UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K


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


For the fiscal period ended December 31, 2010


OR


      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: 333-140177


DUKE MOUNTAIN RESOURCES, INC.

 (Exact name of registrant as specified in its charter)


Nevada

(State or other jurisdiction of incorporation)


98-0503336

(I.R.S. Employer Identification No.)

6805 Sundance Trail, Riverside CA 92506

(Address of principal executive offices)


(951) 907-9911

(Registrant’s telephone number, including area code)


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


Common Stock, $0.001 par value per share

(Title of Each Class)



(Name of exchange on which registered)

None


Securities registered pursuant to Section 12(g) of the Act:   None



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [  ] No [X]


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.

Yes [  ] No [X]


Indicate by check mark whether the registrant: (1) has filed all reports required 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 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 [   ]




Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  (Check one):


Large Accelerated File

[   ]    Accelerated Filer   [   ]   Non-accelerated Filer

[  ] Smaller Reporting Company [X]


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

Yes [ X ] No []


Aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity as of the last business day of the registrant’s most recently completed second fiscal quarter: $-0-


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


Class

 

Outstanding at March 29, 2011

Common Stock, $0.001 par value per share

 

12,180,000 shares



DOCUMENTS INCORPORATED BY REFERENCE


List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).



None.



2



TABLE OF CONTENTS


DUKE MOUNTAIN RESOURCES, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010


PART I

PAGE

 

Item 1.  

 Business

4


Item 1A.

Risk Factors

13


Item 2.   

Properties

  

6


Item 3.

Legal Proceedings

17


PART II

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters

18

and Issuer Purchases of Equity Securities


Item 6.  

Selected Financial Data

18


Item 7.

Management's Discussion and Analysis of Financial Condition

18

and Results of Operations


Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

22

  


Item 8.

Financial Statements and Supplementary Data

23

      


Item 9.

Changes in and Disagreements With Accountants on Accounting

34

and Financial Disclosure


Item 9A.

Controls and Procedures

34

          


Item 9B.

Other Information

36

          


PART III


Item 10.

Directors, Executive Officers and Corporate Governance

36


Item 11.

Executive Compensation

38


Item 12.

Security Ownership of Certain Beneficial Owners and Management

39

and Related Stockholder Matters


Item 13.

Certain Relationships and Related Transactions, and Director

40

  

Independence


Item 14.

Principal Accounting Fees and Services

40


PART IV


Item 15.

Exhibits and Financial Statement Schedules

42


 

Signatures

43



3



PART I


ITEM 1.  BUSINESS.


Forward-Looking Statements


Except for the historical information presented in this document, the matters discussed in this Form 10-K for the fiscal year ended December 31, 2010 and specifically in the items entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” or otherwise incorporated by reference into this document, this report contains forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for working capital.  Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology.  This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements.  These statements may be found in this report under “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,”  “Item 1. Business,” as well as in this report generally.  Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Item 1A. Risk Factors” and matters described in this report generally.


Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform our prior statements to actual results.


The Company   


We are a Nevada corporation incorporated on May 3, 2006. Our authorized capital consists of 76,000,000 common shares, with a par value of $0.001 per share. As of December 31, 2010, we had 12,180,000 shares of common stock issued and outstanding. Our Corporate headquarters are located at 6805 Sundance Trail, Riverside CA 92506. Our telephone number is 951-907-9911.

 

Business


General


We are an exploration stage company engaged in the acquisition and exploration of mineral properties.  We own a 100% mineral interest in three properties. Although exploratory work in the area of our properties conducted by others has indicated some potential showings of mineralization, we are uncertain as to the reproducibility of these prior exploration results and thus we are uncertain as to the potential existence of a commercially viable mineral deposit existing on our mineral claims.  


We currently own a 100% undivided interest in three mineral properties located in the Province of British Columbia, Canada, that we call the “Goldstar Property,” the “Rosewall Gold Property” and the “Waterloo Creek Property.” Currently there are no known mineral reserves on the Goldstar Property, the Rosewall Gold Property or the Waterloo Creek Property.


During the prior year, we commenced and completed phase 1 exploration work on all three of our mineral claims as described below. Due to unsatisfactory mineral results from phase one from our Goldstar and Rosewall claims, we have impaired these two claims and as a result have written off the acquisition costs of $25,000. We fully impaired the acquisition cost of the Waterloo claim of $15,000  in the fiscal year ened December 31, 2009 due to our inability to ascertain the viability of the project.


We have not earned any revenues to date. We do not anticipate earning revenues until such time as we enter into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that any commercially viable mineral deposits exist on our mineral claims, that we will discover commercially exploitable levels of mineral resources on our properties, or, if such deposits are discovered, that we will enter into further substantial exploration programs.


Glossary


The following is a brief glossary of terms and abbreviations which we use in the description of our properties which immediately follows.


Arsenopyrite is a common mineral composed of iron disulphide with a pale brass-yellow color used as an iron ore and in the production of sulfur dioxide for sulfuric acid.


Calc-silicate is a reference to a metamorphic rock consisting mainly of calcite and calcium-bearing silicates.


Calc-slicate is a rock or mineral that is composed of calcium, silicon and oxygen.


Chalcopyrite is a sulphide mineral of copper and iron; it is the most common ore mineral of copper.


Cinnabar is a heavy reddish mercuric sulfide (HgS) that is the principle ore (constituent) of mercury and is used as a pigment.


EM is an acronym for “Electro Magnetic Survey,” which is a survey of the conductive properties of rocks.


Epithermal is a mineral deposit consisting of veins and replacement bodies, usually in volcanic or sedimentary rocks, containing precious metals or, more rarely base metals.


Erythrite is a reddish mineral consisting of hydrated cobalt arsenate in monoclinic crystalline form and used in coloring glass; usually found in veins bearing cobalt and arsenic.


Felsic is a term which describes an igneous rock that has a large percentage of light-colored minerals such as quartz, feldspar, and muscovite. It is also used in reference to the magmas from which these rocks crystallize. Felsic rocks are generally rich in silicon and aluminum and contain only small amounts of magnesium and iron.


IP Survey refers to an “induced polarization survey” that is carried out by pulsating electric current into wires set into the ground.


Minfile Occurrence, as a computerizes mineral inventory system, represents a readily accessible information database for describing the nature and distribution of over 12,000 metallic, industrial mineral and coal occurrences within specific geological settings of British Columbia.


MTO refers to “mineral titles online,” which is a process of online title registration permitted in British Columbia.


NSR refers to “net smelter return” which means the aggregate proceeds received by us from time to time from any smelter or other purchaser from the sale of any ores, concentrates, metals or any other material of commercial value produced, whether in testing, partial production or full production, after deducting from such proceeds, costs such as shipping, insurance and smelter penalties.


 Placer Gold is an alluvial deposit of sand and gravel containing gold and other metals.


PPb refers to parts per billion of gold in a lab assay


Pyrite is a common mineral composed of iron disulphide with a pale brass-yellow color used as an iron ore and in the production of sulfur dioxide for sulfuric acid.


Silicified Felsite is a rock containing an abundance of quartz.


Stibnite is a soft grey mineral.


Stockwork Zone an area that has numerous veins and mineralized fractures


Tenure  is title to a mineral claim as assigned by the Ministry of Mines in British Columbia


Tertiary Age is a geological age ranging from 63 million to 2 million years ago.


Tributary is a reference to a stream which flows into a larger stream.


Properties


Acquisition, Description, Location Of and Access to the Goldstar Property


Acquisition


On June 16, 2006 we entered into a sale and acquisition agreement whereby we acquired a 100% interest in the Goldstar Property from Mr. James (Jim) Laird of Laird Exploration for $10,000. Our interest in the Goldstar Property is subject to a 3% NSR.  The Goldstar Property does not contain any known commercial reserves. During the year ended December 31, 2009 we elected not to proceed with phase two due to unsatisfactory results from phase one and fully impaired our investment.


Location


The Goldstar Property lies along the south valley side of Putnam Creek, within the North Okanagan region of southern British Columbia.  The property is accessed by traveling 15  kilometers north from the town of Lumby, B.C., located on Highway 6.  


The Goldstar Property is located on the west slope of Trinity Valley.  The claim area is cut by Putnam Creek, which flows in a steep-sided valley, originating from the Silver Star Mountain area in the west, flowing to the broad terraced Trinity Valley, to the east of the property area. The property elevation lies between 900 to 1,100 meters elevation on forested moderately steep slopes. Annual precipitation consists of about 40 centimeters of rainfall and 1.4 meters of snowfall.  Temperatures are warm throughout the summer with winter temperatures averaging around -5° Celsius.


Description


The Goldstar Property consists of three mineral claims representing 22 units (474 hectares) that has been staked and recorded.  In British Columbia, each unit equals approximately 20 hectares.  The following table sets forth the details of the claim as of December 31, 2010.


 

 

 

 

          Claim Name

Units

Tenure Number

Expiry Date

Goldstar 1

4

522570

November 23, 2011

            Goldstar 2

5

522607

November 24, 2011

Goldstar 3

13

               560684                    

          June 15, 2011

 

 

 

 




Geology


The Goldstar Property area hosts a series of volcanic and sedimentary rocks known as the Nicola Group, which are favorable for the formation of economic mineral deposits.  Significant concentrations of placer gold have been traced to a tributary of Putnam Creek covered by the property.  The immediate source of the gold has not been identified, but is suspected to be quartz veins and silicified zones occurring in the Nicola rocks.

 

There is little outcrop exposed in the Putnam Creek area, although abundant metamorphosed sedimentary and volcanic rocks are present along the tributary stream bed sampled in 1999.  There are also numerous cobbles of milky white quartz found in the stream bed, but appear to be un-mineralized.  Based upon reports commissioned by us, the gold found in the area is likely related to a local fault structure containing gold-bearing quartz, which has liberated placer gold concentrations into the tributary creek to Putnam Creek.  The tributary creek is likely the source of the placer gold that has been concentrated within the stream bed of Putnam Creek.


Prior Work


The earliest recorded exploration work on the Goldstar Property area was recorded when placer gold was obtained from reddish gravels of schistose and gneissic rock material in Putnam Creek.  The gold was reported to be heavy and well-rounded and associated with black sand.  In 1936, 155 grams of gold was reported as being recovered from Putnam Creek.  No further work has been recorded from this location since 1936.


