June 7,~~following: ~~2009.~~

8¨ Based on information filed in a Form 13D by Telifonda Holdings Co. ~~STOCK~~Limited (“Holdings”) and DFG Master Hedge Fund Ltd. (“DFG”), Antony Warnaars is responsible for the overall management and control of DFG. Holdings and Telifonda are both wholly-~~BASED~~owned ~~COMPENSATION~~subsidiaries of DFG. Mr. Antony Warnaars is the son of Dr. Frederik Warnaars, Chairman of the Board of Directors of Aurelio.

~~The Company~~¨ ~~adopted~~Maarten ~~SFAS No~~D. ~~123R,~~ ~~“Share~~Tjaden ~~Based~~is ~~Payment”~~employed ~~(“SFAS~~by ~~123R”),~~Diversica onFinancial ~~January 1,~~Group ~~2006~~B. ~~SFAS 123R requires all share-based payments~~V., ~~including~~an ~~grants~~affiliate of ~~stock~~DFG ~~options,~~and ~~to be recognized in the income statement as an operating expense, based on their fair values~~Holdings.

~~Prior~~Telifonda, totogether ~~adoption~~with ofits ~~SFAS~~affiliate ~~123R,~~DFG ~~Aurelio~~Master ~~accounted~~Hedge ~~for~~Fund ~~stock-based~~Ltd. ~~employee~~and ~~compensation~~certain ~~under~~advisory ~~Accounting~~board members and related parties of Telifonda beneficially own or ~~Principles~~control ~~Board~~an ~~Opinion~~estimated No4. ~~25,~~6% ~~“Accounting~~of ~~for~~the ~~Stock~~issued ~~Issued~~and tooutstanding ~~Employees”~~common ~~(“APB”)~~stock of the Company. The Company’s ~~has~~Board ~~applied~~of ~~the~~Directors ~~modified~~was ~~prospective~~aware ~~method~~of inthese ~~adopting~~additional ~~SFAS~~interests ~~123R~~and considered them when they approved the Stock Purchase Agreement, ~~and~~as amended, as well aas ~~result,~~the ~~periods~~May ~~prior~~2009 Private Placement Financing and Amendment to the ~~adoption~~February 18, of2009 ~~SFAS~~Respite ~~123R have~~Agreement ~~not~~and ~~been restated~~Note.

~~The~~David ~~following~~C. ~~summarizes~~Knight, a Director of the ~~activity~~Company, holds a 100% interest in the underlying leases, core mining claims and NSR production royalties for the Horse Creek and Iron Butte projects (see Item 6 - Contractual Obligations, Contingent Liabilities and Commitments, notes 4 and 6 on pages 13 - 15). Mr. Knight, through the David C. and Deborah J. Knight Living Trust, is a Member of WFW Resources, LLC, which holds a 100% interest in the ~~Company’s~~underlying ~~stock~~leases, ~~options~~core mining claims and NSR production royalty for the Safford ~~six~~Canyon ~~months~~project ~~ended~~(see ~~June~~Item 306 - Contractual Obligations, ~~2009:~~Contingent Liabilities and Commitments, notes 4 and 6 on pages 16 - 17).

	Shares	Weighted AverageExercise Price		WeightedAverageRemainingContractualTerm	AggregateIntrinsic Value
Number of shares under option:
Outstanding at April 1, 2009	350,000	$	0.70
Granted	0		0
Exercised	0		0
Forfeited or expired	0		0
Outstanding at June 30, 2009	350,000	$	0.70	1.0	$	—
Exercisable at June 30, 2009	350,000	$	0.70	1.0	$	—

David C. Knight, a Director of the Company, also serves as President and a Director of C³ Resources, Inc., which holds 47.5 million common shares of Aurelio Resource Corp.

~~All~~William ~~outstanding~~L. ~~options~~Oppenheimer, ~~were~~a ~~fully~~Director ~~vested as~~ of ~~June 30~~the Company, ~~2009.~~also ~~There~~serves ~~was~~as noa ~~intrinsic~~Director ~~value~~ of ~~any~~C3 ~~option~~Resources, ~~as all~~Inc., ~~were~~which ~~out~~holds of47.5 million ~~the~~common ~~money~~shares as of ~~June 30,~~Aurelio ~~2009~~Resource Corp.

~~The Black~~-~~Scholes~~ ~~option~~20 ~~pricing model is used by the Company to determine the weighted average fair value of options and the value of the re~~-~~priced~~ ~~warrants. The fair value of options at date of grant and the assumptions utilized to determine such values are indicated as follows:~~

	Six Months Ended June 30,
	2009	2008
Expected life	0.25 to 3.75 yrs	3 yr
Risk-free interest rates	0.14 to 1.94%	4.60	%
Expected stock price volatility	164%	74	%
Expected dividend yield	—	—

11. SEGMENT INFORMATION

~~Under~~Through ~~SFAS~~February 18, ~~123R~~2009 ~~forfeitures~~Company ~~are~~operated ~~estimated~~in attwo reportable segments, these being the ~~time~~exploration offor ~~valuation~~copper and ~~reduce~~zinc ~~expense~~on ~~ratably~~its ~~over~~Hill Copper-Zinc ~~the~~Project ~~vesting period.~~in ~~This~~Arizona, ~~estimate~~and isthe ~~adjusted~~exploration ~~periodically~~for ~~based~~gold on ~~the~~its ~~extent~~Gavilanes Property in Mexico. The Arizona business segment was sold to ~~which~~Telifonda ~~actual~~(Cayman) ~~forfeitures~~Ltd. ~~differ~~on February 18, or2009. ~~are~~Between ~~expected~~February 19, to2009 ~~differ~~and June 14, ~~from~~2009 the Company ~~previous~~operated ~~estimate.~~in ~~Under~~one ~~SFAS~~reportable ~~123~~business ~~and~~segment, ~~APB~~namely, 25exploration for gold on its Gavilanes Property in Mexico. Effective June 15, 2009 the Company ~~elected~~was toonce ~~account~~again ~~for~~operating ~~forfeitures~~in ~~when~~two ~~awards~~reportable ~~were actually~~business ~~forfeited~~segments, atthese ~~which~~being ~~time~~on-going exploration ~~all~~for ~~previous~~gold ~~pro~~on ~~forma~~the ~~expense~~Gavilanes ~~was~~Property ~~reversed~~in toMexico, ~~reduce~~and, ~~pro~~exploration ~~forma~~for ~~expense~~gold ~~for~~and ~~that~~silver ~~period~~in Nevada on the ten projects acquired from C3 Resources, Inc.

-Following 19is -the segment information for the periods ending September 30th:


	Arizona		Mexico		Corporate		Total
As of and for the three months ended September 30, 2009:
Revenue	$	—	$	—	$	—	$	—
Depreciation expense		—		650		1,671		2,321
Mineral property expenditures		—		23,758		107,709		131,467
Operating loss		—		28,628		246,975		275,603
Other income		—		—		15,682		15,682
Interest expense		—		—		—		—
Net loss		—		28,628		368,512		397,140
Additions to fixed assets		—		—		—		—
Total assets		—		38,533		4,570,099		4,608,632
As of and for the three months ended September 30, 2008:
Revenue		—		—		—		—
Depreciation expense		945		685		2,529		4,159
Mineral property expenditures		101,302		3,093		—		104,395
Operating loss		138,792		9,387		225,196		373,375
Other income		20		—		2,677		2,697
Interest expense		59,681		—		372,268		431,949
Net loss		198,453		9,387		594,787		802,627
Additions to fixed assets		—		—		29,631		29,631
Total assets		3,364,277		45,607		479,870		3,889,754

	Arizona		Mexico		Corporate		Total
As of and for the nine months ended September 30, 2009:
Revenue	$	—	$	—	$	—	$	—
Depreciation expense		957		1,942		5,012		7,911
Mineral property expenditures		14,855		56,105		122,626		193,586
Operating loss		14,264		70,343		631,954		716,561
Other income		10,500		—		33,698		44,198
Interest expense		20,810		—		175,312		196,122
Net loss		24,594		70,343		2,362,431		2,457,368
Additions to fixed assets		—		—		—		—
Total assets		—		38,533		4,570,099		4,608,632
As of and for the nine months ended September 30, 2008:
Revenue		—		—		—		—
Depreciation expense		2,705		2,000		7,176		11,881
Mineral property expenditures		325,084		27,525		—		352,609
Operating loss		446,126		48,604		674,925		1,169,655
Other income		22		—		11,200		11,222
Interest expense		102,807		—		1,186,403		1,289,210
Net loss		548,911		48,604		1,850,128		2,447,643
Additions to fixed assets		5,200		633		30,851		36,684
Total assets		3,364,277		45,607		479,870		3,889,754

9.- ~~INCOME~~21 ~~TAXES~~-

The Company has net operating loss carry-forwards of approximately $7.7 million available for deduction against future years’ taxable income. This was fully reserved by a valuation allowance as of the quarter ended June 30, 2009, since the realization of the net operating loss carry-forwards is doubtful. It is reasonably possible that our estimate of the valuation allowance will change. The operating loss carry-forwards will expire between 2019 and 2023.


