SILICA RESOURCES CORP - FORM 10-Q

Attached files

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EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER - SILICA RESOURCES CORP	exhibit_31-2.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER - SILICA RESOURCES CORP	exhibit_31-1.htm
EX-32.2 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER - SILICA RESOURCES CORP	exhibit_32-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

Mark One

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 31, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______

Commission File No. 000-52169

Silica Resources Corporation
(Name of small business issuer in its charter)

Nevada	71-0090401
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

789 West Pender Street, Suite 1010 Vancouver, British Columbia, Canada V6C 1H2
(Address of principal executive offices)

(604) 630-2940
(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:	Name of each exchange on which registered:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.

N/A

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.

Yes o No o

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class		Outstanding as of February 15, 2010
Common Stock, $0.001		72,755,800

SILICA RESOURCES CORPORATION

Form 10-Q

Part I	FINANCIAL INFORMATION	F-1

Item 1	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9

Item 4.	Controls and Procedures	9

Part II.	OTHER INFORMATION	10

Item 1	Legal Proceedings	10

Item 1A	Risk Factors	10

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	10

Item 3	Defaults Upon Senior Securities	10

Item 4	Submission of Matters to a Vote of Security Holders	10

Item 5	Other Information	10

Item 6	Exhibits	10

PART I

ITEM 1. FINANCIAL STATEMENTS

Silica Resources Corporation

(An Exploration Stage Company)

FINANCIAL STATEMENTS

DECEMBER 31, 2009

(unaudited)

Index

Balance Sheets	F–2

Statements of Operations	F–3

Statements of Cash Flows	F–4

Statements of Stockholders Equity	F–5

Notes to Financial Statements	F–6

F-1

Silica Resources Corporation

(An Exploration Stage Company)

Balance Sheets

	Dec. 31, 2009 $ (Unaudited)			March 31, 2009 $ (Audited)
ASSETS

Current Assets

Cash		601			2,159
Receivables		1,162			2,436

		1,763			4,595

Mineral properties (Note 4)		5,217			8,797

Equipment, net of depreciation		658			768

Total Assets		7,638			14,160


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable		192,864			135,296
Promissory notes (Note 7 )		210,335			154,868
Due to related parties (Note 6)		83,017			39,573

Total Liabilities		486,216			329,737


Stockholders’ Equity (Deficit)
Capital stock (Note 5)
Authorized: 2,000,000,000 common shares, $0.001 par value
Issued and outstanding: 72,755,800 shares (March 31, 2009 – 72,755,800 shares)		72,756			72,756

Warrants (Note 5)		61,235			61,235

Additional paid in capital		433,927			433,927

Deficit accumulated during the exploration stage		(1,046,496	)		(883,495	)

Total Stockholders’ Equity (Deficit)		(478,578	)		(315,577	)

Total Liabilities and Stockholders’ Equity		7,638			14,160

Contingency (Note 1)

The accompanying notes are an integral part of these financial statements.

F-2

Silica Resources Corporation

(An Exploration Stage Company)

Statements of Operations

(Unaudited)

	For the Three Months Ended Dec. 31,			For the Three Months Ended Dec. 31,			For the Nine Months Ended Dec. 31,			For the Nine Months Ended Dec. 31,			Accumulated From October 7, 2005 Date of Inception to Dec. 31,
	2009			2008			2009			2008			2009
	$			$			$			$			$

Expenses

Depreciation		35			45			110			190			570
Interest		4,056			1,845			9,922			2,986			15,921
Consulting (Note 6)		25,168			79,735			66,741			175,255			320,992
Legal		3,622			6,329			12,970			29,633			153,661
Management fees		-			-			-			-			15,000
Mineral property exploration		-			40,157			7,290			157,464			307,360
Office and administration		9,720			1,143			36,032			57,414			132,480
Professional services		1,100			5,000			26,356			19,040			90,178

Loss from operations		(43,710	)		(134,254	)		(159,421	)		(441,982	)		(1,036,162	)

Other items:
Impairment of mineral properties		-			(15,347	)		(3,580	)		(15,347	)		(18,927	)
Settlement of debt		-			-			-			8,593			8,593


Net loss for the period		(43,710	)		(149,601	)		(163,001	)		(448,736	)		(1,046,496	)


Basic and diluted loss per share		(0.00	)		(0.00	)		(0.00	)		(0.01	)

Weighted average number of shares outstanding – basic and diluted		72,755,800			72,755,800			72,755,800			80,109,918

The accompanying notes are an integral part of these financial statements.