The majority of the exploration work was carried out to the west of the gold anomalous tributary creek and did not concentrate on locating the source of the gold found in the tributary creek. A regional stream sediment sampling program in the Putnam Creek area conducted in 1999, resulted in consistently anomalous gold values.  Of the 5 samples collected along the tributary stream all were considered moderately to highly anomalous for gold.  


Proposed Exploration Program Based Upon the Conclusions of Geological Report


We have completed the phase one of our exploration program which consisted of prospecting, a geological examination of any outcrops encountered, 10 pan samples and 2 rock samples taken. The rock samples were taken from shear-hosted 30 cm. wide quartz veins located at Minfile occurrence # 082LSE 071.The rock samples GSRS-1 and 2 contained trace amounts of sphalerite, galena and pyrite, but showed trace to sub-economic precious and base metal values when assayed.


Ten pan concentrate samples, GSPS-1 to 10, were taken from active sites within drainages identified previously as containing significant amounts of gold.  Samples 1 through 9 consisted of 2-3 pans of active sediment from depths up to 50 cm.  Little or no heavy materials such as magnetite or sulphides were present in the samples, and no gold was observed.


A small amount of specular hematite was observed in the pan samples taken from Putnam Creek itself.  No significant gold values were detected by assay in samples GSPS-1 to 9.  Sample GSPS-10 was a later re-take at sample site GSPS-7, using a modified sample methodology.  This site had provided highly anomalous results in the earlier Brican and Teck programs. GSPS-10 was taken from an active stream site, from a one-meter deep by one-meter square hand-dug hole.  Four pans of material were panned down to fines, and again no visible gold, magnetite or sulphides were seen.  However, the sample assayed 221 ppb gold, comparable to the Teck results.  During sampling, it was noted that the surficial gravels contain a large amount of argillaceous materials, with lesser andesite and unmineralized white quartz cobbles.  Active logging upstream from the sample sites and recent high water flows may have contributed to covering the gold-bearing sediment with lighter materials.  Future pan sampling programs should take this possibility into account by hand-digging sample holes at least one meter deep.


Our consulting geologists have advised that the main exploration focus for the Goldstar Property going forward should involve exploration for the source of gold as found in pan samples taken from the main tributary creek to Putnam Creek, and the placer gold concentrations in Putnam Creek itself.  As previously noted in the 1950 BCDM report and during this program, the surface argillaceous materials contain little or no gold.  It was stated in the same report that the heavy gold was concentrated in underlying reddish gneissic gravels, which were not observed during phase one. Due to poor results from this phase one exploration we have elected not to proceed with phase two exploration work.


Acquisition, Description, Location Of and Access to the Rosewall Gold Property


Acquisition


On June 16, 2006 we entered into a sale and acquisition agreement whereby we acquired a 100% interest in the Rosewall Gold Property which is located in eastern-central Vancouver Island, north of Horne Lake, near the headwaters of Rosewall Creek and Qualicum River.


We purchased the Rosewall Gold Property from Mr. James (Jim) Laird of Laird Exploration for $15,000. Our interest in the Rosewall Gold Property is subject only to a 3% NSR.  The Rosewall Gold Property does not contain any known reserves. During the year ended December 31, 2009 we elected not to proceed with phase two due to unsatisfactory results from phase one and fully impaired our investment.


Location


The Rosewall Gold Property is located on the east-central area of Vancouver Island at 49° 25’ 30” North Latitude and 124° 52’ 30” West Longitude.  The property is accessed by following the Island Highway, approximately 25 kilometers northwest from Qualicum Beach, B.C. At this point the Rosewall Creek road is followed southwesterly for approximately 7 kilometers, reaching the property area. The property area is also located approximately 15 kilometers northwest of Horne Lake.


Topography is moderate to steep, particularly along the creek beds. Vegetation is mostly second growth timber with considerable undergrowth, which conceals much of the outcrop in the area and makes movement through the area somewhat difficult.  The property is within an area of moderate to heavy precipitation. Heavy accumulations of snow can be expected at higher elevations from November to March.


Description


The Rosewall Gold Property consisted of one mineral claim representing 8 units (175 hectares) that has been staked and recorded.   The following table sets forth the details of the claim as of December 31, 2010.

 

 

 

 

Claim Name

Units

Tenure Number

Expiry Date

Rosewall Gold

         8                                              532950                                  April 24, 2012  


Geology


The Rosewall Gold Property covered what we believed to be a promising gold exploration area on Vancouver Island.  A very large silicified alteration zone with minerals characteristic of an epithermal gold deposit environment are found on the property.  Additional work was needed to expand and define the gold in soil anomalies and to geologically map and rock sample the general area.


Prior Work


The only known exploration work on the claim area was carried out in 1986 and 1987.  Recorded work consisted of reconnaissance rock, soil and silt sampling covering an area of approximately 8 square kilometers.  Exploration work consisted of general prospecting of the property area and included the collection and sampling of 40 rock samples, 56 soil samples and 11 silt samples.







Proposed Exploration Program Based Upon the Conclusions of Geological Report


The Rosewall Gold Property contains styles of rock alteration, rock textures and mineralization types that are typically associated with epithermal gold +/- silver deposit types.  Calc-silicate alteration is extensive on the property area suggesting the potential to host a mineral deposit.


Our initial exploration program for the Rosewall Gold Property was composed of three results-contingent stages. The property required a program of concentrated exploration with the establishment of a surveyed control grid.  The grid area would then be thoroughly prospected and geologically mapped with commensurate soil sampling surveys, EM and magnetometer geophysical surveys.  Based on a compilation of these results, a diamond drill program would be designed to explore and define the potential resources.  


Phase 1 Work and Cost Estimate


Phase 1 of our proposed exploration program on the Rosewall Gold Property consisted of reconnaissance geological mapping, prospecting and rock sampling. This initial phase of the recommended programs for the Rosewall Gold Property cost approximately $15,404. This work was completed in two trips, our first trip was on March 26 to 28, 2008. The crew was unable to get the desired results due to late snowfall. The second trip from was from June 6th to 9th, 2008. The Rosewall Property contains styles of rock alteration, rock textures and mineralization types that are typically associated with epithermal gold +/- silver deposit types.  As reported in older assessment reports, gold values in soil, silt and rock geochemistry indicated significant anomalies.  The present pan sample survey was very limited in scope; however it did not substantiate the reported gold values.  This failure to repeat the reported values may be due to several recent large slides and high water flow covering up the heavier minerals with light material. Prospecting and mapping were hampered by 20 years of overgrowth and lack of road access. Due to unsatisfactory results from the phase one exploration program, we have elected not to proceed with phase two work on our Rosewall mineral claims and have fully impaired our investment as of December 31, 2009.


Acquisition, Description, Location Of and Access to the Waterloo Creek Property


Acquisition


On May 19, 2006 we entered into a sale and acquisition agreement whereby we acquired a 100% interest in the Waterloo Creek Property from Mr. James (Jim) Laird, of Laird Exploration Ltd for $15,000. Our interest in the Waterloo Creek Property is subject to a 3% NSR.  The Waterloo Creek Property does not contain any known reserves.


Location


The Waterloo Creek Property is located west of the town of Bowser, British Columbia on the east-central coastal region of Vancouver Island. The property comprises two mineral claims totaling 510 hectares in area.  Access to the property is gained via logging roads from Bowser up the Rosewall Creek drainage to the north-east slope of Mt. Curran.


The Waterloo Creek Property is reached from Nanaimo by driving the Island Highway north to the vicinity of Rosewall Creek.  The Rosewall Creek road is followed for 6.5 km west, where a smaller secondary road branches to the right and is followed for 1.5 km north before reaching Wilfred Creek.  An old logging road to the south bisects the property.


Topography is moderate to steep, particularly along the creek beds. Vegetation is mostly second growth timber with considerable undergrowth, which conceals much of the outcrop in the area and makes movement through the area somewhat difficult.  The property is within an area of moderate to heavy precipitation. Heavy accumulations of snow can be expected at higher elevations from November to March.


Description


The Waterloo Creek Property consists of two mineral claims representing 34 units (510 hectares) that has been staked and recorded.   The following table sets forth the details of the claim as of December 31, 2010.


 

 

 

 

Claim Name

Units

Tenure Number

Expiry Date

 Waterloo and Rosewall

8

532950

       June 19, 2011



 Waterloo and Rosewall

         26

      535928                      June 19, 2011


Geology


Little information has been reported on specific geological aspects of the Waterloo Creek Property area.  The only information available pertains to the main showing area located on the property. The mineral showing area lies along a fault zone occurring within a distinct canyon measuring approximately 5 meters wide by 15 meters deep.  The fault zone contains an intrusive stockwork body consisting of silicified felsite to rhyolite composition.  The stockwork zone has been followed for about 100 meters along the canyon and varies between 2.5 to 5 meters wide.  


The stockwork zone is terminated at the east end by a fault and the other end by an altered dyke. The depositional style and content of the mineralization is consistent with other mineral deposits on Vancouver Island of known Tertiary age.  


Prior Work


The only known exploration on the Waterloo Creek Property was carried out in 1985 and 1988 through 1989. During this period the property was explored through prospecting, surface rock sampling and the drilling of two short diamond drill holes.  The main showing was explored in 1985 by surface sampling using a small portable packsack drill, which was used to blast outcrops in 11 locations.  Four sample results were reported from this work containing encouraging values in gold and other anomalous values.


Two diamond drill holes were drilled from a common set-up over an extended period during 1988 and 1989.  The first hole totaled 53.3 meters, while the second hole totaled 38.1 meters.  Significant concentrations of pyrite, arsenopyrite and minor chalcopyrite were reported in the first drill hole across approximately 9 meters, however only minor sampling was carried out, producing inconclusive results.


Proposed Exploration Program Based Upon the Conclusions of Geological Report


The Waterloo Creek Property contains mineralization that is likely associated with an epithermal style of mineral deposit. Due to the minor amount of exploration carried out on the property area, further investigation was recommended to determine the extent and style of mineralization present on the property.


