TRILLIANT EXPLORATION CORP - FORM 10-K/A

Attached files

file	filename
EX-31.2 - CERTIFICATION OF CFO - TRILLIANT EXPLORATION CORP	ex31-2.htm
EX-31.1 - CERTIFICATION OF CEO - TRILLIANT EXPLORATION CORP	ex31-1.htm
EX-32.1 - CERTIFICATIONOF CEO &AMP; CFO - TRILLIANT EXPLORATION CORP	ex32-1.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

Mark One

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

[ ] 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. 333-138332

TRILLIANT EXPLORATION CORPORATION

________________________________________________________________________________

(Name of small business issuer in its charter)

NEVADA 20-0936313

______ __________

(State or other jurisdiction of incorporation (I.R.S. Employer

or organization) Identification No.)

18851 NE 29th AVENUE

SUITE 306

AVENTURA, FLORIDA 33180

(786) 323-1652

______________

(Issuer's telephone number)

Securities registered pursuant to Section Name of each exchange on which

12(b) of the Act: registered:

NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $0.001

(Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

Indicate by check mark if the registration is a well-known seasoned issuer as defined in Rule 403 of the Securities Act. [ ] Yes [ X ] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ X ] Yes [ ] No

Indicate by check mark whether the registrant has (i) 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 (ii) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this Form 10-K/A. [X]

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

Large accelerated filed [ ] Accelerated filer [ ]

Non-accelerated filer [ ] 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 [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business of the registrant’s most recently completed second fiscal quarter: June 30, 2009 $

ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

N/A

Check 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[ ] No[ ]

APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

Class Outstanding as of April 5, 2010 Common Stock, $0.001

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-K/A (e.g., Part I, Part II, etc.) into which the document is incorporated: (i) any annual report to security holders; (ii) any proxy or information statement; and (iii) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (the "Securities Act"). The listed documents should be clearly described for identification purposes (e.g. annual reports to security holders for fiscal year ended December 24, 1990).

N/A

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

TRILLIANT EXPLORATION CORPORATION

Form 10-K/A

INDEX

	Page

Item 1. Business	6

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments	23

Item 2. Properties	23

Item 3. Legal Proceedings	24

Item 4. Removed and Reserved	24

Item 5. Market for Registrant's Common Equity, Related	24
Stockholder Matters and Issuer Purchases of Equity Securities

Item 6. Selected Financial Data	29

Item 7. Management's Discussion and Analysis of Financial Condition	30
and Results of Operation

Item 7A. Quantity and Qualitative Disclosure About Market Risks

Item 8. Financial Statements and Supplemental Data	36

Item 9. Changes in and Disagreements With Accountants on Accounting	65
and Financial Disclosure

Item 9A. Controls and Procedures	65

Item 9B. Other Information	66

Item 10. Directors, Executive Officers and Corporate Governance	66

Item 11. Executive Compensation	68

Item 12. Security Ownership of Certain Beneficial Owners and	71
Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions and	72
Director Independence

Item 14. Principal Accountant Fees and Services	76

Item 15. Exhibits and Financial Statement Schedules	77

Except for statements of historical fact, certain information contained herein constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are usually identified by our use of certain terminology, including “will,” “believes,” “may,” “expects,” “should,” “seeks,” “anticipates,” or “intends,” or by discussions of strategy or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Such factors include, among others, our history of operating losses and uncertainty of future profitability; our lack of working capital and uncertainty regarding our ability to continue as a going concern; uncertainty of access to additional capital; risks inherent in mineral exploration; environmental liability claims and insurance; dependence on consultants and third parties as well as those factors discussed in the sections entitled “Risk Factors,” “Business,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If one or more of these risks or uncertainties materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated, or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements. We do not assume responsibility for the accuracy and completeness of these statements.

The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. The Company is an exploration stage company and its properties have no known body of ore. U.S. investors are cautioned not to assume that the Company has any mineralization that is economically or legally mineable.

All references in this Annual Report on Form 10-K to the terms “we,” “our,” “us,” “TTXP,” and the “Company” refer to Trilliant Exploration Corporation.

AVAILABLE INFORMATION

Trilliant Exploration Corporation files annual, quarterly, current reports, proxy statements, and other information with the Securities and Exchange Commission (the "Commission"). You may read and copy documents referred to in this Annual Report on Form 10-K that have been filed with the Commission at the Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission filings by going to the Commission's website at http://www.sec.gov.

PART I

ITEM 1. BUSINESS

BUSINESS DEVELOPMENT

Trilliant Exploration Corporation was incorporated under the laws of the State of Nevada on December 29, 2003 under the name Project Development Pacific Inc. We were previously engaged in the business of assisting Canadian citizens to access health care services from private providers. On November 26, 2007, we changed our name to Trialliant Exploration Corporation with a business purpose to acquire and develop mineral properties. During 2007, we began acquiring interests in mining properties. As of the date of this Annual Report, we are engaged in the evaluation, acquisition, exploration, and advancement of mining projects.

On October 15, 2008, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Compania Minera Del Pacifico S.A., an Ecuadorian corporation (“Del Pacifico”) for the purchase of the Muluncay Project. Subsequently, on March 30, 2009, we entered into a share transfer agreement (the “Share Transfer Agreement”) with Del Pacifico and its wholly owned subsidiary, Compania Muluncaygold Corp. S.A. (“Muluncay”). The Share Transfer Agreement superseded in its entirety the terms of the Asset Purchase Agreement.

In accordance with the terms and provisions of the Share Transfer Agreement, we acquired 100% of the total issued and outstanding shares of common stock of Muluncay and its assets, which includes certain customer receivables, foreign tax credit, equipment, fixtures, improvements, all contracts, operations and mining rights and interests in certain mining properties located in Muluncay, Ecuador (the “Controlling Assets”). The total purchase price for the shares of common stock and Controlling Assets was a $3,600,000 contingent note payable, which was to be paid in installments and in accordance with a promissory note in the principal amount of $3,600,000 between us and Muluncay (the “Muluncay Promissory Note”), which bears interest at 4.5% per annum. Repayment of the Muluncay Promissory Note was to begin only upon Muluncay reaching production of 400 tons per day in their operation using 26 day average in a 30-day calendar month (the “Minimum Operations”). Beginning thirty days from the date of first reaching Minimum Operations, we were to make four quarterly payments to Pacifico of $200,000 each. After making the first four quarterly payments, we were to continue to make quarterly payments in the minimum amount of $300,000 until all principal and interest in fully paid. As additional consideration for the purchase of Muluncay, we released Del Pacifico from a debt due and owing to us in the principal amount of $1,195,000 plus interest.

Effective December 31, 2009, Del Pacifico terminated the agreement due to our inability to provide the $1,800,000 investment pursuant to the contract terms. Thus, we determined to discontinue operations through our Muluncay subsidiary. We were released from all obligations and released all claims on the Controlling Assets primarily because we had incurred significant operating losses since acquisition and we could not attract operating capital to meet contractual obligations since the acquisition of Muluncay. See “ – Current Business Operations.”

Subsidiaries

Muluncaygold

Muluncaygold was originally incorporated in Machala, Ecuador in February of 2007 as Compania Minera Ecuadorgold Corp S.A. In August of 2008, it changed its name to Compania Minera Muluncaygold Corp S.A. In accordance with the terms and provisions of the Share Transfer Agreement, we acquired 100% of the total issued and outstanding shares of common stock of Muluncay, including the Controlling Assets, for an aggregate purchase price of $3,600,000. As a result of the Share Transfer Agreement, Muluncay became our wholly-owned subsidiary. During fiscal year we conducted all of our mining operations through Muluncay. However, effective December 31, 2009, Muluncay is no longer our subsidiary, as the Share Transfer Agreement was terminated due to our inability to meet contractual obligations.

Trilliant Diamonds Limited

On July 1, 2009, we obtained a one hundred percent (100%) undivided interest in Trilliant Diamonds Limited (“Trilliant Diamonds”), a company formed under the laws of England and Wales. Trilliant Diamonds was formed on June 30, 2009 for the purpose of conducting our diamond exploration projects. On July 1, 2009, Trilliant Diamonds entered into a subscription agreement (the “Global Diamond Subscription Agreement”) with Global Diamond Resources PLC “Global Diamond”). In accordance with the terms and provisions of the Global Diamond Subscription Agreement, Trilliant Diamonds purchased 10,000,000 common shares of the capital stock of Global Diamond in consideration for payment of £0.15 per share for an aggregate purchase price of £1,500,000 Great Britain Pounds (GBP). After the acquisition by Trilliant Diamonds of the 10,000,000 shares of stock of Global Diamond, Triliiant Diamond held ten percent (10%) of the total outstanding capital shares of Global Diamond. Simultaneously, on July 1, 2009, we entered into a convertible debenture and loan note certificate (the “Benbrack Convertible Note”) with Benbrack Charkit Limited (“Benbrack”), pursuant to which we borrowed from Benbrack the principal amount of £1,500,000 GBP at an annual interest rate of 12%. The proceeds from the Benbrack Convertible Note were used for the acquisition by Trilliant Diamonds of the 10,000,000 common shares of Global Diamond. See “Material Commitment”).

Compania Minera Ayapambagold S.A.

On July 1, 2009, we entered into a stock purchase agreement (the “Ayapambagold Stock Purchase Agreement”) with William Magers (“Magers”). In accordance with the terms and provisions of the Ayapambagold Stock Purchase Agreement, we purchased 799 of the 800 shares of outstanding capital stock of Compania Minera Ayapambagold S.A. (“Ayapambagold”) from Magers at a purchase price of $799. Ayapambagold is a company organized and existing under the laws of Ecuador and has no assets or operations. We acquired Ayapambagold to use as a holding company in Ecuador to facilitate future potential acquisitions.

Bozel S.A.

On September 8, 2009, we entered into a purchase agreement (the “Wellgate Agreement”) with Wellgate International Limited, a company registered under the laws of the British Virgin Islands (“Wellgate”), regarding acquisition by us of all of the shares of stock held of record by Wellgate of Bozel S.A. (“Bozel”). Bozel is a company organized under the laws of Luxembourg. In accordance with the terms and provisions of the Wellgate Agreement, we were to purchase up to 100% of the outstanding capital stock of Bozel in consideration for payment of $80,000,000 of our common stock. It was disclosed in the Wellgate Agreement that Wellgate was the subject of a judgment in the amount of $8,572,995 (the “Wellgate Judgment”). In further accordance with the terms and provisions of the Wellgate Agreement, we were to advance to Bozel $20,000,000 for a term of one year at an interest rate not to exceed 14% per annum. Consummation of the Wellgate Agreement was subject to us acquiring not less than 66% of the issued capital stock of Bozel after the exercise of outstanding warrants for Bozel’s common stock and completion of due diligence, including the status of the Wellgate Judgment.

On September 24, 2009, the Eastern Caribbean Supreme Court in the Virgin Islands, acting in the case of Crastvell Trading Limited v. Wellgate International Limited issued an ex parte order temporarily enjoining Wellgate from transferring to us its shares of Bozel. Subsequently, Wellgate filed a response to the injunction with the Eastern Caribbean Supreme Court seeking dissolution of the injunction based upon false and misleading information provided to the Eastern Caribbean Supreme Court and a $65,000,000 counterclaim as well as other substantive and procedural objections.

On December 5, 2009, we terminated the Wellgate Agreement entirely based upon the inability of Wellgate to perform its obligations under the Wellgate Agreement due to the injunction. We did not incur any penalties with regard to termination of the Wellgate Agreement.

Compania Minera Santafemining S.A.

On July 23, 2009, our wholly-owned subsidiary, Ayapambagold, entered into a share purchase agreement (the “Santafemining Share Purchase Agreement”) to acquire the assets and liabilities of Compania Minera Santafemining S.A. (“Santafemining”) for payment of $1,631,844. An initial payment of $600,000 was required at execution of the Santafemining Share Purchase Agreement, which could be used to satisfy any and all claims, liens or encumbrances to title of any shares of assets to be acquired by Ayapambagold. The remainder of the purchase price was payable in three installments of $343,948 due on or before each of the six months, twelve months and eighteen months following the execution date. As of the date of this Annual Report, the transaction has not yet been completed and there is no indication that we will be able to secure the necessary financing and complete the acquisition. Avapambagold has paid an aggregate of $0 to Santafemining.

Santafemining processes rock and sand tailings and has been operating at 80 tons per day since inception in 2007. Its processing facilities are currently being retrofitted to add an additional 70 tons of operating capacity. Santafemining is located approximately one kilometer from our Muluncay operation.

RECENT DEVELOPMENTS

Amendment to Articles of Incorporation

On June 30, 2009, we filed a Certificate of Designation with the Secretary of State of Nevada, whereby 10,200,000 shares of the 200,000,000 authorized shares of preferred stock, $0.001 par value per share, were designated as Series I Preferred Stock, $0.001 par value and having the powers, designations, preferences, limitations, restrictions and relative rights as set forth in the Certificate of Designation of Series I Preferred Stock. The Certificate of Designation was approved by our Board of Directors on June 30, 2009.

On July 1, 2009, pursuant to a unanimous decision of the shareholders of the Series I Preferred Shares, the designation of the preferred shares were amended as follows: “Each share of Series I Preferred Stock will be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of the Corporation’s Common Stock as is determined by dividing (i) the Base Amount by (ii) the lowest volume weighted average price of the securities on the OTCBB, NASDAQ or other exchange or market on which such Common Stock trades in the five preceding days prior to the closing of such transaction (the "Series I Conversion Price").” The amendment to the Designation of Series I Preferred Stock was approved by our Board of Directors on July 1, 2009. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

TRANSFER AGENT

Our transfer agent is Island Stock Transfer, 100 Second Avenue South, Suite 705S, St. Petersburg, Florida 33701.

CURRENT BUSINESS OPERATIONS

We are engaged in the evaluation, acquisition, exploration and advancement of mining projects. Although we were considered to have exited the pre-exploration stage with the Muluncay acquisition, the disposal of Muluncay necessitates that we re-enter the pre-exploration stage effective December 31, 2009. As of the date of this Annual Report, we are devoting substantially all of our efforts to the execution of our business operations. Through fiscal 2009, funding to acquire and explore gold properties and for operational purposes was acquired through private financings.

Muluncay Project

On March 30, 2009, we entered into the Share Transfer Agreement with Del Pacifico and its wholly owned subsidiary, Companda Muluncaygold Corp. S.A. (“Muluncay”). In accordance with the terms and provisions of the Share Transfer Agreement, we acquired 100% of the total issued and outstanding shares of common stock of Muluncay and its Controlling Assets. The total purchase price for the shares of common stock and Controlling Assets was $3,600,000, which was to be paid in installments and in accordance with a promissory note in the principal amount of $3,600,000 between us and Muluncay (the “Muluncay Promissory Note”). Repayment of the Muluncay Promissory Note shall begin only upon Muluncay reaching production of 400 tons per day in their operation using 26 day average in a 30-day calendar month (the “Minimum Operations”). As additional consideration for the purchase of Muluncay, we released Del Pacifico from a debt due and owing to us in the principal amount of $1,195,000 plus interest.

In further accordance with the terms and provisions of the Share Transfer Agreement, we also agreed to transfer to Muluncay an aggregate of $1,800,000 as follows: (i) an initial payment of $800,000 within ninety day of March 30, 2009; and (ii) the balance of $1,000,000 within 180 days of March 30, 2009. On December 4, 2009, we were notified by Del Pacifico that we had been in default of our obligation to provide the $1,800,000 to Muluncay. The Share Transfer Agreement, which transferred control of Muluncay from Del Pacifico to us, required that we invest $1,800,000 in Muluncay within 180 days of the March 30, 2009 effective date of the Share Purchase Agreement. As of the date of this Annual Report, we have transferred approximately $735,000 under the terms and provisions of the Share Purchase Agreement.

As of December 11, 2009, we were in default for the purchase of Muluncay. We received a letter on February 11, 2010 in which Del Pacifico informed us of its intent to enforce its rights under the Share Transfer Agreement and terminated all contractual agreements between us and Del Pacifico effective December 31, 2009. In the interest of our shareholders and lacking financial funds to further pursue contractual agreements with Del Pacifico, we acknowledged the letter from Del Pacifico and released all claims on the Controlling Assets and rights under the terms of the Share Purchase Agreement.

Effective December 31, 2009, we determined to discontinue operations through our Muluncay subsidiary. We were released from all obligations and released all claims on the Controlling Assets primarily because we had incurred significant operating losses since acquisition and we could not attract operating capital to meet contractual obligations since the acquisition of Muluncay. On December 31, 2009, we completed the loss recognition for a total loss of $1,964,636. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

Operations

Mining operations at the Muluncay Project produced 28-30 tons per day. The ore was transported from the mine through one ton rail cars, and was fed into three Chilean Mills, which feed into a cyanidation process and on to an activated carbon system. The ore was then processed into gold granules and melted, netting approximately 95-96% pure gold. The Chilean Mills are cleaned once a week and go through an amalgamation process using Mercury netting on average 150 -180 grams of pure gold weekly. The Muluncay Project had been averaging approximately 4 kilos of gold per month total.

On October 2, 2009, we were notified that an extrajudicial complaint was executed regarding foreclosure of the mortgage on the property comprising our Ecuadorian operations, including the Muluncay gold mine. The letter, which was served Del Pacifico on October 8, 2009, stated that if the over due installments due March 10, 2009, June 10, 2009 and September 11, 2009 were not remitted within 72 hours, the necessary documents to reverse the sale should be executed.