F-3

Silica Resources Corporation

(An Exploration Stage Company)

Statements of Cash Flows

(Unaudited)

	For the Nine months Ended Dec. 31,			For the Nine months Ended Dec. 31,			Accumulated From October 7, 2005 Date of Inception to Dec. 31,
	2009			2008			2009
	$			$			$

Operating Activities

Net loss		(163,001	)		(457,330	)		(1,046,496	)

Items not requiring the use of cash

Depreciation		110			190			570

Interest accrued		9,717			2,986			15,585

Mineral property costs		-			-			300

Impairment of mineral properties		3,580			15,348			18,927

Settlement of debt		-			-			(8,593	)

Changes in operating assets and liabilities

Receivables		1,274			(2,533	)		(1,162	)

Accounts payable and accrued liabilities		57,568			48,756			201,457

Net Cash Used in Operating Activities		(90,752	)		(392,583	)		(819,412	)

Investing Activities

Acquisition of mineral properties		-			-			(24,144	)
Acquisition of office equipment		-			-			(1,228	)
Net Cash Used in Investing Activities		-			-			(25,372	)

Financing Activities

Proceeds on sale of common stock		-			100,000			567,618
Due to related party		43,444			4,000			83,017
Promissory notes		45,750			145,000			194,750

Net Cash Provided by Financing Activities		89,194			249,000			845,385

Increase (Decrease) in Cash		(1,558	)		(143,583	)		601

Cash – Beginning of Period		2,159			148,254			-

Cash – End of Period		601			4,671			601


Supplemental Disclosures:

Interest paid		–			–			–
Income taxes paid		–			–			–

The accompanying notes are an integral part of these financial statements.

F-4

Silica Resources Corporation

(An Exploration Stage Company)

Statement of Stockholders' Equity

October 7, 2005 (Date of Inception) to December 31, 2009

(Unaudited)

															Deficit Accumulated
							Additional			Common					during the
	Common Shares						Paid-in			Share					Exploration
	Number			Par Value			Capital			Subscription			Warrants		Stage			Total
				$			$			$			$		$			$
Balance, October 7, 2005,		-			-			-			-			-		-			-

Capital stock issued for cash:
– February 2006 at $0.00005 per share		60,000,000			60,000			(57,000	)		-			-		-			3,000
– February 2006 at $0.0025 per share		24,000,000			24,000			36,000			-			-		-			60,000
– March 2006 at $0.0025 per share		6,400,000			6,400			9,600			-			-		-			16,000
Capital stock issued for mineral property:
– March 15, 2006 at $0.0025 per share (Note 4)		120,000			120			180			-			-		-			300

Capital stock subscription		-			-			-			(2,000	)		-		-			(2,000	)

Net loss		-			-			-			-			-		(12,280	)		(12,280	)

Balance, March 31, 2006		90,520,000			90,520			(11,220	)		(2,000	)		-		(12,280	)		65,020

Capital stock issued for cash:
– June 2006 at $0.0025 per share		8,000,000			8,000			12,000			-			-		-			20,000
– September 2006 at $0.0025 per share		800,000			800			1,200			-			-		-			2,000

Capital stock subscription		-			-			-			2,000			-		-			2,000

Net loss		-			-			-			-			-		(127,317	)		(127,317	)

Balance, March 31, 2007		99,320,000			99,320			1,980			-			-		(139,597	)		(38,297	)

Capital stock issued for cash:
– November 2007 to January 2008 at $0.25 per share		1,480,000			1,480			319,988			-			48,532		-			370,000

Issue cost - legal		-			-			(3,382	)		-			-		-			(3,382	)

Net loss		-			-			-			-			-		(212,504	)		(212,504	)

Balance, March 31, 2008		100,800,000			100,800			318,586			-			48,532		(352,101	)		115,817

Capital stock issued for cash:
– June 3, 2008 at $0.25 per share		400,000			400			86,897						12,703		-			100,000

Shares cancelled		(28,444,200	)		(28,444	)		28,444			-			-		-			-

Net loss		-			-			-			-			-		(531,394	)		(531,394	)

Balance, March 31, 2009		72,755,800			72,756			433,927			-			61,235		(883,495	)		(315,577	)

Net loss		-			-			-			-			-		(163,001	)		(163,001	)

Balance, December 31, 2009		72,755,800			72,756			433,927			-			61,235		(1,046,496	)		(478,578	)

The accompanying notes are an integral part of these financial statements

F-5

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 1	Nature of Operations and Basis of Presentation Silica Resources Corporation (the "Company") was incorporated in the State of Nevada on October 7, 2005, and is in the exploration stage. The Company has acquired a mineral property located in the Yukon Territory, Canada, as well as certain other properties in the United States and has not yet determined whether these properties contain reserves that are economically recoverable. The recoverability of costs incurred for acquisition and exploration of each property will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under property agreements, completion of the development of the property, and upon future profitable production of proceeds from the sale thereof. In the opinion of management, the accompanying balance sheets and related interim statements of operations, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s Form 10-K for the year ended March 31, 2009 filed on June 29, 2009 with the U.S. Securities and Exchange Commission. Going Concern These financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has a working capital deficit of $484,453 as at December 31, 2009 ($251,117 – December 31, 2008) and has incurred losses since inception resulting in an accumulated deficit of $1,046,496 as at December 31, 2009 ($809,431 – December 31, 2008), has overdue promissory notes of $209,676 at December 31, 2009 and further losses are anticipated in the development of its business raising 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 ability to continue as a going concern is dependent upon the Company to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and ultimately generating profitable operations in the future. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and private placement of common stock.

Note 2	Summary of Significant Accounting Policies Basis of Presentation The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. Cash and Cash Equivalents The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

F-6

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 2

Summary of Significant Accounting Policies – continued

Mineral Properties

The Company accounts for acquisition costs for mineral rights as tangible assets and shown as a separate component of property, plant, and equipment. Costs relating to exploration and development are expensed as incurred until such time as economic reserves are quantified. To date, the Company has not established any proven reserves on any of its mineral properties.

Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.

Use of Estimates and Assumptions

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

Foreign Currency Translation

The Company translated foreign denominated monetary assets and liabilities into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non monetary assets and liabilities are recorded at the exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year. Exchange gains or losses resulting from foreign currency transactions are included in results of operations.

Financial Instruments

The Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The carrying values of cash, receivables, accounts payable and promissory notes approximate their fair values due to the short-term maturity of these instruments. The fair value of the amounts due to related parties is not determinable as they have no specific repayment terms.

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitments to plan of action based on the then known facts.

Various federal and state mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its mine projects to the pre-existing mine area average quality after the completion of mining.

F-7

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 2

Summary of Significant Accounting Policies - continued

Environmental Costs - continued

The Company recognizes a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. As at December 31, 2009, the Company did not have any liability for environmental costs.

Loss per Share

Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all potentially dilutive common shares outstanding during the period including stock options and warrants, using the treasury method, and preferred stock, using the if-converted method. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. As the effects of conversion of dilutive securities is anti-dilutive, basic loss per share is equal to diluted loss per share.

Stock-based Compensation

The Company recognizes all share-based payments to employees, including grants of employee stock options, in the financial statements based on the grant date fair value of the award. The Company determine the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. As at December 31, 2009, the Company has not granted any stock options and, therefore has not recognized any stock based compensation expense.

Recently Adopted Accounting Guidance

In May 2009, the Financial Accounting Standards Board (“FASB”) issued guidance on subsequent events, which requires companies to recognize in the financial statements the effects of subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. An entity shall disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued. Companies are not permitted to recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. Some nonrecognized subsequent events must be disclosed to keep the financial statements from being misleading. For such events a company must disclose the nature of the event, an estimate of its financial effect, or a statement that such an estimate cannot be made. The guidance was adopted effective in July 2009 and did not have material impact on the Company’s results of operations and financial position.

In July 2009, the FASB issued The FASB Accounting Standards Codification (the “Codification”) and the Hierarchy of Generally Accepted Accounting Principles. The Codification became the source of authoritative GAAP recognized by the FASB to be applied to nongovernmental entities and the Codification will supersede all then-existing non-SEC accounting and reporting standards. The FASB will make all future changes to guidance in the Codification by issuing Accounting Standards Updates. The Codification also provides that rules and interpretive releases of the U. S. Securities and Exchange Commission (SEC) issued under the authority of federal securities laws will continue to be sources of authoritative GAAP for SEC registrants. The Codification does not create any new GAAP standards but incorporates existing accounting and reporting standards into a new topical structure so that users can more easily access authoritative accounting guidance . The guidance was adopted effective in July 2009 and did not have a material impact on our financial statements.

F-8

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 2	Summary of Significant Accounting Policies - continued Recently Adopted Accounting Guidance - continued In July, 2009, we adopted FASB on business combinations. The guidance retains the fundamental requirements that the acquisition method of accounting (previously referred to as the purchase method of accounting) be used for all business combinations, but requires a number of changes, including changes in the way assets and liabilities are recognized and measured as a result of business combinations. It also requires the capitalization of in-process research and development at fair value and requires the expensing of acquisition-related costs as incurred. The Company has no business combination after the adoption of the new guidance. In July, 2009, we adopted the authoritative guidance issued by the FASB that changes the accounting and reporting for non-controlling interests. Non-controlling interests are to be reported as a component of equity separate from the parent’s equity, and purchases or sales of equity interests that do not result in a change in control are to be accounted for as equity transactions. In addition, net income attributable to a non-controlling interest is to be included in net income and, upon a loss of control, the interest sold, as well as any interest retained, is to be recorded at fair value with any gain or loss recognized in net income. Adoption of the new guidance did not have a material impact on our financial statements. In July, 2009, we adopted the authoritative guidance on fair value measurement for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Adoption of the new guidance did not have a material impact on our financial statements. We evaluated events occurring between the end of our fiscal quarter, December 31, 2009 and February 16, 2010 when the financial statements were issued. Recent Accounting Guidance Not Yet Adopted In October 2009, the FASB issued authoritative guidance on revenue recognition that will become effective for us beginning July 1, 2010, with earlier adoption permitted. Under the new guidance on arrangements that include software elements, tangible products that have software components that are essential to the functionality of the tangible product will no longer be within the scope of the software revenue recognition guidance, and software-enabled products will now be subject to other relevant revenue recognition guidance. Additionally, the FASB issued authoritative guidance on revenue arrangements with multiple deliverables that are outside the scope of the software revenue recognition guidance. Under the new guidance, when vendor specific objective evidence or third party evidence for deliverables in an arrangement cannot be determined, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration using the relative selling price method. The new guidance includes new disclosure requirements on how the application of the relative selling price method affects the timing and amount of revenue recognition. We believe adoption of this new guidance will not have a material impact on our financial statements. In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for us beginning July 1, 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. We believe adoption of this new guidance will not have a material impact on our financial statements. In April 2009, the FASB issued guidance on interim disclosures about fair value of financial instruments, which requires quarterly disclosure of information about the fair value of financial instruments. The guidance was adopted effective for the first fiscal quarter of 2010 and did not have a material impact on our financial statements.

