ARGENTEX MINING CORP - FORM 10-Q

Attached files

file	filename
EX-31.1 - CERTIFICATION - ARGENTEX MINING CORP	exhibit31-1.htm
EX-32.1 - CERTIFICATION - ARGENTEX MINING CORP	exhibit32-1.htm
EX-31.2 - CERTIFICATION - ARGENTEX MINING CORP	exhibit31-2.htm
EX-32.2 - CERTIFICATION - ARGENTEX MINING CORP	exhibit32-2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[(Mark One)

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

For the quarterly period ended April 30, 2010

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

For the transition period from ____________ to ____________

Commission file number 000-49995

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

Delaware	71-0867623
(State or other jurisdiction of incorporation or	(I.R.S. Employer Identification No.)
organization)

602 - 1112 West Pender Street, Vancouver, British Columbia Canada V6E 2S1
(Address of principal executive offices) (zip code)

604.568.2496
(Registrant’s telephone number, including area code)

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

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

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

- 2 -

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

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

44,486,754 common shares issued and outstanding as at June 11, 2010.

- 3 -

PART I

Item 1. Financial Statements.

It is the opinion of management that the interim consolidated financial statements for the quarter ended April 30, 2010, include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading.

Our interim consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

- 4 -

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

At April 30, 2010 and January 31, 2010
and for the Three Months Ended April 30, 2010 and 2009

(UNAUDITED)

(Stated in U.S. Dollars)

- 5 -

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

		April 30,			January 31,
		2010			2010
		(Unaudited)
ASSETS

Current
Cash and cash equivalents	$	2,287,673		$	3,209,786
Receivables		-			497
Prepaid expenses and deposit		102,962			109,359

Total current assets		2,390,635			3,319,642

Equipment (Note 4)		49,719			52,534

Total assets	$	2,440,354		$	3,372,176


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	-		$	57
Accrued liabilities		2,727			22,111
Accrued professional fees		59,743			68,813
Accrued investor relations and communications		20,602			32,112
Accrued mineral property interests		305,616			262,529
Accrued consulting		17,500			20,000
Due to related parties (Note 6)		-			36,318

Total liabilities		406,188			441,940

Commitments (Note 10)

Stockholders' equity (Note 7)
Preferred stock, $0.001 par value, authorized 100,000,000, nil shares issued and outstanding at April 30, 2010 and January 31, 2010		-			-
Preferred stock, Series A convertible, $0.001 par value, authorized 2,000, nil shares issued and outstanding at April 30, 2010, and January 31, 2010		-			-
Common stock, $0.001 par value, authorized 100,000,000, 44,486,754 and 43,921,754 issued and outstanding at April 30, 2010 and January 31, 2009, respectively		44,487			43,922
Additional paid-in capital		20,293,324			19,995,457
Deficit accumulated during the exploration stage		(18,423,138	)		(17,078,930	)
Accumulated other comprehensive gain (loss)		119,493			(30,213	)
Total stockholders' equity		2,034,166			2,930,236

Total liabilities and stockholders' equity	$	2,440,354		$	3,372,176

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

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ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(UNAUDITED)

								From December
		For the Three Months Ended						21,
		April 30,						2001 (Inception)
		2010			2009			to April 30, 2010

Expenses

Consulting fees	$	284,003		$	156,207		$	4,105,536
Depreciation		2,816			2,050			24,342
Foreign exchange loss		13,024			10,088			324,091
Investor relations and communication		36,901			36,742			1,880,140
Mineral property interests (Note 5)		837,782			106,807			8,342,685
Office and sundry		41,948			17,033			558,069
Professional fees		76,819			58,144			1,553,553
Rent		9,356			6,060			122,987
Transfer agent fees		12,093			6,316			222,628
Travel		29,466			9,163			344,109
Write-down of mineral claims		-			-			408,496

Net operating loss		(1,344,208	)		(408,610	)		(17,886,636	)

Interest (expense)		-			(4,328	)		(536,502	)

Net loss	$	(1,344,208	)	$	(412,938	)	$	(18,423,138	)

Net loss per share - basic and diluted	$	(0.03	)	$	(0.01	)

Weighted average number of shares outstanding - basic and diluted		49,590,263			32,667,886

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

- 7 -

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)AND COMPREHENSIVE INCOME (LOSS)
FOR THE PERIOD FROM JANUARY 31, 2009 TO APRIL 30, 2010
(Stated in U.S. Dollars)
(UNAUDITED)

	Preferred Stock			Common Stock										Accumulated			Total
	Series A Convertible							Additional						Other			Stockholders'
	Number of			Number of				Paid-in			Accumulated			Comprehensive			Equity
	Shares		Par Value	Shares		Par Value		Capital			Deficit			Income (Loss)			(Defict)

Balance at January 31, 2009	-	$	-	32,590,553	$	32,591	$	14,186,804		$	(14,420,634	)	$	-		$	(201,239	)
Conversion of convertible debenture	-		-	1,500,000		1,500		148,500			-			-			150,000
Equity component of convertible debenture converted	-		-	-		-		(44,102	)		-			-			(44,102	)
Common stock issued for cash	-		-	9,056,201		9,056		5,180,691			-			-			5,189,747
Cost of issuing stock	-		-	-		-		(240,584	)		-			-			(240,584	)
Exercise of warrants	-		-	500,000		500		119,500			-			-			120,000
Exercise of stock options	-		-	275,000		275		77,725			-			-			78,000
Stock-based compensation	-		-	-		-		566,923			-			-			566,923
																	5,618,745
Net loss for the period	-		-	-		-		-			(2,658,296	)		-			(2,658,296	)
Unrealized foreign currency exchange loss	-		-	-		-		-			-			(30,213	)		(30,213	)
																	(2,688,509	)
Balance at January 31, 2010	-		-	43,921,754		43,922		19,995,457			(17,078,930	)		(30,213	)		2,930,236
Exercise of stock options	-		-	115,000		115		56,385			-			-			56,500
Exercise of warrants	-		-	450,000		450		67,050			-			-			67,500
Stock-based compensation	-		-	-		-		174,432			-			-			174,432
																	3,228,668
Net loss for the period	-		-	-		-		-			(1,344,208	)		-			(1,344,208	)
Unrealized foreign currency exchange gain	-		-	-		-		-			-			149,706			149,706
																	(1,194,502	)

Balance at April 30, 2010	-	$	-	44,486,754	$	44,487	$	20,293,324		$	(18,423,138	)	$	119,493		$	2,034,166

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

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(UNAUDITED)

		For the Three Months Ended						From December 21,
		April 30,						2001 (Inception) to
		2010			2009			April 30, 2010