Our exploration program for the Waterloo Creek Property was composed of three results-contingent stages. Our proposed work program included construction of a control grid, geological mapping and rock sampling, a soil and silt geochemical sampling program, IP geophysical survey, and rock trenching.  Based on a compilation of these results, a diamond drill program would have been designed to explore and define the potential resources.


Phase 1 Work and Cost Estimate


Phase 1 of the proposed program consisted of reconnaissance geological mapping, prospecting and rock sampling. The  cost was $5,397. This work was completed in June 2008. During 2009, due to being unable gain access to part of the Waterloo claim, we elected to impair all of our investment in this claim.


Validity of Mining Claims in British Columbia


In British Columbia, all mining claims are valid for one year.  To maintain our interests, we are required to file evidence with the Province of British Columbia that exploration work has been carried out on the claim during the current year or pay cash in lieu of work of $0.40 Cdn. per hectare plus recording fees. Our properties have the following expiration dates: Waterloo Creek Property June 19, 2011. Rosewall Gold Property April 24, 2012 and the Goldstar Property will expire from June 15, 2011 to November 24, 2011.  If the required exploration work expenditure is not completed and filed in any year or if a payment is not made in lieu of the required work within this year, the mineral claims will lapse and title will revert to the Province.  


Title to Our Properties


There are a total of 5 mineral tenures which are owned 100% by our subsidiary. The tenures cover a total area of 1,146 hectares. The tenure numbers are 522570, 522607, 560684, 532950 and 535928.

Competition


The mineral exploration industry, in general, is intensively competitive and even if commercial quantities of ore are discovered, a ready market may not exist for the sale of the ore.  Numerous factors beyond our control may affect the marketability of any substances discovered.  These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital.


Compliance with Government Regulation


We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the Province of British Columbia.  In addition, if we progress to the production phase, production of minerals in the Province of British Columbia will require prior approval of applicable governmental regulatory agencies. We cannot be certain that such approvals will be obtained.  The cost and delay involved in attempting to obtain such approvals cannot be known in advance.  We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the Province of British Columbia. The main agency that governs the exploration of minerals in the Province of British Columbia is the Ministry of Mines.


The Ministry of Mines manages the development of British Columbia's mineral resources, and implements policies and programs respecting their development while protecting the environment. In addition, the Ministry of Mines regulates and inspects the exploration and mineral production industries in British Columbia to protect workers, the public and the environment. The material legislation applicable to us is the British Columbia Mineral Tenure Act, and the British Columbia Mines Act, as well as the Health, Safety and Reclamation Code and the Mineral Exploration Code.


The Mineral Tenure Act and its regulations govern the procedures involved in the location, recording and maintenance of mineral titles in British Columbia. The Mineral Tenure Act also governs the issuance of leases which are long term entitlements to minerals.


All mineral exploration activities carried out on a mineral claim or mining lease in British Columbia must be done in compliance with the Mines Act. The Mines Act applies to all mines during exploration, development, construction, production, closure, reclamation and abandonment. It outlines the powers of the Chief Inspector of Mines, to inspect mines, the procedures for obtaining permits to commence work in, on or about a mine and other procedures to be observed at a mine. Additionally, the provisions of the Health, Safety and Reclamation Code for mines in British Columbia contain standards for employment, occupational health and safety, accident investigation, work place conditions, protective equipment, training programs, and site supervision. Also, the Mineral Exploration Code contains standards for exploration activities including construction and maintenance, site preparation, drilling, trenching and work in and about a water body.


Additional approvals and authorizations may be required from other government agencies, depending upon the nature and scope of the proposed exploration program. If the exploration activities require the falling of timber, then either a free use permit or a license to cut must be issued by the Ministry of Forests. Items such as waste approvals may be required from the Ministry of Environment, Lands and Parks if the proposed exploration activities are significantly large enough to warrant them. Waste approvals refer to the disposal of rock materials removed from the earth which must be reclaimed. An environmental impact statement may be required. We have not budgeted for regulatory compliance costs in the proposed work program recommended by the geological report.


The Mineral Tenure Act requires that a holder of title to mineral claims must spend approximately $4.00 US  per hectare per year in order to keep the property in good standing. The Goldstar Property consists of an area of approximately 474 hectares. As such, our annual fee with respect  to the Goldstar Property is expected to be approximately $1,896 US. The Rosewall Gold Property consists of an area of approximately 483 hectares. As such, our annual fee with respect to the Rosewall Gold Property is expected to be approximately $1,932 US. The Waterloo Creek Property consists of an area of approximately 524 hectares. As such, our annual fee with respect to the Waterloo Creek Property is expected to be approximately $2,184.00 US. Because we have completed phase one on all three claims, we are not required to pay any fees until 2011. We do not foresee electing to renew these claims in the future due to lack of unproven mineral reserves from our initial Phase 1 exploration work conducted on all three of our mineral claims.


We will also have to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned-up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended work program. Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on earnings, our competitive position or on us in the event a potentially economic deposit is discovered.


If we anticipate disturbing ground during our mineral exploration activities, we will be required to make an application under the Mines Act for a permit. A permit is issued within 45 days of a complete and satisfactory application. We do not anticipate any difficulties in obtaining a permit, if needed. The proposed initial exploration activities on our properties do not involve ground disturbance and as a result do not, at this time, require a work permit. Any follow-up trenching and/or drilling will require permits, applications for which will be submitted well in advance of the planned work.


If we enter the production phase, of which there is no assurance, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. The regulatory requirements that we will have to meet will likely include:


·

Ensuring that any water discharge meets drinking water standards;

·

Dust generation will have to be minimal or otherwise re-mediated;

·

Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation;

·

All material to be left on the surface will need to be environmentally benign;

·

Ground water will have to be monitored for any potential contaminants;

·

The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be re-mediated; and

·

There will have to be an impact report of the work on the local fauna and flora including a study of potentially endangered species.


Employees


We have no employees as of the date of this report other than Mr. Dave Gamache, our President, CEO and Principal Accounting Officer. Mr. Gamache is paid a monthly fee of $750 per month. There is no written employment contract, this arrangement commenced on September 15, 2008. We conduct our business largely through agreements with consultants and other independent third party vendors.





ITEM 1A.  RISK FACTORS.


We have sought to identify what we believe to be the most significant risks to our business.  However, 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. We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us. If any of the following risks actually occur, our business, financial condition or operating results could be harmed. In such case, you could lose all or a portion of your investment.


We have yet to earn revenue and our ability to sustain our operations is dependent on our ability to raise financing.


We are an exploration stage Company; we have not generated any revenues since inception and we do not expect to generate any revenues for the foreseeable future, we incurred a net loss of $305,309 for the period from May 3, 2006 (inception) to December 31, 2010 and a loss of $56,692 for year ended December 31, 2010.  Our long-term viability is dependent upon our ability to obtain financing and future profitable operations from the commercial exploitation of our mineral claims or other operations.  


If we do not obtain additional financing, we will need to curtail our exploration activities and our business may fail, in which case you may lose your investment.


For the next year of operations, our current operating funds should be sufficient to cover anticipated operating overheads, professional fees and regulatory filing fees.  However, our existing funds may be insufficient if we decide to proceed with additional exploration programs. Therefore, we will need to obtain additional financing in order to complete our full business plan.


In order for us to perform any further exploration or extensive testing we will need to obtain additional financing.  As of December 31, 2010 we had cash in the amount of $228,195. We currently do not have any operations and we have no income.  Our business plan calls for significant expenses in connection with the exploration of mineral claims. If further exploration programs are warranted, we will require additional financing to complete the follow-up programs.  


We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete.  If our exploration programs are successful in discovering ore of commercial tonnage and grade, we will require additional funds in order to place the properties into commercial production.  We currently do not have any arrangements for financing and we may not be able to obtain financing when required.  Obtaining additional financing would be subject to a number of factors many of which are beyond our control, including the market prices for copper and gold and the costs of exploring for or mining these materials.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.


Because of the difficulties and uncertainties inherent in the mineral exploration business, we face a high risk of business failure.


At this time, we have not been successful in finding commercial mineral deposits on our properties; if all of our exploration efforts are not successful, we will be unable to generate revenues from our operations and we will have to cease doing business.  Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake.  These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.  The expenditures to be made by us in the exploration of the mineral claims may not result in the discovery of mineral deposits.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.


Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.


The search for valuable minerals involves numerous hazards.  As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.  At the present time we have no coverage to insure against these hazards.  The payment of such liabilities may have a material adverse effect on our financial position.


We have no known mineral reserves and if we cannot find any, we will have to cease operations.


We have no mineral reserves. If we do not find a mineral reserve containing commercial quantities of gold, copper, or silver or if we cannot complete the exploration of the mineral reserve, either because we do not have the money to do it or because it will not be economically feasible to do it, we will have to cease operations and you will lose your investment. Mineral exploration is highly speculative. It involves many risks and is often non-productive. Even if we are able to find mineral reserves on our property our production capability is subject to further risks including:


·

Costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;

·

Availability and costs of financing;

·

Ongoing costs of production; and

·

Environmental compliance regulations and restraints.


The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of milling facilities and processing equipment near our properties, and such other factors as government regulations, including regulations relating to allowable production, importing and exporting of minerals, and environmental protection.


Given the above noted risks, the chances of finding reserves on our mineral properties are remote and funds expended on exploration will likely be lost.


Because we will be subject to compliance with government regulation which may change, the anticipated costs of our exploration program may increase and require us to curtail or cease our operations.


There are several governmental regulations that materially restrict mineral exploration or exploitation.  We will be subject to the Mining Act of British Columbia as we carry out our exploration programs.  We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these regulations.  While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program.  If any future regulatory requirements, applicable to our operations, increase the cost of our compliance, we may find it necessary to curtail or cease our exploration activities, in which event you may lose your investment.


Because the Province of British Columbia owns the land covered by our mineral claims and native land claims might affect our title to the mineral claims or to British Columbia’s title to the property, our business plan may fail.


We are unaware of any outstanding native land claims with respect to any of our properties.  However, it is possible that a native land claim could be made in the future.  The federal and provincial government policy at this time is to consult with all potentially affected native bands and other stakeholders in the area of any potential mining.  Should we encounter a situation where a native person or group claims an interest in our claims, we may be required to provide compensation to the affected party in order to continue with our exploration work, or if such an option is not available, we may have to relinquish our interest in these claims.  In either case, the costs and/or losses could be greater than our financial capacity and our business would fail.