	Arizona		Mexico		Corporate		Total
As of and since Inception through September 30, 2009:
Revenue	$	—	$	—	$	—	$	—
Depreciation expense		6,237		7,568		26,324		40,129
Mineral property expenditures		1,876,042		217,956		232,750		2,326,748
Operating loss		2,233,900		328,170		4,178,677		6,740,747
Other income		10,695		—		93,151		103,846
Interest expense		223,251		—		1,369,942		1,593,193
Net loss		2,446,475		353,327		7,398,425		10,198,227
Additions to fixed assets		—		11,188		63,726		74,914
Total assets		—		38,533		4,570,099		4,608,632

1012. ~~RELATED~~SALE ~~PARTY~~OF ~~TRANSACTIONS~~ASSETS TO AND FINANCING ARRANGEMENT WITH A SHAREHOLDER

~~During~~Amended ~~the~~Stock ~~year~~Purchase ~~ended December 31,~~Agreement ~~2008~~ and ~~throughout~~Sale ~~the first and second quarters~~ of ~~2009~~Assets Aurelio maintained consulting contracts with our president, company officers, directors and their wholly-owned companies, through which they provided services to our company. For the three and six months ended June 30, 2009, Aurelio paid or accrued consulting fees of $63,338 and $110,210 in lieu of salaries to company officers and directors. Fees charged for consulting services were in the normal course of business and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Refer to Note 7.

~~Some~~On ofNovember 17, 2008, the Company’s ~~directors~~entered ~~have~~into ~~interests~~an inAmended Stock Purchase Agreement (the ~~various~~“Amended ~~transactions~~Agreement”) with Telifonda (Cayman) Ltd. (~~see~~“Telifonda”). ~~Note~~Telifonda 7is -a ~~Stockholders~~shareholder of the Company and has one representative on the Company’s ~~Equity~~current ~~(May~~Board ~~2009~~of ~~Private~~Directors. ~~Placement~~On ~~Financing)~~October 2, ~~and~~2008, ~~also~~the ~~Note~~Company 12had filed a current report on Form 8-K ~~Sale~~announcing that it had signed a letter of ~~Assets~~intent Topursuant ~~And~~to ~~Financing Arrangement~~which ~~With~~the ACompany ~~Shareholder~~had ~~that~~agreed ~~are~~to ~~different~~sell ~~from~~to Telifonda its wholly-owned subsidiary, orBolsa ~~are~~Resources, inInc., ~~addition~~which toowns the Hill Copper-Zinc Project, ~~their~~and ~~interests~~also asto ~~stockholders~~sell Telifonda a 3% Net Smelter Returns royalty in the Company’s Gavilanes gold project. ~~These~~Finalization ~~interests~~of ~~include~~these transactions was subject to the ~~following:~~approval of the Company’s shareholders.

•The ~~Based~~total onvalue ~~information~~of ~~filed in a Form 13D by Telifonda Holdings Co. Limited (“Holdings”) and DFG Master Hedge Fund Ltd. (“DFG”), Antony Warnaars is responsible for~~ the ~~overall~~transaction ~~management~~ and ~~control of DFG. Holdings and Telifonda are both wholly-owned subsidiaries of DFG. Mr. Antony Warnaars is~~ the ~~son~~cash ofproceeds ~~Dr.~~to ~~Frederik~~ultimately ~~Warnaars,~~be realized ~~Chairman~~by of the ~~board~~Company ofis ~~directors~~$4 ~~of Aurelio~~million.

•The ~~Maarten~~terms D.of ~~Tjaden~~the isAmended ~~employed~~Agreement bybecame ~~Diversica~~necessary ~~Financial~~in ~~Group~~order ~~B.V.,~~for anthe ~~affiliate~~Company to retain access to the cash being made available thereunder and reflected the rapidly-deteriorating global economic outlook in the fourth quarter of ~~DFG~~2008, as well as the difficult debt and ~~Holdings~~equity markets conditions affecting junior mining companies. The Company also believes that these amended terms also better reflect the fair values of the assets being sold to Telifonda.

~~Telifonda,~~Pursuant ~~together~~to ~~with~~the ~~its~~Amended Agreement ~~affiliate DFG Master Hedge Fund Ltd.~~ and ~~certain~~following ~~advisory~~shareholder ~~board~~approval, ~~members~~the ~~and~~Company ~~related~~sold ~~parties~~all of ~~Telifonda beneficially own or control an estimated 4.6% of~~ the ~~issued and~~ outstanding common stock of ~~the~~Bolsa ~~Company~~Resources, Inc. ~~The~~to ~~Company’s~~Telifonda ~~Board~~in ofexchange ~~Directors~~for ~~was~~$2,500,000 ~~aware~~cash. ofThe ~~these~~Company ~~additional~~retained ~~interests~~a ~~and~~3% ~~considered~~Net ~~them~~Smelter ~~when~~Return ~~they~~Royalty ~~approved~~(“NSR”) ~~the~~on ~~Stock~~all future ~~Purchase~~precious ~~Agreement,~~and asbase ~~amended,~~metal asproduction ~~well~~from as the ~~May~~ ~~2009~~Hill ~~Private~~Copper-Zinc ~~Placement~~Project ~~Financing and Amendment to~~ (the ~~February 18,~~“Bolsa ~~2009 Respite Agreement and Note~~NSR”).

11All proceeds were accounted for using the cost recovery method and, accordingly, no gain was realized at the February 18, 2009 closing date. ~~SEGMENT~~The ~~INFORMATION~~Company was also entitled to recover certain Bolsa-related carrying costs it incurred during the period from August 15, 2008 to February 18, 2009.

~~Through~~The ~~February 18,~~Amended ~~2009~~Agreement ~~Company~~requires ~~operated~~Telifonda into ~~two~~complete ~~reportable~~a ~~segments,~~Bankable ~~these~~Feasibility ~~being~~Study ~~the~~within ~~exploration~~four ~~for~~years ~~copper~~of ~~and~~Closing. Upon ~~zinc~~completion onof ~~its~~the ~~Hill~~Bankable ~~Copper-Zinc~~Feasibility ~~Project~~Study, inTelifonda ~~Arizona, and~~would have a right to purchase the ~~exploration~~Bolsa ~~for~~NSR ~~gold~~at fair market value on ~~its~~the ~~Gavilanes~~terms ~~Property~~set forth in ~~Mexico~~the Amended Bolsa NSR Agreement.

~~The~~- ~~Arizona~~22 ~~business~~- ~~segment was sold to Telifonda (Cayman) Ltd. on February 18, 2009).~~

~~Between~~Should ~~February 19,~~Telifonda ~~2009~~fail ~~and~~to ~~June 14~~complete the Bankable Feasibility Study or otherwise maintain the 5,000+ ~~2009~~acre land position, the Company ~~operated~~retains inthe ~~one~~exclusive ~~reportable~~right ~~business~~to ~~segment,~~re-acquire ~~namely,~~the ~~exploration~~Hill ~~for~~Copper-Zinc ~~gold~~Project onby reimbursing Telifonda for its ~~Gavilanes~~ ~~Property~~$2,500,000 ininvestment ~~Mexico~~and any of its out-of-pocket expenditures.

~~Effective~~The ~~June 15,~~proposed ~~2009~~transaction ~~the~~also ~~Company~~requires ~~was~~Telifonda ~~once~~to ~~again~~fund ~~operating~~Bolsa ~~in two reportable business segments~~Resources, ~~these~~ ~~being~~Inc. ~~on-going~~in ~~exploration for gold on~~ the ~~Gavilanes~~initial ~~Property~~amount inof ~~Mexico,~~$8 ~~and~~million ~~,exploration~~to ~~for~~facilitate ~~gold~~further ~~and~~development ~~silver~~of ~~in Nevada on~~ the Hill ~~ten~~Copper-Zinc ~~projects acquired from C3 Resources, Inc~~Project.

-In 20addition -to purchasing all of the common stock of Bolsa, under the terms of the Amended Agreement, Telifonda has also agreed to purchase a 3% NSR interest in the Gavilanes gold project for $50,000 cash (the “Minera NSR”) prior to December 31, 2009 which is expected to result in a realized gain of the same amount. The Company will retain the right to repurchase the Gavilanes NSR at fair market value on the terms set forth in the Gavilanes NSR Agreement. The Minera NSR Agreement was approved by shareholders as part of the overall Amended Agreement.

~~Table~~As of ~~Contents~~September 30, 2009, this agreement had not been executed.

~~Following~~Bridge isLoan ~~the~~Agreement ~~segment information for the periods ending June 30th:~~

	Arizona		Mexico		Corporate		Total
As of and for the three months ended June 30, 2009:
Revenue	$	—	$	—	$	—	$	—
Depreciation expense		—		647		1,670		2,317
Mineral property expenditures		—		1,223		14,917		16,140
Operating loss		—		6,755		164,502		171,257
Other income		—		—		12,545		12,545
Interest expense		—		—		175,100		175,100
Net loss		—		6,755		313,489		320,244
Additions to fixed assets		—		—		—		—
Total assets		—		38,402		4,485,376		4,523,778
As of and for the three months ended June 30, 2008:
Revenue		—		—		—		—
Depreciation expense		1,010		669		2,344		4,023
Mineral property expenditures		122,910		2,092		—		125,002
Operating loss		192,456		10,132		379,835		582,423
Other income		1		—		4,106		4,107
Interest expense		28,849		—		420,479		449,328
Net loss		221,304		10,132		796,208		1,027,644
Additions to fixed assets		5,200		428		1,220		6,848
Total assets		3,374,445		18,572		914,666		4,307,683
	Arizona		Mexico		Corporate		Total
As of and for the six months ended June 30, 2009:
Revenue	$	—	$	—	$	—	$	—
Depreciation expense		957		1,292		3,341		5,590
Mineral property expenditures		14,855		32,347		14,917		62,119
Operating loss		14,264		41,715		384,979		440,958
Other income		10,500		—		18,016		28,516
Interest expense		20,810		—		175,312		196,122
Net loss		24,594		41,715		2,005,476		2,071,785
Additions to fixed assets		—		—		—		—
Total assets		—		38,402		4,485,376		4,523,778
As of and for the six months ended June 30, 2008:
Revenue		—		—		—		—
Depreciation expense		1,760		1,315		4,647		7,722
Mineral property expenditures		223,782		24,432		—		248,214
Operating loss		307,334		39,217		449,729		796,280
Other income		2		—		8,523		8,525
Interest expense		43,126		—		814,135		857,261
Net loss		350,458		39,217		1,255,341		1,645,016
Additions to fixed assets		5,200		633		1,220		7,053
Total assets		3,374,445		18,572		914,666		4,307,683

In connection with the Amended Agreement, on October 1, 2008 Telifonda advanced $2,000,000 to the Company (the “Bridge Loan”) that was repaid upon the closing of the transactions contemplated by the Amended Agreement by offsetting the principal outstanding under the Bridge Loan against the cash consideration due under the Amended Agreement. The Bridge Loan was non-interest bearing, and was secured by all of the assets of the Company, including all shares of common stock held by the Company in its two subsidiaries, as set forth in the related General Security Agreement.