Cash flows from operating activities
Net loss for the period	$	(1,344,208	)	$	(412,938	)	$	(18,423,138	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,816			2,050			24,342
Stock-based compensation		174,432			101,696			2,661,277
Debt discount		-			2,027			5,881
Shares issued to acquire mineral properties		-			-			3,500
Shares issued in payment of bonus		-			-			52,160
Non-cash interest		-			-			333,333
Write-down of mineral claims		-			-			408,496
Changes in operating assets and liabilities
Receivables		497			(930	)		-
Prepaid expenses and deposit		6,396			8,004			(102,963	)
Accounts payable		(57	)		-			336,552
Accrued liabilities		(19,384	)		-			(2,581	)
Accrued professional fees		(9,070	)		20,593			(28,794	)
Accrued investor relations and communications		(11,510	)		-			(9,398	)
Accrued mineral property interests		43,087			-			232,797
Accrued consulting		(2,500	)		-			17,500
Due to related parties		(36,318	)		-			-

Net cash used in operating activities		(1,195,819	)		(279,498	)		(14,491,036	)

Cash flows from investing activities
Acquisition of mineral property interests		-			-			(408,496	)
Acquisition of equipment		-			-			(74,060	)

Net cash used in investing activities		-			-			(482,556	)

Cash flows from financing activities
Issuance of convertible debentures		-			-			1,650,000
Issuance of promissory notes		-			-			790,410
Repayment of promissory notes		-			-			(790,410	)
Proceeds from issuance of capital stock		124,000			491,627			15,491,772

Net cash provided by financing activities		124,000			491,627			17,141,772

Effects of foreign currency exchange		149,706			-			119,493

(Decrease) increase in cash during the period		(922,113	)		212,129			2,287,673

Cash and cash equivalents, beginning of period		3,209,786			108,560			-

Cash and cash equivalents, end of period	$	2,287,673		$	320,689		$	2,287,673

Supplemental disclosures
Cash paid during the period for:
Taxes	$	-		$	-		$	-
Interest	$	-		$	-		$	88,729

Non-cash financing transactions:
Conversion of convertible debenture into common stock	$	-		$	-		$	150,000
Stock based compensation on issuance of brokers warrants	$	-		$	-		$	145,488
Notes and related accrued interest converted to common stock	$	-		$	-		$	1,390,008

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

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Nature of Operations

We were incorporated in the State of Nevada on December 21, 2001 under the name Delbrook Corporation. On March 15, 2004, we changed our name to Argentex Mining Corporation. We effected this name change by merging with our wholly owned subsidiary, Argentex Mining Corporation, a Nevada corporation that we formed specifically for this purpose. Our company was the surviving company in the merger. On November 5, 2007, we moved our state of domicile from Nevada to Delaware. This re-domicile was effected by merging with our wholly owned subsidiary Argentex Mining Corporation, a Delaware corporation that we formed specifically for this purpose. Our subsidiary was the surviving entity upon completion of the merger. Since November 5, 2007, we have been a Delaware corporation.

We have one subsidiary, SCRN Properties Ltd., a Delaware corporation incorporated on February 13, 2004, which we formed for the purpose of acquiring and exploring natural resource properties in Argentina.

In these notes, the terms “Argentex”, “Company”, “we”, “us” or “our” mean Argentex Mining Corporation and its subsidiary, SCRN Properties Ltd., whose operations are included in these consolidated financial statements.

Argentex is involved in acquiring and exploring mineral properties in Argentina. We have not determined whether our properties contain mineral reserves that are economically recoverable.

Exploration Stage

We have not produced any significant revenues from our principal business or commenced significant operations and are considered an exploration stage company as defined by SEC Guide 7 with reference to Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) topic 915.

We are in the early exploration stage. In the exploration stage, management devotes most of its time to conducting exploratory work and developing its business. These unaudited consolidated financial statements have been prepared on a going-concern basis, which implies that we will continue to realize our assets and discharge our liabilities in the normal course of business.

Basis of Presentation

These unaudited consolidated financial statements are stated in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statements included in Argentex’s annual report on Form 10-K for the year ended January 31, 2010. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended April 30, 2010 are not necessarily indicative of the results that may be expected for any other interim period or the entire year. For further information, these unaudited consolidated financial statements and the related notes should be read in conjunction with our audited consolidated financial statements for the year ended January 31, 2010 included in our annual report on Form 10-K.

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted and Recently Issued Accounting Guidance

Adopted

In June 2009, the FASB issued ASC topic 860-20 for changes to the accounting for transfers of financial assets. These changes remove the concept of a qualifying special-purpose entity and remove the exception from the application of variable interest accounting to variable interest entities that are qualifying special-purpose entities; limits the circumstances in which a transferor derecognizes a portion or component of a financial asset; defines a participating interest; requires a transferor to recognize and initially measure at fair value all assets obtained and liabilities incurred as a result of a transfer accounted for as a sale; and requires enhanced disclosure; among others. These changes were effective for us on February 1, 2010. The adoption of these changes did not have an impact on our consolidated financial statements.

In June 2009, the FASB issued changes to the accounting for variable interest entities. These changes require an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity; to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. These changes were effective for us on February 1, 2010. The adoption of these changes did not have an impact on our consolidated financial statements.

Issued

In March 2010, the FASB issued changes related to existing accounting requirements for embedded credit derivatives. Specifically, the changes clarify the scope exception regarding when embedded credit derivative features are not considered embedded derivatives subject to potential bifurcation and separate accounting. These changes become effective for us on August 1, 2010. The adoption of these changes is not expected to have an impact on our consolidated financial statements.

NOTE 3 – GOING CONCERN

These consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going-concern basis, which implies our company will continue to realize its assets and discharge its liabilities in the normal course of business. We have not generated any revenues from mineral sales since inception, have never paid any dividends and are unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of our company as a going concern is dependent upon the continued financial support of our shareholders, our ability to obtain equity financing and the attainment of profitable operations. Our ability to achieve and maintain profitability and positive cash flows is dependent upon our ability to locate profitable mineral properties, generate revenues from mineral production and control production costs.

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 3 – GOING CONCERN, continued

From inception (December 21, 2001) through April 30, 2010, we had accumulated losses of $18,423,138. Based upon our current plans, we expect to continue to incur operating losses in future periods. We plan to mitigate these operating losses through controlling our operating costs and we plan to obtain additional working capital through debt or equity financing and private loans, though there can be no assurance that we will be able to do so. In addition, there is no assurance that we will be able to generate any revenues from our operations in the future. These factors raise substantial doubt regarding our ability to continue as a going concern. These consolidated financial statements do not give any effect to any adjustments that would be necessary should our company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

NOTE 4 – EQUIPMENT

		April 30, 2010
				Accumulated		Net Book
		Cost		Depreciation		Value

Equipment	$	48,672	$	11,387	$	37,285
Furniture and fixtures		8,839		3,408		5,431
Computer equipment		15,957		8,954		7,003
	$	73,468	$	23,749	$	49,719

		January 31, 2010
				Accumulated		Net Book
		Cost		Depreciation		Value

Equipment	$	48,672	$	9,425	$	39,247
Furniture and fixtures		8,838		3,121		5,717
Computer equipment		15,958		8,388		7,570
	$	73,468	$	20,934	$	52,534

NOTE 5 – MINERAL PROPERTY INTERESTS

	a)	Pinguino Property

		Pursuant to the terms of a mineral property option agreement, dated February 24, 2004, between the Company and an affiliate of an ex-director, the Company agreed to purchase an option to purchase a 100% interest in a mineral property located in the Santa Cruz Province of the Republic of Argentina, known as the Pinguino Property.

