EARTH DRAGON RESOURCES INC. - FORM 10-Q

Attached files

file	filename
EX-31 - EARTH DRAGON RESOURCES INC.	exhibit31.htm
EX-32 - EARTH DRAGON RESOURCES INC.	exhibit32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2010

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

For the transition period from __________________ to ______________________

Commission file number

000-53774

EARTH DRAGON RESOURCES INC.
(Exact name of small business issuer as specified in its charter)
Nevada					27-453-7450
(State or other jurisdiction of incorporation or organization)					(IRS Employer Identification No.)
Azaban Green Terrace St. 3-20-1 Minami Azabu Minato-ku Tokyo, 106-0047 Japan
(Address of principal executive offices)
81-(0)3-6859-8532
(Issuer’s telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[ X]	YES	[ ]	NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act
Large accelerated filer			[ ]			Accelerated filer				[ ]
Non-accelerated filer			[ ]	(Do not check if a smaller reporting company)		Smaller reporting company				[ X ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
						[ ]	YES	[ x ]	NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
						[ ]	YES	[ ]	NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
						[ ]	YES	[ ]	NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
454,480,000 common shares issued and outstanding as of January 17, 2011.

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in US Dollars)


				November 30,		May 31,
				2010		2010
				(Unaudited)
ASSETS
Current Assets
	Cash		$	-	$	18,700
Total Current Assets				-		18,700
Mining property acquisition costs, less reserve for
	impairment of $6,500			-		-
Total Assets			$	-	$	18,700


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities
	Account payable and accrued liabilities		$	5,208	$	13,833
	Due to related party			9,839		9,395
	Note payable			26,980		-
Total current liabilities				42,027		23,228
Stockholders' Equity (Deficiency)
	Common stock, $0.0001 par value;
		authorized 2,850,000,000 shares, issued and outstanding
		454,480,000 and 454,480,000 shares, respectively		45,448		45,448
	Additional paid-in capital			79,761		72,552
	Deficit accumulated during
		the exploration stage		(167,236)		(122,528)
Total stockholders' equity (deficiency)				(42,027)		(4,528)
Total Liabilities and Stockholders' Equity (Deficiency)			$	-	$	18,700

See notes to financial statements.

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in US Dollars)
(Unaudited)

			Three months Ended November 30, 2010		Three months Ended November 30, 2009		Six months Ended November 30, 2010		Six months Ended November 30, 2009		Period October 23, 2007 (Inception) to November 30, 2010

Revenue		$	-	$	-	$	-	$	-	$	-

Cost and expenses
	Impairment of mining property acquisition costs		-		-		-		-		6,500
	Exploration costs		-		-		400		-		31,662
	Compensation to related party		34,839		-		34,839		-		34,839
	Other general and administrative expenses		5,556		2,071		9,469		5,207		94,235
Total Costs and Expenses			40,395		2,071		44,708		5,207		167,236


Net Loss		$	(40,395)	$	(2,071)	$	(44,708)		(5,207)		(167,236)

Net Loss per share
	Basic and diluted	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)


Number of common shares used to compute loss per share
	Basic and Diluted		454,480,000		4,544,800,000		454,480,000		454,480,000		428,188,704


See notes to financial statements.

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Stockholders' Equity (Deficiency)
For the period October 23, 2007 (Inception) to November 30, 2010
(Expressed in US Dollars)


		Common Stock, $0.0001 Par Value				Additional Paid-in Capital		Deficit Accumulated During the Exploration Stage		Total Stockholders' Equity (Deficiency)
		Shares		Amount
Common stock issued for cash
	on January 31, 2008 at $0.0000526 per share	380,000,000	$	38,000	$	(18,000)	$	-	$	20,000
Net loss for the period October 23,
	2007 (inception) to May 31, 2008	-		-		-		(14,392)		(14,392)
Balance, May 31, 2008		380,000,000		38,000		(18,000)		(14,392)		5,608
Common stock sold on
	January 31, 2009 at $0.0013158 per share	7,480,000		7,448		90,552		-		98,000
Net loss		-		-		-		(84,167)		(84,167)
Balance, May 31, 2009		387,480,000		45,448		72,552		(98,559)		19,441
Net loss								(23,969)		(23,969)
Balance, May 31, 2010		387,480,000		45,448		72,552		(122,528)		(4,528)

Unaudited:
Donated capital		-		-		7,209		-		7,209
Net loss for the six months
ended November 30, 2010		-		-		-		(44,708)		(44,708)
Balance, November 30, 2010		387,480,000	$	45,448	$	79,761	$	(167,236)	$	(42,027)


See notes to financial statements.