Note 3	Receivables The Company had Goods and Services Tax receivable of $1,162 at December 31, 2009 (March 31, 2009 $2,346) from the Government of Canada.

F-9

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 4	Mineral Properties Canada Sydney Creek – By a placer lease acquisition agreement (“Agreement”) dated March 15, 2006, the Company acquired from an unrelated party (the “Vendor”) a 100% undivided right, title and interest in and to a lease of the mineral property, known as "Sydney Creek Property", located in the Whitehorse Mining District of the Yukon Territory, Canada. The purchase price was paid by the issuance of 120,000 post-forward split common shares of the Company’s capital stock for a total cost of $300.
		United States Elkhorn property On January 31, 2008, the Company entered a Mineral Property Acquisition Agreement (“Agreement”) with Major Ventures LLC, Elk Creek Corporation and Balbach Colorado Inc. (collectively, the “Vendors”). The Vendors granted to the Company the sole and exclusive option to acquire a 100% undivided legal, beneficial and registerable interest in and to the following unencumbered mineral property interests (collectively, the “Property”): (i) the Elkhorn property located in Beaverhead County, Montana, and comprising approximately 1,777 acres; (ii) the Ramey Creek property located in Custer County, Idaho, and comprising approximately 393 acres; and (iii) the Roaring River property located in Elmore County, Idaho, and comprising approximately 2,707 acres; In order to exercise its Option, the Company was obligated to provide the following consideration to the Vendors in the following manner: Affiliate Share Transfer: the Company caused a founding shareholder of the Company to sell an aggregate of 2,000,000 post-forward split common shares to the Vendors at a purchase price of U.S. $0.001 per share; and Maintenance Payments: the Company will pay to the Vendors behalf, all underlying option, regulatory and governmental payments and assessment work required to keep the mineral property interests in good standing.

During the year ended March 31, 2008, the Company paid $85,000 to Major Ventures LLC, of which $4,900 for geologists’ fees spent on the acquired properties were recorded as acquisition of mineral properties, and the remaining was administration expenditures which were expensed as exploration costs.

During the year ended March 31, 2008, $19,244 for legal fees related to the acquisition of the properties were capitalized as acquisition costs of mineral properties.

On March 27, 2008 the Company completed the acquisition requirements under the Agreement and exercised the Option thereby acquiring an undivided 100% legal, beneficial and registerable interest in and to the mineral property interests comprising the Property.

As of August 31, 2008, the Company decided to allow the leases on the Roaring River and Ramey Creek properties to lapse without renewal. The Company has impaired lapsed mineral properties by $15,347 during the year ended March 31, 2009 on the basis of net acres abandoned.

Effective on June 30, 2009, the Company decided to allow the 36 of the 86 total claims comprising the Elkhorn property to lapse without renewal. The Company has impaired lapsed mineral properties by $3,580 during the three months ended June 30, 2009 on the basis of net acres abandoned.

F-10

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 5

Capital Stock

On August 8, 2007, the Company affected a 20:1 forward stock split of the authorized, issued and outstanding common stock. As a result, the authorized share capital increased from 100,000,000 shares of common stock with a par value of $0.001 to 2,000,000,000 shares of common stock with a par value of $0.001. All share amounts have been retroactively adjusted for all periods presented.

At December 31, 2009, there were no outstanding stock options.

Stock Purchase Warrants

Warrant transactions and the number of warrants outstanding at March 31, 2009 and December 31, 2009 are summarized as follows:

	Year ended March 31, 2009						Nine Months ended December 31, 2009
	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Life in Years		Number of Shares			Weighted Average Exercise Price per Share		Weighted Average Life in Years
Balance, Beginning		1,480,000	$	0.35		1.83		1,880,000		$	0.35		0.79
Granted in the period		400,000		0.35		2.00		-			-		-
Expired in the period		-		-		-		(1,000,000	)		0.35		-
Balance, End		1,880,000	$	0.35		0.79		880,000		$	0.35		0.22

Note 6

Related Party Transactions

As at December 31, 2009 the Company owed $12,017 (March 31, 2009 - $12,017) for expense reimbursements to a company with a director in common.

As at December 31, 2009, the Company owed $71,000 (March 31, 2009 - $26,000) in consulting fees for mineral property exploration services rendered and $Nil (March 31, 2009 - $1,556) in related expenses to a director and officer of the Company. The Company paid this director and officer an aggregate of $1,556 for reimbursed expenses during the nine months ended December 31, 2009.

On December 3, 2008, the Company issued a promissory note, to a company that is a significant shareholder, due June 4, 2009 in the amount of $75,000, unsecured with annual interest of 8% (“First Note”). The First Note was not repaid on its due date. The First Note is due on demand and continues to accrue interest at its originally stated terms. On June 16, 2009, the Company issued a promissory note in the amount of $40,000 with this same shareholder (“Second Note”). The Second Note is due on December 16, 2009, is unsecured, and bears interest at 8% per annum. Interest of $1,956 was accrued during the period ended March 31, 2009 on the First Note and a further $5,164 accrued during the nine months ended December 31, 2009 on both notes.

The above transactions have been recorded at exchange amount which is the amount of consideration established and agreed to by the related parties.