-Of 21the -proceeds from the Bridge Loan, $1,500,000 was used on October 1, 2008 to retire all outstanding Convertible Debentures as of September 30, 2008. The remaining proceeds will be used for working capital purposes.

~~Table~~Loan to ofThe ~~Contents~~Company

	Arizona	Mexico	Corporate	Total
As of and since Inception through June 30, 2009:
Revenue	—	—	—	—
Depreciation expense	6,237	6,918	24,653	37,808
Mineral property expenditures	1,876,042	194,198	125,041	2,195,281
Operating loss	2,233,900	299,542	3,931,702	6,465,144
Other income	10,695	—	77,469	88,164
Interest expense	223,251	—	1,369,942	1,593,193
Net loss	2,446,475	324,699	7,041,470	9,812,644
Additions to fixed assets	20,200	13,887	87,520	121,607
Total assets	—	38,402	4,485,376	4,523,778

As part of the overall transaction contemplated by the Amended Agreement and approved by shareholders in February 2009, Telifonda agreed to loan $1.45 million to a newly-created subsidiary of the Company, AIEX Corporation (the “NewCo Loan”). The NewCo Loan Agreement will be an unsecured loan and will be non-recourse to Aurelio. Interest will accrue at LIBOR + 3% over the term of the loan.

~~12.~~The ~~SALE~~Company OFintends ~~ASSETS~~to TOuse ~~AND~~the ~~FINANCING~~proceeds ~~ARRANGEMENT~~of ~~WITH~~the ANewCo ~~SHAREHOLDER~~Loan facility to fund further exploration of its assets, as well as for other property acquisitions and general working capital.

~~Amended~~As ~~Stock~~of ~~Purchase~~September 30, ~~Agreement~~2009 ~~and~~the ~~Sale~~NewCo ofLoan ~~Assets~~had not been funded.

~~On November 17,~~Respite ~~2008, the Company entered into an Amended Stock Purchase~~ Agreement ~~(the “Amended Agreement”) with Telifonda (Cayman) Ltd. (“Telifonda”). Telifonda is a shareholder of the Company~~ and ~~has~~Amendment ~~one representative on the Company’s current Board~~ of ~~Directors.~~AIEX OnLoan ~~October 2,~~Agreement 2008, the Company had filed a current report on Form 8-K announcing that it had signed a letter of intent pursuant to which the Company had agreed to sell to Telifonda its wholly-owned subsidiary, Bolsa Resources, Inc., which owns the Hill Copper-Zinc Project, and also to sell Telifonda a 3% Net Smelter Returns royalty in the Company’s Gavilanes gold project. Finalization of these transactions was subject to the approval of the Company’s shareholders.

~~The~~A ~~total~~Respite ~~value~~Agreement and Amendment of ~~the~~Loan ~~transaction~~Agreement was entered into on February 18, 2009 by and ~~the~~among ~~cash~~Aurelio ~~proceeds~~Resource toCorporation ~~ultimately~~(“Aurelio”), beAIEX ~~realized~~Corporation by(“AIEX”), ~~the~~a Colorado ~~Company~~corporation that is ~~$4 million~~a wholly-owned subsidiary of Aurelio, and Telifonda (Cayman) Ltd. (“Telifonda”).

~~The~~Aurelio ~~terms~~and ofTelifonda previously ~~the~~entered ~~Amended~~into a Stock Purchase Agreement ~~became~~dated ~~necessary~~September 30, in2008, ~~order~~as ~~for~~amended on November 17, 2008 (the ~~Company~~“Stock toPurchase ~~retain~~Agreement”), ~~access~~and, toin connection with the ~~cash~~Stock ~~being~~Purchase ~~made~~Agreement ~~available~~(as ~~thereunder~~amended), ~~and~~Telifonda agreed to ~~reflected~~provide ~~the~~to ~~rapidly-deteriorating~~Aurelio ~~global~~(or ~~economic~~its ~~outlook~~subsidiary, AIEX) a non-resource loan in the ~~fourth~~principal ~~quarter~~amount of ~~2008~~$1,450,000 as(the ~~well~~“AIEX asLoan Amount”), repayable in accordance with the ~~difficult~~terms ~~debt~~of ~~and~~a ~~equity~~Loan ~~markets~~Agreement ~~conditions~~dated ~~affecting~~February 19, ~~junior~~2009 ~~mining~~between ~~companies.~~Telifonda ~~The~~and AIEX, ~~Company~~(the ~~also~~“AIEX ~~believes~~Loan ~~that~~Agreement”), ~~these~~as ~~amended~~that ~~terms~~agreement ~~also~~is ~~better reflect~~further ~~the~~described ~~fair~~in ~~values~~Section 2(b)(ii) of the ~~assets~~Stock ~~being~~Purchase ~~sold~~Agreement, toas ~~Telifonda~~amended.

~~Pursuant~~Simultaneous towith the ~~Amended~~closing ~~Agreement~~under ~~and following shareholder approval,~~ the ~~Company~~Stock ~~sold~~Purchase ~~all of~~Agreement ~~the~~(as ~~outstanding~~amended), ~~common~~Telifonda ~~stock~~also ofagreed ~~Bolsa~~to ~~Resources,~~purchase ~~Inc.~~a toNet ~~Telifonda~~Smelter inRoyalty ~~exchange~~from ~~for~~Minera ~~$2,500,000~~Milenium ~~cash~~S.A. ~~The~~de ~~Company~~C.V, ~~retained~~ a 3%Mexican ~~Net~~corporation (“Minera”) ~~Smelter~~a ~~Return~~subsidiary ~~Royalty~~of Aurelio (the “Minera NSR”) onfor ~~all~~a ~~future~~purchase ~~precious~~price ~~and~~of ~~base~~$50,000 ~~metal~~pursuant ~~production~~to ~~from~~a ~~the~~Net ~~Hill~~Smelter ~~Copper-Zinc Project~~Return Royalty Agreement (as amended) between Minera and Aurelio (the “~~Bolsa~~Minera NSR Royalty Agreement”).

~~All~~- ~~proceeds~~23 ~~were accounted for using the cost recovery method and, accordingly, no gain was realized at the February 18, 2009 closing date. The Company was also entitled to recover certain Bolsa~~-~~related~~ ~~carrying costs it incurred during the period from August 15, 2008 to February 18, 2009.~~

~~The~~Also ~~Amended~~simultaneous ~~Agreement~~with ~~requires~~the ~~Telifonda~~closing tounder ~~complete~~the aStock ~~Bankable~~Purchase ~~Feasibility~~Agreement ~~Study~~(as ~~within~~amended), ~~four~~in ~~years~~accordance ofwith Section 2(e) ~~Closing. Upon completion~~ of the ~~Bankable~~Stock ~~Feasibility~~Purchase ~~Study, Telifonda~~Agreement ~~would~~(as ~~have~~amended), aTelifonda ~~right~~agreed to ~~purchase~~reimburse ~~the~~certain ~~Bolsa~~expenditures ~~NSR~~made atby ~~fair~~Aurelio ~~market~~which ~~value~~the onparties to the ~~terms~~Respite ~~set~~Agreement ~~forth~~agreed inequals $265,523 (the ~~Amended~~“Reimbursement ~~Bolsa NSR Agreement~~Amount”).

~~Should Telifonda fail to complete the Bankable Feasibility Study or otherwise maintain the 5~~February 18,~~000+~~ ~~acre~~2009 ~~land~~Respite ~~position,~~Agreement ~~the Company retains the exclusive right to re-acquire the Hill Copper-Zinc Project by reimbursing Telifonda for its $2,500,000 investment~~ and ~~any~~Note ~~of its out-of-pocket expenditures.~~

~~The~~In ~~proposed~~consideration ~~transaction~~of ~~also~~(i) a ~~requires~~reduction in the interest rate under the AIEX Loan Agreement and (ii) an agreement by the parties hereto to delay the obligation of Aurelio to deliver the Minera NSR Agreement until full payment and satisfaction by Telifonda of its obligations under the Respite and Loan Agreement Amendment, Aurelio granted to ~~fund~~Telifonda ~~Bolsa~~a ~~Resources~~respite of payment of the AIEX Loan Amount, ~~Inc.~~the Minera Amount and the Reimbursement Amount in the ~~initial~~aggregate amount of $81,765,522 ~~million~~(the ~~to facilitate~~“Respite ~~further~~Amount”) ~~development~~as ofevidenced by a note dated February 18, 2009 in the ~~Hill~~principal ~~Copper-Zinc~~amount ~~Project~~of $1,765,522 (the “Respite Note”).