Earth Dragon Resources Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)


				Six months Ended November 30, 2010		Six months Ended November 30, 2009		Period October 23, 2007 (Inception) to November 30, 2010

Cash Flows from Operating Activities
	Net loss		$	(44,708)	$	(5,207)	$	(167,236)
	Adjustments to reconcile net loss to net cash
		used for operating activities:
	Impairment of mining property acquisition costs			-		-		6,500
	Changes in operating assets and liabilities:
		Accounts payable and accrued liabilities		(6,645)		(6,620)		7,188
		Due to related party		34,839		-		34,839
Net cash provided by (used for) operating activities				(16,514)		(11,827)		(118,709)

Cash Flows from Investing Activities
	Mineral property acquisition			-		-		(6,500)
Net cash provided by (used for) investing activities				-		-		(6,500)

Cash Flows from Financing Activities
	Proceeds from sale of common stock			-		-		118,000
	Due to related party			(2,186)		400		7,209
Net cash provided by (used for) financing activities				(2,186)		400		125,209

Increase (decrease) in cash				(18,700)		(11,427)		-
Cash, beginning of period				18,700		30,398		-

Cash, end of period			$	-	$	18,971	$	-


Supplemental Disclosures of Cash Flow Information:
	Interest paid		$	-	$	-	$	-
	Income taxes paid		$	-	$	-	$	-

Schedule of non-cash financing activities:
	Issuance of Promissory Note to Irish Son Limited
		("ISL") in exchange for ISL's payment of
		company liabilities (Accounts payable and
		accrued liabilities- $1,980, Due to related party-
		$25,000)	$	26,980	$	-	$	26,980
	Donated capital resulting from waiver of
		due to related party)	$	7,209	$	-	$	7,209

See notes to financial statements.

EARTH DRAGON RESOURCES INC.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

(Expressed in US Dollars)

(Unaudited)

1. Nature of Operations

Earth Dragon Resources, Inc. (the “Company”) was incorporated in the State of Nevada on October 23, 2007. The Company is an Exploration Stage Company as defined by Accounting Standards Codification (“ASC”) Topic 915, “Development Stage Entities”. The Company has acquired a mineral property located in the State of Nevada, U.S.A, and has not yet determined whether this property contains reserves that are economically recoverable.

Effective December 14, 2010, the Company effected a 38 for 1 forward stock split, increasing the issued and outstanding shares of common stock from 75,000,000 shares to 2,850,000,000 shares. All shares and per share amounts have been to retroactively reflect this stock split.

2. Interim Financial Information

The unaudited financial statements as of November 30, 2010 and for the three and six months ended November 30, 2010 and 2009 and for the period October 23, 2007 (inception) to November 30, 2010 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of November 30, 2010 and the results of operations and cash flows for the periods ended November 30, 2010 and 2009. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the six months ended November 30, 2010 are not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending May 31, 2011. The balance sheet at May 31, 2010 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the period October 23, 2007 (inception) to May 31, 2010 as included in our Form 10-K filed with the Securities and Exchange Commission on September 14, 2010.

EARTH DRAGON RESOURCES INC.

(An Exploration Stage Company)

NOTES TO FINANCIAL STATEMENTS

November 30, 2010

(Expressed in US Dollars)

(Unaudited)

3. Mineral Property

In December 2007, we acquired the right to conduct exploration activities on the Mountain Queen Lode Mining Claim, located in Clark County, Nevada, U.S.A., at a cost of $6,500. The Claim Number is NMC#1010396, which expires September 1, 2011.

In March 2008, the Company received an evaluation report from a third party consulting firm recommending an exploration program with a total estimated cost of $88,000. Due to lack of working capital, the Company has not completed this program.

On May 31, 2008, the Company recorded a $6,500 provision for impairment of mining property acquisition costs.