Risks Particular to the market of our Common Stock


The value and transferability of our shares may be adversely impacted by the penny stock rules.


Holders of our common stock may experience substantial difficulty in selling their securities as a result of the “penny stock rules.”  Our common stock is covered by the penny stock rules, a Securities and Exchange Commission (“SEC” or the “Commission”) rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors, generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.  For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and transaction prior to the sale.  Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers of our stock to sell their shares in the secondary market.  It may also cause fewer broker dealers to make a market in our stock.

In addition to the "penny stock" rules promulgated by the SEC, the NASD 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 NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.  The NASD 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 and have an adverse effect on the market for our shares.

We may compete for time and efforts of our officer and director.

Our officer and director is also an officer, director, and employee of other companies, and we may have to compete with the other companies for his time, attention and efforts. Our officer and director, Mr. Dave Gamache expects to devote approximately twenty five (25%) of his time to our affairs.

Our proposed businesses raise potential conflicts of interests between our officer and director and us.

              Our director may become a director and employee of other mineral exploration companies and, to the extent that such companies may participate in ventures in which we may participate, our director may have a conflict of interest in negotiating and concluding terms regarding the extent of such participation by us and such other companies. In addition, our director may present potential prospects to such other companies rather than presenting the opportunities to us or be affiliated with other exploration companies which may compete with our mineral claims. We have not established any mechanisms regarding the resolution of any such conflict if it were to arise; accordingly, there is no assurance that any such conflict will be resolved in a manner that would not be adverse to our interest.

We have a large number of restricted shares outstanding, a portion of which may be sold under rule 144 which may reduce the market price of our shares.

Of the 12,180,000 shares of common stock issued and outstanding, assuming no warrants are exercised, 10,000,000 shares are deemed “restricted securities,” within the meaning of Rule 144; eighty two (82%) percent of these restricted shares are owned by one person, our former President and Director and controlling shareholder. Absent registration under the Securities Act, the sale of such shares is subject to Rule 144, as promulgated under the Securities Act.

It is anticipated that all of the “restricted securities” will be eligible for resale under Rule 144. In general, under Rule 144, subject to the satisfaction of certain other conditions, a person, who is not an affiliate (and who has not been an affiliate for a period of at least three months immediately preceding the sale) and who has beneficially owned restricted shares of our common stock for at least six months is permitted to sell such shares without restriction, provided that there is sufficient public information about  us as contemplated by Rule 144. An affiliate who has beneficially owned restricted shares of our common stock for a period of at least one year may sell a number of shares equal to one percent of our issued and outstanding common stock approximately every three months.  

Competition

We operate in a highly competitive industry, competing with other mining and exploration companies, institutional and individual investors, which are actively seeking mineral exploration properties throughout the world together with the equipment, labor and materials required for the exploration of such properties. Many of our competitors have financial resources, staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to effectively acquire prime mineral exploration properties and having the ability to explore these properties. Competition for the acquisition of mineral exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of competition. No assurance can be given that a sufficient number of suitable mineral exploration properties will be available for acquisition, exploration and development.

Because our former executive officer and director, owns 82% of our outstanding common stock, investors may find that corporate decisions controlled by this individual are inconsistent with the interests of other stockholders.

 

Our former President controls 82% of our issued and outstanding shares of common stock. Accordingly, in accordance with our Articles of Incorporation and Bylaws, our former Director is able to control who is elected to our board of directors and thus could act, or could have the power to act, as our management. Since our former Director is our majority shareholder, his interests as a controlling shareholder may, at times, be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our former Director exercising in a manner fair to all of our shareholders. Also, due to his stock ownership position, our former Director will have:


 (i) the ability to control the outcome of substantially all corporate actions requiring stockholder approval, including amendments to our articles of incorporation; (ii) the ability to control corporate combinations or similar transactions that might benefit minority stockholders which may be rejected by our former Director to their detriment, and (iii) control over transactions between him and us.


Future sales of shares by us may reduce the value of our stock.


Since our inception, we have relied on such equity sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, your percentage interest in us will be diluted. The result of this could reduce the value of your stock.


We Rely On Our Management, The Loss Of Whose Services Could Have A Material Adverse Effect On Our Business.


We rely upon the services of our board of directors and management, in particular those of Mr. Dave Gamache, the loss of which could have a material adverse effect on our business and prospects.  Competition for qualified personnel to serve in a senior management position is intense.  If we are not able to retain our director and management, or attract other qualified personnel, we may not be able to fully implement our business strategy; failure to do so would have a materially adverse impact on our future prospects.


We currently have no employment agreements with our officer and director imposing any specific condition on our officer and director regarding his continued employment by us. Our officer and director is also an officer, director and employee of other companies, and we may have to compete with such other companies for their time, attention and efforts.  We do not maintain key man insurance on any of our directors or officers.



Compliance With Changing Regulation Of Corporate Governance And Public Disclosure May Result In Additional Expenses.


Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and, in the event we are ever approved for listing on either NASDAQ or a registered exchange, NASDAQ and stock exchange rules, will require an increased amount of management attention and external resources. We intend to continue to invest all reasonably necessary resources to comply with evolving standards, which may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.


We Do Not Intend To Pay Dividends For The Foreseeable Future.


We currently intend to retain future earnings, if any, to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize their investment.


ITEM 2.  PROPERTIES.


Our corporate and administrative office is located at 6805 Sundance Trail, Riverside, California 92506. This office is provided to us on rent free basis by our President and CEO. We believe that our facilities are adequate for our current operations.


A description of our resources properties is set forth above in “Item 1. Business.”


ITEM 3.  LEGAL PROCEEDINGS.


We are not party to any legal proceedings.





4




PART II


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


Market Information


The Company’s Common Stock commenced trading on October 22, 2008 on the OTC Bulletin Board (OTCBB) under the symbol “DKMR”. The following table sets forth the high and low sale prices for the periods indicated:


Fiscal Year 2010

High

Low

First Quarter (January 1 to March 31)

$0.00

$0.00


Second Quarter (April 1 to June 30)

$0.00

$0.00


Third Quarter (July 1 September 30)

$0.00

$0.00


Fourth Quarter (October 1 to December 31)

$0.00

$0.00


As of December 31, 2010, there were approximately 83 shareholders of record of the Company's Common Stock.


Dividend Policy


We have never paid cash dividends on our capital stock and do not anticipate paying any cash dividends in the foreseeable future, but intend to retain our capital resources for reinvestment in our business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our financial condition, results of operations, capital requirements and other factors as the board of directors deems relevant. Our board of directors has the right to authorize the issuance of preferred stock, without further shareholder approval, the holders of which may have preferences over the holders of the Common Stock as to payment of dividends.


Securities Authorized for Issuance Under Equity Compensation Plans


As of the date of this report, we do not have any equity compensation plans.  No options or other securities to acquire shares of our common stock have been granted to our officers and directors.


ITEM 6.  SELECTED FINANCIAL DATA


              Not applicable to smaller reporting companies.


ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Discussion and Analysis


The following discussion and analysis is based upon our  consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, and should be read in conjunction with our consolidated financial statements and related notes. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In addition, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, including, but not limited to, those discussed in “Item 1.A-Risk Factors,” “Forward Looking Statements,” and elsewhere in this prospectus.


Overview 


We are an exploration stage company engaged in the acquisition and exploration of mineral properties. We own a 100% interest in three properties located in the Province of British Columbia, Canada, that we call the “Goldstar Property,” the “Rosewall Gold Property” and the “Waterloo Creek Property.” Currently there are no known mineral reserves on any of the Goldstar Property, the Rosewall Gold Property or the Waterloo Creek Property.


Although exploratory work in the area of our properties conducted by others has indicated some potential showings of mineralization, we are uncertain as to the reproducibility of these prior exploration results and thus we are uncertain as to the potential existence of a commercially viable mineral deposit existing on our mineral claims.  


Our plan of operations was to carry out an initial exploration program on each of our properties in order to ascertain whether any of them possess a commercially exploitable mineral deposit.  We initiated our exploration program on all three of our properties and have completed Phase 1 on the Goldstar Property, Waterloo Property and Rosewall Gold as described below.


The Goldstar Property


We have completed the phase one of our exploration program of the Goldstar and Waterloo Creek Properties at an aggregate cost of $25,000 which consisted of prospecting, a geological examination of any outcrops encountered, 10 pan samples and 2 rock samples taken. The rock samples were taken from shear-hosted 30 cm. wide quartz veins located at Minfile occurrence # 082LSE 071.The rock samples GSRS-1 and 2 contained trace amounts of sphalerite, galena and pyrite, but showed trace to sub-economic precious and base metal values when assayed.


Ten pan concentrate samples, GSPS-1 to 10, were taken from active sites within drainages identified previously as containing significant amounts of gold.  Samples 1 through 9 consisted of 2-3 pans of active sediment from depths up to 50 cm.  Little or no heavy materials such as magnetite or sulphides were present in the samples, and no gold was observed.


A small amount of specular hematite was observed in the pan samples taken from Putnam Creek itself.  No significant gold values were detected by assay in samples GSPS-1 to 9.  Sample GSPS-10 was a later re-take at sample site GSPS-7, using a modified sample methodology.  This site had provided highly anomalous results in the earlier Brican and Teck programs. GSPS-10 was taken from an active stream site, from a one-meter deep by one-meter square hand-dug hole.  Four pans of material were panned down to fines, and again no visible gold, magnetite or sulphides were seen.  However, the sample assayed 221 ppb gold, comparable to the Teck results.  During sampling, it was noted that the surficial gravels contain a large amount of argillaceous materials, with lesser andesite and unmineralized white quartz cobbles.  Active logging upstream from the sample sites and recent high water flows may have contributed to covering the gold-bearing sediment with lighter materials.  Future pan sampling programs should take this possibility into account by hand-digging sample holes at least one meter deep.


Due to unsatisfactory results from phase one exploration program, we have elected not to proceed with phase two work on our Goldstar mineral claim and have impaired our entire investment as of December 31, 2009.