On October 12, 2009, we secured a $210,000 loan by entering into a securities purchase agreement and redeemable debenture (the “$210,000 Loan”) with one of our major stockholders, Trafalgar Capital Specialized Investment Fund (“Trafalgar”). Proceeds of the $210,000 Loan were used to pay the past due mortgage payments. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Description and Location

The Muluncaygold concession lies in the centre of the Portovelo-Zaruma mining camp, which is found in the cantons of Ayapamba and Paccha, Province of El Oro, southern Ecuador. It is centered at Latitude 03º 36’ 30” South and Longitude 79º40’ west. It covers an area of 374 hectares. Muluncaygold assets include all contracts, mining equipment, and operations as follows:

Asociacion de Mineros Autonomos Muluncay area, Code 338, along with an ore reduction and processing plant together with seven mines:

1. MARI JANE (BUENA ESPERANZA)

2. JACETH ETHAN (EL AGUACATE)

3. LA CHONTA Y LOS QUINDE

4. NARANJITO

5. SEÑOR DE LA DIVINA JUSTICIA

6. LAS CAÑAS

7. LOS OSOS

Table 1 – Muluncay Boundary Coordinates

Easting – m		Northing – m
652000		9599400
653100		9599400
7653100		9596800
651600		9596800
651600		9599000
652000		9599000
652000		9599400

The project is situated about 175 kilometers southeast and 60 kilometers east of the major Pacific port cities of Guayaquil and Machala, respectively. It lies on the western slope of the Andes Mountains, part of the Western Cordillera which runs the length of the west coast of North and South America.

Country Dynamics

Although gold has been mined in Ecuador for hundreds of years it is one of the least explored and least mineralogical mapped countries. Ecuador is the only Latin American country without industrial mining operations. In 2008 Ecuador underwent far-reaching mining industry changes wherein 75% of the country’s mining concessions were cancelled, and mining licenses were suspended through January of 2009. The industry changes enable for-profit companies with access to outside capital to consolidate the industry. The newly enacted Ecuador mining law, which is attached to this Current Report on Form 8-K as Exhibit 10.6, include a requirement to process 100 tons/day of material and to increase tailing plant coverage to improve environmental conditions.

Principal Products

In the event we are successful in mining and producing gold, we will generally sell our gold at the prevailing market price during the month in which the gold is delivered to the customer. We will recognize revenue from a sale when the price is determinable, the gold has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably assured.

Gold Uses. Gold has two main categories of use: fabrication and investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins and jewelry.

Gold Supply. The supply of gold consists of a combination of current production from mining and the draw-down of existing stocks of gold held by governments, financial institutions, industrial organizations and private individuals.

Gold Price. The following table presents the annual high, low and average afternoon fixing prices for gold over the past ten years, expressed in US dollars per ounce, on the London Bullion Market.

	Gold Price (USD) on the London Bullion Market
Year	High		Low		Average
1999	$	326	$	253	$	279
2000		313		264		279
2001		293		256		271
2002		349		278		310
2003		416		320		363
2004		454		375		410
2005		536		411		444
2006		725		525		604
2007		841		608		695
2008		1,011		713		872
2009 (Through March 10, 2009)		990		810		902

Source: London Metal Exchange

Employees

As of the date of this Annual Report, we employ five full time equivalents (FTEs) in the United States, and approximately one hundred in Ecuador.

Government Regulation

Mining operations and exploration activities are subject to various national, state, provincial and local laws and regulations which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. Upon acquisition of Muluncaygold, we will have obtained or have pending applications for those licenses, permits or other authorizations required to conduct our exploration and other programs. We believe that we will be in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in the jurisdictions in which we will operate. See “Item 1A. Risk Factors”.

Environmental Regulation

Our gold projects are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, in general, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our operations are in material compliance with applicable laws and regulations.

Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could impact the economics of our planned projects. We estimate that we will not incur material capital expenditures for environmental control facilities during the current fiscal year.

Competition

We compete with other mining companies in connection with the acquisition, exploration, financing and development of gold properties. There is competition for the limited number of gold acquisition and exploration opportunities, some of which is with other companies having substantially greater financial resources than we have. As a result, we may have difficulty acquiring attractive gold projects at reasonable prices. We also compete with other mining companies for mining engineers, geologists and other skilled personnel in the mining industry and for exploration and development equipment.

We believe no single company has sufficient market power to affect the price or supply of gold in the world market.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. The risks described below are all of the material risks that we are currently aware of that are facing our company. Additional risks not presently known to us may also impair our business operations. You could lose all or part of your investment due to any of these risks.

RISKS RELATED TO OUR BUSINESS

We may need additional financing to expand our business plan.

Our business plan calls for substantial investment and cost in connection with the exploration of our mineral properties. While we believe we have sufficient funds to carry out our current plans, unforeseen expenses, an expanded exploration plan or establishing future mining operations could require additional operating capital. We do not currently have any arrangements for additional financing and we can provide no assurance to investors that we will be able to find additional financing if required. Obtaining additional financing would be subject to a number of factors, including market prices for minerals, investor acceptance of our properties, and investor sentiment. These factors may make the timing, amount, terms or conditions of additional financing unfavorable to us. The most likely source of future funds would be through the sale of additional equity capital and loans. Any sale of additional shares will result in dilution to existing stockholders while incurring additional debt will result in encumbrances on our property and future cash flows.

Because there is no assurance when we will generate revenues, we may deplete our cash reserves and not have sufficient outside sources of capital to complete our exploration or mining programs.

To date we have been involved primarily in financing activities, acquisition activities, and limited exploration activities. Before discontinuation of operations, our only anticipated revenue producing properties comprised the Muluncay Project. These revenue producing properties have been virtually exhausted of high grade ore to a depth of 200 meters, and there has been no drilling to test the depth potential of the mining system. Our inability to generate revenues could eventually inhibit our ability to continue in business or achieve our business objectives.

Exploration for natural resources is a speculative venture involving substantial risk. Hazards such as unusual or unexpected geological formations and other conditions often result in unsuccessful exploration efforts. Success in exploration is dependent upon a number of factors including, but not limited to, quality of management, quality and availability of geological expertise and availability of exploration capital. Due to these and other factors, no assurance can be given that our exploration programs will result in the discovery of new mineral reserves or resources.

Gold prices are volatile and there can be no assurance that a profitable market for gold will exist.

The gold mining industry is intensely competitive, and there is no assurance that, even if we discover commercial quantities of gold mineral resources, a profitable market will exist for the sale of those resources. There can be no assurance that gold prices will remain at such levels or be such that we can mine at a profit. Factors beyond our control may affect the marketability of any minerals discovered. Gold prices are subject to volatile changes resulting from a variety of factors including international economic and political trends, expectations of inflation, global and regional supply and demand and consumption patterns, metal stock levels maintained by producers and others, the availability and cost of metal substitutes, currency exchange fluctuations, inflation rates, interest rates, speculative activities and increased production due to improved mining and production methods.

Uncertainty involved in mining.

Mining involves various types of risks and hazards, including environmental hazards, unusual or unexpected geological operating conditions such as rock bursts, structural cave-ins or slides, flooding, earthquakes and fires, labor disruptions, industrial accidents, metallurgical and other processing problems, metal losses, and periodic interruptions due to inclement or hazardous weather conditions. These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, personal injury, environmental damage, delays in mining, increased production costs, monetary losses, and possible legal liability.

We may not be able to obtain insurance to cover these risks at economically feasible premiums. Insurance against certain environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from production, is not generally available to us or to other companies within the mining industry. We may suffer a material adverse effect on our business if we incur losses related to any significant events that are not covered by our insurance policies.

Calculation of mineral resources and metal recovery is only an estimate, and there can be no assurance about the quantity and grade of minerals until resources are actually mined.

The calculation of reserves, resources and corresponding grades being mined or dedicated to future production are imprecise and depend on geological interpretation and statistical inferences or assumptions drawn from drilling and sampling analysis, which might prove to be unpredictable. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Until reserves or resources are actually mined and processed, the quantity of reserves or resources and grades must be considered as estimates only. Any material change in the quantity of reserves, resources, grade or stripping ratio may affect the economic viability of our properties. In addition, there can be no assurance that metal recoveries in small-scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.

Our operations involve exploration and development and there is no guarantee that any such activity will result in commercial production of mineral deposits.

Gold deposits have been nearly exhausted within 200 meters of the surface on the properties we originally intended to mine before discontinuation of operations. There has been no drilling to test the depth potential of commercial ore on these properties, and proposed programs on such properties are exploratory in nature. Development of these mineral properties is contingent upon obtaining satisfactory exploration results. Mineral exploration and development involve substantial expenses and a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to adequately mitigate. There is no assurance that additional commercial quantities of ore will be discovered on our exploration properties. There is also no assurance that, even if commercial quantities of ore are discovered, a mineral property will be brought into commercial production, or if brought into production, that it will be profitable. The discovery of mineral deposits is dependent upon a number of factors including the technical skill of the exploration personnel involved. The commercial viability of a mineral deposit is also dependent upon, among a number of other factors, its size, grade and proximity to infrastructure, current metal prices, and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Most of the above factors are beyond our control.

Competition for new mining properties may prevent us from acquiring interests in additional properties or mining operations.

Significant and increasing competition exists for mineral acquisition opportunities throughout the world. Some of the competitors are large, more established mining companies with substantial capabilities and greater financial resources, operational experience and technical capabilities than us. As a result of the competition, we may be unable to acquire rights to exploit additional attractive mining properties on terms we consider acceptable. Increased competition could adversely affect our ability to attract necessary capital funding or acquire any interest in additional operations that would yield reserves or result in commercial mining operations.

Recent high metal prices have encouraged increased mining exploration, development and construction activity, which has increased demand for, and cost of, exploration, development and construction services and equipment.

Recent increases in gold prices have led to increases in mining exploration, development and construction activities, which have resulted in higher demand for, and costs of, exploration, development and construction services and equipment. Increased demand for services and equipment could cause project costs to increase materially, resulting in delays if services or equipment cannot be obtained in a timely manner due to inadequate availability, and increase potential scheduling difficulties and cost increases due to the need to coordinate the availability of services or equipment, any of which could materially increase project exploration, development and construction costs and/or result in project delays.

Actual capital costs, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable mining operations.

Capital and operating costs, production and economic returns, and other estimates contained in the feasibility studies for our projects may differ significantly from those anticipated by our current studies and estimates, and there can be no assurance that our actual capital and operating costs will not be higher than currently anticipated. In addition, delays to construction schedules may negatively impact the net present value and internal rates of return of our mineral properties as set forth in the applicable feasibility studies.

Recently enacted Ecuadorian mining law requires the mining concession to produce 100 tons per day

Recent Ecuadorian mining law requires mining output in excess of what our mine currently produces. While we expect to be fully compliant with Ecuador law within the window of time provided by such law, there is no guarantee that we will become compliant. Our failure to become compliant with Ecuador mining law within the prescribed time will be detrimental to us.

There can be no assurance that the interests held by us in our properties is free from defects.

We investigated the rights to explore and exploit the Muluncay properties, and, to the best of our knowledge, believed those rights were in good standing. As of the date of this Annual Report, operations have been discontinued through Muluncay. In the event we acquire subsequent interests and rights, no guarantee can be given that such rights will not be revoked or significantly altered to our detriment. There can also be no guarantee that our rights will not be challenged or impugned by third parties. The properties may be subject to prior recorded and unrecorded agreements, transfers or claims, and title may be affected by, among other things, undetected defects. A successful challenge to the precise area and location of these claims could result in our inability to operate on these properties as permitted or being unable to enforce any rights with respect to our properties.

We are exposed to risks of changing political stability and government regulation in the country in which it intends to operate.

Any potential mining rights in Ecuador that we acquire may be affected in varying degrees by political instability, government regulations relating to the mining industry and foreign investment therein, and the policies of other nations in respect of Ecuador. Any changes in regulations or shifts in political conditions are beyond our control and may adversely affect its business. Our operations may be affected in varying degrees by government regulations, including those with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, employment, land use, water use, environmental legislation and mine safety. The regulatory environment is in a state of continuing change, and new laws, regulations and requirements may be retroactive in their effect and implementation. Our operations may also be affected in varying degrees by political and economic instability, economic or other sanctions imposed by other nations, terrorism, military repression, crime, extreme fluctuations in currency exchange rates and high inflation.

We are subject to substantial environmental and other regulatory requirements and such regulations are becoming more stringent. Non-compliance with such regulations, either through current or future operations or a pre-existing condition could materially adversely affect us.

All phases of our operations are subject to environmental regulations in the jurisdiction in which it operates. Environmental legislation is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There can be no assurance that future changes in environmental regulation, if any, will not be materially adverse to our operations.

The mining properties may contain environmental hazards, which are presently unknown to us and which have been caused by previous or existing owners or operators of the properties. If these properties do contain such hazards, this could lead to our inability to use the properties or may cause us to incur costs to clean up such hazards. In addition, we could find ourselves subject to litigation should such hazards result in injury to any persons.

Government approvals and permits are sometimes required in connection with mining operations. Although we believe we will obtain all of the material approvals and permits to carry on its operations, we may require additional approvals or permits or may be required to renew existing approvals or permits from time to time. Obtaining or renewing approvals or permits can be a complex and time-consuming process. There can be no assurance that we will be able to obtain or renew the necessary approvals and permits on acceptable terms, in a timely manner, or at all. To the extent such approvals are required and not obtained; we may be delayed or prohibited from proceeding with planned exploration, development or mining of mineral properties.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities, which may require operations to cease or be curtailed, or corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation of such requirements could have a material adverse impact on us and cause increases in capital expenditures or production costs or reductions in levels of production at producing properties or require abandonment or delays in development of new mining properties.

We Are a New Entrant Into the Gold Mining and Development Industry Without Profitable Operating History.

Since inception, our activities have been limited to organizational efforts, obtaining working capital, acquiring and subsequently terminating the Muluncay Project, and consummating the acquisition of various agreements. As a result, there is limited information regarding property related production potential or revenue generation potential.

The business of gold exploration and development and mining is subject to many risks and if gold is found in economic production quantities, the potential profitability of future possible gold ventures depends upon factors beyond our control. The potential profitability of gold properties if economic quantities are found is dependent upon many factors and risks beyond our control, including, but not limited to: (i) unanticipated ground conditions; (ii) geological problems; (iii) mining and other processing problems; (iv) the occurrence of unusual weather or operating conditions and other force majeure events; (v) lower than expected gold finds; (vi) accidents; (vii) delays in the receipt of or failure to receive necessary government permits; (viii) delays in transportation; (ix) labor disputes; (x) government permit restrictions and regulation restrictions; (xi) unavailability of materials and equipment; and (xii) the failure of equipment to operate in accordance with specifications or expectations.

We have a limited operating history and have not generated a profit since inception; consequently our long term viability cannot be assured.

Our prospects for financial success are difficult to forecast because we have a limited operating history. Our prospects for financial success must be considered in light of the risks, expenses and difficulties frequently encountered by mining companies initiating exploration of unproven properties. Our business could be subject to any or all of the problems, expenses, delays and risks inherent in the establishment of a gold and silver exploration enterprise, including limited capital resources, possible delays in mining explorations and development, failure to identify commercially viable gold or silver deposits, possible cost overruns due to price and cost increases in exploration and ore processing, uncertain gold and silver market prices, inability to accurately predict mining results and attract and retain qualified employees. Therefore, there can be no assurance that our exploration or mining will be successful, that we will be able to achieve or maintain profitable operations or that we will not encounter unforeseen difficulties that may deplete our capital resources more rapidly than anticipated.

We Have a History of Operating Losses and There Can Be No Assurance We Will Be Profitable in the Future.

We have a history of operating losses, expect to continue to incur losses, and may never be profitable; thus, we must re-enter the pre-exploration stage effective December 31, 2009. Further, we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We have incurred losses totaling $3,557,566 from December 29, 2003 (inception) to December 31, 2009. During the year ended December 31, 2009, we incurred losses of $3,361,445. Further, we do not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that: (i) the costs to acquire additional properties are more than we currently anticipate; (ii) mining and completion costs for additional properties increase beyond our expectations; or (iii) we encounter greater costs associated with general and administrative expenses or offering costs.

Our development of and participation in what could evolve into an increasing number of gold prospects may require substantial capital expenditures. The uncertainty and factors described throughout this section may impede our ability to economically find, develop, produce, and acquire gold properties. As a result, we may not be able to achieve or sustain profitability or positive cash flows from operating activities in the future.

We Have Received a Going Concern Opinion From Our Independent Registered Public Auditors’ Report Accompanying Our December 31, 2009 and December 31, 2008 Financial Statements.

The independent registered public auditor's report accompanying our December 31, 2009 and 2008 audited 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 the Company will continue as a going concern." Our ability to continue as a going concern is dependent on raising additional capital to fund our operations and ultimately on generating future profitable operations. There can be no assurance that we will be able to raise sufficient additional capital or eventually have positive cash flow from operations to address all of our cash flow needs. If we are not able to find alternative sources of cash or generate positive cash flow from operations, our business and shareholders will be materially and adversely affected

We may need additional capital to accomplish our exploration and development plans, and there can be no assurance that financing will be available on terms acceptable to us or at all.

The exploration and development of mining properties, including the continued exploration and development of any proposed projects and the construction of mining facilities and operations may require substantial additional financing. Failure to obtain sufficient financing, or financing on terms acceptable to us, may result in a delay or indefinite postponement of exploration, development or production on any or all properties we may obtain, or even a loss of an interest in a property. The only source of funds now available to us is through the sale of debt or equity capital, properties, royalty interests or the entering into of joint ventures or other strategic alliances in which the funding sources could become entitled to an interest in properties or projects we may obtain. Additional financing may not be available when needed or if available, the terms of such financing might not be favorable to us and might involve substantial dilution to existing shareholders. If financing involves the issuance of debt, the terms of the agreement governing such debt could impose restrictions on our operation of our business. Failure to raise capital when needed would have a material adverse effect on our business, financial condition and results of operations.

We are exposed to risks of changing labor and employment regulations.

Production at its mining operations is dependent upon the efforts of mining employees. In addition, employee relations may be affected by changes in the scheme of labor relations that may be introduced by the relevant governmental authorities in whose jurisdictions we carry on business. Changes in such legislation or in the relationship between us and our employees may have a material adverse effect on our business, results of operations and financial condition.