		To acquire the Pinguino property the Company made the following payments: CDN$50,000 on or before July 1, 2004 (paid); CDN$75,000 on or before July 1, 2005 (paid); CDN$100,000 on or before July 1, 2006 (paid); CDN$100,000 on or before July 1, 2007 (paid); and CDN$125,000 on or before July 1, 2008 (paid). The agreement is subject to a 2% net smelter royalty. The Company has the right at any time up to 60 days after commencement of commercial production to repurchase either one-half of the royalty for $935,191 (CDN$1,000,000) or all of the royalty for $1,870,382 (CDN$2,000,000).

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 5 – MINERAL PROPERTY INTERESTS, continued

		The agreement also provides for an area of interest such that, in the event that the optionor records any property claims within five (5) kilometers of the boundaries of the property, such claims will become subject to the mineral property option agreement.

	(b)	Condor Property

		Pursuant to the terms of a mineral property acquisition agreement, dated February 20, 2004, between the Company and an affiliate of an ex-director, the Company paid CDN$10,000 to acquire a 100% interest in certain mineral claims located in the Santa Cruz Province of the Republic of Argentina, known as the Condor Property, subject to a 2% net smelter return royalty in favor of an ex-director.

		The Company has the right to repurchase either one-half of the royalty for $935,191 (CDN$1,000,000) or all of the royalty for $1,870,382 (CDN$2,000,000).

	c)	Santa Cruz and Rio Negro Properties

		Pursuant to the terms of a Mineral Property Acquisition Agreement, dated February 24, 2004, between the Company and an affiliate of an ex-director of the Company, the Company acquired mineral claims located in the Santa Cruz Province of the Republic of Argentina, then known as the Dyakowski Property for total consideration of 833,333 common shares of the Company (subsequently increased, as a result of a stock dividend, to 2,499,999). These shares were issued and were subject to an Escrow Agreement dated March 2, 2004.

		On June 30, 2005, we entered into an amending agreement whereby we amended the Mineral Property Acquisition the Escrow Agreement. This amending agreement was restated August 8, 2005 whereby we agreed to release the 2,499,999 shares of our common stock that were being held in escrow. Of the 2,499,999 released shares, 2,374,999 of these shares were released to us for cancellation, and 125,000 of these shares were released to an ex-director for the transfer of the mineral claims to us.

		In addition, pursuant to the terms of a Share Purchase Agreement, dated February 24, 2004, between the Company and an affiliate of an ex-director of the Company, the Company acquired a 100% interest in SCRN Properties Ltd. (SCRN), a Delaware corporation, the sole asset of which consisted of mineral claims located in the Rio Negro Province of the Republic of Argentina, known as the SCRN Property, for total consideration of 833,333 common shares of the Company (subsequently increased, as a result of a stock dividend, to 2,499,999). The shares have been issued and are subject to an Escrow Agreement dated March 2, 2004.

		On June 30, 2005, we entered into an amending agreement whereby we amended the Share Purchase Agreement. This amending agreement was restated August 8, 2005 whereby we agreed to release the 2,499,999 shares of our common stock that were being held in escrow. Of the 2,499,999 shares released, 2,374,999 of these shares were released to us for cancellation, and 125,000 of these shares were released to an ex-director for the transfer of the mineral claims to us.

		The Mineral Property Acquisition Agreement and the Share Purchase agreement also provide for an area of interest such that, in the event that the vendor records any property claims within five (5) kilometers of the boundaries of either the Dyakowski Property or the SCRN Property, such claims will become subject to the respective Agreements.

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 5 – MINERAL PROPERTY INTERESTS, continued

	d)	Storm Cat Property

		Pursuant to the terms of a mineral property acquisition agreement, dated February 20, 2004, between the Company and an affiliate of an ex-director, the Company paid $10,000 to acquire a 100% interest in mineral claims located in the Santa Cruz and Rio Negro Provinces of the Republic of Argentina, known as the Storm Cat Property.

		Subsequent to acquisition of these properties, the Company has accounted for expenditures by province.

Mineral property interest expense reflected in the accompanying consolidated statement of operations relates to the following projects:

		Three		Three		December
		Months		Months		21, 2001
		Ended		Ended		(Inception) to
		April 30,		April 30,		April 30, 2010
		2010		2009		2010

Pinguino Project:
Claim maintenance	$	35,175	$	-	$	53,564
Assaying, testing and analysis		38,624		27,567		606,576
Camp and field supplies		147,436		63,250		1,781,981
Drilling		490,691		-		4,659,108
Geological and geophysical		59,720		12,364		873,807
Travel and accommodation		13,579		3,626		141,534
		785,225		106,807		8,116,570

Condor Project:
Claim maintenance		-		-		7,528
Camp and field supplies		-		-		198
Geological and geophysical		-		-		4,185
		-		-		11,911

Santa Cruz Properties:
Claim maintenance		-		-		21,851
Camp and field supplies		52,557		-		52,557
		52,557		-		74,408

Rio Negro Properties:
Claim maintenance		-		-		7,108
Camp and field supplies		-		-		51,836
Geological and geophysical		-		-		39,833
Travel and accommodation		-		-		9,614
		-		-		108,391

Other:		-		-		31,405

	$	837,782	$	106,807	$	8,342,685

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 6 - RELATED PARTY TRANSACTIONS

On November 1, 2005, the Company entered into a management agreement with an officer at CDN$2,500 per month. During the three months ended April 30, 2010 and 2009, the Company paid consulting fees of $Nil (2009 - $6,009) relating to this management agreement. This contract was cancelled on August 15, 2009.

During the three months ended April 30, 2010 and 2009, the Company paid consulting fees of $10,552 (CDN$10,500), (2009 - $Nil) to an officer of the Company.

At April 30, 2010 and January 31, 2010 the Company was indebted to a director in the amount of $Nil (2009 - $1,109).