InThe ~~addition~~Reimbursement toAmount ~~purchasing~~plus all ofaccrued ~~the~~and ~~common~~unpaid ~~stock of Bolsa, under the terms of the Amended Agreement, Telifonda has also agreed to purchase a 3% NSR~~ interest inthereon ~~the~~shall ~~Gavilanes~~be ~~gold~~due ~~project~~and ~~for~~payable ~~$50,000~~no ~~cash~~later ~~(the~~than ~~“Minera NSR”) prior to December~~May 31, 2009 ~~which is expected to result in a realized gain of the same amount~~. The ~~Company~~ ~~will~~AIEX ~~retain~~Loan ~~the~~Amount ~~right~~and ~~to repurchase~~ the Minera ~~Gavilanes~~Amount ~~NSR~~plus atall ~~fair~~accrued ~~market~~and ~~value~~unpaid oninterest ~~the~~thereon ~~terms~~and ~~set forth in~~ the ~~Gavilanes~~balance ~~NSR~~of ~~Agreement.~~any ~~The~~other ~~Minera~~unpaid ~~NSR~~amounts ~~Agreement~~payable ~~was~~under ~~approved~~the byRespite ~~shareholders~~Note, asshall ~~part~~be ofdue ~~the~~and ~~overall~~payable ~~Amended~~no ~~Agreement.~~later Asthan ~~of June~~December 3031, 2009~~, this agreement had not been executed~~.

-Interest 22on -the principal balance of the Respite Note shall be payable at the rate of (i) One Year US$ LIBOR per annum, commencing on February 18, 2009, and increasing to One Year US$ LIBOR plus 9% per annum commencing on the occurrence of, and during the continuance of, any Default as described in Section 2 of the Respite Note.

~~Table~~The Respite Agreement also provided for an amendment of ~~Contents~~Section 1(c) of the AIEX Loan Agreement such that interest on the principal balance of the AIEX Loan Note was reduced by 200 basis points to One Year US$ LIBOR plus 3% per annum.

~~Bridge~~Amendment ~~Loan~~to the February 18, 2009 Respite Agreement and Note

In ~~connection~~partial ~~with~~consideration ~~the Amended Agreement, on October 1, 2008 Telifonda advanced $2,000,000 to the Company (the “Bridge Loan”) that was repaid upon the closing~~ of ~~the~~an ~~transactions~~agreement ~~contemplated~~ by the ~~Amended~~Company ~~Agreement~~to ~~by offsetting~~extend the ~~principal~~due ~~outstanding~~date ~~under~~of the ~~Bridge~~payment ~~Loan against the cash consideration~~ due ~~under~~on ~~the~~May 31, ~~Amended Agreement. The Bridge Loan was non-interest bearing~~2009, Telifonda ~~and~~agreed ~~was~~to ~~secured~~subscribe byto ~~all~~a ofprivate ~~the~~placement ~~assets~~financing ofin the ~~Company,~~amount ~~including all shares~~ of ~~common stock held by the Company in its two subsidiaries~~$166,667 as(see ~~set~~Note ~~forth~~7 in- ~~the~~Stockholders’ ~~related General Security Agreement~~Equity).

OfTelifonda made ~~the~~an ~~proceeds~~additional ~~from~~payment ~~the~~to ~~Bridge~~Company ~~Loan~~on June 16, 2009 totaling $133,~~500,000~~333 ~~was~~of ~~used~~which ~~on October 1~~$13,603 ~~2008~~was tocredited ~~retire~~against ~~all~~interest ~~outstanding~~due ~~Convertible~~on ~~Debentures~~the Respite Note as of ~~September~~May 3031, ~~2008.~~2009 ~~The~~and ~~remaining~~$19,730 ~~proceeds~~was ~~will~~applied beto ~~used~~a ~~for~~reduction ~~working~~in ~~capital~~principal ~~purposes.~~of the Respite Note.

~~Loan~~Per the May 29, 2009 Amended Respite Agreement and Note, Telifonda will be obligated to ~~The~~pay $245,792 in principal (plus accrued interest from July 1 - September 30, 2009 on the Respite Note balance) to the Company on or before September 30, 2009, with the final $1,500,000 in principal (plus accrued interest) as scheduled on or before December 31, 2009. As of September 30, 2009, payments due pursuant to the May 29, 2009 Amended Respite Agreement and Note remained outstanding; the Company extended the September 30th due date in exchange for certain cash payments received from Telifonda subsequent to September 30, 2009.

AsITEM ~~part~~2 ofMANAGEMENT’S ~~the~~DISCUSSION ~~overall~~AND ~~transaction~~ANALYSIS ~~contemplated by~~OR ~~the~~PLAN ~~Amended~~OF Agreement and approved by shareholders in February 2009, Telifonda agreed to loan $1.45 million to a newly-created subsidiary of the Company, AIEX Corporation (the “NewCo Loan”). The NewCo Loan Agreement will be an unsecured loan and will be non-recourse to Aurelio. Interest will accrue at LIBOR + 3% over the term of the loan. OPERATIONS

~~The~~Forward ~~Company~~Looking ~~intends~~Statements ~~to use the proceeds of the NewCo Loan facility to fund further exploration of its assets, as well as for other property acquisitions and general working capital.~~

AsCertain ofstatements ~~June 30,~~in this Quarterly Report on Form 10-Q are ~~2009~~forward-looking in nature. These statements can be identified by the ~~NewCo~~use ~~Loan~~of ~~had~~forward-looking ~~not~~terminology ~~been~~such ~~funded~~as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” or negative comparable terminology or by discussion of strategy.

~~Respite~~The ~~Agreement~~risks and ~~Amendment~~uncertainties are discussed in greater detail in the Company’s other filings with the Securities and Exchange Commission, including, most recently, its Annual Report on Form 10-K. There may be additional risks of ~~AIEX~~which ~~Loan~~the ~~Agreement~~Company is not presently aware or that it currently believes are immaterial which could have an adverse impact its business. The Company makes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances that may change.

A- ~~Respite~~24 Agreement and Amendment of Loan Agreement was entered into on February 18, 2009 by and among Aurelio Resource Corporation (“Aurelio”), AIEX Corporation (“AIEX”), a Colorado corporation that is a wholly-~~owned~~ ~~subsidiary of Aurelio, and Telifonda (Cayman) Ltd. (“Telifonda”).~~

~~Aurelio~~Sale ~~and~~of ~~Telifonda~~Assets ~~previously~~to ~~entered into a Stock Purchase Agreement dated September 30, 2008, as amended on November 17, 2008 (the “Stock Purchase Agreement”),~~ and, inFinancing ~~connection~~Arrangement with ~~the Stock Purchase Agreement (as amended), Telifonda agreed to provide to Aurelio (or its subsidiary, AIEX)~~ a ~~non-resource~~Shareholder loan in the principal amount of $1,450,000 (the “AIEX Loan Amount”), repayable in accordance with the terms of a Loan Agreement dated February 19, 2009 between Telifonda and AIEX, (the “AIEX Loan Agreement”), as that agreement is further described in Section 2(b)(ii) of the Stock Purchase Agreement, as amended.

~~Simultaneous~~See ~~with~~Note ~~the~~12 ~~closing under the Stock Purchase Agreement~~ (as“Sale ~~amended),~~Of ~~Telifonda~~Assets ~~also~~To ~~agreed~~And toFinancing ~~purchase~~Arrangement aWith ~~Net Smelter Royalty from Minera Milenium S.~~A. ~~de C.V, a Mexican corporation (“Minera~~Shareholder”) aon ~~subsidiary~~page of22 ~~Aurelio (the “Minera NSR”)~~ for a ~~purchase~~complete ~~price~~discussion of ~~$50,000~~the ~~pursuant~~chronology toand acurrent status ~~Net~~of ~~Smelter~~the ~~Return~~various ~~Royalty~~agreements ~~Agreement (as amended)~~ between ~~Minera~~the Company and ~~Aurelio~~Telifonda ~~(the~~Cayman ~~“Minera NSR Royalty Agreement”~~(Ltd).

~~Also~~Overview ~~simultaneous~~and ~~with~~Going ~~the~~Concern ~~closing~~Considerations under the Stock Purchase Agreement (as amended), in accordance with Section 2(e) of the Stock Purchase Agreement (as amended), Telifonda agreed to reimburse certain expenditures made by Aurelio which the parties to the Respite Agreement agreed equals $265,523 (the “Reimbursement Amount”).

~~February 18~~We continue to focus our efforts on the acquisition and exploration of mineral properties. To date, ~~2009~~we ~~Respite~~have ~~Agreement~~not discovered an economically viable mineral deposit on our mineral claims, and ~~Note~~there is no assurance that we will discover or acquire one. Significant additional exploration, metallurgical analysis, engineering, permitting and economic feasibility analysis will be required before a final evaluation as to the economic and legal feasibility for our future development is determined.