Our operations are subject to the laws of Ecuador.

Our Muluncay Project operates through a foreign company, and substantially all of our assets are held through such foreign entity. Accordingly, any governmental limitation on the transfer of cash or other assets between us and a foreign subsidiary could restrict our ability to fund our operations efficiently. Any such limitations or the perception that such limitations may exist now or in the future could have an adverse impact on our prospects, financial condition and results of operations.

We rely on our management and key personnel, and there is no assurance that such persons will remain with us or that we will be able to recruit skilled individuals.

We rely heavily on our existing management. We do not maintain "key man" insurance. Recruiting and retaining qualified personnel is critical to our success. The number of persons skilled in the acquisition, exploration and development of mining properties is limited and competition for the services of such persons is intense. As our business activity grows, it may require additional key financial, administrative, technical and mining personnel. Although we believe that we will be successful in attracting and retaining qualified personnel, there can be no assurance of such success. The failure to attract such personnel to manage growth effectively could have a material adverse effect on our business, prospects, financial conditions and results of operations.

Our Officers and Directors May be Subject to Conflicts of Interest.

Certain of our officers and directors at times may only part time and can become subject to conflicts of interest. Some devote part of their working time to other business endeavors, including consulting relationships with other entities, and has responsibilities to these other entities. Such conflicts include deciding how much time to devote to our affairs, as well as what business opportunities should be presented to us. Because of these relationships, our officers and directors could be subject to conflicts of interest. Currently, we have no policy in place to address such conflicts of interest.

Nevada Law and Our Articles of Incorporation May Protect our Directors From Certain Types of Lawsuits.

Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

RISKS RELATED TO OUR COMMON STOCK

Sales of a Substantial Number of Shares of Our Common Stock Into the Public Market by Certain Stockholders May Result in Significant Downward Pressure on the Price of Our Common Stock and Could Affect Your Ability to Realize the Current Trading Price of Our Common Stock.

Sales of a substantial number of shares of our common stock in the public market by certain stockholders could cause a reduction in the market price of our common stock. As of the date of this Annual Report, we have 93,131,500 shares of common stock issued and outstanding.

As of the date of this Annual Report, there are 41,564,000 outstanding shares of our common stock that are restricted securities as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Although the Securities Act and Rule 144 place certain prohibitions on the sale of restricted securities, restricted securities may be sold into the public market under certain conditions. Further, as of the date of this Annual Report, there are an aggregate of 10,150,000 whole warrants outstanding. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

Any significant downward pressure on the price of our common stock as the selling stockholders sell their shares of our common stock could encourage short sales by the selling stockholders or others. Any such short sales could place further downward pressure on the price of our common stock.

The Trading Price of Our Common Stock on the OTC Bulletin Board Will Fluctuate Significantly and Stockholders May Have Difficulty Reselling Their Shares.

As of the date of this Annual Report, our common stock trades on the Over-the-Counter Bulletin Board. There is a volatility associated with Bulletin Board securities in general and the value of your investment could decline due to the impact of any of the following factors upon the market price of our common stock: (i) disappointing results from our exploration or development efforts; (ii) failure to meet our revenue or profit goals or operating budget; (iii) decline in demand for our common stock; (iv) downward revisions in securities analysts' estimates or changes in general market conditions; (v) technological innovations by competitors or in competing technologies; (vi) lack of funding generated for operations; (vii) investor perception of our industry or our prospects; and (viii) general economic trends; and (ix) commodity price fluctuation

In addition, stock markets have experienced price and volume fluctuations and the market prices of securities have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may be unable to sell their shares at a fair price and you may lose all or part of your investment.

Additional Issuance of Equity Securities May Result in Dilution to Our Existing Stockholders.

Our Articles of Incorporation, as amended, authorize the issuance of 1,000,000,000 shares of common stock and 200,000,000 shares of preferred stock. The Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing in the future and the issuance of any such shares may result in a reduction of the book value or market price of the outstanding shares of our common stock. If we do issue any such additional shares, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, your proportionate ownership interest and voting power will be decreased accordingly. Further, any such issuance could result in a change of control.

As at December 31, 2008, there were $1,300,000 of debentures outstanding, which debentures are convertible into common shares at a conversion price equal to the lesser of: (a) an amount equal to one hundred percent (100%) of the Volume Weighted Average Price (“VWAP”) as quoted by Bloomberg L.P. on October 15, 2008, or (b) an amount equal to eighty-five percent (85%) of the lowest daily closing VWAP as quoted by Bloomberg L.P. during the five (5) trading days immediately preceding the conversion date. During the life of the debentures, the holders of such securities are given an opportunity to profit from a rise in the market price of common shares with a resulting dilution in the interest of the other shareholders.

As at December 31, 2010, there were 10,200,000 shares of Series A Preferred Shares issued and outstanding.

Our ability to obtain additional financing during the period in which such rights are outstanding may be adversely affected and the existence of the rights may have an adverse effect on the market price of its common shares. The holders of the debentures may exercise such securities at a time when we would be able to obtain needed capital by a new offering of securities on terms more favorable than those provided by the outstanding rights. The increase in the number of our common shares in the market resulting from the exercise of such rights and the possibility of sales of such shares may have a depressive effect on the price of our common shares. In addition, as a result of such additional common shares, the voting power of our existing shareholders will be substantially diluted.

We may, in the future, grant to some or all of its directors, key employees and consultants options to purchase its common shares at exercise prices equal to market prices at times when the public market is depressed. To the extent that significant numbers of such options are granted and exercised, the interests of our then existing shareholders will be subject to additional dilution.

We may be subject to "penny stock" regulations.

The Securities and Exchange Commission, or SEC, has adopted rules that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and our sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. These additional sales practice and disclosure requirements could impede the sale of our securities. Whenever any of our securities become subject to the penny stock rules, holders of those securities may have difficulty in selling those securities.

The trading price for our common shares is volatile.

Securities of micro- and small-cap companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. Our share price is also likely to be significantly affected by short-term changes in gold prices or in its financial condition or results of operations as reflected in its quarterly earnings reports. Other factors unrelated to our performance that may have an effect on the price of its common shares include the following: the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow our securities; the lessening in trading volume and general market interest in our securities may affect an investor's ability to trade significant numbers of common shares; the size of our public float may limit the ability of some institutions to invest in our securities; and a substantial decline in the price of its common shares that persists for a significant period of time could cause our securities to be delisted from the OTCBB, further reducing market liquidity. As a result of any of these factors, the market price of our common shares at any given point in time may not accurately reflect our long-term value.

We have no record of paying dividends.

We have no dividend record. We have not paid any dividends on the common shares since incorporation and do not anticipate doing so in the foreseeable future. Payment of any future dividends will be at the discretion of our board of directors after taking into account many factors, including operating results, financial condition, capital requirements, business opportunities and restrictions contained in any financing agreements.

ITEM 1B. UNRESOLVED STAFF COMMENTS

No report is required.

ITEM 2. PROPERTY

Upon consummation of Muluncay on March 30, 2009, we obtained an undivided 100% interest in the following mining concession. The Muluncay concession lies in the center of the Portovelo-Zaruma mining camp, which is found in the cantons of Ayapamba and Paccha, Province of El Oro, southern Ecuador. On January 2, 2008, Muluncaygoldcorp S.A. formalized with Minera del Pacifico Noroeste S.A. a leasing contract of seven mines:

1.	MARI JANE (BUENA ESPERANZA)
2.	JACETH ETHAN (EL AGUACATE)

3.	LA CHONTA Y LOS QUINDE
4.	NARANJITO

5.	SEÑOR DE LA DIVINA JUSTICIA
6.	LAS CAÑAS

LOS OSOS

The leasing contract includes the mining / processing plant. The seven properties are recorded by the “Asociación de Mineros Autónomos Sociedades Muluncay.” Through the leasing contract, Muluncaygoldcorp S.A. has the right to use and exploit the minerals that are extracted from the leased mines. Beginning April 2007, Muluncaygold began exploration of the “Jayce Ethan” mine, and in October 2007 initiated the exploitation of the “Mary Jane” mine.

As of December 31, 2009, we have discontinued operations through Muluncay and been terminated our rights to the mining concessions above.

Our principal office space is located at 545 Eighth Avenue, Suite 401, New York, New York 10018. The office space is for corporate identification, mailing, and courier purposes only and is provided to us at no cost. The office and services related thereto may be cancelled at any time.

ITEM 3. 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 Annual 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 4. REMOVED AND RESERVED

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR COMMON EQUITY

Shares of our common stock commenced trading on the OTC Bulletin Board under the symbol “TTXP:OB.” The market for our common stock is limited, and can be volatile. The following table sets forth the high and low bid prices relating to our common stock on a quarterly basis for the periods indicated as quoted by the NASDAQ stock market. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions.

Fiscal Quarter	High Bid	Low Bid
2009
Fourth Quarter 10-01-09 to 12-31-09	$0.0095	$0.014
Third Quarter 07-01-09 to 09-30-09	$0.60	$0.092
Second Quarter 04-01-09 to 06-30-09	$2.34	$0.55
First Quarter 01-01-09 to 03-31-09	$2.50	$2.25

Fiscal Quarter	High Bid	Low Bid
2008
Fourth Quarter 10-01-08 to 12-31-08	$0.75	$0.75
Third Quarter 07-01-08 to 09-30-08	$0.75	$0.75
Second Quarter 04-01-08 to 06-30-08	$0.00	$0.00
First Quarter 01-01-08 to 03-31-08	$0.00	$0.00

As of December 31, 2009, we had 46 shareholders of record of our common stock, including shares held by brokerage clearing houses, depositories, or otherwise in unregistered form. We have 10,150,000 in outstanding warrants, do have $2,057,032 in outstanding convertible debentures that are convertible into common equity, as well as $2,389,200 in convertible notes payable and $665,000 in convertible notes payable – related party.

DIVIDEND POLICY

No dividends have ever been declared by the Board of Directors on our common stock. Our losses do not currently indicate the ability to pay any cash dividends, and we do not indicate the intention of paying cash dividends either on our common stock in the foreseeable future.

SECTION 15(g) OF THE SECURITIES EXCHANGE ACT OF 1934

Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as “bid” and “offer” quotes, a dealers “spread” and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the FINRA's toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS

We do not have an equity compensation plan. The table set forth below presents information relating to outstanding warrants.

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding column (a))
Equity Compensation Plans Approved by Security Holders	-0-	-0-	-0-
Equity Compensation Plans Not Approved by Security Holders Warrants	10,000,000 150,000	$0.003 0.25	-0- -0-
Total

RECENT SALES OF UNREGISTERED SECURITIES

As of the date of this Annual Report and during fiscal year ended December 31, 2009, to provide capital, we sold stock in private placement offerings, issued stock in exchange for our debts or pursuant to contractual agreements as set forth below.

2009 PRIVATE PLACEMENTS

May/June/July/August 2009 Private Placement

During May, June, July and August 2009, we completed a private placement offering (the “2009 Private Placement Offering”), whereby we issued an aggregate of 264,000 shares of our restricted common stock at a price of $0.25 per share for aggregate consideration of $66,000. The Private Placement Offering was completed in reliance on Regulation D, Rule 506, and/or Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). Sales were made to certain U.S. residents. The Private Placement Offering was not registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. The per share price of the Private Placement Offering was arbitrarily determined by our Board of Directors based upon analysis of certain factors including, but not limited to, stage of development, industry status, investment climate, perceived investment risks, our assets and net estimated worth.

During May 2009, we issued an additional 25,000 shares of restricted common stock to an investor at $0.25 per share in consideration of execution of a letter of intent for funding. As of December 31, 2009, the letter of intent had not yet been finalized and consideration for the stock had not yet been received.

During July 2009, we issued an additional 500,000 shares of restricted common stock to an investor at $0.25 per share in consideration of execution of a letter of intent for funding. As of December 31, 2009, the letter of intent had not yet been finalized and uncertainly exists in the ability of the investor to complete the transaction. Therefore, as of the date of this Annual Report, we consider the deposit of $125,000 impaired and unlikely to be received and thus have expensed it as consulting fees. We have requested that the investor return the restricted stock certificate.

CONSULTANTS

On July 20, 2009, we issued to a consultant 2,500 shares of our restricted common stock at $0.40 per share for services totaling $1,000. The shares of common stock were issued in reliance on Section 4(2) of the Securities Act. The per share price of the shares was arbitrarily determined by our Board of Directors based upon analysis of certain factors including, but not limited to, stage of development and exploration of properties, industry status, investment climate, perceived investment risks, our assets and net estimated worth.

On August 26, 2009, we issued to three consultants an aggregate of 100,000 shares of our restricted common stock at $0.18 per share for services totaling $18,000. We also issued 150,000 warrants at $017 per share for services totaling $25,500. The warrants are exercisable for a period of three years at $.25 per share. The per share price of the shares was arbitrarily determined by our Board of Directors based upon analysis of certain factors including, but not limited to, stage of development and exploration of properties, industry status, investment climate, perceived investment risks, our assets and net estimated worth.

On September 9, 2009, we issued to a consultant 200,000 shares of our restricted common stock at $0.15 per share for services totaling $30,000. The shares of common stock were issued in reliance on Section 4(2) of the Securities Act. The per share price of the shares was arbitrarily determined by our Board of Directors based upon analysis of certain factors including, but not limited to, stage of development and exploration of properties, industry status, investment climate, perceived investment risks, our assets and net estimated worth.

PREFERRED SHARES

On June 30, 2009, we issued 10,200,000 shares of our Series I Preferred Stock, $0.001 par value, to Trafalgar Capital Specialized Investment Funds FIS (“Trafalgar”) in exchange for Trafalgar’s 5,900,000 shares of our common stock. The 5,900,000 shares of our common stock shall be retired into treasury and no longer outstanding on our books. The issuance of Series I Preferred Stock to Trafalgar and retirement of Trafalgar’s common stock into treasury was approved by a majority of the holders of our common stock and approved by the Company’s Board of Directors on June 30, 2009. The shares of common stock were issued in reliance on Section 4(2) of the Securities Act.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During fiscal year ended December 31, 2009, certain shareholders voted approval as follows:

On September 4, 2009, at a Special Meeting of our stockholders, the following matters were voted on and approved by greater than 50% of our voting capital stock. Representing 63.9% of the total issued and outstanding voting capital stock, 62,089,199 votes were cast in favor of the following matters: (i) the acquisition of 100% of the outstanding capital stock of Bozel for $20,000,000 cash and $80,000,000 of our common stock; (ii) election of Michel Marengere as one of our directors upon completion of the Bozel transaction; and (iii) financing of the $20,000,000 cash payment through the issuance of our convertible debentures or by such other means as our directors deem advisable. The Bozel transaction was never completed.

ITEM 6. SELECTED FINANCIAL DATA

The following selected financial information is qualified by reference to, and should be read in conjunction with our consolidated financial statements and the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” contained elsewhere herein. The selected consolidated income statement data for fiscal years ended December 31, 2009 and 2008 and the selected consolidated balance sheet data as of December 31, 2009 and 2008 are derived from our audited consolidated financial statements which are included elsewhere herein.

STATEMENT OF OPERATIONS	Years Ended December 31 2009 and 2008					For the Period from December 29, 2003 (inception) to December 31, 2009

Revenue		-0-		-0-			-0-

Operating Expenses
Organizational expenses		-0-		-0-			1,200
Professional fees		555,654		80,332			635,986
Salaries and wages		150,060		20,125			170,185
Advertising and promotion		68,750		-0-			68,750
Insurance		11,672		-0-			11,672
Other general and administrative expenses		263,020		14,748			340,187
Total Operating Expenses		1,049,156		115,205			1,227,980

Operating Loss		(1,049,156	)	(115,205	)		(1,227,980	)

Other Income (Expense)
Interest expense		22,683		14,904			37,587
Currency exchange loss		-0-		(9	)		(9	)
Interest income		(370,336	)	(32,192	)		(402,528	)
Total Other Income (Expense)		(347,653	)	(17,297	)		(364,950	)

Loss from Continuing Operations		(1,396,809	)	(132,502	)		(1,592,930	)
Net Loss From Discontinued Operations		(1,964,636	)	-0-			(1,964,636	)

Net Loss Applicable to Common Shares		(3,361,445	)	(132,502	)		(3,557,566	)

BALANCE SHEET DATA
Total Assets		2,509,864		1,305,781
Total Liabilities		5,451,790		1,433,152
Total Stockholders’ Equity		(2,941,926	)	(127,371	)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATION

The summarized financial data set forth in the table below is derived from and should be read in conjunction with our audited financial statements for the period from inception (December 29, 2003) through December 31, 2009, including the notes to those financial statements which are included in this Annual Report. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Annual 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. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report, particularly in the section entitled "Risk Factors." Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We are a pre-exploration stage company and have not generated any revenue to date. The following table sets forth selected financial information for the periods indicated. 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.

RESULTS OF OPERATION

Fiscal Year Ended December 31, 2009 Compared to Fiscal Year Ended December 31, 2008.

Our net loss for fiscal year ended December 31, 2009 was ($3,361,445) compared to a net loss of ($132,502) during fiscal year ended December 31, 2008, an increase of $3,228,943. During fiscal years ended December 31, 2009 and 2008, we did not generate any revenue from continuing operations.

During fiscal year ended December 31, 2009, we incurred operating expenses of $1,049,156 compared to $115,205 incurred during fiscal year ended December 31, 2008, an increase of $933,951. The increase in operating expenses was primarily attributable to the following items: (i) professional fees of $555,654 (2008: $80,332); (ii) salaries and wages of $150,060 (2008: $20,125); (iii) advertising and promotion of $68,750 (2008: $0); (iv) insurance of $11,672 (2008: $-0-); and (v) other general and administrative of $263,020 (2008: $14,748). Operating expenses increased due to the increased scope and scale of our business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

Other income (expense) was incurred during fiscal year ended December 31, 2009 of $22,683 (2008: $14,904) and interest expense of $370,336 (2008: $32,192), which resulted in a loss before discontinued operations during fiscal year ended December 31, 2009 of ($1,396,809) compared to a less before discontinued operations during fiscal year ended December 31, 2008 of ($132,502).