4. Due to Related Party

Due to related party consists of :

	November 30, 2010		May 31, 2010
Compensation due Thomas Herdman (“ Herdman”),
chief executive officer of the Company since
September 21, 2010	$	9,839	$	-
Amount due Yuan Kun Deng (“Deng”),
chief executive officer of the Company from
October 23, 2007 (inception) to September 21, 2010,
non-interest bearing, due on demand		-		9,395
Total	$	9,839	$	9,395

Under a Consultant Agreement dated September 23, 2010 with Herdman , chief executive officer of the Company since September 21, 2010, the Company agreed to pay Herdman compensation of $15,000 per month for management services, or $34,839 for the period September 21,2010 to November 30, 2009. On October 13, 2010 and November 18, 2010, Irish Son Limited (“ISL”) paid $10,000 and $15,000, respectively, to Herdman or his designee on behalf of the Company (see Note 5). The term of the Consultant Agreement is one year; either party may terminate the agreement by giving the other party 30 days written notice.

Under a Release signed by Deng, chief executive officer of the Company from October 23, 2007 (inception) to September 21, 2010, Deng agreed to waive the $7,209 remaining balance due him.

5. Note Payable

On November 30, 2010, the Company issued a $26,980 Promissory Note to Irish Son Limited (“ISL”) on in exchange for ISL’s payment of Company liabilities (Accounts payable and accrued liabilities- $1,980, Due to related party- $25,000). The Promissory Note bears interest at 6% and is due on demand.

6. Common Stock

On January 31, 2008, the Company issued 380,000,000 shares of common stock to its former chief executive officer for total cash proceeds of $20,000.

On January 31, 2009, the Company closed on the sale of a total of 74,480,000, shares of common stock in its public offering at a price of $0.0013158 per share for total cash proceeds of $98,000.

At November 30, 2010, there are no outstanding stock options or warrants.

7. Income Taxes

The provision for (benefit from) income taxes differs from the amount computed by applying the statutory United States federal income tax rate of 35% to income (loss) before income taxes. The sources of the difference follow:

					Period from
	For the six months ended				October 23, 2007
	November 30,				(Date of Inception) to
		2010		2009	November 30, 2010
Expected tax at 35%	$	(15,648)	$	(1,822)	$	(58,533)
Increase in valuation allowance		15,648		1,822		58,533
Income tax provision	$	-	$	-	$	-

Significant components of the Company’s deferred income tax assets are as follows:

	November 30, 2010			May 31, 2010
Net operating loss carryforward	$	58,533	$	42,885
Valuation allowances		(58,533)		(42,885)
Net deferred income tax assets	$	-	$	-

Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset of $58,533 at November 30, 2010 attributable to the future utilization of the net operating loss carryforward of $167,236 will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred tax asset in the financial statements. The Company will continue to review this valuation allowance and make adjustments as appropriate. The $167,236 net operating loss carryforward expires $14,392 in year 2028, $84,167 in year 2029, $23,969 in year 2030 and $44,708 in year 2031.

Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This section of this quarterly report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

As used in this quarterly report, the terms "we", "us", "our", "our company" mean Earth Dragon Resources Inc., unless otherwise indicated. We have no subsidiaries.

General Overview

We were incorporated in the State of Nevada on October 23, 2007.

Plan of Operation

We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.

Our auditor has issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. There is no assurance we will ever reach this point. Accordingly, we must raise cash from sources other than the sale of minerals found on the claim. That cash must be raised from other sources. Our only other source for cash at this time is investments by others. We must raise cash to implement our project and stay in business.

Our exploration target is to find an ore body containing zinc. Our success depends upon finding mineralized material. This includes a determination by our consultant if the claim contains reserves. Mineralized material is a mineralized body, which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average grade of metals to justify removal. If we don’t find mineralized material or we cannot remove mineralized material, either because we do not have the money to do it or because it is not economically feasible to do it, we will cease operations.

In addition, we may not have enough money to complete our exploration of the claim. If it turns out that we have not raised enough money to complete our exploration program, we will try to raise additional funds from a second public offering, a private placement or loans. At the present time, we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money in the future. If we need additional money and can’t raise it, we will have to suspend or cease operations.