See Note 7

F-11

Silica Resources Corporation

(An Exploration Stage Company)

Notes to the Financial Statements

December 31, 2009

(unaudited)

Note 7	Promissory Notes On May 27, 2008, the Company signed a promissory note, with a company that is a significant shareholder, due on August 26, 2008 in the amount of $50,000, unsecured with annual interest of 7%. Interest of $2,886 was accrued during the period ended March 31, 2009 and a further $2,838 during the nine months ended December 31, 2009. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms. On September 12, 2008, the Company issued a promissory note in the amount of $20,000, unsecured, due and payable with accumulated interest within 190 days and bears interest of 8% per annum. Interest of $881 was accrued during the period ended March 31, 2009 and a further $1,284 during the nine months ended December 31, 2009. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms. On November 20, 2008, the Company issued a promissory note in the amount of $4,000, unsecured, due and payable with accumulated interest within 6 months and bears interest of 10% per annum. Interest of $145 was accrued during the year ended March 31, 2009 and a further $244 during the nine months ended December 31, 2009. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms. On June 3, 2009, the Company issued a promissory note in the amount of $1,000 with this same shareholder; the Company has incurred $51 in accrued interest during the nine months ended December 31, 2009. The note is due on June 3, 2010, is unsecured, and bears interest at 10% per annum. On September 18, 2009, the Company issued another unsecured promissory note with this same shareholder in the amount of $4,100, due and payable with accumulated interest in one year and bears interest of 10% per annum; the Company has incurred $118 in accrued interest during the nine months ended December 31, 2009. On December 3, 2008, the Company issued a promissory note, to a company that is a significant shareholder, due June 4, 2009 in the amount of $75,000, unsecured with annual interest of 8% (“First Note”). The First Note was not repaid on its due date. The First Note is due on demand and continues to accrue interest at its originally stated terms. On June 16, 2009, the Company issued a promissory note in the amount of $40,000 with this same shareholder (“Second Note”). The Second Note is due on December 16, 2009, is unsecured, and bears interest at 8% per annum. Interest of $1,956 was accrued during the period ended March 31, 2009 on the First Note and a further $5,164 accrued during the nine months ended December 31, 2009 on both notes. The note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms. The Second Note was not repaid on its due date. The note is due on demand and continues to accrue interest at its originally stated terms.

F-12

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

GENERAL

Silica Resources Corporation was incorporated under the laws of the State of Nevada in October 7, 2005. We are engaged in the business of acquisition, exploration and development of mineral properties in the United States and Canada. We also plan to locate and acquire other precious or industrial mineral properties. As of the date of this Annual Report, and subject to the receipt of adequate funding, our main focus is the identification, acquisition, exploration and development of mineral properties, which has resulted in the acquisition of our interest in the properties discussed below.

Our shares of common stock trade on the Over-the-Counter Bulletin Board under the symbol “SRCN:BB”.

Please note that throughout this Annual Report, and unless otherwise noted, the words "we", "our", "us”, "the Company", “the Corporation”, “Silica”, or "Silica Resources Corporation" refers to Silica Resources Corporation.

BUSINESS OPERATIONS

We are a resource exploration company currently engaged in the exploration and development of properties that we believe may contain valuable minerals for the purpose of discovering commercially viable mineral deposits. Our foundational group of assets consists of the properties located in Montana as more fully described below. We entered into an agreement with Major Ventures LLC, Elk Creek Corporation and Balbach Colorado Inc. (collectively, the "Vendors") to earn a 100% interest in the properties. Since we are an exploration stage company, there is no assurance that a commercially viable mineral deposit exists on the property covered by the prospect lease, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. We have no known reserves of any type of mineral. To date, we have not discovered an economically viable mineral deposit on the property, and there is no assurance that we will discover one.

MINERAL PROPERTIES

The location of our mineral properties is summarized as follows:

Location	Approximate Acreage
Elkhorn Property, Beaverhead County, Montana	920 acres

Sydney Creek Property, Yukon Territory, Canada	247 acres

Mineral Property Acquisition Agreement/Elkhorn Property

On January 31, 2008, we entered into a mineral property acquisition agreement (the "Agreement"), with Major Ventures LLC, Elk Creek Corporation and Balbach Colorado Inc. (collectively, the "Vendors"). Effective March 27, 2008, we completed the terms and conditions of the Agreement.

In accordance with the terms and conditions of the Agreement, the Vendors granted to us the sole and exclusive option (the "Option") to acquire a 100% undivided legal, beneficial and registerable interest in and to the following unencumbered mineral property interests (collectively, the "Property"): (i) the Elkhorn property located in Beaverhead County, Montana, and comprising approximately 1,777 acres; (ii) the Ramey Creek property located in Custer County, Idaho, and comprising approximately 393 acres; and (iii) the Roaring River property located in Elmore County, Idaho, and comprising approximately 2,707 acres.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

MINERAL PROPERTIES - continued

In order to exercise the Option, we were obligated to provide the following consideration to the Vendors in the following manner: (i) we caused one of our certain existing founding shareholders to sell an aggregate of 2,000,000 of our post-forward stock split restricted and controlled and issued and outstanding common shares from the holdings of such shareholder (each an "Affiliate Share") to the order and direction of the Vendors at a purchase price of U.S. $0.0001 per Affiliate Share, as follows: (a) 1,000,000 Affiliates Shares to Balbach Colorado Inc, (b) 600,000 Affiliate Shares to Elk Creek Corporation, and (c) 400,000 Affiliate Shares to Major Ventures LLC; and (ii) we have paid to or on the Vendors’ behalf, all underlying option, regulatory and governmental payments and assessment work required to keep the mineral property interests comprising the Property and any underlying option agreements respecting any of the mineral property interests comprising the Property in good standing.