InOur ~~consideration of~~financial ~~(i) a~~statements ~~reduction~~for in the ~~interest~~three ~~rate~~and ~~under~~nine months ~~the~~ended ~~AIEX~~September 30, ~~Loan~~2009 ~~Agreement~~ and ~~(ii) an~~the ~~agreement~~year byended ~~the~~December 31, ~~parties~~2008 ~~hereto~~have tobeen ~~delay~~prepared with the ~~obligation~~on-going ofassumption ~~Aurelio~~that tothe ~~deliver~~Company ~~the~~will ~~Minera~~be ~~NSR~~able ~~Agreement~~to ~~until~~realize ~~full~~its ~~payment~~assets and ~~satisfaction~~discharge ~~by Telifonda of~~ its ~~obligations~~liabilities ~~under~~in the ~~Respite~~normal ~~and~~course ~~Loan~~of ~~Agreement Amendment~~business. However, ~~Aurelio~~certain ~~granted~~conditions toas ~~Telifonda~~noted abelow ~~respite~~currently ofexist ~~payment~~that ofraise substantial doubt about the ~~AIEX~~Company’s ~~Loan~~ability ~~Amount,~~to ~~the~~continue ~~Minera~~as ~~Amount~~a ~~and~~going ~~the~~concern. ~~Reimbursement~~These ~~Amount~~financial instatements ~~the~~do ~~aggregate~~not ~~amount~~include ofany ~~$1,765,522~~adjustments (to the ~~“Respite Amount”)~~amounts asand ~~evidenced~~classifications byof assets aand ~~note~~liabilities ~~dated~~that ~~February 18,~~might ~~2009~~be innecessary should the ~~principal~~Company ~~amount~~be ofunable ~~$1,765,522~~to ~~(the~~continue ~~“Respite~~as ~~Note”)~~a going concern.

-The 23operations -of the Company have primarily been funded by the sale of common stock and issuance of debt. Continued operations of the Company are dependent on the Company’s ability to complete additional equity and/or debt financings and to generate profitable operations in the future. Management’s plan in this regard is to secure additional funds through future equity and/or debt financings. Such financings may not be available or may not be available on reasonable terms.

~~Table~~We continued our property expenditures in the expectation of ~~Contents~~obtaining financing from one of a number of different leads we were pursuing. To date, these efforts have been unsuccessful, and we are now examining several new alternatives discussed below. Meanwhile, we have reduced our overhead expenditures to conserve our cash.

~~The~~We ~~Reimbursement~~do ~~Amount~~not ~~plus~~have ~~all~~any ~~accrued~~additional financing arranged beyond that described in Note 12 (re: Sale Of Assets And Financing Arrangement With A Shareholder), and ~~unpaid~~we ~~interest~~cannot ~~thereon~~provide ~~shall~~any assurance that we will be able ~~due~~to raise additional funding from the sale of our common stock or debt and, ~~payable~~accordingly, nothere ~~later~~is ~~than~~a ~~May 31~~possibility that we may not be able to continue normal operations. In the absence of such financing, we will not be able to continue exploration ~~2009~~of our mineral claims and our business plan might not succeed. ~~The~~Even ~~AIEX~~if ~~Loan~~we ~~Amount~~are ~~and~~successful in obtaining additional financing to fund the ~~Minera~~next ~~Amount~~phase ~~plus~~of ~~all~~our ~~accrued~~exploration ~~and~~program, ~~unpaid~~there ~~interest~~is ~~thereon~~no ~~and~~assurance that we will obtain the ~~balance~~funding ofnecessary to pursue any ~~other~~advanced ~~unpaid~~exploration ~~amounts~~of ~~payable~~our ~~under~~mineral claims following the ~~Respite~~completion ~~Note~~of the work program. If we do not continue to obtain additional financing, ~~shall~~we could be ~~due~~forced ~~and~~to ~~payable~~sell noor ~~later~~abandon ~~than~~some ~~December 31,~~or ~~2009.~~all of our mineral claims and our plan of operations.

~~Interest~~We onmay ~~the~~consider ~~principal~~entering ~~balance~~into ofjoint ~~the~~venture ~~Respite~~arrangements ~~Note~~to ~~shall~~provide bethe ~~payable~~required atfunding ~~the~~to ~~rate~~develop ofsome (ior all) ~~One~~ ~~Year~~of ~~LIBOR~~our ~~per~~mineral ~~annum,~~claims. ~~commencing~~If we onentered ~~February 18,~~into ~~2009~~a joint venture arrangement, ~~and increasing~~we would likely have to ~~Year~~assign ~~LIBOR~~a ~~plus~~percentage ~~9% per~~of ~~annum~~our ~~commencing~~interest onin our mineral claims to the ~~occurrence~~joint ~~of,~~venture ~~and~~partner. ~~during~~Even ~~the~~if ~~continuance~~we ofdetermined to pursue a joint venture partner, there is no assurance that any third-party ~~Default~~would asenter ~~described~~into a joint venture agreement with us in ~~Section 2~~order to fund exploration of ~~the~~our ~~Respite~~mineral ~~Note~~claims.

~~The~~We ~~Respite~~have ~~Agreement~~no ~~also~~revenues, ~~provided~~have experienced ~~for~~losses ansince ~~amendment~~inception, ofhave ~~Section 1(c)~~no ofoperations, ~~the~~have ~~AIEX~~been ~~Loan~~issued ~~Agreement~~a ~~such~~going ~~that~~concern ~~interest~~opinion onby ~~the~~our ~~principal~~auditors ~~balance~~and ofcontinue ~~the~~to ~~AIEX~~rely ~~Loan~~upon ~~Note~~the ~~was~~sale ~~reduced~~of byour ~~200~~securities ~~basis points~~ to ~~One~~fund ~~Year LIBOR plus 3% per annum~~operations.

~~Amendment~~Plan toof ~~the~~Operations ~~February 18, 2009 Respite Agreement and Note~~

InOur ~~partial~~plan ~~consideration~~ of anoperations ~~agreement~~for by the ~~Company~~next totwelve-month ~~extend~~period ~~the~~as ~~due~~outlined below ~~date~~is ofdependent ~~the payment due~~ on ~~May 31,~~our ~~2009,~~obtaining ~~Telifonda~~additional ~~agreed to subscribe to a private placement~~ financing inunder ~~the~~reasonable ~~amount~~terms ofand ~~$166,667 (see Note 7 – Stockholders’ Equity)~~conditions.

~~Telifonda~~We ~~made~~plan anto ~~additional~~undertake ~~payment~~the tooperations ~~Company on~~outlined ~~June 16,~~below ~~2009~~utilizing ~~totaling~~our ~~$33,333~~existing ofmanagement ~~which~~and ~~$13,603~~field ~~was~~personnel ~~credited~~and ~~against~~will ~~interest~~contract ~~due~~for additional labor on ~~the~~a ~~Respite~~project ~~Note~~basis as ofrequired. ~~May 31,~~We ~~2009~~do not anticipate making any major purchases or sales of plant and ~~$19,730~~equipment ~~was~~as ~~applied~~we intend to asub-contract ~~reduction~~the drilling inprograms ~~principal~~and ofoutsource the ~~Respite~~assaying, ~~Note~~resource estimation, engineering and metallurgical studies.

~~Per~~- ~~the~~25 ~~May 29, 2009 Amended Respite Agreement and Note, Telifonda will be obligated to pay $245,792 in principal (plus accrued interest from July 1~~ - ~~September~~ ~~30, 2009 on the Respite Note balance) to the Company on or before September 30, 2009, with the final $1,500,000 in principal (plus accrued interest) as scheduled on or before December 31, 2009.~~

~~ITEM~~Nevada 2Projects ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS~~

~~Forward~~Between ~~Looking~~Closing ~~Statements~~(June 15, 2009) and the end of the third quarter, the Company’s focus was on marketing a number of the exploration projects acquired from C3 Resources, Inc. As of September 30, 2009, five projects (Crescent Valley North, Indian Creek, North Sleeper, Robinson Creek and Safford Canyon) had been farmed out, and two projects were undergoing due diligence reviews / evaluations by interested parties.

~~Certain~~During ~~statements~~the fourth quarter of 2009, the Company hopes to sell, option, lease or joint venture the Horse Creek, Sand Springs and Veta Grande projects. The Company will seek to vend its interests in ~~this~~various ~~Quarterly~~properties ~~Report~~in onexchange ~~Form~~for 10up-Qfront ~~are~~cash ~~forward-looking~~and instock ~~nature.~~payments ~~These~~plus ~~statements~~significant ~~can~~work becommitments over several years (and recurring cash payments), while ultimately retaining either a minority ~~identified~~participatory byequity ~~the~~interest ~~use~~or an NSR production royalty. Projects that are not sold / farmed out but are deemed worthy of ~~forward-looking~~retaining ~~terminology~~for ~~such~~future asexploration ~~“believes~~work,” ~~“expects,” “~~may,” ~~“will,”~~possibly ~~“should~~see a reduction in land holdings in order to preserve working capital for drilling,” ~~“anticipates~~trenching,” oretc. ~~negative~~on ~~comparable~~other ~~terminology~~projects orin bythe ~~discussion~~Company’s ~~of strategy~~portfolio.

~~The~~Company ~~risks~~geologists ~~and uncertainties~~ are ~~discussed~~developing inexploration ~~greater~~programs ~~detail~~and budgets infor the ~~Company’s~~each ~~other~~of ~~filings with~~ the ~~Securities~~properties ~~and~~that ~~Exchange~~the ~~Commission,~~Company ~~including, most~~intends ~~recently,~~to ~~its~~retain ~~Annual~~100% ~~Report~~interests ~~on Form 10-K~~in. ~~There~~Bids ~~may~~are bealso ~~additional~~being ~~risks~~sought offor ~~which~~an ~~the~~independent ~~Company~~NI is43-101 ~~not~~quality ~~presently~~resource ~~aware~~estimate orfor ~~that~~the itIron ~~currently~~Butte ~~believes~~gold ~~are~~project. ~~immaterial~~A ~~which~~decision ~~could~~on ~~have~~this anwork ~~adverse~~program ~~impact~~and anticipated ~~its~~cost ~~business.~~/ ~~The~~schedule ~~Company~~is ~~makes~~anticipated ~~no commitment~~ to ~~revise~~ orbe ~~update~~made ~~any~~prior ~~forward-looking statement in order~~ to ~~reflect~~the ~~events~~end orof ~~circumstances~~the ~~that may change~~year.