We must conduct exploration to determine what amount of minerals, if any, exist on our properties and if any minerals which are found can be economically extracted and profitably processed.

The claim is undeveloped raw land. To our knowledge, the claim has never been mined. The only event that has occurred is the recording of the claim by Larry Sostad in the name of Multi Metal Mining Corp., a physical examination of the claim by Yuan Kun Deng, our former officer and director, and retaining our consultant to manage the exploration of the claim. The registration of the claim was included in the $6,500 paid to Mr. Sostad. No additional payments were made or are due to Mr. Sostad or Multi Metal Mining Corp. for their services. The claims were recorded in Multi Metal Mining Corp. in order to simplify possible reconveyances of the claims to the former record owners and to the Bureau of Land Management should mineralized material not be discovered on the claim. Since Mr. Deng is a resident of the People’s Republic of China, the ability to obtain an acknowledged reconveyances (notarized) in compliance with U.S. law is very limited. To eliminate the problems related with the foregoing, we elected to have the claims recorded in Multi Metal Mining Corp.’s name. Multi Metal Mining Corp. is owned by Mr. Sostad.

On October 17, 2008, Multi Metal Mining Corp. executed a trust agreement acknowledging that it holds the claim in trust for us. In the event that Multi Metal Mining Corp. transfers title to a third party, the trust agreement will be used as evidence that they breached the terms thereof as well as breaching its fiduciary duty to us. Under the terms of the trust agreement, we have the responsibility to keep the claims in good standing in terms of filing and work and all other requirements. Originally, the trust agreement was executed by Mr. Sostad, individually, however, we discovered the claim was registered in the name of Multi Metal Mining Corp. a corporation owned by Mr. Sostad. We determined that the trust agreement would have to be executed by the record owner of the claim, Multi Metal Mining Corp.

On October 17, 2008, a new the trust agreement was executed by us and Multi Metal Mining Corp. to specifically state that Multi Metal Mining Corp. was the record holder of the claim; that it held the claim in trust for us; that the law of the situs of the claim, the law of Nevada, would govern the terms of the trust agreement; that the parties to the trust agreement consented to personal jurisdiction in the state of Nevada; that Multi Metal Mining Corp. will not transfer its interest to anyone other than us; that Multi Metal Mining Corp. will only transfer title to the claim to us; that Multi Metal Mining Corp. will not demand payment for the claim when it transfers the same to us; that Multi Metal Mining Corp. does not have the right to sell or transfer the interest in and to the claim to anyone but us; that Multi Metal Mining Corp. does not have the right to profit from the transfer of the claim if mineralized material is found on the claim; and, that Multi Metal Mining Corp. must transfer title to the claim to us without payment of any kind, upon our demand, whether mineralized material is found on the claim or not. The trust agreement, under Nevada law, will have the effects described above with respect to the obligations and duties of Multi Metal Mining Corp.

We do not know if we will find mineralized material. We believe that activities occurring on adjoining properties are not material to our activities. The reason is that whatever is located under adjoining claim may or may not be located on our claim.

We do not claim to have any minerals or reserves whatsoever at this time on the claim.

We intend to implement an exploration program which consists of trenching. Trenching is the process of removing samples from the surface and immediately below the surface to the ground. The samples will be tested to determine if mineralized material is located on the claim. Based upon the tests of samples, we will determine if we will terminate operations; proceed with additional exploration of the claim; or develop the claim. We intend to take our core samples to analytical chemists, geochemists and registered assayers located in Reno, Nevada. We have not selected any of the foregoing as of the date of this report.

We do not intend to interest other companies in the claim if we find mineralized materials. We intend to try to develop the reserves ourselves through the use of consultant. We have no plans to interest other companies in the claim if we do not find mineralized material. To pay the consultant and develop the reserves, we will have to raise additional funds through a second public offering, a private placement or through loans. As of the date of this report, we have no plans to raise additional funds. Further, there is no assurance we will be able to raise any additional funds even if we discover mineralized material and a have a defined ore body.

If we are unable to complete any phase of exploration because we don’t have enough money, we will cease operations until we raise more money. If we can’t or don’t raise more money, we will cease operations. If we cease operations, we don’t know what we will do and we don’t have any plans to do anything.