On August 1, 2009, we entered into a two year consulting agreement with our president and Frontera Geological Services Ltd., (Frontera) a company wholly-owned by our President whereby we agreed to pay a consulting fee for services ordinarily provided by a Chief Executive Officer of $12,306 (CDN$12,500) per month and agreed to issue to this director options to purchase 100,000 shares of our common stock with a three year term and an exercise price equal to the closing price, last sale of the day, on the OTC Bulletin Board on the date the options are granted. Under the terms of the agreement, if during the period from August 1, 2009 to August 1, 2010 (a) the Company receives gross proceeds from the sale of equity of $6,000,000 or more or $4,500,000 or more, if the average price of the equity sold is equal to or greater than $1 per share, an incentive bonus is to be paid to this director based on the closing price of the Company’s common stock in the period the financing takes place, times 250,000 (b) the Company receives gross proceeds from the sale of shares of common stock or warrants of $4,500,000 or more, if the average price of the equity sold is equal or greater than $1.50 per share, an additional incentive bonus is to be paid to this director based on the closing price of the Company’s common stock in the period the financing takes place, times 150,000, (c) a resource estimate and a complete and positive scoping study is completed on the Company’s Pinguino property, a cash incentive bonus is to be paid to this director based on the closing price of the Company’s common stock on the date the scoping study is completed, times 150,000 or (d) the average price for the Company’s common stock equals or exceeds $3 for 20 consecutive trading days, an additional incentive bonus is to be paid to this director based on the closing price of the Company’s stock at the end of 20 consecutive days of trading times, 250,000.

During the three months ended April 30, 2010 and 2009, the Company paid or accrued consulting fees of $39,124 (2009 - $21,633) and recorded stock based compensation of $7,913 (2009 - $Nil) relating to this consulting agreement.

On July 14, 2009, we entered into a one year consulting agreement with an officer and a management services company controlled by him whereby we agreed to pay a consulting fee for services consistent with those ordinarily provided by an Executive Vice President of Corporate Development of $11,690 (CDN$12,500) per month and agreed to issue to this officer options to purchase 1,000,000 shares of our common stock at an exercise price of $0.60 per share for three years. Under the terms of the agreement, if during the period from July 14, 2009 to July 14, 2010 (a) the Company receives gross proceeds from the sale of equity of $6,000,000 or more or $4,500,000 or more if the average price of the equity sold is equal to or greater than $1 per share, an incentive bonus is to be paid to this officer based on the closing price of the Company’s stock in the period the financing takes place, times 250,000 (b) the Company receives gross proceeds from the sale of shares of our common stock or warrants for $4,500,000 or more if the average price of the equity sold is equal or greater than $1.50 per share, an additional incentive bonus is to be paid to this officer based on the closing price of the Company’s stock in the period the financing takes place, times 150,000, or (c) the average price for the Company’s common stock equals or exceeds $3 for 20 consecutive trading days an additional incentive bonus is to be paid to this officer, based on the closing price of the Company’s stock at the end of 20 consecutive days of trading, times 250,000.

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 6 - RELATED PARTY TRANSACTIONS, continued

During the three months ended April 30, 2010, the Company paid consulting fees of $41,828 and recorded stock based compensation of $85,218, relating to this consulting agreement. At April 30, 2010 and January 31, 2010, the Company was indebted to this management services company in the amounts of $Nil and $35,210, respectively.

See Notes 7 and 10.

NOTE 7 – CAPITAL STOCK

Stock Transactions

On February 2, 2010, we issued a total of 75,000 shares of our common stock at $0.62 per share for proceeds of $46,500 on the exercise of 75,000 stock options.

On February 2, 2010, we issued 40,000 shares of our common stock at $0.25 per share to a director for proceeds of $10,000 on the exercise of 40,000 stock options. (Notes 6)

On March 16, 2010, we issued 450,000 shares of our common stock at $0.15 per share to a director for proceeds of $67,500 on the exercise of 450,000 warrants. (Note 6)

Share purchase warrants

Share purchase warrant transactions are summarized as follows:

				Weighted
	Number of			Average
	Shares			Exercise Price

Balance at January 31, 2009	4,960,637		$	1.17
Issued	7,933,443			0.58
Exercised	(500,000	)		(0.24	)
Expired	(2,935,637	)		(1.54	)
Balance at January 31, 2010	9,458,443			0.61
Exercised	(450,000	)		(0.15	)
Balance at April 30, 2010	9,008,443		$	0.64

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 7 – CAPITAL STOCK, continued

Share purchase warrants, continued

At April 30, 2010, the following share purchase warrants were outstanding and exercisable:

Number of	Exercise
shares	Price	Expiry Date

357,648	$ 0.71 (CDN$0.72)	November 27, 2010
325,000	$ 0.15	January 15, 2011
1,328,334	$ 0.45	April 24, 2011
434,782	$ 0.45	May 22, 2011
500,000	$ 0.15	May 28, 2011
455,000	$ 0.65	June 18, 2011
727,272	$ 0.65	July 13, 2011
1,000,000	$ 0.15	November 12, 2011
2,980,407	$ 0.89 (CDN$0.90)	November 27, 2011
900,000	$ 1.25	April 11, 2012


9,008,443

Stock Options

Stock option transactions are summarized as follows:

				Weighted
	Number of			Average
	Shares			Exercise Price

Balance at January 31, 2009	1,833,334			0.50
Granted	3,035,000			0.54
Exercised	(275,000	)		(0.28	)
Expired	(200,000	)		(0.25	)
Balance at January 31, 2010	4,393,334		$	0.56
Exercised	(115,000	)		(0.49	)
Expired	(15,000	)		(1.37	)
Balance at April 30, 2010	4,263,334		$	0.56

The weighted average fair value per stock option granted during the three months ended April 30, 2010 and 2009 $Nil and $0.27.

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 7 – CAPITAL STOCK, continued

Stock Options, continued

At April 30, 2010, the following stock options were outstanding:

Number of	Exercise
shares	Price	Expiry Date

50,000	$0.25	June 26, 2010
400,000	$0.49	February 7, 2011
200,000	$0.58	February 9, 2011
150,000	$1.35	May 11, 2011
1,000,000	$0.60	July 14, 2012
100,000	$0.675	September 1, 2012
100,000	$1.13	November 13, 2012
193,334	$0.25	March 26, 2013
150,000	$0.35	October 28, 2013
1,370,000	$0.37	February 10, 2014
550,000	$0.855	January 19, 2015
4,278,334

The fair value of stock options granted during the three months ended April 30, 2010 and 2009 was $Nil and $377,501 which is being recognized over the options vesting periods. At January 31, 2010, 3,275,834 stock options were exercisable.