~~Sale~~Gavilanes ofProperty ~~Assets to and Financing Arrangement with a Shareholder~~

~~See~~In ~~Note~~the 12third ~~(“Sale~~quarter Ofof ~~Assets~~2009, Towe ~~And~~made ~~Financing~~one ~~Arrangement~~option ~~With~~payment Aof ~~Shareholder)~~$25,000 onin ~~page~~order 22to ~~for~~keep athe ~~complete~~Gavilanes ~~discussion~~land ofpurchase ~~the chronology~~option ~~and~~in ~~current~~good ~~status~~standing. ofWe ~~the~~may ~~various~~need ~~agreements~~to raise ~~between~~additional ~~the~~funds ~~Company~~in ~~and~~order ~~Telifonda~~to ~~Cayman~~make ~~(Ltd)~~subsequent payments.

~~Overview~~Our planned exploration program (subject to funding) during the next twelve months includes approximately 7,000 feet of diamond drilling to test several exploration targets on the Gavilanes Property. Based on our review of all the pertinent data available on the property, we are pursuing our goal of identifying a bulk mineable, open pittable deposit at Gavilanes. The budget for this drill program is approximately $375,000 (not including land costs), and ~~Going~~should ~~Concern~~take ~~Considerations~~three to four months to complete. If this program shows the expected results, we will then undertake a larger program of up to 10,000 feet of diamond drilling on the property that is anticipated to cost approximately $500,000.

WeResults ~~continue to focus our efforts on the acquisition and exploration~~ of ~~mineral~~Operations properties. To date, we have not discovered an economically viable mineral deposit on our mineral claims, and there is no assurance that we will discover or acquire one. Significant additional exploration, metallurgical analysis, engineering, permitting and economic feasibility analysis will be required before a final evaluation as to the economic and legal feasibility for our future development is determined.

-Revenues ~~24 -~~

~~Table~~We ofhave ~~Contents~~had no operating revenues since our inception on February 19, 2004, through September 30, 2009. During the next twelve-month period, we do not anticipate generating any revenues.

~~Our~~General ~~financial~~Operating ~~statements~~Expenses for the three and six months ended March 31 and June 30, 2009 and the year ended December 31,2008 have been prepared with the on-going assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. However, certain conditions as noted below currently exist that raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

~~The~~General ~~operations~~operating expenses consist primarily of ~~the~~labor ~~Company~~costs, ~~have~~including ~~primarily~~stock ~~been~~based ~~funded~~compensation byexpenses, ~~the~~for ~~sale~~officers, ofdirectors ~~common~~and ~~stock~~administrative consultants and ~~issuance~~independent ~~of debt~~contractors. ~~Continued~~In ~~operations~~addition, ofin ~~the~~its ~~Company~~normal ~~are~~course ~~dependent~~of onbusiness, the Company’s ~~ability~~incurs toprofessional ~~complete~~accounting ~~additional equity~~ and~~/or~~ ~~debt~~legal ~~financings~~fees ~~and~~in toits ~~generate~~normal ~~profitable~~course ~~operations~~of inbusiness, ~~the~~transfer ~~future.~~agent ~~Management’s~~fees ~~plan~~and infees ~~this regard is~~ to ~~secure additional~~maintain ~~funds~~our ~~through future equity and/or debt financings~~offices. ~~Such~~All ~~financings~~such ~~may~~costs ~~not~~are beincluded ~~available~~in orgeneral ~~may~~administrative ~~not be available on reasonable terms~~expense.

We ~~successfully~~ ~~raised~~anticipate spending approximately $~~166~~750,~~667~~000 in ~~equity~~ongoing ~~financing~~general ~~during~~and administrative expenses over the ~~period~~next ~~ending~~twelve ~~June 30,~~months. ~~2009,~~Such ~~and~~expenditures weexclude ~~continued~~the costs ~~our~~that ~~property~~might ~~expenditures~~be incurred in ~~the~~raising ~~expectation~~additional offunding. ~~obtaining~~The ~~financing~~general ~~from~~and ~~one~~administrative ofexpenses afor ~~number~~the year will consist primarily of ~~different~~professional ~~leads~~fees wefor ~~were~~our ~~pursuing.~~management, Toaccounting ~~date~~and reporting expenses, audit and legal work relating to our ~~these~~regulatory ~~efforts~~filings, ~~have~~as ~~been~~well ~~unsuccessful~~as transfer agent fees, promotion and weinvestor ~~are~~relations ~~now~~activities, ~~examining~~expenses ~~several~~related ~~new~~to ~~alternatives~~the ~~discussed~~annual ~~below.~~shareholder ~~Meanwhile~~meeting, weD ~~have~~& ~~reduced~~O insurance, and the costs of maintaining our ~~overhead~~executive ~~expenditures~~office toin ~~conserve~~Lakewood, Colorado and our field ~~cash~~office in Culiacan, Mexico.

We- do26 ~~not~~- have any additional financing arranged beyond that described in Note 12 (re: Sale Of Assets And Financing Arrangement With A Shareholder), and we cannot provide any assurance that we will be able to raise additional funding from the sale of our common stock or debt and, accordingly, there is a possibility that we may not be able to continue normal operations. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan might not succeed. Even if we are successful in obtaining additional financing to fund the next phase of our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims following the completion of the work program. If we do not continue to obtain additional financing, we could be forced to sell or abandon some or all of our mineral claims and our plan of operations.

WeMineral ~~may~~Property ~~consider~~Costs entering into joint venture arrangements to provide the required funding to develop some (or all) of our mineral claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our mineral claims to the joint venture partner. Even if we determined to pursue a joint venture partner, there is no assurance that any third-party would enter into a joint venture agreement with us in order to fund exploration of our mineral claims.

WeCosts ~~have~~incurred noduring ~~revenues,~~each ~~have~~of ~~experienced~~the ~~losses~~three ~~since~~and ~~inception,~~nine ~~have no~~month ~~operations,~~periods ~~have~~ended ~~been~~September 30, ~~issued~~2009 aand ~~going~~2008 ~~concern~~pertain ~~opinion~~primarily byto ~~our~~property ~~auditors~~maintenance payments and ~~continue~~exploration activities that are described above. Costs vary from period to ~~rely~~period based upon the ~~sale~~timing of ~~our~~required ~~securities~~payments and funds available to ~~fund~~carry ~~operations~~out planned exploration activities including drilling, assaying, geological and metallurgical evaluations.

~~Plan of~~Professional ~~Operations~~Fees

~~Our~~Professional ~~plan~~fees pertain ofto ~~operations~~contract ~~for~~labor ~~the~~costs ~~next~~related ~~twelve-month~~to ~~period~~field aspersonnel ~~outlined~~conducting ~~below~~exploration isand ~~dependent~~exploration onplanning ~~our~~activities. ~~obtaining~~Variations ~~additional~~from ~~financing~~period ~~under reasonable~~to ~~terms~~period ~~and~~pertain ~~conditions~~principally to available funding.

WeInterest ~~plan~~Expense to undertake the operations outlined below utilizing our existing management and field personnel and will contract for additional labor on a project basis as required. We do not anticipate making any major purchases or sales of plant and equipment as we intend to sub-contract the drilling programs and outsource the assaying, resource estimation, engineering and metallurgical studies.

~~Nevada~~Interest ~~Projects~~expense in 2008 pertains to the issuance of convertible debentures in February 2008 (which were subsequently redeemed / repaid in full as of October 1, 2008), including amortization of the discount attributed to recording these debentures at FMV as well as recognition of the beneficial conversion feature.

~~Between~~Liquidity ~~Closing (June 15, 2009)~~ and ~~the~~Capital ~~end of the quarter, the Company’s focus was on marketing a number of the exploration projects acquired from C3~~ Resources, Inc. As of the end of June 2009, one project (north Sleeper) had been farmed out, six projects were undergoing due diligence reviews / evaluations by interested parties, and negotiations were in progress on four of the projects.

-At 25September 30, -2009, we had cash on hand of approximately $145,734.

~~Table~~We anticipate that our cash and working capital will only be sufficient to enable us to pay for the cost of ~~Contents~~a limited exploration program and for general and administrative expenses for approximately the next three to six months. Accordingly, our ability to complete our ongoing exploration activities and the next phase of our recommended work programs will be subject to us obtaining additional financing as these expenditures will exceed our cash reserves.