All of the work on the claim will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

Results of Operations

Overview

Six Months Ended November 30, 2010 and 2009

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2010 which are included herein.

Our operating results for the six months ended November 30, 2010, for the six months ended November 30, 2009 and the changes between those periods for the respective items are summarized as follows:

	Six months Ended November 30, 2010 ($)		Six months Ended November 30, 2009 ($)		Change Between Six month Period Ended November 30, 2010 and November 30, 2009 ($)
Revenue		-		-		-
Operating Expenses		44,708		5,207		39,501
Net Income (Loss)		(44,708)		(5,207)		(39,501)

Operating Expenses

Our operating expenses for the six months ended November 30, 2010 and November 30, 2009 are outlined in the table below:

		Six Months Ended
		November 30

		2010		2009

Impairment of mining property acquisition costs	$	-	$	-
Exploration costs	$	400	$	-
Compensation to related party	$	34,839	$	-
Other general and administrative expenses	$	9,469	$	5,207

The increase in operating expenses for the six months ended November30, 2010, compared to the same period in fiscal 2009, was mainly due to compensation to related party and an increase in other genral and administrative expenses to $9,469 from $5,207.

Three Months Ended November 30, 2010 and 2009

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2010 which are included herein.

Our operating results for the three months ended November 30, 2010, for the three months ended November 30, 2009 and the changes between those periods for the respective items are summarized as follows:

	Three months Ended November 30, 2010 ($)		Three months Ended November 30, 2009 ($)		Change Between Three month Period Ended November 30, 2010 and November 30, 2009 ($)
Revenue		-		-		-
Operating Expenses		40,395		2,071		32,324
Net Income (Loss)		(40,395)		(2,071)		(32,324)

Operating Expenses

Our operating expenses for the three months ended November 30, 2010 and November 30, 2009 are outlined in the table below:

		Three Months Ended
		November 30

		2010		2009

Impairment of mining property acquisition costs	$	-	$	-
Exploration costs	$	-	$	-
Compensation to related party	$	34,839	$	-
Other general and administrative expenses	$	5,556	$	2,071

The increase in operating expenses for the three months ended November30, 2010, compared to the same period in fiscal 2009, was mainly due to compensation to related party and an increase in other general and administrative expenses to $5,556 from $2,071.

Revenues

We have earned $0 revenues from selling precious metals since our inception.

Liquidity and Financial Condition

As of November 30, 2010, our total assets were $0 and our total current liabilities were $42,027 and we had a working capital deficit of $42,027. Our financial statements report a net loss of $44,708 for the six months ended November 30, 2010.

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.

Cash Flows
		At		At
		November 30, 2010		November 30, 2009

Net Cash provided by (Used in) Operating Activities	$	(16,514)	$	(11,827)
Net Cash Provided by (Used In) Investing Activities	$	-	$	-
Net Cash Provided by Financing Activities	$	2,186	$	400
Cash increase (decrease) during the period	$	(18,700)	$	(11,427)

We had no cash as of November 30, 2010 as compared to $18,700 as of May 31, 2010. We had a working capital deficit of $42,027 as of November 30, 2010 compared to working capital deficit of $4,528 as of May 31, 2010.

We have the right to explore one claim containing one twenty acre claim. We will begin our exploration provided that sufficient working capital is obtained.

Since inception, we have issued 454,480,000 shares of our common stock and received $118,000. This number of shares issued reflects a 38:1 forward split that we conducted on December 14, 2010.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Milestones

Providing that sufficient working capital is obtained, the following are our milestones:

1.	90-180 days - Surveying, Trenching and Sampling. We will survey the claim. Surveying will cost up to $5,000. Trenching and sampling will cost up to $7,500. Trenching will used to accumulate samples from the surface and just below the surface. Our activities will be subcontracted to non-affiliated third parties. Time to conduct trenching and sampling - 90 days.
2.	180-210 days- Have an independent third party analyze the samples from the trenching to determine if mineralized material is below the ground. If mineralized material is found, we will attempt to define the ore body. We estimate that it will cost $3,000 to analyze the samples and will take 30 days. Delivery of the samples to the independent third party is necessary to carry out this milestone.
3.	210-370 days – If mineralized material is found, specific drilling targets will be established. We estimate this would cost $1,200. Subsequently, a process of permitting, contracting and hosting a drilling rig on site (including posting reclamation bond and all necessary government permits) which we estimate will cost $35,000 for mobilization/demobilization and $12,500 – 25,000 per drill hold, depending upon terrain and depth.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we conduct into the research and exploration of the claim before we start production of any minerals we may find. We believe that we have the funds that will allow us to operate for one year.