Total stock-based compensation recognized during the three months ended April 30, 2010 and 2009 was $174,432 and $101,696. Stock-based compensation has been recorded in the consolidated statements of operations as follows, with corresponding additional paid-in capital recorded in stockholders' equity:

		Three		Three
		Months		Months
		Ended April		Ended April
		30,		30,
		2010		2009

Consulting fees	$	174,432	$	88,066
Investor relations		-		13,630
	$	174,432	$	101,696

The following weighted average assumptions were used for the Black-Scholes valuations of stock options granted:

	Three
	Months	Year
	Ended	Ended January
	April 30,	31,
	2010	2010
Risk-free interest rate	1.23%	1.23%
Expected life of options	4.28 years	4.28 years
Annualized volatility	93%	93%
Dividend rate	0%	0%

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 7 – CAPITAL STOCK, continued

Stock Options, continued

At April 30, 2010, the aggregate intrinsic value (AIV) of all outstanding, vested stock options was $974,909 and the AIV of options exercised during the three months ended April 30, 2010 was $32,050.

See Note 11

NOTE 8 - SEGMENTED INFORMATION

At April 30, 2010 and January 31, 2010, the Company and its subsidiary operated in one reportable segment, being the exploration for and the development of mining properties in Argentina. Identifiable assets, revenues and net loss in each geographic area are as follows:

		April 30,		January 31,
		2010		2010

Identifiable assets
Canada	$	2,164,152	$	3,191,348
Argentina		276,202		180,828
	$	2,440,354	$	3,372,176

		Three		Three
		Months		Months
		Ended		Ended
		April 30,		April 30,
		2010		2009

Loss for the period
Canada	$	869,845	$	285,520
Argentina		474,363		127,418
	$	1,344,208	$	412,938

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 9 – FINANCIAL INSTRUMENTS

The FASB ASC topic 820 on fair value measurement and disclosures establishes three levels of inputs that may be used to measure fair value: quoted prices in active markets for identical assets or liabilities (referred to as Level 1), observable inputs other than Level 1 that are observable for the asset or liability either directly or indirectly (referred to as Level 2), and unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities (referred to as Level 3).

The carrying values and fair values of our financial instruments are as follows:

			April 30, 2010				January 31, 2010
			Carrying		Fair		Carrying		Fair
	Level		value		value		value		value
Cash and equivalents	Level 1	$	2,287,673	$	3,209,786	$	3,209,786	$	3,209,786
Receivables	Level 2	$	-	$	-	$	497	$	497

Accounts payable and accrued liabilities	Level 2	$	406,188	$	406,188	$	405,622	$	405,622

The following method was used to estimate the fair values of our financial instruments:

The carrying amount approximates fair value because of the short maturity of the instruments.

NOTE 10 – COMMITMENTS

Lease Commitments

On December 15, 2007, we entered into a sublease agreement for two years and eleven months at CDN$1,537 (US$1,513) per month until October 31, 2010.

On June 1, 2008, we entered into a three year lease agreement at $2,350 per month until May 31, 2011.

At April 30, 2010, the minimum future lease payments under our operating leases are as follows:

At April 30,	2011	2012

Premises lease payments	$ 37,279	$ 2,350

Consulting Commitments

On July 14, 2009, we entered into a one year consulting agreement with a company controlled by an officer whereby we agreed to pay a consulting fee of $12,306 (CDN$12,500) until July 13, 2010. (Note 6)

On August 1, 2009, we entered into a two year consulting agreement with a company wholly-owned by our President whereby we agreed to pay a consulting fee of $12,306 (CDN$12,500) until July 31, 2011. (Note 6)

At April 30, 2010, the minimum future payments under our consulting contracts are as follows:

At April 30,	2011	2012

Consulting fees	$ 178,431	$ 36,917

ARGENTEX MINING CORPORATION
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2010
(Unaudited)
(Stated in U.S. Dollars)

NOTE 11 – SUBSEQUENT EVENTS

In accordance with ASC 855 management evaluated all activity of the Company through June 11, 2010 (the issue date of the financial statements) and concluded that no subsequent events have occurred that would require recognition in the consolidated financial Statements or disclosure in the consolidated notes to the financial statements.

On May 11, 2010, the Company granted 400,000 stock options to a newly appointed director. These stock options are exercisable at CDN$0.64 (US$0.63), expire in five years on May 10, 2015 and vest in four installments each in the amount of 100,000 stock options on November 10, 2010, February 10, 2011, May 10, 2011 and November 10, 2011.

On May 31, 2010, the Company entered into a non-binding term sheet with one investor to undertake a private placement of 9,184,000 units at CDN$0.80 (US$0.79) per unit. Each unit is to consist of one common share and one common share purchase warrant. Each warrant is exercisable into one common share of the Company at CDN$1.34 (US$1.32) for a period of five years after closing.

On June 7, 2010, the Company acquired a group of contiguous mineral tenures known as the Clapperton Property, covering an aggregate of approximately 825 hectares of land located in south central British Columbia, approximately 25 kilometers northeast of the town of Merritt, British Columbia.

- 21 -

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

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report include statements about:

Our future exploration programs and results,
Our future capital expenditures, and
Our future investments in and acquisitions of mineral resource properties.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

General economic and business conditions,
Exposure to market risks in our financial instruments,
Fluctuations in worldwide prices and demand for minerals,
Fluctuations in the levels of our exploration and development activities,
Risks associated with mineral resource exploration and development activities,
Competition for resource properties and infrastructure in the mineral exploration industry,
Technological changes and developments in the mineral exploration and mining industry,
Regulatory uncertainties and potential environmental liabilities,
Political changes in Argentina, which could affect our interests there, and
The risks in the section of this quarterly report entitled “Risk Factors”,

any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our interim unaudited consolidated financial statements and the related notes that appear elsewhere in this quarterly report and our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 .

- 22 -

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the common shares in our capital stock and the terms “we”, “us” and “our” mean Argentex Mining Corporation, a Delaware corporation, and our wholly owned subsidiary, SCRN Properties Ltd., a Delaware corporation.

Plan of Operations

We are a junior exploration stage company that has not yet generated or realized any revenues from our business operations. We currently hold interests in mineral properties located in the Rio Negro and Santa Cruz provinces of Argentina and in the Province of British Columbia, Canada. All of the mineral exploration licenses with respect to the Argentine claims are registered in the name of our Delaware subsidiary, SCRN Properties Ltd., while all of the mineral tenures with respect to our British Columbia claims are registered in the name of our company. One of the properties located in the Santa Cruz province of Argentina consists of a group of claims that we refer to as the Pinguino property and we have concentrated almost all of our exploration efforts on this property. During the next year we intend to continue to focus our exploration efforts primarily on the Pinguino property, where we have had exploration success in discovering polymetallic mineralization in the past. We believe that additional targeted exploration expenditures in the form of geophysics, soil geochemistry, trenching and drilling on the Pinguino property is warranted to test the limits of known mineralization as well as new target testing.

We have not determined whether our properties contain any mineral reserve. A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.

We have not begun significant operations and are considered an exploration stage company, as that term is defined in Industry Guide 7.