On March 27, 2008, we completed the acquisition requirements under the Agreement and exercised the Option and thereby acquired an undivided 100% legal, beneficial and registerable interest in and to the mineral property interests comprising the Property. During fiscal year ended March 31, 2008, we paid an aggregate of $85,000 to the Vendors, of which $4,900 for geologists’ fees spent were recorded as acquisition of mineral property, and the remaining was administration expenditures which were expenses as exploration and development in mineral property costs.

As of August 31, 2008, we have decided to allow the leases on the Roaring River and Ramey Creek properties to lapse without renewal.

The lease on the Elkhorn property remains in good standing and is paid through August 2009. As of the date of this Quarterly Report, we have decided to renew fifty (50) of the eighty-six (86) total claims based on identification of exploratory and geological work indicating core claims. Management has analyzed the market conditions and rising price for molybdenum and believes that such factors increase the potential value of these claims as an exploration target. We have decided to allow the other thirty-six (36) of the eighty-six (86) claims comprising the property to lapse without renewal. We have thus impaired lapsed mineral properties recorded of $15,347 during fiscal year ended March 31, 2009 on the basis of net acres abandoned.

Placer Lease Acquisition Agreement/Sydney Creek

On March 15, 2006, we entered into a Placer Lease Acquisition Agreement with Karl Gruber (the “Prospect Lease”) whereby we purchased a 100% interest in an unpatented lease to prospect a five mile portion of Sidney Creek located approximately one mile downstream of Iron Creek, in the Whitehorse Mining Division of the Yukon Territory, Canada. The purchase price was paid by the issuance of 120,000 post-Forward Stock Split shares of our common stock for a total cost of $300. The term of the lease is one-year renewable for two additional one-year periods if we incur the qualifying property expenditures required under the Prospect Lease. Further, the claims expired and certain of the claims of interest have been re-staked.

PROPOSED FUTURE BUSINESS OPERATIONS

Our current strategy is to complete further acquisition of additional mineral opportunities which fall within the criteria of providing a geological basis for development of mining initiatives that can provide revenue potential and production cash flows and create expanding reserves. Our emphasis during the past fiscal year was on exploration objectives targeting molybdenum. We are also considering further options for acquisitions and development mandates that may or may not be molybdenum related. We anticipate that our ongoing efforts, subject to adequate funding being available, will continue to be focused on successfully concluding negotiations for additional interests in mineral properties. We plan to build a strategic base of exploration properties with mineral production capability.

Our ability to continue to complete planned exploration activities and expand acquisitions and explore mining opportunities is dependent on adequate capital resources being available and further sources of debt and equity being obtained. See “Plan of Operation”.

RESULTS OF OPERATION

We are an exploration stage company and have not generated any revenue to date. We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

The summarized financial data set forth in the table below is derived from and should be read in conjunction with our unaudited financial statements for the nine month period ended December 31, 2009 and December 31, 2008, including the notes to those financial statements which are included in this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

RESULTS OF OPERATION - continued

The following table sets forth selected financial information for the periods indicated.

	Nine Month Period Ended December 31,						For the Period from October 7, 2005 (inception) to December 31,
	2009			2008			2009
Expenses
Depreciation	$	110		$	190		$	570
Interest		9,922			2,986			15,921
Consulting		66,741			175,255			320,992
Legal		12,970			29,633			153,661
Management fees		-0-			-0-			15,000
Mineral property exploration		7,290			157,464			307,360
Office and administration		36,032			57,414			132,480
Professional services		26,356			19,040			90,178
Loss from operation	$	(159,421	)	$	(441,982	)	$	(1,036,162	)
Impairment of mineral properties		(3,580)			(15,347)			(18,927)
Settlement of debt		-0-			8,593			8,593
Net Loss	$	(163,001	)	$	(448,736	)	$	(1,046,496	)

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Nine Month Period Ended December 31, 2009 Compared to Nine Month Period Ended December 31, 2008.

Our net loss for the nine month period ended December 31, 2009 was ($163,001) compared to a net loss of ($448,736) during the nine month period ended December 31, 2008 (a decrease of $285,735). During the nine month periods ended December 31, 2009 and December 31, 2008, we did not generate any revenue.

During the nine month period ended December 31, 2009, we incurred expenses of $159,421 compared to $441,982 incurred during the nine month period ended December 31, 2008 (a decrease of $282,561). This resulted in a loss from operations during the nine month period ended December 31, 2009 of ($163,001) as compared with the loss from operations during the nine month period ended December 31, 2008 of ($448,736). These expenses incurred during the nine month period ended December 31, 2009 consisted of: (i) depreciation of $110 (2008: $190); (ii) interest of $9,922 (2008: $2,986); (iii) consulting of $66,741 (2008: $175,255); (iv) legal of $12,970 (2008: $29,633); (v) mineral property exploration of $7,290 (2008: $157,464); (vi) office and administration of $36,032 (2008: $57,414); and (viii) professional services of $26,356 (2008:$19,040).