During fiscal year ended December 31, 2009, we incurred a net loss from discontinued operations of ($1,964,636) as compared to a net loss from discontinued operations of $-0- during fiscal year ended December 31, 2008. We determined to discontinue operations with our Muluncay subsidiary, a mining operation in Ecuador effective December 31, 2009. This resulted in a net loss applicable to common shares during fiscal year ended December 31, 2009 of ($3,361,445) as compared to a net loss applicable to common shares during fiscal year ended December 31, 2008 of ($132,502). The basic weighted average number of shares outstanding was 92,447,750 for fiscal year ended December 31, 2009 compared to 93,296,164 for fiscal year ended December 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

Fiscal Year Ended December 31, 2009

As at December 31, 2009, our current assets were $22,433 and our current liabilities were $5,451,790, which resulted in a working capital deficit of $3,429,357. As of December 31, 2009, current assets were comprised of $22,433 in prepaid expenses. As of December 31, 2009, current liabilities were comprised of: (i) $56,269 in accounts payable; (ii) $24,589 in accounts payable – related party; (iii) $2,389,200 in convertible notes payable, current; (iv) $665,000 in convertible notes payable – related party, current; (v) $2,057,032 in bonds payable, convertible and secured – related party; (vi) $47,983 in accrued interest, convertible bonds payable – related party; (vii) $179,222 in accrued interest, convertible notes payable – related party; and (viii) $32,495 in short term notes payable. See “ – Material Commitments.”

As of December 31, 2009, our total assets were $2,509,864 comprised of: (i) $22,433 in current assets; (ii) $2,389,200 in investments, which represents Trilliant Diamonds’ interest in Global Diamond Resources; (iii) $92,585 in bond issue costs, net – related party; and (iv) $5,646 in deposits. . The increase in total assets during fiscal year ended December 31, 2009 from fiscal year ended December 31, 2008 was primarily due to our investment in GDR.

As at December 31, 2009, our total liabilities were $5,451,790 comprised entirely of current liabilities. The increase in liabilities during fiscal year ended December 31, 2009 from fiscal year ended December 31, 2008 was primarily due to the issuance of convertible notes payable, and bonds payable, convertible and secured – related party.

Stockholders’ deficit increased from ($127,371) for fiscal year ended December 31, 2008 to ($2,941,926) for fiscal year ended December 31, 2009.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For fiscal year ended December 31, 2009, net cash flows used in operating activities was ($1,499,079) consisting primarily of a net loss of $3,361,445 adjusted by the Company’s forgiveness of notes receivable ($990,000), ($42,805) in amortization of bond issue costs – related party, common stock issued for services ($255,250), and vesting of warrants issued for services ($219,853). Net cash flows used in operating activities was further affected by changes of $228,117 in interest payable, $53,612 in accounts payable and $39,567 in prepaid expenses.

Cash Flows from Investing Activities

We did not engage in any investing activities during the year ended December 31, 2009.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the fiscal year ended December 31, 2009, net cash flows provided from financing activities was $1,319,856 compared to $1,336,250 for fiscal year ended December 31, 2008. Cash flows from financing activities for fiscal year ended December 31, 2009 consisted of $678,856 in proceeds from convertible bonds payable – related party; $575,000 in net proceeds from convertible notes payable – related party, and $66,000 from the issuance of common stock.

PLAN OF OPERATION AND FUNDING

A substantial portion of fiscal year ended December 31, 2009 was dedicated to the Muluncay mining project and financing. As at December 31, 2009, our cash and cash equivalents were $-0-. For fiscal year ended December 31, 2009, we incurred a net loss from continuing operations of $1,396,809 and a net loss from continuing and discontinued operations of $3,361,445. Net cash provided by financing activities for fiscal year ended December 31, 2009 of $1,319,856, which was attributed to the issuance of convertible bonds and notes payable. The accumulated deficit increased by $3,361,445 as at December 31, 2009 due to losses incurred on the disposal of Muluncay and increases in general & administrative costs, salaries and wages, note and bond interest, and professional fees. The orchestration and execution of our business acquisitions resulted in increased professional fees and the need for funding. As such, during fiscal year ended December 31, 2009, we entered into various note and bond payable agreements to finance our acquisitions and Muluncay operations, which increased our interest expense. In addition, we entered into management and consulting agreements with our officers and directors, which contributed to the increased salaries and wages.

We will need additional further advances and issuance of debt instruments to fund our operations over the next six months. In connection with our future business plan, management anticipates additional increases in operating expenses and capital expenditures relating to acquisition of further interests in gold mining concessions. We would finance these expenses with further issuances of securities and debt issuances. We expect we would need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities would result in dilution to our current shareholders. Further, such securities may have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.

MATERIAL COMMITMENTS

As of the date of this Annual Report, we have the following material commitments as described below.

Contractual Obligations	Total		Less than one year		1 – 3 Years		3 – 5 Years		More than 5 Years
Convertible Bonds (1A-D)	$	2,057,032	$	2,057,032	$	-	$	-	$	-
Convertible Notes Payable (2A-E)		3,054,200		3,054,200
Total	$	5,111,232	$	5,111,232	$	-	$	-	$	-

(1A). On October 15, 2009, we entered into a convertible secured bond debenture in the principal amount of $1,300,000. Interest accrues monthly at the rate of 9% APR and is payable monthly. Unless converted, principal is payable in full on October 15, 2010. Upon default, the interest rate is increased to 18%. Interest payments are made mid-month resulting in bond interest payable of $14,990 at December 31, 2009. Bond interest expense was $106,140 (including $18,390 in bond issuance cost amortization) for the year ended December 31, 2009. The bond has an optional conversion feature whereby the bond holder is entitled to convert the bond and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the “Fixed Price”), which was determined to be $0.61 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, we have the option to redeem the bond provided we pay a 16% redemption premium on the amount redeemed. If the bond is not converted, we are required to make interest only payments for a period of one year following the bonds’ inception. Thereafter, we shall continue making month interest payments, in addition to quarterly principal payments of $325,000 and quarterly 16% redemption premium payments that amount to $52,000 per quarter ($208,000 total).

(1B). On April 30, 2009, we entered into a convertible secured bond debenture in the principal amount of $300,000. Interest accrues monthly at the rate of 9% APR and is payable monthly. Unless converted, principal is payable in full on October 31, 2010. Upon default, the interest rate is increased to 18%. Interest payments are made at month end resulting in bond interest payable or $2,464 at December 31, 2009. Bond interest expense was $22,679 (including $11,429 in bond issuance cost amortization) for the fiscal year ended December 31, 2009. The bond has an optional conversion feature whereby the bond holder is entitled to convert the bond and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the “Fixed Price”), which was determined to be $0.61 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, we have the option to redeem the bond provided we pay a 16% redemption premium on the amount redeemed. If the bond is not converted, we are required to make interest only payments for a period of one year following the bonds’ inception. Thereafter, we shall continue making month interest payments, in addition to quarterly principal payments of $75,000 and quarterly 16% redemption premium payments that amount to $12,000 per quarter ($48,000 total).

(1C). On October 12, 2009, we entered into a convertible secured bond debenture in the principal amount of $210,000. Interest accrues monthly at the rate of 9% APR and is payable monthly. Unless converted, principal is payable in full on January 12, 2010 or upon completion of any new investments in us exceeding $1,500,000. Upon default, the interest rate is increased to 18% and we may convert all bonds held by the bond holder without restriction. The Company incurred bond issuance costs of $42,000, which are being accrued to bonds payable on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 was $23,062. Interest payments are made at month end resulting in bond interest payable or $4,115 at December 31, 2009. Bond interest expense was $4,115 for the fiscal year ended December 31, 2009. The bond has an optional conversion feature whereby the bond holder is entitled to convert the bond and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the “Fixed Price”), which was determined to be $0.07 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, we have the option to redeem the bond provided we pay a 16% redemption premium on the amount redeemed. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009, then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate.

(1D). On November 3, 2009, we entered into a convertible secured bond debenture in the principal amount of $210,000. Interest accrues monthly at the rate of 9% APR and is payable monthly. Unless converted, principal is payable in full on January 12, 2010 or upon completion of any new investments in us exceeding $1,500,000. Upon default, the interest rate is increased to 18% and we may convert all bonds held by the bond holder without restriction. Interest payments are made at month end resulting in bond interest payable or $2,993 at December 31, 2009. Bond interest expense was $2,993 for the fiscal year ended December 31, 2009. The bond has an optional conversion feature whereby the bond holder is entitled to convert the bond and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the “Fixed Price”), which was determined to be $0.07 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, we have the option to redeem the bond provided we pay a 16% redemption premium on the amount redeemed. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009, then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate.

2(A) We entered into an arrangement with Charms Investments to obtain $275,000 of financing payable on or before January 5, 2010. The note accrues interest at the rate of 8%. On April 29, 2009 the agreement was amended to increase amounts loaned to $350,000. All amounts are payable on or before June 23, 2010.

2(B) On July 1, 2009, we entered into an arrangement with Charms investments to obtain $100,000 of financing payable on or before July 1, 2010. The note accrues interest at the rate of 8%.

2(C) On July 6, 2009, we entered into an arrangement with Charms Investments to obtain $20,000 of financing payable on or before July 6, 2010. The note accrues interest at the rate of 8%.

2(D) We entered into an arrangement with Charms Investments to obtain $500,000 of financing payable on or before August 30, 2010. The loan is issued in installments with $195,000 issued as of September 30, 2009. The note accrues interest at the rate of 8%.

2(E) We entered into an arrangement with Benbrack Charkit Limited (a foreign investor) to obtain a note for $2,485,200 (1,500,000 British pounds). The note accrues interest at a rate of 12%. All amounts are payable on or before June 24, 2010. The note is convertible at $.45 per share of common stock. Proceeds of the loan were used to acquire 10,000,000 shares of Global Diamond Resources held through Trilliant Diamonds, our subsidiary. A foreign currency translation adjustment of $96,000 decreased the loan amount to $2,389,200 at December 31, 2009.

PURCHASE OF SIGNIFICANT EQUIPMENT

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

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Annual 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 December 31, 2009 and December 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.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2009 the FASB established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

Statement of Financial Accounting Standards ("SFAS") SFAS No. 165 (ASC Topic No. 855), "Subsequent Events," SFAS No. 166 (ASC Topic No. 810), "Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140," SFAS No. 167 (ASC Topic No. 810), "Amendments to FASB Interpretation No. 46(R)," and SFAS No. 168 (ASC Topic No. 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162," were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.

Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic No. 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic No. 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic No. 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2009-15 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Currency Risk and Foreign Currency Translations

The functional currency of the Company is the United States Dollar (USD). In accordance with ASC Topic No. 830, realized gains or losses on expenses incurred in denominations other than USD are recognized in earnings on the transaction date. At such time as there are any foreign denominated assets or liabilities, the Company will report changes in valuation in a Statement of Other Comprehensive Income or (Loss) due to the changes in cumulative adjustments from foreign currency translation. The company holds an investment and a note payable denominated in the Great Britain Pound (GBP). The Company reported changes in the value of the investment due to a foreign currency adjustment of $96,000 as of December 31, 2009, which is offset by the same adjustment to the note payable. The Company is required to pay interest in GBP on the note payable. As of December 31, 2009 the Company accrued net interest of $143,325 after an adjustment of $5,787 in currency translation recorded in Accumulated Other Comprehensive Income.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

TRILLIANT EXPLORATION CORPORATION

(A PRE-EXPLORATION STAGE COMPANY)

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2009 and 2008,

and the Period of December 29, 2003 (Inception)

to December 31, 2009

TRILLIANT EXPLORATION CORPORATION

(A PRE-EXPLORATION STAGE COMPANY)

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2009 and 2008,

and the Period of December 29, 2003 (Inception)

to December 31, 2009

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Other Comprehensive Loss

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to the Audited Consolidated Financial Statements

CHILD VAN WAGONER & BRADSHAW, PLLC

CERTIFIED PUBLIC ACCOUNTANTS

SALT LAKE CITY

5296 South Commerce Dr.

Suite 300

Salt Lake City, Utah 84107

Phone: 801-281-4700

Fax : 801-281-4701

KAYSVILLE

1284 West flint Meadow Dr.

Suite D

Kaysville, Utah 84037

Phone: 801-927-1337

Fax: 801-927-1344

HONG KONG

Suite A, 5/F

Max Share Centre

373 King's road

North Point, Hong Kong

Phone: +(852) 21 555 333

Fax: +(852) 21 165 222

www.cpaone.net

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders

Trilliant Exploration Corporation

Las Vegas, NV

We have audited the accompanying balance sheets of Trilliant Exploration Corporation (a pre-exploration stage company) (the “Company”) as of December 31, 2009 and 2008, and the related statements of operations, other comprehensive loss, changes in stockholders' equity (deficit), and cash flows for the years then ended and for the period of December 29, 2003 (inception) through December 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2009 and 2008, and the results of its operations and cash flows for the years then ended and for the period of December 29, 2003 (inception) through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 8 to the financial statements, the Company has generated minimal revenues from operations and has incurred net losses since inception. This raises substantial doubt about the Company's ability to meet its obligations and to continue as a going concern. Management's plans in regard to this matter are described in Note 8. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Child, Van Wagoner & Bradshaw, PLLC

Child, Van Wagoner & Bradshaw, PLLC

Salt Lake City, UT

April 15, 2010

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Balance Sheets

	As of December 31,
	2009		2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	-	$	179,223
Accounts receivable		-		40
Prepaid expenses (Note 7)		22,433		62,000
Total Current Assets		22,433		241,263

OTHER ASSETS
Investments (Note 11)		2,389,200		-
Notes receivable - related party (Note 6C)		-		990,000
Interest receivable, notes receivable - related party (Note 6C)		-		14,904
Bond issue costs, net - related party (Note 6E)		92,585		57,214
Deposits		5,646		2,400
Total Other Assets		2,487,431		1,064,518
TOTAL ASSETS	$	2,509,864	$	1,305,781

LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	56,269	$	2,657
Accounts payable - related party (Note 6B)		24,589		-
Convertible notes payable, current (Note 11)		2,389,200		-
Convertible notes payable–related party, current (Note 6A)		665,000		-
Bonds payable, convertible and secured–related party (Note 6E)		2,057,032		-
Accrued interest, convertible bonds payable–related party (Note 6E)		47,983		4,875
Accrued interest, convertible notes payable (Note 11)		143,325		-
Accrued interest, convertible notes payable–related party (Note 6A)		35,897		-
Short-term notes payable–related party (Note 6B)		32,495		32,495
Accrued officer compensation (Note 6D)		-		3,125
Total Current Liabilities		5,451,790		43,152

LONG-TERM LIABILITIES
Long-term notes payable - related party ( Note 6B)		-		90,000
Bonds payable, convertible and secured - related party (Note 6E)		-		1,300,000
Total Long-Term Liabilities		-		1,390,000
Total Liabilities		5,451,790		1,433,152

(continued)

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Balance Sheets (cont’d)

	As of December 31,
	2009			2008

STOCKHOLDERS' DEFICIT
Preferred stock, par value $.001, 200,000,000 shares authorized,		10,200			-
10,200,000 issued and 10,200,000 outstanding (Note 4)		-			-
Common stock, par value $.001, 1,000,000,000 shares authorized,
93,131,500 issued, 87,231,500 outstanding, Dec 31, 2009;
91,940,000 shares issued and outstanding Dec. 31, 2008 (Note 4)		93,132			91,940
Additional paid-in capital		10,706,521			(23,190	)
Accumulated other comprehensive income (Note 11)		5,787			-
Deficit accumulated prior to re-entering the pre-exploration stage		(3,557,566	)		(196,121	)
Total stockholder's deficit (before treasury stock)		7,258,074			(127,371	)
Treasury Stock (5,900,000 shares at $1.73 per share) (Note 4)		(10,200,000	)		-
Total Stockholders' Deficit		(2,941,926	)		(127,371	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,509,864		$	1,305,781

See Accompanying Notes to Audited Consolidated Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Statements of Operations

							Cumulative Totals
							from December 29,
							2003 (Inception)
	Year Ended December 31,						to December 31,
	2009			2008			2009

Revenues	$	-		$	-		$	-
Operating Expenses								-
Organizational expenses		-			-			1,200
Professional fees		555,654			80,332			635,986
Salaries and wages		150,060			20,125			170,185
Advertising and promotion		68,750			-			68,750
Insurance		11,672			-			11,672
Other general and administrative		263,020			14,748			340,187
Total Operating Expenses		1,049,156			115,205			1,227,980
Operating Loss		(1,049,156	)		(115,205	)		(1,227,980	)

Other Income (Expense)
Interest income		22,683			14,904			37,587
Currency exchange loss		-			(9	)		(9	)
Interest expense		(370,336	)		(32,192	)		(402,528	)
Total Other Income (Expenses)		(347,653	)		(17,297	)		(364,950	)

LOSS BEFORE INCOME TAXES		(1,396,809	)		(132,502	)		(1,592,930	)
Provision for income taxes		-			-			-
NET LOSS FROM CONTINUING OPERATIONS		(1,396,809	)		(132,502	)		(1,592,930	)
Loss from discontinued operations		191,495			-			191,495
Loss on disposal of subsidiary		1,773,141			-			1,773,141
NET LOSS FROM DISCONTINUED OPERATIONS		(1,964,636	)		-			(1,964,636	)