Cash Requirements

We anticipate that we will incur the following expenses during the 12 month period ending May 31, 2011:

Estimated Funding Required During the Next 12 Months
Expense	Amount
Mineral exploration expenses and holding costs	$1,350,000
General and administrative expenses, including investor relations	1,100,000
Accrued accounts payable, repayment of debt and acquisition of fixed assets	350,000
Total	2,800,000
Cash on hand, May 31, 2010, estimated	1,700,000
Proceeds from exercise of warrants and options	-
Estimated excess of cash requirements over cash resources	$1,100,000

During the 12 months ending May 31, 2011, we anticipate that we will require approximately $2.8 million in order to fund the plan of operations outlined above.

Since April 30, 2010 we have not raised any additional funds. Our cash on hand as at the date of this interim report on Form 10-Q is not sufficient to fund our budgeted operating requirements for the next 12 months. In addition, our budget could increase during the year in response to matters that we are not aware of at the date of this annual report. Regardless of whether our budget remains the same or increases during the year, we do not have enough money to fund our budgeted requirements and we will have to raise additional funds. We have historically raised capital to fund our activities through the sale of debt or equity securities and we plan to raise any required funds through private placement sales of our common stock. We do not currently have any arrangements in place for the completion of any private placement financings and there can be no assurance that we will be successful in completing any private placement financings.

- 23 -

Results of Operations

Our operating results for the years ended January 31, 2010 and 2009 and the changes in our operating expenses between the years are summarized below:

						Changes
						Between the
		Three Months		Three Months		Three Months
		Ended April		Ended April 30,		Ended April 30,
		30, 2010		2009		2010 and 2009

Mineral exploration activities	$	837,782	$	106,807	$	730,975
Stock-based compensation		174,432		101,696		72,736
General and administrative		331,994		200,107		131,887

Total expenses	$	1,344,208	$	408,610	$	935,598

Revenue

We have not earned any revenue from operations since our inception and we do not anticipate earning any revenue from our operations until such time as we have entered into commercial production at one or more of our mineral projects or we sell one or more of our mineral properties. We are currently in the exploration stage of our business and we can provide no assurances that we will discover a reserve on our properties or, if we do discover a reserve that we will be able to enter into commercial production.

Expenses

Mineral Exploration Activities

Our mineral exploration expenses increased by $730,975 or 684% from $106,807 for the three months ended April 30, 2009 to $837,782 for the three months ended April 30, 2010. The increase in our mineral exploration expenses was primarily due to our decision to temporarily suspend our drilling and exploration program during the first three quarters of the year ended January 31, 2010, due to the global economic downturn. After we completed a private placement of approximately $4.4M during the fourth quarter of the year ended January 31, 2010 we commenced our drilling and exploration program.

Stock-Based Compensation

Our stock-based compensation expense increased by $72,736 or 72% from $101,696 for the three months ended April 30, 2009 to $174,432 for the three months ended April 30, 2010. The increase in our stock-based compensation was due to an increase in the stock based compensation per share due to an increase in the value of our shares during the year ended January 31, 2010.

General and Administrative

Our general and administrative expenses increased by $131,887 or 66% from $200,107 for the three months ended April 30, 2009 to $331,994, for the three months ended April 30, 2010. This increase was primarily caused by increases of $41,431 in consulting (net of $174,432 and $88,068 in stock based compensation) due to hiring more consultants; office and sundry expenses of $24,915 and travel of $20,303 due to more travel to the mine site, $18,675 in professional fees and $5,777 in transfer agent fees due to our Canadian and US exchange listings.

- 24 -

Liquidity and Capital Resources

Our working capital at April 30, 2010 and January 31, 2010 is summarized below:

						Changes between April 30,
		At April 30, 2010		At January 31, 2010		2010 and January 31, 2010

Current assets	$	2,390,635	$	3,319,642	$	(929,007	)
Current liabilities		406,188		441,940		(35,752	)
Working capital (deficit)	$	1,984,447	$	2,877,702	$	(893,255	)

Current Assets

Our current assets decreased by $929,007 or 28% from $3,319,642 at January 31, 2010 to $2,390,635 at April 30, 2010. The decrease was primarily due to raising only $124,000 in cash from equity financing during the three month period ended April 30, 2010 while spending in excess of $1 million in cash during the same period.

Current Liabilities

Our current liabilities decreased by $35,752 or 8% from $441,940 at January 31, 2010 to $406,188 at April 30, 2010. The decrease was primarily due to paying consulting fees to a director and officer that were accrued at January 31, 2010.

Working Capital

Our working capital decreased by $893,255 or 31% from a working capital of $2,877,702 to working capital of $1,984,447. The decrease was primarily due to spending more cash than we received from equity financings.

The following table summarizes our sources and uses of cash during the three month periods ended April 30, 2010 and 2009:

		Three Months			Three Months
		Ended April 30,			Ended April 30,
		2010			2009

Cash flows used in operating activities	$	(1,195,819	)	$	(279,498	)
Cash flows used in investing activities		-			-
Cash flows provided by financing activities		124,000			491,627
Effect of foreign currency exchange		149,706			-
Net (decrease) increase in cash during period	$	(922,113	)	$	(212,129	)

Net cash used in operating activities

Net cash used in operating activities during three months ended April 30, 2010 was $1,195,819. This cash was primarily used to pay for the cost of our drilling program.

Net cash used in operating activities during the three months ended April 30, 2009 was $279,498. This cash was primarily used to cover the cost of maintaining our mineral properties and to pay our consultants.

- 25 -

Net cash used in investment activities

During the during the three months ended April 30, 2010 we did not have any investment activities.

During the during the three months ended April 30, 2009 we did not have any investment activities.

Net cash provided by financing activities

During the during the three months ended April 30, 2010, we received cash of $56,500 on the issuance of 115,000 shares of common stock on the exercise of 115,000 options and $67,500 on the issuance of 450,000 shares of common stock on the exercise of 450,000 warrants.

During the during the three months ended April 30, 2009, we received net cash of $441,627 on the issuance of 1,478,334 units sold in a private placement offering of our equity securities and we received $50,000 in cash on the issuance of 200,000 shares of our commons stock on the exercise of 200,000 options.

Product Research and Development

We do not anticipate that we will spend any significant sums on product research and development over the twelve month period ending May 31, 2011.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve month period ending May 31, 2011.

Going Concern

We have historically incurred losses since inception. From inception through April 30, 2010, we have incurred losses of $18,423,138. We anticipate that we will continue to incur losses without generating any revenue from operations unless and until we are able to sell one or more of our resource properties or identify a mineral resource in a commercially exploitable quantity on one or more of our mineral properties and build and operate a mine, and there can be no assurance that we will ever be able to do so. Because of these historical losses and our continuing failure to generate any revenue from operations, we believe that we will require additional working capital to continue our exploration programs and develop our business operations in the future. We intend to raise any additional working capital required through private placements, public offerings and/or advances from related parties or shareholder loans. We have recently entered into a non-binding term sheet with International Finance Corporation pursuant to which we propose to sell 9,184,000 shares of our common stock and 9,184,000 share purchase warrants for $7,000,000, but there can be no assurance that we will be able to complete this proposed financing. With the exception of this non-binding term sheet with International Finance Corporation, we do not currently have any arrangements for any such financing in place, nor can we provide any assurance that we will be able to arrange any such financing. If adequate working capital is not available we may not be able to continue our operations.