Expenses incurred during the nine month period ended December 31, 2009 compared to the nine month period ended December 31, 2008 decreased primarily due to the decrease in mineral property exploration costs, consulting fees, legal and office and administration relating to the decreased scale and scope of business operations of our interests. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

This resulted in a loss from operations of ($159,421) incurred during the nine month period ended December 31, 2009 compared to a loss from operations of ($441,982) incurred during the nine month period ended December 31, 2008.

Other items recorded during the nine month period ended December 31, 2009 were impairment of mineral properties in the amount of ($3,580) compared to ($15,347) incurred as impairment of mineral properties during the nine month period ended December 31, 2008. Settlement of debt was recorded in the amount of $-0- during the nine month period ended December 31, 2009 compared to $8,593 during the nine month period ended December 31, 2008.

This resulted in a new loss for the nine month period ended December 31, 2009 of ($163,001) compared to a net loss of the nine month period ended December 31, 2008 of ($448,736).

The weighted average number of shares outstanding was 72,755,800 for the nine month period ended December 31, 2009 compared to 80,109,918 for the nine month period ended December 31, 2008.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

LIQUIDITY AND CAPITAL RESOURCES

Nine Month Period Ended December 31, 2009

As at the nine month period ended December 31, 2009, our current assets were $1,763 and our current liabilities were $486,216, which resulted in a working capital deficit of $484,453. As at the nine month period ended December 31, 2009, current assets were comprised of $601 in cash and $1,162 in receivables. As at the nine month period ended December 31, 2009, current liabilities were comprised of: (i) $192,864 in accounts payable and accrued liabilities; (ii) $210,335 in promissory notes; and (iii) $83,017 due to related parties.

As at the nine month period ended December 31, 2009, our total assets were $7,638 comprised of: (i) current assets of $1,763; (ii) valuation of mining properties of $5,217; and (iii) equipment, net of depreciation, of $658. The decrease in total assets during the nine month period ended December 31, 2009 from fiscal year ended March 31, 2009 was primarily due to the decrease in cash and receivables and in valuation of mineral property.

As at the nine month period ended December 31, 2009, our total liabilities were $486,216 comprised entirely of current liabilities. The increase in liabilities during the nine month period ended December 31, 2009 from fiscal year ended March 31, 2009 was primarily due to the increase in accounts payable, amounts due to related parties and promissory notes. See “Material Commitments.”

Stockholders’ deficit increased from ($315,577) for fiscal year ended March 31, 2009 to ($478,578) for the nine month period ended December 31, 2009.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the nine month period ended December 31, 2009, net cash flows used in operating activities was ($90,752) consisting primarily of a net loss of ($163,001). For the nine month period ended December 31, 2008, net cash flows used in operating activities was ($392,583) consisting primarily of a net loss of ($457,330). During the nine month period ended December 31, 2009, net cash flows used in operating activities was adjusted by items not requiring the use of cash for depreciation in the amount of $110 (2008: $190), interest accrued in the amount of $9,717 (2008: $2,986), and impairment of mineral properties in the amount of $3,580 (2008: $15,348). Net cash flows used in operating activities was further changed by $1,274 (2008: ($2,533)) for receivables and $57,568 (2008: $48,756) for accounts payable and accrued liabilities.

Cash Flows from Investing Activities

For the nine month periods ended December 31, 2009 and December 31, 2008, net cash flows used in investing activities was $-0-.

Cash Flows from Financing Activities

We have financed our operations primarily from either debt related advances or the issuance of equity and other debt instruments. For the nine month period ended December 31, 2009, net cash flows provided from financing activities was $89,194 compared to $249,000 for the nine month period ended December 31, 2008. Cash flows from financing activities for the nine month period ended December 31, 2009 consisted of: (i) $-0- (2008: $100,000) in proceeds from sale of common stock; (ii) $43,444 (2008: $4,000) in related party amounts; and (iii) $45,750 in promissory notes (2008: $145,000).

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities and debt instruments. Our working capital requirements are expected to increase in line with the growth of our business.

PLAN OF OPERATION AND FUNDING

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) mineral property exploration; (ii) possible exploratory drilling initiatives on current and future properties; and (iii) future property acquisitions. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict or negate our business operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

PLAN OF OPERATION AND FUNDING - continued

Plan of Operations

We will have to raise additional funding in order to conduct any work programs and budgeted expenditures relating to the Elkhorn property as well as ongoing general and administrative expenses and those required costs related to the Property relating to the Agreement.

Advances and further private placements are expected to be adequate to fund our operations over the next six months. However, we will require financing to enable us to complete our exploration programs, and to pay for our general and administrative expenses for the next twelve months.

During the twelve month period following the date of this Quarterly Report, we anticipate that we will not generate any revenue. Accordingly, we anticipate that we will be required to obtain financing in order to complete our plan of operations during the next twelve months. We believe that debt financing will not be an alternative for us 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 our plan of operations. In the absence of such financing, we will not be able to continue exploration of our exploration prospects and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration programs, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our prospects. If we do not continue to obtain financing, we will be forced to abandon our exploration prospects and our plan of operations will fail.