Net Loss applicable to Common Shares	$	(3,361,445	)	$	(132,502	)	$	(3,557,566	)
BASIC AND DILUTED LOSS PER COMMON SHARE:
Net loss per share, continuing operations	$	(0.015	)	$	(0.001	)
Net loss per share, discontinued operations		(0.021	)		-
Total net loss per share	$	(0.036	)	$	(0.001	)
Weighted Average Number of
Common Shares Outstanding (Basic)		92,447,750			93,296,164
Weighted Average Number of
Common Shares Outstanding (Diluted)		902,162,411			93,661,826

See Accompanying Notes to Audited Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Statements of Other Comprehensive Loss

	Year Ended December 31,						Cumulative Totals from December 29, 2003 (Inception) to December 31,
	2009			2008			2009
Net loss	$	(3,361,445	)	$	(132,502	)	$	(3,557,566	)
Other comprehensive income, net of tax
Foreign currency translation adjustment		5,787			-			5,787
Comprehensive loss	$	(3,355,658	)		(132,502	)	$	(3,551,779	)


See Accompanying Notes to Audited Consolidated Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

December 29, 2003 (Inception) to December 31, 2009

														Deficit			Accum.
											Additional			Accum.			Other					Total
	Common Stock						Preferred Stock				Paid-in			during Pre-			Comp.		Treasury			Stockholders’
	Shares			Amount			Shares		Amount		Capital			Explor. Stage			Income		Stock			Equity (Deficit)
December 29, 2003 (Inception)		-		$	-			-	$	-	$	-		$	-		$	-	$			$	-
Issuance of common stock
December 29, 2003		8,000,000			8,000			-		-		(6,000	)		-			-		-			2,000
Net loss		-			-			-		-		-			-			-		-
Balance, December 31, 2003		8,000,000			8,000			-		-		(6,000	)		-			-		-			2,000

Net loss		-			-			-		-		-			(1,805	)		-		-			(1,805	)
Balance, December 31, 2004		8,000,000			8,000			-		-		(6,000	)		(1,805	)		-		-			195

Issuance of common stock
December 15, 2005		72,000,000			72,000			-		-		(54,000	)		-			-		-			18,000
Net loss		-			-			-		-		-			(795	)		-		-			(795	)
Balance, December 31, 2005		80,000,000			80,000			-		-		(60,000	)		(2,600	)		-		-			17,400
															-
Issuance of common stock for cash, March 15, 2006		10,000,000			10,000			-		-		(7,500	)		-			-		-			2,500
Net loss		-			-			-		-		-			(12,785	)		-		-			(12,785	)
Balance, December 31, 2006		90,000,000			90,000			-		-		(67,500	)		(15,385	)		-		-			7,115

Issuance of common stock for cash, March 31, 2007		1,300,000			1,300			-		-		31,200			-			-		-			32,500
Issuance of common stock for cash, June 4, 2007		140,000			140			-		-		3,360			-			-		-			3,500
Issuance of common stock November 6, 2007		5,000,000			5,000			-		-		(3,750	)		-			-		-			1,250
Issuance of common stock for payment of debt, November 6, 2007		1,000,000			1,000			-		-		(750	)		-			-		-			250
Net loss		-			-			-		-		-			(48,234	)		-		-			(48,234	)
Balance, December 31, 2007		97,440,000			97,440			-		-		(37,440	)		(63,619	)		-		-			(3,619	)

Cancellation of shares, February through May 2008		(5,500,000	)		(5,500	)		-		-		4,250			-			-		-			(1,250	)
Forgiveness of related party debt		-			-			-		-		10,000			-			-		-			10,000
Net loss		-			-			-		-		-			(132,502	)		-		-			(132,502	)
Balance, December 31, 2008		91,940,000		$	91,940			-		-		(23,190	)	$	(196,121	)		-		-			(127,371	)

Issuance of common stock for services, May 2009		25,000			25							6,225											6,250
Issuance of common stock for cash, June 2009		184,000			184							45,816											46,000
Issuance of preferred stock, June 30, 2009		-						10,200,000		10,200		10,189,800								(10,200,000	)		-
Issuance of common stock for services, July 7, 2009		500,000			500							124,500											125,000
Issuance of common stock for cash, July 20, 2009		40,000			40							9,960											10,000
Issuance of common stock for services, July 20, 2009		2,500			3							997											1,000
Issuance of common stock for cash, August 5, 2009		40,000			40							9,960											10,000
Issuance of common stock and warrants for services August 26, 2009		100,000			100							43,400											43,500
Issuance of common stock for services, Sept 9, 2009		200,000			200							29,800											30,000
Issuance of warrants for services December 23, 2009												194,353											194,353
Issuance of Stock for compensation to officers, December 15, 2009		100,000			100							74,900											75,000
Foreign currency translation adjustments																		5,787					5,787
Net loss															(3,361,445	)							(3,361,445	)
Balance, December 31, 2009		93,131,500		$	93,132			10,200,000	$	10,200	$	10,706,521		$	(3,557,566	)	$	5,787	$	(10,200,000	)	$	(2,941,926	)

See Accompanying Notes to Audited Consolidated Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Statements of Cash Flows

							Cumulative Totals
							from December 29,
							2003 (Inception)
	Year Ended December 31,						to December 31,
	2008			2008			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(3,361,445	)	$	(132,502	)	$	(3,557,566	)
Adjustments to reconcile net loss to net cash
used in operations:
Forgiveness of notes receivable		990,000			-			990,000
Amortization of bond issue costs - related party		42,805			7,430			50,235
Common stock issued for services		255,250			-			255,250
Vesting of warrants issued for services		219,853			-			219,853
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable		40			(40	)		-
Interest receivable, notes receivable - related party		14,904			(14,904	)		-
Prepaid expenses		39,567			(62,000	)		(22,433	)
Deposits		(3,246	)		(2,400	)		(5,646	)
Increase (Decrease) in:
Accounts payable		53,612			(2,942	)		56,269
Accounts payable – related parties		24,589			-			24,589
Accrued interest, convertible bonds payable–rel. party		43,108			4,875			47,983
Accrued interest, convertible notes payable		149,112			-			149,112
Accrued interest, convertible notes payable–rel. party		35,897			-			35,897
Accrued officer compensation		(3,125	)		3,125			-
Net Cash Used In Operating Activities		(1,499,079	)		(199,358	)		(1,756,457	)

CASH FLOWS FROM INVESTING ACTIVITIES
Issuance of notes receivable - related party		-			(990,000	)		(990,000	)
Net Cash Used In Investing Activities		-			(990,000	)		(990,000	)

(continued)

See Accompanying Notes to Audited Consolidated Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Consolidated Statements of Cash Flows (cont’d)

							Cumulative Totals
							from December 29,
							2003 (Inception)
	Year Ended December 31,						to December 31,
	2008			2008			2009
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible bonds payable- related party		678,856			1,235,356			1,914,212
Proceeds from convertible notes payable-related party		650,000			90,000			740,000
Payments made on convertible notes payable -related party		(75,000	)		-			(75,000	)
Proceeds from notes payable - related party		-			49,163			49,764
Payments on notes payable - related party		-			(7,019	)		(7,019	)
Refunds for rescission of common stock					(1,250	)		(1,250	)
Net proceeds from sale of common stock		66,000			-			125,750
Net Cash Provided By Financing Activities		1,319,856			1,366,250			2,746,457

NET INCREASE (DECREASE) IN CASH		(179,223	)		176,892			-
CASH AT BEGINNING OF PERIOD		179,223			2,331			-
CASH AT END OF PERIOD	$	-		$	179,223		$	-


SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	19,500		$	19,500
Cash paid for income taxes	$	-		$	-		$	-
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Forgiveness of related party debt	$	-		$	10,000		$	10,000
Purchase of investment with convertible note payable, net of $96,000 foreign currency translation adjustment	$	2,389,200		$	-		$	2,389,200
Issuance of 10,200,000 shares of preferred stock at $1 per share in exchange for 5,900, 000 shares of treasury stock at $1.73 per share	$	10,200,000		$	-		$	10,200,000

See Accompanying Notes to Audited Consolidated Financial Statements

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Trilliant Exploration Corporation, (the “Company”) was incorporated as Project Development Pacific, Inc. on December 29, 2003, under the laws of the State of Nevada. The business purpose of the Company was originally to assist Canadian citizens to access health care services from private providers. On November 26, 2007, the Company changed its name to Trilliant Exploration Corporation, with a purpose to acquire and develop mineral properties. The Company has elected a fiscal year end of December 31.

On March 30, 2009 (Date of Acquisition), Trilliant Exploration Corporation (the Parent) acquired a 100% interest in MuluncayGoldCorp (a Subsidiary) (Muluncay), as disclosed in Note 10. The transaction was accounted for as a purchase pursuant to ASC Topic No. 805.

On June 29, 2009 (Date of Formation), the Company established a wholly-owned Trilliant Diamonds Limited (a Subsidiary) (Trilliant Diamonds), a private limited England and Wales Company, to facilitate the Company’s diamond exploration. Trilliant Diamonds has been inactive since formation. The only asset of Trilliant Diamonds is an investment in Global Diamond Resources (GDR), a Gibraltar, Spain entity. On July 1, 2009, Trilliant Diamonds acquired 10,000,000 shares of GDR, representing 3.2% of the outstanding shares of GDR stock, for $2,485,200. The investment was obtained via issuance of a note payable in the amount of $2,485,200, as further disclosed in Note 11. The investment and note payable are denominated in British Pounds, as of December 31, 2009 the investment and note payable are adjusted to $2,389,200 after currency translation adjustments of $96,000.

On July 1, 2009 the Company acquired 799 of 800 shares of AyapampaGold S.A (AYA) (a Subsidiary) at $1 per share for a purchase price of $799 AYA was formed in mid-2007 as a shell and has been inactive since inception. The Company acquired AYA to use as a holding company in Ecuador to facilitate future potential acquisitions.

On February 11, 2010, Minera Del Pacifico (the seller of MuluncayGoldCorp) exercised its rights retroactive to December 31, 2009 to terminate the purchase of MuluncayGoldCorp as described in Note 12. The activity of MuluncayGoldCorp from the Date of Acquisition through December 31, 2009 is reported as discontinued operations pursuant to ASC Topic 205.

The accompanying consolidated financial statements for the year ended December 31, 2009 include the operations of the Subsidiaries’ activity from the dates of Acquisition and Formation through December 31, 2009. All historical financial statements are those of the Parent. Inter- company transactions have been eliminated upon consolidation. The Parent and Subsidiaries are collectively referred to as “the Company.”

The audited financial statements of Trilliant Exploration Corporation were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pre-Exploration Stage Company

The Company is considered to be in the pre-exploration stage as defined in ASC 915 (SFAS No. 7), “Accounting and Reporting by Development Stage Enterprises” as interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7. The Company is devoting substantially all of its efforts to the execution of its business plan. In June 2009, management considered requirements for exploration stage companies and determined that the Company had exited development and pre-exploration stage and the associated filing requirements. Company performance since June 2009 and the disposal of MuluncayGoldCorp (Note 12) require management to re-enter the pre-exploration stage effective December 31, 2009.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates that may change in the near future include value of goodwill, impairment of long-lived assets acquired, and value of investments.

Cash and Cash Equivalents

Cash and cash equivalents consists principally of currency on hand, demand deposits at commercial banks, and liquid investment funds having a maturity of three months or less at the time of purchase. The Company had $0 and $179,223 in cash and cash equivalents as of December 31, 2009 and December 31, 2008, respectively. Of these amounts, $0 and $179,223 was federally insured. In December 2009, the Company closed both of its bank accounts.

Legal Reserve

The Company records the Ecuadorian required legal reserve in the Stockholders’ Equity (Deficit) section of the balance sheet. Through acquisition, the Company acquired $210 of reserves for employee benefits. Firms operating in Ecuador are required by law to set aside 10% of liquid profits in a legal reserve for the benefit of employees. Such reserve must be set aside until the reserves reach 50% of cumulative liquid profits, which are equivalent to distributable net income under US GAAP. These reserves were removed in recording discontinuing operations. As of December 31, 2009, the Company held no legal reserves.

Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting shareholders’ equity that, under generally accepted accounting principles, are excluded from net income. For the Company, such items consist primarily of unrealized gains and losses on marketable securities and foreign currency translation gains and losses.

The Company holds an investment and liability for Global Diamond Resources, discussed in Note 11. Both the investment and liability are denominated in British Pounds and currency adjustments offset The liability accrues interest payable in British Pounds. As of December 31, 2009, the Company had accrued interest of $143,325 after currency adjustments, resulting in an unrealized gain of $5,787, which is recorded in Accumulated Other Comprehensive Income.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Revenue Recognition

The Company recognizes revenues when a sale agreement has been made, when there are no restrictions or repurchase agreements on the transaction, when collection is reasonably certain, and when the goods or services have been delivered to the buyer.

Mineral Acquisition and Exploration Costs

ASC 805-20-30-1.H defines mineral rights as the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. ASC 805-20-55-37 states that usage rights are contract based intangible assets to be accounted for separately from goodwill. The Company has not obtained significant geological surveys to determine the amount of mineral rights separate from the acquisition cost of Muluncay as described in Note 10 A. Management estimates the undetermined value of the mineral rights to be equal to or greater than the cost of acquisition of Muluncay. Until December 31, 2009, the Company had mineral rights of $412,588. On December 31, 2009 the Company discontinued these operations as discussed in Note 12, and disposed of the mineral rights. As of December 31, 2009, the Company held no mineral rights.

Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method.

Property, Plant, and Equipment

Property and equipment are stated at cost. The Company acquired certain property, plant, and equipment in the acquisition of MuluncayGoldCorp. Depreciation and amortization are determined using the straight-line method over estimated useful lives of the assets. All property, plant, and equipment were disposed of and any gains and losses on the disposal are included in discontinued operations as disclosed in Note 12. As of December 31, 2009, the Company held no property, plant or equipment.

Goodwill and Other Intangibles

The Company acquired MuluncayGoldCorp. through a share purchase agreement (the Acquisition) (Note 10) on March 30, 2009. The Company also acquired additional assets from Minera del Pacifico, including mines for which proven reserves have not been established, but the value of which are estimated to be the difference between the purchase price and the known assets purchased.

Upon acquisition of MuluncayGoldCorp, the Company reported Goodwill of $340,221. In September 2009, the Company increased goodwill by $72,366 after Ecuadorian tax authorities reviewed Muluncay for the period ending 2008 and informed Muluncay they did not owe $72,366 in taxes that had been previously accrued. Under terms of the purchase of Muluncay, Trilliant Exploration assumed all of Muluncay’s liabilities; the absence of the tax accrual would have increased Muluncay’s net assets thus resulting in the increased goodwill upon purchase. Due to the contingent and estimable nature of the Ecuadorian tax liability, the change has been treated prospectively in the financial statements and does not require restatement of prior periods. As of December 31, 2009, no impairment on goodwill had been estimated

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

In November 2009, the Company estimated the value of the goodwill previously recorded should be assigned to mineral rights and reclassified the estimate of goodwill accordingly. Due to the contingent and estimable nature of the mineral rights, the change has been treated prospectively in the financial statements and does not require restatement of prior periods.

As of December 31, 2009, the Company held no Goodwill, and the reclassified mineral rights were disposed of with gains or losses on disposal included in Discontinued Operations (Note 12). The Company possesses no other intangible assets.

Net Income or (Loss) Per Share of Common Stock

The Company has adopted ASC Topic No. 260 concerning earnings per share (EPS), which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. The reconciliation of unamortized convertible bond issuance costs and interest expense on convertible bonds and convertible notes payable to net income, and addition of shares assuming conversion of notes and bonds and exercise of warrants, resulted in a nominal anti-dilutive effect on loss per share.

	Year Ended December 31,
	2009			2008
BASIC
Net loss	$	(3,361,445	)	$	(132,502	)
Weighted average common shares outstanding		92,447,750			93,296,164
Net loss per share (Basic)	$	(0.036	)	$	(0.001	)

DILUTED
Net loss (Basic)	$	(3,361,445	)	$	(132,502	)
Convertible bond and note interest		364,096			24,375
Unamortized convertible bond issuance costs		(92,585	)		-
Net loss (Diluted)	$	(3,089,934	)	$	(108,127	)

Weighted average common shares outstanding (Basic)		92,447,750			93,296,164
Convertible preferred shares		607,142,857			365,662
Convertible bonds and notes		202,571,804			-
Options		-			-
Warrants		-			-
Weighted average common shares outstanding (Diluted)		902,162,411			93,661,826

Net loss per share (Diluted)	$	(0.003	)	$	(0.00	)

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Net Income or (Loss) Per Share of Common Stock (cont’d)

On June 30, 2009, the Company exchanged 5,900,000 shares of common stock held by Trafalgar Capital Specialized Investment Fund FIS (“Trafalgar”) (a significant stockholder of the Company) for 10,200,000 of designated Series I preferred stock, which is convertible to common stock based on the average closing price of the five days preceding conversion. The 5,900,000 common shares were acquired at $1.73 per share and the preferred stock was issued at $1.00 per share. The transaction resulted in treasury stock of $10,200,000, and an increase to Additional Paid in Capital of $10,189,800. The effects of this transaction have been included in the above dilution computation.

Recently Issued Accounting Pronouncements

Statement of Financial Accounting Standards ("SFAS") SFAS No. 165 (ASC Topic No. 855),"Subsequent Events," SFAS No. 166 (ASC Topic No. 810), "Accounting for Transfers of Financial Assets-an Amendment of FASB Statement No. 140," SFAS No. 167 (ASC Topic No. 810), "Amendments to FASB Interpretation No. 46(R)," and SFAS No. 168 (ASC Topic No. 105), "The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162," were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.