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting during the quarter ended November 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

On November 14, 2008, our Form S-1 registration statement (SEC file no. 333-152619) was declared effective by the SEC. Pursuant to the S-1, we offered 1,000,000 shares minimum, 2,000,000 shares maximum at an offering price of $0.05 per share in a direct public offering, without any involvement of underwriters or broker-dealers. On January 1, 2009, we completed our public offering and raised $98,000 by selling 1,960,000 shares of common stock at an offering price of $0.05 per share. Since completing our public offering, we have used $61,077 of the $98,000 proceeds as follows: legal fees of $ 31,078; audit fees of $17,924; and transfer agent fees of $12,075.

As at November 30, 2010, there are no outstanding stock options or warrants.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5.

OTHER INFORMATION

On January 12, 2010, the Company entered into a Joint Venture Agreement with Netas Mining Company Ltd. (“Netas”) whereas the Company and Netas formed a Joint Venture to conduct hard rock mining operations and production on property located in Ghana, West Africa, to which Netas owns mining concessions. These concessions are known as Nkwanta and Asuogya.

The term of the joint venture is for a minimum of two (2) years. Netas has agreed to accept primary responsibility of the joint venture including coordinating compliance with all applicable mining, environmental, business and tax rules, regulations and laws. The Company is primarily responsible for developing, maintaining and managing the mining site, facilities, equipment and operations, as well as selecting and purchasing all necessary equipment, tools, supplies and other necessities for the site. The Company agrees to contribute a minimum of USD$2 million towards the development of the property. In exchange for such contribution, the Company shall earn a 20% ownership in the property. The Company will provide a prefeasibility study of the property by qualified engineers. The Company also has the right of first refusal to purchase all of Netas’ remaining ownership interests in the concessions.

On January 11, 2011, Ms. Christine L. Salvesen was appointed to the Company's Board of Directors.

Ms. Salvesen (age 38) has served as a Director of Academic Success and Achievement at the University of Arizona since 2009, and has over 12 years of experience with the University of Arizona, being progressively responsible for experience planning, analyzing, developing innovative programs, and implementing marketing plans. From 2005 to 2008, she was the Assistant Director for The Disability Resource Center where she was charged with evaluating programs, managing a team and implementing strategic enhancements. Ms. Salvesen earned a Bachelor of Science in Psychology from the University of Arizona in 1995 and earned a Masters of Arts, Educational Psychology from the University of Arizona in 1997.

On January 13, 2011, Mr. James F. Park was appointed to the Company’s Board of Directors.

Mr. Park is a Certified Senior Geologist with over 25 years of progressive experience in all phases of geotechnical and mineral resource development. His background includes expertise in the areas of geotechnical management, environmental studies, water rights, economic evaluations, acquisitions, mine planning, land patenting and reserve development. He has been an independent mining consultant since 2008 and previously served as either a consulting, chief, project or exploration geologist with the following organizations: Golden Predator Corp. November 2007 to November 2008, Mining Consultant September 1993 to November 2007. Mr. Park is a resident of Arizona and earned his Bachelor's Degree in Geology at Western Washington University and undertook graduate studies at Arizona State University, Graduate School.

ITEM 6.

EXHIBITS.

The following documents are included herein:

Exhibit No.	Document Description
31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 19th day of January, 2011.

	EARTH DRAGON RESOURCES INC.

Date: January 19, 2011	/s/ Thomas William Herdman
	Thomas William Herdman
	President, Secretary, Treasurer and Director (Principal Executive Officer, Principal Financial and
	Principal Accounting Officer)

EARTH DRAGON RESOURCES INC. - FORM 10-Q - January 19, 2011

Attached files

EARTH DRAGON RESOURCES INC. Reports