These conditions raise substantial doubt about our ability to continue as a going concern. Our unaudited interim consolidated financial statements for the three months ended April 30, 2010 were prepared assuming that we will continue as a going concern. This contemplates that our assets will be realized and liabilities and commitments satisfied in the normal course of business. In the notes to our consolidated financial statements for the year ended January 31, 2010, our independent auditors included an explanatory paragraph expressing concern about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and no non-consolidated, special-purpose entities.

- 26 -

Contingencies and Commitments

We had no contingencies at May 31, 2010.

We have the following long-term contractual obligations and commitments:

Operating leases

On December 15, 2007, we entered into a sublease agreement for two years and eleven months at CDN$1,537 (US$1,513) per month until October 31, 2010.

On June 1, 2008, we entered into a three year lease agreement payable at $2,350 per month until May 31, 2011.

Consulting contract

On September 1, 2009, with retroactive effect to August 1, 2009, we entered into a new consulting agreement with Frontera Geological Services Ltd. and Kenneth Hicks, our President, Chief Executive Officer and a director of our company, pursuant to which Frontera Geological Services Ltd. agreed to cause Kenneth Hicks to provide, among other things, services to our company consistent with those ordinarily provided by a Chief Executive Officer, including the duties and responsibilities set out at schedule A to the consulting agreement and we agreed, among other things, to (i) pay Frontera Geological Services Ltd. a monthly cash fee of CDN$12,500 (US$12,306); (ii) grant Mr. Hicks options to purchase 100,000 shares of our common stock at an exercise price equal to the closing price, last sale of the day, on the OTC Bulletin Board on the date the options were granted and with a term of three years from the date of grant; and (iii) pay incentive bonuses upon the occurrence of specified milestones.

Internal and External Sources of Liquidity

To date we have funded our operations by selling our securities, borrowing funds secured with promissory notes and issuing convertible debentures.

Critical Accounting Policies

A summary of our critical accounting policies is included in our annual report on Form 10-K for the year ended January 31, 2010.

New accounting standards adopted during the three months ended April 30, 2010 were:

- 27 -

New accounting standards to be adopted are as follows:

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 this Form 10-Q in evaluating our company and our business before making any investment decision about our company. Our business, operating results and financial condition could be seriously harmed due to any of the following risks.

Risks Associated With Mining

All of our properties are in the exploration stage. There is no assurance that we can establish the existence of any mineral reserve on any of our properties. Unless and until we can do so, we cannot earn any revenues from operations and if we do not do so we will lose all of the funds that we have spent on exploration. If we do not discover any mineral reserve, our business will fail.

Despite exploration work on our mineral properties, we have not established that any of them contain any mineral reserve, nor can there be any assurance that we will be able to do so. If we do not, our business will fail.

A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an individual prospect ever having a “reserve” that meets the requirements of the Securities and Exchange Commission’s Industry Guide 7 is extremely remote; in all probability none of our mineral resource properties contains any ‘reserve’ and any funds that we spend on exploration will probably be lost.

The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.

Mineral operations are subject to applicable law and government regulation. Even if we discover a mineral resource in a commercially exploitable quantity, these laws and regulations could restrict or prohibit the exploitation of that mineral resource. If we cannot exploit any mineral resource that we might discover on our properties, our business may fail.

Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral properties or for the construction and operation of a mine on our properties at an economically viable cost. If we cannot accomplish these objectives, our business could fail. Although we believe that we are in compliance with all material laws and regulations that currently apply to our activities, we can give no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.

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If we establish the existence of a mineral reserve on any of our properties, we will require additional capital in order to develop the property into a producing mine. If we cannot raise this additional capital, we will not be able to exploit the reserve and our business could fail.

If we do discover a mineral reserve on any of our properties, we will be required to expend substantial sums of money to establish the extent of the reserve, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a reserve, there can be no assurance that any reserve established will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail.

Mineral exploration and development is subject to extraordinary operating risks. We do not currently insure against these risks. In the event of a cave-in or similar occurrence, our liability may exceed our resources, which would have an adverse impact on our company.

Mineral exploration, development and production involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all of the hazards and risks inherent in these activities and, if we discover a mineral reserve, our operations could be subject to all of the hazards and risks inherent in the development and production of a mineral reserve, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company.

Mineral prices are subject to dramatic and unpredictable fluctuations and the economic viability of any of our exploration properties and projects cannot be accurately predicted.

We expect to derive revenues, if any, either from the sale of our mineral properties or from the extraction and sale of precious and base metals such as gold, silver, copper, zinc and indium. The price of these commodities has fluctuated widely in recent years and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors are based on the price of precious metals and therefore the economic viability of any of our exploration properties cannot accurately be predicted.

The mining industry is highly competitive and there is no assurance that we will continue to be successful in acquiring mineral claims. If we cannot continue to acquire properties to explore for mineral resources, we may be required to reduce or cease operations.

The mineral exploration, development, and production industry is largely unintegrated. We compete with other exploration companies looking for mineral resource properties. In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations. While we may compete with other exploration companies in the effort to locate and acquire mineral resource properties, we do not believe that we will compete with them for the removal or sales of mineral products from our properties if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce.

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Risks Associated with Our Company

We have a limited operating history on which to base an evaluation of our business and prospects and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

Although we have been in the business of exploring mineral resource properties since 2002, we have not yet located any mineral reserve and we have never had any revenues from our operations. In addition, our operating history has been restricted to the acquisition and exploration of our mineral properties and this does not provide a meaningful basis for an evaluation of our prospects if we ever determine that we have a mineral reserve and commence the construction and operation of a mine. We have no way to evaluate the likelihood of whether our mineral properties contain any mineral reserve or, if they do, that we will be able to build or operate a mine successfully. We anticipate that we will continue to incur operating costs without realizing any revenues during the period when we are exploring our properties. During the 12 month period ending May 31, 2011, we expect to spend approximately $2,800,000 million on the exploration of our mineral properties and on general and administrative expenses. We therefore expect to continue to incur significant losses into the foreseeable future. If we are unable to generate significant revenues from mining operations and any dispositions of our properties, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

The fact that we have not earned any operating revenues since our incorporation raises substantial doubt about our ability to continue to explore our mineral properties as a going concern.