~~During~~While ~~the~~one ~~third~~of ~~quarter~~our ofprevious ~~2009,~~financings ~~the~~was ~~Company~~a ~~hopes~~convertible todebt ~~sell~~offering, ~~option,~~we ~~lease~~believe orthat ~~joint~~debt ~~venture~~financing aswill ~~many~~not asbe ~~six~~a long-term alternative for funding additional phases of ~~the~~exploration ~~Nevada projects.~~as ~~The~~we ~~Company~~do ~~will~~not ~~seek~~have tangible assets to ~~exchange~~secure ~~its~~any ~~interests~~debt infinancing. ~~various~~We ~~properties~~anticipate inthat ~~exchange~~additional ~~for~~funding ~~up-front~~will ~~cash~~be ~~and~~in ~~stock~~the ~~payments~~form ~~plus~~of ~~significant~~equity ~~work~~financing ~~commitments~~from ~~over~~the ~~several~~sale ~~years~~of ~~(and~~our ~~recurring~~common ~~cash~~stock. ~~payments)~~However, ~~while~~we ~~ultimately~~do not ~~retaining~~have ~~either~~any ~~a minority~~financing ~~participatory~~arranged ~~equity~~and ~~interest~~we orcannot anprovide ~~NSR~~investors ~~production~~with ~~royalty.~~any ~~Projects~~assurance that ~~are~~we ~~not~~will ~~sold~~be /able ~~farmed~~to ~~out~~raise ~~but~~sufficient ~~are~~funding ~~deemed~~from ~~worthy~~the sale of ~~retaining~~our ~~for~~common ~~future~~stock to fund the next phase of our exploration ~~work~~program. In the absence of such financing, ~~may~~we ~~see~~will anot ~~reduction~~be inable ~~land~~to ~~holdings~~continue exploration of our mineral claims and our business plan will fail. Even if we are successful in ~~order~~obtaining equity financing to ~~preserve~~fund ~~working~~the ~~capital for~~next ~~drilling,~~phase ~~trenching~~of our exploration programs, ~~etc.~~there onis ~~other~~no ~~projects~~assurance inthat we will obtain the ~~Company’s~~funding ~~portfolio~~necessary to pursue any advanced exploration of our mineral claims following the completion of the work program. If we do not continue to obtain additional financing, we will be forced to either sell or abandon our mineral claims and our plan of operations.

~~Company~~Cash ~~geologists~~provided ~~are~~by ~~prioritizing~~(used ~~the~~for) ~~Nevada~~operating ~~projects~~activities was $435,329 and ~~are developing~~$1,425,961 ~~exploration~~for ~~programs~~the three and ~~budgets~~nine ~~for~~months ended ~~the~~September 30, ~~each~~2009 of($401,097 ~~the~~and ~~properties~~$1,697,579 ~~that~~for the ~~Company~~three ~~intends~~and tonine ~~retain~~months ~~100%~~ended ~~interests~~September 30, ~~in.~~2008), ~~Two~~which ofreflects the ~~projects~~costs ~~could~~of beour ~~drilled~~operations infor ~~late~~the ~~2009~~period orand, ~~early~~in ~~2010~~2009, ~~based~~the onreduction ~~availability~~ of ~~funding,~~outstanding ~~with~~accounts ~~current~~payable ~~thoughts~~pertaining to ~~centered~~elimination onof ~~10,000~~land toacquisition ~~15,000~~payments ftand ~~RVC~~mineral ~~drill~~exploration ~~programs~~/ atdevelopment ~~each~~work ~~project~~in ~~(costs~~Arizona ~~estimates~~resulting ~~unavailable).~~from ~~RFPs~~the ~~are~~sale ~~also~~of ~~being~~Bolsa ~~developed~~Resources, ~~for~~Inc. anCash ~~independent~~used NIin ~~43-101~~investing ~~quality~~activities ~~resource~~in ~~estimate~~2009 ~~for~~and ~~the~~2008 ~~Iron~~related ~~Butte~~principally ~~gold~~to ~~project.~~purchase Aof ~~decision~~additional onlands within ~~this~~the ~~work~~Hill ~~program and~~Copper-Zinc ~~anticipated~~project, ~~cost~~option /payments ~~schedule~~and isgeneral ~~anticipated~~and toadministrative becosts ~~made~~in ~~prior~~Mexico, toand ~~the~~land ~~end~~/ ofexploration ~~the~~costs ~~third~~in ~~quarter~~Nevada.

~~Gavilanes~~We ~~Property~~have funded our business to date from sales of our common stock and convertible debentures, and, more recently, the sale of our Arizona subsidiary. Gross cash proceeds from the sale of our common shares during the period from inception, on February 19, 2004, through September 30, 2009 totaled approximately $4.2 million (after adjustments when we acquired ARI), including $1 million in 2008. Gross proceeds from the sale of 10% Convertible Debentures approximated $1.5 million in February 2008. The Convertible Debentures were repaid in full at their face value of $1,500,000 on October 1, 2008 (refer to Note 12 - Sale of Assets to and Financing Arrangement with a Shareholder).

In- ~~the~~27 ~~first~~- ~~quarter of 2009, we made one option payment of $25,000 in order to keep the Gavilanes land purchase option in good standing. We may need to raise additional funds in order to make subsequent payments.~~

~~Our~~We ~~planned~~anticipate ~~exploration~~continuing ~~program~~to ~~(subject~~rely toon ~~funding)~~equity ~~during~~sales ~~the~~of ~~next~~our ~~twelve~~common ~~months~~shares ~~includes~~and ~~7,000~~/ ~~feet~~or issuance of ~~diamond~~ ~~drilling~~debt toin ~~test~~order ~~several~~to continue ~~exploration~~to ~~targets~~fund onour ~~the~~business ~~Gavilanes Property~~operations. ~~Based~~Issuance onof ~~our~~additional ~~review~~shares ofwill ~~all~~result ~~the~~in ~~pertinent~~dilution ~~data~~to ~~available~~our onexisting ~~the~~shareholders. ~~property,~~There we are ~~pursuing~~no ~~our~~assurances ~~goal~~that ofwe ~~identifying~~will abe ~~bulk~~able ~~mineable,~~to ~~open~~achieve ~~pittable~~further ~~deposit~~sales atof ~~Gavilanes.~~our ~~The budget~~common ~~for~~stock ~~this~~or ~~drill~~any ~~program~~other isform ~~approximately~~of ~~$375,000~~additional financing. ~~(not~~If ~~including~~we ~~land~~are ~~costs),~~unable ~~and~~to ~~should~~achieve ~~take~~the ~~three~~financing tonecessary ~~four months~~ to ~~complete.~~continue Ifour ~~this~~plan ~~program~~of ~~shows the expected results~~operations, then we will ~~then~~not ~~undertake~~be aable ~~larger program of up~~ to ~~10,000~~continue ~~feet~~exploration of ~~diamond drilling~~our ~~on the property that is anticipated to cost approximately $500,000~~properties.

~~Results~~Contractual ofObligations, ~~Operations~~Contingent Liabilities and Commitments

~~Revenues~~See Note 6 on page 12 for a complete discussion.

~~We have had no operating revenues since our inception on February 19, 2004, through June 30, 2009. During the next twelve~~Off-~~month~~Balance ~~period,~~Sheet weArrangements ~~will not generate any revenues.~~

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

~~General~~Related ~~operating~~Party ~~expenses consist primarily of labor costs, including stock based compensation expenses, for officers, directors and administrative~~Transactions consultants and independent contractors. In addition, in its normal course of business, the Company incurs professional accounting and legal fees in its normal course of business, transfer agent fees and fees to maintain our offices. All such costs are included in general administrative expense.

WeDuring ~~anticipate~~the ~~spending~~year ~~approximately~~ended ~~$750~~December 31,~~000~~ in2008 ~~ongoing~~and ~~general~~throughout the first, second and ~~administrative~~third ~~expenses~~quarters ~~over~~of ~~the~~2009 ~~next twelve~~Aurelio ~~months.~~maintained ~~Such~~consulting contracts ~~expenditures~~with ~~exclude~~our ~~the~~president, ~~costs~~company ~~that~~officers, ~~might~~directors beand ~~incurred~~their inwholly-owned ~~raising~~companies, ~~additional~~through ~~funding.~~which ~~The~~they ~~general~~provided ~~and~~services ~~administrative~~to ~~expenses~~our ~~for~~company. For the ~~year~~three ~~will~~and ~~consist~~nine ~~primarily~~months ofended ~~professional~~September 30, ~~fees~~2009, ~~for~~Aurelio ~~our~~paid ~~management,~~or ~~accounting~~accrued ~~and~~consulting ~~reporting~~fees of ~~expenses~~$59,994 ~~audit~~ and ~~legal~~$180,032 ~~work~~in ~~relating~~lieu toof ~~our~~salaries ~~regulatory~~to ~~filings,~~company asofficers ~~well~~and asdirectors. ~~transfer~~Fees ~~agent~~charged ~~fees,~~for ~~promotion~~consulting ~~and~~services ~~investor~~were ~~relations~~in ~~activities,~~the ~~expenses~~normal ~~related~~course toof ~~the~~business ~~annual~~and ~~shareholder~~were ~~meeting,~~measured Dat &the Oexchange ~~insurance~~amount, ~~and~~which is the ~~costs~~amount of ~~maintaining~~consideration ~~our~~established and ~~executive~~agreed ~~office~~to inby ~~Lakewood,~~the ~~Colorado~~related ~~and~~parties. ~~our~~Refer ~~field~~to ~~office~~Note ~~in Culiacan, Mexico~~7.

~~Mineral~~In ~~Property~~addition, ~~Costs~~in June 2009 we issued a total of 522,000 restricted common shares to Company officers, directors and consultants in partial consideration for consulting services. 432,000 of those shares were a pre-payment (for the period July 1, 2009 thru December 31, 2010) of the equity portion of the individuals’ consulting contracts. The value of the shares issued for the three and nine months ending September 30, 2009 was $7,200 and $16,200 respectively.

~~Costs~~Critical ~~incurred~~Accounting ~~during~~Policies ~~each of the three~~ and ~~six~~Estimates month periods ended March 31 and June 30, 2009 and 2008 pertain primarily to property maintenance payments and exploration activities that are described above. Costs vary from period to period based upon the timing of required payments and funds available to carry out planned exploration activities including drilling, assaying, geological and metallurgical evaluations.