We may consider entering into a joint venture arrangement to provide the required funding to develop our current or future properties under consideration by management. We have undertaken preliminary efforts to locate a joint venture participant for our Elkhorn property. Even if we determined to pursue a joint venture participant, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund exploration of our prospect claims. If we entered into a joint venture arrangement, we would likely have to assign a percentage of our interest in our prospect lease to the joint venture participant.

MATERIAL COMMITMENTS

As of the date of this Quarterly Report, and other than our obligations to be incurred under the Agreement and the Assignment Agreement, we do not have any material commitments other than as described below.

Promissory Notes

On May 27, 2008, we issued a promissory in the principal amount of $50,000 due on August 26, 2008. The note is unsecured and bears interest at the rate of 7%. The promissory note was not paid on August 26, 2008. Therefore, the note continues to accrue interest at the rate of 7% per annum. Interest of $2,886 was accrued during fiscal year ended March 31, 2009 and a further $2,838 accrued during the nine-month period ended December 31, 2009.

On September 12, 2008, we issued a promissory note in the principal amount of $20,000 due within 190 days from the date of issuance. The promissory note is unsecured and bears interest at the rate of 8% per annum. The promissory note was not paid on March 21, 2009. Therefore, the note continues to accrue interest at the rate of 8% per annum. Interest of $881 was accrued during fiscal year ended March 31, 2009 and a further $1,284 accrued during the nine month period ended December 31, 2009.

On November 20, 2008, we issued a promissory note in the principal amount of $4,000 due within six months from the date of issuance. The promissory note is unsecured and bears interest at the rate of 10% per annum. On June 3, 2009, we issued an additional promissory note in the amount of $1,000 with the same shareholder. The note is due on June 3, 2010, is unsecured and bears interest at 10% per annum. On September 18, 2009, we issued another unsecured promissory note with this same shareholder in the amount of $4,100 due and payable with accumulated interest in one year and bearing interest at the rate of 10% per annum. Interest of $145 was accrued on the $4,000 note during fiscal year ended March 31, 2009 and a further $244 accrued during the nine month period ended December 31, 2009. Interest of $118 was accrued on the $1,000 note during the nine month period ended December 31, 2009.

On December 3, 2008, we issued a promissory note to one of our significant shareholders in the principal amount of $75,000 due on June 4, 2009(`First Note`). The First note is unsecured with interest at the annual rate of 8%. The First note was not repaid on its due date. The First note is due on demand and continues to accrue interest at its originally stated terms. On June 16, 2009 we issued an additional promissory note in the amount of $40,000 with the same shareholder (`Second Note`). The Second note is due on December 16, 2009, is unsecured and bears interest at 8% per annum. Interest of $1,956 was accrued on the $75,000 note during fiscal year ended March 31, 2009 and a further $5,164 was accrued during the nine month period ended December 31, 2009 on both the First note and the Second notes.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any significant equipment during the next twelve months.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION - continued

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any 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 are material to investors.

GOING CONCERN

The independent auditors' report accompanying our March 31, 2009 and March 31, 2008 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates.

Exchange Rate

Our reporting currency is United States Dollars (“USD”). In the event we acquire any properties outside of the United States, the fluctuation of exchange rates may have positive or negative impacts on our results of operations. However, since all of our properties are currently located within the United States, any potential revenue and expenses will be denominated in U.S. Dollar, and the net income effect of appreciation and devaluation of the currency against the US Dollar would be limited to our costs of acquisition of property.

Interest Rate

Interest rates in the United States are generally controlled. Any potential future loans will relate mainly to acquisition of properties and will be mainly short-term. However our debt may be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could have a significant impact on our operating and financing activities. We have not entered into derivative contracts to hedge existing risks for speculative purposes.

ITEM 4 . CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2009, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer and our principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (also our principal executive officer and chief financial officer also our principal financial and accounting officer) concluded that our disclosure controls and procedures were effective in providing reasonable assurance in the reliability of our financial reports as of the end of the period covered by this quarterly report. Effectiveness of disclosure controls was primarily a function of our current scale and scope of operations which are relatively non-complex with a limited volume of transactions and capital resources.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal controls over financial reporting that occurred during the nine month period ended December 31, 2009 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

ITEM 4 . CONTROLS AND PROCEDURES - continued

AUDIT COMMITTEE

Our Board of Directors has not established an audit committee. The respective role of an audit committee has been conducted by our Board of Directors. We are contemplating establishment of an audit committee during fiscal year 2010. When established, the audit committee's primary function will be to provide advice with respect our financial matters and to assist our Board of Directors in fulfilling its oversight responsibilities regarding finance, accounting, and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as its compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide an open avenue of communication among the independent accountants, management and our Board of Directors.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

No report required.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

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

No report required.

ITEM 5. OTHER INFORMATION

No report required.

ITEM 6. EXHIBITS

Exhibits:

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

31.2

Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

32.1

Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SILICA RESOURCES CORPORATION

Dated: February 15, 2010	By:	/s/ Gerry Jardine
		Gerry Jardine, President and
		Chief Executive Officer

Dated: February 15, 2010	By:	/s/ Gerry Jardine
		Gerry Jardine, Chief Financial Officer

SILICA RESOURCES CORP - FORM 10-Q - February 16, 2010

Attached files

SILICA RESOURCES CORP Reports