The Rosewall Gold Property


This initial phase of the recommended programs for the Rosewall Gold Property cost $15,404; This work was completed in two trips, our first trip was on March 26 to 28, 2008. The crew was unable to get the desired results due to late snowfall. The second trip from was from June 6 to 9, 2008.The Rosewall Property contains styles of rock alteration, rock textures and mineralization types that are typically associated with epithermal gold +/- silver deposit types.  As reported in older assessment reports, gold values in soil, silt and rock geochemistry indicated significant anomalies.  The present pan sample survey was very limited in scope; however it did not substantiate the reported gold values.  This failure to repeat the reported values may be due to several recent large slides and high water flow covering up the heavier minerals with light material. Prospecting and mapping were hampered by 20 years of overgrowth and lack of road access. Due to unsatisfactory results from phase one exploration program, we have elected not to proceed with phase two work on our Rosewall mineral claim and have impaired our entire investment as of December 31, 2009.


The Waterloo Creek Property


Phase one of our proposed exploration program on the Waterloo Creek Property consists of reconnaissance geological mapping, prospecting and rock sampling. The aggregate cost for the work on the Goldstar and Waterloo Creek Properties was $25,000. This phase was completed in March and June 2008. As of September 2009, due to being unable to gain access to part of the Waterloo claim, we elected to impair all of the acquisition cost for this claim.


The Waterloo Property contains styles of rock alteration, rock textures and mineralization types that are typically associated with epithermal gold +/- silver deposit types.  As reported in older assessment reports, gold values in soil, silt and rock geochemistry indicated significant anomalies.  The present pan sample survey was very limited in scope; however it did not substantiate the reported gold values.  This failure to repeat the reported values may be due to several recent large slides and high water flow covering up the heavier minerals with light material.


Critical Accounting Policies


Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosures. We review our estimates on an ongoing basis.


We consider an accounting estimate to be critical if it requires assumptions to be made that were uncertain at the time the estimate was made; and changes in the estimate or different estimates that could have been made could have a material impact on our results of operations or financial condition. While our significant accounting policies are described in more detail in the notes to our consolidated financial statements, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.


Exploration Costs


Exploration and development costs represent costs incurred to explore our three 100% owned mineral claims located in British Columbia, Canada. The cost of exploration includes such items as wages, contract fees, lodging, 4X4 vehicle rentals, field supplies, assays and management fee to our exploration contractor. We charge all exploration expenses to operations as they are incurred. We do not track exploration and development expenses by project.


Results of Operations for Years Ended December 31, 2010 and 2009


We had no revenues in 2010 and 2009. Our expenses decreased to $57,957 in 2010, from $102,422 in the same period in 2009. This decrease was primarily attributable to, impairments of three mineral properties and bad debt expense incurred in 2009.    


Interest income decreased to $1,265 in 2010, from $2,413 during the same period in 2009. This was the result of lower average cash balances and lower interest paid during 2010.



Liquidity and Capital Resources for Years Ended December 31, 2010 and 2009


At December 31, 2010, the Company had a cash balance of $228,195, compared to a cash balance of $276,383 at December 31, 2009. During 2010, the Company used $48,188 of net cash in operating activities, as compared to $45,489 of net cash in 2009.

 

The Company used $20,000 in investing activities by issuing a note receivable during 2009.  We determined that the note receivable was uncollectible during the same year.


The Company has financed its operations primarily from cash on hand, through private placements and proceeds from public offerings. Net cash provided by financing activities was $0 for 2010 and 2009.


The Company does not have any arrangements, understandings or agreements with any person regarding any additional financings. Although there are 775,000 Warrant A’s and 775,000 Warrant B’s exercisable into one common share at $0.50 and $0.55, which if exercised in full could provide us with an aggregate of $813,750, there is no assurance that the Warrants will be exercised in full or in part.  


The Company has not generated any revenues and has incurred an accumulated deficit of $305,309 since inception. The Company has incurred a loss of $56,692 during the year ended December 31, 2010. The Company faces all the risks common to companies in their early stages of development including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern. Continuation as a going concern is dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The future of the Company hereafter will depend in large part on the Company’s ability to successfully raise capital from external sources to pay for planned expenditures to locate and develop mineral claims and to fund operations.


If and when the time comes to obtain additional funding in order to proceed with additional exploration of one or more of our properties, we anticipate that such funding will be in the form of equity financing from the sale of our common stock.  However, we cannot provide investors with any assurance that we will be able to obtain sufficient funding from the sale of our common stock to fund further exploration.  We believe that debt financing will not be an alternative for funding any further phases in our exploration program.  The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing.  Failure to raise needed financing could result in our having to discontinue our mining exploration and development business.


Plan of Operations


Our plan of operation has been to conduct mineral exploration on our properties in order to assess whether the properties contains mineral reserves capable of commercial extraction. Our exploration program is designed to explore for commercially viable deposits of copper, silver and gold. We have not, nor has any predecessor, identified any commercially exploitable reserves of these minerals on any of our properties.


Since we are in the exploration stage of our business plan, we have not yet earned any revenues from our planned operations.  As of December 31, 2010 we had $228,195 cash on hand and $7,004 in total liabilities.  From our inception May 3, 2006 through December 31, 2010 we have incurred a net loss of $305,309.  


We received a geological evaluation report as to each of our properties. The geological report summarizes the results of the history of the exploration of the mineral claims, the regional and local geology of the mineral claims and the mineralization and the geological formations identified as a result of the prior exploration. The geological report also gives conclusions regarding potential mineralization of the mineral claims and recommends a further geological exploration program on the mineral claims.


As of December 31, 2009, we completed phase one of our exploration program on our mineral claims; during 2009 we elected to not to proceed with phase two work programs on the Rosewall and Goldstar properties due to unsatisfactory results from phase one. We do not anticipate initiating phase two exploration on our Waterloo property due to the lack of success in the phase one program


As of December 31, 2010, we had cash on hand of $228,195. We have sufficient cash to pay the anticipated costs of the proposed phase 2 exploration activities on our Waterloo property; in such a case, the decision to conduct additional recommended exploration program will be dependent upon a number of factors such as our consulting geologist’s recommendations based upon results of our exploration program and available financing at that time.  


The actual cost of completing the exploration program may exceed our estimates of those costs. If the actual costs of the exploration program are substantially greater than we have estimated, we may be required to seek additional financing prior to the completion of phase two of the proposed three phase program. In addition, if we decide to proceed with additional work beyond phase three of our proposed exploration activities, of which there is no assurance, we may also be required to seek additional financing. The Company does not have any arrangements, understandings or agreements with any person regarding any additional financings. Although there are 775,000 Warrant A’s and 775,000 Warrant B’s exercisable into one common share at $0.50 and $0.55, which if exercised in full could provide us with an aggregate of $813,750, there is no assurance that the Warrants will be exercised in full or in part.  


During the exploration stage of our business, our President will be devoting approximately 25% of his time to our business. We do not foresee this limited involvement negatively impacting our company over the next twelve months as all exploratory work has been, and will continue to be, performed by outside consultants. Additionally, we will not have a need to hire any employees over the next twelve months, nor do we plan to make any purchases of equipment over the next twelve months. Outside consultants and geologists will be expected to provide all tools needed for the exploratory work being conducted. There is no assurance that we will achieve all or any of our goals due to the exploration stage of our business.


Related Party Transactions


Management Fees


During the year ended December 31, 2010, we incurred a management fee of $9,000 to our President and CEO. This is a monthly fee of $750. There is no employment, management or consulting agreement in effect nor is there an agreement in place to convert debt to equity between us and our officer and director.

 

Rent

 Our corporate office is located at 6805 Sundance Trail, Riverside CA 92506. We pay no monthly rent for the use of this office. There is no lease or rent agreement in place. This is provided to us by our President, CEO and sole director.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


As a Smaller Reporting Company this item is not required.



5




ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.



Index to Financial Statements


PAGE

Report of Independent Registered Public Accounting Firm

24


Consolidated Balance Sheets as of December 31, 2010 and 2009

    25

  

Consolidated Statements of Operations for the years ended December 31, 2010 and 2009 and for the period

from Inception on May 3, 2006 to December 31, 2010

   26

      

Consolidated Statements of Stockholders’ Equity from Inception on May 3, 2006  

   27

to December 31, 2010

 


Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009

and for the period from Inception on May 3, 2006 to December 31, 2010

   28


Notes to Consolidated Financial Statements

   29

          








































REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors

Duke Mountain Resources, Inc. and Subsidiary

(An Exploration Stage Company)

Riverside, California


We have audited the accompanying consolidated balance sheets of Duke Mountain Resources, Inc. and Subsidiary (an Exploration Stage Company) (the “Company”), as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended and for the period from Inception on May 3, 2006 to December 31, 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  The consolidated financial statements for the period from Inception on May 3, 2006 to December 31, 2008 were audited by other auditors whose report expressed an unqualified opinion on those consolidated financial statements. The consolidated financial statements for the period from Inception on May 3, 2006 to December 31, 2008 include total revenues of $-0- and a net loss of $150,128, respectively. Our opinion on the consolidated statements of operations, stockholders’ equity and cash flows for the period from Inception on May 3, 2006 to December  31, 2010, insofar as it relates to amounts from Inception on May 3, 2006 to December 31, 2008, is based solely on the report of other auditors.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Duke Mountain Resources, Inc. and Subsidiary as of December 31, 2010 and 2009 and the consolidated results of their operations and their consolidated cash flows for the years then ended and for the period from Inception on May 3, 2006 to December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has had no revenues and has generated losses from operations since inception. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to those matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ GBH CPAs, PC

Houston, Texas

March 25, 2011









DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

 

 

2010

 

2009

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

228,195

 

$

276,383

 

Prepaid expenses

 

 

5,500

 

 

7,000

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

 

233,695

 

 

283,383

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

233,695

 

$

283,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

7,004

 

$

-

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

7,004

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

7,004

 

 

-

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Common shares: $0.001 par value, 76,000,000

 

 

 

 

 

 

 

   shares authorized: 12,180,000 shares

 

 

 

 

 

 

 

   issued and outstanding, respectively

 

 

12,180

 

 

12,180

 

Additional paid-in capital

 

 

519,820

 

 

519,820

 

Deficit accumulated during the exploration stage

 

 

(305,309)

 

 

(248,617)

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Equity

 

 

226,691

 

 

283,383

 

 