-The 26preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. The most significant policy we have implemented is to capitalize the cost of acquiring patented mining claims and surface rights to properties. Our significant accounting policies are disclosed in Note 3 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

~~Table~~ITEM of3. ~~Contents~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Professional~~Not ~~Fees~~required for a Smaller Reporting Company.

~~Professional~~ITEM ~~fees pertain to contract labor costs related to field personnel conducting exploration and exploration planning activities~~4. ~~Variations~~CONTROLS ~~from~~AND ~~period to period pertain principally to available funding~~PROCEDURES.

~~Interest~~Evaluation Of ~~Expense~~Disclosure Controls And Procedures

~~Interest~~As ~~expense~~of inthe ~~2008~~end ~~pertains~~of to the ~~issuance of~~period ~~convertible~~covered ~~debentures~~by inthis ~~February~~report, ~~2008~~we ~~(which~~carried ~~were~~out ~~subsequently~~an ~~redeemed~~evaluation /of ~~repaid~~the effectiveness ~~in full as~~ of ~~October 1,~~the ~~2008),~~design ~~including~~and ~~amortization~~operation of ~~the~~our ~~discount~~“disclosure ~~attributed~~controls toand ~~recording~~procedures” ~~these~~(as ~~debentures~~defined atin ~~FMV~~the asSecurities ~~well~~Exchange asAct ~~recognition~~ of ~~the beneficial~~1934, ~~conversion~~as ~~feature.~~amended (“Exchange Act”), Rules

~~Liquidity~~- ~~and~~28 ~~Capital~~- ~~Resources~~

At 13a-15(e) ~~June 30~~and 15d-15(e)) under the supervision and with the participation of our management, ~~2009~~including our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, weour Chief ~~had~~Executive ~~cash~~Officer onand ~~hand~~our acting Chief Financial Officer concluded that, as of ~~approximately~~the ~~$353~~end of the period covered by this report,~~267~~ our disclosure controls and procedures are effective.

WeChanges ~~raised~~In ~~$166,667~~Internal inControls ~~June~~Over ~~2009~~Financial ~~through~~Reporting ~~a private placement equity financing.~~

~~However,~~There wewere ~~anticipate~~no ~~that~~changes ~~our~~in ~~cash and working capital will only be sufficient to enable us to pay for the cost of a limited exploration~~our ~~program~~internal ~~and~~control ~~for~~over ~~general~~financial ~~and~~reporting ~~administrative~~that ~~expenses~~occurred ~~for~~during ~~approximately the next six months. Accordingly,~~ our ~~ability~~most torecently ~~complete~~completed ~~our~~fiscal ~~ongoing~~quarter ~~exploration~~that ~~activities~~have ~~and~~materially ~~the~~affected, ~~next~~or ~~phase~~are ofreasonably ~~our~~likely ~~recommended work programs will be subject~~ to usmaterially ~~obtaining additional~~affect, ~~financing~~our asinternal ~~these~~control ~~expenditures~~over ~~will~~financial ~~exceed our cash reserves~~reporting.

~~While~~PART ~~one~~II of– ~~our~~OTHER ~~2008~~INFORMATION financings was a convertible debt offering, we believe that debt financing will not be a long-term alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund the next phase of our exploration program. In the absence of such financing, we will not be able to continue exploration of our mineral claims and our business plan will fail. Even if we are successful in obtaining equity financing to fund the next phase of our exploration programs, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our mineral claims following the completion of the work program. If we do not continue to obtain additional financing, we will be forced to either sell or abandon our mineral claims and our plan of operations.

~~Cash~~ITEM ~~provided by (used for) operating activities was $3,641,000 and $~~1,861,290 for the three and six months ended June 30, 2009 ($629,926 and $1,296,817 for the three and six months ended June 30, 2008), which reflects the costs of our operations for the period and, in 2009, the reduction of outstanding accounts payable pertaining to elimination of land acquisition payments and mineral exploration / development work in Arizona resulting form the sale of Bolsa Resources, Inc. ~~Cash~~LEGAL used in investing activities in 2009 and 2008 related principally to purchase of additional lands within the Hill Copper-Zinc project, option payments and general and administrative costs in Mexico, and land / exploration costs in Nevada. PROCEEDINGS

~~We have funded our business to date from sales of our common stock and convertible debentures, and, more recently, the sale of our Arizona subsidiary~~None. Gross cash proceeds from the sale of our common shares during the period from inception, on February 19, 2004, through June 30, 2009 totaled approximately $4.2 million (after adjustments when we acquired ARI), including $1 million in 2008. Gross proceeds from the sale of 10% Convertible Debentures approximated $1.5 million in February 2008. The Convertible Debentures were repaid in full at their face value of $1,500,000 on October 1, 2008 (refer to Note 12 - Sale of Assets to and Financing Arrangement with a Shareholder).

WeITEM ~~anticipate continuing to rely on equity sales of our common shares and/or issuance of debt in order to continue to fund our business operations~~2. ~~Issuance~~UNREGISTERED ~~of additional~~SALES ~~shares~~OF ~~will~~EQUITY ~~result~~SECURITIES inAND ~~dilution~~USE toOF our existing shareholders. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue exploration of our properties. PROCEEEDS

-None. ~~27 -~~

~~Table~~ITEM of3. ~~Contents~~DEFAULTS UPON SENIOR SECURITES

~~Contractual Obligations, Contingent Liabilities and Commitments~~ None.

~~See~~ITEM ~~Note~~4. 6SUBMISSION onOF ~~page~~MATTERS 12TO ~~for~~A aVOTE ~~complete~~OF ~~discussion.~~SECURITY HOLDERS

~~Off-Balance~~There ~~Sheet Arrangements~~were no matters submitted to a vote of the Security Holders during the quarter ended September 30, 2009.

WeITEM have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders5. OTHER INFORMATION

~~Related~~None. ~~Party Transactions~~

~~During the year ended December~~ITEM 31, 2008 and throughout the first and second quarters of 2009 Aurelio maintained consulting contracts with our president, company officers, directors and their wholly-owned companies, through which they provided services to our company6. ~~For~~EXHIBITS the three and six months ended June 30, 2009, Aurelio paid or accrued consulting fees of $63,338 and $110,210 in lieu of salaries to company officers and directors. Fees charged for consulting services were in the normal course of business and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Refer to Note 7.

~~Critical~~Exhibit ~~Accounting~~31.1 ~~Policies~~Certification of the Chairman and ~~Estimates~~Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~The~~Exhibit ~~preparation~~31.2 ofCertification ~~financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount~~ of ~~assets and liabilities and disclosure of contingent assets and liabilities at~~ the ~~date~~acting ofCFO ~~the~~Pursuant ~~financial~~to ~~statements~~Section 302 ~~and the reported amounts~~ of ~~revenues and expenses during~~ the ~~reporting~~Sarbanes-Oxley ~~period.~~Act ~~Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects~~ of ~~matters that are inherently uncertain~~2002. The most significant policy we have implemented is to capitalize the cost of acquiring patented mining claims and surface rights to properties. Our significant accounting policies are disclosed in Note 3 to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

~~ITEM~~Exhibit 332.1 Certification ~~QUANTITATIVE~~of ~~AND~~Chairman ~~QUALITATIVE~~and ~~DISCLOSURES~~Chief ~~ABOUT~~Executive ~~MARKET~~Officer ~~RISK~~pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Not required~~Exhibit ~~for~~32.2 aCertification ~~Smaller~~of ~~Reporting~~acting ~~Company~~CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~ITEM~~- 4.29 ~~CONTROLS~~- ~~AND PROCEDURES.~~

~~Evaluation~~SIGNATURES ~~Of Disclosure Controls And Procedures~~

AsPursuant ofto the ~~end~~requirements of the ~~period covered by this report, we carried out an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in the~~ Securities Exchange Act of 1934, as amended ~~(“Exchange Act”)~~, ~~Rules 13a-15(e) and 15d-15(e)) under~~ the ~~supervision~~Registrant ~~and~~has ~~with~~duly ~~the~~caused ~~participation~~this ofreport ~~our~~to ~~management, including~~be ~~our~~signed ~~Chief~~on ~~Executive~~its ~~Officer~~behalf ~~and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and our acting Chief Financial Officer concluded that, as of the end of the period covered~~ by ~~this report, our disclosure~~ ~~controls~~the ~~and~~undersigned ~~procedures~~thereunto ~~are~~duly ~~effective~~authorized.

Changes In Internal Controls Over Financial Reporting


Date: November 19, 2009								AURELIO RESOURCE CORPORATION
								A Colorado Corporation

								/s/ STEPHEN B. DOPPLER
								Stephen B. Doppler
								Chief Executive Officer

Date: November 19, 2009								/s/ FREDERIK W. WARNAARS
								Frederik W. Warnaars
								Interim Chief Financial Officer, Chairman, and Secretary

~~There~~- ~~were~~30 no- changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

- 28 -

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of the Security Holders during the quarter ended June 30, 2009.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit 31.1 Certification of the Chairman and Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 Certification of the acting CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 Certification of Chairman and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 Certification of acting CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

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

Date: August 14, 2009		AURELIO RESOURCE CORPORATION
		A Colorado Corporation
		/s/ Stephen B. Doppler
		Stephen B. Doppler
		Chief Executive Officer
Date: August 14, 2009		/s/ Frederik W. Warnaars
		Frederik W. Warnaars
		Interim Chief Financial Officer, Chairman, and Secretary

- 29 -

Table of Contents

Table of Contents

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Filing Compare · AURELIO RESOURCE CORP