We have not generated any revenue from operations since our incorporation. During the three month period ended April 30, 2010, we incurred a net loss of $1,344,208. From inception through April 30, 2010, we have incurred an aggregate loss of $18,423,138. We anticipate that we will continue to incur operating expenses without revenues unless and until we are able to sell one or more of our resource properties or identify a mineral resource in a commercially exploitable quantity on one or more of our mineral properties and build and operate a mine. On June1, 2010, we had cash and cash equivalents in the amount of approximately $1.7 million. We estimate our average monthly operating expenses to be approximately $92,000, excluding exploration but including general and administrative expenses and investor relations expenses. We do not believe that our cash on hand is sufficient to fund our currently budgeted operating requirements for the 12 month period ending May 31, 2011. In addition, our budget could increase during the year in response to matters that cannot be currently anticipated and we might find that we need to raise more capital in order to properly address these items. As we cannot assure a lender that we will be able to successfully explore and develop our mineral properties, we will probably find it difficult to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity and debt securities, but there can be no assurance that we will continue to be able to do so. The economic crisis in the United States and the resulting economic uncertainty and market instability may make it harder for us to raise capital as and when we need it and have made it difficult for us to assess the impact of the crisis on our operations or liquidity and to determine if the prices we might receive on the sale of minerals, if any, would exceed the cost of mineral exploitation. If we cannot raise the money that we need to continue exploration of our mineral properties, we may be forced to delay, scale back, or eliminate our exploration activities. If any of these were to occur, there is a substantial risk that our business would fail.

Because all of our officers and directors are located outside of the United States, you may have no effective recourse against them for misconduct and you may not be able to enforce judgment and civil liabilities against our officers, directors, experts and agents.

All of our directors and officers are nationals and/or residents of countries other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

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Risks Associated with Our Common Stock

Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and the FINRA’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these 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 level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common stock.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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As required by Rule 13a-15 under the Exchange Act, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures at April 30, 2010, which is the end of the period covered by this report. This evaluation was carried out by our President, who is our principal executive officer, and our Chief Financial Officer, who is our principal financial officer. Based on this evaluation, our President and our Chief Financial Officer have concluded that the design and operation of our disclosure controls and procedures were effective as at the end of the period covered by this report.

There were no changes in our internal control over financial reporting during the quarter ended April 30, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholders are an adverse party or has a material interest adverse to us.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

On June 7, 2010, we acquired a group of three contiguous mineral tenures known as the Clapperton Property, covering an aggregate of approximately 825 hectares of land located in south central British Columbia, approximately 25 kilometers northeast of the town of Merritt, British Columbia. These mineral tenures will expire on June 7, 2011 unless we maintain ownership by spending at least $3,301 in annual exploration expenses on these properties or paying an equivalent amount in lieu.

The map reproduced below shows the location of the Clapperton Property:

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There are no known mineral resources or reserves on the Clapperton Property, nor can there be any assurance that we will be able to identify any mineral resource or reserve there.

Item 6. Exhibits.

The following Exhibits are filed with this quarterly report:

Exhibit
Number	Description

(3)	Articles of Incorporation and Bylaws

3.1	Restated Certificate of Incorporation (incorporated by reference from our Registration Statement on Form S-1 filed on January 19, 2010)

3.2	Bylaws (incorporated by reference from our Registration Statement on Form S-1 filed on January 19, 2010)

(4)	Instruments Defining the Rights of Security Holders, including Indentures

4.1	2007 Stock Option Plan (incorporated by reference to an exhibit to our current report on Form 8-K filed on November 15, 2007)

(10)	Material Contracts

10.1	Mineral Property Option Agreement dated February 24, 2004 with Chris Dyakowski (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 4, 2004)

10.2	Mineral Property Acquisition Agreement dated February 24, 2004 with San Telmo Energy Ltd. (incorporated by reference to an exhibit to our current report on Form 8-K filed on March 4, 2004)

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10.3	Diamond Core Drilling (Surface) Agreement, dated as of January 18, 2005 with Connors Argentina S.A. (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 24, 2005)

10.4	Consulting Agreement dated April 12, 2007 with Frontera Geological Services Ltd. (incorporated by reference to an exhibit to our current report on Form 8-K filed on April 18, 2007)

10.5	Private Placement Subscription Agreement dated October 14, 2008 (incorporated by reference to an exhibit to our current report on Form 8-K filed on October 20, 2008)

10.6	Form of Subscription Agreement for Debentures (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 14, 2009)

10.7	Form of Subscription Agreement for Units (incorporated by reference to an exhibit to our current report on Form 8-K filed on January 15, 2009)

10.8	Form of Subscription Agreement (incorporated by reference to an exhibit to our current report on Form 8-K filed on April 27, 2009)

10.9	Form of Subscription Agreement (incorporated by reference to an exhibit to our current report on Form 8-K filed on May 26, 2009)

10.10	Form of Subscription Agreement (incorporated by reference to an exhibit to our current report on Form 8-K filed on June 18, 2009)

10.11	Form of Subscription Agreement (incorporated by reference to an exhibit to our current report on Form 8-K filed on July 13, 2009)

10.12	Consulting Agreement dated July 14, 2009 with 0845557 B.C. Ltd. and Mark Vanry (incorporated by reference to an exhibit to our current report on Form 8-K filed on July 15, 2009)

10.13	Agency Agreement dated November 27, 2009 with Wellington West Capital Markets Inc. and Canaccord Capital Corporation (incorporated by reference to an exhibit to our current report on Form 8-K filed on December 1, 2009)

10.14	Form of Broker Warrant Certificate Issued to Wellington West Capital Markets Inc. and Canaccord Capital Corporation (incorporated by reference to an exhibit to our current report on Form 8-K filed on December 1, 2009)

10.15	Form of Subscription Agreement with the Selling Stockholders (incorporated by reference to an exhibit to our current report on Form 8-K filed on December 1, 2009)

10.16	Form of Warrant Certificate Issued to the Selling Stockholders (incorporated by reference to an exhibit to our current report on Form 8-K filed on December 1, 2009)

10.17	Consulting Agreement dated August 1, 2009 with Frontera Geological Services Ltd. and Kenneth Hicks filed (incorporated by reference to an exhibit to our current report on Form 10-Q filed on December 14, 2009)

(21)	Subsidiaries

21.1	Subsidiary of Argentex Mining Corporation: SCRN Properties Ltd., a Delaware corporation

(31)	Rule 13a-14(a)/15d-14(a) Certifications

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended (Chief Executive Officer).

31.2*	Certification pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended (Chief Financial Officer).

(32)	Section 1350 Certifications

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).

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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).

*Filed herewith

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SIGNATURES

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

By: /s/ Ken Hicks
Kenneth Hicks
President and Director
(Principal Executive Officer)
Date: June 14, 2010

By: /s/ Valerie Helsin
Valerie Helsing, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Date: June 14, 2010

ARGENTEX MINING CORP - FORM 10-Q - June 14, 2010

Attached files

ARGENTEX MINING CORP Reports