Accounting Standards Update ("ASU") ASU No. 2009-05 (ASC Topic No. 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-13 (ASC Topic No. 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic No. 985), Certain Revenue Arrangements that include Software Elements, and various other ASU's No. 2009-2 through ASU No. 2010-11 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Currency Risk and Foreign Currency Translations

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Currency Risk and Foreign Currency Translations

The Company holds investments and notes payable denominated in the Great Britain Pound (GBP). The Company reported changes in the value of the asset due to foreign currency adjustments of $96,000 as of December 31, 2009, which is offset by the same adjustments to a related note payable. The Company is required to pay interest in GBP on the above note payable. As of December 31, 2009 the Company accrued net interest of $143,325 after an adjustment of $5,787 in currency translation recorded in Accumulated Other Comprehensive Income (see Note 11).

NOTE 3 - PROVISION FOR INCOME TAXES

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income regardless of when reported for tax purposes. Deferred taxes provided for under ASC Topic No. 740 give effect to the temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, and allowances based on the income taxes expected to be payable in future years. Deferred tax assets arising as a result of net operating loss carry-forwards and foreign tax credit carry-forwards have been offset completely by a valuation allowance due to the uncertainty of their utilization in future periods.

The Company is expected to file consolidated US tax return to realize the benefits of foreign tax loss carryforwards against possible future foreign taxable income. Operating loss carry-forwards of $3,557,566 generated since inception through December 31, 2009 will begin to expire in 2023 Accordingly, deferred tax assets of approximately $889,391 were completely offset by the valuation allowance Following are the components of the income tax benefit based on the Ecuadorian tax rate of 25%.


	Cumulative			For the Year Ended December 31,
	from			2009			2008
	Inception
Net operating income (loss)	$	(3,557,566	)	$	(3,361,445	)	$	(132,502	)
Current provision
Domestic
Federal	$	-		$	-		$	-
State & Local		-			-			-
Foreign		-			-			-
Deferred (benefit) provision
Domestic
Federal		-			-			-
State & Local		-
Foreign		(889,391	)		(840,361	)		(33,126	)
Total tax benefit		(889,391	)		(840,361	)		(33,126	)
Valuation allowance		889,391			840,361			33,126
Net benefit (provision)	$	-		$	-		$	-

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 4 – STOCKHOLDERS’ DEFICIT

Article Amendment

Effective December 1, 2008, the Company amended its Articles of Incorporation thereby increasing its authorized common and preferred stock to 1,000,000,000 and 200,000,000 shares, respectively. The par value for preferred and common stock is $.001. This change has been reflected in the accompanying financial statements.

Stock Splits

On November 9, 2007, the Company affected a 2 for 1 forward split on its common stock. On November 14, 2008, the Company affected another 2 for 1 forward stock split. Par value remained at $.001, and both splits have been retroactively applied to the earliest period presented in the accompanying financial statements.

Preferred Stock and Treasury Stock

On June 30, 2009, the Company issued to Trafalgar Capital Specialized Investment Fund FIS (“Trafalgar”) (a significant stockholder of the Company), 10,200,000 shares of designated Series I Preferred Stock (par value $.001), in exchange for 5,900,000 shares of the Company’s own common stock previously held by Trafalgar. The 5,900,000 common shares were acquired at $1.73 per share and the preferred stock was issued at $1.00 per share. The transaction was recorded using the Cost Method, resulting in treasury stock of $10,200,000 and an increase to Additional Paid in Capital of $10,189,800

Series I preferred stockholders do not receive interest or dividends separately from common stock shareholders. Series I shall participate in dividends when and if declared in the same proportion as common stock shareholders. Series I preferred stock is convertible into common shares at the lowest volume weighted average price of the common shares in the five days preceding conversion.

Common Stock

The Company had 93,131,500 and 91,940,000 shares of common stock issued and outstanding at December 31, 2009 and 2008, respectively. The Company’s common stock is thinly traded with a limited market. As of December 31, 2009, the stock was trading at a market price of $.014 per share.

Following are the Company’s stock transactions on a post-2007 and 2008 stock split basis:

On December 29, 2003, the Company issued 16,000,000 shares of its common stock at $.00025 for $4,000 subscriptions receivable. Collection of $2,000 of the subscriptions receivable was completed on 8,000,000 shares. The remaining $2,000 subscription receivable and the underlying 8,000,000 shares were cancelled. The proceeds were used for working capital.

On December 15, 2005, the Company issued 72,000,000 shares of its common stock at $.00025 per share for $18,000. The proceeds were used for working capital and to execute the Company’s business plan.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 4 – STOCKHOLDERS’ DEFICIT (CONT’D)

On March 15, 2006, the Company sold 10,000,000 shares at $.00025 per share for $2,500 cash. The proceeds were used for working capital.

During January through March of 2007, the Company sold 1,300,000 shares of its common stock at $.025 per share for $32,500 cash. The proceeds were used for working capital and to fund its operations.

On June 4, 2007, the Company sold 140,000 shares of its common stock for $.025 per share. The $3,500 cash received was used for working capital.

On November 6, 2007, the Company sold 5,000,000 shares of its common stock at $.00025 for $1,250 cash. On the same date, 1,000,000 shares of common stock were exchanged at $.00025 for a $250 reduction in loans from stockholders.

On February 14, 2008, 1,500,000 shares of common stock were rescinded and cancelled for repayment of $250 cash.

On April 15 and May 21, 2008, four Company officers resigned their positions and were refunded their initial stock investments for a total of $1,000 for 4,000,000 shares which were then cancelled.

In May 2009, the Company issued 25,000 shares to an independent investor at $.25 per share for signing a letter of intent for funding. As of December 31, 2009, the letter of intent had not yet been finalized and consideration for the stock had not yet been received, resulting in a stock subscription receivable of $6,250 reported in the stockholders’ deficit section of the balance sheet. Management considers these funds unlikely to be received and has expensed $6,250 as consulting fees as of December 31, 2009.

During June 2009, the Company sold to four independent investors, 184,000 shares of common stock at a price of $.25 per share for $46,000 cash.

On July 20, 2009, the Company sold to independent investors 40,000 shares of restricted common stock at $.25 per share for $10,000 cash.

In July 2009, the Company issued an additional 500,000 shares of restricted stock to an independent investor at $.25 per share for signing a letter of intent for funding. This established a deposit of $125,000 and additional paid in capital of $124,500. As of December 31, 2009 the letter of intent had not been finalized and uncertainty exists in the ability of the investor to complete the transaction. Management considers the deposit of $125,000 unlikely to be received, and issued orders to the transfer agent to cancel the stock certificate. The Company retains the right and obligation of not lifting the restriction on the stock and has requested the investor return the restricted stock certificate The deposit of $125,000 was expensed as consulting fees as of December 31, 2009.

On July 20, 2009, the Company issued to a consultant 2,500 shares at $.40 per share for services totaling $1,000

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 4 – STOCKHOLDERS’ DEFICIT (CONT’D)

On August 5, 2009, the Company sold to an independent investor, 40,000 shares of common stock at a price of $.25 per share for $10,000.

On August 26, 2009, the Company issued to three consultants a total of 100,000 shares of common stock at $.18 per share ($18,000 value) and 150,000 warrants at $.17 per share ($25,500 value) for services totaling $43,500. The Black-Scholes Option Pricing Model was used to determine the fair value of the warrants using the following assumptions: On August 26, 2009 the closing price was $.18 per share and the risk free rate on 3 year treasuries was 1.57%, options expire in three years, immediate vesting, no dividends, and stock volatility of 260%.

On September 9, 2009, the Company issued to a consultant 200,000 shares of common stock at $.15 per share for services totaling $30,000. The contract term is six months, resulting in $12,600 expensed as of December 31, 2009 and $12,600 recorded as services prepaid with stock in the stockholders’ equity (deficit) section of the balance sheet.

On December 15, 2009, the Company issued 100,000 shares of common stock to an officer at $.75 per share for total value of $75,000. The issuance was pursuant to an employment agreement whereby the officer would receive a stock bonus should he serve out his term as specified in the agreement (see Note 6D).

On December 21, 2009, the Company entered into an agreement with Questas Global Ltd (Questas) by which the Company issued 10,000,000 warrants on common stock at $.003 per share in exchange for office space and services provided to the Company president over the past year for a total of $194,353. Terms of the warrant allow for Questas to purchase up to 10,000,000 shares of common stock under a cashless purchase after six months at .003 cents per share, and the warrants expire five years from the date of the contract. As a cashless exchange, if the fair market value of the common stock is greater than the exercise price, Questas may elect to receive shares equal to the value of the warrants. The exercise of warrants is restricted such that Questas may not obtain beneficial ownership of more the 4.99% of the outstanding shares of common stock (see Note 7).

The Company had 93,131,500 and 87,131,500 shares of common stock issued and outstanding, respectively (taking into consideration the 5,900,000 shares of treasury stock) at December 31, 2009 and 91,940,000 shares of common stock issued and outstanding at December 31, 2008. The Company’s common stock is thinly traded with a limited market. As of December 31, 2009, the stock was trading at a market price of $.014 per share.

NOTE 5 - PURCHASE OF MINING CLAIMS

On March 30, 2009, Trilliant Exploration Corp. acquired one mine held by MuluncayGoldCorp (Muluncay) and six other mining properties from Minera del Pacifico (Pacifico) (Note 10). One claim identified as the Caspach mining region, originally purchased by Muluncay on January 29, 2008 for $50,000, was revoked on June 10, 2008 by the Ecuadorian government for failure to meet 100 ton per day production requirements. A legal appeal to reclaim the concession has been made. As of December 31, 2009 Management discontinued all operations in Ecuador.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 6- RELATED PARTY TRANSACTIONS

A.1 – Convertible Notes Payable

The Company has entered into multiple convertible notes payable agreements with an investment firm that is also a minority stockholder of the Company. Each note carries a separately dated promissory note that bears interest of 8% and is payable on or before August 31, 2010, with each funding due one year from original date of receipt. Principal and interest are convertible at the option of the note-holder into shares of the Company’s common stock at the rate of 80% of the average of the five daily volume weighted average price preceding the conversion date.

Accrued interest and interest expense on the convertible notes payable as of and for the year ended December 31, 2009 totaled $35,897 Due to the contingent nature of the conversion price, no beneficial conversion feature was noted.

The convertible promissory notes with the investment firm are summarized as follows:

Loan No.	Amount	Date	Maturity	Interest Rate
1	$ 90,000	12/31/2008	1/5/2010	8.00%
2	100,000	1/16/2009	1/5/2010	8.00%
3	50,000	1/23/2009	1/5/2010	8.00%
4	25,000	2/2/2009	1/5/2010	8.00%
5	10,000	3/9/2009	1/5/2010	8.00%
6	50,000	4/8/2009	4/8/2010	8.00%
7	75,000	4/27/2009	4/27/2010	8.00%
7	(75,000)	5/29/2009	payment
8	25,000	6/23/2009	6/23/2010	8.00%
9	100,000	7/1/2009	7/1/2010	8.00%
10	20,000	7/6/2009	7/6/2010	8.00%
11 (A)	195,000	8/27/2009	8/31/2010	8.00%
Balance, Dec. 31, 2009	$ 665,000

(A) In August, the Company entered into a master borrowing agreement with the investment firm, which allows for notes payable of up to $500,000 to be paid in installments as needed. Each note carries a separately dated promissory note that bears interest of 8% and is payable on or before August 31, 2010. As of December 31, 2009, six installments were made totaling $195,000.

B – Short-Term Notes Payable

The Company has borrowed funds from stockholders for working capital purposes from time to time. The loans are non-interest bearing, payable on demand and, consequently, reported as current liabilities. The Company has received $39,514 in advances since inception and made repayments of $7,019 in cash, resulting in a payable balance of $32,495 as of December 31, 2009 and 2008 The Company also owes its officers and directors $24,589 and $0 at December 31, 2009 and 2008, respectively, for reimbursable expenses incurred in the normal course of business.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 6- RELATED PARTY TRANSACTIONS (CONT’D)

C – Notes Receivable

On October 16, 2008, the Company entered into a note receivable agreement with Minera del Pacifico (Pacifico), a 17.36% stockholder of the Company, whereby the Company was required to advance Pacifico up to $1,200,000 in anticipation of the purchase of MuluncayGoldCorp from Pacifico (Note 10). A total of $1,195,000 was advanced to Pacifico as follows:

No.	Amount	Due
1	$ 500,000	10/16/2008
2	400,000	10/17/2008
3	90,000	12/30/2008
4	100,000	1/16/2009
5	50,000	1/23/2009
6	25,000	2/2/2009
7	20,000	2/18/2009
8	10,000	3/9/2009

The note bore interest of 8% and was payable on or before January 5, 2010. The December 31, 2008 balance comprises the first, second, and third installments totaling $990,000. Interest earned on the note for the period of the note’s inception through December 31, 2008 totaled $14,904, all of which was receivable at December 31, 2008 Interest income of $22,633 was earned during the three months ended March 31, 2009. On March 30, 2009, Pacifico was released from any repayment obligation pursuant to the Share Transfer Agreement disclosed in Note 10.

D – Accrued Officer Compensation

The Company has executed service agreements with its Director and Officers, whereby these individuals will perform management functions on the Company’s behalf. The Secretary was to receive $4,000 monthly compensation for the 15-month period of October 2008 through December 2009. On December 22, 2009 the Secretary resigned his position. The President and sole Director is to receive $3,000 monthly compensation for the 13-month period of December 2008 to December 2009, with a 100,000 share stock bonus to be granted at the end of the contract term if he performs his contracted duties for a period of 6 months of more. For duties less than 12 months, but greater than 6 months, the stock bonus shall be prorated at 8,333 shares per full calendar month.

Pursuant to ASC Topic Nos. 505 and 718, the bonus was valued on the grant date using the Black-Scholes Options Pricing model. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant. Expected volatility is based on the historical volatility of the Company’s stock. The Black Scholes valuation was derived based on the bonus term of one year as expected life, the stock price of $.75, assuming a risk-free interest rate between 4% and 5% per annum, and zero volatility, dividend yield, and forfeiture rate. The resulting total fair value of the bonus on the grant date was $75,000, which the Company is recognizing as compensation expense ratably over the term of the management agreement. The Company has recognized $150,060 in compensation expense with these individuals during the year ended December 31, 2009, including $75,000 in stock bonus compensation.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 6- RELATED PARTY TRANSACTIONS (CONT’D)

E – Bonds Payable, Convertible & Secured

October 15, 2008 Bonds

On October 15, 2008, the Company issued $1,300,000 in convertible secured bonds to a stockholder for net proceeds of $1,235,356 (including two months of prepaid interest totaling $19,500 retained by the stockholder that was amortized to interest expense by December 31, 2008). The bonds bear interest of 9% and mature (if not converted) on October 15, 2010. Upon default, the interest rate is increased to 18%. The stockholder incurred bond issuance costs of $64,644, which are being amortized to interest expense on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 and December 31, 2008 was $92,585and $57,214, respectively, net of $42,805and $7,430, respectively, in amortization. Interest payments are made mid-month, resulting in bond interest payable of $49,115 at December 31, 2009. Bond interest expense was $142,1545 (including $24,519 in bond issuance cost amortization) for the year ended December 31, 2009.

The bonds have an optional conversion feature whereby the stockholder is entitled to convert the bonds and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the ‘Fixed Price,’ which was determined to be $.61 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. If the bonds are not converted, the Company is required to make interest-only payments for a period of one year following the bonds’ inception. Thereafter, the Company shall continue making monthly interest payments, in addition to quarterly principal payments of $325,000 and quarterly 16% redemption premium payments that amount to $52,000 per quarter ($208,000 total). Due to the contingent nature of the conversion price, no beneficial conversion feature was recorded

April 30, 2009 Bonds

On April 30, 2009, the Company issued $300,000 in convertible secured bonds to a stockholder for net proceeds of $258,856 (including two months of prepaid interest totaling $4,500 retained by the stockholder that was amortized to interest expense by December 31, 2009). The bonds bear interest of 9% and mature (if not converted) on October 31, 2010. Upon default, the interest rate is increased to 18%. The stockholder incurred bond issuance costs of $41,144, which are being amortized to interest expense on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 was $23,152, net of $18,286 in amortization for the year ended December 31, 2009. Interest payments are made at month-end, resulting in bond interest payable of $6,750 at December 31, 2009. Bond interest expense was $31,786 (including $18,286 in bond issuance cost amortization) for the year ended December 31, 2009.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 6- RELATED PARTY TRANSACTIONS (CONT’D)

E – Bonds Payable, Convertible & Secured (cont’d)

April 30, 2009 Bonds (cont’d)

If the bonds are not converted, the Company is required to make interest-only payments for a period of eighteen months following the bonds’ inception. Thereafter, the Company shall continue making monthly interest payments, in addition to quarterly principal payments of $75,000 and quarterly 16% redemption premium payments that amount to $12,000 per quarter ($48,000 total). Due to the contingent nature of the conversion price, no beneficial conversion feature was noted.

October 12, 2009 Bonds

On October 12, 2009, the Company issued $210,000 in convertible secured bonds to a stockholder for net proceeds of $210,000 The bonds bear interest of 9% and mature (if not converted) on January 12, 2010 or upon completion of any new investments in the company exceeding $1,500,000. Upon default, the interest rate is increased to 18%, and the company may convert all bonds held by lender without restriction The Company incurred bond issuance costs of $42,000, which are being accrued to bonds payable on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 was $23,062. Interest payments are made at month-end, resulting in bond interest payable or $4,115 at December 31, 2009. Bond interest expense was $4,115 for the year ended December 31, 2009. Use of the funds was to provide services for new financing, payment on mortgages, payment of past due bills, and to support operations.

The bonds have an optional conversion feature whereby the stockholder is entitled to convert the bonds and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the ‘Fixed Price,’ which was determined to be $.07 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. Due to the contingent nature of the conversion price, no beneficial conversion feature was noted. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009 then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate.