TOTAL LIABILITIES AND

 

 

 

 

 

 

 

 

   STOCKHOLDERS'  EQUITY

 

$

233,695

 

$

283,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 





DUKE MOUNTAIN RSOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 From Inception

 

 

 

For the Year Ended

 

On May 3, 2006

 

 

 

December 31,

 

To December 31,

 

 

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

REVENUES

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Impairment of asset

 

-

 

 

40,000

 

 

40,000

 

Bad debt expense

 

-

 

 

20,000

 

 

20,000

 

Mineral exploration expense

 

-

 

 

-

 

 

40,404

 

General and administrative

 

57,957

 

 

42,422

 

 

229,752

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

57,957

 

 

102,422

 

 

330,156

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(57,957)

 

 

(102,422)

 

 

(330,156)

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income - related party

 

-

 

 

1,520

 

 

1,520

 

Interest income

 

1,265

 

 

2,413

 

 

23,327

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Income

 

1,265

 

 

3,933

 

 

24,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(56,692)

 

 

(98,489)

 

 

(305,309)

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

-

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(56,692)

 

$

(98,489)

 

$

(305,309)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER SHARE

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER

 

 

 

 

 

 

 

 

OF SHARES OUTSTANDING, BASIC AND DILUTED

 

12,180,000

 

 

12,180,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 




6









DUKE MOUNTIAN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Statements of Stockholders' Equity

From Inception on May 3, 2006 to December 31, 2010

 

 

 

 

 

 

 

 

 

 

Deficit

 

 

 

 

 

 

 

 

 

Additional

 

Accumulated

 

Total

 

Common Stock

 

Paid-In

 

During the

 

Stockholders'

 

Shares

 

Amount

 

Capital

 

Exploration Stage

 

Equity

Balance, May 3, 2006

-

 

$

-

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash in

 

 

 

 

 

 

 

 

 

 

 

 

 

private placement, May 3, 2006

10,000,000

 

 

10,000

 

 

-

 

 

-

 

 

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash in

 

 

 

 

 

 

 

 

 

 

 

 

 

private placement, May 19, 2006

1,000,000

 

 

1,000

 

 

49,000

 

 

-

 

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash in

 

 

 

 

 

 

 

 

 

 

 

 

 

    private placement, November 14, 2006

405,000

 

 

405

 

 

161,595

 

 

-

 

 

162,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

    December 31, 2006

-

 

 

-

 

 

-

 

 

(12,704)

 

 

(12,704)

Balance, December 31, 2006

11,405,000

 

 

11,405

 

 

210,595

 

 

(12,704)

 

 

209,296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash in

 

 

 

 

 

 

 

 

 

 

 

 

 

    public offering, August 29, 2007

760,000

 

 

760

 

 

303,240

 

 

-

 

 

304,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for cash in

 

 

 

 

 

 

 

 

 

 

 

 

 

    public offering October 31, 2007

15,000

 

 

15

 

 

5,985

 

 

-

 

 

6,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

    December 31, 2007

-

 

 

-

 

 

-

 

 

(69,547)

 

 

(69,547)

Balance, December 31, 2007

12,180,000

 

 

12,180

 

 

519,820

 

 

(82,251)

 

 

449,749

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

    December 31, 2008

-

 

 

-

 

 

-

 

 

(67,877)

 

 

(67,877)

Balance, December 31, 2008

12,180,000

 

 

12,180

 

 

519,820

 

 

(150,128)

 

 

381,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

    December 31, 2009

-

 

 

-

 

 

-

 

 

(98,489)

 

 

(98,489)

Balance, December 31, 2009

12,180,000

 

 

12,180

 

 

519,820

 

 

(248,617)

 

 

283,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the year ended

 

 

 

 

 

 

 

 

 

 

 

 

 

    December 31, 2010

-

 

 

-

 

 

-

 

 

(56,692)

 

 

(56,692)

Balance, December 31,2010

12,180,000

 

$

12,180

 

$

519,820

 

$

(305,309)

 

$

226,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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







DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

From

 

 

 

 

 

 

 

 

 

 Inception on

 

 

 

 

 

For the Year Ended

 

May 3, 2006 to

 

 

 

 

 

December 31,

 

To December 31,

 

 

 

 

 

2010

 

2009

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(56,692)

 

$

(98,489)

 

$

(305,309)

 

Adjustments to reconcile net loss to

 

 

 

 

 

 

 

 

 

net cash used by operating activities:

 

 

 

 

 

 

 

 

 

 

Impairment of mineral rights

 

-

 

 

40,000

 

 

40,000

 

 

Fair value of warrants granted for services

 

 

 

 

 

 

 

 

 

 

Bad debt expense

 

 

-

 

 

20,000

 

 

20,000

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 

 

1,500

 

 

(7,000)

 

 

(5,500)

 

 

Accounts receivable

 

 

-

 

 

-

 

 

-

 

 

Accrued interest

 

 

-

 

 

-

 

 

-

 

 

Changes in accounts payable

 

7,004

 

 

-

 

 

7004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in Operating Activities

 

(48,188)

 

 

(45,489)

 

 

(243,805)

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note receivable

 

 

-

 

 

(20,000)

 

 

(20,000)

 

Investment in mineral right

 

 

-

 

 

-

 

 

(40,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used in Investing Activities

 

-

 

 

(20,000)

 

 

(60,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from public offering

 

-

 

 

-

 

 

310,000

 

Proceeds from private placements

 

-

 

 

-

 

 

222,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Financing Activities

 

-

 

 

-

 

 

532,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH

 

(48,188)

 

 

(65,489)

 

 

228,195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AT BEGINNING OF PERIOD

 

276,383

 

 

341,872

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH AT END OF PERIOD

$

228,195

 

$

276,383

 

$

228,195

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF

 

 

 

 

 

 

 

 

 

CASH FLOW INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH PAID FOR:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

-

 

$

-

 

$

440

 

 

Income taxes

 

$

-

 

$

-

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 






DUKE MOUNTAIN RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Notes to Consolidated Financial Statements



NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Business Organization

Duke Mountain Resources, Inc. (the “Company"), a Nevada Corporation, was formed on May 3, 2006 with authorized capital of 76,000,000 shares of common stock, par value of $0.001 per share.


On September 21, 2007, the Company established a Canadian operating subsidiary Duke Mountain Resources Canada, Inc. The Canadian operating subsidiary will conduct all mineral explorations for Duke Mountain Resources, Inc. Duke Mountain Resources Canada, Inc. controls over 1,503 hectares of mineral claims. All mineral claims were transferred to our Canadian operating subsidiary Duke Mountain Resources Canada, Inc., on December 21, 2007 from our former President and Chief Executive Officer.


The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Duke Mountain Resources Canada, Inc. All significant intercompany balances and transactions have been eliminated.


Duke Mountain Resources, Inc., together with its wholly-owned subsidiary, is an exploration stage company focused on the acquisition, exploration, and development of gold, silver and base metal properties.


The Company has not generated any revenues and has incurred an accumulated deficit of $305,309 since inception. The Company has incurred a loss of $56,692 during the year ended December 31, 2010. The Company faces all the risks common to companies in their early stages of development including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern. Continuation as a going concern is dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. The Company’s financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The future of the Company hereafter will depend in large part on the Company’s ability to successfully raise capital from external sources to pay for planned expenditures to locate and develop mineral claims and to fund operations.


Principles of Accounting

These consolidated financial statements are stated in U.S. Dollars and have been prepared by management on the accrual basis in accordance with the United States generally accepted accounting principles (US GAAP).


Accounting Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Areas where management uses subjective judgment include valuation of equity instruments and related party transactions. Actual results can differ from those estimates and assumptions.


Foreign Operations

Transaction gains (losses) that arise from exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in the statements of operations.


The Company operates outside of the United States of America and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates in and the Canadian dollar.



NOTE 1 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


Cash and Cash Equivalents

Cash and cash equivalents include bank deposits and a term deposit with an original maturity date of three months or less. Duke Mountain occasionally has cash with financial institutions in excess of insured limits.


Mineral Rights

Mineral rights consist of costs to obtain the mineral claims. For mineral rights costs that are capitalized, once the Company determines it is not economically feasible to develop the claim, the costs are expensed. Also, mineral rights costs are not capitalized at an amount more than the anticipated recovery from the claim area. Mineral rights costs associated with specific areas will be amortized as minerals are produced from these areas. During 2009, initial exploration had been completed on all three of the Company’s mineral claims. There has been no production from the Company’s mineral properties since inception. All other costs related to the exploration of unproven properties are expensed as incurred.


Impairment of Long-lived Assets

Long-lived assets of the Company are reviewed for impairment when changes in circumstances indicate their carrying value has become impairedManagement considers assets to be impaired if the carrying amount of an asset exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the asset will be written down to fair value, and a loss is recorded as the difference between the carrying value and the fair value. Fair values are determined based on the quoted market values, discounted cash flows or internal and external appraisals, as applicable. Mineral rights assets are tested annually for impairment. During the year ended December 31, 2009, the Company fully impaired its mineral rights costs totaling $40,000.


Concentrations of Credit Risk

Occasionally, the Company has funds deposited in a financial institution in excess of amounts insured by the FDIC. At December 31, 2010, the Company had $-0- on deposit in excess of currently insured amounts.


Fair Value of Financial Instruments

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision.  Changes in assumptions can significantly affect estimated fair value. The carrying value of cash and cash equivalents and accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant market or credit risks arising from these financial instruments.


Earnings (Loss) per Share

Basic and diluted earnings (loss) per common share is calculated using the weighted average number of common shares outstanding during the period. For the years ended December 31, 2010 and 2009, the Company’s warrants are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s losses during those periods.


Recent Accounting Pronouncements

 Management has considered all recent accounting pronouncements issued since the last audit of its consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements.



NOTE 2 - RELATED PARTY TRANSACTIONS


During the second fiscal quarter of 2009, the Company generated $1,520 of income through Hardin Marine Arrowhead. The Company provided website consulting services to Hardin Marine Arrowhead and the Allen Lee Group developed and implemented the web design changes. This was a one-time event due to the Company’s President and CEO, Mr. Dave Gamache, being associated with Hardin Marine Arrowhead and the Allen Lee Group. As a result, the Company has classified the amount in Other Income from related party for the year ended December 31, 2009.