November 3, 2009 Bonds

On November 3, 2009, the Company issued $210,000 in convertible secured bonds to a stockholder for net proceeds of $210,000 The bonds bear interest of 9% and mature (if not converted) on February 3, 2010 or upon completion of any new investments in the Company exceeding $1,500,000. Upon default, the interest rate is increased to 18%. Interest payments are made at month-end, resulting in bond interest payable or $2,993 at December 31, 2009. Bond interest expense was $2,993 for the year ended December 31, 2009. Use of the funds was to provide payment on mortgages and payment of past due bills.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 6- RELATED PARTY TRANSACTIONS (CONT’D)

E – Bonds Payable, Convertible & Secured (cont’d)

November 3, 2009 Bonds (cont’d)

If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. Due to the contingent nature of the conversion price, no beneficial conversion feature was noted. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009 then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate. The Company is required to place 100,000,000 shares of common stock into escrow, which shall be released unconditionally in the event of default.

NOTE 7 - OTHER MATERIAL CONTRACTS

On October 21, 2008, the Company entered into a consulting agreement, whereby the consultant would assist the Company with various aspects of the Company's merger and acquisition activities. Upon the agreement’s inception, the Company paid the consultant a non-refundable fee of $100,000 for services to be rendered for the six-month period of October 21, 2008 through April 21, 2009, resulting in consulting expense of $38,000 for 2008 and a prepaid expense of $62,000 at December 31, 2009. The prepaid expense was amortized ratably during 2009 over the remainder of the agreement term.

In June 2009, the Company acquired a one year insurance policy with total premium of $20,760. As of December 31, 2009 total payments of $20,760 were made and $11,591 of the total premium has been amortized, resulting in a balance of $9,169 as of December 31, 2009

On June 22, 2009, the Company entered into a consulting agreement, whereby the Consultant will promote the Company with brokers and potential investors. The contract term is six months at $25,000 per month for total potential fees of $150,000. Upon signing, the Company paid and immediately expensed $25,000 for the first month of service. The Company may terminate the contract at any time without cause.The Company terminated the contract after completion of the first month and is not obligated to further payments.

On October 12, 2009 the Company entered into an engagement agreement with a registered Securities Broker-Dealer, whereby the Broker-Dealer will act as placement agent in connection with a $30,000,000 private placement transaction in two tranches dated December 15, 2009 and March 15, 2010. The initial fee is $20,000. Additional fees upon successful placement include 8.5% of gross proceeds, 2% on all funds raised to Broker-Dealer and 2% of all funds raised to another Broker-Dealer for co-management, 4.5% to the selling group which may include the above listed Broker-Dealers, plus 1.5% on all funds raised to be paid to Trafalgar Capital Advisors (an existing shareholder). The placement agent shall also receive upon successful placement; warrants equal to 10% of the total value of all securities placed with an exercise price of equal to the imputed equity placement price in the offering, and have a cashless exercise price with an open option period of 5 years and an anti-dilution provision. As of December 31, 2009 there have been no further actions on this agreement and no securities placements have occurred.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 7 - OTHER MATERIAL CONTRACTS (CONT’D)

On December 21, 2009, the Company entered into an agreement with Questas Global Ltd (Questas) by which the Company issued 10,000,000 warrants on common stock with an exercise price of $.003 per share in exchange for office space and services provided to the Company president over the past year. The total value of warrants was $194,353, which is included in general and administrative expenses for the year ended December 31, 2009. Pursuant to ASC Topic Nos. 505 and 718, the warrants were valued on the grant date using the Black-Scholes Options Pricing model. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant. Expected volatility was based on the historical volatility of the Company’s stock. The Black Scholes valuation was derived based on the exercise term of five years as expected life, the stock price on the grant date of $.002, exercise price of $.003, assuming a risk-free interest rate between 2% and 3% per annum, and 153% volatility, and 0% dividend yield and forfeiture rate. As a cashless exchange, if the fair market value of the common stock is greater than the exercise price, Questas may elect to receive shares equal to the value of the warrants. The exercise of warrants is restricted such that Questas may not obtain beneficial ownership of more the 4.99% of the outstanding shares of common stock.

For the year ending December 31, 2009 the Company paid $46,624 in prepaid expenses, and amortized $24,191. As of December 31, 2009 the unamortized balance is $22,433 (including $9,169 in prepaid insurance described above).

NOTE 8 - GOING CONCERN

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has accumulated an operating deficit since its inception. The acquisition of MuluncayGoldCorp and properties from Minera del Pacifico substantially increased the Company’s liabilities. Additionally, current economic conditions in the United States and globally create significant problems attaining sufficient funding. Accordingly, management has encountered significant difficulties in obtaining financing. These items raise substantial doubt about the Company’s ability to continue as a going concern. In view of these matters, realization of the assets of the Company is dependent upon the Company’s ability to meet its financial requirements through equity financing, borrowing, and the success of future operations. These financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

NOTE 9 - SUBSEQUENT EVENTS

As discussed in Note 12, the Company was notified on February 11, 2010 by Minera Del Pacifico that the STA between the Company and MuluncayGoldCorp had been terminated effective December 31, 2009.

The Company has evaluated events from December 31, 2009, through the date whereupon the financial statements were issued and has determined that there are no additional items to disclose.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 10 – BUSINESS COMBINATIONS

A – MuluncayGoldCorp S.A.

On March 30, 2009, Trilliant Exploration Corp. (Trilliant) acquired MuluncayGoldCorp S.A. (an Ecuadorian Company) (Muluncay), and additional properties, from Minera del Pacifico (Pacifico) pursuant to a Share Transfer Agreement (STA). Muluncay is engaged primarily in metallic mining operations, such as the extraction and sale of gold and silver ores. Muluncay also extracts and sells rock, sand, and gravel. Trilliant acquired 100% of the voting equity interest in Muluncay, as well as the assets and liabilities. In addition, Trilliant acquired six properties from Pacifico. The purchase price for the net assets was a $3,600,000 contingent note payable to be paid in installments (discussed below) with interest on the outstanding balance. The Company was also required to make an additional investment in Muluncay of $1,800,000 to further the development of its existing and acquired properties.

The primary reason for the acquisition was to provide cash-flow through Muluncay’s mining operation, while upgrading the facilities to comply with the 100 ton/day minimum operations required by Ecuador’s mining laws. By exploiting existing relationships of Muluncay’s existing management team, the Company was hoping its presence would lead to acquisitions of other operating mining companies which are unable to comply with the new 100 ton/day requirements.

Expected synergies from the acquisition of Muluncay were thought to have included providing Trilliant the ability to acquire other mining operations in Ecuador. Many of the operating gold mines in Ecuador are not expected to meet 100 tons/day minimum operations as required by Ecuador mining law.

At the time of purchase, goodwill included the mining potential of Mari Jane and Jaceth Ethan mines. ASC Topic No. 805 requires proven mineral rights to be capitalized and recorded separately from goodwill. Management was unable to determine mineral rights separate from the purchase transaction for lack of a comprehensive feasibility study. As such, no mineral rights were recorded. In November 2009, the Company estimated the value of the goodwill previously recorded should be assigned to mineral rights and reclassified the estimate of goodwill accordingly. Management believes that while the Mari Jane and Jaceth Ethan mines are already producing gold, they have the potential for greater production.

The purchase of Muluncay lead to the acquisition of 7 properties which includes 6 mines and 1 plant for processing ore. These are

1.	Mari Jane Plant

2.	Mari Jane Mine

3.	Jaceth Ethan Mine, also known as Jacob Ethan or El Aguacate

4.	La Chonta & Los Quiendes

Naranjito

6.	Seňor de la Divina Justica

Las Cańas

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 10 – BUSINESS COMBINATIONS

A – MuluncayGoldCorp S.A. (CONT’D)

Of these properties, only Las Canas is freely transferable at time of purchase and was wholly owned by Muluncay. All remaining properties were held by Minera del Pacifico and were under mortgage. Ecuadorian law allows for the transfer of rights, but not ownership until existing mortgage balances are paid in full. As such, mortgages totaling $604,161 were assumed by the Company. Since assumption of the mortgages, the Company has made $200,541 in principal payments, resulting in a December 31, 2009 balance of $403,620, all of which is payable by September 13, 2010. The Company has classified the entire amount as current. Since the mortgages are non-interest bearing, interest has been imputed on the notes and has recorded a debt discount of $61,056. Since assumption of the mortgages, $35,664 of the debt discount has been amortized to interest expense, resulting in an unamortized debt discount of $25,392 and net present value of the mortgages of $403,620 at December 31, 2009.

Payment of the $3.6 Million purchase price was contingent upon Muluncay reaching production of 400 tons/day. If this threshold was not achieved, the note and interest were not payable, and title to Muluncay’s net assets would remain with Trilliant. A value of $1,915,809 (net of interest imputed on the mortgages) was assigned to the acquired plant, and $16,000 assigned to the land where the plant is situated. These items netted with the other assets and liabilities acquired resulted in goodwill of $412,587 (including the Ecuadorian tax accrual reversal as described in Note 2 - Goodwill and Other Intangibles). The transaction included various adjustments, such as the elimination of $1,195,000 notes receivable and $37,538 of interest receivable from Minera del Pacifico (MDP) (Note 6C), which were abolished pursuant to the terms of the STA. All acquired assets and liabilities were recorded at fair value.

Additional assets acquired or liabilities assumed include, but are not limited to, the following: $140,433 in customer receivables, foreign tax credits of $64,343, and fixed assets of $97,382 (consisting primarily of machinery, computer, electrical, and tooling equipment). In addition to the mortgages discussed previously, the Company assumed supplier payables totaling $68,620, foreign tax liabilities of $179,135, payroll liabilities of $8,090 (including related tax obligation), and local and intangible tax obligations of $13,351. The Company assumed obligations payable to a principal stockholder of Pacifico in the amount of $515,170, and unearned income of $38,000. In addition, Ecuadorian law requires that 10% of annual liquid profit be set aside in a legal reserve fund, at the time of acquisition this amounted to $210 and was recorded as such in the Stockholders’ Deficit section of the balance sheet.

The $3.6 Million contingent note payable to Pacifico bore interest of 4.5% per annum, and was payable upon achievement of 400 tons per day (Minimum Operations). Beginning 30 days from the date of first reaching Minimum Operations, the Company was to make four (4) quarterly payments to Pacifico of $200,000 each. After making the first four quarterly payments, the Company was to continue to make quarterly payments in the minimum amount of $300,000 until all principal and interest was fully paid.

Per Note 12, the Muluncay STA was terminated effective December 31, 2009.

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 10 – BUSINESS COMBINATIONS (CONT’D)

B – AyapambaGold S.A.

On July 1, 2009 the Company acquired 799 of 800 shares of AyapampaGold S.A (AYA) at $1 per share for a purchase price of $799. AYA was formed in mid-2007 as a shell and has been inactive since inception. The Company acquired AYA to use as a holding company in Ecuador to facilitate future potential acquisitions.

On or about July 23, 2009, AYA entered into a Share Purchase Agreement (SPA) to acquire the assets and liabilities of Santa Fe Mining Corporation (SFM). SFM is a gold processing company located in the El Oro Province of Ecuador. The total purchase price is expected to be $1,631,844. Initial payment of $600,000 is required at execution of the purchase agreement. Under terms of the agreement, SFM is required to use initial payment to satisfy any and all claims, liens, or encumbrances to title of any shares or assets to be acquired by AYA. The remainder of the purchase price is payable in three installments of $343,948 due on or before each of the six months, twelve months, and eighteen months following the signing date. The acquisition was expected to close in August 2009. Management had not completed the transaction as of December 31, 2009

NOTE 11 – INVESTMENTS

On July 1, 2009, the Company entered into a convertible loan agreement under the laws of England and Wales for the price of ₤1,500,000. Based on the July 1, 2009 Interbank exchange rate of 1.6568, the loan was initially valued and recorded at $2,485,200. The note bears interest of 12% and is payable on or before June 24, 2010. The loan and interest are convertible into the Company’s common stock at $.45 per share. Interest is accrued quarterly but may be paid at maturity on June 24, 2010. Early payments must be in intervals of ₤100,000. Accrued interest and interest expense as of and for the period of July 1, 2009 through December 31, 2009 totaled $143,325 after currency translation adjustments of $5,787 recorded to accumulated other comprehensive income.

On July 1, 2009, Trilliant Diamonds (a wholly-owned subsidiary of the Company) used the funds to acquire 10,000,000 shares of Global Diamond Resources PLC (GDR) at ₤ .15 per share for total purchase price of ₤1,500,000, representing a 3.2% ownership interest in GDR. GDR is located in Gibraltar, Spain and primarily engages in diamond mining. The investment, likewise, was recorded at $2,485,000, and is considered an available-for-sale security to be adjusted to fair market value on reporting dates with holding gains and losses tracked in other accumulated comprehensive income (loss) in accordance with ASC Topic No. 320. GDR is a private company, so the stock value is difficult to determine. Management has determined that there has been no material change in the investment’s valuation since July 1, 2009, and has therefore not recorded any holding gains or losses.

The currency translation adjustment based on the Interbank exchange rate of 1.5928 as of December 31, 2009 is $96,000, resulting in the devaluation of the investment and the note payable down to $2,389,200

Trilliant Exploration Corporation

(A Pre-Exploration Stage Company)

Notes to Audited Consolidated Financial Statements

Years Ended December 31, 2009 and 2008, and the

Period of December 29, 2003 (Inception) to December 31, 2009

NOTE 12 – DISCONTINUED OPERATIONS

As of December 31, 2009, the Company was in default on credit arrangements for the purchase of MuluncayGoldCorp. The Company received a letter on February 11, 2010 in which Minera Del Pacifico informed the Company of the intent to enforce its rights under the agreements, and terminated all contractual agreements between the two companies effective December 31, 2009. Management, in the interest of the Company and lacking financial means to further pursue contractual agreements, acknowledged the letter from Minera Del Pacifico and released all claims on mining assets and rights attached to previous agreements.

Effective December 31, 2009, the Company disposed of its Muluncay Subsidiary and recognized a Net Loss from Discontinued Operations of $1,964,636, consisting of a $1,773,141 loss on disposal and $191,495 loss from operations for the period of March 30, 2009 through December 31, 2009. The Company was released from all obligations and released all claims on assets primarily because it has incurred significant operating losses since acquisition and the Company could not attract operating capital to meet contractual obligations since the acquisition of MuluncayGoldCorp. The assets lost consisted primarily of accounts receivable, inventories, property and equipment, and other assets. Minera Del Pacifico also assumed certain accounts payable and accrued liabilities.

The following is a summary of the significant net assets lost and discharge of liabilities as determined at December 31, 2009:

ASSETS			LIABILITIES
Current Assets			Current Liabilities
Checking/Savings	$	4,501	Accounts payable - trade	$	57,940
Accounts receivable trade		86,788	Bank overdrafts		14,323
Employee loans		3,957	Loan payable - related party		644,985
Accounts receivable - rel. party		472,598	Unearned income		3,500
Accounts Receivable - Other		186,920	Loans payable		11,000
Foreign tax credits		16,078	Foreign taxes payable		120,736
Inventory		91,949	Payroll liabilities		91,975
Fixed Assets			Mortgage liabilities, net		403,620
Land		16,000	Total Liabilities	$	1,348,079
Plant		1,915,809
Machinery and equipment		105,213	Net assets/loss on disposal	$	1,773,141
Computer equipment		614	Operating loss, 3/30-12/31/09		191,495
Electrical equipment		10,476	Net loss, discontinued operations	$	1,964,636
Tools		4,351
Accumulated depreciation		(206,622)
Other Assets
Mineral rights (formerly goodwill)		412,588
Total Assets	$	3,121,220

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Our principal independent registered public accounting firm is Child, Van Wagoner & Bradshaw PLLC (CVWB”), 5296 S. Commerce Drive, Suite 300, Salt Lake City, Utah 84107. The report of CVWB on our financial statements for fiscal years ended December 31, 2009 and December 31, 2008 (which include the balance sheets as of December 31, 2009 and 2008, and the statements of operations, other comprehensive loss, changes in stockholders’ deficit for the period from December 29, 2003 (inception) through December 31, 2009), did not contain an adverse opinion or disclaimer of opinion, nor was it modified as to uncertainty, audit scope or accounting principles, other than to state that there is substantial doubt as to our ability to continue as a going concern. During our fiscal year ended December 31, 2009 and December 31, 2008, there were no disagreements between us and CVWB, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of CVWB, would have caused CVWB to make reference thereto in its report on our audited financial statements.

ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

Changes in Internal Controls

We have also evaluated our internal controls for financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.

Limitations on the Effectiveness of Controls

Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the CEO and the CFO. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications). This Item of this report, which you are currently reading is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

ITEM 9B. OTHER INFORMATION

Not applicable.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.

Our directors and executive officers, their ages and positions held are as follows:

Name	Age	Position with the Company
Jeffrey Sternberg		President, Chief Executive Officer and Treasurer/Chief Financial Officer and a Director

Business Experience

The following is a brief account of the education and business experience of each director, executive officer and key employee during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he or she was employed, and including other directorships held in reporting companies.

Jeffrey Sternberg. Mr. Sternberg has been the President/Chief Executive Officer and the Treasurer/Chief Financial Officer and a member of the Board of Directors of the Company since February 1, 2010. Since the year 2000, Mr. Sternberg has been involved with investment advisory firms providing portfolio management and financial planning services to private and public companies. From approximately 2007 to current date, Mr. Sternberg has served as an analyst for Trafalgar Capital Advisors, LLC, an institutional investor (“Trafalgar”), where he is responsible for tracking and evaluating potential transactions and monitoring Trafalgar’s expenditures. From approximately 2004 to 2006, Mr. Sternberg served as the president of Advantage Capital Development Corporation, a small business development company (“Advantage Capital”), where he was primarily responsible for eliminating debt of client companies and managing Advantage Capital’s general operations.

AUDIT COMMITTEE AND CHARTER

We have a separately-designated audit committee of the board. Audit committee functions are performed by our board of directors. Our director is not deemed independent. All directors also hold positions as our officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee. .

AUDIT COMMITTEE FINANCIAL EXPERT

None of our directors or officers has the qualifications or experience to be considered a financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services of a financial expert are not warranted.

CODE OF ETHICS

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely, and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

DISCLOSURE COMMITTEE AND CHARTER

We have a disclosure committee and disclosure committee charter. Our disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.

COMMITTEES OF THE BOARD OF DIRECTORS

As of the date of this Annual Report, we have not established a compensation committee nor a nominating committee. We intend within the next fiscal quarter to establish such committees and adopt and authorize certain corporate governance policies and documentation.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers or persons that may be deemed promoters is or have been involved in any legal proceeding concerning: (i) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction permanently or temporarily enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity; or (iv) being found by a court, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law (and the judgment has not been reversed, suspended or vacated).

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our directors and officers, and the persons who beneficially own more than ten percent of our common stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to us pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the reports received by us and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements during the fiscal year ended December 31, 2009. The exception to the compliance is

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to our Chief Executive Officer and those executive officers that earned in excess of $100,000 during fiscal years ended December 31, 2009 and 2008 (collectively, the “Named Executive Officers”):

SUMMARY COMPENSATION TABLE

Executive Officer Compensation Table
Name and Principal Position	Year (US$)	Salary (US$)			Bonus (US$)		Stock Awards (US$)		Option Awards (US$)		Non Equity Incentive Plan Compensation (US$)		Nonqualified Deferred Compensation Earnings (US$)		All Other Compensation (US$)		Total (US$)
William Lieberman, President	2008 2009	$	0 36,000	(1) (2)	$	0 0		0 75,000		0 0		0 0		0 0		0 0	$	0 111,000
Andrew J Befumo, Secretary	2008 2009	$	10,000 48,000	(1) (2)		0 0		0 0		0 0		0 0		0 0		0 0	$	10,000 48,000

(1)

In order to retain cash flows and conserve expenses, we retain the specialized services of directors and officers. As of December 31, 2009 and December 31, 2008, we retained the services of William Lieberman – President, and Andrew Befumo – Secretary. These individuals operate as consultants to the firm with the designated titles. Mr. Lieberman receives $3000 per month base salary over a twelve-month period commencing December 31, 2008, with bonus eligibility of 100,000 shares of restricted stock payable upon the end of the contract term. Mr. Befumo receives $4,000 per month (payable to Befumo & Schaeffer, PLLC), plus fees for additional services beyond the scope of his contract.

(2)	Effective on December 20, 2009, we accepted the resignation of Andrew Befumo as our secretary. Effective on January 31, 2010, we accepted the resignation of William Lieberman as our President/Chief Executive Officer and Treasurer/Chief Financial Officer and a director.

The firm employed use of Black-Scholes pricing methods. Black-Scholes methodology requires substantial calculation examining multiple inputs including vesting, volatility, and stock price. The resulting stock bonus valuation on the December 15, 2008 grant date was determined to be $.75 per share, or $75,000 total compensation to be recognized ratably over the requisite service period (one-year contract period). This resulted in a $3,125 bonus accrual for the period of December 15 through December 31, 2008 as noted in the following table.

STOCK OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2009

The following table sets forth information as at December 31, 2009 relating to Stock Options that have been granted to the Named Executive Officers:

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($)				Option Awards ($)				Non Equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total (US$)
William Lieberman,		$	0			$	0				0				0				0				0			$	0

All compensation received by our officers and directors has been disclosed. There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance.

EMPLOYMENT AND CONSULTING AGREEMENTS

As of the date of this Annual Report, we do not have any contractual relationships with certain of our executive officers and directors as follows.

INDEMNIFICATION

Under our Bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

As of the date of this Annual Report, the following table sets forth certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated. As of the date of this Annual Report, there are 93,131,500 shares of common stock issued and outstanding.

Name and address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Position	Percent of Class
Jeffrey Sternberg Address	-0-	Current President/CEO/CFO/ Director	-0-
William Lieberman 140 West 4th St. Apartment 9 New York, NY 10012	300,000	Prior President/Director	0.32%
Andrew Befumo PO Box 717 Culpeper, VA 22701	250,000	Prior Secretary	0.27%
Compania Minera del Pacifico, S.A. Cir. Norte #511 Y 12 AVA Machala, El Oro, Ecuador	16,500,000	N/A	17.72%
Benstole Invest LTD 24 De Castro Street Wickhams Cay 1 Road Town, Tortola	10,000,000	N/A	10.74%
Phillip C. Smith 2877 South Paradise Suite 2206 Las Vegas, Nevada 89109	10,000,000	N/A	10.74%

*	Less than one percent.

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding as of the date of this Annual Report. As of the date of this Annual Report, there are 93,131,500 shares issued and outstanding.

CHANGES IN CONTROL

We are unaware of any contract, or other arrangement or provision, the operation of which may at a subsequent date result in a change of control of our company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

As of the date of this Annual Report, other than as disclosed below, none of our directors, officers or principal stockholders, nor any associate or affiliate of the foregoing, have any interest, direct or indirect, in any transaction or in any proposed transactions, which has materially affected or will materially affect us during fiscal year ended December 31, 2009.

Short-term Notes Payable – Related Parties

We have borrowed funds from stockholders for working capital purposes from time to time. The loans are non-interest bearing. They are payable on demand and, consequently, reported as current liabilities. We have received $39,514 in advances since inception and made repayments of $7,019 in cash, resulting in a payable balance of $32,495 as of December 31, 2009. Interest has not been imputed due to its immaterial impact on the financial statements. The Company also owes its officers and directors $24,589 and $0 at December 31, 2009 and 2008, respectively, for reimbursable expenses incurred in the normal course of business.

On January 11, 2008, we received $10,000 from a stockholder pursuant to a note dated January 19, 2008. Terms were 8% interest with repayment due upon receipt by us of $250,000 in equity financing. Interest accrued through May 21, 2008 was $287. On May 21, 2008, the stockholder forgave the note principal and accrued interest to compensate us for various expenses incurred in reliance on the mineral purchase agreement which was unfulfilled (Note 5). The $10,000 forgiveness was recognized by us as an increase in additional paid-in capital, while the interest of $287 was reversed against expenses.

Long-term Notes Payable

Accrued interest and interest expense on the convertible notes payable as of and for the year ended December 31, 2009 totaled $35,897. Due to the contingent nature of the conversion price, no beneficial conversion feature was noted.

The convertible promissory notes with the investment firm are summarized as follows:

Loan No.	Amount	Date	Maturity	Interest Rate
1	$ 90,000	12/31/2008	1/5/2010	8.00%
2	100,000	1/16/2009	1/5/2010	8.00%
3	50,000	1/23/2009	1/5/2010	8.00%
4	25,000	2/2/2009	1/5/2010	8.00%
5	10,000	3/9/2009	1/5/2010	8.00%
6	50,000	4/8/2009	4/8/2010	8.00%
7	75,000	4/27/2009	4/27/2010	8.00%
7	(75,000)	5/29/2009	payment
8	25,000	6/23/2009	6/23/2010	8.00%
9	100,000	7/1/2009	7/1/2010	8.00%
10	20,000	7/6/2009	7/6/2010	8.00%
11 (A)	195,000	8/27/2009	8/31/2010	8.00%
Balance, Dec. 31, 2009	$ 665,000

Notes Receivable and Share Transfer Agreement

On October 16, 2008, we entered into a note receivable agreement with Minera del Pacifico (Pacifico) a significant stockholder, whereby we were required to advance Pacifico up to $1,200,000. A total of $1,195,000 was advanced to Pacifico as follows

No.	Amount	Due
1	$ 500,000	10/16/2008
2	400,000	10/17/2008
3	90,000	12/30/2008
4	100,000	1/16/2009
5	50,000	1/23/2009
6	25,000	2/2/2009
7	20,000	2/18/2009
8	10,000	3/9/2009

The note bears interest of 8% and was payable on or before January 5, 2010. The December 31, 2008 balance was comprised of the first, second, and third installments totaling $990,000. Interest earned on the note for the period of the note’s inception through December 31, 2008 totaled $14,904, all of which was receivable at year-end. Proceeds from this loan correspond with several of the payments for, and are being partially funded by, the Long-term Notes Payable above.

On March 30, 2009, we executed the Share Transfer Agreement whereby we purchased 100% ownership interest in Muluncay. In consideration of this acquisition, the Company issued a $3,600,000 promissory note to Pacifico, which carries an annual interest rate of 4.5% (compounded quarterly), and is payable in four $200,000 quarterly installments commencing 30 days following Muluncay’s reaching production of 400 tons per day. We would then pay $300,000 in quarterly installments until principal and interest is fully paid. We would also be required to pay an additional $1,800,000 investment to Muluncay with $800,000 due within 90 days following the Agreements execution date, and $1,000,000 due within 180 days of the execution date.

Bonds Payable, Convertible & Secured

October 15, 2008 Bonds

On October 15, 2008, we issued $1,300,000 in convertible secured bonds to Trafalgar Capital Specialized Investment Fund (Trafalgar), a significant stockholder of the Company, for net proceeds of $1,235,356 (including two months of interest totaling $19,500 retained by Trafalgar). The bonds bear interest of 9% and mature (if not converted) on October 15, 2010. Upon the event of default, the interest rate is increased to 18%. Trafalgar incurred bond issuance costs of $64,644, which are being amortized to interest expense on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2008 was $57,214, net of $7,430 in amortization for 2008. Interest payments are made mid-month, resulting in bond interest payable of $4,875 at December 31, 2008, and bond interest expense of $24,375 for 2008.

The bonds have an optional conversion feature whereby Trafalgar is entitled to convert the bonds and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the ‘Fixed Price,’ which was determined to be $.75 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. If the bonds are not converted, the Company is required to make interest-only payments for a period of one year following the bonds’ inception. Thereafter, we shall continue making monthly interest payments, in addition to quarterly principal payments of $325,000 and quarterly 16% redemption premium payments that amount to $52,000 per quarter ($208,000 total).

April 30, 2009 Bonds

On April 30, 2009, the Company issued $300,000 in convertible secured bonds to a stockholder for net proceeds of $258,856 (including two months of prepaid interest totaling $4,500 retained by the stockholder that was amortized to interest expense by December 31, 2009). The bonds bear interest of 9% and mature (if not converted) on October 31, 2010. Upon default, the interest rate is increased to 18%. The stockholder incurred bond issuance costs of $41,144, which are being amortized to interest expense on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 was $29,715, net of $11,429 in amortization for the year ended December 31, 2009. Interest payments are made at month-end, resulting in bond interest payable or $2,464 at December 31, 2009. Bond interest expense was $22,679 (including $11,429 in bond issuance cost amortization) for the year ended December 31, 2009.

The bonds have an optional conversion feature whereby the stockholder is entitled to convert the bonds and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the ‘Fixed Price,’ which was determined to be $.61 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. If the bonds are not converted, the Company is required to make interest-only payments for a period of eighteen months following the bonds’ inception. Thereafter, the Company shall continue making monthly interest payments, in addition to quarterly principal payments of $75,000 and quarterly 16% redemption premium payments that amount to $12,000 per quarter ($48,000 total). Due to the contingent nature of the conversion price, no beneficial conversion feature was noted.

October 12, 2009 Bonds

On October 12, 2009, the Company issued $210,000 in convertible secured bonds to a stockholder for net proceeds of $210,000 The bonds bear interest of 9% and mature (if not converted) on January 12, 2010 or upon completion of any new investments in the company exceeding $1,500,000. Upon default, the interest rate is increased to 18%, and the company may convert all bonds held by lender without restriction. The Company incurred bond issuance costs of $42,000, which are being accrued to bonds payable on a straight-line basis over the term of the bond. The carrying amount of the bond issuance costs at December 31, 2009 was $23,062. Interest payments are made at month-end, resulting in bond interest payable or $4,115 at December 31, 2009. Bond interest expense was $4,115 for the year ended December 31, 2009. Use of the funds was to provide services for new financing, payment on mortgages, payment of past due bills, and to support operations.

The bonds have an optional conversion feature whereby the stockholder is entitled to convert the bonds and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the ‘Fixed Price,’ which was determined to be $.07 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, the Company has the option to redeem the bonds, provided it pays a 16% redemption premium on the amount redeemed. Due to the contingent nature of the conversion price, no beneficial conversion feature was noted. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009 then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate.

November 3, 2009 Bonds

On November 3, 2009, we entered into a convertible secured bond debenture in the principal amount of $210,000. Interest accrues monthly at the rate of 9% APR and is payable monthly. Unless converted, principal is payable in full on January 12, 2010 or upon completion of any new investments in us exceeding $1,500,000. Upon default, the interest rate is increased to 18% and we may convert all bonds held by the bond holder without restriction. Interest payments are made at month end resulting in bond interest payable or $2,993 at December 31, 2009. Bond interest expense was $2,993 for the fiscal year ended December 31, 2009. The bond has an optional conversion feature whereby the bond holder is entitled to convert the bond and accrued interest at any time based on the lesser of the stock price on the bonds’ inception (the “Fixed Price”), which was determined to be $0.07 per share) or the lowest daily closing volume weighted average price during the five days preceding conversion. If the common stock price drops below the Fixed Price, we have the option to redeem the bond provided we pay a 16% redemption premium on the amount redeemed. Limitations on conversion prevent the number of shares issued from exceeding 9.99%. The bonds carry a currency rate conversion clause wherein if the Euro to US dollar exchange rate is lower than the rate of October 12, 2009, then the number of shares to be issued shall be increased by an equal percentage of the decline in the exchange rate.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

(1) Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

	2009	$65,000	Child, Van Wagoner & Bradshaw, PLLC
	2008	$15,000	Child, Van Wagoner & Bradshaw, PLLC

(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

	2009	$575	Child, Van Wagoner & Bradshaw, PLLC
	2008	$1,250	Child, Van Wagoner & Bradshaw, PLLC

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

	2009	$1,000	Child, Van Wagoner & Bradshaw, PLLC
	2008	$0	Child, Van Wagoner & Bradshaw, PLLC

(4) All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

	2009	$0	Child, Van Wagoner & Bradshaw, PLLC
	2008	$0	Child, Van Wagoner & Bradshaw, PLLC

(5) Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.

ITEM 15. EXHIBITS AND FINANCIAL SCHEDULES

The following exhibits are filed as part of this Annual Report.

		Incorporated by reference
					Filed
Exhibit	Document Description	Form	Date	Number	herewith

3.1	Articles of Incorporation of Registrant	SB-2	10-31-06	3.1
3.1.1	Certificate of Incorporation of Trilliant Diamonds Limited	8-K	07-09-09	3.1.1
3.1.2	Memorandum and Articles of Association for Trilliant Diamonds	8-K	07-09-09	3.1.2
3.1.3	Certificate of Designation of Series I Preferred Stock	8-K	07-09-09	3.1.3
3.1.4	Amendment to Designation of Series I Preferred Stock	8-K	07-09-09	3.1.4
3.2	Bylaws	SB-2	10-31-06	3.2
10.1	Share Transfer Agreement Registrant, Pacifico and Muluncygold	10-K	04-15-09	10.1
10.2	Muluncay Project Report Prepared by Exploration Alliance Ltd.	10-K	04-15-09	10.2
10.3	Geological Report of the Mulcaney Deposit	10-K	04-15-09	10.3
10.4	Report on Exploration Potential – Muluncay Project	10-K	04-15-09	10.4
10.5	Ecuador Mining Law	10-k	04-15-09	10.5
10.6	Diagram of Current 40 Ton Plant	10-K	04-15-09	10.6
10.7	Loan Agreement and Note between Registrant and Charms Investments Ltd.	10-K	04-15-09	10.7
10.8	Stock Purchase Agreement between Registrant and Trafalgar Capital Specialized Investment Fund	8-K	04-20-09	10.8
10.9	Redeemable Debenture issued to Trafalgar Capital Specialized Investment Fund	8-K	04-20-09	10.9
10.10	Global Diamond Subscription Agreement	8-K	07-09-09	10.10
10.11	Trilliant Diamonds Charge of Shares	8-K	07-09-09	10.11
10.12	Loan Note Instrument/Convertible Debenture	8-K	07-09-09	10.12
10.13	Registrant Loan Note Certificate	8-K	07-09-09	10.13
10.14	Stock Purchase Agreement between Registrant and Samazo Limited	8-K	07-23-09	10.14
10.15	Order of the Eastern Caribbean Supreme Court	8-K	09-25-09	10.15
10.16	Sale and Purchase Agreement	8-K	09-30-09	10.16
10.17	Extrajudicial Complaint	8-K	10-08-09	10.17
10.18	Securities Purchase Agreement between Registrant and Trafalgar Capital Specialized Investment Fund	8-K	10-13-09	10.18
10.19	Redeemable Debenture	8-K	10-13-09	10.19
10.20	Securities Purchase Agreement between Registrant and Trafalgar Capital Specialized Investment Fund	8-K	11-12-09	10.20
10.21	Redeemable Debenture	8-K	11-12-09	10.21

14.1	Code of Ethics	10-K	04-15-09	14.1
99.1	Audit Committee Charter	10-K	04-15-09	99.1
99.2	Disclosure Committee Charter	10-K	04-15-09	99.2

31.1	Certification of Chief Executive Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.				X

31.2	Certification of Chief Financial Officer pursuant to 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended.				X

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

32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)				X

TRILLIANT EXPLORATION CORPORATION

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

	TRILLIANT EXPLORATION CORPORATION

Dated: April 16, 2010	By:	/s/ JEFFREY STERNBERG
		Jeffrey Sternberg, President/Chief
		Executive Officer

Dated: April 16, 2010	By:	/s/ JEFFREY STERNBERG
		Jeffrey Sternberg, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: April 16, 2010	By:	/s/ JEFFREY STERNBERG
		Director

Attached files

TRILLIANT EXPLORATION CORP Reports

Also read