NOTE 3 - INCOME TAXES   


Net deferred tax assets consist of the following components:

 

December 31 2010

 

December 31, 2009

Deferred  tax asset

$

104,172

 

$

81,361

Valuation allowance

 

(104,172)

 

 

(81,361)

Net deferred tax asset

$

-

 

$

-


The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax income (loss) from continuing operations as follows:

 

December 31, 2010

 

December 31, 2009

Tax benefit at statutory rates

$

(21,523)

 

$

(38,411)

Impairment of asset

 

-

 

 

15,600

Change in valuation allowance

 

21,523

 

 

22,811

Net deferred tax asset

$

-

 

$

-


The Company has accumulated net operating loss carryovers of approximately $264,000 as of December 31, 2010 which are available to reduce future taxable income.  Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax losses begin to expire in 2027 to 2030. The fiscal years 2008 through 2010 remain open to examination by federal tax authorities and other tax jurisdictions.


NOTE 4 - NOTE RECEIVABLE


During the year ended December 31, 2009, the Company made a loan to an unrelated party in the amount of $20,000. The loan was non-interest bearing had no maturity date and was repayable from the proceeds of the borrower’s operations.  During 2009, the Company recorded a loss of $20,000 on the note due to the determination that it was uncollectible.


NOTE 5 - WARRANTS


On October 31, 2007, the Company completed a public offering for $310,000 where investors purchased 775,000 units for $0.40 per unit (760,000 shares purchased on August 29, 2007 and 15,000 shares purchased on October 31, 2007). Each unit consisted of one common share, one class A warrant to purchase a common share at $0.50 per share for a period of 60 months from date of issuance and one class B warrant to purchase one common share at $0.55 per share for a period of 60 months from date of issuance.  


NOTE 5 – WARRANTS (CONTINUED)


The movement of share purchase warrants can be summarized as follows:


 

 

 

 

 

Weighted

 

 

Number of

 

 

Average

 

 

Warrants

 

 

Exercise

 

 

Outstanding

 

 

Exercise Price

Class A Warrants

 

 

 

 

 

Balance, December 31, 2008

 

775,000

 

$

0.50

      Granted

 

-

 

 

-

      Exercised

 

-

 

 

-

  Balance, December 31, 2009

 

775,000

 

$

0.50

      Granted

 

-

 

 

-

      Exercised

 

-

 

 

-

  Balance, December 31, 2010

 

775,000

 

$

0.50

 

 

 

 

 

 

Class B Warrants

 

 

 

 

 

Balance, December 31, 2008

 

775,000

 

$

0.55

      Granted

 

-

 

 

-

       Exercised

 

-

 

 

-

Balance, December 31, 2009

 

775,000

 

$

0.55

     Granted

 

-

 

 

-

     Exercised

 

-

 

 

-

Balance, December 31, 2010

 

775,000

 

$

0.55

 

 

 

 

 

 



No warrants were granted, exercised or expired in the years ended December 31, 2010 and 2009. The warrants had no intrinsic value at December 31, 2010 and 2009 and at December 31, 2010 had a remaining contractual life of approximately 1.8 years.


NOTE 6 - SUBSEQUENT EVENTS


In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and determined that there are no material subsequent events to report.












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


We have had no disagreements with our independent auditors with respect to accounting practices, procedures or financial disclosure. On October 12, 2009 we elected a new independent registered public accounting firm to audit the Company’s financial statements. The firm of GBH CPAs, PC currently serves as the Company’s independent accountants. They have served as our independent auditors since October 12, 2009. Our previous auditors were Peterson Sullivan, LLP from inception May 6, 2006 through October 12, 2009.

ITEM 9A:  CONTROLS AND PROCEDURES.


 Evaluation of Disclosure Controls and Procedures


We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2010. The evaluation was conducted under the supervision and with the participation of management, including our chief executive officer. Disclosure controls and procedures mean our controls and other procedures that are designed to ensure that information required to be disclosed 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 SEC rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including the chief executive officer, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of disclosure controls and procedures includes an evaluation of some components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis for purposes of providing the management report that is set forth below.


The evaluation of our disclosure controls and procedures included a review of their objectives and design, our implementation of the controls, and the effect of the controls on the information generated for use in this Form 10-K. In the course of the controls evaluation, we sought to identify any past instances of data errors, control problems or acts of fraud and sought to confirm that appropriate corrective actions, including process improvements, were being undertaken. This evaluation is performed on a quarterly basis so that the conclusions of management, including the chief executive officer, concerning the effectiveness of our disclosure controls and procedures can be reported in our periodic reports.


Our chief executive officer has concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, that as of December 31, 2010, our disclosure controls and procedures were not effective due to the material weaknesses described in Management's Report on Internal Control over Financial Reporting below.


Management's Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


 Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company;

 

 

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

 

 

 Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.


As required by Rule 13a-15(c) promulgated under the Exchange Act, our management, (Chief Executive Officer and Chief Financial Officer), evaluated the effectiveness of our internal control over financial reporting as of December 31, 2010. Management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (“COSO”). Based upon management’s assessment using the criteria contained in COSO, and for the reasons discussed below, our management has concluded that, as of December 31, 2010, our internal control over financial reporting were ineffective due to the material weaknesses described below.


  

1)

The Company did not sufficiently segregate duties over incompatible functions. The Company's inability to sufficiently segregate duties is due to a small number of personnel.


  

2)

In conjunction with the lack of segregation of duties, the Company did not institute specific anti-fraud controls. While management found no evidence of fraudulent activity, certain individuals have access to both accounting records and corporate assets, principally the operating bank account.


Under the  rules promulgated by the US Securities and Exchange Commission (the “SEC”), the term “material weakness” means a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness in internal control over financial reporting does not imply that a material misstatement of the financial statements has occurred, but rather, that there is a reasonable possibility that a material misstatement could occur.



Inherent Limitations over Internal Controls


Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.


Management, including our Chief Executive Officer and Chief Accounting Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.






Changes in Internal Control over Financial Reporting


There have not been any changes in the Company's internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during its fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect its internal control over financial reporting.




ITEM 9B.  OTHER INFORMATION.


This Annual Report on Form 10-K does not include an attestation report of the Company's independent registered public accounting firm regarding Internal Control over Financial Reporting.  The Company's Internal Control over Financial Reporting was not subject to attestation by the Company's independent registered public accounting firm pursuant to the provisions of the Dodd-Frank Act that permit the Company to provide only management's report on Internal Control over Financial Reporting in this annual report.



PART III


ITEM 10:  DIRECTORS,  EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE


Set forth below is certain information regarding each of the directors and officers of the Company:


Dave Gamache . - President, Director, CEO & CFO. Since 2001 Mr. Gamache has been the principal of the Allen Lee Group. A company that provides business consulting services to businesses and individuals.Mr. Gamache is a former President, Director and Treasurer of Lake Victoria Mining Company.  Currently Mr. Gamache serves as Director and Officer of the following companies. Kibo Resources Company Inc, Microchannel Technologies Corp and Emergent Energy Corporation.


Meetings of the Board of Directors

 

Our directors are expected to attend meetings of the Board. Our directors are expected to spend the time needed at each meeting and to meet as frequently as necessary to properly discharge their responsibilities. We encourage members of our Board of Directors to attend annual meetings of stockholders, but we do not have a formal policy requiring them to do so. Our Board of Directors met two times and acted by unanimous written Minutes two times during the year ended December 31, 2009. Through December 31, 2009, our Board of Directors consisted of Mr. Dave Gamache, Mr. Mike Patton. On October 20, 2009, Mr. Mike Patton elected to resign due to other commitments and Mr. Gamache is our sole director at December 31, 2010.


Director Compensation


Our President was compensated $9,000 for serving as such in 2010.This is a monthly fee of $750. There is no employment, management or consulting agreement in effect nor is there an agreement in place to convert debt to equity between us and any of our officers and directors.

 

Director Liability and Indemnification


Our officers and directors are indemnified as provided by the Nevada Revised Statutes and our bylaws.


Under the governing Nevada statutes, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company’s articles of incorporation.  Our Articles of Incorporation do not contain any limiting language regarding director immunity from liability.  Excepted from this immunity are:


·

a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;

·

a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);

·

a transaction from which the director derived an improper personal profit; and

·

willful misconduct.


Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:


·

such indemnification is expressly required to be made by law;

·

the proceeding was authorized by our board of directors;

·

such indemnification is provided by us, in our sole discretion, pursuant to the powers vested in us under Nevada law; or

·

such indemnification is required to be made pursuant to the bylaws.


Our bylaws provide that we will advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the company, or is or was serving at the request of the company as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefore, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under our bylaws or otherwise.


Our bylaws provide that no advance shall be made by us to an officer of the company, except by reason of the fact that such officer is or was a director of the company in which event this paragraph shall not apply, in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the company.


Audit Committee


The Board does not currently have a standing Audit Committee.  The full Board performs the principal functions of the Audit Committee.  The full Board monitors the Company's financial reporting process and internal control system and reviews and appraises the audit efforts of the Company's independent accountants.


Compensation Committee.


The Board does not currently have a standing Compensation Committee.  The full Board establishes overall compensation policies for the Company and reviews recommendations submitted by the Company’s management.


Nominating Committee.


The Board does not currently have a standing Nominating Committee.  The Company does not maintain a policy for considering nominees.  The Company’s Bylaws provides that the number of Directors shall be fixed from time to time by the Board, but in no event shall be less than the minimum required by law.  The Board shall be large enough to maintain the Company’s required expertise but not too large to function efficiently.  Director nominees are recommended, reviewed and approved by the entire Board.  The Board believes that this process is appropriate due to the relatively small number of directors on the Board and the opportunity to benefit from a variety of opinions and perspectives in determining director nominees by involving the full Board.


While the Board is solely responsible for the selection and nomination of directors, the Board may consider nominees recommended by Stockholders as it deems appropriate. Stockholders who wish to recommend a nominee should send nominations to the Company’s Chief Executive Officer, Dave Gamache, 6805 Sundance Trail, Riverside CA, 92506, that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors. The recommendation must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected.



Communications with the Board of Directors


Stockholders who wish to communicate with the Board of Directors may do so by addressing their correspondence to the Board of Directors at Duke Mountain Resources, Inc., Attention: Corporate Secretary, 6805 Sundance Trail, Riverside CA, 92506.   The Board of Directors has approved a process pursuant to which the Corporate Secretary shall review and forward correspondence to the appropriate director or group of directors for response


Code of Ethics

 

We have adopted a Code of Conduct and Ethics that applies to our principal executive officer or principal financial officer, or persons performing similar functions, as well as to all our directors, officers and employees. Our Code of Conduct and Ethics is posted on our Internet website. Our Internet website is www.dukemountain.com. We intend to post on our website any amendment to, or waiver from, any provision of our Code of Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting or other persons performing similar functions that relates to any element of our Code regarding: (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) full, fair, accurate, timely and understandable disclosure in our reports and other filings with the SEC or our public communications; (3) compliance with applicable governmental laws, rules and regulations; (4) prompt internal reporting of the violations of our code to an appropriate person identified in our code; and (5) accountability for adherence to our code.


ITEM 11:  EXECUTIVE COMPENSATION.


Remuneration and Executive Compensation


The following table shows, for the two-year period ended December 31, 2010, the cash compensation paid by the Company, as well as certain other compensation paid for such year, to the Company's Chief Executive Officer and the Company's other most highly compensated executive officers. Except as set forth on the following table, no executive officer of the Company had a total annual salary and bonus for 2010 that exceeded $100,000.


Summary Compensation Table

                                                                                  

   Securities

                                                                                 

  Underlying

Name and                                                                         

    Options       

All Other

Principal Position               Year      Salary        Bonus

Other(1)

            Granted                 Compensation

                           

Dave Gamache            

2010

$0

 

$0       

$9,000   

   0

$0

President, CEO     

2009

$0

$0        

$9,000   

   0             

$0

and Director                            

             

                

                                                                     


Mike Patton          

2009

$0

$0       

$0

          0

$0

Director

         


(1) Mr. Gamache was compensated and $9,000 for 2010 and 2009. This is a monthly fee of $750. There is no employment, management or consulting agreement in effect nor is there an agreement in place to convert debt to equity between us and any of our officers and directors.

 

Stock Option Grants in Last Fiscal Year


Shown below is further information regarding employee stock options awarded during 2010 to the named officers and directors:


   Number of

% of Total

   Securities

Options Granted

   Underlying

to Employees

Exercise

Expiration

Name

   Options

in 2009

Price ($/sh)

Date

Dave Gamache

0

0%

n/a

          n/a



Aggregated Option Exercises During Last Fiscal Year and Year End Option Values


The following table shows certain information about unexercised options at year-end with respect to the named officers and directors:


Common Shares Underlying Unexercised

Value of Unexercised In-the-money    

Options on December 31, 2010    

Options on December 31, 2010      

Name  

Exercisable

     Unexercisable

Exercisable

  Unexercisable

Dave Gamache

0

0

0

0

Mike Patton

0

0

0

0


Changes in Control


There are no understandings or agreements, aside from the transaction completed and described under “Certain Relationships and Related Transactions, and Director Independence” known by management at this time which would result in a change in control of the Company.  If such transactions are consummated, of which there can be no assurance, the Company may issue a significant number of shares of capital stock which could result in a change in control and/or a change in the Company’s current management.


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


The following table sets forth, as of December 31, 2010, the beneficial ownership of the Company's Common Stock by each director and executive officer of the Company and each person known by the Company to beneficially own more than 5% of the Company's Common Stock outstanding as of such date and the executive officers and directors of the Company as a group.


Number of Shares

 

Person or Group

of Common Stock

Percentage

Herdev S. Rayat

10,000,000

  82%

3466 West Broadway

Vancouver, BC V6R 2B3


Dave Gamache

3,000

    0.02%

6805 Sundance Trail

Riverside, CA  92506


Mike Patton

0

    0%

  

Irvine, CA

    


Directors and Executive Officers

3,000

  

    0.02%

as a group ( 2 persons)



ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


Related Transactions


During the second fiscal quarter of 2009, the Company generated $1,520 of income through Hardin Marine Arrowhead. The Company provided website consulting services to Hardin Marine Arrowhead and the Allen Lee Group developed and implemented the web design changes. This was a one-time event due to the Company’s President and CEO Mr. Dave Gamache, being associated with Hardin Marine Arrowhead and the Allen Lee Group. As a result the Company has classified the amount in Other Income from related party for the year ended December 31, 2009.




Review, Approval or Ratification of Related Party Transactions


We do not maintain a formal written procedure for the review and approval of transactions with related persons. It is our policy for the disinterested members of our board to review all related party transactions on a case by case basis. To receive approval, a related-party transaction must have a business purpose for us and be on terms that are fair and reasonable to us and as favorable to us as would be available from non-related entities in comparable transactions.


Director Independence


Under the Nasdaq rules, a majority of the board of directors must be comprised of independent directors as defined in Nasdaq Rule 4200. Under Nasdaq Rule 4200(a)(15), an "Independent director" means a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the issuer's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The rule then sets forth a list of persons who are not considered independent under these rules. Audit committee members are subject to additional, more stringent requirements under Nasdaq Rule 4350(d). Audit committee members must: (i) be independent as defined under Rule 4200; (ii) meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (subject to the exemptions provided in Exchange Act Rule 10A-3(c)); (iii) not have participated in the preparation of the financial statements of the company or any current subsidiary of the company at any time during the past three years; and (iv) be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement. None of our current directors can be deemed independent under the Nasdaq rules and our company does not have separately designated audit, compensation or nominating committees.


ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES.


The firm of GBH CPAs, PC currently serves as the Company’s independent accountants. They have served as our independent registered public accounting firm since October 12, 2009. Our previous auditors were Peterson Sullivan, LLP from inception May 6, 2006 through October 12, 2009. The Board of Directors of the Company, in its discretion, may direct the appointment of different public accountants at any time during the year, if the Board believes that a change would be in the best interests of the stockholders.  We do not currently have an audit committee. The Board of Directors has considered the audit fees, audit-related fees, tax fees and other fees paid to the Company's accountants, as disclosed below, and had determined that the payment of such fees is compatible with maintaining the independence of the accountants.


Audit Fees:  The aggregate  fees,  including  expenses, in connection with the audits of our consolidated  financial statements for the two most recent  fiscal years and for the reviews of our financial information  included in our Annual  Report on Form 10-K  and our  quarterly reports on Form 10-Q during the fiscal years ending  December  31, 2010 and December 31, 2009 were approximately $13,000 and $18,000, respectively.


Tax fees:  The aggregate fees billed to us for tax compliance, tax advice and tax planning by our independent registered public accounting firm for fiscal 2010 and 2009 were approximately $-0- and $0, respectively.


There were no audit-related or other fees billed by our independent registered public accounting firm for the years ended December 31, 2010 and 2009.






















































PART IV

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.


(a) The following documents are filed as a part of this Form 10-K:

 


1.

Financial Statements


The following financial statements are included in Part II, Item 8 of this Form 10-K:


·

Report of Independent Registered Public Accounting Firm


·

Consolidated Balance Sheets as of December 31, 2010 and 2009


·

Consolidated Statements of Operations for the years ended December 31, 2010 and 2009 and for the period

·

from Inception on May 3, 2006 to December 31, 2010


·

Consolidated Statements of Stockholders’ Equity from Inception on May 3, 2006  

·

to December 31, 2010

 


·

Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009

·

and for the period from Inception on May 3, 2006 to December 31, 2010


·

Notes to Consolidated Financial Statements





2.

Exhibits


The Exhibits listed in the Exhibit Index, which appears immediately following the signature page, are incorporated herein by reference, and are filed as part of this Form 10-K.


3.

Financial Statement Schedules

 

Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the consolidated financial statements or notes described in Item 15(a)(1) above.





















SIGNATURES


Pursuant to the requirements of Sections 13 or 15 (d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

Duke Mountain Resources, Inc.

 

(Registrant)



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


 

Signature

Title

Date

 

 

 

 

 

 

/s/ Dave Gamache

President, Chief Executive Officer,

March 29, 2011

Dave Gamache

Chief Financial Officer and Director

 




































Exhibit Index


 

Exhibit No.

Description of Exhibit

 

 

 


31.1

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).


31.2

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).


32.1

Certification by the Chief Executive Officer pursuant to 18  U.S.C. 1350 as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2

Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

































Exhibit 31.1


CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


I, Dave Gamache, certify that:


(1)

I have reviewed this annual report on Form 10-K of Duke Mountain Resources, Inc. (the “registrant”);


(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

(4)

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and


(5)

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):


(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 29, 2011     

                  By:     

   /s/ Dave Gamache

 

 

   Dave Gamache

 

 

   President and Chief Executive Officer













Exhibit 31.2


CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


I, Dave Gamache, certify that:


(1)

I have reviewed this annual report on Form 10-K of Duke Mountain Resources, Inc. (the “registrant”);


(2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


(3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


(4)

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:


(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and


(5)

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):


(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: March 29, 2011

Date: March 9, 2009


Date: March 9, 2009

Date:  March 9, 2009

By:

/s/ Dave Gamache

 

 

Dave Gamache

 

 

Chief Financial Officer






Exhibit 32.1


Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


In connection with the Annual Report of Duke Mountain Resources, Inc. (the “Company”) on the Form 10-K for the period ended December 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dave Gamache, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:


(i)

the Report filed by the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(ii)

The information contained in that Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented therein.



 

DUKE MOUNTAIN RESOURCES, INC.

 

 

 

Date:  March 29, 2011

By:

/s/ Dave Gamache

 

 

Dave Gamache



 

 

President and Chief Executive Officer


This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



























Exhibit 32.2

 

Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


In connection with the Annual Report of Duke Mountain Resources, Inc. (the “Company”) on the Form 10-K for the period ended December 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dave Gamache, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:


(i)

the Report filed by the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(ii)

The information contained in that Report fairly presents, in all material respects, the financial condition and results of operations of the Company on the dates and for the periods presented therein.



 

DUKE MOUNTAIN RESOURCES, INC.

 

 

 

Date: March 29, 2011

By:

/s/ Dave Gamache

 

 

Dave Gamache

 

 

Chief Financial Officer



This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.